Brian Wishneff & Associates LLC v. DelShah Development, Inc., No. 7:2019cv00190 - Document 20 (W.D. Va. 2019)
Court Description: MEMORANDUM OPINION. Signed by Senior Judge Glen E. Conrad on 11/8/2019 . (ck)
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CLERK S OFFICE U. S.DI ST.CG JRT AT ROANOKE,VA FILED Nt/v 22 2g1g IN THE UN ITED STA TES D ISTRICT COU RT FOR THE W ESTEM D ISTRICT O F V IRG W IA ROA N OICE D IV ISION JUL C, UDLEY C ERK BY: Y CLi: 'K BR IA N W ISHN EFF & A SSO CIATES LLC,aVirginia lim ited liability Com panyy CivilActionN o.7:19CV00190 Plaintiff, M EM ORANDUM OPINION DELSHAH DEVELOPM ENT,lN C., aNew York corporation, By:Hon.Glen E.Conrad SerliorUnited StatesDistrictJudge D efendant. Brian W ishneff& AssociatesLLC (ççW ishneff'),a Virginia limited liability company, fled thisaction for breach ofcontractand quantum meruitagainstDelshah Development,Inc. tstDelsha' h''),aNew York corporatioh. Delshahhasmoked to dismissthecomplainton several grounds,including lack ofpersonaljtuisdiction. Forthe following reasons,the m otion willbe denied. Background W ishneff provides tax credit consulting services to real estate developers across the United States. The lim ited liability company m aintains offices in Roanoke and Arlington, Virginia,and each ofits members is a Virginia resident. Delshah isa realestate developm ent cop oration based in N ew Y ork City. M ichaelShah is itspresident. Brian Wishneff & Associates LLC v. DelShah Development, Inc. Doc. 20 In 2015, D elshah and its affiliates were involved in several real estate developm ent projectsin New York City forwhich Delshah wasinterested in obtaining historictax credits. Delshah learned about W islmeff from another entity,Higgins Quasebarth & Partners LLC (tll-liggins Quasebarth''). Delshah initiated contactwith W ishneff,either directly orthrough Dockets.Justia.com HigginsQuasebarth. In Augustof2015,Erik W ishneff(GGErik''),theplaintiffsvicepresident and general cotmsel, met with Shah at Delshah's New York ofdce, where they discussed W ishneffspotentialrole as atax creditconsultant. Atthe end ofthe m eeting,Shah asked Erik to send him a term sheet. O ver the next several w eeks,the parties negotiated a consulting agreem entviatelephoneand email. On Septem ber 30,2015,W ishneff formally entered into the Delshah DevelopmentTax CreditAgreement(the GsAgreemenf')with Delshah Developmentoritsassignee,lpursuantto wllich W ishneff agreed to assistthe developer in obtaining historic tax credits to redevelop certain N ew York properties. The Agreem ent,which wasprepared by W ishneff,describesthe scope ofconsulting work to be performed and the agreed-upon fee arrangement. AtDelshah's request,W ishneff agreed to include a New York choice-of-law clause. See A greem ent8,Dkt. No 11-2 (ç$TheprovisionsofthisAgreementshallbesubjectto and construed and enforced in accordancewiththelawsoftheStateofNew York.'').W ishneffalsoaddedthefollowingwaiver provision in aseparateparagraph: 6. W aiver of Jurv Trial.The parties to this agreem ent hereby waivetrialbyjury andwaiveany objection which theymay have based on lack ofjlzrisdiction or improper venue orforum non conveniens to the conduct of any action instituted heretm der,or arising outoforin cormection with thisagreem ent.... Id.(capitalization omittedl.z TheAgreementidentisesW ishneffasaCçvirginialimited liability com pany located in Roanoke,Virginia,''and requires thatany notices be sentto itsRoanoke officeaddress.Id.at2,9. 1AtthetimeoftheAgreem ent,Delshah wasnotyetincorporated. 2N either the choice-of-law clause nor the w aiver provision specifies where a dispute arising 9om the A greem entm ustbebrought. 2 Although the Agreem entdoesnotdesignate aplaceofperformance,the record indicates that m ost of W islmeffs consulting services w ere performed from its offices in Virginia. According to asworn àfûdavitfrom Erik,S'the Defendantand itsagentsplaced severalhtmdred callsto Plaintiffsphone numbersin Virginiay''dtlring which W ishneffSleducated Defendanton thedetailsofthetax creditprogrnm s,including how to structuretransactions...to maximizetax creditqualitkations.''ErikAE ! 10,Dkt.No.15.Delshah also t'called PlaintiffinVirginiafor advice on m arketing efforts for potential tax credit investors, including legal and snancial structuring,due diligence,and closing callswith prospective investors....'' Id. ln addition to com municating by telephone, ttthe Defendant and its agents sent thousands of e-mails to PlaintiY sselwersin Virginiaconcerninga1laspectsoftheproject.''1d.jg12, .seealso ShahDecl. ! 