Tobias Bermudez CHAVEZ, et al., v. DOLE FOOD COMPANY, INC., et al. Julio Abrego Abrego, et al., v. Dole Food Company, Inc., et al. Alvarado Alfaro Miguel Francisco, et al., v. Dole Food Company, Inc., et al. Jorge Luis Aguilar Mora, et al., v. Dole Food Company, Inc., et al. Edwin Aguero Jimenez, et al., v. Dole Food Company, Inc., et al. Gonzalez Araya Franklin, et al., v. Dole Food Company, Inc., et al. Tobias Bermudez Chavez, et al., Appellants
No. 13-4144
United States Court of Appeals, Third Circuit
September 2, 2016
Court Ordered Rehearing En Banc on September 22, 2015
Argued on June 24, 2014 before Merits Panel; Argued En Banc on February 17, 2016
For the reasons set forth above, I would affirm in part the district court‘s conclusion that Student-Plaintiffs have adequately alleged standing at the pleadings stage, and I would defer a determination of qualified immunity.4
Caitlin J. Halligan, Andrea E. Neuman [ARGUED], Gibson, Dunn & Crutcher LLP, 200 Park Avenue, 47th Floor, New York, NY 10166, William E. Thomson, III, Gibson, Dunn & Crutcher LLP, 333 South Grand Avenue, 47th Floor, Los Angeles, CA 90071, Somers S. Price, Jr., Potter,
Michael L. Brem, Schirrmeister Diaz-Arrastia Brem, LLP, 700 Milam Street, 10th Floor, Houston, TX 77002, Donald E. Reid, Morris, Nichols, Arsht & Tunnell LLP, 1201 North Market Street, P.O. Box 1347, Wilmington, DE 19899, Counsel for Appellee Dow Chemical Co.
Timothy J. Houseal, Jennifer M. Kinkus, Young Conaway Stargatt & Taylor LLP, 1000 North King Street, Rodney Square, Wilmington, DE 19801, D. Ferguson McNiel, III, Vinson & Elkins LLP, 1001 Fannin Street, Suite 2500, Houston, TX 77002, Counsel for Appellee Occidental Chemical Corp.
John C. Phillips, Jr., Phillips, Goldman, McLaughlin & Hall, P.A., 1200 North Broom Street, Wilmington, DE 19806, Counsel for Appellee AMVAC Chemical Corporation
Kelly E. Farnan, Katharine L. Mowery, Richards, Layton & Finger, P.A., 920 North King Street, One Rodney Square, Wilmington, DE 19801, Counsel for Appellee Shell Oil Co.
Steven L. Caponi [ARGUED], Blank Rome LLP, 1201 Market Street, Suite 800, Wilmington, DE 19801, R. Jack Reynolds, Samuel E. Stubbs, Pillsbury, Winthrop, Shaw & Pittman LLP, 909 Fannin Street, Suite 2000, Two Houston Center, Houston, TX 77010, Counsel for Appellees Chiquita Brands International, Inc., Chiquita Brands, L.L.C., Chiquita Fresh North America, L.L.C.
Boaz S. Morag, Cleary, Gottlieb, Steen & Hamilton LLP, One Liberty Plaza, New York, NY 10006, James W. Semple, Cooch & Taylor, 1000 West Street, 10th Floor, Wilmington, DE 19801, Counsel for Del Monte Fresh Produce N.A., Inc.
Before: McKEE, Chief Judge, AMBRO, FUENTES*, SMITH, FISHER, CHAGARES, GREENAWAY, JR., VANASKIE, SHWARTZ, KRAUSE, and RESTREPO, Circuit Judges
OPINION OF THE COURT
FUENTES, Circuit Judge, with whom McKEE, Chief Judge, AMBRO, SMITH, FISHER, CHAGARES, GREENAWAY, JR., VANASKIE, SHWARTZ, KRAUSE, and RESTREPO, Circuit Judges, join.
The plaintiffs in these cases are foreign agricultural workers who labored on banana plantations in Central and South America from the 1960s through the 1980s. They allege that their employers and certain chemical companies knowingly exposed them to toxic pesticides over many years, and that this exposure caused adverse health consequences ranging from sterility, to birth defects, to a heightened risk of cancer. Litigation against the defendants first began in Texas state court in 1993, yet to date no court has reached the merits of the plaintiffs’ claims.
A series of byzantine procedural developments eventually led the plaintiffs out of Texas and into Louisiana, where they filed several diversity-based suits in federal district court raising tort claims against the defendants under Louisiana law. The defendants moved to dismiss those claims on timeliness grounds, and the plaintiffs, fearing that the Louisiana District Court would grant those motions, filed nearly identical suits in the District of Delaware raising analogous tort claims under Delaware law. Because the timeliness rules of Louisiana and Delaware are different, the plaintiffs hoped that, even if the Louisiana
Our initial inquiry concerns proper application of “the first-filed rule.” That rule is a comity-based doctrine stating that, when duplicative lawsuits are filed successively in two different federal courts, the court where the action was filed first has priority. In some cases, “first-filed” courts have relied on the rule to enjoin litigation in other jurisdictions. In other cases, “second-filed” courts have cited the rule to defer consideration of a matter until proceedings have concluded elsewhere. Application of the rule is discretionary.1 If a second-filed court decides to invoke the rule, it also has the discretion to decide whether to stay, transfer, or dismiss the case before it. Here, the Delaware District Court chose to apply the first-filed rule and then, rather than staying or transferring the plaintiffs’ claims, it dismissed those claims with prejudice.2 That decision effectively terminated the plaintiffs’ cases. On appeal, the plaintiffs contend that these dismissals were an abuse of discretion.
The second issue relates to personal jurisdiction. One of the defendants, Chiquita Brands International, moved for dismissal on the ground that the Delaware District Court lacked personal jurisdiction over it. The plaintiffs argued that personal jurisdiction was present, but, in the event that the Delaware District Court disagreed, they asked it to transfer their claims against Chiquita Brands International to New Jersey, where that defendant is incorporated, rather than dismiss them outright. The Delaware District Court held that it lacked personal jurisdiction and refused to transfer the claims, believing that its decision to dismiss all other defendants under the first-filed rule merited a similar dismissal as to Chiquita Brands International. The plaintiffs contest that ruling on appeal.
