Opinion
CASE NO. C13-5246 RBL
09-10-2014
RETAIL MANAGEMENT SOLUTIONS, L.L.C., Plaintiff, v. HARTFORD FIRE INSURANCE COMPANY, Defendant.
ORDER DENYING DEFENDANT'S MOTION TO DISMISS IN FAVOR OF FIRST-FILED ACTION AND GRANTING DEFENDANT'S ALTERNATIVE MOTION TO STAY
THIS MATTER comes before the court on Defendant Hartford Fire Insurance Company's ("Hartford") motion to dismiss in favor of their first-filed action. Hartford is the plaintiff in a similar action filed in United States District Court for the District of Minnesota (the "first-filed action"). That action was filed on March 29, 2013, three days before this action was filed by Plaintiff Retail Management Solutions, L.L.C. (defendant in the first-filed action), on April 1, 2013.
Because Hartford filed its action earlier, Hartford argues that this action should be dismissed in accordance with the "first-to-file" rule. The first-to-file rule permits a district court to decline jurisdiction over an action when a complaint involving the same issues and parties has already been filed in a court with concurrent jurisdiction. Pacesetter Sys., Inc. v. Medtronic, Inc., 678 F.2d 93, 94-95 (9th Cir. 1982) (citing Church of Scientology of Calif. v. U.S. Dep't of the Army, 611 F.2d 738, 749 (9th Cir. 1979); Great N. Ry. Co. v. Nat'l R.R. Adjustment Bd., 422 F.2d 1187, 1193 (7th Cir. 1970)). There are, however, exceptions to this general rule. A court will not apply the first-to-file rule when there is evidence of bad-faith, anticipatory suit, or forum shopping. Z-Line Designs, Inc. v. Bell'O Int'l, L.L.C., 218 F.R.D. 663, 665 (N.D. Cal. 2003). Further, a court may refuse to apply the first-to-file rule if the balance of convenience weighs in favor of the latter-filed action. Id.
In this case, two or more exceptions to the first-to-file rule potentially apply; however, judicial discretion cautions against accepting the second-filed action at this time. See Alltrade, Inc. v. Uniweld Products, Inc., 946 F.2d 622, 628 (9th Cir. 1991) ("The most basic aspect of the first-to-file rule is that it is discretionary."). Rather, given the uncertain status of the Minnesota action, and the potential for statute of limitations problems to arise, the prudent course of action is to stay this proceeding pending the outcome of the Minnesota action. See, e.g., Alltrade, 946 F.2d at 629 (finding that in cases where the first-filed action "presents a likelihood of dismissal," the second-filed action should be stayed, not dismissed).
Accordingly, the defendant's motion to dismiss in favor of their first-filed action is DENIED, but their motion in the alternative to stay these proceedings pending the outcome of the Minnesota action is GRANTED.
Dated this 10th day of September, 2014.
/s/_________
RONALD B. LEIGHTON (as authorized/dn)
UNITED STATES DISTRICT JUDGE