16,Dk4.No.11-1 (acknowledging that Shah and otherDelshah employees engaged in a ttsubstantialmlmberofcommunications...withErik W ishneff'). By letterfrom counseldated Januazy 22,2019,Delshah notified W ishneffofitsintention toterminatetheAgreement(theSçTermination Letter'l. In theTennination Letter,which was sentby FederalExpressto W ishneffsaddressesin Roanokeand Arlington,Delshah asserted that GiW ishnefffailed to perfonn the duties as required by the agreem entand breached itscontract.'' Termination Ltr.2,Dk4.N o. 11-4. Based on W ishhnefps alleged çifailure of considerationy'' Delshah further asserted thatW islmeffwasnotentitled to bepaid the fees contemplated tmder the Agreement,and thatDçlshah had no %ldesireforW ishneffto continue as a consultantto the projectforfutlzrephases.''1d. 3 One day later,on Janualy 23,2019,Delshah sled a sum mons with notice in New York statecourtagainstw islmefll3 The summ onswith notice described the StNatttreoftheAction''as follow s: The nature ofthisaction isa claim form oney dnmages aswellas declaratory relief relating to a Sd-l-ax Credit Agreem ent'' dated September 30,2015 (çW greemenf),a1lpertaining to realestate transactionsin N ew York Colmty,thatthe defendantbreached the Agreem ent including the failure of consideration, that the Agreem enthasbeen terminated,and thatplaintiffincurred dnmage in the amountofno less than $500,000.00,togetherwith interest, contractualattorneys'fees,costsand disbursem entsoftllisaction. Sum m onsw ith N otice 1,Dkt.N o.11-5. Approxim ately fourweekslater,on February 22,2019,W ishnefffiled the instantaction in thiscourtagainstDelshah.W islmeffclaim sthatitsubstantially performed alloftheservices required under the Agreem ent and that Delshah breached the Agreem ent by failing to pay W islmeff for the services provided, Alternatively, W ishneff m aintains that it is entitled to recoverundera theory of quantum m eruit. On April 25,'2019, Delshah m oved to dism iss the complaint on several grounds, including lack ofpersonaljmisdiction. In supportofthe motion,Delshah submitted Shah's declaration and severalexllibits. Thereafter,the courtscheduled a hearing on the motion and adopted the adjusted biiefng schedule agreed to by the parties. On M ay 22,2019,W ishneff ûled abriefin opposition to the motion to dismiss,along with a sworn affidavitf' rom Erik. The courtheld aheadng on them otion on July 15,2019. 3In N ew York state courts,a plaintiffcomm ences a lawsuitçsby tiling a sum m ons and complaintor a summonswithnotice.''N.Y.C.P.L.R.j304(a).ç: A partymayelecttofileasummonswithnoticeifthepartyisnot prepared to serve the com plaint;in thatcase,the sum m onsm u 'stputthe defendanton notice ofthe tnature ofthe actionandthereliefsought'aswellasSthesum ofmoney'forwhichjudgmentmaybetakenincaseofdefault.''' Lehman XS Trust.Series2006-GP2 v.GreenpointMorta.Fundina,Inc.,916 F.3d 116,119 n.2 (2d Cir.2019) (quotingN.Y.C.P.L. R.j30509). 4 Following the hearing,the defendantsubm itted the complaintsled in New York state courtas a supplem entalexhibit. The exhibitindicates thatthe complaintwas filed on July 16, 2019,nearly seven m onthsafterDelshah filed itssumm onswith notice. D iscussion Inthependingmotion,Delshahprimarilym' guesthatthecomplaintissubjecttodismissal forlack ofpersonaljudsdiction. ln thealternative,Delshah contendsthatthecomplaintshould bedismissedundertheprior-pending-actiondoctrineortheColoradollive/ abstentiondoctrine. Thecourtwilladdresseach argumentin t'tzrn. 1. PersonalJurisdiction Rule 12(b)(2)oftheFederalRulesofCivilProcedme authorizesdismissalforlack of personaljudsdiction. Under this nzle, çça defendant must affinnatively raise a personal jtuisdiction challenge,buttheplaintiffbearsthebtlrden ofdemönstratingpersonaljurisdiction at everystagefollowingsuchchallenge.''Gravsonv.Anderson,816F.3d262,267 (4thCir.2016). El-l-heplaintiff'sburden in establishingjurisdiction variesaccording to thepostureofacaseand the evidence thathasbeen presented to the court.'' Id.at268. Forinstance,çGwhen the parties havenotyethad afairopporttmityto develop and presenttherelevantjudsdictionalevidence,'' plaintiffsneed only make a prima facie showing ofpersonaljudsdiction. Sneha Media & Entm't LLC v.AssociatedBroad.Co.P Ltd.,911F.3d 192,196-97 (4th Cir.2018).However, ççwhen,ashere,the courtdoesnotprecludethepartiesfrom pursuingjurisdictionaldiscovery, and holds a hearing at w hich the parties m ay present relevant evidence and legal argllm ents based on a developed record, plaintiffs willbe held to the burden of establishing personal jlzrisdictionbyapreponderanceoftheevidence.''1d.at197. 