United States District Court, N.D. Mississippi, Aberdeen Division
DOUGLAS JUMPER, SR., et al. PLAINTIFFS
CRIMSON FINANCIAL GROUP, LLC, et al. DEFENDANTS
SHARION AYCOCK UNITED STATES DISTRICT JUDGE
matter is presently before the Court on Defendant
Hartford's Motion to Dismiss or Transfer , supported
by Defendant Terri Lee Brown. Plaintiff responded and also
requested remand to state Court .
and Procedural History
case concerns the right to death benefits of Gaylon Laboa
under a term life insurance policy issued by Hartford Life
& Annuity Insurance Company. Plaintiffs allege that
Gaylon LaBoa defrauded them out of large sums of money, and
that he used some of that ill-gotten money to pay the
premiums on the Hartford policy. Plaintiffs allege that they
are entitled to the death benefits to the exclusion of the
minor beneficiary, G.L.L.
receiving a letter from Plaintiffs' attorney claiming
interest in the death benefits on behalf of undisclosed
clients, Hartford filed a Complaint in Interpleader in the
United States District Court for the Northern District of
Georgia in an action titled Hartford, et al. v. G.L.L., a
minor, et al., Civil Action No. 1:17-CV-00131-WSD on
January 12, 2017. Hartford named the Plaintiffs as
“Does” in the Interpleader action due to their
purported refusal to identify themselves.
later, Plaintiffs filed their Complaint for the Policy
proceeds in the Chancery Court of Prentiss County,
Mississippi. After Hartford was served with the State Court
Complaint, it amended its complaint in the Georgia case to
add the named Plaintiffs. The Mississippi action was removed
to this Court on February 15, 2017.
the first-to-file rule, when two cases that involve
substantially similar issues are pending before two federal
courts, the court where the second action was filed should
defer to the first court for adjudication of the issues.
Cadle Co. v. Whataburger of Alice, Inc., 174 F.3d
599, 603 (5th Cir. 1999); Save Power Ltd. v. Syntek Fin.
Corp., 121 F.3d 947, 950 (5th Cir. 1997); West Gulf
Maritime Ass'n v. ILA Deep Sea Local 24, 751 F.2d
721, 728 (5th Cir. 1985). It is not necessary for either the
issues or the parties to be identical but only that there be
“substantial overlap.” Save Power Ltd.,
121 F.3d 947, 950 (5th Cir. 1997) (quoting Mann Mfg.,
Inc. v. Hortex, Inc., 439 F.2d 403, 408 (5th Cir.
1971)). If such overlap exists, application of the rule
should be precluded only by the presence of “compelling
circumstances.” Mann Mfg., 439 F.2d at 407.
The rule rests on principles of comity and sound judicial
administration. See Save Power, 121 F.3d at 950;
West Gulf, 751 F.2d at 728. “The concern
manifestly 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.” West Gulf, 751 F.2d at 729.
it is clear that the Georgia action and the Mississippi
action involve substantially similar issues, and that the
Georgia action was the first-filed action, the Plaintiffs
move the Court to consider its subject matter jurisdiction
before it reaches the Defendants' Motion to Transfer or
a challenge to a Court's jurisdiction is generally
considered before a motion to transfer, “a federal
court has leeway ‘to choose among threshold grounds for
denying audience to a case on the merits, '”
Sinochem Int'l Co. Ltd. v. Malaysia Int'l
Shipping Corp., 549 U.S. 422, 431, 127 S.Ct. 1184, 167
L.Ed.2d. 15 (2007) (quoting Ruhrgas AG v. Marathon Oil
Co., 526 U.S. 574, 585, 119 S.Ct. 1563, 143 L.Ed.2d 760
(1999)). This is because “jurisdiction is vital only if
the court proposes to issue a judgment on the merits.”
Sinochem, 549 U.S. 422, 431, 127 S.Ct. 1184.
(quoting Intec USA, LLC v. Engle, 467 F.3d 1038,
1041 (7th Cir. 2006)). In this case, the Court is not issuing
a judgment on the merits but is merely deciding a question of
venue. Furthermore, good reason exists for deferring ruling
on the issue of subject matter jurisdiction: the record is
incomplete with respect to the question of diversity and
personal jurisdiction, and analysis of these issues may
require the Court to improperly examine the merits of both
parties' claims. See, e.g., Hamrick v.
Feldman, No. 4:12-CV-2139, 2013 WL 12098757, at *2 (S.D.
Tex. Jan. 15, 2013).
insist that this Court lacks subject matter jurisdiction
because DJF, LLC and GJJJ, LLC, companies formed by Gaylon
LaBoa, are Mississippi residents, as some of their members
are Mississippi residents. Defendants counter that the LLC
Defendants have been administratively dissolved.
Additionally, the resident members of the Defendant LLCs are
also named Plaintiffs in the action. Therefore, Defendants
allege that the LLC Defendants were improperly joined merely
to defeat diversity in this suit. Furthermore, none of the
LLC Defendants have answered Plaintiffs' Complaint or
otherwise appeared in this action or in the state court
action, and there is dispute over whether they were properly
served. This question has led the Plaintiffs to dispute
whether the LLC Defendants timely joined in the petition for
removal. Finally, there is some question as to whether
Plaintiffs properly served Defendant Brown. The ultimate
determination of these questions will affect the law of the
case, as these issues are intertwined with the merits of
Plaintiff's allegations. Moreover, under the
first-to-file rule, it is not proper for this Court to
conduct such an analysis but rather to defer to the Northern
District of Georgia.
general rule in the Fifth Circuit is that, absent compelling
circumstances, “where duplicative issues and parties
exist in two cases the court with the first case should
resolve the issues between the parties and the second court
should defer.” Save Power, 121 F.3d at 950.
Such is the situation here, as no compelling circumstances
exist to justify deviating from this rule. Therefore, this
Court defers to the first-filed court for resolution of the