Court Transfers Keller Williams Case to Texas: Learn More About the First-Filed Rule!
The Baroness is back. 2 blogs in 1 day! I hope you all find this stuff useful and interesting just as much as we do.
There is another case I want to share. When I saw “Keller Williams Realty” in the case title, I was immediately intrigued.
By way of background, in June 2018, James Havassy listed his Pennsylvania home for sale. He did not list it with Keller Williams or any Keller Williams affiliated realtors. Between June and December 2018, Hassavy received “voluminous” calls from Keller Williams realtors seeking to list his property. Havassy alleged he received at least 24 prerecorded voice messages on his two cell phone numbers.
Based on the above, Havassy brought suit in state court against Keller Williams Realty, Inc. alleging violations of the TCPA for making calls to his two cell phone numbers without his prior express written consent.
Keller Williams removed the case to federal court in the Eastern District of Pennsylvania and Havassy named two additional defendants—Peter Hewitt and Kelly Houston (Kelly Williams realtors).
Keller Williams then moved to dismiss the case or transfer it to the Western District of Texas where the first action was filed and is pending (Wright).
Now let’s back up for a second.
3 years prior to Havassy filing his action, two individuals named Bruce Wright and Sam Tuli filed a nationwide putative class action against Keller Williams in the United States District Court for the Western District of Texas asserting similar claims and the same violations of the TCPA.
A few years later, Samatoro filed a similar action against Keller Williams in the United Stated District Court for the Eastern District of Michigan. This case was later transferred and consolidated with the Wright case in Texas.
A third case, Asher v. Keller Williams, which was also filed in the Western District of Texas was consolidated with the Wright case.
Now, the law.
Under the first-filed rule, federal cases sharing substantially similar subject matter must be decided by the court where the litigation was first filed.
The rare exceptions to the rule are: “(1) extraordinary circumstances; (2) the first filer engaged in inequitable conduct, acted in bad faith, or engaged in forum shopping; (3) the later-filed action has progressed further than the first-filed action; and (4) the first filer instituted suit in one forum in anticipation of the opposing party’s filing an action in a less favorable forum.”
In determining whether two putative class actions are substantially similar, the relevant inquiry is whether plaintiffs in the later action would be considered members of the class in the first action.
In this case, what that means is, the Court must determine whether Havassy would be considered a member of the class in the Wright case.
The Court found that Havassy clearly falls within the two class definitions in the Wright case. In fact, the class definitions in both actions were similar to begin with. Further, the Court found that Havassy and Wright have the same overlapping issues and share substantially similar factual allegations.
Interestingly, Havassy did not dispute that the issues were similar in both cases, rather, he argued that the Western District of Texas court did not have personal jurisdiction over the defendants Hewitt and Houston (Keller Williams realtors). However, the Court stated “there is no requirement that the first-filed court have personal jurisdiction over every party.”
Thus, the Court found the first-filed rule applied.
Now that the second-filed court (Havassy) determined that the first-filed rule applied, it had the discretion to dismiss, stay, or transfer the case. However, in exercising its discretion, a court should usually stay or transfer the second-filed action.
Here, the Court transferred the action for consolidation with the Wright case as it was “more likely to promote comity among the courts and serve the interest of sound judicial administration than would staying the action.”
Happy to discuss.