Our third inquiry relates to the doctrine of res judicata. While the defendants’ motions to dismiss under the first-filed rule were pending in Delaware, the Louisiana District Court dismissed the plaintiffs’ claims on timeliness grounds. Certain defendants in the Delaware suits, reacting to this development, moved to dismiss the plaintiffs’ Delaware claims on the ground that the Louisiana dismissals ought to bar re-litigation of related claims in another forum. The Delaware District Court declined to reach the issue in view of its application of the first-filed rule, but the issue nonetheless confronts our Court today given the present posture of these cases.
Our resolution of this appeal is therefore threefold. First, we conclude that the Delaware District Court abused its discretion under the first-filed rule by dismissing the plaintiffs’ claims with prejudice. Second, we conclude that the Delaware District Court erred by refusing to transfer the plaintiffs’ claims against Chiquita Brands International to another forum. And third, we conclude that the timeliness dismissals entered by the Louisiana District Court do not create a res judicata bar to the plaintiffs’ Delaware suits. As these cases come
Accordingly, we will vacate the Delaware District Court‘s dismissals and remand these cases for further proceedings.
I. Background
These cases arise from the use of the pesticide dibromochloropropane (DBCP) on banana farms in several countries, including Panama, Ecuador, and Costa Rica. The plaintiffs allege that they were exposed to DBCP beginning in the 1960s and ending sometime in the 1980s, and that their exposure to DBCP has caused them to suffer from a number of serious health problems. The plaintiffs have been seeking redress for those injuries in various courts around the country and, indeed, around the world for over twenty years.
The full history of these cases has been well chronicled elsewhere, and we will not duplicate those efforts here.4 Still, because the complexity of this litigation‘s procedural history bears on our substantive analysis, we provide a brief summary of that history below.
A. Procedural History in the Texas Courts
This litigation began in 1993 with the filing of a class action in Texas state court.5 The defendants quickly adopted a three-step strategy for defeating the plaintiffs’ claims. First, they impleaded various foreign entities under the Foreign Sovereign Immunities Act.6 This, in turn, provided a hook for federal jurisdiction.7 Second, the defendants removed the case to the United States District Court for the Southern District of Texas. Third, the defendants asked the Texas District Court to dismiss the plaintiffs’ class action on the ground of forum non conveniens.8
This strategy was successful, at least for a time. In 1995, the Texas District Court
By the early-2000s, it had become clear that foreign courts were, as the Texas District Court anticipated, unwilling to hear these cases. As a result, the plaintiffs returned to Texas and asked for permission to litigate their claims in the United States. The Texas District Court, acting under the return jurisdiction clause it included in its 1995 dismissal order, revived the case and sent it back to Texas state court.12 The defendants challenged the reinstatement but were unsuccessful.13
In 2009, they again removed the case to federal court, this time claiming that Congress‘s passage of the Class Action Fairness Act in 2005 conferred federal jurisdiction over the plaintiffs’ state-law claims, even though the plaintiffs sued the defendants well over a decade before the Act came into effect. The Texas District Court rejected this argument and—again—remanded the case to state court.14
There, the defendants obtained a denial of class certification in 2010.15 That decision brought the Texas-based chapter of this saga to a close.
B. Subsequent Litigation in Louisiana and Delaware
After the denial of class certification in Texas, the plaintiffs in these cases decided to strike out on their own and sue the defendants on a non-class basis. They determined that it made sense to sue in either Louisiana or Delaware,16 but, given
Those problems were twofold. First, there was the issue of cross-jurisdictional class action tolling.17 The plaintiffs’ claims flow from state-law causes of action with relatively short limitations periods. The plaintiffs maintain that this is not a barrier to suit because the pendency of their class action in Texas should have tolled any applicable limitations period between 1993, when the putative class action was filed, and 2010, when the Texas state court denied class certification. At the time the plaintiffs were deciding whether to sue in Louisiana or Delaware, however, it was unclear whether the courts in those states would agree.18
Second, even if Louisiana or Delaware were to recognize cross-jurisdictional class action tolling, the plaintiffs’ claims might still be untimely. Recall that the plaintiffs’ class action was filed in Texas state court, removed to the Texas District Court, dismissed on the ground of forum non conveniens, and then reinstated several years later. If a court were to conclude that the plaintiffs’ class action was not “pending” during the period of the forum non conveniens dismissal, the plaintiffs’ claims would likely be untimely even if cross-jurisdictional class action tolling applied.19
Deciding where to file suit therefore required the plaintiffs to predict how courts in Delaware and Louisiana would, in the absence of clear precedent, untangle the procedural Gordian Knot that this litigation had become. The plaintiffs eventually decided to sue in federal district court in Louisiana. The defendants then moved for summary judgment on the ground that the plaintiffs’ claims were time-barred under Louisiana‘s one-year statute of limitations.20
Fearing that an adverse timeliness ruling might be forthcoming from the Louisiana District Court, the plaintiffs decided to take action in order to preserve their ability to litigate in another forum where their claims might be timely.21 To that end, they
The defendants believed that this strategy—filing duplicative lawsuits in Delaware as an insurance policy against an adverse timeliness ruling in Louisiana—was improper. Accordingly, Dole filed a motion to dismiss the Delaware cases under the first-filed rule.24 The Delaware District Court concluded that the first-filed rule applied, meaning that it then faced a discretionary decision whether to stay, transfer, or dismiss the proceedings.25 It chose to dismiss the plaintiffs’ claims against Dole with prejudice, reasoning that the plaintiffs had already sued in Louisiana and “one fair bite at the apple [was] sufficient.”26 The Delaware District Court eventually applied this reasoning to dismiss the plaintiffs’ claims against most of the other defendants as well.27
One additional defendant, Chiquita Brands International, moved for dismissal on the ground that the Delaware District Court lacked personal jurisdiction over it. The plaintiffs contested that motion, but, in the event that the Delaware District Court concluded that personal jurisdiction was lacking, they asked it to transfer their claims against Chiquita Brands International to New Jersey, where that defendant is incorporated, instead of dismissing their claims outright. The Delaware District Court, having already concluded that the plaintiffs’ duplicative lawsuits merited dismissal under the first-filed rule, refused that request and granted the motion to dismiss.28
In the meantime, things started to go badly for the plaintiffs in Louisiana. First, the Louisiana District Court dismissed the plaintiffs’ claims as time-barred. It reasoned that, even if the Louisiana Supreme Court were to recognize cross-jurisdictional class action tolling (which, to date, it had not done), the Texas District Court‘s fo-
Quite apart from the first-filed rule, the Louisiana District Court‘s timeliness dismissals also raised potential res judicata issues vis-à-vis the Delaware litigation. Two of the defendants—Chiquita Brands, L.L.C. and Chiquita Fresh North America, L.L.C.—recognized this and moved for dismissal both under the first-filed rule and on res judicata grounds.34 In view of its prior holdings, the Delaware District Court dismissed the cases against these two defendants under the first-filed rule and dismissed their res judicata motions as moot.35 These orders terminated the last of the plaintiffs’ claims.