4SeeColoradoRiverWaterConservationDist.v.UnitedStates,424U.S.800(1976). 5 A districtcourtcan assertpersonaljurisdiction overanomrsidentdefendantonlyif:(1) thefonlm state'slong-arm statm eauthorizestheexerciseofjurisdiction;and (2)theexerciseof jurisdiction comports with the due process requirements of the Fourteenth Amendment. CarefirstofM d..Inc.y.CarefirstPrecnancy Ctrs..Inc.,334F.3d 390,396 (4th Cir.2003). The United States CourtofAppeals forthe Foul' th Circuithasrecogrlized thatççvirginia'slonpnrm statuteextendspersonaljurisdiction totheextentpennitted by theDueProcessClause:'' Young v.New Haven Advocate,315 F.3d 256,261 (4th Cir.2002). Consequently,GçGthe statutory inquiry necessadly merges with the constitutional inquiry, and the two inquires essentially become one.''' ld.(quoting Stoverv.O'ConnellAssocs..lnc.,84 F.3d 132,135-36 (4th Cir. 1996:. The Due Process Clause requires that a nonresidentdefendanthave GGcertain minimum contactswith Ethefonzm statejsuchthatthemaintenance ofthesuitdoesnotoffend traditional notiohsoffairplay and substantialjustice.'' Int'lShoe Co.v.W ashiriRton,326 U.S.310,316 (1945)(internalquotation marksand citationsomitted). This requirementçGgives a degree of predictability to the legal system that allows potèntial defendants to stnzctlzre their primary conductwith some minimum assurance as to where thatconductwilland willnotrenderthem J '' W ld liabletosul t. or W ideVolkswacenCorp.v.W oodson,444U.S.286,297 (1980). - Depending on the nature of a defendant's contacts with the forum state,a courtmay exercise general or specits. c jtuisdiction. Geheraljurisdiction exists when a defendant's affiliationswith aforum stateare(iso tcontinuousandsystematic'asto render(itjessentially at hom e in the forum State.'' Goodyear D tm lop Tires Operations. S.A .v.Brow n,564 U .S.915, 919 (2011). KW courtwith generaljuiisdiction may hearany claim againstthatdefendant,even % . ifallthe incidentsunderlying the claim occurred in a differentState.'' Bristol-M yers Squibb Co. 6 v.SuperiorCourt,137 S.Ct.1773,1780 (2017). Specificjudsdiction,on the otherhand,is dependentdion the relationship nmong the defendant,the forum ,and the litigation.'' W alden v. Fiore,571U.S.277,283-84 (2014)(internalquotationmarksandcitation omitted).Inorderfor theexerciseofspecificjurisdiction to comportwith dueprocess,çççthesuit'mustçarisgeqoutof orrelatgejto the defendant'scontactswith the forum.''' Bristol-M yers Squibb,137 S.Ct.at 1780 (emphasisin original)(quoting DaimlerAG v.Bauman,571 U.S.117,127 (2014)). $$ln other words,there mustbe an affiliation between the forum and the underlying controversy, principally,activity oran occurrencethattakesplaceinthefonzm Stateand isthereforesubject to the State's regulation.'' ld.(alteration in originalomitted) (internalquotation marks and citation omitted). Consistentwiththeparties'briefs,thecourtwillfocusitsanalysisonwhether W ishneffhasdemonstrated thatDelshah'scontactswith Virgirlia are sufficientto conferspecific J'tlrisdiction.s SToracoul'tto havespecifcpersonaljurisdiction overadefendant,the defendantmust have Gpurposefully established minimllm contacts in the forum State' such tthat (it) should reasonably anticipatebeing haled into courtthere.''' Perdue FoodsLLC v.BlkF S.A .,814 F.3d 185,189 (2016)(quoting BtuxerKing Com .v.Rudzewicz,471U.S.462,474 (1985)). The Fourth Circuit tçhas synthesized the due process requirements for asserting specisc personal jtlrisdiction in athreeparttest.''ConsultincEng'rsCorn.v.GeometricLtd.,561F.3d273,278 (4th Cir.2009). Underthistest,the courtconsiders:ç1(1)the extentto which the defendant pumosefullyavaileditselfoftheprivilegeofconductingactivitiesinthefortzm state;(2)whether the plaintiff's claims arise outofthose activities;and (3) whether the exercise ofpersonal jtlrisdiction isconstitutionally reasonable.'' Tire Eng'g & Distrib.pLLC v.Shandong Linglong 5 W islmeffacknowledgesin itsbriefin opposition tothedefendant'smotion thatSçthefocushereshouldbe onspecificjtlrisdiction.''P1.'sBr.Opp'n4,Dkt.No.15. Rubber Co.,682 F.3d 292,30 4th Cir.2012). $$The plaintiffmustprevailon each prong.'' ,2 ( PerdueFoods,814 F.3d at189. A. PurposefulAvailm ent The firstprong,purposefulavailment,Eçarticulates the m irlim um contactsrequirementof constitutional