HBC US Propco Holdings, LLC v. Federal Realty Investment Trust, No. 558, Sept. Term
2022. Opinion by Arthur, J.
CIVIL PROCEDURE—MOTION TO DISMISS—SECTION 6-104(a) OF THE
COURTS AND JUDICIAL PROCEEDINGS ARTICLE
Section 6-104(a) of the Courts and Judicial Proceedings Article of the Maryland Code
(1974, 2020 Repl. Vol.) permits a circuit court to dismiss an action if, “in the interests of
substantial justice,” the action “should be heard in another forum.” In essence, section 6-
104(a) permits a Maryland court to dismiss an action if another State is another more
convenient forum than Maryland. Under section 6-104(a), a court, in its analysis, must
balance the “public factors of systemic integrity” in addition to “private concerns.” The
public factors include the fairness of imposing jury duty on a community with little or no
relationship to the controversy, the interest in having local controversies decided locally,
and the appropriateness of having a trial in the forum that is familiar with the governing
law. The private concerns involve the convenience of the parties and witnesses.
CIVIL PROCEDURE—MOTION TO DISMISS—PARALLEL LITIGATION
In this case, appellant filed its complaint in the Circuit Court for Montgomery County,
Maryland, minutes before appellee filed its complaint in the Court of Common Pleas in
Montgomery County, Pennsylvania. The two cases arose from the same transactions,
involved identical legal issues, and were mirror images of each other. The circuit court
determined that there was parallel litigation in Pennsylvania and Maryland and dismissed
the appellant’s complaint in favor of the Pennsylvania litigation.
The Appellate Court of Maryland held that the circuit court did not abuse its discretion in
dismissing appellant’s complaint, based in part on its determination that the dispute
should go forward in only one jurisdiction: Pennsylvania. The litigation concerned a
guaranty on the lease of a retail property that was located in Pennsylvania; the lease was
governed by Pennsylvania law; it was apparent from the appellant’s complaint that many
of the witnesses would probably be residents of Pennsylvania; and the appellant sought
an injunction to prohibit the redevelopment of the property in Pennsylvania. The public
and private costs of duplicative litigation, as well as the possibility of conflicting rulings
and conflicting judgments if the case proceeded on two separate tracks in two different
states, required the court to make a reasonable determination about which jurisdiction
was the most appropriate forum. The circuit court reasonably concluded that the case
should proceed in Pennsylvania even though the appellee is a Maryland real estate
investment trust, which would not be inconvenienced if it were required to defend itself
in Maryland.
CIVIL PROCEDURE—FIRST-TO-FILE RULE—ANTICIPATORY FILING
Where identical actions are pending concurrently in two courts, the first-to-file rule
generally provides that the suit that was filed first should have priority. The policy
underlying the first-to-file rule is the avoidance of duplicative litigation and conservation
of judicial resources. Exceptions to the first-to-file rule are common where justice or
expediency requires. The exceptions include bad faith filing, anticipatory filing, and
forum shopping.
An anticipatory filing is improper when it attempts to exploit the first-to-file rule by
securing a venue that differs from the one that the filer’s adversary would be expected to
choose. An improper anticipatory filing is one made under the apparent threat of a
presumed adversary filing the mirror image of that suit in a different court.
In this case, appellant had actual knowledge of appellee’s intention to file suit, had reason
to suspect that appellee would probably file suit in Pennsylvania, and in response, filed a
preemptive declaratory judgment action in Maryland, a forum that it thought might look
more skeptically at appellee’s damages claims than a Pennsylvania court would. The
Appellate Court of Maryland held that, in these circumstances, the circuit court did not
abuse its discretion by discounting the importance of appellant’s choice of a Maryland
forum. Because of the anticipatory nature of appellant’s filing, it was appropriate for the
court to refrain from a rigid and inflexible application of the first-to-file rule.
Circuit Court for Montgomery County
Case No. 485946-V
REPORTED
IN THE APPELLATE COURT
OF MARYLAND*
No. 558
September Term, 2022
______________________________________
HBC US PROPCO HOLDINGS, LLC
V.
FEDERAL REALTY INVESTMENT TRUST
______________________________________
Arthur,
Ripken,
Wilner, Alan M.
(Senior Judge, Specially Assigned),
JJ.
______________________________________
Opinion by Arthur, J.
______________________________________
Filed: September 1, 2023
Pursuant to the Maryland Uniform Electronic Legal Materials
Act (§§ 10-1601 et seq. of the State Government Article) this
document is authentic.
** Tang, J., and Albright, J., did not participate
2023-09-01
in the Court’s decision to designate this opinion
14:42-04:00 for publication pursuant to Md. Rule 8-605.1.
Gregory Hilton, Clerk
* At the November 8, 2022, general election, the voters of Maryland ratified a
constitutional amendment changing the name of the Court of Special Appeals of
Maryland to the Appellate Court of Maryland. The name change took effect on
December 14, 2022.
This case concerns whether a Maryland court erred or abused its discretion in
dismissing a lawsuit on the ground that “in the interest of substantial justice” it “should
be heard in another forum,” outside of the State of Maryland. See Md. Code (1974, 2020
Repl. Vol.), § 6-104(a) of the Courts and Judicial Proceedings Article.
The parties to this case are appellant HBC Propco US Holdings LLC (“HBC”) and
appellee Federal Realty Investment Trust (“FRIT”). HBC is a Delaware limited liability
company that has its principal place of business in New York. FRIT is a Maryland real
estate investment trust that has its principal place of business in Montgomery County,
Maryland.
HBC is the guarantor of a lease of a commercial property in Pennsylvania. The
lease is governed by Pennsylvania law. The tenant has defaulted on the lease. FRIT is
the landlord.
After FRIT demanded payment from HBC on the guaranty, HBC filed suit in the
Circuit Court for Montgomery County, Maryland, seeking a declaration that it has no
liability on the guaranty, as well as other relief. Minutes later, FRIT filed suit in the
Court of Common Pleas in Montgomery County, Pennsylvania, where the leased
property is located, seeking to recover on the guaranty.
On FRIT’s motion, the Maryland court dismissed HBC’s complaint on the ground
that the case should be heard in Pennsylvania. HBC appealed. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
A. The Premises, Lease, and Guaranty
In 1953, the parties’ predecessors-in-interest entered into a commercial lease for a
department store located in a shopping center in Bala Cynwyd, Pennsylvania. In 2010,
after a series of assignments, FRIT had become the landlord, and Lord & Taylor LLC had
become the tenant.
On December 27, 2010, FRIT and Lord & Taylor amended the lease to extend the
lease term until 2031. In that lease amendment, FRIT agreed to obtain Lord & Taylor’s
consent before redeveloping all or a portion of an area that included Lord & Taylor’s
premises. The parties agreed that the amendment “shall be governed by the laws of the
Commonwealth of Pennsylvania.”
As an inducement for FRIT to enter into the lease amendment, Lord & Taylor’s
parent, Lord & Taylor Holdings LLC, agreed to guarantee the performance of the lease
obligations, including the payment of the sums to which Lord & Taylor, as tenant under
the lease, might be legally liable to the landlord, FRIT. In the guaranty, Lord & Taylor
Holdings submitted to personal jurisdiction in Pennsylvania for the enforcement of the
guaranty.
At some point, HBC became the successor-in-interest to Lord & Taylor Holdings
under the guaranty. In 2019, Lord & Taylor was sold to Le Tote, Inc., which became the
tenant under the lease.