All of this procedural history brings us, at last, to the fundamental issue in this case: whether the Delaware District Court‘s prejudice-based dismissals were a proper exercise of its discretion under the first-filed rule. Once the Fifth Circuit affirmed the Louisiana District Court‘s timeliness rulings, the dismissals in Delaware threatened to prevent the plaintiffs from ever being able to litigate the merits of their claims in any court. Believing that this result was not a permissible outcome under the first-filed rule, the plaintiffs appealed.36 A divided panel of our Court affirmed the Delaware District Court‘s dismissals, the plaintiffs filed a petition for rehearing en banc, and we granted that petition in September of 2015.37
II. The Delaware District Court Abused Its Discretion under the First-Filed Rule
We initially adopted the first-filed rule in Crosley Corp. v. Hazeltine Corp., 122 F.2d 925 (3d Cir. 1941). That case, like all first-filed cases, involved two duplicative actions. In the first, Crosley sued Hazeltine in federal district court in Delaware to contest the validity of several of Hazeltine‘s patents. In the second, Hazeltine sued Crosley in federal district court in Ohio, alleging that Crosley had infringed several of the same patents at issue in Delaware. Crosley asked the Delaware District Court to enjoin the Ohio suits, but it refused. We reversed with instructions to enter a temporary injunction.39 In doing so, we stated that “[t]he party who first brings a controversy into a court of competent jurisdiction for adjudication should, so far as our dual system permits, be free from the vexation of subsequent litigation over the same subject matter.”40
In E.E.O.C. v. University of Pennsylvania, 850 F.2d 969 (3d Cir. 1988), we elaborated on Crosley and discussed various scenarios where, for equitable reasons, the presumption against duplicative litigation might not apply. That case arose from an E.E.O.C. investigation into the University of Pennsylvania‘s decision to deny tenure to a professor, allegedly based on the professor‘s race and sex. The E.E.O.C. subpoenaed the professor‘s tenure file, and the University resisted turning over the relevant documents. Knowing that a subpoena enforcement suit was imminent, the University preemptively sued the E.E.O.C. in federal district court in the District of Columbia. That suit, a declaratory judgment action, sought to challenge the E.E.O.C.‘s policies governing how it investigated denials of tenure. The E.E.O.C. nonetheless filed its subpoena enforcement action in the Eastern District of Pennsylvania, raising the question of whether the first-filed rule barred the Pennsylvania suit.42
We concluded that it did not. We reiterated that the first-filed rule is “grounded on equitable principles”43 and requires district court judges to “fashion[ ] a flexible response to the issue of concurrent jurisdiction.”44 In our view, the district court was correct to focus on the fact that “[t]he timing of the University‘s filing in the District of Columbia indicate[d] an attempt to preempt an imminent subpoena enforcement [action].”45 We concluded that, “[b]ecause the first-filed rule is based on principles of comity and equity, it should not apply when at least one of the filing party‘s motives is to circumvent local law.”46
Both Crosley and E.E.O.C. addressed the issue of when a federal district court, confronted with a second-filed action, should permit that action to continue. This appeal raises a different question. When a district court decides to apply the first-filed rule, it then faces the discretionary choice whether to stay the second-filed action, transfer it, dismiss it without prejudice, or dismiss it with prejudice, thereby
We begin by looking to the relevant treatises. Speaking of the first-filed rule as a doctrine of abstention, Wright and Miller say that “it is well settled that if the same issues are presented in an action pending in another federal court, one of these courts may stay the action before it or even in some circumstances enjoin going forward in the other federal court.”47 Wright and Miller also discuss the possibility of transferring a second-filed case to another forum.48 At no point do they suggest that a court ought to dismiss a second-filed action, much less do so with prejudice.
Moore‘s Federal Practice, meanwhile, states that “[i]f the first-filed action is vulnerable to dismissal on jurisdictional or statute of limitations grounds, the court in the second-filed action should stay it or transfer it, rather than outright dismiss it.”49 This guidance reflects the common-sense proposition that, in a case raising timeliness concerns, a court‘s decision to dismiss a second-filed suit could, if the limitations clock were to expire in the first forum, have the effect of putting the plaintiffs entirely out of court. Indeed, that is precisely what is threatened in this very case.
Several of our sister circuits have also considered the appropriateness of dismissing a case under the first-filed rule. The Seventh, Ninth, and Fifth Circuits have all stated that district courts should be careful to apply their discretion under the rule so as not to cause undue prejudice to the litigants appearing before them. These courts have therefore indicated that, in most circumstances, a stay or transfer of a second-filed action will be more appropriate than a dismissal.
