304 F.Supp.2d 279 (2004) | Cited 5 times | D. Rhode Island | February 11, 2004


The "first-filed rule" is an equitable doctrine of venue selectionfollowed universally: "[w]here identical actions are proceedingconcurrently in two federal courts . . . the first filed action isgenerally preferred in a choice-of-venue decision." Cianbro Corp. v.Curran-Lavoie, Inc., 814 F.2d 7, 11 (1st Cir. 1987). This case teststhe application of the rule to a scenario in which one party files astate court action that is subsequently removed to federal court, and theother party sues in a different federal court after the state action wasfiled, but before its removal. The question is whether the state filingdate or the date of removal is the relevant date for applying thefirst-filed rule. Finding that the state court action is first-filed, andthat there are no other circumstances warranting transfer of venue, theCourtPage 2denies the Defendant's motion to transfer venue to the District ofMassachusetts, or to dismiss or stay the case.

I. Background

The following facts are derived from the Complaint and from theparties' filings in support of and in opposition to the motion. PlaintiffAlan Shawn Feinstein ("Feinstein"), a businessman and philanthropist, isthe executive director of Plaintiff Alan Shawn Feinstein Foundation("ASFF") and a director of Plaintiff The Feinstein Foundation(collectively "Plaintiffs"). On March 17, 2000, Feinstein entered into acontract with Defendant J. Larry Brown whereby ASFF would contribute $3million, over three years, in charitable funding to support various goodworks of the Center on Hunger and Poverty, of which Brown is theexecutive director.

Things did not go well. Brown claims that Feinstein and ASFF failed tomake any of the promised payments, and Plaintiffs rejoin that Brown wasunable to fulfill any of the material terms of the agreement. The partiesexchanged frequent correspondence in an attempt to resolve theirdifferences. However, on April 22, 2002, Brown wrote a letter to theRhode Island Foundation that particularly offended Feinstein. In thatletter, Plaintiffs allege that

Brown deliberately misrepresented facts to the Rhode Island Foundation and misrepresented Feinstein's dealings with three Rhode Island-based colleges,. . . two specifically-named Rhode Island non-profit institutions, and other unnamed institutions . . .[and] referred to the "consideration of legal action" as the only thingPage 3 which would induce Feinstein to fulfill alleged legal commitments.

Pl. Mem. at 3.

The relationship continued to deteriorate, until finally, in an August12, 2003 letter, counsel for Brown wrote to Feinstein, ASFF, and theRhode Island Foundation complaining of Feinstein's failure to pay any ofthe promised contributions, and stating: We will be happy to review any information, including documents, that you think we need to review, and consider any contrary arguments that you may wish to make. As you can imagine, bringing suit on a charitable pledge and promise, however clear and binding as is the case here, is never an undertaking that is pursued without exhausting all means of alternative resolution. . . .Def. Answer and Counterclaims, Ex. C.

On August 28, 2003, in response to this letter and a progressivelyworsening relationship with the Rhode Island Foundation (caused, inFeinstein's opinion, by Brown's defamatory remarks), Plaintiffs suedBrown in Providence County Superior Court for defamation, tortiousinterference with advantageous business relations, and breach ofcontract. On September 25, 2003, Brown removed that action to this Court.He then answered the complaint on September 30, 2003, and assertedcounterclaims for breach of contract and a declaratory judgment thatBrown did not defame Feinstein.

On September 17, 2003, Brown filed an action in the United StatesDistrict Court for the District of Massachusetts. The parties agree thatthe claims raised in this action mirror thePage 4counterclaims that Brown asserted in the first action. Brown nowmoves, pursuant to 28 U.S.C. § 1404(a),1 to transfer venue in theaction in this Court to Massachusetts, based on the first-filed rule andother equitable considerations relating to venue.