due process that the defendant pup oseftzlly avail himself of the privilege of conducting businesstm derthe laws ofthe fortzm state.'' Consultin: Eng'rs Cop .,561 F.3d at 278. Gi' W hile this requirem ent is not susceptible of m echanical application, courts have considered variousnonexclusive factorsin seeking to resolve whether a defendanthasengaged in such puposefulavailment.'' JJ-, In the businesscontext,these factorsinclude,butare not limitedto,thefollowing: (1)whetherthedefendantmaintainedofficesoragentsintheState; (2) whether the defendantmaintained property in the State;(3) whetherthe defendantreached into the State to solicitor initiate business; (4) whether the defendant deliberately engaged in significantorlong-term businessactivitiesintheState;(5)whether achoiceof1aw clauseselectsthe1aw oftheState;(6)whetherthe defendant m ade in-person contact w ith a resident of the State regarding the business relationship; (7) whether the relevant contractsrequired performanceofdutiesin the State;and (8)the nature,quality,and extent of the parties' comm unications about thebusinessbeing transacted. SnehaMedia& Entm't,911F.3dat198-99(citing ConsultingEna'rsCorp.,561F.3dat278). Although the foregoing factorsare helpfulin evaluating the purposeful-availm entprong of the due process test,the assessm entCtdoes not end with a m ere survey of the box score.'' Liberty M ut.Fire lns.Co.v.M enozziLuiai& C.S.p.A.,92 F.Supp.3d 435,441 (E.D.Va. 2015). In otherwords,ç1a courtdoesnotdetermine purposef'ulavailmentsimply based upon which party hasm ore factorsin itsfavor orthe quantity ofdefendant's contacts.'' Id.;see also Carefirst,334F.3d at397 (explaining thatcourtsGçshouldnotmerely ...cotmtthecontactsand 8 quantitatively compare (a) case to Other preceding cases'). Instead, the court's analysis çtproceeds on a case-by-casebasis,''taking into consideration the tdqualitative natare of each of the defendant's corm ectionsto the forum state.'' Tire Eng'g,682 F.3d at302. çslllthatvein,a single actby a defendant can be suffcientto satisfy the necessary quality and nattlre of such m inim al acts,although casual or isolated contacts are insufscientto trigger all obligation to litigate in the forum .'' Id.;see also CFA Inst.v.Inst.ofChartered Fin.Analvstsof lndia,551 F.3d 285,293 (4th Cir.2009) (ççour precedentrecognizes that a districtcourt's exercise of personaljtlrisdiction overaparticulardefendantmay restupon limited contactswith theforum state,solongasdueprocessisnotoffended.'). Afterconsidering the evidence adduced in the instantcase,the courtfindsthatW ishneff hasmetitsburden ofproving thatDelshah purposely availed itselfoftheprivilege ofconducting activitiesin the Com monwea1th ofVirginia. Firstand forem ost,the evidence establishesthatit wasDelshah who initiated contactw ith W islmeffin Virginia,eitherdirectly orthrough Higgins Quasebarth.Underexistingprecedent,thisfactorisentitledto lispecialweight.'' SeeCFA Inst., 551 F.3d at 295 & n.17;see also Pan-Am erican Prods.& Holdincs.LLC v.R.T.G.Fllrnittzre Com .,825F.Supp.2d664,682(M .D. N .C.2011)(Gç(T)heFourthCircuithasgiven greatweight to thequestion ofwho initiated thecontactbetween theparties.'')(internalquotation marksand citationsomitted). Second,theevidence establishesthatafteran initialmeeting in New York, the parties negotiated the Agreem ent at issue in this case through comm unications between DelshahinNew York andW islmeffinVirginia.SeeShahDecl.!9(;t1requestedErik W islmeff tosendmeaterm sheet.'');Erik Aff ! 11(ç1(TjheAgreementwasnegotiatedthroughphonecalls and e-mailsbetween Defendantin New York and Plaintiffin Virginia.'). Third,the record retlectsthatW ishneffperfonned m any ofitsconsulting obligationsf' rom itsofficesin Virginia. Although the A greem entdid not specify a place ofperform ance,the courtfinds thatDelshah ççshould have expected''thatatleastsom e of W islmeffs consulting work would be performed here.Remickv.M anfredy,238F.3d248,256(3dCir.2001);seealsoPan-AmericanProds.,825 F.Supp.2d at683(GGglqnowledgethataplaintiffwillperform work in a foram may satisfy the purposefulavailmentrequirementincombinationwithotherfactors.'')(citingEnglish& Smithv. M etzcer,901F.2d36,39-40(4th Cir.1990)).