We begin with the Seventh Circuit‘s decision in Asset Allocation and Management Co. v. Western Employers Insurance Co., 892 F.2d 566 (7th Cir. 1989). The plaintiff there sued the defendant in federal district court in Illinois, only to have the defendant then sue the plaintiff in federal district court in California. At the plaintiff‘s request, the Illinois District Court not only enjoined any duplicative litigation in California, but ordered the defendant to dismiss its California case entirely.51
While the Seventh Circuit affirmed the portion of the district court‘s order enjoining the parties from proceeding in California, it reversed the dismissal order. It explained that if the Illinois District Court were to dismiss the plaintiff‘s claims before litigation was “well advanced,” the parties were free to litigate their claims in California.52 The court also warned that statute of limitations problems could arise if the defendant in Illinois were forced to dismiss its California claims. It summa-
The Seventh Circuit again considered the first-filed rule in Central States, Southeast and Southwest Areas Pension Fund v. Paramount Liquor Co., 203 F.3d 442 (7th Cir. 2000). That case arose from a contested arbitration, at the conclusion of which one party filed suit to enforce the arbitration award in Missouri and another party filed suit to annul the award in Illinois. Because the Missouri suit was filed first, the district court in Illinois dismissed the case before it without prejudice—under the first-filed rule.55 The Seventh Circuit concluded that the district court erred by doing so, stating that the dismissal “created an unwarranted risk of legal prejudice.”56 The better rule, the court explained, is that “[w]hen comity among tribunals justifies giving priority to a particular suit, the other action (or actions) should be stayed, rather than dismissed, unless it is absolutely clear that dismissal cannot adversely affect any litigant‘s interests.”57
The Ninth Circuit adopted a similar approach in Alltrade, Inc. v. Uniweld Products, Inc., 946 F.2d 622 (9th Cir. 1991). That case arose from Uniweld‘s attempt to seek cancellation of several of Alltrade‘s federal trademark registrations before the Trademark Trial and Appeal Board. Neither side was satisfied with the outcome of that proceeding, leading Uniweld to file suit in Florida and Alltrade to file suit in California. The California court, applying the first-filed rule, dismissed the case before it. On appeal, the Ninth Circuit vacated that decision. Looking to the Seventh Circuit‘s decision in Asset Allocation for guidance, it expressed the concern that if the Florida court were to terminate Uniweld‘s first-filed case without reaching the merits, Alltrade “would have to file a new suit in California and would risk encountering statute of limitations problems.”59 A stay, on the other hand, would avoid any prejudice to the parties. If the litigation were to proceed in Florida, “the stay [in California] could be lifted and the second-filed action dismissed or transferred.”60
Finally, the Fifth Circuit considered the proper application of the first-filed rule in Burger v. American Marine Officers Union, No. 97-31099, 1999 WL 46962 (5th Cir. Jan. 27, 1999). The plaintiff there sued the same defendants twice, first in Florida and then again in Louisiana. The Louisiana District Court dismissed the case—with prejudice—under the first-filed rule.62 The Fifth Circuit vacated that decision. It noted that, after the Louisiana court had dismissed the case, the Florida court dismissed several of the defendants for lack of personal jurisdiction. The Louisiana court‘s prejudice-based dismissal thereby created a sit-
The through-line connecting these cases is the proposition that a court exercising its discretion under the first-filed rule should be careful not to cause unanticipated prejudice to the litigants before it. We agree with that proposition and today incorporate it into the jurisprudence of our Circuit.
In addition to reflecting the wisdom of our sister circuits, this conclusion is consistent with, and perhaps even a necessary consequence of, our obligations under
Quackenbush thus drew a distinction between two of the Supreme Court‘s abstention precedents, Louisiana Power & Light Co. v. City of Thibodaux, 360 U.S. 25 (1959) and County of Allegheny v. Frank Mashuda Co., 360 U.S. 185 (1959). In Thibodaux, the plaintiff‘s claims arose under a Louisiana statute that, up to that point, had not yet been interpreted by the Louisiana courts. The district court stayed the federal proceedings “until the Supreme Court of Louisiana ha[d] been afforded an opportunity to interpret [the law].”72 The Thibodaux Court concluded that this decision was appropriate in view of the federal interest in “avoiding the hazards of serious disruption by federal courts of state government or needless friction between state and federal authorities.”73 In County of Allegheny, by contrast, the district court in Pennsylvania “had not merely stayed adjudication of the federal action pending the
For present purposes, the teaching of Quackenbush is that “where there is no other forum” with the power to hear a case, “relinquishing jurisdiction is not abstention; it‘s abdication.”78 In other words, judge-made canons of comity and equity cannot supplant a district court‘s duty to decide cases within its jurisdiction. Consistent with this principle, a district court should generally avoid terminating a claim under the first-filed rule that has not been, and may not be, heard by another court.
Our own abstention jurisprudence has long directed district courts to stay, rather than dismiss, potentially duplicative federal suits.79 As we explained in Feige v. Sechrest, 90 F.3d 846 (3d Cir. 1996), a stay “retains the sensitivity for concerns of federalism and comity implicated by ... abstention, while preserving appellants’ right to litigate their claims in the federal forum should the [state] courts, for jurisdictional or other reasons, fail to adjudicate them.”81 In this way, a stay order does not “abdicate [a district court‘s] judicial duty to exercise its jurisdiction,” but rather “postpone[s] the exercise of that jurisdiction until [related] proceedings ... reach their conclusion.”82
The benefits of staying a second-filed suit are just as persuasive in the context of the first-filed rule. Because a stay confines litigants to the first forum until proceedings there have concluded, a stay will generally avoid wasted judicial efforts, conflicting judgments, and unnecessary friction between courts. In addition, a second-filed court will rarely need to reach the merits of the stayed case. The far more likely result is that the matter will reach a final resolution in the first court. In the few instances where there is no res judicata (or other) bar that would prevent litigation in the second forum, it will generally be because the second suit is not truly duplicative of the first. In those circumstances, a second-filed court has an obligation, consistent with Quackenbush, to take jurisdiction over the plaintiffs’ claims.
