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Bath Iron Works Corp. v. Congoleum Corp.

United States District Court, D. Maine

May 14, 2019

BATH IRON WORKS CORPORATION, Plaintiff,
v.
CONGOLEUM CORPORATION, Defendant.

          ORDER ON MOTION TO DISMISS OR TRANSFER

          George Z. Singal, United States District Judge

         Before the Court is Defendant Congoleum Corporation's Motion to Dismiss or Transfer (ECF No. 11) filed pursuant to Fed.R.Civ.P. 12(b)(6) and 28 U.S.C. § 1404(a). For the reasons explained below, the Court GRANTS the Motion to the extent it seeks transfer and DENIES AS MOOT the portion of the Motion requesting dismissal.

         I. LEGAL STANDARD

         Under 28 U.S.C. § 1404(a), a district court may “[f]or the convenience of parties and witnesses, in the interest of justice . . . transfer any civil action to any other district or division where it might have been brought.” This statute “is intended to place discretion in the district court to adjudicate motions for transfer according to an ‘individualized, case-by-case consideration of convenience and fairness.'” Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988) (quoting Van Dusen v. Barrack, 376 U.S. 612, 622 (1964)). In the exercise of that discretion, courts in the First Circuit consider not only “the convenience of parties and witnesses, ” but also “the availability of documents; the possibility of consolidation; and the order in which the district court obtained jurisdiction.” Coady v. Ashcraft & Gerel, 223 F.3d 1, 11 (1st Cir. 2000) (citing Cianbro Corp. v. Curran-Lavoie, Inc., 814 F.2d 7, 11 (1st Cir. 1987)).

         “The burden of proof rests with the party seeking transfer” and, ordinarily, “there is a strong presumption in favor of the plaintiff's choice of forum.” Id. However, under the First Circuit's “first-filed” rule, “[w]here identical actions are proceeding concurrently in two federal courts, entailing duplicative litigation and a waste of judicial resources, the first filed action is generally preferred in a choice-of-venue decision.” Cianbro Corp., 814 F.2d at 11. “[W]here the overlap between two suits is less than complete, the judgment is made case by case, based on such factors as the extent of overlap, the likelihood of conflict, the comparative advantage and the interest of each forum in resolving the dispute.” TPM Holdings, Inc. v. Intra-Gold Indus., Inc., 91 F.3d 1, 4 (1st Cir. 1996) (internal citation omitted). The first-filed rule exists to reduce “wasted resources because of piecemeal litigation, the possibility of conflicting judgments, and a general concern that the courts may unduly interfere with each other's affairs.” Id.

         II. FACTUAL BACKGROUND

         Plaintiff Bath Iron Works Corporation (“BIW”) is a shipbuilding business incorporated under the laws of Maine with its principal place of business in Bath, Maine. Defendant Congoleum Corporation (“Congoleum”) is a manufacturer and seller of flooring products incorporated under the laws of Delaware with its principal place of business in Mercerville, New Jersey.

         On June 12, 2017, two non-parties to the instant lawsuit, DVL, Inc. and DVL Kearny Holdings, LLC (collectively, “DVL”), sued Congoleum in the District of New Jersey. See DVL, Inc. v. Congoleum Corp., No. 2:17-cv-04261-KM-JBC (D.N.J.) (hereinafter, “the DVL litigation”). There, DVL initially sought damages related to Congoleum or its predecessors' alleged environmental contamination of a property at 160-194 Passaic Avenue in Kearny, New Jersey (the “DVL parcel”), which DVL had come to own. More specifically, DVL alleged that Congoleum or its predecessors owned the DVL parcel from the late 1880s to at least 1959 and, in the course of manufacturing and testing flooring products on that parcel, contaminated it with hazardous chemicals. On October 6, 2017, Congoleum filed a third-party complaint against BIW requesting a declaratory judgment that, due to a series of historical corporate transactions, BIW is the real party-in-interest regarding the alleged contamination of the DVL parcel. On October 26, 2017, DVL amended its complaint to include BIW as a direct defendant.

         On June 30, 2018, another non-party to this suit, Occidental Chemical Corporation (“Oxychem”), sued BIW and numerous other defendants in the District of New Jersey. See Occidental Chemical Corp. v. 21st Century Fox America, Inc., No. 2:18-cv-11273-MCA-JAD (D.N.J.) (hereinafter, “the Occidental litigation”).[1] This suit seeks cost recovery and contribution under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. §§ 9607 & 9613, for the cleanup of the Lower Passaic River (“the River”). As relevant here, Oxychem alleges that from the late 1880s to the mid-1970s, BIW or its predecessor operated a flooring business on a property at 195 Belgrove Drive in Kearny, New Jersey (the “Kearny parcel”), through which it discharged hazardous chemicals into the River. It is undisputed for purposes of this Motion that the DVL parcel was part of the Kearny parcel until about 1959. (See Def. Mot., PageID #s 25-26 n.2; Pl. Resp. (ECF No. 13), PageID # 193.)

         BIW filed the instant suit on October 1, 2018. In its Complaint, BIW alleges that Congoleum signed a Merger Agreement on July 1, 1986, in which Congoleum “took the assets and liabilities related to the resilient flooring operations and agreed to defend, indemnify and hold BIW harmless against any loss or claim arising out of or related to those operations.”[2] (Compl. (ECF No. 1), PageID # 5.) BIW also alleges that it requested defense and indemnification from Congoleum in the Occidental litigation, which Congoleum refused. Based on that refusal, BIW now claims that Congoleum breached the Merger Agreement and a duty of good faith and fair dealing (Counts I and II); and seeks a declaratory judgment that Congoleum is obligated under the Merger Agreement to defend and indemnify BIW in the Occidental litigation.

         On October 8, 2018, just a week after filing the instant action, BIW filed crossclaims against Congoleum based on the Merger Agreement in the DVL litigation. There, as here, BIW alleges that Congoleum refused to defend or indemnify BIW; claims that such refusal breached the Merger Agreement and a duty of good faith and fair dealing; and seeks a judgment declaring that Congoleum is obligated under the Merger Agreement to defend and indemnify it in that matter. (See BIW Ans. (DVL ECF No. 69), PageID #s 1408, 1414-1415, 1423.)

         III. DISCUSSION

         In its Motion to Dismiss or Transfer, Congoleum primarily argues that the First Circuit's first-filed rule necessitates transfer to the District of New Jersey. It also contends, in the alternative, that the relevant § 1404(a) factors heavily favor transfer.

         A. Jurisdiction in the ...


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