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Montauk U.S.A. LLC v. 148 S. Emerson Assocs.LLC

Action's Transfer Leads to Vacatur of Dismissal in Favor of 'First-Filed' Georgia Suit

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Appeal from the United States District Court for the Eastern District of New York. No. 16-cv-02741 — Sandra J. Feuerstein, Judge.

*1 Plaintiff-Appellant Montauk U.S.A., LLC (“Montauk”) appeals from (i) the district court’s dismissal without prejudice of its Lanham Act claims and motion for preliminary injunction under the “first-filed” rule, and (ii) the district court’s order, pursuant to Fed. R. Civ. P. 41(d), that Montauk pay the costs, including attorneys’ fees, that Defendant-Appellee 148 South Emerson Associates LLC (“Associates”) incurred in responding to a previous action Montauk brought against Associates in Georgia state court that Montauk voluntarily dismissed. Central to Montauk’s appeal is the contention that Associates, a limited liability company, should have been held in default because Associates could not litigate through a partial owner who lacked derivative litigation rights under New York law. Because New York law allows for derivative representation on the facts presented, we conclude at the outset that the district court correctly rejected Montauk’s request to hold Associates in default. We nevertheless vacate the district court’s dismissal of Montauk’s complaint and preliminary injunction motion in favor of a first-filed federal Georgia action because the Georgia suit has been transferred to the Eastern District of New York, so the reasoning behind the first-filed ruling no longer pertains. We affirm the district court’s award of costs under Rule 41(d), including attorneys’ fees, incurred by Associates in the Georgia state action. Consequently, we AFFIRM in part, VACATE in part, and REMAND for further proceedings.

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