2
B. Default and Bankruptcy
HBC alleges that, until March of 2020, Lord & Taylor had performed its
obligations under the lease, including the payment of all rent obligations. By the end of
March 2020, however, the COVID-19 pandemic had been declared a national emergency.
In that same month, the Governor of Pennsylvania ordered all non-essential businesses to
close and implemented a stay-at-home directive for numerous counties, including
Montgomery County, Pennsylvania, the location of the leased premises. HBC alleges
that, as a result of the restrictions, “Lord & Taylor was legally prohibited from operating
a retail store” at the leased premises.
On June 25, 2020, FRIT sent Lord & Taylor a notice of default because of its
failure to pay amounts due to it under the lease.
In August 2020, Lord & Taylor’s store operator, Le Tote, filed a petition for
protection from its creditors under Chapter 11 of the United States Bankruptcy Code.
The bankruptcy court entered an order authorizing the rejection of the lease on January
31, 2001.1 FRIT filed claims in Le Tote’s bankruptcy case to attempt to recover the
amounts that the tenant had failed to pay under the lease, as amended.
On Thursday, May 13, 2021, FRIT, through an attorney in southern New Jersey,
sent a notice of demand for payment, by Federal Express, to HBC.2 The notice
1
Under 11 U.S.C. § 365(a), a debtor has the right to reject executory contracts and
unexpired leases.
2
The attorney has an office in Lawrenceville, New Jersey, which is just across the
Delaware River from Bucks County, Pennsylvania, a suburb of Philadelphia.
3
demanded payment of $20,931,205.75 due under the guaranty to HBC, for amounts owed
through the end of the lease term in 2031. In addition, the notice alerted HBC that FRIT
intended to file suit should HBC fail to pay: “If Guarantor fails to immediately pay the
Guarantied Obligations in full, Landlord reserves the right to pursue all rights and
remedies under the Lease, at law and/or in equity.”
C. The Lawsuits
At 11:26 a.m. on Friday, June 4, 2021, HBC filed a complaint in the Circuit Court
for Montgomery County, Maryland. HBC’s complaint includes 12 counts for declaratory
and injunctive relief. Counts I though VII seek a declaration that HBC has no obligation
under the lease or guaranty to pay amounts demanded by FRIT based on various
defenses; Counts IX through XI seek declarations that FRIT is not entitled to payment of
amounts due under the lease because the lease was frustrated and became both impossible
to perform and commercially impractical because of the Pennsylvania state and local
COVID-19 orders; and Count XII requests that FRIT be enjoined from redeveloping the
leased premises and the shopping center in which the premises are located and that FRIT
be ordered, instead, to continue operating the shopping center “as required under the
lease.” HBC’s complaint acknowledges that Pennsylvania law governs the interpretation
of the lease.
On that same morning, 21 minutes after HBC filed its complaint, FRIT filed suit
against HBC in the Court of Common Pleas in Montgomery County, Pennsylvania.
Asserting claims based on breach of the guaranty, estoppel, and unjust enrichment, FRIT
requested judgment in its favor in the amount of $20,931,205.75. The claim for damages
4
included the amount of rent that the tenant had failed to pay through the date when it
rejected the lease and the additional amounts that would come due throughout the
remainder of the lease term, which runs until 2031.
D. The Motion to Dismiss
On July 6, 2021, FRIT moved to dismiss the action filed by HBC in the Circuit
Court for Montgomery County, Maryland, on grounds of forum non conveniens. FRIT
relied on section 6-104(a) of the Courts and Judicial Proceedings Article. Section 6-
104(a) provides as follows:
If a court finds that in the interest of substantial justice an action should be
heard in another forum, the court may stay or dismiss the action in whole or
in part on any conditions it considers just.
In its motion, FRIT argued that the case did “not belong in Maryland” because the
real property at issue was located in Pennsylvania, the lease and other governing
documents at issue were governed by Pennsylvania law, most of the material witnesses
were in Pennsylvania, and a lawsuit was pending in Pennsylvania involving the same
parties, the same facts, the same property, the same issues, and the same law. FRIT also
argued that neither the judiciary nor the people of Maryland had an interest in the
disposition of a Pennsylvania shopping center and that a Maryland court should not be
charged with interpreting and applying Pennsylvania law, including Pennsylvania state
and local COVID-19 orders.
In opposing FRIT’s motion, HBC was candid about why it filed suit in Maryland
and why it did not want the suit to proceed in Pennsylvania: “Maryland,” said HBC, “will
5
require FRIT to mitigate its alleged damages, whereas, in Pennsylvania, [FRIT] can argue
that it has no such obligation.”3
On the merits, HBC disputed FRIT’s invocation of forum non conveniens. It
argued that FRIT is a real estate investment trust formed under the laws of Maryland; that
FRIT has its principal place of business in Montgomery County, Maryland; that FRIT
owns or operates numerous properties in Maryland; and that FRIT had filed over 100
lawsuits in Maryland state courts, including 89 in the Circuit Court for Montgomery
County. HBC also argued that FRIT had made factual assertions that were not supported
by affidavit or other documents. And HBC stressed that it had filed first, in Maryland.
Citing Johnson v. G.D. Searle & Co., 314 Md. 521, 530 (1989), one of the few cases
concerning section 6-104(a), HBC concluded that there were no “weighty reasons” to
disturb its choice of forum.
E. Judgment of the Circuit Court for Montgomery County, Maryland
On September 29, 2021, the circuit court heard argument on FRIT’s motion to
dismiss. On November 18, 2021, the circuit court issued an oral ruling, in which it
granted the motion.
3
Citing NCO Financial Systems v. Montgomery Park, LLC, 918 F.3d 388, 390
(4th Cir. 2019), HBC asserts that under Maryland law a commercial landlord has a duty
to make reasonable commercial efforts to mitigate its damages. Citing Stonehedge
Square LP v. Movie Merchants, Inc., 685 A.2d 1019, 1023 (Pa. Super. Ct. 1996), HBC
asserts that a landlord that is not in breach does not have a duty to mitigate its damages
under Pennsylvania law. It is unclear why the difference in law matters, because the
amendment to the lease states that the parties’ obligations are governed by Pennsylvania
law. As the guarantor, HBC stands in the shoes of the tenant.
6
In its ruling, the circuit court began by observing that HBC filed this case 21
minutes before FRIT filed its case in Pennsylvania. The court recognized that the two
cases arose from the “same transactions,” involved “identical legal issues,” and were
“mirror images” of one another. As a result, said the court, there was “parallel litigation”
in Pennsylvania and Maryland.
The court quoted section 6-104(a), which permits it to dismiss an action if, “in the
interests of substantial justice,” the action should be heard in another forum. It
recognized that, under one of the few cases interpreting section 6-104(a),4 it must balance
the “public interest factors of systemic integrity” in addition to “private concerns.”
The court accurately described the relevant private concerns, which generally
involve the convenience of the parties and the witnesses. It also accurately described the
“public interest factors,” which include the fairness of imposing jury duty on a
community with little or no relationship to the controversy, the interest in having local
controversies decided locally, and the appropriateness of having a trial in the forum that
is familiar with the governing law.
The court found that the dispute arises from a lease, executed in Pennsylvania, for
a retail establishment in Pennsylvania. It observed that HBC’s complaint requested a
permanent injunction that would prevent FRIT from conducting a planned redevelopment
of the Pennsylvania property and would require FRIT to continue to operate it as a retail
4
See Jones v. Prince George’s County, 378 Md. 98, 120-21 (2003).