We therefore conclude that, in the vast majority of cases, a court exercising its discretion under the first-filed rule should stay or transfer a second-filed suit.
Note that we say “almost always,” not “always.” The factual circumstances giving rise to duplicative litigation are too variable to adopt a blanket, hard-and-fast rule, and there may well be circumstances in which a district court is correct to respond to a second-filed suit with a prejudice-based dismissal. For example, “if the second suit is harassing, vexatious, [or] an abuse of process, the proper disposition ... is dismissal with prejudice, so that the plaintiff cannot refile the suit.”83 Similarly, if the duplicative litigation results from the plaintiff‘s own failure to follow the rules, such as by repeatedly failing to timely serve process, a prejudice-based dismissal may be appropriate.84 Blatant forum shopping or gamesmanship by one or both parties may also merit such a result.85
This, of course, brings us to the issue at the heart of the present litigation. The defendants insist that what happened here was forum shopping. In their view, the plaintiffs had an obligation to research the timeliness rules in both Louisiana and Delaware and then, having done so, take their “best shot” at finding a forum willing to hear the merits of their claims. If the plaintiffs chose poorly, and their claims were dismissed as time-barred, that result might be unfortunate—but, the defendants insist, such a possibility does not require federal courts to entertain duplicative lawsuits.
To be sure, there is some merit to the defendants’ assertions. A plaintiff who sues in two jurisdictions simultaneously may be required to litigate in the first forum once the court there has expended substantial judicial resources.86 A plaintiff‘s negligence in researching the applicable timeliness rules may also have adverse consequences. If it is crystal clear that, under the limitations period in one forum, a plaintiff‘s claims will be untimely, and it is crystal clear that, under the limitations period in a second forum, a plaintiff‘s claims will be timely, it may well be the case that a plaintiff who erroneously sues in the first forum will have to live with the consequences of the inevitable dismissal. But that outcome, should it come to pass, will be a function of the first forum‘s substantive law of res judicata and claim preclusion. Whether and to what extent those principles apply is a separate question from the proper application of the first-filed rule. To put it another way, the first-filed rule is just one of many doctrines that
Moreover, we are skeptical of the defendants’ characterization of the facts giving rise to the present appeal. The assertion that the plaintiffs engaged in impermissible forum shopping depends on the proposition that the plaintiffs acted improperly by trying to preserve their right to litigate in two different jurisdictions. In view of the unusual circumstances surrounding these cases, we simply disagree.
While reasonable minds may differ about what constitutes forum shopping in any particular case, the term generally denotes some attempt to gain an unfair or unmerited advantage in the litigation process. But here, the plaintiffs were indifferent as to which court would hear their claims; they simply wanted a court to hear their claims. Indeed, the traditional rule is that a timeliness dismissal in one jurisdiction does not bar litigation of the same claim in another forum with a longer limitations period.87 Nor were the plaintiffs negligent in failing to research the applicable timeliness rules in Louisiana and Delaware. The law was simply unclear. Once the Texas state court denied the plaintiffs’ motion for class certification in 2010—nearly two decades after this litigation began—the plaintiffs could only guess whether other jurisdictions would recognize cross-jurisdictional class action tolling and conclude that their claims were timely. Louisiana and Delaware addressed that issue only after the plaintiffs filed suit in Louisiana and even then reached divergent conclusions.88
Whatever else the first-filed rule demands, it does not require litigants to see through a glass darkly in order to predict whether a court will consider their claims timely. In our view, the defendants have not pointed to a single advantage, “either legally, practically, or tactically,” that the plaintiffs sought by suing in two different jurisdictions.89 The plaintiffs were not trying to game the system by filing duplicative lawsuits. They were trying to find one court, and only one court, willing to hear the merits of their case.
Accordingly, we hold that the Delaware District Court abused its discretion under the first-filed rule by dismissing these cases with prejudice.
III. Personal Jurisdiction over Chiquita Brands International
This brings us to the second issue in this appeal. The Delaware District Court concluded that it lacked personal
Personal jurisdiction over a defendant may be either general or specific.91 A court exercises general jurisdiction over a defendant when the plaintiff‘s claim arises out of that defendant‘s “continuous and systematic” contacts with the forum state.92 Specific jurisdiction, by contrast, is present “when the cause of action arises from the defendant‘s forum related activities.”93 The plaintiffs do not assert that the Delaware District Court had specific jurisdiction over Chiquita Brands International, limiting our analysis to the question of general jurisdiction alone.
The Supreme Court recently revisited the issue of general jurisdiction in Daimler AG v. Bauman, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014). There, the Supreme Court explained that general jurisdiction over a foreign corporation typically arises only when that corporation‘s “affiliations with the State are so continuous and systematic as to render [it] essentially at home in the forum State.”95 Daimler also explained that a corporation is generally “at home” in its “place of incorporation and principal place of business.”96 Applying these principles, one of our sister circuits has commented that it is “incredibly difficult to establish general jurisdiction [over a corporation] in a forum other than the place of incorporation or principal place of business.”97
Against this backdrop, Chiquita Brands International argues that it was never “at home” in Delaware, and we agree. The company is not incorporated there, does not maintain an office there, and does not supervise its business there. While the plaintiffs recognize as much, they contend that Chiquita Brands International engaged in other contacts with Delaware sufficient to create general jurisdiction there. On the record before us, we discern no error in the Delaware District Court‘s conclusion to the contrary.
But that is not the end of the matter. Chiquita Brands International is incorporated in New Jersey, and the plaintiffs asked the Delaware District Court to
We disagree. In the first place, the statutory provision applicable in these circumstances is arguably not
We will therefore vacate the Delaware District Court‘s dismissal of Chiquita Brands International and remand with instructions to grant the plaintiffs’ request for a transfer to the District of New Jersey.
