United States District Court, N.D. Mississippi, Aberdeen Division
MICHAEL D. GREER and GREER, RUSSELL, DENT & LEATHERS, PLLC PLAINTIFFS
CAROLINA CASUALTY INSURANCE COMPANY DEFENDANT
MEMORANDUM OPINION GRANTING DEFENDANT MOTION TO
DISMISS OR STAY OR. IN THE ALTERNATIVE. TO TRANSFER
before the Court is the Defendant Carolina Casualty Insurance
Company ("CCIC" or "the Defendant")'s
Motion to Dismiss or Stay or, in the alternative, to Transfer
[Doc. No. 10]. Upon due consideration, the Court finds that
the motion should be granted and this action transferred to
the Eastern District of Pennsylvania.
Factual and Procedural Background
Michael Greer and Greer, Russell, Dent & Leathers, PLLC
("Plaintiffs" or "Greer") filed this
declaratory judgment insurance coverage action in this court
on August 14, 2017. [Doc. No. 1]. In doing so, Plaintiffs
seek to litigate insurance coverage issues that are presently
pending, and many of which have been already been briefed for
adjudication, in the United States District Court for the
Eastern District of Pennsylvania in Carolina Casualty
Insurance Company v. Michael Greer; et at., Civil Action
No. 2:17-cv-02827 ("the Pennsylvania action"),
which was filed in that court on June 22, 2017,
twenty-two (22) days before Plaintiffs filed
this action in this court. Compare Doc. No. 1 (Pl.'s
Compl.) to Doc. No. 6 (Notice of Pending Litigation, and
Exhibits 1-4 attached thereto).
Pennsylvania action, the parties are actively litigating the
issues that have been raised in this action, including a now
fully-briefed Motion to Dismiss or Transfer that action to
this Court [Doc. No. 14 in the Pennsylvania action] and a
motion regarding the enjoining of these proceedings [Doc. No.
22 in the Pennsylvania action]. In this Court, the sole
pending motion is CCIC's present motion to dismiss, stay,
or transfer this action to the Pennsylvania court [Doc. No.
motion, CCIC argues, inter alia, that the issues
pending in this case substantially overlap with the issues
pending in the Pennsylvania action and that the
"first-to-file" rule thus applies and this action
should therefore be transferred, dismissed, or stayed pending
the outcome of the proceedings in the Pennsylvania action.
Plaintiffs oppose this motion and argue that the
first-to-file rule does not apply because: (1) in 2015,
Plaintiffs filed a long-ago dismissed action in Mississippi
state court that was subsequently removed to this Court
("the 2015 action"), which they did not move to
re-open prior to the filing of this suit, that is actually
the "first filed" case regarding the parties'
pending insurance coverage dispute; and (2) the parties'
forum selection agreement, and the equities of this case,
"trump" the application of the first-to-file rule
in this instance.
Legal Standard for Application of the First-to-File
the first-to-file rule, when two cases that involve
substantially similar issues are pending before two different
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); Sutter Corp. v. P&P
Indus., Inc., 125 F.3d 914, 917 (5th Cir. 1997) (when
two cases "overlap on the substantive issues, the cases
[should] be ... consolidated in ... the jurisdiction first
seized of the issues."); 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); Jumper v. Crimson Fin.
Grp., LLC, No. 1:17-CV-00025-SA-DAS, 2017 WL 4227397, at
*1 (N.D. Miss. Sept. 20, 2017). "In deciding if a
substantial overlap exists, this court has looked at factors
such as whether 'the core issue ... was the same' or
if 'much of the proof adduced ... would likely be
identical.'" Gateway Mortgage Grp., L.L.C. v.
Lehman Bros. Holdings, Inc., No. 16-20688, 2017 WL
2347603, at *2 (5th Cir. May 30, .2017); International
Fid. Ins. Co. v. Sweet Little Mexico Corp., 665 F.3d
671, 678 (5 th Cir. 2011) (quoting West Gulf Mar. Ass
'n v. ILA Deep Sea Local 24, S. Atl. & Gulf Coast
Dist. of the ILA, 751 F.2d 721, 730 (5th Cir. 1985));
Mann Mfg., Inc. v. Hortex Inc., 439 F.2d 403, 407
(5th Cir. 1971).
rule rests on principles of comity and sound judicial
administration and "[t]he 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."
Save Power, 121 F.3d at 950; West Gulf, 751
F.2d at 728 - 29. "Courts have noted that a substantial
relationship exists between two suits where the issues,
though not identical, are similar enough that the cases would
be consolidated if filed in the same [c]ourt."
Rooster Prod. Int'l, Inc. v. Custom Leathercraft Mfg.
Co., No. CIV.A. SA04CA864XR, 2005 WL 357657, at *2 (W.D.
Tex. Feb. 1, 2005) (citing Save Power, 121 F.3d at
950; Mann Mfg., 439 F.2d at 408 n. 6); Texas
Ass'n of Realtors, Inc. v. PDFfiller, Inc., No.