7
shopping center. It also observed that, according to HBC, the COVID-19 pandemic
frustrated the purpose of the lease.
The court acknowledged that, under the governing case law, a plaintiff’s choice of
forum should not be disturbed except for “‘weighty reasons.’”5 But, citing a case
interpreting Maryland Rule 2-327(c), which permits the transfer of cases from one
Maryland court to another on grounds of forum non conveniens, the court asserted that
the plaintiff’s choice is entitled to less deference when the plaintiff does not reside in the
forum.6
The court also acknowledged that, in general, “jurisdiction belongs to the court in
which the complaint was first filed.” The court recognized, however, that public and
private concerns “can militate against a mechanical application of the first to file rule.”
As examples, the court cited cases decided under 28 U.S.C. § 1404(a), the federal statute
that permits the transfer of cases “[f]or the convenience of parties and witnesses, in the
interest of justice[.]” According to the court, those cases say that the first-to-file rule may
yield when there is a race to the courthouse or an anticipatory filing.7
The court concluded that Maryland was not an “appropriate” forum for the
litigation. It recognized that HBC had filed first, but it rejected a “mechanical
5
Johnson v. G.D. Searle & Co., 314 Md. 521, 529 (1989) (quoting Restatement
(Second) of Conflict of Laws § 84 cmt. c (1971)).
6
Leung v. Nunes, 354 Md. 217, 228-29 (1999).
7
The court cited Samsung Electronics Co. v. Rambus, Inc., 386 F. Supp. 2d 708
(E.D. Va. 2005); and Nutrition & Fitness, Inc. v. Blue Stuff, Inc., 264 F. Supp. 2d 357
(W.D.N.C. 2003).
8
application” of the first-to-file rule, reasoning that doing so would not serve the public or
private interests in the case.
The court remarked that neither HBC nor the tenant were residents of Maryland.
It conceded that FRIT was a Maryland resident. “But,” it said, a forum is not appropriate
“merely because a [c]ourt has jurisdiction.” Instead, the court said, it must weigh the
“equitable considerations” that bear on the issue.
The court reiterated that the dispute involves the extent of liability under a lease,
executed in Pennsylvania, for a Pennsylvania property. In the court’s view, Pennsylvania
law would apply both to the interpretation of the lease and to HBC’s defenses to liability.
The court added that, in evaluating those defenses, the factfinder would hear evidence
about the effect of the COVID-19 pandemic in Pennsylvania, including the governmental
restrictions that officials in Pennsylvania imposed during the pandemic. That evidence,
the court inferred, “might include” local residents and local authorities in Pennsylvania.
The court went on to say that HBC had requested an injunction to prevent the
redevelopment of the Pennsylvania property. Although HBC had asserted that it intended
to abandon that request, the court noted that the claim for injunctive relief was still a part
of the case.
The court characterized the case as a “local landlord[-]tenant dispute” that would
affect the residents of Pennsylvania, “especially if the [c]ourt were to enjoin the
development of a regional shopping center.” The court conceded that it could interpret
Pennsylvania law. But because of the case’s origins in Pennsylvania and its potential
9
impact on Pennsylvania residents, the court thought it more “appropriate” for a
Pennsylvania court to interpret the governing law.8
“Finally,” the court remarked that there was “parallel litigation” in two states at a
time when courts everywhere were struggling with the disruption caused by the delays
that resulted from the COVID-19 pandemic. The public concern of “efficient and fair
justice,” the court said, weighed against “maintaining two actions at once, especially
when there is another forum which has already obtained jurisdiction, albeit 21 minutes
later, [and] which is a more appropriate forum.”
The court entered an order on November 18, 2021, staying the case for six months
to ensure that the Pennsylvania action would proceed without issue and that Pennsylvania
would continue to serve as a viable alternative forum. The court dismissed the case on
May 13, 2022, after determining that the litigation had proceeded in Pennsylvania.
8
The circuit court seemed to think that the guaranty, which has no choice-of-law
clause, might be governed by Pennsylvania law as well. In fact, until the circuit court
had decided which court should hear this case, it was impossible to make a definitive
determination about whose law would apply to the guaranty. The forum statute typically
applies its own choice-of-law rules to determine which state’s substantive law should
apply. See Eugene F. Scoles & Peter Hay, Conflict of Laws 50 (West 1982); Restatement
(Second) of Conflict of Laws, supra, § 8(1). If Maryland were the forum, the court
would typically apply the law of the place where the contract was made (see, e.g.,
Cunningham v. Feinberg, 441 Md. 310, 326-29 (2015)), which appears to have been
either Maryland or New York. By contrast, if Pennsylvania were the forum, the court
would apply “a ‘flexible rule which permits analysis of the policies and interests
underlying the particular issue before the court’ and directs courts to apply the law of the
state with the ‘most interest in the problem.’” Specialty Surfaces Int’l, Inc. v. Cont’l Cas.
Co., 609 F.3d 223, 229 (3d Cir. 2010) (quoting Hammersmith v. TIG Ins. Co., 480 F.3d
220, 227 (3d Cir. 2007)); accord American Guar. & Liab. Ins. Co. v. Law Offices of
Richard C. Weisberg, 524 F. Supp. 3d 430, 443-44 (E.D. Pa. 2021). It is not immediately
apparent whose law a Pennsylvania court would apply to the guaranty.
10
HBC noted this timely appeal.
QUESTION PRESENTED
On appeal, HBC presents one question, which we have rephrased in the interest of
concision: Did the circuit court abuse its discretion when it dismissed HBC’s suit on
grounds of forum non conveniens, where there is ongoing active litigation involving the
same parties and the same issues in Pennsylvania?9
STANDARD OF REVIEW
“On appellate review of the dismissal of a complaint” under the authority of
section 6-104(a) of the Courts and Judicial Proceedings Article, “the test is whether the
trial court ‘exceeded[ed] its powers or the bounds of its discretion.’” Johnson v. G.D.
Searle & Co., 314 Md. at 526 (quoting Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 512
(1947)). In cases involving the related principles pertaining to the transfer of an action
from one Maryland court to another under Rule 2-327(c), Maryland has “resolutely
applied an abuse of discretion standard.” University of Md. Med. Sys. v. Kerrigan, 456
Md. 393, 401 (2017). “Although appellate courts do not rubberstamp the rulings of trial
9
HBC framed its question as follows:
Did the Circuit Court abuse its discretion when it dismissed HBC’s lawsuit for
forum non conveniens, transferring it to Pennsylvania, when (1) the Circuit Court
gave no weight to HBC’s choice of forum which is entitled to deference; (2) FRIT
is at home in Montgomery County, Maryland; (3) FRIT made no attempt to
demonstrate any hardship or inconvenience if the dispute were to be litigated in
Maryland; (4) the Guaranty at issue was neither excluded, nor was it to be
performed, in Pennsylvania; and (5) a Maryland court is equally well situated to
address and resolve the interpretation of the Guaranty as a Pennsylvania Court
would be?
11
court judges, appellate courts ‘should . . . be reticent’ to substitute their own judgment for
that of the trial court unless they can identify ‘clear abuse’ of the wide latitude given to
trial courts[.]” Id. (quoting Urquhart v. Simmons, 339 Md. 1, 17, 19 (1995)).
