Trilogy Federal, LLC v. Civitasdx LLC

• Court: District Court, District of Columbia
• Decided: February 5, 2025
• Docket: Civil Action No. 2024-2713
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

TRILOGY FEDERAL, LLC,

Plaintiff, Civil Action No. 24-2713 v. Judge Beryl A. Howell CIVITASDX, LLC, et al.,

Defendants.

MEMORANDUM OPINION AND ORDER

Plaintiff Trilogy Federal, LLC (“Trilogy”), a federal government contractor for financial

management systems, sued defendants CivitasDX, LLC, Cognitive Medical Systems, Inc.

(“CMS”), Halfaker and Associates (“Halfaker”), Science Applications International Corporation

(“SAIC”), Client First Technologies, Inc. (“Client First”), and Kila Thomas, alleging

misappropriation of trade secrets, breach of contract, tortious interference with contract, and

tortious interference with a prospective business relationship. See Complaint, ECF No. 1. Two

of these six defendants, CivitasDX, LLC and CMS (“moving defendants” or “CivitasDX and

CMS”), have moved to dismiss or stay this litigation in light of pending related litigation

initiated by these two defendants in the Southern District of California. Moving Defs.’ Mot. to

Dismiss or Stay Pursuant to the First-to-File Rule (“Moving Defs.’ Mot.”), ECF No. 31. Plaintiff

opposed. Pl.’s Opp’n, ECF No. 35. For the reasons explained below, moving defendants’

motion is denied.

I. BACKGROUND

The basic facts as follows are also set out in this Court’s memorandum opinion and order

granting the motion to compel arbitration in a related case, Trilogy v. General Dynamics

Information Technology, Inc., 24-cv-2772 (BAH), ECF No. 18. Trilogy is a federal government 1 contractor that implemented and maintained financial management systems for the U.S.

Department of Veteran Affairs (“VA”) pursuant to a five-year contract starting in 2016. Compl.

¶ 1. In performing these services, Trilogy was the subcontractor to a prime contractor, SRA

International, Inc. (“SRA”), which was subsequently acquired by General Dynamics Information

Technology, Inc. (“GDIT”). Id. ¶¶ 1, 22. In 2021 when the VA opened the bidding process for

renewal of that contract, both Trilogy and GDIT submitted bids, but separately this time, with

new partners. Id. ¶¶ 24-26, 28. Trilogy submitted a proposal with B3 as its prime contractor,

while GDIT submitted a bid with moving defendant CivitasDX as the prime contractor and

Client First as a co-subcontractor. Id.; Trilogy v. GDIT, 24-cv-2772 (BAH), Compl. ¶¶ 12, 17

(“GDIT Compl.”), ECF No. 1. CivitasDX is a joint venture of moving defendant CMS and

defendant Halfaker, which is a subsidiary of SAIC. Compl. ¶¶ 11, 27.

Trilogy’s proposal lost to the one submitted by GDIT and the moving defendants in this

case. Compl. ¶ 3. According to Trilogy, through a former Trilogy employee, Kila Thomas, who

now works for Client First, and/or through the 2016 bidding process, all of the parties affiliated

with the winning bid—i.e., GDIT, the moving defendants, SAIC, Halfaker, Client First, and

Thomas—misappropriated Trilogy’s trade secrets, in violation of the Defend Trade Secrets Act,

18 U.S.C. §§ 1836, et seq., and the District of Columbia Uniform Trade Secrets Act, D.C. Code

§§ 36-401, et seq., and tortiously interfered with its prospective business relationship with the

VA through their submission of the 2021 bid. Id. ¶¶ 29-30, 44-47, 60-87, 105-112; Trilogy v.

GDIT, 24-cv-2772 (BAH), GDIT Compl. ¶¶ 63-97 (claims against GDIT). Trilogy also alleges a

breach of contract by Thomas, Compl. ¶¶ 88-96, and tortious interference of its contract with

Thomas by Client First, the moving defendants, Halfaker, and SAIC, id. ¶¶ 97-104.

