# John S. Stritzinger v. Christiana Trust, a Division of Wilmington Savings Fund Society, FSB > Texas Court of Appeals, 3rd District (Austin) · November 15, 2016 URL: https://www.frixlaw.com/law-library/cases/4100911 ## Case - **Court:** Texas Court of Appeals, 3rd District (Austin) - **Decided:** November 15, 2016 - **Precedential status:** Published - **Opinion:** Opinion - **Cited by:** 0 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/4100911 ## How later opinions describe it (automated extraction) - stating that courts of equity have power to enjoin parties within their jurisdiction from prosecuting actions in foreign countries - holding that burden was met and first suit was dismissed - holding that pending related action is a factor under 28 U.S.C. § 1404(a) ## Opinion text ACCEPTED 03-16-00761-CV 13800262 THIRD COURT OF APPEALS AUSTIN, TEXAS 11/15/2016 1:42:07 PM JEFFREY D. KYLE CLERK Texas A&M University School of Law RECEIVED IN 3rd COURT OF APPEALS Texas A&M Law Scholarship AUSTIN, TEXAS 11/15/2016 1:42:07 PM Faculty Scholarship JEFFREY D. KYLE Clerk 1999 Parallel Litigation James P. George Texas A&M University School of Law, pgeorge@law.tamu.edu Follow this and additional works at: http://scholarship.law.tamu.edu/facscholar Part of the Law Commons Recommended Citation James P. George, Parallel Litigation, 51 Baylor L. Rev. 769 (1999). Available at: http://scholarship.law.tamu.edu/facscholar/427 This Article is brought to you for free and open access by Texas A&M Law Scholarship. It has been accepted for inclusion in Faculty Scholarship by an authorized administrator of Texas A&M Law Scholarship. For more information, please contact sphillips64@law.tamu.edu. PARALLEL LITIGATION' James P. George- TABLE OF CONTENTS I. PARALLEL LAWSUITS--AN OVERVIEW ............................................... 773 A. ParallelLitigation Defined and Distinguished............................ 773 B. The Milieu--FourDistinct Settings for ParallelLitigation.......... 776 C. The Remedies: Five Responses to ParallelLitigation................. 777 1. Do Nothing ............................................................................. 777 2. Transfer and Consolidation .................................................... 777 3. Dismissals and Stays (and Abatements) ............................... 778 4. Antisuit Injunctions ................................................................ 780 D. The Common Doctrines: Six Themes in ParallelLitigation ....... 782 1. The First-Filed Case ............................................................... 782 2. In Rem Cases .......................................................................... 782 3. Declaratory Actions ............................................................... 782 4. Degree of Similarity ................................................................ 783 5. Discretionary Standard ........................................................... 783 6. Com ity .................................................................................... 783 E. The Slow Development ofPrecedent and FederalCourt Prom inence................................................................................... 784 F. Unitary Discussions...................................................................... 785 *G. Terminology.................................................................................. 785 II. INTRAJURISDICTIONAL LITIGATION ................................................... 785 A. Intra-FederalParallelLitigation................................................. 785 1. Who filed first? .......................................... . . .. . .. . . .. . . .. . . .. . . .. . . .. . 788 2. In rem cases ............................................................................ 788 3. Statutory Preemption ............................................................ 788 4. Which court decides? .................................... . . . .. . .. . . .. . . .. . . .. . . . .. 789 B. Transfer and Consolidation.......................................................... 789 1. Consolidation Within the Same Division .............................. 789 2. Move to Another Division Within the District ...................... 789 3. Move to Another Division or District to Correct Venue ....... 790 4. Transfers Based on Forum Selection Agreement .................. 791 *The author is grateful to Professors Anna Teller and Susan Phillips, and law librarian Wendy Law, for significant help in researching and rewriting this article, and to attorneys Brian Stagner, Lu Pham, Albon Head, and Jeff Bragalone for valuable editorial suggestions. -Professor of Law, Texas Wesleyan University School of Law. 770 BA YLOR LA WREVIEW [Vol. 51:4 5. Inconvenient Forum Transfers ............................................... 792 6. Multidistrict Transfer of Multiple Cases for Consolidated Pretrial Proceedings .............................................................. 795 C. Dismissal...................................................................................... 796 1. Voluntary Dismissals and The "Two Dismissal Rule" ......... 796 2. Involuntary Dismissals ........................................................... 797 D. Stays in Favor of OtherFederalCourt Litigation........................ 799 1. The Landis Case ..................................................................... 799 2. Various Tests in the Circuits .................................................. 801 3. Stay of Derivative Suits ......................................................... 807 .4. Enjoining Other Federal Litigation ........................................ 808 III. INTRASTATE PARALLEL LITIGATION ................................................... 813 A. Consolidationand TransfersIn Texas ......................................... 813 1. Consolidation W ithin One Court ........................................... 813 2. Transfers within a Judicial District ........................................ 813 3. Transfers Between Different Judicial Districts in the Same State ........................................................................................ 814 a. Improper Venue .............................................................. 814 b. Impartiality................................... 814 c. Consent ...................................... 814 d. Inconvenient Forum........................................................ 815 e. Multidistrict Transfer..................................................... 815 B. Stays, Dismissals and Injunctions: Texas and Other States ..... 816 1. General Principles .................................................................. 816 2. Statutory Dismissal ................................................................ 819 IV. INTERSTATE PARALLEL LITIGATION ................................................... 820 A. "Transfers" to a Sister State ........................................................ 820 B. Dismissing or Staying the Local Action ....................................... 821 1. Dismissal Under the First-Filed Rule .................................... 822 2. Dismissal of the Second-Filed Declaratory Action ............... 825 3. Dismissals Based on Forum Selection Agreements ............... 826 4. Interstate Forum Non Conveniens ......................................... 832 5. Staying the Local Action ........................................................ 837 C. Antisuit Injunctions Against Sister State Litigation ..................... 840 1. General Principles in Texas ................................................... 841 2. Other States ............................................................................ 848 3. Refusal to Recognize Another State's Injunction .................. 849 V. FEDERAL COURTS AND PENDING STATE LITIGATION ......................... 849 A. Transferringthe FederalCase to State Court............. 850 B. Dismissingthe FederalAction Based on a Forum Selection Agreement ..................................................................................... 851 1999] PARALLEL LITIGATION 854 C. Stays and DismissalsBased on the Abstention Doctrines............ 1. Colorado River Abstention: Economy, Convenience and "Wise Judicial Administration" ........................855 a. Moses Cone and Wilton Refine the Test ................. 860 b. OtherFederal Tests for State-FederalParallels........... 863 2. Dismissals or Stays Based on Federalism-The Other Abstention Doctrines ................................ 864 a. Pullman Abstention-- Unclear State Law with ConstitutionalImplications.........................864 b. BurfordAbstention--Avoiding Conflict With Complex State Regulatory Systems ........................... 870 c. Thibodaux Abstention: Difficult Questions of State Law ........................................ 872 3. Abstention Procedure: Reserving Rights to a Federal F orum .......................................... 874 D. Enjoining the State Action ............................... 875 1. The Younger/Pennzoil Doctrine and Equitable Abstention... 876 a. The Younger and Pennzoil Cases..................... 876 b. Younger's Application in Civil Cases................... 879 c. Perfecting a Younger Objection...................... 881 2. Statutory Abstention: The Anti-Injunction Act ............... 881 a. "ExpresslyAuthorized" Injunctions................... 882 b. Injunctions "In Aid of Its Jurisdiction".................. 885 c. Injunctions to Prevent Relitigation... * ...... 888 E. Summary of Limits on FederalCourtsEnjoining State Court L itigation .......................................... 896 VI. 897 STATE COURTS AND PENDING FEDERAL LITIGATION ................... A. "Transfers "from State to FederalCourt: FederalRemoval..... 897 B. Dismissing or Staying the State Case........................ 898 1. Forum Selection Clauses ..............................898 2. O ther Grounds................................... 898 3. Enjoining the Federal Litigation ......................... 901 VII. FEDERAL COURTS AND FOREIGN LITIGATION ........................ 904 A. Dismissingor Staying the FederalAction ..................... 904 1. The General In Personam Tests: Landis and Colorado R iver .................................... 905 a. The First-to-JudgmentRule, the Laissez-Faire Approach .................................... 909 b. Comity as a stand-alone test........................ 910 2. Dismissals Based on Forum Selection Agreements ............. 912 BA YLOR LAW REVIEW [Vol. 51:4 a. Five FoundationalCases................................................ 913 i. The Bremen v. Zapata Off-Shore Company .............. 913 ii. Scherk v. Alberto-Culver Co ..................................... 916 iii. MitsubishiMotors Corp. v. Soler Chrysler- Plymouth, Inc............................................................ 918 iv. Stewart Organization,Inc. v. Ricoh Corp................. 920 v. Carnival CruiseLines, Inc. v. Shute ......................... 921 b. Divergence as to Governing Law ................................... 923 c. IntrajurisdictionalCases................................................ 925 d. Interstate Cases.............................................................. 926 e. State-FederalCases........................................................ 926 f InternationalCases ........................................................ 928 i. Federal Question Cases ............................................. 