II. Analysis

A. The First-Filed Rule

The first-filed rule, as applied in the First Circuit, typicallygoverns the choice of venue when identical actions proceed concurrentlyin two federal courts. See, e.g., Coady v. Ashcraft &Gerel, 223 F.3d 1, 11 (1st Cir. 2000) (federal courts inMassachusetts and Washington, D.C.); TPM Holdings, Inc. v.Intra-Gold Indus., Inc., 91 F.3d 1, 2 (1st Cir. 1996) (federalcourts in New Hampshire and Texas); Cianbro Corp. v. Curran-Lavoie,Inc., 814 F.2d 7, 11 (1st Cir. 1987) (federal courts in NewHampshire and Maine); Nortek, Inc. v. Molnar, 36 F. Supp.2d 63,65 (D.R.I. 1999) (federal courts in Rhode Island and New York).

No court in this circuit, however, has had occasion to consider how therule operates when "Action A" is filed in state court, and then removedto federal court after "Action B" is filed in a differentfederal court. In such a procedural posture,Page 5Defendant argues that the earlier of the date of removal of Action Aand the date of the filing of Action B is controlling, because "courtslook to the order in which the federal districts> obtainedjurisdiction. . . . A state court's obtaining of jurisdiction isirrelevant." Def. Mem. at 5 (emphasis omitted).

Every court that has confronted this issue has disagreed.2 Forexample, in Manufacturers Hanover Trust Co. v. Palmer Corp.,798 F. Supp. 161 (S.D.N.Y. 1992), the court faced precisely the samesituation: defendant filed an action in New Jersey state court; plaintifffiled a second, parallel action in the Southern District of New York sixdays later; and plaintiff removed the first action to New Jersey federalcourt thereafter. Id. at 166. After noting that the SecondCircuit had not squarely addressed that procedural sequence, the courtfound "ample authority for the proposition that the state court filingdate is the relevant benchmark." Id. (collecting cases from theNinth Circuit, Texas, New Jersey, West Virginia, and Pennsylvania). Thecourt further observed that "[t]he principles underlying removal alsoweigh in favor of the state filing date." Id. (citing 14AWright, Miller &Page 6Cooper, Federal Practice and Procedure § 3738 at556-57 (1985) ("After removal, a federal court acquires full andexclusive jurisdiction over the litigation. The removed case proceedsaccording to the Federal Rules of Civil Procedure and is treated asthough it had been commenced originally in the federal court.")(footnotes omitted) (emphasis added)). Since Palmer, severalother courts have reached the same conclusion. See, e.g.,800-Flowers, Inc. v. Intercontinental Florist, Inc.,860 F. Supp. 128, 131 n.l (S.D.N.Y. 1994); Affinity Memory & Micro,Inc. v. K&Q Enters., Inc., 20 F. Supp.2d 948, 954n.10 (E.D. Va. 1998); First Health Group Corp. v. Motel 6 OperatingL.P., No. OOC524, 2000 WL 984160, at *2 (N.D. Ill. July 17, 2000).

This writer agrees with the reasoning of these courts, and has found nofactually similar case that has been decided to the contrary. The actionfiled by Plaintiffs in state court and subsequently removed to this Courtis first-filed.

B. Equitable Venue Considerations: Special Circumstances andthe Balance of Convenience

Although there is a "strong presumption" favoring a plaintiff's choiceof venue in the first-filed action, see Coady, 223F.3d at 11, that presumption may be overcome:

The preference for the first-filed action is not a per se rule, but rather a policy governed by equitable considerations: "the forum where an action is first filed is given priority over subsequent actions, unless there is `a showing of balance of convenience in favor of the second action,' or there are special circumstances which justify giving priority to the second[.]"Page 7

SW Indus., Inc. v. Aetna Gas. & Sur. Co., 653 F. Supp. 631,634 (D.R.I. 1987) (citations omitted). Defendant submits that bothspecial circumstances and the balance of convenience favor transferringvenue to the District of Massachusetts.

