1818 Farms, LLC v. Plum Island Soap Company, LLC (18-cv-00135, N.D. Alabama).

1818 Farms, after negotiating a settlement in principal on Plum Island’s trade dress and trademark assertions, surreptitiously filed this lawsuit and withdrew form settlement talks. Upon learning of this lawsuit, Plum Island Soap filed its own suit in Massachusetts. The background is discussed in detail here. Plum Island Soap sought to dismiss or stay the Alabama suit or, in the alternative, to transfer the Alabama suit to the District of Massachusetts for consolidation. Judge Kallon determined that transfer was appropriate. While 1818 Farms was the first to file suit, Judge Kallon noted that filing suit in anticipation of another pending proceeding or to improperly forum shop may be sufficient to show the compelling circumstances needed to overcome the presumption in favor of the first-to-file rule, particularly when the suit is a declaratory judgment action brought in the face of clear threats to sue. Here, he found that the parties were engaged in on-going discussions that had reached a mutually agreeable framework for settlement, and that in the middle of these discussions, and without informing Plum Island Soap, 1818 Farms filed the Alabama suit. 1818 Farms then continued negotiating without informing Plum Island Soap about their filing. This was found to be a clear attempt to preempt Plum Island Soap and obtain a jurisdiction desirable to 1818 Farms. Additionally, it was found to be in bad faith, given that 181 Farms continued to mislead Plum Island that settlement was imminent. Finally, Judge Kallon determined that a refusal to transfer would undermine the strong Federal interest in encouraging potential plaintiffs to attempt settlement negotiations rather than racing to the courts.

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