2 In August 2024, plaintiff sent GDIT, CivitasDX, CMS, SAIC, Halfaker, Client First, and

Thomas a demand letter and draft complaint with those allegations in an effort to resolve the

dispute. See Pl.’s Opp’n at 3; id., Decl. of Jennifer Semko (“Semko Decl.”) ¶ 4, ECF No. 35-1;

Semko Decl., Exhs. A and B, ECF Nos. 35-2, 35-3. That letter threatened filing suit if

defendants did not want to discuss settlement in the subsequent nine days. Six days later, on

August 27, 2024, moving defendants CivitasDX and CMS preemptively filed suit in the

Southern District of California (“the California action”) against Trilogy, requesting declaratory

judgment with respect to the threatened causes of action by Trilogy and requesting declaratory

relief and damages for alleged interference by Trilogy with its prospective business relationship

with the VA. CivitasDX LLC v. Trilogy Federal LLC (“California Action”), 24-cv-1522 (MMA)

(MSB) (S.D. Cal.), Complaint, ECF No. 1.

Then, on September 23, 2024, as threatened in its August demand letter, Trilogy filed the

complaint in this matter. See Compl. This complaint names as defendants CivitasDX, CMS,

SAIC, Halfaker, Client First, and Thomas. Trilogy separately filed a similar complaint against

GDIT on September 27, 2024, Trilogy v. GDIT, 24-cv-2772 (BAH), GDIT Compl., which was

not consolidated with this case due to concerns about a conflict of interest with counsel. Pl.’s

Response to Show-Cause Order Regarding Consolidation of Cases, ECF No. 26.

In November, moving defendants CivitasDX and CMS requested an extension of time to

respond to the complaint in this matter until after the conclusion of the Early Neutral Evaluation

(“ENE”) in the California action, which was scheduled for January 2025. See Defs.’ Mot. for

Extension of Time, ECF No. 17. The Court initially granted that request, see Min. Order (Oct.

21, 2024), but upon consideration of other defendants’ follow-on requests and Trilogy’s

3 opposition, vacated the extension and instead ordered all defendants to respond to the complaint

on the same schedule in early December, see Min. Order (Nov. 13, 2024).

Moving defendants, CivitasDX and CMS, then filed the pending motion to dismiss or

stay the litigation in light of the California action. Moving Defs.’ Mot. Two other defendants,

SAIC and Halfaker, have moved to dismiss the complaint for failure to state a claim under Rule

12(b)(6), see Defs. SAIC and Halfaker’s Mot. to Dismiss, ECF No. 30, while the remaining two

defendants, Client First and Thomas, have filed answers, Defs. Client First and Thomas’s

Answer to Compl., ECF No. 28. Meanwhile, in the California action, the parties exchanged

early discovery, held the ENE, which did not result in settlement, and CivitasDX and CMS filed

an amended complaint with additional claims. See Defs.’ Mot. for Extension of Time ¶ 3;

California Action, Min. Entry (Jan. 14, 2025), ECF No. 18; id., Amended Complaint, ECF No.

21; Defs.’ Reply in Supp. of Defs.’ Mot. (“Defs.’ Reply”) at 1, ECF No. 39. No dispositive

briefing has yet taken place in the California Action.

II. LEGAL STANDARD

Given the inefficiency of having “parallel litigation of factually related cases in separate

fora,” district courts have discretion to dismiss or stay a pending suit while a parallel suit

proceeds. Handy v. Shaw, Bransford, Veilleux & Roth, 325 F.3d 346, 349 (D.C. Cir. 2003).

“The usual ‘rule in this circuit has been that where two cases between the same parties on the

same cause of action are commenced in two different Federal courts, the one which is

commenced first is to be allowed to proceed to its conclusion first.’” UtahAmerican Energy, Inc.

v. Dep’t of Labor, 685 F.3d 1118, 1124 (D.C. Cir. 2012) (quoting Wash. Metro. Area Transit

Auth. v. Ragonese, 617 F.2d 828, 830 (D.C. Cir. 1980)). “The decisions recognizing the first-in-

time rule note,” however, that “‘equitable considerations’ may weigh against applying it in

4 particular cases.” Id.; see also Handy, 325 F.3d at 350 (“[W]e have emphasized that the district

court must balance equitable considerations rather than using ‘a mechanical rule of thumb.’”

(quoting Columbia Plaza Corp. v. Sec. Nat’l Bank, 525 F.2d 620, 628 (D.C. Cir. 1975))).

Such equitable factors include the convenience and efficiency of proceeding in each

forum, such as whether all parties are present in both cases, the location of witnesses, and the

stage of the respective proceedings. See Columbia Plaza, 525 F.2d at 627-30. The court may

also take into account whether full and complete adjudication of all issues may be achieved

before that court. Cf. Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 495 (1942); see Lewis v.

