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Morris Industries, Inc v. Trident Steel Corporation

December 14, 2010

MORRIS INDUSTRIES, INC.,
PLAINTIFF,
v.
TRIDENT STEEL CORPORATION, AT AL., DEFENDANTS.



The opinion of the court was delivered by: Peter G. Sheridan, U.S.D.J.

Not for Publication

OPINION

This is a breach of contract and breach of warranty dispute between Plaintiff Morris Industries, Inc. (Morris) and Defendant Trident Steel Corporation (Trident).*fn1 This action was filed by Morris in New Jersey Superior Court on December 23, 2009, and Trident removed the action to federal court on July 8, 2010 (hereinafter "New Jersey Action"). However, Trident had previously filed suit against Morris for breach of contract and breach of warranties in Texas on September 8, 2009 (hereinafter "Texas Action"). Currently before this Court is Trident's motion to dismiss, or in the alternative, to stay the New Jersey Action.

I. Background

Morris is a New Jersey corporation with its principal place of business in New Jersey. Morris distributes piping and related products. Trident is a Missouri corporation with its principal place of business in Missouri. Trident supplies piping and related products for use in oilfield drilling.

The dispute underlying this matter involves a series of orders, in or around March 2008, that Trident placed with Morris for pipe couplings. Couplings are short length pipes used to connect two joints of oilfield pipe casings. Pursuant to the orders, the couplings were to conform to the American Petroleum Institute's (API's) safety standards and delivery was to be made at the Port of Houston in Harris County, Texas. Morris ordered the pipe couplings for Trident's orders from TIPO, and the couplings were shipped to the Port of Houston. In the course of testing whether the couplings complied with API safety standards, Trident discovered defects in the couplings. Trident revoked acceptance of the allegedly non-conforming couplings and Morris returned payment for those couplings. The parties dispute whether payment for the couplings was made prior to or after Trident's testing of the couplings. Trident claims that the allegedly non-conforming couplings are in Morris's possession in Texas.

On September 8, 2009, Trident filed suit against Morris in the District Court of Harris County, Texas, for breach of contract and breach of express and implied warranties. Pursuant to Texas Rule of Civil Procedure 120a, Morris entered a "Special Appearance" in the Texas Action, objecting to the jurisdiction of the court over Morris. On December 11, 2009, the trial court in the Texas Action denied Morris's Special Appearance, determining that it had personal jurisdiction over Morris. Morris filed an interlocutory appeal to the Texas Court of Appeals for the First Judicial District in Houston, Texas, contesting the trial court's finding of personal jurisdiction.

During the pendency of the appeal, on December 23, 2009, Morris filed an action against Trident in the Law Division of the Superior Court of New Jersey, Morris County. Trident removed the New Jersey Action to this Court on the basis of federal diversity subject matter jurisdiction on July 8, 2010. On July 30, 2010, Trident moved for dismissal, or in the alternative, a stay of the New Jersey Action.

On November 10, 2010, the Texas Court of Appeals for the First District of Texas ruled on Morris's interlocutory appeal in the Texas Action. Morris Indus., Inc. v. Trident Steel Corp., No. 01-09-01094(CV) (Tex. App. Nov. 10, 2010). The Court of Appeals concluded that the trial court erred in finding personal jurisdiction over Morris. However, the Court of Appeals remanded the Texas Action back to the trial court for consideration of whether Trident should be given additional time to conduct jurisdictional discovery.*fn2

II. Parties' Arguments

Trident advances three arguments in support of its motion to dismiss, or in the alternative, to stay this action. First, Trident asserts that under the principles of the "first-filed rule," the New Jersey Action should be dismissed or stayed. Second, Trident argues that the Colorado River abstention doctrine and comity require dismissal or a stay to preserve judicial resources and to prevent duplication of efforts by the judiciary. Finally, Trident maintains that dismissal is warranted based on the doctrine of forum non conveniens.

In response, Morris posits that the New Jersey Action should not be dismissed under the first- to-file rule or the Colorado River doctrine. Morris argues that the New Jersey Action should be stayed pending the determination of whether there is jurisdiction over Morris in the Texas forum. Further, Morris contends that the motion to dismiss on the basis forum non conveniens is premature and should be denied without prejudice to allow for refiling should the stay be lifted upon a determination of whether there is jurisdiction over Morris in the Texas Action.

III. DISCUSSION

A. The ...


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