1. Special Circumstances

When the first-filed action is the result of a preemptive "race to thecourthouse," a court may allow a later-filed case to proceed in place ofthe first-filed action. See Cianbro Corp., 814 F.2dat 11. Defendant contends that Plaintiffs reacted to Brown's August 12,2003 letter by filing an "anticipatory" suit, thereby depriving Brown ofthe first-filed benefit unfairly. See Def. Mem. at 7.

Defendant has fallen far short of demonstrating the existence ofspecial circumstances. Feinstein claims to have been defamed by Brown asearly as April 22, 2002, over sixteen months before he sued Brown. Thereare allegations of an increasingly acrimonious relationship between theparties during those intervening months. That Brown's August 12, 2003letter makes oblique reference to the possibility of legal action doesnot lead inexorably to the conclusion that Plaintiffs' suit wasanticipatory. Plaintiffs neither misled Brown into foregoing litigationin order to negotiate a settlement and then filed suit, nor reacted toBrown's notice of imminent filing by "literally sprinting to thecourthouse the same day[.]" See The Holmes Group, Inc. v.HamiltonPage 8Beach/Proctor Silex, Inc., 249 F. Supp.2d 12, 16 (D.Mass. 2002) (citations omitted). Plaintiffs were not obligated tocontinue what, in their view, was a fruitless negotiation before comingto court. There are no special circumstances here that overcome thepresumption favoring the first-filed action.

2. The Balance of Convenience

The first-filed presumption can also be overcome by a showing that thebalance of convenience favors the venue of the later-filed action. Thefactors traditionally weighed in the balance of convenience include: (1)the plaintiff's choice of forum; (2) the convenience of the parties; (3)the convenience of witnesses and location of documents; (4) anyconnection between the forum and the issues; (5) the law to be applied;and (6) the state or public interest at stake. The Holmes Group,Inc., 249 F. Supp.2d at 17. Here, it is Brown's burden todemonstrate that the Plaintiffs' choice of forum, Rhode Island, is"substantially more inconvenient" than proceeding in Massachusetts.See Kleinerman v. Luxtron Corp., 107 F. Supp.2d 122,125 (D. Mass. 2000).

Brown has not met his burden. The first factor favors Plaintiffs, sincethey have chosen to litigate in Rhode Island. The next three factors areneutral. There are witnesses and documents in Rhode Island andMassachusetts, both of which have connections to the claims in the case,and the fora are close enough not to implicate concerns of subpoena poweror anyPage 9appreciable inconvenience to either side. It is unclear what lawwill govern the claims in this case, but since neither party makes anissue of this factor, the Court will not assume that it favors transfer.Finally, there is no state or public interest at stake that wouldmilitate in favor of transfer.3 In sum, Brown has not demonstratedthat the balance of convenience so overwhelmingly favors venue inMassachusetts that it overcomes the presumption accorded Plaintiffs bythe first-filed rule.

III. Conclusion

For the foregoing reasons, Defendant's Motion to Transfer or to Dismissor Stay4 this action is DENIED.


1. Section 1404(a) states: For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.

2. Care must be taken to distinguish this procedural context fromone in which there are two actions proceeding concurrently in a state andfederal forum, and the state action is not removed. In his supplementalmemorandum, Defendant purports to rely on Central States Indus.Supply, Inc. v. McCullough, 218 F. Supp.2d 1073, 1092 (N.D. Iowa2002), which acknowledges the split of authority regarding theapplication of the first-filed rule where the first-filed case is anunremoved state action.

3. Defendant contends that Feinstein is well-known in Rhode Island,and that his "much-publicized" name is a factor favoring transfer toMassachusetts. Def. Mem. at 7-8. To the extent that such a considerationmight affect the "public interest," Feinstein's name recognition,standing alone, is plainly insufficient to tip the balance of conveniencein favor of Defendant.

4. Defendant's contentions with respect to dismissal or stay arepredicated on a finding that his action was first-filed. Since the Courthas rejected that position, his arguments in favor of dismissal or stayare moot.

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