NFL, 813 F. Supp. 1, 4-5 (D.D.C. 1992). How closely in time the two suits were filed, and

whether the first plaintiff filed a preemptive strike or “an anticipatory suit (usually a declaratory

judgment action) in a preferred forum” to deprive the second plaintiff the forum of their choice,

may also be important factors. Baatz v. Columbia Gas Transmission, LLC, 814 F.3d 785, 792-93

(6th Cir. 2016); Stone & Webster, Inc. v. Ga. Power Co., 965 F. Supp. 2d 56, 61 (D.D.C. 2013).

III. DISCUSSION

The California action was indisputably filed before this action and involves common

parties and factual disputes. Moving Defs.’ Mem. at 5-6; see Pl.’s Opp’n at 3, 7. The parties

dispute, however, whether the equitable factors warrant departure from the first-to-file rule.

Given that several factors weigh heavily against application of the first-to-file rule, this rule is

not applied here, and defendants’ motion is denied.

A. Preemptive Strike

First, the California action was a preemptive strike by defendants. Just days after

receiving Trilogy’s letter indicating Trilogy’s intent to file suit in the District of Columbia, the

moving defendants filed in the Southern District of California claims for declaratory relief

establishing defendants did not misappropriate Trilogy’s trade secrets, tortiously interfere with 5 any contract, or tortiously interfere with any prospective business relationship. See California

Action, Compl. (Aug. 27, 2024); Semko Decl., Exhs. A and B (letter dated Aug. 21, 2024). The

moving defendants clearly intended to beat Trilogy to the courthouse door, filing the inverse suit

of the one anticipated by Trilogy in their preferred forum. In light of this gamesmanship,

“[w]hen the [first-filed] declaratory judgment action has been triggered by a notice letter, this

equitable consideration” weighs in favor of “allowing the later filed action to proceed to

judgment in plaintiff[’s] chosen forum.” Thayer/Patricof Educ. Funding, LLC v. Pryor Res.,

Inc., 196 F. Supp. 2d 21, 30 (D.D.C. 2002) (first alteration in original) (quoting Factors Etc., Inc.

v. Pro Arts, Inc., 579 F.2d 215, 219 (2d Cir. 1978)); see also Int’l Painters & Allied Trades

Indus. Pension Fund v. Painting Co., 569 F. Supp. 2d 113, 115-17 (D.D.C. 2008) (holding that

the “equities” did not “support applying the first-to-file rule” in part because of the defendant’s

preemptive strike, described as “fil[ing] the [declaratory judgment] Ohio action with full

knowledge of the plaintiffs’ intention to file suit, specifically in the United States District Court

for the District of Columbia, if the defendant did not respond within ten days”).

The moving defendants resist this characterization, contending that their filing was not

the kind of improper anticipatory filing that should weigh against application of the first-to-file

rule. Moving Defs.’ Reply at 5-8. According to the moving defendants, their California filing

should not cause concern, first, because they were not forum shopping, pointing to the Southern

District of California as where they are “home” and where the facts giving rise to the dispute

occurred, making that venue proper. Id. at 6. Second, the moving defendants contend that they

are “true” plaintiffs in that action because in addition to the request for declaratory judgments,

which if successful would preclude plaintiff’s claims against them, the moving defendants

requested damages in their original complaint for tortious interference by Trilogy and added

6 claims based on false advertising, unfair competition, and trade libel, among others, in their

amended complaint. See id. at 6-7; California Action, Compl. ¶¶ 76-81; id., Amended

Complaint ¶¶ 64-97, 104-110.

Neither point is persuasive. Defendants’ filing in California, even if motivated by

practical concerns for a more convenient forum rather than perceived tactical advantage, see

Moving Defs.’ Mem. at 8, still represents an effort to preempt plaintiffs’ action to secure its

preferred forum, an effort which the law disfavors. See, e.g., Thayer/Patricof Educ. Funding,

196 F. Supp. 3d at 30. Further, the moving defendants cannot credibly be characterized as “true”

plaintiffs in California. None of their claims is based on a distinct, independent cause of action:

All of their claims were pled under the Declaratory Judgment Act in direct response to Trilogy’s

claims, as outlined in the August demand letter. California Action, Compl. ¶¶ 36-81. The sole

request for damages due to “Trilogy’s tortious interference with [CivitasDX and CMS’s]

prospective business relationship with the VA” in their 2024 bid—the claim that moving

defendants describe as “offensive,” Moving Defs.’ Reply at 6— is, too, based on Trilogy’s