929 ii. Diversity Cases Applying Federal Law to the Forum Clause ............................................................ 931 iii. Diversity Cases Applying State Law to the Forum Clause ........................................................................ 935 iv. Undecided as to Which Law Governs in Diversity Cases ......................................................................... 936 g. What Law Governs Interpretation?................................ 937 h. The ProrogationDistinction........................................... 938 i. Form ofMotion and Standardof Review .............. 941 j. Ensuringthe Case's Survival ......................................... 941 3. Forum non conveniens dismissals ......................................... 942 a. Generally........................................................................ 942 b. Removal to FederalCourt to Obtain Different Forum Non Conveniens Law ...................................................... 946 c. EnjoiningRepetitive Litigation of ForeignClaims PreviouslyDismissed on Forum Non Conveniens Grounds.......................................................................... 949 4. Dismissal or Stay of In Rem Cases ........................................ 950 B. FederalInjunctionsAgainst ForeignLitigation .......................... 953 1. Historical Development ......................................................... 953 2. Current Law ........................................................................... 955 3. M iscellaneous Points .............................................................. 966 VIII. STATE COURTS AND FOREIGN LITIGATION ......................................... 969 A. Transferringthe Case................................................................... 970 B. Dismissing or Staying the Local Case.......................................... 970 1. Comity .................................................................................... 971 2. Forum Selection Agreements ................................................. 974 3. Forum Non Conveniens ......................................................... 975 1999] PARALLEL LITIGATION 773 4. Another Dismissal Ground: Due Process and the Fair Play and Substantial Justice Test ........................................... 979 C. Enjoiningthe ForeignLitigation.................................................. 981 1. The B asic Standard ................................................................ 981 2. Anti-Antisuit Injunctions ....................................................... 986 I. PARALLEL LAWSUITS--AN OVERVIEW The keynote speaker at Fort Worth's 1999 bar awards banquet, Dee Kelly, has stories about people and places in a career that began on Speaker Sam Rayburn's congressional staff. Some of the audience no doubt would have preferred his recollections to the intense address he delivered. His choice--"What To Do When Your State Court Action is Collaterally Attacked in Federal Court"--arose from the four lawsuits generated by the airport dispute in Dallas and Fort Worth. This dispute is not the first to generate duplicative litigation,, and the airport fight is not Texas's most sensational example. That distinction may belong, at least for the moment, to the Dallas Cowboys' decision to promote Pepsi and Nike alongside the NFL's promotion of Coca Cola and Adidas, leading to mirror-image lawsuits in New York. Outside of Texas, the Beatles did their version in a management dispute that led to twin billings in New York and England.2 So have Elvis,, Disney 4 and Caruso,5 to name only a few. Although the tactics involved may be as old as litigation itself, their- increasing high-stakes use have made parallel litigation a timely topic. A. ParallelLitigationDefined and Distinguished Parallel litigation-a dispute generating multiple lawsuits-is not a new phenomenon and is not limited to celebrities or sensational controversies. Besides the publicity-generating lawsuits noted above, divorce actions have a long history of parallel lawsuits and conflicting judgments. Recent years have seen an expansion both in the incidence and the subject matter of parallel lawsuits, perhaps fueled by the traditional motivations of home- 'See Southwest Airlines Co. v. Texas Int'l Airlines, 546 F.2d 84, 87-89 (5th Cir. 1977) (involving suits between Southwest Airlines and Dallas, filed in both federal and state courts). 2 See Abkco Indus., Inc. v. Lennon, 377 N.Y.S.2d 362 (N.Y. App. Div. 1975) 3 See Factors Etc., Inc. v. Pro Arts, Inc., 579 F.2d 215, 217 (2d Cir. 1978). 4 See Muller v. Walt Disney Prod., 822 F. Supp. 1033, 1034 (S.D.N.Y. 1993). 5 See Caruso v. Caruso, 143 A. 771, 772 (N.J. Ch. 1928), rev'd 148 A. 882 (N.J. 1930). BAYLOR LAWREVIEW [Vol. 51:4 court advantage and differing laws, along with the expansion of personal jurisdiction rules in the past fifty years.6 In spite of this increase, the vocabulary remains imprecise and ambiguous. Parallel litigation would seem to mean identical or mirror image lawsuits between identical parties, but is often used when the lawsuits are not identical. Duplicative litigation has been defined as the "simultaneous prosecution of two or more suits in which some of the parties or issues are so closely related that the judgment in one will necessarily have a res judicata effect on the other.", Earlier discussion have noted three categories of parallel litigation: (1) repetitive actions: multiple suits on the same claim by the same plaintiff against the same defendant; (2) reactive suits: a separate suit filed by a defendant in the first action against the plaintiff in the first action, seeking a declaratory judgment that he is not liable under the conditions of the first action or asserting an affirmative claim that arises out of the same transaction or occurrence as the first suit; and (3) separate actions by class members on the same cause of action raised in the class action, seeking to represent the same or a similar class. These categories are perfectly parallel and clearly subject to claim and issue preclusion, along with arguments that simultaneous prosecution is inefficient and wasteful., A distinct fourth category is "related litigation": separate suits involving similar parties or issues to which claim preclusion may not apply, but eligible for issue preclusion and to a lesser extent, subject to the same arguments as to wasteful litigation. Treatment here includes all four categories, with distinctions drawn as to their differing treatment in varying jurisdictions. In discussing these cases and their remedies, this Article will use the terms "parallel" and "duplicative" interchangeably, in reference both to identical and mirror image lawsuits, as well as substantially similar lawsuits with common questions of law or fact between substantially-but not always perfectly-identical parties. This Article discusses (1) repetitive suits by the same plaintiff against the same or similar defendants, 9 (2) reactive suits filed by the defendant in the first action 6 See G. BORN, INTERNATIONAL CIVIL LITIGATION IN UNITED STATES COURTS 459 (3d ed. 1996) (hereinafter BORN, INTERNATIONAL CIVIL LITIGATION). 7 R. MARCUS & E. SHERMAN, COMPLEX LITIGATION 104 (3d ed. 1998). sSee id. at 147-48 (citing Vestal, Repetitive Litigation, 45 IOWA L. REV. 525 (1960), and Vestal, Reactive Litigation, 47 IOWA L. REV. 11 (1961)). 9 See Semmes Motors, Inc. v. Ford Motor Co., 429 F.2d 1197, 1200-01 (2d Cir. 1970); Foyt v. Championship Auto Racing Teams, Inc., 947 F. Supp. 290, 291-92 (S.D. Tex. 1996). 1999] PARALLEL LITIGATION against the plaintiff in the first action,' 0 (3) declaratory judgment suits filed by a current or potential defendant lacking any real affirmative claim," and (4) separate actions by class members on the same cause of action raised in the class action.,, Most of the cases discussed are reactive and anticipatory suits where the defendant in the first case becomes the plaintiff in the second suit in a different court, perhaps in a different state or country. In the two lawsuits, both plaintiffs may believe their respective choice of forum to be more appropriate, or even essential to success. Both plaintiffs may be reluctant to forego their choice of forum, even though the entire lawsuit may be litigable in one court. Some of the cases are repetitive suits, and there are many reasons for a party to file two lawsuits in the same matter. Three reasons are that (1) the plaintiff anticipates a real or imagined jurisdictional flaw in the first lawsuit, and files the second to beat the limitations period, (2) the first forum makes a preliminary ruling that displeases the plaintiff, or (3) without any ruling or action by the first forum, the plaintiff experiences "post-filing dissonance" from discomfort with the judge, the type of court, the locale, or some other aspect of the first lawsuit. Plaintiffs who file a second lawsuit in the same matter often file a voluntary dismissal or nonsuit in the first case. Some do not nonsuit, and that leads to repetitive parallel litigation, and possibly reactive litigation. For example, assume that P sues D in Forum A, and D then counterclaims against P. P now decides that Forum A is undesirable because of the judge, locale, type of court, a bad preliminary ruling, or P's intuition and files a second lawsuit in Forum B that provides what P perceives as a better setting. Now the lawsuit has two affirmative claimants, each desiring a distinct forum, in what are now reactive suits that may both be aggressively pursued." Yet another example is duplicative (but not quite parallel) litigation in which a dispute is being litigated in two or more forums with somewhat different parties and/or slightly different claims, but with significantly overlapping parties, issues and claims. This example is not to suggest that every time different lawsuits have overlapping issues or parties that they "See Manufacturers Hanover Trust Co. v. Kingston Investors Corp., 819 S.W.2d 607, 609 (Tex. App--Houston [lst Dist.] 1991, no writ). "See William Gluckin & Co., v. International Playtex Corp., 407 F.2d 177, 177-78 (2d Cir. 1969); Texas Liquor Control Bd. v. Canyon Creek Land Corp., 456 S.W.2d 891, 895 (Tex. 1970). '2Katz v. Realty Equities Corp. of New York, 521 F.2d 1354, 1357 (2d Cir. 1975). "See Semmes Motors, Inc., 429 F.2d at 1202-03. 776 BAYLOR LAWREVIEW [Vol. 51:4 are necessarily duplicative. To the contrary, many lawsuits in modem litigation are repetitive and overlapping, but not duplicative. When the lawsuits have a sufficient degree of overlap, or are identical, concerns may arise as to the efficient use of the parties' and taxpayers' resources. This Article explores the remedies for duplicative lawsuits and highlight a few special problems in using those remedies. One category of overlapping lawsuit that is not primarily featured in this Article is the derivative suit. Some disputes involving multiple litigation are not truly parallel or duplicative, but instead involve an underlying suit with a later derivative. Two examples are (1) an underlying action for liability where the defendant's insurer files a derivative declaratory action to assert nonliability,1 and (2) an underlying action in which a plaintiff's attorney has allegedly committed malpractice, and the plaintiffs immediate derivative action for malpractice is filed before the underlying action is final.' 