United States District Court, S.D. New York
September 6, 2005.
NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA, Plaintiff,
LIBERTY MUTUAL FIRE INSURANCE COMPANY, Defendant.
The opinion of the court was delivered by: DENISE COTE, District Judge
MEMORANDUM OPINION AND ORDER
In a dispute over insurance coverage, Liberty Mutual Fire
Insurance Company ("Liberty Mutual") brought an action on April 11, 2005 against National Union Fire Insurance Company of
Pittsburgh, PA ("National Union") in the United States District
Court for the District of Kansas seeking reimbursement for an
insurance payment. On June 2, 2005, National Union brought this
action against Liberty Mutual seeking a declaratory judgment that
it does not owe reimbursement to Liberty Mutual. Liberty Mutual
has moved to dismiss this action based on the "first-filed" rule,
and its alternate claim that National Union's action is improper
under the Federal Declaratory Judgment Act, 28 U.S.C. § 2201.
Because the decision on the first-filed rule is for the Kansas
court to decide, Liberty Mutual's motion to dismiss is denied.
This action is stayed for thirty days to allow Liberty Mutual to
bring a motion in the Kansas action pursuant to the first-filed
rule. In the event that motion is brought, this action is stayed
until the motion is resolved.
"It is a well-settled principle in this Circuit that where
there are two competing lawsuits, the first suit should have
priority, absent the showing of balance of convenience or special
circumstances giving priority to the second." Amos v. Reno, No.
00 Civ. 6151 (DLC), 2000 WL 1871710, at *2 (S.D.N.Y. Dec. 21,
2000) (citation omitted). "It is the court in which the
first-filed action was brought that should decide whether one of
the exceptions applies." Id. See also Schnabel v. Ramsey
Quantitative Sys., Inc., 322 F. Supp. 2d 505, 510-11 (S.D.N.Y. 2004). "Under this Circuit's first-filed rule, a district court
may enjoin the suitor in a more recently commenced case from
taking any further action in the prosecution of that case if the
claims presented in the second action should have been interposed
as compulsory counterclaims to the claims in the suit pending
before it." Computer Assocs. Int'l, Inc. v. Altai, Inc.,
893 F.2d 26, 28-29 (2d Cir. 1990). "Where an action is brought in one
federal district court and a later action embracing the same
issue is brought in another federal court, the first court has
jurisdiction to enjoin the prosecution of the second action."
Id. at 29 (citation omitted). See also City of New York v.
Exxon Corp., 932 F.2d 1020, 1025 (2d Cir. 1991).
Because the action filed in the District of Kansas was filed
first, it is up to that court to decide whether any exceptions to
the first-filed rule apply. Therefore, Liberty Mutual's motion to
dismiss is denied.
Liberty Mutual's motion to dismiss is denied. This action is
stayed for thirty days. The parties shall provide a status report
on October 6, 2005.
© 1992-2005 VersusLaw Inc.