22 | September/October 2023 | BAEC Bulletin
Motion to Stay (First-Filed Rule) In Nelson v. G.Skill USA, Inc., 22-cv-6175-FPG (May 8, 2023), a putative class action brought under the consumer protection laws of multiple States based on defendant’s allegedly misleading advertising, defendant moved to stay the action pending resolution of a parallel putative class action against it for similar claims, which is pending in the Central District of California. In support of its motion, defendant argued that the California action was filed first, and both actions involve substantially the same issues, so judicial economy would be promoted by staying this later-filed suit. Plaintiff opposed, primarily arguing that the California court may not be able to exercise personal jurisdiction over defendant for the New York plaintiffs’ claims, such that rulings in the California action would not have preclusive effect on the issues and claims in this action. In deciding the motion, the Court first noted that the Second Circuit has long followed the “first-filed rule” in deciding whether a case should be stayed or dismissed in favor of a case pending in another federal court and, under that rule, where two actions involve substantially the same issues, the first should have priority unless therer are special circumstances which justify giving priority to the second. The Court then found that no such special circumstances existed, rejecting as “unpersuasive” plaintiff’s suggestion that the California court might lack jurisdiction over New York plaintiffs’ claims asserted in the California action. This is because, while the California court might lack “specific jurisdiction” over defendant for claims occurring in New York, defendant is a California corporation with its principal place of business there, meaning it is subject to “general jurisdiction” in California for any claim against it, even if all the incidents underlying the claim occurred in a different State. And because plaintiff offered no basis for departing from the first-filed rule, defendant’s motion to stay the action was granted. Employment Discrimination In Weiss v. Premier Technologies, 22-cv-6349-DGL (May 9, 2023), plaintiff sued two defendants for employment discrimination under state and federal law. Plaintiff had worked as a sales representative for one defendant, who in turn was an official retailer for the second defendant. The second defendant moved to “...the allegations were merely conclusory, hypothetical statements regarding a purportedly fraudulent scheme, and failed to allege actual instances where the scheme occurred...”
out of the same transaction or occurrence, joinder of the driver was permissible under Rule 20(a). The Court disagreed with defendants that, in order to join the driver, plaintiff also had to satisfy the standard for amending a complaint under Rule 15 (and, in turn, a motion to dismiss under Rule 12(b)(6)). Turning to whether joinder also would comport with fundamental fairness, the Court concluded it did because plaintiff had waited only two months after removal to seek to join the driver, no prejudice would result to defendants, denying the joinder would risk multiple litigations in state and federal court, and plaintiff’s motivation for the joinder was facially not impermissible. Finding that the four factors relevant to fundamental fairness weighed in favor of plaintiff, the Court granted the motion to join the driver and remanded the lawsuit to state court. Motion for Stay Pending Appeal in Separate Action In City of Buffalo v. Smith & Wesson Brands, Inc., 23-cv-66-FPG (June 8, 2023), the Cities of Buffalo and Rochester brought claims against various firearm manufacturers and distributors seeking to hold them liable for allegedly causing gun violence in their communities. Because the constitutionality of the statute underlying one of plaintiffs’ claims is currently at issue in a separate litigation pending before the Second Circuit, defendants sought a stay of proceedings pending the Second Circuit’s determination in that separate litigation, which plaintiffs opposed. Noting that it has authority to stay proceedings pending disposition of another case that could affect the outcome, the Court then considered the five-factor test governing the analysis and concluded that a stay was warranted, primarily because the Second Circuit’s decision in the separate litigation will likely provide helpful guidance on the constitutionality and applicability of the statute underlying plaintiffs’ central claim in this litigation. Further, the Court found that it would be an inefficient use of the time and resources of the Court and parties to “tread the same ground” shortly in advance of a binding decision from the Second Circuit that may significantly impact this litigation. Finally, the Court observed that the only potentially countervailing factor is prejudice to plaintiffs, but because they were seeking only monetary—and not equitable—relief for their claims, plaintiffs’ assertion that a delay of several months would cause “extreme prejudice” was “belied by the kind of relief they have chosen to seek” and could be remedied by pre-judgment interest. As a result, defendants’ motion was granted, and the matter was stayed pending the Second Circuit’s resolution of the separate litigation.
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