Opinion ID: 17700
Heading Depth: 4
Heading Rank: 2

Heading: Why the Jurisdiction of the First-Filed Court

Text: Might Matter In light of this distinction between collateral estoppel and the first-to-file rule, it comes as no surprise that Cadle has not presented any persuasive case law to support its analogy. The only support that Cadle provides for its 12 argument comes from a case decided by a district court in the Third Circuit, Jefferson Ward Stores, Inc. v. Doody Co., 560 F. Supp. 35 (E.D. Pa. 1983). Jefferson Ward had contracted with Doody to renovate its stores; after several rounds of complaints by Jefferson Ward, Doody filed an action in the Southern District of Ohio seeking a declaration that it had not breached their contract. Jefferson Ward then filed suit in the Eastern District of Pennsylvania against Doody for breach of contract and negligence. The “dispositive” factor in the court’s decision to keep the case rather than dismiss it in favor of the first-filed court was “a serious question as to that court’s jurisdiction.” Jefferson Ward, 560 F. Supp. at 36. The court supported its decision with the following statement, which provides the sole basis for Cadle’s argument in its brief: “It is not the first case filed which has precedence, but ‘the court first obtaining jurisdiction of the parties and the issues’ which should proceed with the litigation.” Jefferson Ward, 560 F. Supp. at 37 (quoting Omni-Exploration, Inc. v. McGookey, 520 F. Supp. 36, 37 (E.D. Pa. 1981)). This excerpt would seem to lend support to Cadle’s view that the first-to-file rule requires the secondfiled court to consider the jurisdiction of the first. Jefferson Ward’s analysis of the first-to-file rule, however, is unpersuasive. The court’s decision to consider 13 the jurisdiction of the first-filed court sprang from Columbia Pictures Industries., Inc. v. Schneider, 435 F. Supp. 762 (S.D.N.Y. 1977).4 That case presents a much clearer picture of how the jurisdiction of the first-filed court fits into the rule and indicates that Jefferson Ward failed to place the relevance of the first-filed court’s jurisdiction in the proper context. The defendants in Columbia had threatened antitrust litigation against Columbia; Columbia responded by filing an action in the Southern District of New York seeking a declaration that it had not violated any antitrust laws. See id. at 745-46. The defendants filed their antitrust suit in the Central District of California six days later. Columbia moved the New York court to enjoin the defendants from pursuing their claim in California. Id. The New York court declined to issue the injunction, finding that although it was the first-filed court, exceptional circumstances militated against exercising its priority under the rule. Id. at 747. Among other factors (not relevant in this case), the court considered the effect that a potential dispute about its personal jurisdiction over Columbia would have on the value of judicial economy so central to the first-to-file rule. 4 Omni Exploration, quoted by Jefferson Ward above, also relied on Columbia Pictures in its analysis. See Omni Exploration, 520 F. Supp. at 37-38. 14 There is a substantial question . . . whether [personal] jurisdiction exists under the New York long arm statute against these defendants, all of whom reside in California. The possibility of an erroneous determination of personal jurisdiction in New York followed by lengthy proceedings thereafter over which we were ultimately found to lack jurisdiction, and the desirability of avoiding decisions unnecessary to ultimate resolution of the merits by a federal court strongly suggest that California is a more appropriate forum. Columbia Pictures, 435 F. Supp. at 748. The mere existence of such questions suggested “that considerations of judicial economy require the case to be litigated first in California.” Id. at 750. Subsequent case law, uncited by Cadle, casts the Jefferson Ward and Columbia Pictures decisions in the appropriate light. While the likelihood of a jurisdictional dispute in the first-filed court may be a factor to consider in applying the rule, resolving the dispute in favor of that court’s jurisdiction is never a condition precedent to applying it. See Berisford Capital Corp. v. Central States, Southeast and Southwest Areas Pension Fund, 677 F. Supp. 220 (S.D.N.Y. 1988) (“I would not conclude in the ‘sound discretion’ allotted to me in this matter that [jurisdictional uncertainty in the first filed court], standing virtually alone, should be so compelling as to cause me to depart from the well established and salutary first-filed rule.”); Brower v. Flint Ink Corp., 865 F. Supp. 564, 570 (N.D. Iowa 1994) (noting that Berisford “rejected the suggestion that 15 jurisdictional uncertainties standing alone should be so compelling as to cause the court to depart from the ‘first filed rule.’”); Firstier Bank, N.A. v. G-2 Farms, No. 95-3118, 1996 WL 539217, at  (D. Neb. Mar. 11, 1996) (noting that a jurisdictional dispute is only one factor to consider).