Marie Sharp’s Fine Foods, Ltd., a Belize condiment and jam manufacturer, and Eve Sales Corp., a New York-based purchaser of Marie Sharp’s branded products, filed an anticipatory declaratory judgment and breach of contract action against Marie Sharp’s USA, LLC, a North Carolina-based distributor of Marie Sharp’s branded products. Eve Sales Corp. v. Marie Sharp’s, USA, LLC, 2025 WL 606497 (S.D.N.Y. Feb. 24, 2025).
Marie Sharp’s and Eve filed their suit in a federal court in New York. Shortly thereafter, Sharp’s USA sued in federal court in North Carolina, alleging breach of contract, tortious interference, and fraudulent and/or negligent misrepresentation against Marie Sharp’s and Eve. The dispute arose from a breakdown in the parties’ contractual relationships. Eve terminated its agreement with Sharp’s USA, alleging misrepresentations about distribution rights and pricing. Subsequently, Eve began purchasing products directly from Marie Sharp’s, which Sharp’s USA claimed violated its exclusive distribution agreement. After Marie Sharp’s terminated its agreement with Sharp’s USA and offered a non-exclusive deal, Sharp’s USA threatened litigation. Marie Sharp’s and Eve then filed their New York declaratory action. Sharp’s USA moved to dismiss or transfer the New York action to North Carolina.
The court granted the motion to transfer, holding that the first-to-file rule did not apply because Marie Sharp and Eve’s declaratory judgment action was an improper anticipatory filing in response to a direct threat of litigation from Sharp’s USA. The court reasoned that Sharp’s USA, as the “natural plaintiff,” was deprived of the rule’s benefit by Marie Sharp’s and Eve’s choice to “race to the courthouse” after Sharp’s USA stated it was preparing to file suit. Further, the court found the declaratory judgment action contravened the Declaratory Judgment Act’s purpose, as Sharp’s USA had already incurred damages. The court also determined that the convenience of the parties, witnesses, and the locus of operative facts favored transfer. Finally, the court denied Sharp’s USA’s request for attorneys’ fees and costs because of procedural defects.
[View source.]