“threats of litigation” and not any separate dispute. Id. ¶¶ 76-81. The addition of new causes of

action after initial discovery to allow the moving defendants to appear like true plaintiffs with

“affirmative” claims, Moving Defs.’ Reply at 6, smacks of gamesmanship. That such claims

were only realized after discovery reinforces that Trilogy is the “true” plaintiff and the moving

defendants’ allegations are better-suited as counterclaims. “The preemptive and declaratory

nature of defendants’ [California] action is a strong factor, [therefore], counseling against rigid

application of the first-filed rule.” Thayer/Patricof Educ. Funding, 196 F. Supp. 2d at 31.

B. Complete Adjudication of All Issues

Second, regarding the ability to fully and fairly adjudicate all related issues, this Court is

better situated than the Southern District of California, so proceeding there would be inefficient. 7 See Int’l Painters, 569 F. Supp. 2d at 117 (noting that all related disputes could be resolved in

the instant court and declining to apply the first-to-file rule). All parties relevant to the disputes

about bidding for the 2021 VA contract (Trilogy, GDIT, CivitasDX, CMS, Halfaker, SAIC,

Thomas, Client First) are before this Court, either in the instant litigation or the related case

against GDIT. By contrast, only moving defendants, CivitasDX and CMS, and Trilogy are

involved in the California action. Although each defendant’s liability is based on its own

actions, as defendants emphasize, see Moving Defs.’ Mem. at 9; Moving Defs.’ Reply at 10-11,

some general facts underlie the dispute against each defendant such that having all claims before

the same court would aid efficiency. For instance, evidence about what information was

conveyed from GDIT to CivitasDX and CMS would clearly be relevant to the liability of GDIT,

CivitasDX, and CMS. That same evidence could also be pertinent to the liability of, or defenses

asserted by, other defendants, like Client First and Thomas. Requiring Trilogy to prove such

facts both in the California Action and before this Court, in litigation against the other

defendants, would be inefficient and burdensome. Moreover, the moving defendants’ claims

against Trilogy in the California Action may be properly brought as counterclaims before this

Court, allowing for all related issues to be resolved here.

C. Other Convenience and Efficiency Considerations

Third, in addition to the presence of all of the parties before this Court, other convenience

and efficiency factors weigh in favor of continuing this action. See Stone & Webster, 965 F.

Supp. 2d at 61 (listing relevant factors, including whether the cases have progressed very far, the

location of witnesses, and the interest in deciding local controversies at home). Most of the

witnesses, parties, and facts have a stronger connection to the D.C. area than to California.

Trilogy is based in Arlington, Virginia, and the other parties, besides CivitasDX and CMS, are

also based in northern Virginia. Compl. ¶¶ 9-11, 13-15; Pl.’s Opp’n, Declaration of Eric McNutt 8 (“McNutt Decl.”) ¶¶ 3, 14. All of the work performed under the 2016 and 2021 contracts

occurred in the D.C. area, McNutt Decl. ¶ 6; the alleged trade secrets were developed here in

working with the VA’s Office of Information Technology (based in D.C.), id.; Compl. ¶¶ 32-36;

the alleged solicitation of employees occurred here, Compl. ¶¶ 49-51; McNutt Decl. ¶ 15; and at

least several of the probable witnesses (Thomas, personnel at Trilogy, Client First, and Halfaker,

and relevant personnel at CivitasDX) are located in the D.C. area, id. ¶¶ 10, 15, 18-19; Compl.

¶¶ 9, 11, 13-15. See Columbia Plaza, 525 F.2d at 628 (noting, in favor of continuing the instant

action, that “[t]he witnesses . . . are in or near the District of Columbia” (emphasis added)).

The moving defendants insist, to the contrary, that the dispute is closely connected to

California because that is where these defendants are located and where the 2021 proposal, at

least from these defendants’ perspective, was prepared. See Defs.’ Mem. at 7-8; Defs.’ Reply at

12-13. Trilogy disagrees, countering that even the relevant CivitasDX employee who worked on

the proposal was located in the D.C. area, not in San Diego. Pl.’s Opp’n at 15-16; McNutt Decl.

