United States District Court, E.D. Pennsylvania
Darnell Jones, II J.
NOW, this 21st day of February, 2017, upon
consideration of Defendants' Motion to Stay, Dismiss or
Transfer, (ECF No. 4), and Plaintiff's Opposition
thereto, (ECF No. 6), it is hereby ORDERED that said Motion
is GRANTED insofar as the above-captioned matter shall be
transferred to the United States District Court for the
District of South Carolina pursuant to the first-filed rule
and 28 U.S.C. § 1404(a). It is denied as moot in all
Schulmerich Bells, LLC, commenced an action raising federal
and state law claims against Shawn Lackey in Pennsylvania
state court on November 29, 2016. Pl.'s Br. 2-3, ECF No.
6. Lackey is an employee of Jeffers Handbell Supply, Inc.
Defs.' Br. 1, ECF No. 4-1. Plaintiff did not name Jeffers
as a defendant in the original state complaint. Upon learning
of the state court action, Jeffers filed suit for declaratory
judgment against Schulmerich in the U.S. District Court for
the District of South Carolina on December 15, 2016.
Pl.'s Br. 4. The parties agree the state and federal
court actions are identical or substantially overlap.
See Pl.'s Br. 1; Defs.' Br. 3. Both disputes
involve federal Lanham Act claims arising from the same
course of conduct. See Pl.'s Br. 2-3; Defs.'
December 30, 2016, counsel for Jeffers notified
Schulmerich's counsel of the South Carolina action.
Defs.' Br. 2. On January 5, 2017, Schulmerich filed an
amended complaint in Pennsylvania state court, adding Jeffers
as a co-defendant. Pl.'s Br. 4. On January 18, 2017,
Defendants removed the state court action to this Court
pursuant to 28 U.S.C. § 1441. Plaintiff has not
initiated a federal action against Jeffers or Lackey
in the course of this litigation.
now move to transfer this case to the federal district court
in South Carolina pursuant to the first-filed rule and 28
U.S.C. § 1404(a) or, in the alternative, to stay or to
dismiss Lackey from the case for lack of personal
jurisdiction. Schulmerich agrees the first-filed rule
applies, but opposes the transfer motion on the grounds that
(1) the state court action in Pennsylvania was first in time
and (2) the declaratory judgment action in South Carolina
constitutes bad faith, forum shopping and an anticipatory
filing. Schulmerich also contends personal jurisdiction over
Lackey is proper.
“first-filed rule” provides that, “in 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) (emphasis added). “The
first-filed rule encourages sound judicial administration and
promotes comity among federal courts of equal
rank.” Equal Employment Opportunity Commission v.
University of Pennsylvania, 850 F.2d 969, 971-72 (3d
Cir.1988) (emphasis added), aff'd on other
grounds, 493 U.S. 182 (1990). The first-filed rule gives
district courts the discretion “to stay the
second-filed action, transfer it, dismiss it without
prejudice, or dismiss it with prejudice, ” but the
Third Circuit recently indicated its preference for staying
or transferring a second-filed suit “in the vast
majority of cases.” Chavez v. Dole Food Co.,
Inc., 836 F.3d 205, 216, 220 (3d Cir. 2016).
Court agrees the present case is the second-filed
federal action and, as a matter of comity and
judicial efficiency, grants the motion to transfer this
matter to the federal district court in South Carolina, the
first federal court to possess jurisdiction of the
subject and a proper venue for this dispute under 28 U.S.C.
first reason for opposing transfer is unavailing. The
first-filed ruled prioritizes the first federal
court that properly possesses jurisdiction over the subject,
and does not credit a party's decision to initiate the
action in state court. See N. Am. Commc'ns,
Inc. v. Homeowners Loan Corp., No. 2006-147, 2007 WL
184776, at *3 n.1 (W.D. Pa. Jan. 22, 2007); Just Born,
Inc. v. Summit Foods Enterprises, Inc., No. CIV.A.
13-7313, 2015 WL 996380, at *2 (E.D. Pa. Mar. 6, 2015)
(original federal action took precedence over subsequent
removal proceeding even though the removed state court action
was first in time).
is directly on point. There, as here, the plaintiff commenced
the first action in Pennsylvania state court. Within
days, the defendant filed a substantially similar action in
the federal court for the Northern District of Georgia.
Id. at *2. Shortly thereafter, the defendant removed
the state court proceeding to the federal court for the
Western District of Pennsylvania. Id. at *1. The
defendant then moved to dismiss or, alternatively, to
transfer the case to the Northern District of Georgia.
Id. at *2. The plaintiff opposed the motion on the
grounds that it had initiated the first action in state court
and “its choice of forum should be respected.”
Id. Applying the first-filed rule, the court
concluded “the first federal court to possess
jurisdiction was the Northern District of Georgia.”
Id. at *3 (emphasis in original). The court
cautioned: “the plaintiff in a state civil action can
avoid being the second-filed matter by simply filing a
complaint in a federal district court, not a state trial
court at the outset.” Id. at *3 n.1. The
reasoning in Homeowners is especially compelling
where, as here, original federal jurisdiction is undisputed
and the action could have been initiated just as easily in
federal court as in state court.
reliance on D & L Distribution, LLC v. Agxplore
Intern., LLC, 959 F.Supp.2d 757 (E.D. Pa. 2013) is not
only misplaced, but also reinforces Defendants' position.
D & L Distribution involved parties that
initiated separate law suits in sister federal
courts. Thus, as in the present case, the court properly
transferred the second-filed action to the first federal
court with jurisdiction of the subject.
second basis for opposing transfer is equally unpersuasive.
The Third Circuit has recognized exceptions to the
first-filed rule, such as bad faith, forum shopping, and
gamesmanship (e.g. anticipatory suits filed by a plaintiff in
one forum to preclude imminently filed suits in another
forum). E.E.O.C. v. Univ. of Pennsylvania, 850 F.2d