*TheAgreementspeciscally identifedW islmeff asaSdvirginia lim ited liability company located in Roanoke,''and thescopeofwork described in the Agreem entinclùded tasks thatcould be perfonned from W ishneffs Virginia offkes. See. e.:.,Agreement4 (requiring W ishneffto çtdraftavariety ofdocllments''and lçreview theinitial drafts''of a cost certification audit;id.at 5 (requiring W ishneffto GGprepare informational packets''andStreview draftdocuments'').Finally,duringthecourseoftheirmorethanthree-year contractual relationship,the parties frequently ççexchanged . . .telephone calls and written com munications''on m attersrelated to the Agreement. English & Smith,901F.2d at39. Such com munications included a substantialnum berofcallsplaced to W ishneffs phone numbers in Virginia,aswellasthe Term ination LetterofJanuary 22,2019,which wasm ailed to W ishneff's . offcesin Roanokeand Arlington. Based on the foregoing contacts, the court is convinced that Delshah should have çireasonably anticipateld) being haled into court in (Virginial'' on claims related to the Agreement. TireEnc':,682 F.3dat305 (plterationsin original)(intemalquotation marksand citation omitted). In reaching thisdecision,thecourtrecognizesthatDelshah did notmaintain offices,agents,or property in Virginia;that Delshah did notconductin-person meetings with W ishneff or anyone else in Virginia;and that the parties agreed that New York 1aw would 10 govern any contractua1disputes.b W hile such factors are relevantto the purposeful-availment analysis,thecourtdoesnotbelievethattheyprecludetheexerciseofpersonaljurisdiction inthe instantcase. Courtshaverecognized thata choice-of-law clause tGisnotdispositive ofthe issue ofspecificpersonaljurisdiction.'' Pervasive Software.lnc.v.LexwareGMBH & Co.KG,688 F.3d 214,223(5th Cir.2012).Neitherisadefendant'sçElack ofphysicalpresence.'' Enclish & Smith,901F.2d at39. Indeed,dçtheSupremeCourthasmadeitclearthat...jlzrisdiction ... maynotbeavoidedmerelybecausethedefendantdidnotphysically entertheforum State.'''Ld-a (emphasisinoriginal)(quotingBurgerKinc,471U.S.at476);seealso W alden,571U.S.at285 (noting thatçlphysicalpresence in the fonzm isnotaprerequisitetojurisdiction,''butSGphysical entry into the State- eitherby thedefendantin person orthrough an agent,goods,mail,orsom e othermeans- iscertainly arelevantcontacf'). In sum ,viewing allof Delshah'srelevantcontacts as a whole,the courtconcludes that W islmeffhasmetitsbtlrden ofestablishing thatDelshah pup osely availed itselfofthe privilege of conducting activities in the fonlm state. D elshah's contacts w ith Virginia w ere not so Glrandom,fortuitous,orattenuated''thatitwould offend dueprocessto subjectDelshah to suit here.BurcerKing,471U.S.at475(intelmalquotationmmksomitted). B. R elatedness The second prong ofthetestforspecificjurisdiction focuseson whetherthe plaintiffs claim s çlarise outofthe activities directed atthe forum .'' Consulting Eng'rs Co1' n.,561 F.3d at 278. ti-l-he analysis here is generally not com plicated.'' Tire En:':, 682 F.3d at 303. A 6Asnotedabove,theprovision oftheAgreementspecifyingthatitCtshallbesubjecttoandconstruedand enforced in accordance with the lawsofthe State ofNew York''isa choice-of-law clause,ratherthan a forumselection provision. Neither thatclause nor the subsequentwaiver provision designates a particular forum for disputesarising 9om theAgreement. See,e.c.,G&G LLC v.White,535 F.Supp.2d452,461(D.Del.2009) (RgTlhemergeragreementdoèsnotcontain aforum selection clause;instead,itholdsa choice oflaw provision. Specifically,paragraph4.7 ofthemergeragreementprovides:çGoverningLaw.ThisAgreementshallinal1respects beconstrued,interpretedandenforcedinaccordancewithandgovernedbythelawsoftheStateofDelaware....'') (citationsomitted). plaintiffs claims have been fotmd to arise from activities directed atthe forum where:(1) Sçactivity in theforum stateisGthegenesisofgthe)dispute''';or(2)ççsubstantialcon-espondence and collaboration between the parties, one of which is based in the forum state, forms an importantpartoftheclaimlsl.''Ld= (quotingCFA lnst.,551F.3dat295). Here,W ishneffscausesofaction forbreach ofcontractand quantum m eruitclearly arise f' rom Delshah's forum -related activities. W ishneffclaim sthatDelshah breached theAgreement that'wasform ed afterDelshah initiated contactwith theVirginia limited liability company,that Delshah improperly attempted to tenninate the Agreem ent by sending a letter to W ishnec s Virginiaoffices,and thatW ishneffisentitledto compensation forservicesperformed in Virginia on Delshah'sbehalf.Based on theevidencepresented,thesecondprong isclearly satisfied here. R easonableness The finalprong of the three-pal't inquiry requires the courtto detennine whether the exercise