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Daniels v. Painter

United States District Court, E.D. Wisconsin

May 27, 2016

BRETT DANIELS and BRETT DANIELS PRODUCTIONS, INC., Plaintiffs,
v.
SIMON PAINTER, TIMOTHY LAWSON, INTERNATIONAL SPECIAL ATTRACTIONS, LTD., TML ENTERPRISES, PTY, LTD., ASIA LIVE NETWORK, PTE, LTD., and THE WORKS ENTERTAINMENT INC., Defendants.

         ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTIONS TO DISMISS, TO TRANSFER CASE TO CENTRAL DISTRICT OF CALIFORNIA, OR TO STAY ACTION PENDING ARBITRATION (DKT. NOS. 24, 27 AND 41), ORDERING CASE TRANSFERRED TO THE CENTRAL DISTRICT OF CALIFORNIA, AND DENYING AS MOOT MOTION FOR LEAVE TO FILE SUPPLEMENTAL BRIEFS (DKT. NO. 35), MOTION TO FILE A SUR-REPLY MEMORANDUM (DKT. NO. 38), AND MOTION ASKING THE COURT TO CONSIDER CERTAIN DEFENDANTS AS HAVING BEEN SERVED (DKT. NO. 40)

          HON. PAMELA PEPPER United States District Judge

         This case relates to contract disputes arising out of a traveling stage performance, and it is the first-filed of two federal cases involving this dispute and these parties. The plaintiffs in this case filed their complaint in the Eastern District of Wisconsin about one week before the defendants filed their complaint in the Central District of California, where the defendants seek an order compelling the parties to arbitrate their dispute.

         The defendants have filed several motions in the case here in Wisconsin: defendant Painter filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2), or in the alternative to transfer venue pursuant to 28 U.S.C. §1404(a) or to stay further proceedings pending the conclusion of the arbitration proceeding currently pending in Los Angeles, California. Dkt. No. 24. Defendant The Works Entertainment, Inc. filed a similar motion. Dkt. No. 27. After they appeared in the case, defendants Asia Live Network Pte Ltd., Timothy Lawson, and TML Enterprises, Pty, Ltd. filed a similar motion. Dkt. No. 41.

         For the reasons explained in this decision and order, the court grants in part and denies in part the defendants’ motions, and exercises its discretion to transfer this case to the Central District of California pursuant to §1404(a).

         I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

         Plaintiff Brett Daniels was a performer in a traveling stage production known as The Illusionists, a live magic show. Dkt. No. 19, ¶1. Brett Daniels Productions, Inc., is a corporation wholly owned by Mr. Daniels. Id., ¶7. The defendants are individuals and entities wholly owned by those individuals that were associated with the production of The Illusionists. Id., ¶¶22-33.

         On November 9, 2015, the plaintiffs filed their complaint in this court, asserting eleven claims against the defendants, including breach of contract, breach of the covenant of good faith and fair dealing, breach of fiduciary duty, unjust enrichment, conversion, copyright infringement, and misappropriation of trade secrets; the complaint also sought declaratory relief. Dkt. No. 1. The plaintiffs filed an amended complaint on January 8, 2016. Dkt. No. 19. The plaintiffs’ allegations show that all of their claims arise out of or relate to the creation, production, and performance of The Illusionists.

         In 2012, the parties allegedly entered into a series of contracts related to services that the plaintiffs and defendants were to provide in connection with The Illusionists. One set of such contracts, which the plaintiffs refer to as the “Performance Agreements, ” contains an arbitration clause, which provides in relevant part:

In the event of any dispute or controversy arising out of or in any way in connection with the Agreement, such dispute or controversy shall be settled exclusively by arbitration in Los Angeles, California, in accordance with the arbitration rules of the American Arbitration Association or its successors then in effect.

E.g., Dkt. No. 16-1, at 2. At some point after the contracts were executed, a dispute arose which led to the plaintiffs ending their relationship with the defendants, apparently, in July 2013. Dkt. No. 19, ¶65. Now, over two years later, litigation has ensued in two federal districts, and a private arbitration has been initiated.

         The defendants’ motions ask the court to dismiss the amended complaint, or to transfer the case to the Central District of California, or to stay further proceedings pending arbitration. Dkt. Nos. 24, 27 and 41. The plaintiffs filed the case here in the Eastern District of Wisconsin on November 9, 2015. Dkt. No. 1. Four days later, on November 13, 2015, all but one the defendants in this case filed an arbitration demand with the American Arbitration Association in Los Angeles. Dkt. No. 15-1. Three days after that, all but two of the defendants in this case filed their own civil action in the Central District of California, in which they pleaded a single claim for specific performance of the arbitration agreement. After the plaintiffs refused to proceed with the arbitration, the defendants asked the California court for an order compelling arbitration.

         On February 9, 2016, the California court entered an order staying further proceedings in that case in light of the defendants’ pending motions in this court. Painter v. Daniels, No. 15-8913-RSWL, Dkt. No. 29 (C.D. Cal. Feb. 2, 2016) (order staying action pending dismissal or resolution of the Wisconsin action). That court determined that both federal cases involve substantially similar parties and issues so, under the first-to-file rule, it would be prudent to allow this court to decide whether the first-filed case should proceed in this court before the California court took further action. In its order, the California court explained that it “is the proper forum for Plaintiffs to seek an order compelling arbitration in Los Angeles, ” decided not to transfer that case to this court “because Plaintiffs wish to arbitrate in the Central District of California, and the Wisconsin court cannot compel arbitration in Los Angeles, ” and declined to dismiss that case because of the possibility that this court might dismiss this case. Id. at 8, 12 n.8 (citing 9 U.S.C. §4).

         II. DISCUSSION

         There appears to be no dispute that subject matter jurisdiction is proper in this court. The complaint alleges that the parties are completely diverse, and that the amount in controversy exceeds $75, 000. The defendants did not contest these allegations. Instead, the defendants contended that three separate grounds would support this court’s decision not to allow the plaintiffs’ claims to proceed ...


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