ROCKHILL INSURANCE COMPANY v. J.M. DRILLING, LLC, No. 1:2018cv01050 - Document 20 (W.D. Tenn. 2018)
Court Description: ORDER GRANTING, IN PART, MOTION TO DISMISS, OR, IN THE ALTERNATIVE, TO TRANSFER OR STAY ROCKHILL'S DECLARATORY ACTION AND TRANSFERRING THIS MATTER PURUSANT TO 28 U.S.C. § 1404. Signed by Chief Judge S. Thomas Anderson on 10/30/18. (mbm)
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points out that this declaratory action was filed before the Louisiana Federal Action. Under the “first-to-file rule,” when actions involving nearly identical parties and issues have been filed in two different district courts, the Court in which the first suit was filed generally should proceed to judgment. See Zide Sport Shop of Ohio, Inc. v. Ed Tobergte Assocs., 16 F. App’x. 433, 437 (6th Cir. 2001) (“The first-to-file rule is a wellestablished doctrine that encourages comity among federal courts of equal rank.”); see also Certified Restoration Dry Cleaning Network, L.L.C. v. Tenke Corp., 511 F3d. 535, 551 (6th Cir. 2007). “However, district courts have discretion to dispense with the first-to-file rule when equity so demands.” DigiTrax Entm’, LLC v. Universal Music Corp., 21 F. Supp. 3d 917, 925 (E.D. Tenn. 2014). For example, the first-to-file rule “much more often than not gives way in the context of a coercive action filed subsequent to a declaratory judgment.”4 Encore Furniture 4 “Coercive relief” is defined as “[j]udicial relief, either legal or equitable, in the form of a personal command to the defendant that is enforceable by physical restraint.” Black’s Law Dictionary 1317 (8th ed. 2004). “Coercive relief includes suits seeking injunctions as well as Thrifts & More, LLC v. Doubletap, Inc., 281 F. Supp. 3d 665, 668-69 (M.D. Tenn. 2017). And, Courts may decline to enforce the rule when the record contains evidence of forum shopping, bad faith, or anticipatory declaratory actions. See AmSouth Bank v. Dale, 386 F.3d 763, 791 n. 8 (6th Cir. 2004). In determining the applicability of the rule, a Court should consider “(1) the chronology of events; (2) the similarity of the parties involved; and (3) the similarity of the issues or claims at stake.” Smithers–Oasis Co. v. Clifford Sales & Mktg., 194 F. Supp. 2d 685, 687 (N.D. Ohio 2002). “A plaintiff, even one who files first, does not have a right to bring a declaratory judgment action in the forum of his choosing.” Zide, 16 F. App’x at 437. [T]he first-filed rule is not a strict rule and much more often than not gives way in the context of a coercive action filed subsequent to a declaratory judgment .... Cases construing the interplay between declaratory judgment actions and suits based on the merits of underlying substantive claims create, in practical effect, a presumption that a first filed declaratory judgment action should be dismissed or stayed in favor the substantive suit. Certified Restoration, 511 F.3d at 551-52 (quoting AmSouth Bank, 386 F.3d at 791 n. 8); see also UAW v. Dana Corp., 1999 WL 33237054 at *6 (N.D. Ohio Dec. 6, 1999) (stating that, in applying the first-filed rule to a declaratory judgment action, “the real question for the court is not which action was commenced first but which will most fully serve the needs and convenience of the parties and provide a comprehensive solution of the general conflict”) (citation omitted)). “[C]oercive actions . . . should with few exceptions be given precedence over declaratory judgment actions, even when a declaratory judgment action presenting similar parties and issues is filed first.” Clear!Blue, LLC v. Clear Blue, Inc., 521 F. Supp. 2d 612 (E.D. Mich. 2007). In “[c]ases construing the interplay between declaratory judgment actions and suits based on the suits seeking damages.” Chaffee McCall, LLP v. World Trade Ctr. of New Orleans, 2009 WL 322156 at *5 (E.D. La. Feb. 9, 2009) (citation omitted). merits of underlying substantive claims create, in practical effect, a presumption that a first filed declaratory judgment action should be dismissed or stayed in favor of the substantive suit.” AmSouth Bank, 386 F.3d at 781 n.8. In the present case, the Court will not apply the first-to-file rule because the subsequently filed Louisiana Federal Action is both a declaratory action and a coercive, substantive breach of contract action. Furthermore, unlike in this case, all the interested parties are also parties to the Louisiana Federal Action. Additionally, “the issues and claims at stake” are substantially the same, and there has been long-standing litigation in Louisiana over the events giving rise to the present action. Next, the Court must consider whether it would be inconvenient to require Rockhill and its witnesses to appear in the Louisiana Federal Action. “The convenience of the witnesses, is one of the most important factors in considering a motion to transfer venue.” See Applied Energy Techs., Inc., 2009 WL 2777079 at *6 (citation omitted). Rockhill has not claimed hardship or provided evidence that potential witnesses and proof would not be readily available in the Western District of Louisiana. Given the absence of any claim of hardship, the interests of justice and judicial economy are determinative in this transfer request. In summary, the Underlying Thibodeaux Plaintiffs’ interest in litigating this matter, all the parties’ interests in having consistent outcomes, Defendant J.M. Drilling’s interest in not having to litigate a declaratory action in both Tennessee and Louisiana, the presumption that substantive cases should take precedence over declaratory actions, the Louisiana Court’s interest in controlling cases within its jurisdiction, and this Court’s interest in judicial economy and efficiency weigh in favor of transfer. See Boys, 2013 WL 3834010 at *1–5 (transferring the action from Tennessee to New Jersey based on the equities). Accordingly, the portion of Defendant’s motion seeking to dismiss or stay the action is DENIED. The portion of the motion seeking to transfer the action to the Western District of Louisiana is GRANTED. This matter is hereby TRANSFERRED to the United States District Court for the Western Division of Louisiana, Lafayette Division, for all further proceedings pursuant to 28 U.S.C. § 1404(a). IT IS SO ORDERED. s/ S. Thomas Anderson S. THOMAS ANDERSON CHIEF UNITED STATES DISTRICT JUDGE Date: October 30, 2018.
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