ofpersonaljurisdiction would beconstimtionally reasonable. Thisprong Gtprotects a partyfrom litigation so gravely difficultandinconvenientthat(thejparty unfairly isatasevere disadvantage in comparison to (itsqopponent.'' ESAB Grp..Inc.v.Zurich Ins.PLC,685 F.3d 376,392 (4th Cir.2012)(alterationsin original)(internalquotation marks omitted). Factors relevantto thisinquiry include:t$(1)theburden on thedefendantoflitigating in thefonzm;(2) theinterestoftheforum statein adjudicatingthedispute;(3)theplaintiffsinterestinobtaining convenient and effective relief;(4) the shared interest of the states in obtaining efficient resolutionofdisputes;and(5)theinterestsofthestatesin furtheringsubstantivesocialpolicies.'' ConsultingEnR'rsCorp.,561F.3d at279. After considering a1l of the relevant factors, the court concludes that the 'exercise of jurisdiction would comportwith ççfairplay and substantialjustice.'' BurcerKinc,471 U.S.at 486 (internalquotation marksomitted). AlthoughVirginiamay belessconvenientforDelshah than a N ew York forum ,the courthas no reason to believe thatthe burden of litigating here is Glso greatasto makeunfaironthatbasisalonetheexerciseofjurisdiction.''FirstAm.FirsteInc. v.Nat'lAssoc.ofBank W omen,802 F.2d 1511,1517 (4th Cir.1986);see also W orld-W ide Volkswagen, 444 U.S. at 294 (recognizing over thirty years ago that çGprogress in comm unications and transportation hasm ade the defense ofa lawsuitin a foreign tribtmalless burdensome');CFA Inst.,551F.3d at296(acknowledgingthatthedefendant'slocationinIndia çtm ay presentunique challenges''butnonethelessdetermining thatitsability to secure counselin the forum state and itschoice to do businesswith a forum residentindicated thatdefending the suitwould notbeparticularlyburdensome). W hen theburden upon Delshah isweighed against theotherfactorssetforth above,itcnnnotbesaidthattheexerciseofpersonaljudsdictionwould be constitutionally unreasonable.The Fourth Circuithasrecognized thatççvirginia hasa strong interestin tproviding effectivem eansofredressforitsresidents,'''including a ççprincipally local businessoperation.'' FirstAm.First Inc.,802 F.2d at1517 (quoting M cGee v.lnt'lLifeIns. Co.,355U.S.220,223(1957)).M oreover,W ishneffhasanGsobviousinterestinlitigatingin(itsj hom e state.'' Id. Finally,federalcourts regularly apply state 1aw in diversity cases,and this courtwillhaveno difficulty applyingNew York 1aw asappropriate. ln sllm ,after weighing a11of the relevantfactors,the courtis convinced thatthe exercise ofpersonaljurisdiction overDelshahwouldbeconstitutionally reasonable.Thisissimply nota case in w hich the interests ofthe plaintiffand V irginia are so attenuated thatthey are outw eighed by the burden ofsubjecting the defendantto litigation within the Commonwea1th. The cotu't 13 therefore concludesthatitmay properly exercise specificjurisdiction over Delshah,and that Delshah'smotiontodismissforlackofpersonaljurisdictionmustbedenied.; Il. Prior-pendinz-A ction D octrine Delshah nextarguesthatdism issalis warranted underthe prior-pending-action doctrine, since itfiled suitfirstin N ew York state cotlrt. Even assum ing thatthe doctdne applieswhen similazactionsarepending in stateandfederalcourt,the courtconcludesthatthedoctrineshould notbarthe proceedingshere.B The prior-pending-action doctrine Siprovides generally that çwhere there are two competing lawsuits, the first suit should have priority, absent the showing of balance of convenience ...or ...specialcircum stancesgiving priority to the second.''' Gibbs& Hill.Inc. v.HarbertInt'lelnc.,745F.Supp.993,996(N.D.N.Y.1990)(quotingFirstCityNat'lBnnkand TrustCo.v.Simmons,878 F.2d 76,79 (2d Cir.1989)). Courts have emphasized thatthe doctrine is çstnot to be applied in a m echanical w ay,regardless of other considerations.''' ld. (quoting Brierwood Shoe Com .v.SearssRoebuck & Co.,479 F.Supp.563,568 (S.D.N.Y. 1979:. Gdconsiderationsthathave been fotmd to renderthe rule inap/licable include those situations in which priority of fling w as gained by winning a Erace to the courthouse,' as is frequentlythecasewhen thefirst-filed suitisadeclaratoryjudgmentaction ûledin anticipation 7HavingconcludedthatthecourtmayproperlyexercisespeciticjurisdictionoverDelshah,thecourtneed notaddresswhetherDelshahwaivedanyobjectiontopersonaljurisdiction. 