DISCUSSION
I. Section 6-104(a)
Under the doctrine of forum non conveniens, “‘[a] state will not exercise
jurisdiction if it is a seriously inconvenient forum for the trial of the action[,] provided
that a more appropriate forum is available to the plaintiff.’” Johnson v. G.D. Searle &
Co., 314 Md. at 525 (quoting Restatement (Second) of Conflict of Laws § 84 (1971)).
At common law, trial courts of general jurisdiction, such as Maryland’s circuit
courts, had the inherent power to dismiss cases by applying the principles of forum non
conveniens. See id. at 527. Section 6-104(a) of the Courts and Judicial Proceedings
Article “confirms the existence of an inherent power and makes clear that it may be
applied in relation to the broad standard of ‘the interest of substantial justice.’” Id. at
527-28.
Section 6-104(a) was enacted in 1964 in connection with Maryland’s long-arm
statute, which is found in the adjacent section of the Code, section 6-103 of the Courts
and Judicial Proceedings Article. Johnson v. G.D. Searle & Co., 314 Md. at 528. The
long-arm statute and section 6-104(a) are both based on a model act, the Uniform
Interstate and International Procedure Act. Id. After the United States Supreme Court
had expanded the bases for personal jurisdiction in International Shoe Co. v. Washington,
326 U.S. 310 (1945), and the General Assembly had taken advantage of the expanded
12
bases by enacting the long-arm statute, it was considered “desirable to have a safety valve
for those cases in which exercise of the enlarged in personam jurisdiction would not be
‘in the interest of substantial justice.’” Johnson v. G.D. Searle & Co., 314 Md. at 528.
Since its enactment nearly 60 years ago, Maryland’s appellate courts have had
only two occasions to review section 6-104(a). We shall review each case in turn.
A. Johnson v. G.D. Searle & Co.
In Johnson v. G.D. Searle & Co., 314 Md. at 523-24, two women asserted
products liability claims against the Illinois-based manufacturer of an intrauterine
contraceptive. The women lived in Illinois; one had received a prescription for the
device in Michigan, the other in Illinois; and both had undergone medical treatment for
their injuries in Illinois. Id. They filed suit in Baltimore City because the statute of
limitations had run in Illinois. See id. at 529; id. at 537.
The manufacturer moved to dismiss the complaints under Section 6-104(a),
arguing that each action should be heard in an Illinois forum. Id. at 524. The circuit
court granted the motions. Id.
On appeal, Maryland’s highest court, then known as the Court of Appeals, began
its analysis with this observation:
If the instant cases involved only the weighing of factors bearing on
convenience, without presenting any issue of availability, we assume that it
would have been within the discretion of the circuit court unconditionally
to dismiss the actions because Illinois was the more convenient forum. But
this case is not really about convenience. It is about limitations.
Id. at 529.
13
“Thus,” the Court said, “the issue” in that case was “whether the circuit court
should have conditioned its order” on the manufacturer’s agreement not to assert the
defense of limitations if the plaintiffs were required to assert their claims in Illinois. Id.
at 530.
The Court reasoned that “[i]n order to apply a forum non conveniens analysis
there must be an alternative forum which is available for the litigation.” Id. To explain
“the concept of an available alternative forum,” the Court quoted comment c to section
84 of the Restatement (Second) of Conflict of Laws:
The two most important factors look to the court’s retention of the case.
They are (1) that since it is for the plaintiff to choose the place of suit, his
choice of a forum should not be disturbed except for weighty reasons, and
(2) that the action will not be dismissed unless a suitable alternative forum
is available to the plaintiff. Because of the second factor, the suit will be
entertained, no matter how inappropriate the forum may be, if the defendant
cannot be subjected to jurisdiction in other states. The same will be true if
the plaintiff’s cause of action would elsewhere be barred by the statute of
limitations, unless the court is willing to accept the defendant’s stipulation
that he will not raise this defense in the second state.
The Court went on to discuss a number of decisions from other jurisdictions, in
which courts had dismissed cases on grounds of forum non conveniens on the condition
that the defendant waive the defense that limitations had already run in the alternative
forum when the plaintiff filed suit in the inconvenient forum. Id. at 534-37. The Court
quoted one of those cases, which had concluded that, “‘[i]n a suit between United States
citizens, no court has ever applied the doctrine of forum non conveniens to dismiss a case
when there was no other forum available to the plaintiff.’” Id. at 537 (quoting
Shewbrooks v. A.C. and S., Inc., 529 So.2d 557, 562 (Miss. 1988)).
14
The Court recognized that section 6-104(a) “controls forum shopping by plaintiffs
by permitting the dismissal of ‘an action [which] should be heard in another forum’ if
dismissal, which may be conditional, is ‘in the substantial interest of justice.’” Id. at 537.
The Court reasoned, however, that it was “not in the interest of substantial justice,” and
that it was “anomalous, if not disingenuous, to request dismissal of an action on the
ground that it should be heard in another forum when the action will likely never be heard
in the other forum because it is barred by limitations there.” Id. “Accordingly,” the
Court held that “the circuit court abused its discretion by unconditionally dismissing” the
complaints. Id. at 538. The Court vacated the judgments and remanded the case to the
circuit court, with instructions to dismiss the complaints “on the condition that the
defendants file with the circuit court waivers of limitations under the law of Illinois.” Id.
B. Jones v. Prince George’s County
The Court revisited Section 6-104(a) 14 years later in Jones v. Prince George’s
County, 378 Md. 98 (2003). In that case, a pair of Prince George’s County police officers
had followed Prince Carmen Jones, Jr., as he drove from Prince George’s County into
Virginia. Id. at 102-03. When Jones pulled into a driveway in Virginia, one of the
officers pulled in behind him in an unmarked car and blocked his exit. Id. at 103. The
officer got out of his car, exhibited his weapon, but allegedly failed to identify himself as
a police officer. Id. Jones attempted to flee, was shot five times by the officer, and died
a short time later in Virginia. Id.
15
Jones’s father and the mother of Jones’s child brought a wrongful death action in
the Circuit Court for Prince George’s County. Id. at 103-04. As defendants, they named
the police chief, the police department, and Prince George’s County. Id. at 104.
The complaint alleged, among other things, that the officer who fired the shots had
used excessive force; that both officers had been grossly negligent and reckless; that the
chief, the department, and the County were liable under the doctrine of respondeat
superior; that the police department “‘had a policy of tolerating and even encouraging
these episodes of excessive force’”; that the police chief “‘knew . . . that county police
officers were repeatedly injuring civilians’” by using “‘excessive force’”; and that the
County’s failure to properly supervise and train its officers “‘led directly’” to Jones’s
death. Id. at 104-05. In addition to common-law claims, the complaint alleged violations
of Jones’s rights under Articles 24 and 26 of the Maryland Declaration of Rights. Id. at
105.
According to the complaint, some of the wrongful conduct occurred in Virginia
and, thus, was governed by Virginia law. Id. Other conduct, however, occurred in
Maryland and, thus, was governed by Maryland law. Id.
The defendants moved to dismiss the complaint on the ground of forum non
conveniens. Id. at 106. They argued that Virginia was a more convenient forum, because
the shooting occurred in Virginia and Jones’s child and the child’s mother lived in
Virginia. Id. They also argued that Virginia law would govern the case and that “‘key
evidence’” was located in Virginia. Id. The circuit court granted the motion and
dismissed the case. Id.