5 These multiple disputes are neither reactive nor repetitive. They often do not lend themselves to resolution under the standard remedies for parallel litigation and instead may have distinct tests. This category of multiple lawsuits is generally not addressed here and when discussed is noted separately. B. The Milieu--FourDistinct Settingsfor ParallelLitigation The problems and tactical opportunities of parallel or related litigation occur in four settings: (1) within the same jurisdiction, (2) between states in the United States, (3) between the state and federal systems, and (4) internationally. This discussion is organized under those headings. The state and federal court approaches to these conflicts are similar in many instances and identical in some. In spite of this similarity, this study avoids consolidating different jurisdictions' approaches because of a danger of quickly concluding that the law is homologous when it is not. In many jurisdictions, there have been too few cases to permit development of a well-considered policy for dealing with jurisdictional conflicts. Moreover, the emergence of a more cohesive international community may cause changes in the law. The court's authority and willingness to remedy duplicative litigation draws on a number of conflicting doctrines and policies. These include honoring the plaintiffs choice of forum, favoring the first-filed lawsuit, reluctance to dismiss an action that has proper jurisdiction and venue, 4 See Montrose Chem. Corp. v. Superior Court, 861 P.2d 1153, 1555-56 (Cal. 1993). "See Adams v. Paul, 904 P.2d 1205, 1207 (Cal. 1995). 1999] PARALLEL LITIGATION 777 avoidance of waste, convenience to parties, respect paid to coordinate courts and governments, and federalism concerns in state-federal conflicts. C. The Remedies: Five Responses to ParallelLitigation Litigants who find themselves in parallel litigation may choose from five responses: (1) do nothing and continue to litigate both cases, (2) transfer and consolidation, (3) dismissal, (4) stay, and (5) antisuit injunctions. The Article discusses the latter four generally in that sequence within each category, varying where the law combines two remedies, such as dismissals and stays. The definitions immediately below provide a common entry point for their application in the various jurisdictional conflicts. 1. Do Nothing Except for actions concerning real property, an outright bar to parallel or related lawsuits does not exist in state and federal courts in the United States. 6 There are, however, discretionary legal doctrines which may cause the excessive suits to be dismissed, abated, enjoined, or transferred. Parties to duplicative litigation may find relief in one or more of the four remedies discussed below. On the other hand, if an attorney wishes to use duplicate litigation, and the strategy is under attack by one of the motions discussed below, these cases also provide the best defenses. 2. Transfer and Consolidation Transfers and consolidations are distinct procedural functions, available only within the same jurisdiction. This may be changing. Currently, there are inter-jurisdictional means of moving disputes. Forum non conveniens and enforcement of a forum selection agreement are examples, but these methods are accomplished by dismissing in one forum and refiling in the other. There are also proposals for inter-jurisdictional transfers in the form of uniform acts and treaties, but few jurisdictions have adopted this option.'" Within the jurisdiction, transferring a case for consolidation with a parallel case is often unnecessary. Instead, parties merely amend one of the lawsuits to add the necessary claims and parties from the other lawsuit. Transfer and consolidation, may be necessary, however, to preserve claims that for any reason may not be added by amendment. An example involves "6See Princess Lida of Thum & Taxis v. Thompson, 305 U.S. 456, 466 (1939); Laker Airways Ltd. v. Sabena, Belgian World Airlines, 731 F.2d 909, 926-27 (D.C. Cir. 1984). "7See infra Part IV.A. BAYLOR LAWREVIEW [Vol. 51:4 a claim where a limitations period has run. Other reasons include using discovery gathered in the transferred case and taking advantage of the transferor court's preliminary rulings, which would be lost if the court dismissed the case. 3. Dismissals and Stays (and Abatements) The third and fourth responses to parallel litigation are dismissal and stay, discussed together because of the confusion arising from the ambiguous use of the term "abatement," which can mean both dismissal and stay. A dismissal ends the case, usually without prejudice.", Dismissal may not be the preferred option because it (1) terminates a lawsuit with proper jurisdiction and venue, (2) upends the timetable in that case, and (3) assumes a perfect identity with the parallel case, or at least sufficient similarity that no claims are lost or other prejudice results. Nonetheless, dismissal is available in several forms as discussed below. In both state and federal courts, these forms include voluntary dismissals (either unilaterally by the plaintiff or by stipulation), involuntary dismissal pursuant to comity, and forum non conveniens dismissals. A stay is a court's temporary suspension of the prosecution of its own case. "Stay" sometimes describes a temporary suspension imposed by another court, either on a party or the court.' 9 One example is a bankruptcy court's automatic "stay" of related civil proceedings, and another is the editor's title choice for the federal Anti-Injunction Act, which is termed a "Stay of State court proceedings."20 This use may be a legitimate meaning for stay, but it is less confusing to limit the term to a court's self-imposed suspension of proceedings. Upon request, a court may suspend prosecution of its own action, pending resolution of the other case. If the other case becomes final (that is, it is decided on the merits by a competent court, and becomes final under the law of the rendering state or country), it should have a preclusive effect as to the stayed action which can then be dismissed. On the other hand, if the parallel case does not result in a valid and final judgment on the merits, then the stayed case may be revived and litigated. If circumstances change during the stay, it may be lifted for good cause. Case law, however, does not offer examples of this procedure in stays imposed based on parallel litigation. "But see the "two dismissal" rule, infra at Part II.C.1. 9See 28 U.S.C. § 2283 (1994). 2 See id. 1999] PARALLEL LITIGATION Abatement is a more difficult term to understand because it can mean both stay and dismissal. The Seventh Circuit has defined "abatement" as "the overthrow or destruction of a pending action ... which defeats the action for the present, but does not debar the plaintiff from commencing it in a better way."2 Black's Law Dictionary echoes that definition, defining "Abatement of Action" as "an entire overthrow or destruction of the suit so that it is quashed and ended."2 2 On the other hand, "Plea in Abatement" is defined as something that "merely suspends or postpones" the action's prosecution.? Texas case law usage reflects this meaning, without referring to Black's Law Dictionary.24 One Texas statute uses the term "abatement" to describe a sixty-day suspension of prosecution arising from the plaintiffs failure to provide written notice of the complaint prior to filing suit.2 5 The first two meanings are consistent with dismissal, the last three with a stay. An 1870 South Carolina case may explain. this inconsistency: The effect of an abatement at law and in equity is materially different. "In the sense of Courts of Equity, an abatement signifies only a preserit suspension of all proceedings in the suit from the want of proper parties capable of proceeding therein. At the common law, a suit, 26 when abated, is absolutely dead." This distinction may have been lost with the merger of law and equity in federal and most state courts. Whatever the reason for the conflicting usage, this Article will avoid the term "abatement" where possible, using dismissal or stay as indicated in the specific case. Where the case refers to "abatement," this Article will note such usage and attempt to describe whether the effect was a stay or dismissal. One other distinction must be made between stays and dismissals. Logically, dismissals are preferred over stays for duplicative litigation within the same jurisdiction, while stays are preferred over dismissals (if a remedy is available at all) for parallel cases in multiple jurisdictions. The 2 Bowles v. Wilke, 175 F.2d 35, 37-38 (7th Cir. 1949). 2BLACK'S LAW DICTIONARY 4 (6th ed. 1990).(quoting Carver v. State, 398 S.W.2d 719 (1966)). 3ld. at 1151 (citing United States v. Brodson, 234 F.2d 97, 99 (7th Cir. 1956)). 2 See Miles v. Ford Motor Co., 914 S.W.2d 135, 139 (Tex. 1995). 25 See TEx. Bus. & COM. CODE ANN., § 17.505(d)(Vemon Supp. 1999). 26 Pringle v. Sizer, 2 S.C. 59, 68 (1870) (quoting JOSEPH STORY, COMMENTARIES ON EQUITY PLEADING § 354 (C.C. Little & J. Brown 1848)). 780 BAYLOR LAWREVIEW [Vol. 51:4 use of dismissals for local duplication is more economical, while the use of stays for interjurisdictional conflicts reflects courts' greater reluctance to extinguish a case and expose the local plaintiff to the mercy of a distant forum. Stays provide the protection of reviving the case in the event of problems in the other forum. Where dismissals are available in interjurisdictional conflicts the test is a heightened one, often linked to forum non conveniens analysis.17 The test for stays, on the other hand, may be as simple as the "first-filed rule."2 One exception to the no-dismissal rule involves in rem cases, where courts will generally dismiss in deference to the court first assuming control over the property.2 9 4. Antisuit Injunctions A fourth option is to ask the court to enjoin the opposing party from pursuing the other case. 0 This option is especially appropriate when the other court may not grant a motion to stay its own action." The injunction applies only to the party being enjoined; it does not apply to the court or judge presiding over the parallel case.,2 In other words, courts of original jurisdiction may not enjoin each other." However, an appellate court with jurisdiction over a trial court may freeze the litigation in the lower court 34 where a court improperly denied a motion for stay. One treatise describes four applications for antisuit injunctions: (1) stopping litigation of the same dispute in another forum; (2) consolidating related-but-not-identical claims in the moving party's preferred forum, (3) stopping the relitigation of a completed case in another forum, and (4) a counter-injunction, or anti-antisuit injunction to prevent the opponent from seeking an antisuit injunction in another forum.3 Stays and dismissals may achieve the same objectives, however, antisuit injunctions may be most effective when the "other" forum is unlikely to grant the stay or dismissal. The antisuit injunction remedy began as an intrajurisdictional device in fifteenth century England, where common law courts issued writs of "See, e.g., White Light Prods., Inc. v. On The Scene Prods., Inc., 660 N.Y.S.2d 568 (1997); RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 84 cmt. e (1971). 28 See infra text accompanying notes 63-85. 29 See id. 3°See 16 WRIGHT & MILLER, FEDERAL PRACTICE AND PROCEDURE § 3923 (2d. ed. 1996). 3 'See id. 32See id. 33See id. 34 See id. 3'BORN, INTERNATIONAL CIVIL LITIGATION, supra note 6, at 475. 