8In supportofthe pending motion,Delshah cites cases 9om the DistrictofM assachusetts in which the prior-pending-action rule wasapplied where a state courtaction wasfiled first. SeeOutab v.Kvani.Inc.,324 F. Supp.3d243 (D.Mass.2018);Oualitv OneW ireless.LLC v.GoldieGp..LLC,37 F.Supp.3d 536 (D.Mass. 2014). However,severalcourtshaveheldthatçsthepriorpending action doctrineappliesonly wheretherelevant actions are b0th proceed.ing in federalcourts.'' W illiams v.Bavview Loan Servichm,LLC,No.1:14-cv-07427, 2016U.S.Dist.LEXIS 7760,at*6(E.D.N.Y.Jan.22,2016)(citationsomitted);seealsoNat'lCouncilon Comp. Ins..Inc.v.Caro& Graifman.P.C.,259F.Supp.2d 172,177-78(D.Conn.2003)(d$ET1hedefendantsarguethatthis action should be dism issed due to the presence ofapriorpending action in the New York Suprem e Court. The defendants'argum entignoresthewell-establishedfederalrulethatthe Spendencyofanaction in statecourtisnobar to proceedingsconcerning thesamematterin theFederalcourthavingjurisdiction.''')(quoting Colorado River WaterConservationDist.v.UnitedStates,424U.S.800,817(1976)). ofthelater-filed action.'' Id.(citationsomitted);seealso Samsung Elecs.Co.v.RnmbusInc., 386 F.Supp.2d 708,724 (E.D.Va.2005)(noting thatGlthe frst-to-file nlle losesmuch ofits force''if Stthe circumstances suggesta race to the courthouse''). Couz' ts also tonsider the chronology ofthe filingsand how fareach casehasprogressed. Harrisv.M cDonnell,N o.5:13- cv-00077,2013U.S.Dist.LEXIS 150330,at*12-13(W .D.Va.Oct.18,2013). Having considered therelevantfactors,thecourtdeclinesto dism issthiscaseptlrsuantto the prior-pending-action doctrine. First,the cirolmstances gtlrrotmding the sling of the state courtaction ére suggestive ofaraceto the courthouse. Delshah comm enced theaction by filing asum monswith notice onJanuary 23,2019,oneday afterDelshah notified W isbneffofitsintent to tenninate the A greem ent. Second,the chronology ofthe parties'filings weighs againstthe application ofthe doctrine. ççcourtswithin the Fourth Circuithave held thatarigid application ofthe first-to-file rule isunwarranted when thesecond action wasfiled only weeksafterthe first adion.'' Harris,2013 U.S.Dist.LEXIS 150330,at* 12.Thatisprecisely whathappened here. Finally,theN ew York action hasnotadvanced any f' urtherthan the instantaction. Instead,the record indicatesthatcomplaintwasnotfiled untilJuly 16,2019,nearly seven m onths afterthe complaint was filed in the instantaction. For a11 of these reasons,the courtconcludes that dism issalisnotwarranted undertheprior-pending-action doctrine. 111. A bstention Finally,Delshah arguesthatthecomplaintshouldbedism issed underthe Colorado Itiver abstention doctrine. Once again,the courtisunpersuaded. Glln Colorado River,the Suprem e Court held that a federal cotu't may qbstain from deciding non-frivolousnondeclaratory claimsin favorofaparallelstatesuitforreasonsofçwise judicialadmirlistration' butonly in çexceptionalcircumstances.'' vonRosenbergv.Lawrence, 781F.3d 731,734 (4th Cir.2015)(quoting Colorado River,424 U.S.at818). In reaclling its decision,the Court emphasized that a pending action in state court is generally EEno bar to proceedings conceming the same mnnner in the Federalcourthaving jurisdiction,''and that federalcourts have a Glvirtually untlagging obligation ...to exercise the jurisdiction given them .'' Colorado River,424 U .S.at817. In lightofthis obligation,the Courtexplained thatççthe circumstancespermittingthe dismissalofafederalsuitdueto thepresenceofa concurrentstate proceeding forreasons ofwisejudicialadministration are considerably more limited than the circllmstances appropriate for abstention''underotherdoctrines. Id. Thus,the Colorado River abstention doctrinemustbe Sçapplied parsim oniously,''and courtsmustçtrem ain mindfulthatthis form of abstention is an extraordinary and narrow exception to the duty of a districtcourtto adjudicateacontroversyproperlybeforeit.''ChaseBrextonHealthSelws..Inc.v.M aryland,411 F.3d457,463(4thCir.2005). In deciding whether to abstain tmder Colorado River,the courtmust balance several factors,çtwith the balanceheavily weighted in favorofthe exercise of(federaljjtlrisdiction.'' M osesH.Cone M em 'lHosp.,460 U .S.at16. çW lthough the prescribed analysisisnota Ghardand-fast'one in wllich application ofa çchecklist'dictates the outcom e,six factors have been identified to guide the analysis.'' Ctzase Brexton,411 F.3d at463 (citations omitted). Those factorsareasfollosvs: (1)whetherthe subjectmatterofthe litigation involvesproperty where the first court may assume Lq rem jtlrisdiction to.the exclusion of others; (2) whether the federal fortzm is an inconvenient one; (3) the desirability of avoiding piecemeal litigation; (4) the relevant order in which the courts obtained jtlrisdiction and theprogress achieved in each action (5)whether state law orfederallaw provides the nzle ofdecision on the m erits; and (6)theadequacyofthe stateproceedingtoprotecttheparties' rights. 