On Appeal from the United States District Court for the Eastern District of Pennsylvania, D.C. Miscellaneous No. 87-0294.
Becker, Hutchinson, and Scirica Circuit Judges.
Nearly fifty years ago, this court adopted what has become known as the "first-filed" rule. We concluded that "[i]n all cases of federal concurrent jurisdiction, the court which first has possession of the subject must decide it." Crosley Corp. v. Hazeltine Corp., 122 F.2d 925, 929 (3d Cir. 1941) (quoting Smith v. M ' Iver, 22 U.S. (9 Wheat.) 532, 6 L. Ed. 152 (1824)), cert. denied, 315 U.S. 813, 62 S. Ct. 798, 86 L. Ed. 1211 (1942). Since then, this policy of comity has served to counsel trial judges to exercise their discretion by enjoining the subsequent prosecution of "similar cases . . . in different federal district courts." See generally Compagnie Des Bauxites De Guinea v. Insurance Co. of North America, 651 F.2d 877, 887 n.10 (3d Cir. 1981), cert. denied, 457 U.S. 1105, 73 L. Ed. 2d 1312, 102 S. Ct. 2902 (1982); see also Berkshire Intern. Corp. v. Marquez, 69 F.R.D. 583, 586 (E.D.Pa. 1976) ("it has long been the policy of our Circuit Court that absent unusual circumstances" the first-filed rule applies in cases of concurrent federal jurisdiction); accord West Gulf Maritime Ass'n v. ILA Deep Sea Local 24, 751 F.2d 721, 728 (5th Cir. 1985) ("federal courts have long recognized that . . . comity requires federal district courts to exercise care to avoid interference with each other's affairs.").
This appeal requires us to revisit the first-filed rule. We must determine whether the rule bars a district judge in the Eastern District of Pennsylvania from enforcing a subpoena issued by the Equal Employment Opportunity Commission ("EEOC") to an employer, the University of Pennsylvania ("the University"), which has already filed in the district court for the District of Columbia a constitutional challenge to the national policy authorizing the EEOC subpoena. The University contends that the district judge in the Eastern District of Pennsylvania abused his discretion by declining to dismiss the EEOC's enforcement suit in favor of the University's earlier constitutional challenge.
The first-filed rule encourages sound judicial administration and promotes comity among federal courts of equal rank. It gives a court "the power" to enjoin the subsequent prosecution of proceedings involving the same parties and the same issues already before another district court. See Triangle Conduit & Cable Co. v. National Elec. Products Corp., 125 F.2d 1008, 1009 (3d Cir.), cert. denied, 316 U.S. 676, 86 L. Ed. 1750, 62 S. Ct. 1046 (1942). That authority, however, is not a mandate directing wooden application of the rule without regard to rare or extraordinary circumstances, inequitable conduct, bad faith, or forum shopping. District courts have always had discretion to retain jurisdiction given appropriate circumstances justifying departure from the first-filed rule. See Crosley Cod. v. Westinghouse Elec. & Mfg. Co., 130 F.2d 474, 475-76 (3d Cir.), cert. denied, 317 U.S. 681, 87 L. Ed. 546, 63 S. Ct. 202 (1942); accord Pacesetter Systems, Inc. v. Medtronic, Inc., 678 F.2d 93, 95 (9th Cir. 1982); Mattel, Inc. v. Louis Marx & Co., 353 F.2d 421, 423-24 & n.4 (2d Cir. 1965); cf. Colorado River Water Conserv. Dist. v. United States, 424 U.S. 800, 817, 96 S. Ct. 1236, 47 L. Ed. 2d 483 (1976) (no precise rule governs relations between federal district courts possessing jurisdiction, but general principle is to avoid duplicative litigation); Kline v. Burke Constr. Co., 260 U.S. 226, 229, 67 L. Ed. 226, 43 S. Ct. 79 (1922) (forbearance exercised by coordinate federal courts is discretionary) (quoting Covell v. Heyman, 111 U.S. 176, 182, 28 L. Ed. 390, 4 S. Ct. 355 (1884)).
Therefore, we review the district court's order for abuse of discretion. Crosley, 122 F.2d at 927; see also United States v. Criden, 648 F.2d 814, 817 (3d Cir. 1981); Pacesetter Systems, 678 F.2d at 95 & n.1. We hold that the district court did not abuse its discretion by declining to invoke the first-filed rule to dismiss the EEOC's enforcement action. When the University filed the first suit in the District of Columbia Circuit, it knew the EEOC's enforcement action in the Eastern District of Pennsylvania was imminent, and that precedent in this Circuit, see E.E.O.C. v. Franklin & Marshall College, 775 F.2d 110 (3d Cir. 1985), cert. denied, 476 U.S. 1163, 90 L. Ed. 2d 729, 106 S. Ct. 2288 (1986), might favor resolution of the dispute in favor of the EEOC. Under these circumstances, and in light of the purposes of Title VII of the Civil Rights Act of 1964, the first-filed rule does not govern this case.