1999] PARALLEL LITIGATION prohibition to undermine the expansion of ecclesiastical courts' jurisdiction.36 The chancery courts adopted the remedy, using their equitable power to restrain parties from bringing related suits in common law courts. Antisuit injunctions were eventually used to enjoin foreign proceedings, which Professor Bermann cites as its most common use in English courts today.,8 Today, state courts have the power to enjoin litigation (1) within the same state, pursuant to that state's law, with no constitutional or international law hurdles to clear;19 (2) in sister state courts under the common law doctrine of comity;40 and (3) in foreign countries.41 State courts may not enjoin federal litigation absent extraordinary circumstances such as maintaining the court's in rem jurisdiction.42 A federal court's power is similar. A federal court may restrain federal litigation,'4 state litigation where the effect would be to defeat or impair the jurisdiction of the federal court,"4 and foreign litigation under the doctrine of comity and 4 the limits discussed in Gau Shan Co., Ltd. v. Bankers Trust Co. 1 Injunction is the most controversial of the remedies for parallel litigation because it interferes with another court's power, often in another state or country. As noted above, the injunction is against the party, not against the other court.46 Some courts and commentators, however, suggest that this is a meaningless distinction and that the other forum may perceive 7 that its powers are being challenged or compromised.4 36 See George A. Bermann, The Use of Anti-Suit Injunctions in InternationalLitigation, 28 COLUM. J. TRANSNAT'L L. 589, 593 (1990) (hereinafter Bermann, Anti-Suit Injunctions). 3"See id. at 593-94. 38 See id.; see also Hartley, Comity and the Use of Antisuit Injunctions in International Litigation, 35 AM. J. COMP. L. 487, 489 (1987). 39 See Gannon v. Payne, 706 S.W.2d 304, 305-06 (Tex. 1986). 4°See Christensen v. Integrity Ins. Co., 719 S.W.2d 161, 163 (Tex. 1986). 41 See Gannon, 706 S.W.2d at 305-06 (noting that this power is accompanied by a "caveat of limited use"). 42 See Donovan v. City of Dallas, 377 U.S. 408,412 (1964); cf University of Tex. v. Morris, 344 S.W.2d 426, 428 (Tex. 1961). 4 3See Municipal Energy Agency of Miss. v. Big Rivers Elec. Corp., 804 F.2d 338, 343 (5th Cir. 1986). 44See Kline v. Burke Constr. Co., 260 U.S. 226, 229 (1922). 4 1See Gau Shan Co. v. Bankers Trust Co., 956 F.2d 1349, 1354-55 (6th Cir. 1992). "'See Gannon, 706 S.W.2d at 306. 47 1d. at 306-07(citing Laker Airways v. Sabena, Belgian World Airlines, 731 F.2d 909, 937 (D.C. Cir. 1984)); see also Total Minatome Corp. v. Santa Fe Minerals, Inc., 851 S.W.2d 336, 339 n.5 (Tex. App--Dallas 1993, no writ); BORN, INTERNATIONAL CIVIL LITIGATION, supra note 6 at 476 nn. 39-40; Trevor C. Hartley, Comity and the Use of Antisuit Injunctions in 782 BAYLOR LAWREVIEW [Vol. 51:4 D. The Common Doctrines: Six Themes in ParallelLitigation Six points transcend these remedies, some with consistent applications and some varied according to the setting and the law of a specific jurisdiction. 1. The First-Filed Case In intrajurisdictional conflicts, there is a heavy presumption favoring the first-filed case, but it may be overcome by a party's misconduct (such as forum shopping) or important state interests. The first-filed rule appears irregularly in other settings, varying from a mere element of a larger test to the same presumptive strength it has in intrajurisdictional settings. 2. In Rem Cases The first-filed presumption is stronger for in rem cases, which almost invariably defer to the first-filed action as noted in PrincessLida of Thurn and Taxis v. Thompson . In many jurisdictions, the presumption is weaker to non-existent for parallel case conflicts involving another jurisdiction, including state-federal conflicts within the same territory. Because of the dominance of the first-filed rule for in rem cases, readers should assume that cases discussed herein are in personam unless stated otherwise. 3. Declaratory Actions Declaratory actions are suspect when they are mirror images of the other suit, but that alone will not cause one to be dismissed. In many jurisdictions, a second-filed declaratory action is dismissed as a matter of law if it seeks no greater relief than the first-filed action. In some jurisdictions, this applies to first-filed declaratory actions under certain circumstances, such as a perception that the first plaintiff was merely forum shopping. InternationalLitigation, 35 AM. J. COMP. L. 487, 506 (1987); William L. Reynolds, The Proper Forumfor a Suit: TransnationalForum Non Conveniens and Counter-suit Injunctions in the FederalCourts, 70 TEx. L. R V. 1663, 1713 (1992) (citing George A. Bermann, The Use of Anti-Suit Injunctions in International Litigation, 28 COLUM. J. TRANSNAT'L L., 589, 629 (1990)). 41305 U.S. 456, 466 (1939). See infra Part VII.A.4. 1999] PARALLEL LITIGATION 4. Degree of Similarity To the extent that identity of parties and claims is an issue, the meaning of identity varies broadly among jurisdictions, and sometimes among courts within a jurisdiction 5. Discretionary Standard The legal issues that resolve conflicts in parallel litigation are generally discretionary. 6. Comity Some remedies rely on comity in various forms and to various degrees, with some states' remedies based entirely on comity. As a legal doctrine, comity is weak, imprecise and unreliable. Nonetheless, it has given many courts a nail on which to hang a ruling. Comity's weakness derives from its nonbinding nature-it is designed to promote friendly relations between sovereigns and not to protect private rights. Its disfavor is reflected in its omission from the Restatement (Second) of Conflict of Laws, although that may be the result of the drafters' wish to compensate for the over-emphasis on comity in earlier choice of law theories.49 Comity does receive' somewhat greater mention in the Restatement (Third) of Foreign Relations Law of the United States,so discussing (1) its role in international law;' (2) extraterritorial application of antitrust law;12 (3) enforcement of foreign judgments;"3 (4) "reasonableness";14 and (5) in the introductory note to Part IV discussing prescriptive jurisdiction. Even so, these five references are seemingly minimal treatment for a concept that is pervasive in American courts, reflecting the dim view that scholarly texts have of the doctrine." On the other hand, sufficient prolonged use of a nonbinding, nonlegal doctrine can result in its ripening into a legal doctrine capable of predictable application. It is difficult to determine whether this is the case with regard to comity, in spite of the increased application of comity in interstate and international procedural matters. In light of this uncertainty, 49RESTATEMENT (SECOND) OF CONFLICT OF LAWS (1971). "°RESTATEMENT (THIRD) OF FOREIGN RELATIONS LAW OF THE UNITED STATES (1987). 1 " See id. § 101, cmt. e. 2 See id. § 415, note 4. 3 See id. § 481, note 1. "'See id. § 402, cmt. a. 55 See EUGENE F. SCOLES & PETER HAY, CONFLICT OF LAWS 11-15 (2d ed. 1992) (discussing comity and its critics); see also James Paul George & Fred C. Pedersen, Conflict of Law, 41 SW. L.J. 383, 409-10 nn.217-21 (1987) BAYLOR LAWREVIEW [Vol. 51:4 a lawyer should be aware of comity's arguably suspect status as a legal norm and be prepared either to challenge or defend its application. E. The Slow Development of Precedentand Federal Court Prominence Precedent developed slowly for the doctrines and remedies discussed here. The reasons are speculative, but most prominent may be the distance that inhibited all but local parallel litigation until the most recent decades. To the extent that remedies were available, parties in parallel lawsuits may not have raised them as often, instead preferring races to judgment to gain a preclusion and execution advantage. Another reason may be the interlocutory nature of these remedies and a possible non- appealability that inhibited the development of stare decisis. In examining this doctrinal development, this Article's earlier drafts placed state courts first in each setting because of their status as courts of general jurisdiction. It was the author's initial belief that these remedies were largely based on common law that originated some time ago in state courts. However, to the contrary, some of these doctrines developed almost exclusively in federal courts. The reasons for federal prominence are also speculative. First, orders that were appealed may have been less likely to be reported in state courts. Second, until the last fifty years American jurisprudence subscribed to a strong concept of state sovereignty, which may have discouraged remedies against parallel litigation except in intrajurisdictional conflicts. Federal courts, as components of a single judiciary, had a greater opportunity to develop rules and precedents for parallel litigation that spanned any significant distance. Third, international disputes may have been more likely to be filed in federal court or removed there for a dismissal motion. Whatever the reason, federal law provides a somewhat better history of these issues and is discussed first in each of the parallel settings. State law discussions are nonetheless important for an accurate survey of current law. This Article focuses on Texas because of the author's familiarity with that law, but has examples from other states. Primary attention is given to states whose decisions appeared in digests more often and whose law was therefore presumably better developed, as well as to states whose law provides a contrast. A brief foreign law section provides general cites on these topics 'without attempting the same analysis. 1999] PARALLEL LITIGATION F. UnitaryDiscussions In spite of the individual treatment given each remedy in each jurisdictional setting, some topics required a unitary discussion to fully illustrate the doctrine and its development. These unitary discussions which cover forum selection clauses, forum non conveniens, and antisuit injunctions, appear in Section VII (addressing international parallel litigation in federal courts), and are cross referenced to other specific sections. G. Terminology The paucity of writing in this area has left the terminology imprecise. As noted above, the term "parallel litigation" is itself ambiguous and is used here as a generic reference to pending related lawsuits.16 The term "abatement" also has conflicting definitions. This article opts for the more precise terms "stay" and "dismissal," and attempts to identify the correct meaning for each use of "abatement" from case law or statutes." For inconvenient forum remedies, this article uses two terms. The first, "inconvenient forum" means statutory transfers within the same jurisdiction, while the second, "forum non conveniens" refers to the common law doctrine that provides for dismissal and re-filing in a geographically distinct jurisdiction. References to the federal practice treatise by Professors Wright, Miller, and others are made simply to "Professor Wright" or "Wright." II. INTRAJURISDICTIONAL LITIGATION A. Intra-FederalParallelLitigation Federal law disfavors simultaneous federal litigation and distinguishes it from state-federal duplication. Generally, as between state and federal courts, the rule is that "the pendency of an action in the state court is no bar to proceedings concerning the same matter in the Federal court having jurisdiction .... ." As betweenfederal district 56 See discussion supra at Part I.A. "'See discussion supra at Part I.C.3. BAYLOR LAW REVIEW [Vol. 51:4 courts, however, though no precise rule has evolved, the generalprinciple is to avoid duplicative litigation." In the earlier Kerotest case, the Court had observed that solving the problem of duplicative federal litigation must involve "giving regard to conservation of judicial resources and comprehensive disposition of litigation, [and did] not counsel [a] rigid mechanical solution." 