16 Id.at463-64. Ultimately,however,t'abstention should be the exception,notthe l'ule,''and G&a distdctcourtmustremain mindfulthat...çabdication ofthe obligation to decide casescan be justified undergabstentionqonly in theexceptionalcircumstanceswheretheordertotheparties to repair to the State'court would clearly serve an important countervailing interest.''' Id. (quotingColoradoRiver,424U.S.at813). W ith respectto thefrstfactoridentified in ChaseBrexton,thepartiesagreethatno resor propertyisinvolvedoverwhichtheNew York courthasassertedjurisdiction.Accordingly,this factorweighsagainstabstention.GnnnettCo.v.ClarkConstr.Gp.plnc.,286F.3d 737,747(4th Cir.2002). The courtsndsthatthe second factor,whetherthe federalforum isan inconvenientone, is neutral. Although Delshah and its witnesses reside in New York, and its documentary evidence is located there,the snm e reasons make the N ew York forum less convenient for W ishneffand itswitnessesin Virginia. Delshah argues that the third factor,the desirability of avoiding piecem eal litigation, clearly weighs in favor of abstention. However,the courtdisagrees. In Colorado River,the SupremeCourtmadeclearthattheçtmerepotentialforconflictintheresultsoftheadjudications, doesnot,withoutmore,warrantstaying (the)exerciseoffederaljtlrisdiction.''426U.S.at816. Likewise,the Fourth Circuithas recogrlized that ççthere is nothing in the nature ofbreach of contract actions that renders the fact of duplicative proceedings exceptionally problem atic.'' Garm ett Co.,286 F.3d at 746. Consequently,the courtis tm able to find thatthe third factor weighsin favorofabstention. SeeLd.. a(holdingthatçGthe districtcourtabused itsdiscretion by determiningthatthepossibility ofpiecemeallitigation weighsin favorofabstention''l;seealso M idAtlanticInt'l.Inc.v.AGC FlatGlassN.Am..lnc.,497F.App'x 279,283 (4th Cir.2012) 17 (holdingthatthepotentialçlresiudicataproblems''citedbythedisthctcourtwereSçnotthethreat with which Colorado Riverwas concerned,''and thatthe districtcourttherefore çsen' ed when it detenninedthatgthethird)factorweighedinfavorofabstention''). ThecourtmustalsorejectDelshah'sargumentthatthefotlrth factor,theorderin which the courtsobtainedjlzrisdiction,favorsabstention. The SupremeCourthas explained thatthis factorisnotçsm easured exclusivelyby which complaintwasfiled first,butratherin termsofhow much progresshasbeen m adein thqtwo actions.''M osesH.Cone,460 U.S.at21.Asdiscussed above,the litigation in N ew York state courtis notany further along than the instant action. Accordingly,the fourth factordoesnotcounselin favorofabstention. M idAtlantic lnt'l,497 F. App'x at283. Finally,the courtisofthe opinion thatthe fifth factor,whetherstate law orfederallaw providesthe nzle ofdecision on the m erits,and the sixth factor,assessing the adequacy ofthe state proceeding to protectthe pm ies'rights,do notweigh in favor of abstention. ççg-lqhe Suprem e Court has m ade clear that the presence of state 1aw and the adequacy of state proceedings can be used only in çrare circumstances'to justify Colorado Riverabstention.'' GnnnettCo.,286 F.3d at746 (citing M osesH.Cone,460 U.S.at26).Such circumstancesare notpresenthere. The mere factthatNew York state 1aw isimplicated in tllis action doesnot weighinfavorofabstention.Id.i&lljn adiversity case,such asthisone,federalcourtsregularly grapple with questions of state law,and abstention on the basis ofthe presence of state law, withoutmore,wouldunderminediversityjurisdiction.''1d.M oreover,thisisnotacaseinwhich %tretention ofJ'urisdiction would create needless friction with important state policies.'' Jds (internalquotationmarksandcitationomitted). 18 In sumono factororcombinationoffactorsin thiscaseovercomestheççheavily weighted'' balance in favor ofretaining jurisdiction. M oses H.Cone,460 U.S.at 15. Accordingly, dismissalisnotwarrantedtmdertheColoradoRiverabstçntion doctrine. Conclusicn Forthereasonssetforth abcve,Delshah'sm otiontodismisswillbedenied.TheClerk is directed to send copiesofthismemorandllm opinion and the accompr ying orderto al1collnqel ofrecord. DATED:ThisC dayofNovember,2019. SeniorUnited StatesDistrictJudge 19
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