16
On certiorari, the Court held that the circuit court erred when it dismissed the case
on the ground of forum non conveniens. Citing a decision involving Rule 2-327(c),
which permits the transfer of cases from one Maryland jurisdiction to another “if the
transfer is for the convenience of the parties and witnesses and serves the interests of
justice,” the Court began with the premise that “[t]he plaintiffs’ choice of forum is not to
be lightly disturbed.” Jones v. Prince George’s County, 378 Md. at 120 (citing Leung v.
Nunes, 354 Md. 217, 224-25 (1999)). The Court added that “[a] court ‘must weigh in the
balance the convenience of witnesses and those public-interest factors of systemic
integrity and fairness that, in addition to private concerns, come under the heading of
“‘the interest of justice.”’” Id. at 120-21 (quoting Leung v. Nunes, 354 Md. at 224).
In considering the factors, the Court asserted that “Maryland obviously had strong
interests in the action.” Id. at 121. “Denying the plaintiffs access to the courts of this
State,” the Court said, “implicates important public policy considerations.” Id. “[A]ll of
the defendants” were Maryland residents, as were both Jones himself and his mother,
who had intervened. Id. “Perhaps the only [eye]witness”—the police officer who fired
the fatal shots—was “a Maryland resident.” Id. “The sequence of actions that ended in
Virginia began in Maryland.” Id. “Certain claims [were] entirely controlled by
Maryland law.” Id.
Furthermore, no action had been filed in Virginia, and Virginia’s two-year statute
of limitations for the action had expired. Id. Thus, as in Johnson v. G.D. Searle, “no
action could be filed in Virginia unless the bar of limitations were waived.” Jones v.
Prince George’s County, 378 Md. at 121.
17
The Court reiterated the holding in Johnson v. G.D. Searle, that “‘a circuit court
abuses its discretion by unconditionally dismissing actions on the ground of forum non
conveniens when the statute of limitations has likely run in the alternative forum.’” Id.
(citing Johnson v. G.D. Searle & Co., 314 Md. at 523). It concluded: “This was clearly
not an appropriate case for applying the doctrine of forum non conveniens.” Id.10
C. Implications of Johnson v. G.D. Searle and Jones v. Prince George’s
County
The facts in Johnson v. G.D. Searle and Jones v. Prince George’s County bear
little resemblance to the instant case, so the cases offer little guidance. Strictly speaking,
both appear to hold only that a court may not unconditionally dismiss an action on
grounds of forum non conveniens unless an alternative forum is available. Beyond that,
both suggest that the plaintiff’s choice of a forum is entitled to deference—it “‘should not
be disturbed except for weighty reasons’” (Johnson v. G.D. Searle & Co., 314 Md. at 530
(quoting Restatement (Second) of Conflict of Laws, supra, § 84 cmt. c)) or “is not to be
10
Forum non conveniens was an alternative ground for dismissing the complaint.
The circuit court had also dismissed the case on the ground that Jones’s mother, as the
personal representative of his estate, was the only person authorized to bring a wrongful
death under Virginia law. Id. On certiorari, the Court reversed that decision as well.
Among other things, the Court held that, under Maryland’s wrongful death statute, a
Maryland court applies its own rules of pleading and procedure even if the wrongful act
occurred in another state (id. at 107-08; id. at 110-13; see § 3-903(b) of the Courts and
Judicial Proceedings Article); that the question of who has standing to bring a wrongful
death action is a matter of pleading and procedure (see Johnson v. G.D. Searle & Co.,
314 Md. at 115); and that since 1997 the statutory beneficiaries under the wrongful death
statute have had standing to bring a wrongful death action under the Maryland rules. Id.
at 115-18. Because Jones’s father and the mother of Jones’s child were beneficiaries
under the Maryland statute, the Court held that the circuit court erred in ruling that they
lacked standing. See id. at 118. The Court also held that the substantive law of Virginia
applied to some, but not all, of the claims. Id. at 109-10.
18
lightly disturbed.” Jones v. Prince George’s County, 378 Md. at 120 (citing Leung v.
Nunes, 354 Md. at 224-25).
Jones suggests that a circuit court must “‘balance’” the “‘private concerns,’” such
as the convenience of parties and the witnesses, against the “‘public-interest factors of
systemic integrity and fairness that, in addition to private concerns, come under the
heading of the interest of justice.’” Id. at 120-21 (quoting Leung v. Nunes, 354 Md. at
224) (further quotation marks omitted). Jones also suggests that the circuit court’s
decision depends on the strength of Maryland’s interests in the action, which includes
whether the defendant is a Maryland resident, where most of the witnesses are located,
whether the claims arose in whole or in part in Maryland, and whether Maryland law
governs some of the claims in the case. Id. at 121.
Finally, because Jones cites a decision involving Rule 2-327(c), which permits the
transfer of cases from one Maryland jurisdiction to another “if the transfer is for the
convenience of the parties and witnesses and serves the interests of justice,” Jones
implies that those decisions may inform the analysis of whether a court should dismiss an
action “in the interest of substantial justice” under section 6-104(a).
II. The Court Did Not Abuse Its Discretion
In arguing that the circuit court abused its discretion, HBC deploys an array of
arguments. It asserts that FRIT failed to adduce any admissible evidence to establish that
Maryland was an inconvenient forum. It says that its choice of forum should prevail
because it was the first to file. It contends that the court gave insufficient weight to
Maryland’s interest in adjudicating a case involving a Maryland resident, for which
19
Maryland was certainly not an inconvenient forum. Finally, it claims that the court gave
undue weight to its request for an injunction prohibiting FRIT from redeveloping the
property, in Pennsylvania.
For the reasons enumerated below, we reject each of those arguments.
A. The Alleged Absence of Admissible Evidence
HBC begins by asserting, correctly, that under section 6-104(a) the burden for
dismissal is high. Jones v. Prince George’s County, 378 Md. at 120; Johnson v. G.D.
Searle & Co., 314 Md. at 530. HBC argues that FRIT did not meet that burden, because
FRIT presented no evidence to support its contention that Maryland was an inconvenient
forum.
In support of its contention, HBC cites Maryland Rule 2-311(d), which provides
that “[a] motion or a response to a motion that is based on facts not contained in the
record shall be supported by affidavit and accompanied by any papers on which it is
based.” HBC argues that FRIT failed to support its motion with an affidavit. Hence,
HBC concludes that FRIT had no right to contend, for example, that most of the
witnesses in this case would reside in Pennsylvania.
HBC fails to recognize that FRIT’s motion relied on the factual allegations in
HBC’s complaint and on the documents attached to the complaint, such as the lease
amendment and the guaranty. On the basis of those documents alone, it is abundantly
clear that this case involves a lease of a commercial property in Pennsylvania, that the
lease is governed by Pennsylvania law, that HBC’s defenses depended on the specific
restrictions imposed by state and local officials in Pennsylvania during the COVID-19
20
pandemic, and that HBC had asked the court to enjoin the redevelopment of the
commercial property in Pennsylvania. FRIT did not need to supply an affidavit reciting
facts that were apparent from HBC’s pleading itself.
Moreover, the circuit court expressly stated that it had not relied on anything
outside of the record. Instead, the court based its ruling on the materials before it—
HBC’s complaint and the exhibits thereto. With those documents at hand, the court did
not need an affidavit to infer, for example, that, in a case concerning the effect of the state
and local restrictions imposed on a retail business in Pennsylvania during the COVID-19
pandemic, many (if not most) of the witnesses would probably come from Pennsylvania.