9 Instead, an evaluation of matters of equity should be made and "an ample degree of discretion" should be afforded the lower court.60 When faced with duplicate federal litigation, most courts use all four remedies: transfer and consolidation, dismissal, stay, and injunction,6 although some have observed only three, omitting dismissal.62 The common thread in exercising these remedies is the "first-to-file" rule, and its application is fairly uniform throughout the remedies. West Gulf Maritime Ass 'n v. ILA Deep Sea Local 24 offers perhaps the best Fifth Circuit statement, holding that the Texas federal court should have heeded the first-filed rule and "stayed, dismissed, or transferred" its second-filed action in deference to the New York federal court that had jurisdiction over a broader range of issues in the dispute.63 West Gulf further noted the policies underlying the first-filed rule were "comity and orderly administration ofjustice," both of which stress the importance of deference to prior exercised power and the efficiency and convenience of letting one court adjudicate substantially-related issues.6 The following brief synthesis of the first-filed rule is generally applicable to the discussion of remedies that follows. Application of the rule dictates that the first action filed takes priority unless (1) the balance of convenience strongly favors the other forum, or (2) there are special (sometimes "compelling") circumstances that justify an alternative such as SColorado River Water Conservation Dist. No. 7 v. United States, 424 U.S. 800, 817 (1976) (emphasis added)(citations omitted). 59 Kerotest Mfg. Co. v. C-O-Two Fire Equip. Co., 342 U.S. 180, 183 (1952). 'Id. at 183-84. See also Sutter Corp. v. P & P Indus., Inc., 125 F.3d 914, 917 (5th Cir. 1997) (discussing the "first-to-file rule" of parallel federal litigation). "' See West Gulf Maritime Ass'n. V,.ILA Deep Sea Local 24, 751 F.2d 721, 728-32 (5th Cir. 1985) (vacating a preliminary injunction and remanding for an order of stay, transfer, or dismissal). 62 See Smith v. SEC, 129 F.3d 356, 361 (6th Cir. 1997). 63751 F.2d 721, 730 (5th Cir. 1985). "Id. at 729 (quoting Washington Metro. Area Transit Auth. V. Ragonese, 617 F.2d 828, 830 (D.C. Cir. 1980)). 1999] PARALLEL LITIGATION 787 dismissing, enjoining or transferring the first action, or allowing both to be litigated. The balance of convenience test resembles an inconvenient forum contest under 28 U.S.C. § 1404(a).65 The special factors are more vague, but may include the following: (1) the similarity of the claims, though perfect identity is not required;" 67 (2) the relative progress of the two cases; (3) the existence of a forum selection clause;0 (4) a plaintiff's need to litigate that claim individually rather than join a class;69 (5) the need to consolidate related actions; ° 7 (6) multidistrict litigation transfer for pretrial purposes; ' (7) lack of notice of the first-filed claim;72 (8) having jurisdiction over necessary or desirable parties;71 61See 800-Flowers, Inc. v. Intercontinental Florists, Inc., 860 F. Supp. 128, 133 (S.D.N.Y. 1994); Igloo Prods. Corp. v. Mounties, Inc., 735 F. Supp. 214, 218 (S.D. Tex. 1990). "See Save Power Ltd. v. Syntek Fin. Corp., 121 F.3d 947, 950-51 (5th Cir. 1997) (transferring first suit to second forum). But see Congress Credit Corp. v. AJC Int'l, Inc., 42 F.3d 686, 689-90 (1st Cir. 1994) (quoting Thermal Dynamics Corp v. Union Carbide Corp., 214 F. Supp. 773, 776 (S.D.N.Y. 1963) for the proposition that suits "must be materially on all fours with the other," and "must have such an identity that a determination in one action leaves little or nothing to be determined in the other"); Computer Assocs. Int'l v. Altai, Inc., 893 F.2d 26, 29 (2d Cir. 1990) (stating that it is improper to enjoin related proceedings where the claim therein would not have been a compulsory counterclaim). "See Cooperative Centrale Raiffeisen-Boerenleen Bank B.A. v. Northwestern Nat'l Ins. Co., 778 F. Supp. 1274, 1279 (S.D.N.Y. 1991) (denying stay of second suit). SSee International Software Sys., Inc. v. Amplicon, Inc., 77 F.3d 112 (5th Cir. 1996); In re Fireman's Fund Ins. Co., 588 F.2d 93 (5th Cir. 1979); Texas Source Group, Inc. v. CCH, Inc., 967 F. Supp. 234 (S.D. Tex. 1997) (holding that the forum selection clause was valid in spite of allegations of breach of underlying contract); American Airlines, Inc. v. Rogerson ATS, 952 F. Supp. 377 (N.D. Tex. 1996); Wellons v. Numerica Say. Bank, FSB, 749 F. Supp. 336 (D. Mass. 1990). "See Savidge v. Fincannon, 784 F.2d 186 (5th Cir. 1986) (denying transfer of individual suit for consolidation with class). 70 See Factors Etc., Inc. v. Pro Arts, Inc., 579 F.2d 215, 219 (2d Cir. 1978) (denying transfer to first forum because of later filing in second forum of related actions against other defendants for the same tort of misappropriation of Elvis Presley's likeness); Davidson v. Exxon Corp., 778 F. Supp. 909, 912 (E.D. La. 1991) (transferring later-filed class action to district with more than 100 actions already on file). "See In re Antibiotic Drugs Antitrust Litig., 355 F. Supp. 1400, 1402 (J.P.M.L. 1973). 72 See Employers Ins. of Wausau v. Prudential Ins. Co. of America, 763 F. Supp. 46, 49-50 (S.D.N.Y. 1991) (denying dismissal and transfer of second suit). BAYLOR LAWREVIEW [Vol. 51:4 (9) discouragement of forum shopping;74 (10) the bad faith filing of a declaratory judgment action;" and 6 (11) "state interest" of the second forum.7 The burden of proving special circumstances is, of course, on the party challenging the first-to-file rule." 1. Who filed first? Closely filed actions may be deemed filed simultaneously. The most extreme example of this was simultaneous electronic filing that was alleged to be four-tenths of a second apart; the two courts selected the forum by a coin toss. 8 In removed cases, the state court filing date controls.7 2. In rem cases While the "special factors" exceptions make the first-to-file rule flexible, the rule is rigid for in rem cases. That is, the first court to acquire jurisdiction of the res has priority to the exclusion of other courts. 0 3. Statutory Preemption The "first-filed" presumption yields to statutory overrides such as mandatory venue,8' exclusive jurisdiction statutes such as 28 U.S.C. § 1346(b) giving federal district courts exclusive jurisdiction over claims 1 73See Span-Eng. Assoc. v. Weidner, 771 F.2d 464, 470 (10th Cir. 1985) (addressing the opportunity to add defendants); see also Chiron Corp. v. Advanced Chemtech, Inc., 869 F. Supp. 800, 802 (N.D. Cal. 1994). 7"See Amerada Petroleum Corp. v. Marshall, 381 F.2d 661, 663 (5th Cir. 1967) (staying first- filed action); S-Fer Int'l, Inc. v. Paladion Partners, Ltd., 906 F. Supp. 211, 217 (S.D.N.Y. 1995) (denying transfer of first suit, and granting injunction against second suit); Johnson Bros. Corp. v. Int'l Bhd. of Painters, 861 F. Supp. 28, 30 (M.D. La. 1994) (dismissing first suit). 71See Commercial Union Ins. Cos. v. Torbaty, 955 F. Supp. 1162, 1163-64 (E.D. Mo. 1997) (dismissing first suit). 7'See Muller v. Walt Disney Prods., 822 F. Supp. 1033, 1034-40 (S.D.N.Y. 1993) (denying defendant's motions to stay or transfer based on balance of convenience and the second forum's greater interest in the litigation). 'See Hanson PLC v. Metro-Goldwyn-Mayer, Inc. 932 F. Supp. 104, 106-08 (S.D.N.Y. 1996) (holding that burden was met and first suit was dismissed). 71See Mobil Oil Exploration Co. v. Federal Energy Regulatory Comm'n, 814 F.2d 998, 1001(5th Cir. 1987). 'gSee Igloo Prods. Corp. v. Mounties, Inc., 735 F. Supp. 214, 217 (S.D. Tex. 1990). 8 See Dailey v. National Hockey League, 987 F.2d 172, 175 (3d Cir. 1993). "1See Sutter Corp. v. P & P Indus., Inc., 125 F.3d 914, 917 (5th Cir. 1997). 1999] PARALLEL LITIGATION under the Federal Torts Claims Act," or statutes divesting a court's jurisdiction, such as 28 U.S.C. § 1500, which divests jurisdiction in the Court of Federal Claims for a litigant involved in a parallel action." 4. Which court decides? Dillard v. Merrill Lynch, Pierce, Fenner & Smith, Inc., was a patent dispute with the first suit filed in the Eastern District of New York and the second in the Western District of Texas, with the New York court enjoining that defendant from pursuing the Texas case, and the Texas federal court enjoining the New York plaintiff from adding a related patent claim in that action. + The Fifth Circuit reversed the Texas injunction and held that the court first having jurisdiction in a patent case should be the one to determine where the case should be tried, thus deferring the decision to the New York federal court. 5 B. Transfer and Consolidation 1. Consolidation Within the Same Division Federal Rule of Civil Procedure 42(a) permits the consolidation of actions having a common question of law or fact, and provides for "joint trial of any or all the matters at issue."6 It does not, however, address case transfer. Case transfer is achieved within the division in which a court sits by 28 U.S.C. § 1404(c), which permits a district court to order that a case be tried at any court within the division. However, Rule 42(a) is directed to convenience and economy, and (unlike Texas Rule 41) does not merge the suits into a single cause of action.?1 2. Move to Another Division Within the District 28 U.S.C. § 1404(b) provides the court with discretion to transfer the case from one division to another in the same district." Professor Wright 2 See Calhoun v. United States, 32 Fed. Cl. 400,407 (Fed. C1. 1994), aff'd 61 F.3d 918 (Fed. Cir. 1995). 3 See Keene Corp. v. United States, 508 U.S. 200 (1993). "961 F.2d 1148, 1161 (5thCir. 1992). "See id. at 1161; see also, Smith v. SEC, 129 F.3d 356, 361 (6th Cir. 1997); Kentucky Fried Chicken Corp. v. Diversified Packaging Corp., 552 F.2d 601, 603 (5th Cir. 1977); Mann Mfg., Inc. v. Hortex, Inc., 439 F.2d 403, 407 (5th Cir. 1971). 86FED. R. Civ. P. 42(a). "7See Johnson v. Manhattan Ry. Co., 289 U.S. 479, 497 (1933). "See e.g.. Country Maid, Inc. v. Haseotes, 312 F. Supp. 1116, 1117 (E.D. Pa. 1970). 790 BAYLOR LAWREVIEW [Vol. 51:4 argues that section 1404(b) is limited to transfers in which all parties consent, pointing out that the second sentence of section 1404(b), which permits transfer of in rem actions brought by the United States without its consent, is meaningless unless consent of all parties is required for other transfers. Wright concludes that section 1404(a), which addresses transfers "to any other district or division," governs motions for transfer within the district lacking consent of all parties8 9 3. Move to Another Division or District to Correct Venue Two federal statutes provide for venue transfers to correct improper filing, both of which may be used in limited cases to transfer and combine parallel actions. The first is a venue statute, 28 U.S.C. § 1406(a), which provides for the dismissal of cases filed in the wrong venue, but permits the court "in the interests of justice" to transfer the case to any district or division with proper venue. 