A-16-CA-1304-SS, 2017 WL 3821690, at *2 (W.D. Tex. Aug. 31,
2017). It is not necessary for either the legal issues or the
parties to be identical but only that there be
"substantial overlap" between the two cases.
International Fid. Ins., 665 F.3d at 678; Save
Power Ltd., 121 F.3d at 950-51 ("Complete identity
of parties is not required for dismissal or transfer of a
case filed subsequently to a substantially related
action."). If such an overlap exists, application of the
rule should be precluded only by the presence of
"compelling circumstances." Mann Mfg., 439
F.2d at 407. Accordingly, if this Court finds that the issues
in the two cases substantially overlap, "the proper
course of action [is] for the court to transfer the case to
the [Pennsylvania] court to determine which case should, in
the interests of sound judicial administration and judicial
economy, proceed." Cadle, 174 F.3d at 606.
Analysis and Discussion
largely do not dispute that the core issues in this action
substantially overlap those pending in the first-filed
Pennsylvania action. Instead, Plaintiffs argue two primary
points in opposition to CCIC's motion: first, that the
2015 action is actually the "first filed" action
regarding these issues and that the first-to-file rule is
therefore not grounds for the dismissal of this action or for
the transfer of this action to the Eastern District of
Pennsylvania; and second, that the parties' forum
selection agreement, the enforceability of which is being
actively litigated in the Pennsylvania action, renders
application of the first-to-file rule inappropriate in this
case. The Court finds that both of these arguments are
the Court finds that the 2015 action is irrelevant to the
present first-to-file analysis, because that action is no
longer pending and because Plaintiffs did not move in any
fashion, via Rule 60(b)(6) of the Federal Rules of Civil
Procedure or otherwise, to re-open it prior to the filing of
the Pennsylvania action or this suit. The parties voluntarily
dismissed the 2015 action in December 2015 pursuant to Rule
41(a)(1) of the Federal Rules of Civil Procedure.
See Doc. Nos. 20, 21 in Greer, et al. v.
CCIC, No. 1:15-cv-66-NBB-DAS (N.D. Miss.). The effect of
a Rule 41(a)(1) dismissal is to "put the plaintiff in a
legal position as if he had never brought the first
suit." Harvey Specialty & Supply, Inc. v. Anson
Flowline Equip., Inc., 434 F.3d 320, 324 (5th Cir.
2005); Ford v. Sharp, 758 F.2d 1018, 1023-24 (5th
Cir. 1985) ("If a plaintiff voluntarily dismisses an
action without prejudice, it is considered that the suit had
never been filed"). Accordingly, because the 2015 action
was voluntarily dismissed by the parties in 2015, and
Plaintiffs did not seek to re-open that action prior to the
filing of the Pennsylvania action or this action, the 2015
action cannot serve as the "first-filed" case for
the purpose of applying the first-to-file rule. See,
e.g., New View Gifts & Accessories, Ltd. v. Tri-Coastal
Design Group, No. 02-CV-3428, 2002 WL 1896217 (E.D. Pa.
Aug. 15, 2002) (rejecting argument that earlier voluntarily
dismissed action qualified as the first-filed suit). The
Pennsylvania action, therefore, is the first-filed case in
relation to the parties' underlying dispute insofar as
the Court's analysis regarding the applicability of the
first-to-file rule is concerned. The Court thus finds that
this argument is without merit.
the Court finds that the parties' forum selection
agreement, the enforceability of which is presently being
litigated in the Pennsylvania action, does not trump the
application of the first-to-file rule and does not constitute
a compelling circumstance requiring or permitting the Court
to refuse to apply the rule. The Fifth Circuit in any event
rejected this very argument earlier this year, holding that
the existence of a forum selection agreement is not a
"compelling circumstance" that displaces
application of the first-to-file rule when the parties are
free to move for a transfer of venue in the first-filed
court. Gateway Mortgage Grp., 2017 WL 2347603, at
*2; see also Bank of Am. v. Berringer Harvard Lake
Tahoe, No. 3:13-CV-0585-G, 2013 WL 2627085, at *4 (N.D.
Tex. June 12, 2013) ("[T]he issue of whether the
forum-selection clause binds the parties does not need to be
addressed by the court in the second-filed action.").
the Plaintiffs indisputably have already moved for a transfer
of venue in the Pennsylvania action, clearly demonstrating
that the existence of the parties' forum selection clause
is not a compelling circumstance warranting displacement of
the first-to-file rule. See Doc. No. 14 in the
Pennsylvania action (Greer's motion seeking, inter
alia, to transfer venue of the Pennsylvania action to
the Northern District of Mississippi). Accordingly, the Court
finds that this argument is without merit.
the Plaintiffs' remaining arguments are likewise without
merit. First, whether or not Mississippi law applies to the
parties' underlying dispute regarding insurance coverage
is irrelevant to this Court's first-to-file rule analysis
- the Pennsylvania court is certainly capable of applying
Mississippi law should Mississippi law indeed apply to the
parties' dispute. Likewise, the fact that Plaintiffs are
contesting personal jurisdiction in the Pennsylvania action
is irrelevant to this Court's first-to-file analysis -
that issue is ...