B. HBC’s Choice of Forum
HBC goes on to argue that the circuit court “misapplied the facts and law” in
concluding that Maryland was an inconvenient forum. Among other things, HBC argues
that it filed first and chose the forum and that its choice of a forum is entitled to
deference. It points out that FRIT is a resident of Montgomery County, Maryland, and
thus that the circuit court could not have been an inconvenient forum for FRIT. It
contends that the circuit court “devalued” Maryland’s alleged interest in adjudicating a
dispute involving one of its citizens.
1. “First to File”
In a controversy concerning whether a court is an inconvenient forum, the
plaintiff’s choice of a forum is entitled to deference. Jones v. Prince George’s County,
378 Md. at 120; Johnson v. G.D. Searle & Co., 314 Md. at 530. In cases decided under
Rule 2-327(c), however, this Court has cautioned that “the plaintiff’s choice of forum
21
need not be articulated and evaluated all over again as a ‘factor’ in the weighing process,”
because “it has already been factored into the burden or persuasion itself[.]” Smith v.
Johns Hopkins Cmty. Physicians, Inc., 209 Md. App. 406, 415 (2013) (emphasis omitted)
(citing Payton-Henderson v. Evans, 180 Md. App. 267, 287 (2008)); see also Urquhart v.
Simmons, 339 Md. at 18 n.7 (stating that a proper regard for the plaintiff’s choice of
forum “is not a separate element in the analysis,” but rather a reason why the motion
“‘should be granted only when the balance weighs strongly in favor of the moving
party[]’”) (quoting Odenton Dev. Co. v. Lamy, 320 Md. 33, 40 (1990)). “‘Once the trial
judge enters into the balancing process, the discretion entrusted is extremely wide and the
appellate deference owed is concomitantly wide.’” Smith v. Johns Hopkins Cmty.
Physicians, Inc., 209 Md. App. at 416 (emphasis omitted) (quoting Payton-Henderson v.
Evans, 180 Md. App. at 287).
Because of the scarcity of authority under section 6-104(a), both parties debate the
importance of HBC’s choice of a Maryland forum by discussing cases that interpret and
apply Rule 2-327(c). But although the policies underlying the rule are analogous to those
that underlie the statute, the facts of this case differ in one material respect from the facts
in the cases that interpret and apply the rule. In those cases, the plaintiff has filed suit in
one circuit court in Maryland, and the defendant has moved to transfer the case to another
circuit court in Maryland “for the convenience of the parties and the witnesses” and in
“the interests of justice.” Here, by contrast, the court was not called upon to decide
whether “the convenience of the parties and the witnesses” and “the interests of justice”
meant that that single, discrete case should be heard elsewhere. Instead, the court was
22
called upon to decide whether it should hear a case when another case, involving the
same parties, the same subject matter, and the same legal issues, was pending in another
jurisdiction.11
In cases under 28 U.S.C. § 1404(a), which permits federal courts to transfer an
action to another federal district “[f]or the convenience of parties and witnesses, in the
interest of justice,” courts have confronted the problem of how to proceed when a similar
or identical lawsuit is pending in another federal district.12 Those cases state that,
“[w]here ‘identical actions are pending concurrently in two federal courts, the first-filed
action is generally preferred.’” Samsung Elecs. Co., Ltd. v. Rambus, Inc., 386 F. Supp.
2d 708, 724 (E.D. Va. 2005) (quoting Holmes Group, Inc. v. Hamilton Beach/Proctor
Silex, Inc., 249 F. Supp. 2d 12, 15 (D. Mass. 2002)); accord Pontchartrain Partners,
L.L.C. v. Tierra de Los Lagos, L.L.C., 48 F.4th 603, 606 (5th Cir. 2022) (stating that, “in
11
Citing cases decided under Maryland Rule 2-327(c), FRIT argues that the
importance of the plaintiff’s choice “shrinks” when “the plaintiff does not reside in the
forum where the plaintiff has chosen to file suit.” Univ. of Maryland Med. Sys. Corp. v.
Kerrigan, 456 Md. at 406; accord Smith v. Johns Hopkins Cmty. Physicians, Inc., 209
Md. App. at 413 (stating that “where the plaintiff does not live in the forum he initially
chooses, the plaintiff’s choice is entitled to little deference and thus little weight”). The
circuit court seemed to agree. We question whether that principle should apply in a case
under section 6-104(a), in which an out-of-state plaintiff has filed suit in Maryland. If
applied in such a case, the rule might seem to disadvantage out-of-state plaintiffs by
automatically devaluing their choice of a Maryland forum.
12
Because Maryland Rule 2-327(c) “was derived from 28 U.S.C. § 1404(a),” “the
federal law construing § 1404(a) is highly persuasive” in the interpretation and
application of Rule 2-327(c). Odenton Dev. Co. v. Lamy, 320 Md. at 40; accord
Urquhart v. Simmons, 339 Md. at 10. Rule 2-327(c), in turn, sheds some light on the
proper interpretation and application of section 6-104(a). Jones v. Prince George’s
County, 378 Md. at 120-21.
23
the absence of compelling circumstances, the district court [judge] who gets the suit first
should be the one to decide the case”) (internal quotations omitted); Emps. Ins. of
Wausau v. Fox Ent. Grp., Inc., 522 F.3d 271, 274-75 (2d Cir. 2008) (stating that as a
“general rule, ‘[w]here there are two competing lawsuits, the first suit should have
priority’”) (quoting First City Nat’l Bank & Trust Co v. Simmons, 878 F.2d 76, 79 (2d
Cir. 1989)); Learning Network, Inc. v. Discovery Commc’ns, Inc., 11 Fed. App’x 297,
302 (4th Cir. 2001) (stating that the first suit should have priority, except “when the
balance of convenience favors the second action”); Samsung Elecs. America, Inc. v.
Grecia, 525 F. Supp. 3d 590, 598 (E.D. Pa. 2021) (stating that “‘[w]here there are parallel
proceedings, in different federal courts, the first court in which jurisdiction attaches has
priority to consider the case’”) (quoting FMC Corp. v. AMVAC Chem. Corp., 379 F.
Supp. 2d 733, 737 (E.D. Pa. 2005)); Nutrition & Fitness, Inc. v. Blue Stuff, Inc., 264 F.
Supp. 2d 357, 360 (W.D.N.C. 2003) (stating that, where the same parties have filed
similar litigation in separate forums, doctrines of comity “dictate that the matter should
proceed in the court where the action was first filed, and that the later-filed action should
be stayed, transferred, or enjoined”); First Nationwide Mortg. Corp. v. FISI Madison,
LLC, 219 F. Supp. 2d 669, 672 (D. Md. 2002) (stating that, “[i]n general, when parties to
a dispute file mirror-image suits in two federal district courts, priority is given to the suit
that is filed first”).
Here, HBC filed first—21 minutes before FRIT. But that trivial difference could
have resulted from any number of fortuities, such as whether the traffic was worse in
suburban Philadelphia than in suburban Washington, D.C., whether more people were
24
waiting in line to file in Pennsylvania than in Maryland, or whether the clerk’s office in
Maryland was better staffed or more efficient than the clerk’s office in Pennsylvania. We
doubt that the first-to-file rule should govern when the two, parallel filings were, for all
practical purposes, nearly simultaneous, as they were in this case.
