United States District Court, E.D. Wisconsin
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)
PAMELA PEPPER United States District Judge
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.
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.
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
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
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.,
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.
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
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.
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.
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).
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 ...