9° The court may transfer even if it lacks subject matter jurisdiction, 9' or personal jurisdiction.92 Section 1406(a) has been used to transfer improperly filed cases to districts where a properly filed parallel case was pending. 91 Venue must be improper to trigger the 94 statute. The second statute is 28 U.S.C. § 1631, which provides for transfer of an action filed in a federal court lacking subject matter jurisdiction to any other such [federal] court in which the action or appeal could have been brought at the time it was filed or noticed, and the action or appeal shall proceed as if it had been filed in or noticed for the court to which it is transferred on the date upon which it was actually filed in or noticed for the court from which it is transferred.95 $915 WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE, §§ 3809 n.29, 3842 n.3; see also Williams v. Hoyt, 556 F.2d 1336 (5th Cir. 1977). 9028 U.S.C. § 1406(a) (West 1993). 9 See United States ex reL Ayala v. Tubman, 366 F. Supp. 1268, 1270 (E.D.N.Y. 1973). "See Goldlawr, Inc., v. Heiman, 369 U.S. 463, 465-66 (1962); Dubin v. United States, 380 F.2d 813, 815 (5th Cir. 1967). "See Papercraft Corp. v. Procter & Gamble Co., 439 F. Supp. 1060, 1063 (W.D. Pa. 1977); Scaramucci v. FMC Corp., 258 F. Supp. 598, 602 (W.D. Okla. 1966). 94 But see Manley v. Engram, 755 F.2d 1463, 1467 (11 th Cir. 1985) (holding that where venue is proper and personal jurisdiction is lacking, § 1406 authorizes transfer); Dubin, 380 F.2d at 815. 9028 U.S.C. § 1631 (1994). 1999] PARALLEL LITIGATION This statute is aimed at several matters, but is principally a safety net for parties who mistakenly file in a federal court lacking some aspect of subject matter jurisdiction. This can be especially useful in cases where the limitations period may expire before correct filing occurs. By the statute's express terms, it applies where the transferor court lacks subject matter jurisdiction.96 If the transferor court lacks subject matter jurisdiction, it is no impediment to transfer that it also lacks personal jurisdiction. 97 Although there are no cases using section 1631 in parallel cases, two decisions implicate its use to transfer from a court lacking jurisdiction to one having jurisdiction."s 4. Transfers Based on Forum Selection Agreement The law of forum selection agreements is problematic, requiring a unitary discussion which appears in the International Section." This section will briefly discuss the issue in intra-federal conflicts. Forum selection agreements have been enforceable in federal courts since Bremen v. Zapata Off-Shore Corporation.' Bremen, an admiralty case with an English forum-selection clause, was not controlling for a federal court faced with a forum-selection clause naming another federal court.'0 ' Clauses that created an intra-federal conflict were first considered in Stewart Organization,Inc. v. Ricoh Corporation.1 02 At the court of appeals level, the Eleventh Circuit had conducted an Erie analysis and determined that federal common law (Bremen) governed because the issue was not contract, but venue, an issue controlled by federal law.' 3 The Supreme Court affirmed on different grounds-that the role of section 1404(a) as a federal statute precluded Erie analysis.,, The Supreme Court further held that under section 1404(a), the forum clause was not per se enforceable, "See In re Exclusive Indus., 751 F.2d 806, 808-09 (5th Cir. 1985). 97 See O'Neal v. Hatfield, 921 F. Supp. 574, 575-76 (S.D. Ind. 1996). Lack of venue is also no impediment to a transfer under 28 U.S.C. § 1631. See Dornbusch v. Commissioner, 860 F.2d 611, 612 (5th Cir. 1988). "See Hill v. U.S. Air Force, 795 F.2d 1067, 1070 (D.C. Cir. 1986) (holding court did not abuse its discretion in failing to transfer a case sua sponte where neither party raised the issue); York Assocs., Inc. v. Secretary of H.U.D., 815 F. Supp. 16, ,22 (D.D.C. 1993) (holding no transfer where claims were "completely duplicative"). "See infra Part VII.A.2. 1'407 U.S. 1, 15 (1972). "'"Id. at 8-9. 102487 U.S. 22, 28-29 (1988). '0 3See Stewart Org., Inc. v. Ricoh Corp., 810 F.2d 1066, 1068-69 (11 th Cir. 1987) (en banc). "See Stewart, 487 U.S. at 28-29. 792 BAYLOR LAWREVIEW [Vol. 51:4 but would instead trigger an inconvenient forum analysis in which the forum agreement would be a factor to be balanced against other factors such as convenience and economy.0 5 There are at least three instances where forum selection clauses are not governed by section 1404(a). The first is where a plaintiff files suit in a federal court in the designated location, but the defendant challenges personal jurisdiction, and federal law differs from that state's law on whether a forum selection clause waives personal jurisdiction objections."1) In this situation, the Eleventh Circuit has held that state law governs. 0 The second instance is where the forum selection clause specifies a state court, which of course makes a section 1404(a) venue transfer irrelevant.108 The third instance is where the designated forum is a foreign country.'1 5. Inconvenient Forum Transfers In 28 U.S.C. § 1404(a),'"' Congress provided an inconvenient forum statute resembling the common law forum non conveniens standards of Gulf Oil"' and PiperAircraft*'-. The statute's test is simpler, providing for transfer "to any other district or division where [the action] might have been brought" when it is justified "[flor the convenience of parties and witnesses" and "in the interest ofjustice."", Section 1404(a) transfers have choice of law implications missing in other venue transfer statutes. Following a section 1404(a) transfer, the "°SSeeid. at 29. For examples of 28 U.S.C. § 1404(a) transfers to enforce a forum selection agreement, see In re Fireman's Fund Ins. Cos., 588 F.2d 93, 94-95 (5th Cir. 1979) (upholding a transfer to federal court in New Jersey, honoring a forum selection clause, in spite of venue rule appearing to fix venue at the place of the contract's performance in Louisiana); Texas Source Group, Inc. v. CCH Inc., 967 F. Supp. 234, 238 (S.D. Tex. 1997) (holding forum selection clause was valid in spite of allegations of breach of underlying contract, resulting in transfer to Illinois); Wellons v. Numerica Savings Bank, FSB, 749 F. Supp. 336, 337-38 (D. Mass. 1990) (transferring first-filed action from Massachusetts to New Hampshire for consolidation with second-filed action, consistent with forum selection clause). "See Alexander Proudfoot Co. World Headquarters v. Thayer, 877 F.2d 912, 916 (11 th Cir. 1989) (distinguishing the jurisdictional challenge from the venue issue in Stewart). But see Northwestern Nat. Ins. Co. v. Donovan, 916 F.2d 372, 376 (7th Cir. 1990) (holding that federal law (Bremen) governs defendant's challenge to jurisdiction in the contractually-chosen forum). '°"See id. at 919. O'See infra Part V.B. for a discussion of what law governs these transfers. '"gSee infra Part VII.A.3. "28 U.S.C. § 1404(a) (1993). "'Gulf Oil v. Gilbert, 330 U.S. 501 (1947). "'Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981). 11328 U.S.C. § 1404(a). 1999] PARALLEL LITIGATION 793 transferee court must apply the transferor court's choice of law rule.' The transferor court's choice of law rule is that of the state in which the court is located.1" Ginsey Industries,Inc. v. I TK Plastics,Inc. illustrates several aspects of a section 1404(a) transfer involving a parallel action."'l Plaintiff Ginsey, a Pennsylvania corporation with its principal place of business in New Jersey, purchased vinyl plastic sheeting from defendant manufacturer, I.T.K., based in Massachusetts.",7 Then, alleging the plastic was not fit for its intended purpose, Ginsey sued in feaeral court to recover his payment and consequential damages.'- Ginsey brought the action in a Pennsylvania federal court, even though the pertinent facts occurred in Massachusetts and New Jersey.' 9 ITK objected on personal jurisdiction grounds, but alternatively sought transfer to the District of Massachusetts. 0 Ginsey failed to come forward with evidence on the personal jurisdiction challenge, but instead asked for transfer to its home base in New Jersey.2 ' The court noted both New Jersey and Massachusetts satisfied section 1404(a)'s requirement that a case be transferred only to a district where the action might have been brought (under requirements of jurisdiction and venue)., The more difficult question was "whether the balance of convenience weighs decisively in favor of one of the proposed districts.",-3 Although the law strongly favors a plaintiff's choice of forum,114 that presumption was overcome here by the presence of a pending related case in a Massachusetts federal court. 5 The actions were not identical-they involved distinct but related purchases of plastic that were both rejected.' ""See Piper Aircraft Co., 454 U.S. at 243 n.8 (1981) (citing Van Dusen v. Barrack, 376 U.S. 612, 613 (1946)). 'See Klaxon v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941). 16545 F. Supp. 78, 79-80 (E.D. Pa. 1982). 7 - See id. at 79. 1"See id. "-Seeid. at 79-80 "'Seeid. at 79. 1'See id. '2 2See id. at 80. 13Id. 24See id. "It is well-settled that 'unless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed."' Id. (quoting Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947)). 'See id. at 80-81. 12See id. 794 BAYLOR LAWREVIEW [Vol. 51:4 Relying on judicial efficiency and economy, the court chose Massachusetts: [I]t would appear that significant economies of time and effort can be achieved if these actions were consolidated in a single district. The essential questions of liability in both actions concern the fitness of I.T.K.'s vinyl products for the commercial purposes Ginsey sought to pursue. The witnesses who will testify about I.T.K.'s product and about Ginsey's reasons for purchasing that product are likely to be the same in both cases. To be sure, consolidation of these actions in the District of Massachusetts imposes a burden on Ginsey. But transfer to that district would, in my judgment, promote efficient judicial administration to such an extent that plaintiff's preference for New Jersey is outweighed. And consolidation ultimately benefits both parties since it is clearly more convenient to conduct related litigation in a single district rather than in two 27 separate forums. As Ginsey noted, section 1404(a) limits transfer to "a district where the action might have been brought," requiring that the transferee court must have personal jurisdiction over all parties.128 In ContinentalAirlines, Inc. v. American Airlines, Inc., a Galveston federal court denied defendant's motion to transfer venue to Dallas, where much of the witnesses and documents were, or failing that, to Houston on the grounds that Galveston lacked direct air service and Houston was more accessible.29 The court soundly rejected the notion that its location fifty miles from Houston amounted to the level of inconvenience contemplated by section 1404(a).130 The court denied a section 1404(a) transfer in Muller v. Walt Disney Productions,where the executor of Leopold Stokowski's estate sued Walt Disney Productions regarding royalties on the video cassette of Fantasia.