By Michael Gallub
- This article was first published on Law.com
Network - April 29, 2014
In the class action world, the proliferation of “copycat”
lawsuits has plagued courts and litigants for decades. Until a
class action is certified under Federal Rule 23, it has merely a
“putative” status, meaning that the claims are asserted solely
on behalf of the individual named plaintiff(s). Since the
claims at that point are “individual,” some attorneys, hoping to
procure large fees with reduced effort, “piggy-back” on existing
class actions by filing copycat suits. This has become easier
through modern technology, where routine internet searches can
enable counsel to locate and sign-up at least one other
“similarly situated” person to serve as a plaintiff in a new
class action based upon the same product and controversy as the
pending one. The new action may be identical to the existing
one, or it may involve “tweaking” of the pending allegations,
legal claims, named defendants and/or class definitions in an
effort to make it appear different. It may be commenced in the
same court as the pending action or in an entirely different
jurisdiction. It may be commenced for an improper purpose, such
as to extort another attorney fee out of an already existing
controversy, to ride the coattails of or interfere with a
proposed settlement, or to expand the dispute to other courts
and jurisdictions. Regardless of the motive, such lawsuits
impose substantial burdens upon courts, defendants and even the
plaintiffs and their counsel.
There is a legal antidote for duplicative or copycat lawsuits –
a doctrine called the “first-to-file” rule. The rule has two
facets: (1) it provides a legal presumption that the first-filed
action is the correct forum for the controversy, and (2) it
empowers the court to dismiss, stay or transfer a second similar
action based on the pendency of the first-filed action. E.E.O.C.
v. Univ. of Pennsylvania, 850 F.2d 969 (3d Cir. 1988), aff’d,
493 U.S. 182 (1990); Penders
v. Sega of America, 2013 U.S. App. LEXIS 21540 (9th Cir.
Oct. 23, 2013); Pacesetter
Systems, Inc. v. Medtronic, Inc., 678 F.2d 93 (9th Cir.
Licensing Co. v. American Casualty Co. of Reading, Pa., 713
F.3d 71 (11th Cir.
2013). Discretionary in its application, the first-to-file rule
is designed to promote the important goals of judicial economy,
efficiency and avoidance of inconsistent results. Alltrade,
Inc. v. Uniweld Products, Inc., 946 F.2d 622, 625 (9thCir.
v. Freightcar Am., Inc., 2014 U.S. Dist. LEXIS 4299, *13-15
(W.D. Pa. Jan. 14, 2014). To foster these goals, courts have
said that the first-to-file rule should not be disregarded
except in compelling circumstances. Id.; Neuralstem,
Inc. v. Stemcells, Inc., 573 F. Supp. 2d 888, 900 (D. Md.
The first-to-file rule is not limited to class actions but has
particular significance in the class action context. Motions
based on the first-to-file rule are generally decided on three
factors: (1) chronology of the actions, (2) similarity of the
parties and (3) similarity of the issues. Penders, supra at
Ins. Co. v. DLJ Mortgage Capital, Inc., 2012 U.S. Dist.
LEXIS 19361, *3 (M.D. Fla. Jan. 26, 2012).
(1) The “chronology” factor favors the first-filed suit,
especially where it is in a more advanced stage of litigation
than the second suit. Id.
(2) The “similarity of the parties” factor does not require
complete party identity but only that the parties in both
actions be substantially similar. Hilton
v. Apple, Inc., 2013 U.S. Dist. LEXIS 142354, *23-26 (N.D.
Cal. Oct. 1, 2013). Where multiple class actions involve
different “individual” plaintiffs, the putative classes are
compared. Similarity of parties has been found where the
actions share at least one common defendant and the putative
class of the second action is similar to or at least partially
subsumed within the putative class of the first-filed action. Id.; Medlock
v. HMS Host USA, Inc., 2010 U.S. Dist. LEXIS 133143, *8-10 (E.D.
Cal. Dec. 16, 2010). Thus, similarity is satisfied if the named
plaintiff in the second suit (or at least one of multiple named
plaintiffs) falls within the putative class definition of the
first-filed action. Id.
Further, a court can dismiss or transfer a copycat class action
even if, as is often the case, the copycat action alleges a
broader class than that of the first-filed action, such as a
broader scope of class members and/or the addition of other
products of defendant. See, e.g., Koehler
v. Pepperidge Farm, Inc., 2013 U.S. Dist. LEXIS 128440,
*12-13 (N.D. Cal. Sept. 9, 2013)(ordering transfer under
first-to-file rule where proposed class in new action
encompassed purchasers of all Goldfish crackers, whereas
proposed class in first suit encompassed only purchasers of
“Cheddar” Goldfish crackers).
(3) The “similarity of the issues” factor also does not require
complete identity; only that the issues are substantially
similar. The fact that a copycat suit contains varied
allegations, additional legal claims or different legal claims
does not preclude the court from dismissing, staying or
transferring the action if the suit involves the same or
substantially similar controversy or dispute. Walker
v. Progressive Casualty Ins. Co., 2003 U.S. Dist. LEXIS
7871, *7-8 (W.D. Wash. May 9, 2003); Inherent.com
v. Martindale-Hubbell, 420 F. Supp. 2d 1093, 1099 (N.D. Cal.
2006). Nor is relief precluded when, for instance, the copycat
suit alleges a more expansive definition that includes more
putative class members (such as lessors in addition to
purchasers) and/or more of defendant’s products (such as
additional products or additional model years of the same
The remedy chosen by the court will depend upon case specific
facts and circumstances. Dismissal should be ordered where the
actions are duplicative, or where the putative class and claims
in the second action are substantially similar to or subsumed
within the first action. Other cases which are not
substantially similar may be appropriate for a stay where, for
example, a determination of the first action may have a binding
effect on claims or issues raised in the second action. Still
other cases may be appropriate for a transfer and/or
consolidation in the interest of judicial economy. Regardless
of the remedy ultimately employed, an appropriate motion to
dismiss, stay or transfer under the first-to-file rule could
eliminate or reduce the costs and burdens imposed by a copycat
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