1.7.9 Competing Lawsuits
For many reasons, it is a good idea to attempt to learn whether or not other lawyers have already begun either individual or class actions involving the same or similar practices. When an action presents issues and parties that are either identical to or largely overlapping with the issues and parties in another case, “[u]nder the first-to-file rule, a district court may choose to stay, transfer, or dismiss a duplicative later-filed action.”175 In applying the first-to-file rule, courts generally evaluate three factors: (1) the chronology of events; (2) the similarity of the parties involved; and (3) the similarity of the issues or claims at stake.176 Furthermore, although a putative class member is not a party to a lawsuit merely by virtue of being within the putative class, if there is substantial overlap between the classes, the district court has discretion to apply the rule.177
If another lawyer has a similar individual action pending and will not be seeking certification of a nationwide class, that lawyer may be a great resource for both facts and law; in any event, a review of existing court filings may be highly beneficial. When there is already ongoing class litigation, it may be a wise use of limited resources to forego bringing another lawsuit alleging essentially the same claims—depending on the jurisdiction, scope, status, and attorneys in the existing litigation—if the existing litigation may be expanded to nationwide scope, thus possibly swallowing any subsequently filed case.
Even if the decision is to go ahead and proceed with a second class action, it is essential to coordinate with other pending class actions, either formally by consolidation through the Panel for Multidistrict Litigation178 or informally through coordinated discovery, briefing, and/or negotiation when appropriate.
Finding out about existing litigation is not always simple. It is essential to utilize PACER and online legal research tools that aggregate state dockets when conducting searches. However, keep in mind that not all state court dockets appear online or are searchable in a central repository. After a case is filed, counsel should make a point to learn about the pendency of other lawsuits, both by inquiring directly of defense counsel and by engaging in formal discovery aimed at identifying similar or overlapping cases.
After filing a case, it is equally important for counsel to monitor new cases filed against the defendant. If another case against the same defendant settles, and the class definition or release is overly broad, it could spell disaster for the earlier filed case. When there are competing cases, a defendant may try a “reverse auction” to see which case will settle most advantageously to the defendant. There are numerous technological methods to monitor new case filings. For example, Westlaw and Lexis have features that allow practitioners to set up alerts of new case filings.
175 Merial Ltd. v. Cipla Ltd., 681 F.3d 1283, 1299 (Fed. Cir. 2012). See, e.g., Ingram-Fleming v. Lowe’s Home Ctr., L.L.C., 2015 WL 456509 (M.D. Fla. Feb. 3, 2015).
176 Baatz v. Columbia Gas Transmission, L.L.C., 814 F.3d 785 (6th Cir. 2016).
177 Id. at 790–791 (noting that “if the opposite rule were adopted, the first-to-file rule might never apply to overlapping class actions as long as they were filed by different plaintiffs”).
178 Cases filed in different federal districts may be transferred to a single district court for coordination purposes pursuant to the multidistrict litigation statute, 28 U.S.C. § 1407. See U.S. Judicial Panel on Multidistrict Litig., Rules of Procedure of the Judicial Panel on Multidistrict Litigation (eff. Oct. 4, 2016), available at www.jpml.uscourts.gov. See also Manual for Complex Litigation § 20.1, at 218–228 (4th ed. 2004); U.S. Judicial Panel on Multidistrict Litig. & Fed. Judicial Ctr., Ten Steps to Better Case Management, A Guide for Multidistrict Litigation Transferee Judges (2014), available at www.fjc.gov.
Many states have procedures for coordinating or consolidating cases under various circumstances. See, e.g., Cal. Civ. Proc. Code § 1048 (West) (consolidation); Cal. Civ. Proc. Code § 404 (West); Cal. Rules of Court 3.501–3.550 (coordination).