BAKER & HOSTETLER LLP 45 Rockefeller Plaza New York, New ...

10-04285-brl Doc 127 Filed 08/17/12 Entered 08/17/12 14:29:55 Main Document
Pg 129 of 133
D. Luxalpha’s Arguments Relating to the Pending Action in Luxembourg Are
Erroneous
1. The “First Filed” Rule Is Inapplicable in the Context of International
Parallel Proceedings
Arguing that this Court should defer to Luxalpha’s pending action in Luxembourg (as
defined in Section III.C.11., infra., the “Luxembourg Action”), Luxalpha mischaracterizes the
relevant facts and appropriate legal standards. Luxalpha erroneously relies on the “first filed”
rule (see Luxalpha Mot. at 18,) ignoring that this rule applies only when both actions are
proceeding in domestic district courts. See Glaxosmithkline Consumer Healthcare, L.P. v. Merix
Pharm. Corp., No. Civ.A. 05-898, 2005 WL 1116318, at *9 (D.N.J. May 10, 2005) (“The first-
filed rule essentially provides that in all cases of federal concurrent jurisdiction, the court which
first has possession of the subject must decide it. Obvious concerns arise when actions involving
the same parties and similar subject matter are pending in different federal district courts . . . .”
(internal quotations omitted)); Howard v. Klynveld Peat Marwick Goerdeler, 977 F. Supp. 654,
664–65 (S.D.N.Y. 1997) (applying “first-filed” rule to two actions before the same federal
district court); First City Nat’l Bank & Trust Co. v. Simmons, 878 F.2d 76, 79–80 (2d Cir. 1989)
(same).
The Second Circuit applies a separate test with respect to international parallel
proceedings. Royal & Sun Alliance Ins. Co. of Canada v. Century Int’l Arms, Inc., 466 F.3d 88,
92–95 (2d Cir. 2006). As a threshold requirement, the court must first determine whether the
U.S. and foreign proceedings are “parallel,” meaning “the parties in the actions . . . must be
substantially the same, litigating substantially the same issues in both actions.” Id. at 94–95. If
the two actions are parallel, a court may dismiss the domestic action only if “exceptional
circumstances exist that justify the surrender of [the court’s] jurisdiction.” Id. at 93 (“The
exceptional circumstances that would support such a surrender must, of course, raise
109