IV. The Delaware Actions Are Not Barred by Res Judicata
This brings us to the final and most doctrinally complex issue in this appeal—namely, whether the Louisiana District Court‘s timeliness dismissals ought to have a claim-preclusive effect in Delaware. The Delaware District Court did not rule on this issue in light of its application of the first-filed rule, but both sides have briefed the issue before us.102 While we could, and perhaps normally would, remand the issue for consideration by the Delaware District Court in the first instance, there are countervailing reasons to address the res judicata question sooner rather than later.
It is true that “[w]e ordinarily decline to consider issues not decided by a district court, choosing instead to allow that court to consider them in the first instance.”103 Still, we have made exceptions for disputes of particularly long “vintage,” particularly when as a “matter of judicial economy” it makes sense to “accelerate [a case‘s] resolution to the extent reasonably possible.”104
If a case were ever in need of judicial acceleration, it is this one. We see little
A. The Inquiry under Semtek
The plaintiffs’ claims in Louisiana were dismissed as time-barred by a federal district court sitting in diversity and applying Louisiana law. The question we confront is whether the Louisiana dismissals prevent a federal district court in Delaware, sitting in diversity and applying Delaware‘s timeliness rules, from reaching the merits of the plaintiffs’ claims.
The Supreme Court‘s decision in Semtek International Inc. v. Lockheed Martin Corp., 531 U.S. 497 (2001) tells us how to approach this question. Semtek instructs us that the preclusive effect of a timeliness dismissal entered by a federal court, whether exercising its diversity or federal question jurisdiction, is always a question of federal law.106 Semtek also recognizes that, at common law, the traditional rule was that “expiration of the applicable statute of limitations merely bars the remedy and does not extinguish the substantive right, so that dismissal on that ground does not have claim-preclusive effect in other jurisdictions with longer, unexpired limitations periods.”107 Notwithstanding this traditional rule, Semtek held that, in a case raising issues of cross-jurisdictional claim preclusion resulting from a diversity court‘s dismissal, faithfulness to Erie requires courts assessing the claim-preclusive effect of that dismissal to look to the substantive law of the state where the federal diversity court sits.108 This means that the claim-preclusive effect of a dismissal issued by a federal diversity court varies by jurisdiction.109
Semtek itself dealt with the claim-preclusive effect of a timeliness dismissal entered by a federal diversity court sitting in California. Under the rule Semtek announced, “the claim-preclusive effect” of that dismissal “is governed by a federal rule that in turn incorporates California‘s law of claim preclusion.”110
Semtek thus directs us to evaluate the res judicata effects of the Louisiana District Court‘s timeliness dismissals by looking to Louisiana‘s law of claim preclusion. When we do so, we have little trouble concluding that Louisiana courts treat timeliness dismissals as judgments on the merits that have claim-preclusive effects.111
We begin by noting that there is an important ambiguity in Semtek itself. Semtek alludes only briefly to the fact that a state might apply two rules simultaneously: first, that a timeliness dismissal precludes re-litigation of the same claims within that state; and second, that a timeliness dismissal does not bar litigation of the same claims in a court outside that state.112 To frame the problem in the context of this appeal, the fact that timeliness dismissals are claim-preclusive within Louisiana may not necessarily mean that such dismissals extinguish related claims in other states with longer limitations periods.
While fact patterns raising this issue are perhaps uncommon, they are not unheard of. The Supreme Court of Connecticut, for example, addressed the issue of cross-jurisdictional claim preclusion in Advest, Inc. v. Wachtel, 235 Conn. 559, 668 A.2d 367 (1995). That case arose after a state court in Connecticut dismissed a suit on timeliness grounds and the plaintiffs in that action then commenced an arbitration proceeding in New York. The defendants in the first action asked the state court to enjoin the arbitration proceedings as claim-precluded, which the state court refused to do.114 The Connecticut Supreme Court affirmed that decision on appeal. It stated that while “the running of Connecticut‘s statute of limitations precludes the defendants in the present action from bringing the same claim in Connecticut, it does not automatically bar their pursuit of such a claim in another jurisdiction.”115
The Seventh Circuit, too, noted in Reinke v. Boden, 45 F.3d 166 (7th Cir. 1995) that states might adopt different policies about intra- and extra-jurisdictional claim preclusion. The plaintiff there sued in Minnesota state court, lost at summary judgment on timeliness grounds, and then sued again in federal district court in Illinois. The defendant moved for summary judgment in Illinois on the ground of res judicata, and the Illinois District Court granted the motion. The Seventh Circuit reversed. It explained that “[i]n the context of the intersystem use of res judicata ... the intent of the first forum to save the judicial resources of the second cannot be so readily presumed.”117 With this distinction in mind, the Seventh Circuit surveyed Minnesota jurisprudence and concluded that Minnesota courts did not necessarily intend for timeliness dismissals to be claim-preclusive outside Minnesota.118 Other courts have
Unlike the Connecticut Supreme Court, the Louisiana Supreme Court has not directly addressed the issue of whether Louisiana timeliness dismissals are claim-preclusive in other jurisdictions. The Louisiana Court of Appeal, however, has indicated that the dismissal of a plaintiff‘s claim as time-barred in one court system is not necessarily claim-preclusive in another.
The key case is Griffin v. BSFI Western E & P, Inc., 812 So.2d 726 (La. Ct. App. 2002). The plaintiffs there sued in Louisiana state court on a variety of state-law claims and then filed a second, diversity-based suit in federal district court in Louisiana arising from the same facts.121 The federal suit raised both federal question claims and pendent state-law claims. The Louisiana District Court dismissed certain of the plaintiffs’ federal claims on timeliness grounds under the applicable federal statute of limitations and dismissed some of the state-law claims without prejudice.122 The defendants then moved to dismiss the state suit as res judicata in light of the federal dismissals. The Louisiana trial court granted the motion, but the Court of Appeal reversed.