In any event, because “[t]he policy underlying the first-to-file rule is the avoidance
of duplicative litigation and the conservation of judicial resources,” exceptions “are
common ‘when justice or expediency requires.’” Samsung Elecs. Co., Ltd. v. Rambus,
Inc., 386 F. Supp. 2d at 724 (quoting Genentech, Inc. v. Eli Lilly and Co., 998 F.2d 931,
937 (Fed. Cir. 1993), overruled on other grounds, Wilton v. Seven Falls Co., 515 U.S.
277 (1995)); LifeNet, Inc. v. United States Dep’t of Health & Human Servs., 617 F. Supp.
3d 547, 555-56 (E.D. Tex. 2022) (stating that the purpose of the first-to-file rule is to
“‘avoid the waste of duplication, to avoid rulings which may trench upon the authority of
sister courts, and to avoid piecemeal resolution of issues that call for a uniform result[]’”)
(quoting W. Gulf. Mar. Ass’n v. ILA Deep Sea Local 24, 751 F.2d 721, 729 (5th Cir.
1985)); Mamani v. Bustamante, 547 F. Supp. 2d 465, 474 (D. Md. 2008) (stating that a
“significant factor in considering the interests of justice is ‘avoiding duplicative litigation
in courts’”) (quoting Cronos Containers, Ltd. v. Amazon Lines, Ltd., 121 F. Supp. 2d 461,
466 (D. Md. 2000)); Encore Furniture Thrifts & More, LLC v. Doubletap, Inc., 281 F.
Supp. 3d 665, 668 (M.D. Tenn. 2017) (stating that “exceptions to the first to file rule are
not rare and are made when justice or expediency requires”).
The “exceptions to the first-to-file rule include bad faith, anticipatory suits, and
forum shopping.’” Samsung Elecs. Co., Ltd. v. Rambus, Inc., 386 F. Supp. 2d at 724
25
(citing Plating Resources, Inc. v. UTI Corp., 47 F. Supp. 2d 899, 905 (N.D. Ohio 1999));
accord Neuralstem, Inc. v. StemCells, Inc., 573 F. Supp. 2d 888, 901 (D. Md. 2008)
(citing exceptions in cases of “‘bad faith, anticipatory suit[s], and forum shopping[]’”)
(quoting Alltrade, Inc. v. Uniweld Prods., Inc., 946 F.2d 622, 622 (9th Cir. 1991));
Nutrition & Fitness, Inc. v. Blue Stuff, Inc., 264 F. Supp. 2d at 360 (stating that, “even if a
court finds the first-filed rule applicable, it may still make the discretionary determination
that the rule should be ignored as a result of ‘special circumstances,’ such as forum
shopping, anticipatory filing, or bad faith filing”).
“When the circumstances suggest a race to the courthouse, the first-to-file rule
loses much of its force.” Samsung Elecs. Co., Ltd. v. Rambus, Inc., 386 F. Supp. 2d at
724; accord Research Automation, Inc. v. Schrader-Bridgeport Int’l, Inc., 626 F.3d 973,
980 (7th Cir. 2010) (stating that courts have “departed from a first-to-file rule where one
party files its lawsuit in anticipation of an impending suit by the opposing party”);
Honeywell Int’l Inc. v. Int’l Union, United Auto., Aerospace & Argic. Implement Workers
of America, 502 Fed. App’x 201, 205 (3d Cir. 2012); Great West Cas. Co. v. Packaging
Corp. of America, 444 F. Supp. 3d 664, 671 (M.D.N.C. 2020) (stating that the “courts
should decline jurisdiction over a first-filed declaratory judgment action where a party
races to the courthouse seeking to head off ‘the trial of an issue in a court of coordinate
jurisdiction’”) (quoting Aetna Cas. & Sur. Co. v. Quarles, 92 F.2d 321, 324 (4th Cir.
1937)); Herbert Ltd. P’ship v. Electronic Arts, Inc., 325 F. Supp. 2d 282, 292 (S.D.N.Y.
2004)) (stating that “[c]ourts do not mechanically apply the first-filed rule ‘where the first
suit constitutes an “improper anticipatory filing” or was motivated solely by forum
26
shopping’”) (quoting Reliance Ins. Co. v. Six Star, Inc., 155 F. Supp. 2d 49, 54 (S.D.N.Y.
2001)); see also 15 Charles Alan Wright et al., Federal Practice & Procedure § 3854, at
343 & n.13 (4th ed. 2023) (“courts have found exceptions to the first-filed rule based on
forum shopping, anticipatory conduct, or when other special circumstances justify giving
priority to the second action”).
“‘An anticipatory filing is improper when it attempts to exploit the first-filed rule
by securing a venue that differs from the one that the filer’s adversary would be expected
to choose.’” Samsung Elecs., Ltd. v. Rambus, Inc., 386 F. Supp. 2d at 724 (quoting
Herbert Ltd. P’ship v. Electronic Arts, Inc., 325 F. Supp. 2d at 292) (further quotation
omitted). “An improper anticipatory filing is one ‘made under the apparent threat of a
presumed adversary filing the mirror image of that suit in a different [court].’” Herbert
Ltd. P’ship v. Electronic Arts, Inc., 325 F. Supp. 2d at 292 (quoting Ontel Prods., Inc. v.
Project Strategies Corp., 899 F. Supp. 1144, 1150 (S.D.N.Y. 1995)).
The United States District Court for the District of Maryland gave an example of
an anticipatory filing in First Nationwide Mortgage Corp. v. FISI Madison, LLC, 219 F.
Supp. 2d at 672. In that case, the parties’ dispute had been simmering for months, but the
plaintiff, First Nationwide, did not file suit until shortly after counsel for its adversary
sent a letter stating “threatening ‘swift legal action.’” Id. at 673. First Nationwide “could
have foreseen that the impending legal action would be filed in Tennessee[,]” because its
adversary’s principal place of business was in Tennessee and its counsel was located
there. Id. “Rather than waiting to become a defendant in Tennessee, First Nationwide
jumped on the chance to be a plaintiff in Maryland.” Id.
27
Much like the complaint in First Nationwide, HBC’s complaint is an example of
an anticipatory filing. HBC had actual knowledge of FRIT’s intention to file suit to
enforce the guaranty: in the letter that HBC received by Federal Express three weeks to
the day before the parties filed their respective complaints, FRIT’s attorney informed
HBC that FRIT “reserved the right to pursue all rights and remedies under the Lease, at
law and/or in equity,” if HBC did not “immediately pay” the amounts allegedly due
under the guaranty. HBC would have suspected that FRIT intended to “pursue” its
“rights and remedies” in Pennsylvania, because FRIT was represented by a firm in nearby
New Jersey, and because HBC had consented to personal jurisdiction in Pennsylvania in
the guaranty. In response to the warning of imminent litigation from FRIT’s attorney,
HBC filed a preemptive declaratory judgment action in Maryland, a forum that (it says)
might look more skeptically at FRIT’s damages claim than a Pennsylvania court would.
HBC’s preemptive lawsuit is identical to the counterclaim that it would have filed in a
Pennsylvania lawsuit brought by FRIT. In fact, HBC has described the two lawsuits as
“two sides of the same coin.” In these circumstances, it was entirely appropriate for the
circuit court to discount the importance of HBC’s choice of a Maryland forum and to
refrain, as the court did, from a rigid and inflexible application of the first-to-file rule.