- Disney had already sued in Pennsylvania, and moved to stay or transfer 12'Id. at 80-81. "I1d. at 80 (citing Hoffman v. Blaski, 363 U.S. 335, 342-43 (1960)); see also Liaw Su Teng v. Skaarup Shipping Corp., 743 F.2d 1140, 1148 (5th Cir. 1984) (applying the Hoffman standard, overruled on othergrounds, In re Air Crash Disaster Near New Orleans, LA, 821 F.2d 1147 (5th Cir. 1987)). .29805 F. Supp. 1392, 1394 (S.D. Tex. 1992). "OSee id. at 1400-01. 822 F. Supp. 1033, 1040 (S.D.N.Y. 1993). 1999] PARALLEL LITIGATION this action there.- The court denied the motions, finding that the balance of convenience and New York interest favored the New York forum. 1" First-filed actions do not always prevail on choice of forum. Factors Etc., Inc. v. Pro Arts, Inc., was part of a two-case dispute in federal courts in Ohio and New York regarding exclusive ownership of Elvis Presley's likeness. ' The Second Circuit upheld the trial court's refusal to transfer the second-filed case to the Ohio federal court, where convenience favored 35 the second district. When both venue and personal jurisdiction are improper, section 1406136 is the authority for transfer.'7 But where venue is proper and personal jurisdiction is lacking, some courts still use section 1406, in spite of its application only in cases where venue is improper. 8 Other courts-and sometimes other appellate panels-have held that section 1404(a) is appropriate here."19 6. Multidistrict Transfer of Multiple Cases for Consolidated Pretrial Proceedings The multidistrict litigation statute, 28 U.S.C. § 1407, provides for the transfer of multiple civil actions from different districts with "one or more common questions of fact" to be transferred to a common forum for pretrial proceedings only.140 Unlike transfers under sections 1404(a), 1404(b) or 1406, which may be consolidated with a parallel action under Federal Rule of Civil Procedure 42(a) ("Rule 42"), this may not be done 1'2See id. at 1034-35. 3 1' See id. at 1039. 134579 F.2d 215, 217 (2d Cir. 1978), overruled on other grounds, Pirone v. McMillan, Inc. 894 F.2d 579 (2d Cir. 1990). 'See id. at 218-19. Other cases using 28 U.S.C. § 1404(a) (1994) to transfer and consolidate a second-filed parallel federal case include Jarvis Christian College v. Exxon Corp., 845 F.2d 523, 528 (5th Cir. 1988); Sundance Leasing Co. v. Bingham, 503 F. Supp. 139, 141 (N.D. Tex. 1980) (holding that pending related action is a factor under 28 U.S.C. § 1404(a)); Santa Fe Int'l Corp. v. Transcontinental Gas Pipe Line Corp., 728 F. Supp. 435, 437 (E.D. Tex. 1989). ' See 28 U.S.C. § 1406 (1993). See Goldlawr, Inc. v. Heiman, 369 U.S. 463, 466 (1962); Aguacate Consolidated Mines, Inc. v. Deeprock, Inc., 566 F.2d 523, 524 (5th Cir. 1978). 'See Dubin v. U.S., 380 F.2d 813, 815-16 (5th Cir. 1967). '"See Sargent v. Genesco, Inc., 492 F.2d 750, 758-59 (5th Cir. 1974); 15 Wright Miller & Cooper, FEDERAL PRACTICE AND PROCEDURE § 3827 (2d ed. 1986). 14028 U.S.C. § 1407 (1993). BAYLOR LAW REVIEW [Vol. 51:4 with a multidistrict transfer under section 1407.' But Rule 42 does have limited use in a section 1407 transfer, as illustrated in Katz v. Realty Equities Corporation.14 The court made a creative use of Rule 42 to order a consolidated complaint in a section 1407 transfer of cases (including class actions) from four districts in three states.1 43 The consolidated complaint allowed the judge to assess how best to conduct the pretrial discovery before returning the cases to their original forums for trial.'" However, while cases transferred under section 1407 may not be consolidated for trial, if the multidistrict pretrial proceeding resolves the case, by summary judgment for example, the case will not be remanded to 45 the transferor district court. In re Aviation Products Liability Litigation is an early case distinguishing between cases that should be transferred for pretrial proceedings and those that should not.146 The panel considered twenty related lawsuits in various federal districts, for defective design, manufacture and installation of helicopter engines.'' 7 Another instructive example is In re the Upjohn Co. Antibiotic "Cleocin" Products Liability Litigation, holding that discovery orders made prior to the multidistrict transfer may be modified by the transferee judge. 148 C. Dismissal 1. Voluntary Dismissals and The "Two Dismissal Rule" Federal Rule of Civil Procedure 41(a) ("Rule 41(a)") provides for plaintiffs unilateral dismissal, or nonsuit, by notice if filed before defendant answers or files a motion for summary judgment.'"4 If defendant has answered or filed a dispositive motion, voluntary dismissal is still '4 'See Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26, 38 (1998) (holding that a court may not use section 1404 to retain a case for trial after obtaining the case under section 1407). 142521 F.2d 1354, 1355 (2d Cir. 1975). "14 See id. at 1356. '"See id. at 1359. 1028 U.S.C. § 1407 (1993). 146347 F. Supp. 1401, 1404-06 (J.P.M.L. 1972). ' 47See id. at 1402. 148450 F. Supp. 1168, 1170 (J.M.P.L. 1978), affld 664 F.2d 114 (6th Cir. 1981). For other examples, see In re Asbestos Litigation, 963 F. Supp. 247, 251 (S.D.N.Y. 1997); In re Air Crash Disaster at Lockerbie, Scotland, 709 F. Supp. 231, 232 (J.P.M.L. 1989), aff'd, In re Pan Am Corp., 16 F.3d 513, 517 (2d Cir. 1994). "9Fed. R. Civ. P. 4 1(a). 1999] PARALLEL LITIGATION available by stipulation signed by all parties.'1° A crucial feature of Rule 41(a) is the "two dismissal rule:" the first voluntary dismissal is without prejudice, that is, it is not an adjudication on the merits unless otherwise stated in the dismissal order.," The second dismissal is with prejudice, that is, when a voluntary dismissal is filed "by a plaintiff who has once dismissed in any court of the United States or of any state an action based on or including the same claim."'" The rule's rigidity is illustrated in Lake at Las Vegas Investors Group, Inc., v. PacificMalibu Development Corp., where the first dismissal, in state court, was not a dismissal as to all defendants, and was required because the plaintiff was an unregistered foreign corporation.' 2. Involuntary dismissals If the plaintiff will not file a notice of dismissal or agree to a stipulated dismissal, the court may involuntarily dismiss the case. This is not authorized by Rule 41, in spite of Rule 41(b)'s provisions for involuntary dismissals, they are expressly directed to the plaintiff's failure to prosecute or comply with a court order or the Federal Rules of Civil Procedure.11 No cases were found dismissing a duplicate lawsuit under Rule 41. Federal Rule of Civil Procedure 12 ("Rule 12"), which authorizes dismissals on seven grounds, also does not apply to parallel litigation although it has been applied to motions to enforce a forum selection clause.' 5 No other statute or rule authorizes dismissal for grounds other than those in Rules 12 and 41. Federal law no longer provides for pleas in abatement,S6 and as just stated, nothing in the federal rules or statutes authorizes its equivalent. However, federal common law and the doctrine of comity do provide for dismissal on other grounds. 157 'See id. l5 11d. 15'Id. (emphasis added); see also Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 394-95 (1990). 11933 F.2d 724, 726-28 (9th Cir. 1991). '"4Fed. R. Civ. P. 41(b). 'See infra Part VII.A.2.i. '-See Fed. R. Civ. P. 7(a),(c). 'See Ulmet v. United States, 888 F.2d 1028, 1031 (4th Cir. 1989); 800-Flowers, Inc. v. Intercontinental Florists, Inc., 860 F. Supp. 128, 135-36 (S.D.N.Y. 1994); Johnson Bros. Corp. v. Int'l Bhd. of Painters, 861 F. Supp. 28, 29 (M.D. La. 1994); Commercial Union Ins. Cos. v. Torbaty, 955 F. Supp. 1162, 1163 (E.D. Mo. 1997); Brower v. Flint Ink Corp., 865 F. Supp. 564, 567 (N.D. Iowa 1994); see also Michael Wells, The Role of Comity in the Law of Federal Courts, 60 N.C. L. REv. 59, 61 n.5 (1981). 798 BAYLOR LA WREVIEW [Vol. 51:4 One federal rule that may impact, parallel cases is the compulsory counterclaim rule stated in Federal Rule of Civil Procedure 13(a). In Adam v. Jacobs, the court reversed the lower court's denial of Jacobs' motion to dismiss the second-filed New York federal case in deference to his first- filed Michigan federal case.158 The Second Circuit held that although Adam had not technically violated Rule 13(a) by filing the second federal action instead of a counterclaim in the first action in Michigan, the district court abused its discretion in not dismissing or transferring Adam's second-filed claim for consolidation with Jacobs' first action. 59 Although the court recognized that filing a second lawsuit instead of a compulsory counterclaim in the first did not violate Rule 13(a), Adam was taking a chance.16° If Jacobs' first-filed action came to final judgment first, Adam's compulsory counterclaim would then be precluded.'6 ' Courts are often reluctant to dismiss lawsuits for which there is valid personal and subject matter jurisdiction. 162 In addressing duplicate litigation, trial courts are more inclined to use the other remedies: stay of the immediate case in that court; enjoining a party from pursuing the parallel case; or, where appropriate, moving the immediate action to be consolidated with the parallel case.163 Forum selection clauses are one area providing for dismissals. The motion is raised under Federal Rule of Civil Procedure 12(b)(6), failure to state a claim, rather than Rule 12(b)(3), improper venue. '6 The problem of parallel federal adjudication also arises between federal courts and federal administrative agencies. 165 Congress may assign certain matters, for example, the granting of a federal permit to operate a hazardous waste processor, to' a federal agency along with adjudicatory authority as to parties who challenge the agency's decision.'" In these cases, the agency may continue the litigation even when a party files suit in an Article III court; that is, the lawsuit does not divest the agency of 158950 F.2d 89, 90 (2d Cir. 1991). 59 ' See id. at 94. '"See id. at 93. 16'See id. " 2 See EEOC v. Univ. of Pa., 850 F.2d 969, 972 (3d Cir. 1988) (affirming the trial court's refusal to dismiss the EEOC's second-filed lawsuit seeking enforcement of a subpoena against the University of Pennsylvania for peer review records). ' 63See id. at 976 n.4. '"See, e.g., Lambert v. Kysar, 983 F.2d 1 110, 1112 n.l (lst Cir. 1993). 16'See, e.g., Marine Shale Processors, Inc. v. EPA, 81 F.3d 1371, 1376 (5th Cir. 1996). 6See id. 1999] PARALLEL LITIGATION 799 jurisdiction.167 This was the result when Marine Shale Processors, Inc., applied to the Environmental Protection Agency ("EPA") for a permit to dispose of hazardous waste."68 The EPA denied the permit, and Marine Shale appealed within the agency's administrative review structure. 169 In the meantime, the United States sued Marine Shale in federal district court for burning waste without a permit.'7" In the federal lawsuit, Marine Shale immediately challenged the EPA's continuing jurisdiction over the permit application, arguing that by invoking the power of an Article III court, the United States ended the EPA's adjudicatory authority.'