The Court of Appeal began its analysis by stating that “[t]he dismissal of an action under a federal statute of limitations constitutes a final judgment on the merits in federal court, and is res judicata as to successive actions arising from the same transaction filed in other federal courts.”123 Even so, the court recognized that “a claim dismissed under a traditional statute of limitations does not automatically preclude consideration of the substantive merits by a different or foreign court system, especially ‘in other jurisdictions with longer, unexpired limitations periods.’ ”124
Relying in part on the Seventh Circuit‘s decision in Reinke, the Griffin Court reasoned that, in a cross-jurisdictional situation, Louisiana‘s law of claim preclusion incorporates basic notions of equity and fairness. Accordingly, a court in such a situation should consider “the goal of res judicata principles,” including that “litigation must eventually have an end,” while remaining sensitive to “the plaintiff‘s right of access to the courts.”125 Griffin explained that when the Louisiana District Court dismissed the plaintiffs’ claims under the federal statute of limitations, it had “refused to consider ... tolling based on acts of the defendants,” which was “an exception recognized in Louisiana.”126 Consequently, the Court of Appeal concluded that “the federal and state time limitation rules are too different to foster both the
Other Louisiana cases have occasionally echoed this appreciation for the distinction between intra- and extra-jurisdictional claim preclusion.129 One way to resolve the res judicata question in this appeal, therefore, would be to conclude that even if a Louisiana timeliness dismissal bars re-litigation of the same claims within Louisiana, it does not bar litigation of those claims elsewhere.
As it turns out, however, our resolution of these cases does not depend on the distinction between intra- and extra-jurisdictional claim preclusion. While we have wrestled with that distinction before,130 such an analysis raises certain deep questions about the structure of our federal system that are perhaps better left for another day.131 Instead, having reviewed
B. Louisiana‘s Law of Res Judicata Does Not Bar the Plaintiffs’ Claims
We begin with an important foundational principle. The Louisiana Supreme Court has stated that res judicata is such a drastic procedural device that “any doubt concerning [its] application ... must be resolved against its application.”132 Or, as the Fifth Circuit has put it, “Louisiana‘s doctrine of res judicata can only be invoked if all essential elements are present and established beyond all question.”133
What‘s more, Louisiana‘s rules of claim preclusion are not absolute. The Louisiana Supreme Court has explained that “[o]ne of the goals of res judicata is to promote judicial economy and fairness,” and that applying the doctrine “blindly or mechanically ... does not foster judicial economy or fundamental fairness to the parties.”134 Courts should therefore not use res judicata “as a scythe applied mechanically to mow down claims where the party asserting the claim is not at fault for the lack of adjudication of that claim in the first suit.”135
At common law, Louisiana‘s doctrine of res judicata included a safety valve for “exceptional circumstances” sufficient to overcome “the policies favoring preclusion of a second action.”136 When Louisiana adopted a new statute governing res judicata in 1990, it codified this exception.137 The relevant statutory provision states that “[a] judgment does not bar another action by the plaintiff ... [w]hen exceptional circumstances justify relief from the res judicata effect of the judgment.”138
Louisiana courts have held that the statutory exception to res judicata “generally applies to complex procedural situations in which litigants are deprived of the opportunity to present their claims due to unanticipated quirks in the system.”140 So, for example, the Court of Appeal applied the exception in Simmons v. Baumer Foods, Inc., 55 So.3d 789 (La. App. 4 Cir. 2010), a wrongful death and workman‘s compensation case that bounced around from court to court without the plaintiff‘s ever having had the opportunity to present their claims on the merits before the defendants invoked res judicata as a bar to relief. In those circumstances, where the plaintiffs had “vigorously pursued their claims but the substance of [those] claims [had] yet to be addressed,” the Court of Appeal concluded that the “pursuit of justice ha[d] been derailed by ... procedural determinations” and an exception to res judicata was appropriate.142
Federal courts, too, have applied Louisiana‘s statutory exception to res judicata in appropriate circumstances. The Eighth Circuit, for example, relied on the exception in Follette v. Wal-Mart Stores, Inc., 41 F.3d 1234 (8th Cir. 1994). That case arose from, of all things, an exploding can of hairspray. The plaintiffs, who were Louisiana residents, initially sued in federal district court in Texas, in part because the one-year Louisiana statute of limitations had already run. The Texas court transferred the case back to Louisiana, where the district court dismissed the case on timeliness grounds. The plaintiffs then brought another suit in federal court in Arkansas, suing under a different cause of action with a longer limitations period. This raised the question of whether the previous dismissal in Louisiana created a res judicata bar vis-à-vis the Arkansas suit. The Eighth Circuit concluded that it did not. Surveying the cases applying Louisiana‘s equitable exception to res judicata, it concluded that Louisiana courts were hesitant to invoke principles of claim preclusion when doing so would create a “procedural windfall” for defendants,144 especially when “[t]he merits of the plaintiffs’ claims had not [yet] been reached.”145
The logic of Simmons and Follette applies with equal force to the situation we confront now. As in Simmons, the plaintiffs here have “vigorously pursued their claims” only to be met at every moment with procedural hurdles.146 We believe that a Louisiana court, faced with these facts, would conclude that the byzantine procedural history of this case merits an exception to Louisiana‘s normal rules of claim preclusion.
As Wright and Miller recognize, “[a]mong the weakest cases for preclusion would be one in which the plaintiffs were legitimately surprised by the limitations ruling in the first action; unlike a dismissal
The defendants’ contrary arguments are not persuasive. While the defendants recognize that, under Semtek, Louisiana law controls our res judicata analysis, they contend that Louisiana has adopted, as a principle of its own substantive law, the view that federal rules of claim preclusion dictate the effects of judgments entered by federal diversity courts. On this account, neither Louisiana‘s res judicata statute nor its equitable exception should inform our analysis. In support of this proposition, the defendants rely on a single unpublished opinion of the Fifth Circuit.150
The defendants are wrong. It is true that, before Semtek, Louisiana courts stated that the claim-preclusive effect of all federal judgments was controlled by federal principles of claim preclusion.151 Some Louisiana courts have said the same thing after Semtek, but only in cases involving federal question jurisdiction.152 The defendants do not point to a single case in which a Louisiana court has chosen to ignore Semtek outright by looking to federal law, rather than state law, to assess the claim-preclusive effects of a judgment issued by a federal district court sitting in diversity.