2. Forum Considerations
HBC argues that the circuit court “erred” or “abused its discretion” because, HBC
says, it undervalued the extent of Maryland’s interest in resolving this controversy. In
particular, HBC contests the circuit court’s characterization of the case, at its core, as a
landlord-tenant dispute involving a lease for a property in Pennsylvania. HBC argues
28
that the dispute concerns a separate contractual document—a guaranty, albeit a guaranty
of a lease that is governed by Pennsylvania law, that concerns a property in Pennsylvania,
and that was given as consideration for an extension of the lease. HBC concedes that
“there is, of course, some secondary relation to the Lease and real property located in
Pennsylvania,” but it insists that the case is really about “a Maryland entity’s demand for
money.” “Maryland,” HBC argues, “has a substantial interest in resolving” a dispute
involving “the rights of a Maryland entity” that has “its principal place of business here.”
Similarly, HBC asserts that Montgomery County, Maryland, “is not an
‘inconvenient’ forum” for this litigation and that “FRIT could not credibly contend” that
it was inconvenient. HBC stresses that FRIT is chartered in Maryland, that it has its
principal place of business in Montgomery County, Maryland, and that it has instituted
litigation in Montgomery County, Maryland, on no fewer than 89 occasions.
HBC also asserts that the circuit court put too much weight on the probability that
many of the witnesses and much of the evidence would be based in Pennsylvania.13
“Any” resulting inconvenience, HBC says, would be “minimal given the reality of
modern transportation and communication.” According to HBC, “[w]itnesses can be
interviewed by telephone, documents can be scanned and produced electronically, and
lawyers can easily travel” what HBC refers to as “the short distance” between suburban
HBC also asserts that the court’s conclusion is not supported by evidence in the
13
record. We have already rejected that contention.
29
Washington, D.C., and suburban Philadelphia14 “to conduct any discovery that would
need to be conducted in Pennsylvania[.]”
HBC’s argument misapprehends the nature of the discretionary decision that the
circuit court was called upon to make. The court was required to weigh a number of
factors to make a determination about what “the interests of substantial justice” required.
Those factors included private considerations, such as the convenience to the witnesses,
who, for the most part, are likely to have to travel from Pennsylvania—a fact that HBC
does not mention. The relevant factors also included public considerations, such as
whether the burden of this litigation should be borne by the citizens of Montgomery
County, Maryland, or by the citizens of Montgomery County, Pennsylvania, where the
property is located, and whether a Maryland court should decide the questions of
Pennsylvania law that will arise in a case involving the guaranty of a lease that is
governed by Pennsylvania law. The weighing process was more complicated in this case
than in others because of the parallel litigation pending in Pennsylvania and the need to
avoid duplicative litigation and the possibility of conflicting rulings and judgments.
The pertinent factors do not all point in the same direction. Maryland is certainly
not an inconvenient forum for FRIT, though this alone is hardly a dispositive
14
HBC asserts that the Pennsylvania witnesses are “merely two hours away” from
the Maryland courthouse where HBC filed this suit. According to Google Maps, it would
take two hours and 54 minutes to drive the 144.4 miles from Norristown, Pennsylvania,
where the Court of Common Pleas in Montgomery County, Pennsylvania, is located, to
Rockville, Maryland, where the Circuit Court for Montgomery County, Maryland, is
located.
30
consideration.15 Nor is Maryland an inconvenient forum for HBC, which was content to
file suit here. Pennsylvania borders Maryland, and suburban Philadelphia is not as
remote from suburban Washington, D.C., as (for example) suburban Los Angeles, is.
Nonetheless, the circuit court was under no obligation to assign the same weight to
those factors as HBC does. “‘So long as the Circuit Court applies the proper legal
standards and reaches a reasonable conclusion based on the facts before it, an appellate
court should not reverse a decision vested in the trial court’s discretion.’” University of
Md. Med. Sys. v. Kerrigan, 456 Md. at 401 (quoting Aventis Pasteur, Inc. v. Skevofilax,
396 Md. 405, 436 (2007)). Here, the circuit court applied the proper legal standards and
reached a reasonable conclusion based on the facts before it. Therefore, we have no basis
to set aside the court’s exercise of its discretion.
Finally, the question before the circuit court was not so much whether Maryland
was an inconvenient forum for the parties, but whether a Maryland court should entertain
this case when an identical case, involving the same parties, had been filed almost
simultaneously in Pennsylvania. In these circumstances, the court was rightly concerned
about the public and private costs of duplicative litigation. The court may also have been
concerned about the possibility of conflicting rulings and conflicting judgments if the
15
See Fox v. Callender, 729 F. Supp. 32, 34 (D. Md. 1990) (transferring a case
from the District of Maryland to the Eastern District of Virginia under 28 U.S.C. §
1404(a) because “the only connection that this case has with Maryland is the residence of
the Defendants, who, by their own motion, show a preference in having this action tried
in Virginia”); accord Mamani v. Bustamante, 547 F. Supp. 2d at 474 (transferring a case
from the District of Maryland to the Southern District of Florida under 28 U.S.C. §
1404(a) again because the only connection with Maryland was the residence of the
defendants, who had moved to have the action tried elsewhere).
31
cases proceeded on separate tracks in two different states. Thus, the court recognized that
the dispute should go forward in only one jurisdiction and that it was required to decide
which of those jurisdictions was the most appropriate forum.
The court’s ruling reflects a reasonable determination that because the property is
located in Pennsylvania, because the lease is governed by Pennsylvania law, and because
many of the witnesses are likely to be residents of Pennsylvania, Pennsylvania was the
most appropriate jurisdiction for this dispute.16
3. Claim for Injunctive Relief
Finally, HBC complains that, in dismissing the Maryland action in favor of the
Pennsylvania action, the circuit court considered its claim for an injunction barring FRIT
from redeveloping the Pennsylvania property. HBC observes that, in FRIT’s answer to
HBC’s Maryland complaint, FRIT asserted that the request for an injunction was “moot,”
apparently because the tenant had rejected the lease in bankruptcy and had relinquished
control of the premises. HBC concludes that the circuit court abused its discretion in
counting the claim for injunctive relief as a factor weighing in favor of dismissal.
We see no abuse of discretion. Although HBC expressed an intention to withdraw
its claim for injunctive relief, the claim was still pending when the circuit court ruled.
Moreover, it is unclear whether HBC agreed with FRIT’s assertion that the claim was
moot.
16
Because the case has now been proceeding in Pennsylvania for over a year, we
would create a serious problem that the circuit court avoided—the possibility of
conflicting rulings and conflicting judgments—if we reversed the circuit court’s exercise
of discretion.
32
But even if the court abused its discretion in considering the allegedly “moot”
claim for injunctive relief, a reversal is unwarranted, because the error, if any, was
harmless. Crane v. Dunn, 382 Md. 83, 91 (2004) (stating that “[i]t is the policy of this
Court not to reverse for harmless error and the burden is on the appellant in all cases to
show prejudice as well as error[]”). Even without HBC’s claim for an injunction
restricting the use of property in Pennsylvania, the circuit court had more than an
adequate basis to conclude that this dispute should proceed in Pennsylvania, and not in
Maryland.
JUDGMENT OF THE CIRCUIT COURT
FOR MONTGOMERY COUNTY
AFFIRMED; COSTS TO BE PAID BY
APPELLANT.
33
HBC US Propco v. Fed. Realty Inv. Trust
Combined Opinion