Antitrust Law Daily Wrap Up, ANTITRUST—D. Nev.: “First-to-file” rule applied to transfer Dawgs’ claim against Crocs, (Oct 1, 2015)

By Michael Menzhuber, J.D., LL.M.

An antitrust action brought by U.S.A Dawgs, Inc. against Crocs, Inc. was transferred from a federal district court in Nevada to a federal district court in Colorado, where Crocs had filed a patent infringement suit against Dawgs and Dawgs had asserted antitrust counterclaims. The federal district in Las Vegas found that the three factors for the “first-to-file” test were satisfied (U.S.A. Dawgs, Inc. v. Crocs, Inc., September 30, 2015, Boulware, R.).

Background. Dawgs, a Las Vegas-based shoe company, filed antitrust counterclaims in a patent infringement suit brought against it by Crocs, a Colorado-based shoe company, in Colorado. Dawgs subsequently filed an antitrust complaint against Crocs in Nevada. Dawgs’ claims, other than its claim that Crocs violated section 3 of the Clayton Act, mirrored Dawgs’ Colorado counterclaims. Crocs filed a motion to dismiss pursuant to Nev. Rev. Stat. § 41.660 and a motion to dismiss pursuant to FRCP Rule 12(b)(6).

First-to-file rule. The court noted that the “first-to-file” rule in the Ninth Circuit permits a district court to transfer an action when a similar complaint has already been filed in another federal court. In determining whether the “first-to-file” rule should be applied, the court analyzed three factors: (1) the chronology of the lawsuits; (2) the similarity of the parties; and (3) the similarity of the issues. Kohn Law Group, Inc. v. Auto Parts Manufacturing Mississippi, Inc., 787 F.3d 1287 (2015).

Because the Colorado counterclaim had been filed prior to the claim in the present case, and the parties in both actions were the same, the court was left to determine whether there was a similarity of issues. Dawgs characterized the Colorado action as primarily a patent infringement case and the present case as an antitrust case. However, the court determined that there was a “substantial overlap” between the two cases such that they could be considered substantially similar because Dawgs’ claims, other than its claim brought under section 3 of the Clayton Act, mirrored Dawgs’ Colorado counterclaims.

The case number is 24-cv-01461-RFB-PAL.

Attorneys: Donald R. Pepperman (Blecher Collins Pepperman & Joye, PC) and Jordan L. Ludwig (Crowell & Moring LLP) for U.S.A. Dawgs, Inc. Lauren Sachi Miyamoto (Arnold & Porter LLP) for Crocs, Inc.

Companies: U.S.A. Dawgs, Inc.; Crocs, Inc.

Cases: Antitrust NevadaNews