In addition, we will affirm, for reasons other than those stated by the district court, the order denying the University's request to raise its defenses at the subpoena enforcement stage. We will remand, however, on the issue whether the University should be entitled to produce redacted records.
The facts are undisputed. In 1985, the University denied tenure to Rosalie Tung, a junior member of the faculty of the University's 'Wharton School. Tung then filed charges with the EEOC, alleging that the denial was based on her race (Asian) and on her sex (female). As a result of the EEOC's investigation, the University supplied a wide range of documents, but declined to release confidential peer review materials relating to the tenure review process for Tung and the five other male candidates under consideration. The EEOC then issued a subpoena seeking:
1. Copies of Tung's tenure file;
2. Copies of the tenure file for the five other candidates considered with Tung for tenure;
3. The identity, tenure status, and qualifications of those individuals who comprised the tenure committees for the University's management department from June, 1984 to the present; and
4. The identity of all members of the University's personnel committee.
J.A. at 3 (EEOC subpoena).
The University requested the EEOC to balance its need for access to investigative materials with the University's "important societal and constitutional interests in preserving the integrity of the peer review process." J.A. at 9. This balancing, the University maintained, would require the EEOC to modify the subpoena to exclude confidential peer review material. Id. at 8-9. The EEOC denied this request on April 10, 1987, concluding that: (1) the peer review information was necessary to determine whether Tung was treated differently from those who received tenure; and (2) this court's decision in Franklin & Marshall required it to reject the University's argument that principles of academic freedom created a qualified privilege protecting universities from disclosing tenure review information to the EEOC. J.A. at 11-14. The EEOC notified the University that unless it responded to the subpoena within twenty days of receiving the agency decision, subpoena enforcement proceedings would be initiated. Id. at 14.
The University received the EEOC decision on April 14, 1987; thus, the twenty-day grace period expired on May 4, 1987. On May 1, 1987 -- three days before expiration of the grace period -- the University responded by filing suit for declaratory judgment and injunctive relief in the district court for the District of Columbia. The University claimed the EEOC had violated the first and fifth amendments, see U.S. Const. amend. I, V, and the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 553 (1982), by adopting a policy that, in practice, constituted a nationwide rule requiring complete disclosure of confidential peer review materials. See J.A. at 148, 153-54, 157.*fn1 Count IV of the University's complaint explicitly requested the court to quash the subpoena issued by the EEOC's Philadelphia office. Id. The University said it filed suit in Washington, D.C., rather than Philadelphia, because "more was at stake than the single question of the Commission's possible enforcement of the its subpoena against the University." Brief for Appellant at 6.
The EEOC instituted its subpoena enforcement action on June 19, 1987 in the Eastern District of Pennsylvania. At that point, therefore, each party had filed suit relating to the validity of the EEOC subpoena, but the suits were pending in different federal district courts. Citing our decision in Crosley, the University sought dismissal of the enforcement action in favor of its previously filed suit in the District of Columbia. In the event the action was not dismissed on comity grounds, the University requested an opportunity to raise its constitutional and APA defenses when the Eastern District of Pennsylvania court considered the subpoena enforcement question. It then sought discovery to support those claims. The EEOC opposed the discovery requests, arguing that the constitutional and APA issues could not be considered in the enforcement action.
The Eastern District of Pennsylvania judge heard oral argument July 2, 1987 on the University's motion to dismiss. See J.A. at 44-76 (transcript of oral argument). The trial judge posited that the University filed the first action in the District of Columbia to avoid an adverse decision in this circuit based on Franklin & Marshall:
As I see it, . . . we have . . . a case on point . . . . and maybe you were looking somewhere else, that you thought might result in something different than they did in the Third Circuit. That is possible, isn't it? . . . Isn't that why you did it?
J.A. at 55-56. The University's counsel responded that avoidance of Franklin & Marshall "may have been a consideration . . . but we did not choose a forum that was inappropriate for the action that we brought." Id. at 56; accord Transcript of Oral Argument at 4, 5 (3d Cir. February 25, 1988). On September 1, 1987, the Eastern District of Pennsylvania judge denied the motion to dismiss, ordered the ...