Some litigants believe the best defense is a good offense. However, the Seventh Circuit recently confirmed that a "good offense" does not include filing a separate lawsuit seeking a stay of the first.
In Buntrock v. SEC, No. 03-1890, 2003 WL 22442993 (7th Cir. Oct. 29, 2003), the SEC authorized its legal staff to bring a civil complaint in federal court against Dean Buntrock charging him with violations of federal securities laws. Buntrock filed his own lawsuit against the SEC, seeking to stay the SEC's filing of a case against him; when the SEC actually filed its case (Buntrock had not sought an injunction), Buntrock amended his complaint to seek a stay of the SEC's case. Both cases were consolidated, and on the SEC's motion the court dismissed Buntrock's case for lack of subject-matter jurisdiction.
The Seventh Circuit affirmed the dismissal because Buntrock's case had "no basis in law or common sense." The jurisprudence of federal jurisdiction includes a line of cases holding that a plaintiff's case might be so completely frivolous that it does not even trigger the jurisdiction of the federal courts. The Seventh Circuit found this to be such a case. One reason for disallowing such a tactic is that defendant's approach would "turn every case in which there is a defense into two cases." The rules of federal procedure provide litigants with the opportunity to present their defenses in a single action. Put simply, if you have a defense to a plaintiff's claims, you must plead it in the case plaintiff has filed.
Another, more technical, approach is that Buntrock has an adequate remedy at law -- to interpose his defense in the SEC's case -- and is unable to satisfy the prerequisites for equitable relief, i.e., a stay. While Buntrock argued that his remedy was not adequate because he would have to go through a whole trial, and the purpose of his complaint was to prevent that, the Seventh Circuit held that did not render his remedy inadequate as a matter of law.
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