Third Circuit Says Bananas to Forum Shoppers Seeking Second Bite at the Apple

In a recent precedential 2-1 decision, Chavez, et al. v. Dole Food Company, Inc., et al., the Third Circuit emphasized the importance of the “first filed” rule and affirmed the dismissal of a Delaware suit that was “materially identical” to one first brought in Louisiana. The Circuit Court reiterated that “[t]he ‘first filed’ rule is a well-established policy of the federal courts that in all cases of concurrent jurisdiction, the court which first has possession of the subject must decide it. This rule permits the district courts, in their discretion, to stay, transfer, or dismiss cases that are duplicates of those brought previously in other federal fora.”

The plaintiffs, foreign agricultural workers, first filed a putative class action against Dole (and other related companies) in 1993, followed by a convoluted procedural history, and then filed another lawsuit in the United States District Court for the Eastern District of Louisiana in 2011. Dole successfully moved for summary judgment on statute of limitations grounds, and the United States Court of Appeals for the Fifth Circuit affirmed the dismissal. While Dole’s motion for summary judgment was pending in federal court in Louisiana, the same plaintiffs filed a nearly identical action against the same defendants in the United States District Court for the District of Delaware, and Dole moved to dismiss the second action based upon the “first filed” rule. The federal court in Delaware granted Dole’s motion, and dismissed the action with prejudice, explaining that the plaintiffs “filed in Delaware notwithstanding their choice to file first in Louisiana. Decisions have consequences; one fair bite at the apple is sufficient.”

The plaintiffs appealed the dismissal with prejudice to the Third Circuit, which affirmed the application of the “first filed” rule. The Third Circuit observed that the plaintiffs first sued in federal court in Louisiana, and then filed identical claims in federal court in Delaware only when their initial suit was on the verge of an unfavorable outcome. In other words, the Circuit Court reasoned that the “pivotal question” was whether there was concurrent jurisdiction at the time the duplicative action was filed, which requires a district court “to take a snap-shot of the cases at a particular moment in time: the date of the filing of the second complaint.” The Third Circuit held that concurrent jurisdiction existed when the plaintiffs filed again in federal court in Delaware.

Furthermore, the majority held that the District Court did not abuse its discretion by exercising its “inherent power to control its docket” and dismissing with prejudice, instead of staying or transferring, the Delaware action. The majority criticized the plaintiffs for their flagrant gamesmanship by engaging in obvious forum shopping by filing in both districts with the intention of proceeding in the forum in which they fared better. The majority also declared that no exceptions to the first filed rule applied. They explained that the plaintiffs already exercised their choice of forum by filing first in federal court in Louisiana; so what mattered was that the two actions were duplicative. The Third Circuit further explained that any strategic delay tactics by Dole did not warrant an exception to the first filed rule, because the concern was “only with the two cases at issue – not any other procedural issues or history of related, but irrelevant litigation.”

In his dissent, Judge Fuentes agreed with the majority that the first-filed rule should apply, but departed from the majority on the grounds that “a second-filed suit may not be dismissed with prejudice solely on the basis of equity or judicial management,” and that “dismissal with prejudice under the first-filed rule should be limited to cases where some other legal basis,” i.e., “res judicata, jurisdiction, mootness, or the like,” is at issue. Judge Fuentes expressed concern that the plaintiffs were robbed of any opportunity to have their case heard on the merits, and therefore a stay, rather than dismissal, would have been appropriate. Indeed, both the majority and the dissent noted that due to procedural wrangling, no court has heard the merits of the plaintiffs’ claims.

Overall, Chavez reaffirms that the first filed rule is designed to “encourage sound judicial administration and to promote comity among the courts in the federal system.” It therefore prevents parties from attempting to hedge their bets by filing in multiple jurisdictions to avoid an unfavorable outcome. As noted by the majority, this case presents the rare instance where a party “not only filed first, but second as well,” since the rule is typically invoked in instances in which the defendant counter-sues in a separate action in another jurisdiction; however, the majority spoke strongly in admonishing the plaintiffs for putting themselves in that position.