Ocinomled Ltd. v. Five "M" Corp.

Background

Ferdo and Omer Grgurev brought the federal action individually and on behalf of Ocinomled Ltd. and 50/50 Restaurant Corp. The complaint included allegations that Milan Licul and Branko Turcinovic infringed and diluted the “Delmonico’s” trademark and that Milan Licul, Branko Turcinovic, and Dennis Turcinovic misappropriated money allegedly owed to Ocinomled and the plaintiffs. The court later allowed the plaintiffs to add Gina Tucci and Beaver Equities Group, L.P. as necessary parties and to add a claim seeking a declaration about ownership of the mark.

The plaintiffs later filed a New York Supreme Court action seeking equitable dissolution of Ocinomled. They amended that state complaint to include the claims in the federal Second Amended Complaint, but did not add Dennis Turcinovic, Five “M” Corp., 268 SH Restaurant Corp., Delmonico’s Distribution LLC, or 268 SH Realty Corp. as defendants. The state court stayed the overlapping state and federal claims. The federal defendants then moved to dismiss under Federal Rule of Civil Procedure 12(b)(1), arguing that the federal court should abstain under the Colorado River doctrine. Although the plaintiffs initially opposed the motion, they later withdrew their opposition and joined it.

Legal standard

Rule 12(b)(1) permits dismissal when the court lacks subject-matter jurisdiction—the legal authority to decide the case. The court explained that an unopposed motion still must be evaluated rather than automatically granted.

Colorado River abstention is an exception to the federal courts’ general duty to exercise their jurisdiction. Before considering the doctrine’s other factors, the court must determine whether the state and federal proceedings are parallel. Proceedings generally are parallel when they involve substantially the same parties, issues, and requested relief, although perfect identity is not required.

Court’s analysis

The court held that the proceedings were not parallel. Although the state and federal cases shared factual underpinnings and overlapping claims, the state action omitted five of the seven federal defendants identified by the court: Dennis Turcinovic and four corporate defendants. The court noted that the federal case had thirty-six claims pending against those five defendants.

The court stated that the omission of the corporate defendants alone might not have prevented parallelism because Milan Licul and Branko Turcinovic controlled those corporations. But Dennis Turcinovic’s omission was significant: abstaining from the federal case would leave him without any proceeding addressing the relevant issues. Because the state and federal actions were not parallel, the court did not decide whether the other Colorado River factors supported abstention.

Disposition

Judge Gregory H. Woods denied the defendants’ motion to dismiss. The court explained that the parties could instead agree to dismiss the federal case through a stipulation under Federal Rule of Civil Procedure 41, but they had not done so. The court directed the Clerk of Court to terminate the pending motion.