Earlier this month, a federal court in Pennsylvania faced the issue of whether it must file a second-filed suit even though the first-filed suit was transferred to the same court, and judge, as the second. The issue arose out of a dispute between St. Paul Fire & Marine Insurance Company (“St. Paul”) and the R&Q Reinsurance Company (“R&Q”) related to reinsurance obligations that R&Q assumed from the INA Reinsurance Company. After St. Paul sent R&Q a $4.4 million bill, both parties filed declaratory judgment actions in different courts.
R&Q filed first in the U.S. District Court for the Northern District of Illinois (the “Illinois Action”). St. Paul followed the next month in the U.S. District Court for the Eastern District of Pennsylvania (the “Pennsylvania Action”). Around the same time that St. Paul initiated the Pennsylvania Action, it filed a motion to transfer the Illinois Action to the Eastern District of Pennsylvania—which was granted six months later.
Federal courts typically follow the “first-filed rule” where the first court with possession of a dispute must decide it. However, cases of concurrent jurisdiction typically are pending in different courts—not before the same judge. With that in mind, Judge Berle M. Schiller of the Eastern District of Pennsylvania applied the same standards, applying a holding that “the procedural posture of the first-filed case on the date the second-filed action is dismissed is irrelevant to the analysis,” and finding that no exceptions to the first-filed rule applied. Thus, Judge Schiller dismissed the Pennsylvania Action under the first-filed rule on the basis that there was concurrent jurisdiction, even though he now had sole jurisdiction over both declaratory judgment actions.
St. Paul Fire & Marine Ins. Co. v. R&Q Reinsurance Co., No. 15-5528 (E.D. Pa. June 2, 2016).