¶¶ 18-19. Regardless, given that Trilogy and all of the other defendants are located in the D.C.

area and Trilogy’s central allegations of misconduct involve work performed and contracts

formed in or around the D.C. area, Compl. ¶¶ 35, 37-39, 44, 46, 49, 51, the litigation as a whole

is more linked to this district. Defendants also contend that the harm from Trilogy’s tortious

interference is experienced in California, Defs.’ Reply at 3-4, but that point is neutral at best:

Trilogy’s harm from the tortious interference Trilogy alleges, on the other hand, is experienced

in the D.C. area.

The moving defendants further attempt to draw a meaningful distinction between the

District of Columbia, where none of the parties are located, and Virginia, where all the other

parties are located, to argue that D.C. should not be a favored forum. See Defs.’ Reply at 12

9 (“The fact that [Trilogy] has chosen [the District of Columbia for its] forum is entitled to less

deference than it otherwise would be because [Trilogy] is a non-resident who lacks a substantial

connection to the chosen forum.” (quoting Villa v. Salazar, 933 F. Supp. 2d 50, 57 (D.D.C.

2013))). Considering, however, that Trilogy is located just across the Potomac River in

Arlington, and contracts with government agencies in D.C., Trilogy hardly lacks “substantial

connection” to its chosen forum. The other defendants are also headquartered in very close

proximity to the District. 1 The distinction between northern Virginia and the District itself is

negligible when weighing convenience factors for parties and witnesses, especially when the

other potential forum is in San Diego.

Regarding the relative progress of the suits, neither the California Action nor the cases

before this Court have “progressed very far,” and on balance, the suits before this Court are

further along, which weighs against application of the first-to-file rule. See Federation

Internationale de Football Ass’n v. Nike, Inc., 285 F. Supp.2d 64, 68 (D.D.C. 2003) (citing the

fact that “the two suits were filed closely together in time and neither has progressed very far” as

“militat[ing] against” application of the first-filed rule). Although the California action was filed

about a month before this one, compare California Action, Compl. (Aug. 27, 2024); and Compl.

(Sep. 23, 2024), and proceeded to some early discovery and an ENE with initial settlement

discussions, which defendants argue indicate that the California action is further along, Moving

Defs.’ Reply at 9-10, both cases before this Court have fully briefed potentially dispositive

motions. See Moving Defs.’ Mot.; Defs. SAIC and Halfaker’s Mot. to Dismiss; Trilogy v. GDIT,

24-cv-2772 (BAH), Def.’s Mot. to Compel Arb., ECF No. 12. The main purpose behind the

1 Halfaker, like Trilogy, is located in Arlington, Compl. ¶ 13; GDIT is in Falls Church, Virginia, which borders Arlington, Trilogy v. GDIT, 24-cv-2772 (BAH), Compl. ¶ 12, ECF No. 1; and SAIC is in Reston, Virginia, while Client First and Thomas are in Fairfax, Virginia, which are only slightly further out, Compl. ¶¶ 11, 14-15.

10 first-to-file rule—the ease and efficiency in having the more advanced suit proceed—thus does

not apply here.

Defendants argue that even if some of the equitable factors favor proceeding with the

instant case, the Court does not start the inquiry from a position of neutrality and, instead, there

must be “sound reason[s] that would make it unjust or inefficient to continue the first filed

action,” to overcome the general rule. Intervet Inc. v. Merial Ltd., 535 F. Supp. 2d 112, 115

(D.D.C. 2008) (alteration in original) (quoting Genentech, Inc. v. Eli Lilly & Co., 998 F.2d 931,

937 (Fed. Cir. 1993), abrogated on other grounds by Wilton v. Seven Falls Co., 515 U.S. 277

(1995)); see Moving Defs.’ Mem. at 5; Moving Defs.’ Reply at 8. Assuming that is the proper

standard despite Intervet’s differing posture—that case concerned two parallel cases before the

same court, see id. at 114-15—the factors discussed, supra in Parts III. A, B, and C, constitute

such sound reason. The moving defendants’ gamesmanship in filing a declaratory action,

combined with the ability for this Court to adjudicate all disputes between all of the parties

involved and the other parties’ and the underlying dispute’s connection to the District, make

clear that the interests of fairness to the parties and efficiency for both the parties and the courts

favor proceeding with the litigation here.

IV. ORDER

For the reasons explained, it is hereby—

ORDERED that defendants’ Motion to Dismiss or Stay is DENIED.

Date: February 5, 2025 __________________________ BERYL A. HOWELL United States District Judge