To the contrary, federal district courts in Louisiana “appl[y] Louisiana law to determine the preclusive effect of [their] prior [diversity] judgments.”153 The defendants’ contrary argument—that Semtek tells us to look to Louisiana law, which
Next, the defendants rely on another Fifth Circuit case, Steve D. Thompson Trucking, Inc. v. Dorsey Trailers, Inc., 870 F.2d 1044 (5th Cir. 1989), to argue that the plaintiffs’ Delaware suits are barred by res judicata.155 That case involved parallel actions pending in federal district courts in Louisiana and Mississippi. The Louisiana District Court dismissed the plaintiffs’ claims as time-barred under the applicable Louisiana statute of limitations. The defendants then moved to dismiss the Mississippi action as res judicata. The Mississippi District Court denied the motion, but the Fifth Circuit reversed. In its view, “[a]llowing plaintiffs who fail to comply with applicable statutes of limitations to move to the next state over would have the undesirable effect of encouraging forum shopping and rewarding dilatory conduct.”156
While we appreciate that there are certain parallels between Thompson Trucking and the situation we confront today, we do not think Thompson Trucking is persuasive in the present context.
First, Thompson Trucking predated Semtek, leaving the Fifth Circuit free to reason that “the effect of a prior federal diversity judgment is controlled by federal rather than state res judicata rules.”157 Under Semtek, that is no longer correct. As Wright and Miller point out in their discussion of the case, the Fifth Circuit “applied federal preclusion principles without asking whether either Louisiana or Mississippi law would preclude a second action in Mississippi.”158
Second, Thompson Trucking focused extensively on what it characterized as the plaintiffs’ impermissible forum shopping. While we understand these concerns—and indeed might find them persuasive in the appropriate case—they carry little weight here for the straightforward reason that the plaintiffs have not engaged in what we consider to be forum shopping. As we explained earlier, the plaintiffs were not scouring multiple jurisdictions for more advantageous substantive law or more sympathetic fact-finders. Instead, they were trying to find one court—and only one court—willing to reach the merits of their claims.
Accordingly, we conclude that Louisiana‘s statutorily-codified equitable exception to res judicata applies to the present facts. Consistent with Semtek, we therefore hold that the timeliness dismissals entered by the Louisiana District Court do not create a res judicata bar to the plaintiffs’ Delaware suits. Rather than affirm
V. Issues on Remand
Among the issues the Delaware District Court will address on remand is the question of whether the plaintiffs’ claims are timely under Delaware‘s applicable statute of limitations.159 The Delaware District Court recently addressed that issue in a related case, Marquinez v. Dole Food Co., 45 F.Supp.3d 420 (D. Del. 2014). While Marquinez acknowledged that Delaware accepts cross-jurisdictional class action tolling,161 it nonetheless concluded that any such tolling ended in 1995. Marquinez therefore held that Delaware‘s two-year statute of limitation had long since expired.162
In reaching that conclusion, Marquinez relied on an extremely fine-grained interpretation of what occurred in Texas in 1995. In particular, Marquinez drew a distinction between the question of whether the Texas District Court‘s 1995 dismissal on forum non conveniens grounds restarted Delaware‘s statute of limitations clock, and whether the contemporaneous denial of the pending motion for class certification as moot did so.163 It is true, Marquinez noted, that the Delaware Superior Court‘s Blanco decision addressed the first question, and in fact concluded that the Texas District Court‘s “original decision to dismiss did not start plaintiff‘s Delaware statute of limitations.”164 But, said Marquinez, the Delaware Superior Court “did not reach the [other] question, which forms an alternative basis to end tolling.”165
Contrary to Marquinez‘s characterization, Blanco in fact summarized the defendants’ argument that the “plaintiff[s] cannot rely on the [Texas] actions to toll the statute of limitations because all pending motions, including one for class certification, were denied as moot.”166 In denying the defendants’ motion for judgment on the pleadings, the Blanco Court appears to have rejected that assertion. Indeed, Blanco went further still, stating that the “defendants have attempted to tranquilize these claims through repeated forum shopping removals and technical dismissals, playing for time and delay and striving to prevent, or arguably frustrate, the claims from ever being heard on the merits in any court.”167
We also note that when the Texas District Court dismissed the class action in 1995, it did more than include a return clause in its dismissal order.168 It also entered injunctions that barred the named plaintiffs and “[a]ll persons ... who receive actual notice of this judgment” from commencing any related actions “in any court in the United States.”169
Nor did Marquinez acknowledge that when the Texas District Court reinstated the class action in 2004, it framed its decision as “a direct continuation of the prior proceedings over which the court expressly stated its intent to retain jurisdiction.”174 Rather than look to these sources, Marquinez focused on cases from other jurisdictions that applied the state law of Louisiana and Hawaii, rather than the law of Delaware.175
We leave it to the Delaware District Court on remand to consider these issues and to perform its “duty ... to ascertain from all the available data what the state law is and apply it rather than to prescribe a different rule, however superior it may appear from the viewpoint of ‘general law.’ ”176
VI. Conclusion
For over two decades, the plaintiffs have been knocking on courthouse doors all over the country and, indeed, the world, only for those doors to remain closed. The Delaware District Court concluded that, pursuant to the first-filed rule, its doors must remain shut as well.
That conclusion was in error. Neither the first-filed rule nor Louisiana‘s doctrine of res judicata is fatal to the plaintiffs’ Delaware claims. We revive this litigation now, more than two decades after it began, while expressing our sincerest hope that it proceeds with more alacrity than it has to the present date.
Accordingly, we will vacate the Delaware District Court‘s dismissals and remand these cases for further proceedings consistent with this Opinion.
JULIO M. FUENTES
CIRCUIT JUDGE