First to File a Class Action is Not Enough to be Heard First
Early bird did not get the worm in Pena v. Heath, Case No. 1:18-cv-24407-UU, 2019 U.S. Dist. LEXIS 206006. Two rival TCPA class action Plaintiffs (and Plaintiff firms) jostled at the finish line, where a Floridian class action settlement was granted preliminary approval.
The Florida class assert claims against the Defendant for violating the TCPA with unauthorized phone calls, & text messages. In Nebraska, a similar TCPA class allege the same Defendant sent unauthorized text messages. The Nebraska class action was filed first, (over a year before the Florida case), so the Nebraskan Plaintiff sought to intervene, and stay the Florida proceedings under Federal Rule 24, arguing that both cases are substantially similar, making the Florida case a waste of judicial resources, and a grimy product of forum shopping. He also relied on the first-to-file rule, which provides that when parties have parallel litigation in separate courts, the first court must hear the case, absent compelling circumstances.
The Florida Court barely blinked. In a few words, the court held that it would exercise its discretion to block permissive intervention under Federal Rule 24, since Florida already settled, while the Nebraska case is knee deep in discovery. The court preserved the resolution of thousands of claims, and did not want to make them wait around for a case that has not even had any settlement negotiations. Further, the court held that even if the Nebraska Plaintiff established the first-to-file rule, compelling circumstances existed for an exception. For example, counsel for the Defendant disclosed that his client would not be interested in a settlement, if the settlement did not include both the phone call class, and the text message class – an impossibility in the Nebraska case, which is just about text messages.
Finally, team Nebraska tried to argue that setting aside the first-to-file rule would create dangerous precedent in class actions since not honoring his early filing will empower plaintiffs’ lawyers to file lawsuits after lawsuits are filed, and defendants can get away with settling for the lowest amount on the market. The Court tossed that fear aside since no one here is arguing the Florida settlement is unfair, and, if the Court wants it can sua sponte reevaluate whether the first-to-file rule ought to apply, before final approval of the settlement.
In quarrels like these, do they sell popcorn for the courtroom pew spectators?