-' The Fifth Circuit disagreed, observing by comparison that, State courts are not Article III courts, yet nothing in Article III prevents a state court from litigating the same controversy pending before a district court. In such cases, if the state court reaches final judgment first, its disposition may preclude further litigation in the [federal] district court without violating Article III.'"7 D. Stays in Favor of Other FederalCourt Litigation 1. The Landis Case In Landis v. North American Co., Justice Cardozo described a court's inherent power to stay its own case. 17 Landis is not often cited by courts addressing intrafederal parallels, apparently because its formulation of a first-impression test has been superseded by later, more definitive cases. 74 It nonetheless established an important point. The Landis opinion arises from two cases. 17 In understanding Cardozo's ruling, it is important to note that the plaintiffs in the two cases are distinct, although the issues were apparently identical.' 76 The plaintiff in each of the two actions was a holding company described in the opinion "67See id. at 1377. 68See id. at 1374. 169See id. at 1374-75. '70See id. 'See id. at 1376-77. at 1377 (citation omitted). 172ld. '17299 U.S. 248, 254 (1936). 174See SEC v. Downe, 1993 WL 22126, at "12 (S.D.N.Y. Jan. 26, 1993). See Landis, 299 U.S. at 249 (consolidating Landis v. North Amercan Co. and Landis v. American Water Works & Elec. Co.) "76See id. at 249. 800 BAYLOR LAW REVIEW [Vol. 51:4 as "the apex of a pyramid which includes subsidiary holding companies as well as subsidiary operating companies, these last being engaged as public ' 77 utilities in supplying gas and electricity to consumers in different states.' In addition to these two primary actions, other plaintiffs had filed forty- seven similar suits in thirteen federal districts.17 Defendants filed motions to stay in each of the two cases, hoping to use only one forum to resolve the central issue of the constitutionality of the registration requirement. 7 9 The district court granted the stay, but the D.C. Circuit reversed.1SO On review, the Supreme Court limited the question to a court's right to stay cases pending the resolution of a related case.-1 This focus led to Cardozo's often quoted statement: Viewing the problem as one of power, and of power only, we find ourselves unable to assent to the suggestion that before proceedings in one suit may be stayed to abide the proceedings in another, the parties to the two causes must be shown to be the same and the issues identical ... Apart, however, from any concession, the power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants. How this can best be done calls for the exercise of judgment, which must weigh competing interests and maintain an even balance. True, the suppliant for a stay must make out a clear case of hardship or inequity in being required to go forward, if there is even a fair possibility that the stay for which he prays will work damage to some one else. Only in rare circumstances will a litigant in one cause be compelled to stand aside while a litigant in another settles the rule of law that will define the rights of both. Considerations such as these, however, are counsels of moderation rather than limitations upon 82 power. 1 at 177Id. 249-50. 17'See id. at 252. ' 79See id. at 250-51. '8 See id. at 253-54. '8'See id. at 254. '8 Ild. at 254 (citation omitted). 1999] PARALLEL LITIGATION Thus, the Court ruled that a federal court may stay, at least temporarily, an action that is less than a perfect parallel to a similar action that may resolve common issues. 83 The test is a balancing test which requires the movant to "make out a clear case of hardship or inequity in being required to go forward, if there is even a fair possibility that the stay for which he prays will work damage to some one else."114 Cardozo also clarified that (1) the burden is on the party seeking the stay; and (2) the decision was discretionary but must be kept "within the bounds of moderation."'' s 2. Various Tests in the Circuits While Landis establishes the source of the power to stay a parallel case, it did little to clarify when a stay should be granted, contrary to Cardozo's opening paragraph: "The controversy hinges upon the power of a court to stay proceedings in one suit until the decision of another, and upon the propriety of using such a power in a given situation."186 To the extent that the emphasized phrase promises a legal test, Landis offers only oblique .phrases such as: (1) "the exercise of judgment, which must weigh competing interests and maintain an even balance;"'- s (2) "clear case of hardship or inequity;"",s (3) "fair possibility that the stay ...will work damage to someone else;"'1 9 (4) "scandal to the administration of justice;"'' 0 and (5) "discretion was abused if the stay was not kept within the bounds of moderation."'' The absence of a usable legal standard may explain why Landis is often ignored in legal opinions and scholarship tracing the heritage of stays to remedy parallel cases in federal courts. 9 "83See id. at 254-55. Landis noted several lower court opinions that limited stays to cases with identical parties. The Court observed that these cases could have been resolved on the grounds that the stays, all of indefinite duration, were an abuse of discretion. The other view,that courts simply lacked the power to stay a case whose parallel had different parties, was unacceptable. 4 'I 1d. at 255. 8 ' I1d. at 256. 86 " 1d. at 249 (emphasis added). 8 Id. at 254-55. 'Id. at 255. 1891d. 9 "' Id. (quoting Amos v. Chadwick, L.R. 9 Ch. Div. 459, 462). 1911d. at 256. 92 ' In spite of these shortcomings, the Fifth Circuit has applied Landis, explaining that: "A stay can be justified only if, based on a balancing of the parties' interests, there is a clear inequity to the suppliant who is required to defend while another action remains unresolved and if the order granting a stay can be framed to contain reasonable limits on its duration." GATX Aircraft Corp. v. M/V Courtney Leigh, 768 F.2d 711,716 (5th Cir. 1985) (citing Landis, 299 U.S. at 254- BAYLOR LAWREVIEW [Vol. 51:4 With no solid guidance from Landis, federal courts have found other authorities for staying local cases in deference to other federal litigation. One often cited case is Kerotest Manufacturing Co. v. C-O-Two Fire Equipment Co., a parallel patent dispute in which the Supreme Court affirmed a stay of the second-filed declaratory judgment action.19 Kerotest fails to add anything substantive to Landis: Wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation, does not counsel rigid mechanical solution of such problems. The factors relevant to wise administration here are equitable in nature. Necessarily, an ample degree of discretion, appropriate for disciplined and experienced judges, must be left to the lower courts.... Even if we had more doubts than we do about the analysis made by the Court of Appeals, we would not feel justified in displacing its judgment with ours.94 In other words, standards with identifiable elements are inappropriate here because the management of parallel litigation within the federal system requires a case-by-case analysis in which pertinent factors will vary from case to case. Of course, this approach may have contemplated that guidelines would develop over time, and they did. In spite of being somewhat ignored in domestic parallel settings, Landis is cited with some regularity by federal courts considering stays of the immediate action in deference to foreign actions.19 These cases, fortunately, have developed the legal test missing in Landis. One case considering a stay in deference to a first-filed Canadian case identified the following factors: [1] principles of comity, [2] the adequacy of relief available in the alternative forum, [3] promotion of judicial efficiency, [4] the identity of the parties and issues in the two actions, [5] the likelihood of prompt disposition in the alternative forum, [6] the convenience of the parties, 55). GATX upheld the federal trial court's denial of a stay pending the resolution of a non- parties' bankruptcy. See GATX, 768 F.2d at 717. 193342 U.S. 180, 186 (1952). 1941d. at 183-84. 195See infra Part VII.A. 1. 1999] PARALLEL LITIGATION counsel and witnesses, and [7] the possibility of prejudice if the stay is granted.196 When these factors are considered in a purely federal context, presumably comity would decline or disappear, but the others are no doubt appropriate. 197 The Seventh Circuit has stated a clear test based on Kerotest.19 In Serlin v. Arthur Andersen & Co., the court upheld the trial court's dismissal of a duplicate federal action.'" For authority, it drew from a local federal district court opinion which paraphrased Kerotest's language authorizing dismissal of a parallel action "for reasons of wise judicial administration ... whenever it is duplicative of a parallel action already pending in another federal court." 200 Interestingly, Kerotest's "wise judicial administration" concept was also the basis for the ColoradoRiver doctrine, which determines the appropriateness of stays and dismissals in state-federal parallel litigation.2ol This has led to confusion for courts that might be tempted to apply the multi-factored Colorado River test in an intrafederal setting. Serlin's citation to Colorado River for the "wise judicial administration" test, quoted above, is an example. The Seventh Circuit corrected this in Chrysler Credit Corp. v. Marino, by rejecting movant's reliance on Colorado River as a basis for a stay of a parallel action: Colorado River and its progeny, however, address the stay of federal proceedings pending the conclusion of parallel state actions and that is how we have applied it. Here, both the guaranty and replevin actions were filed in federal court in the Northern District of Illinois. Consequently, abstention from the guaranty action under ColoradoRiver is inapplicable.02 Of course there is no legal error in this if the court merely applies Colorado River's elements without the federalism twist, and perhaps without the heavy presumption of allowing the actions to continue. The "I.J.A., Inc. v. Marine Holdings, Ltd., Inc., 524 F. Supp. 197, 198 (E.D. Pa. 1981). 97 1 See id. 198 See Serlin v. Arthur Anderson & Co., 3 F.3d 221, 223 (7th Cir. 1993). 99 1 d. at 222. 2 "Id. at 223 (quoting Ridge Gold Standard Liquors v. Joseph E. Seagram, 572 F. Supp. 1210, 1213 (N.D. III.1983) (citation omitted). 201 See infra Part V.C. 20263 F.3d 574, 578 (7th Cir. 1995) (citations omitted). BAYLOR LA WREVIEW [Vol. 51:4 Seventh Circuit also has a narrower definition of "parallel:" "A suit is only duplicative if it involves the 'same claims, parties, and available relief.' '23 This is contrary to the Supreme Court's approach in Landis, which held that "we find ourselves unable to assent to the suggestion that before proceedings in one suit may be stayed to abide the proceedings in another, the parties to the two causes must be shown to be the same and the issues identical."20 In other cases, the Fifth Circuit appears also to base its test on Kerotest, in spite of its earlier reliance on Landis in GA TX, discussed above.25 The best example of this Kerotest reliance is West Gulf Maritime Ass 'n v. ILA Deep Sea Local 24.2- Like the Seventh Circuit, the Fifth Circuit cites the inappropriate Colorado River precedent along with Kerotest.0? However, the Court also identifies several useful considerations, including the degree of identity of the actions, the courts' respective ability to resolve all the issues in the dispute, and the likelihood of piecemeal litigation.208 West Gulf also draws from Mann ManufacturingInc. v. Hortex, Inc.,1 9 which provides the Fifth Circuit's position on stays in duplicate patent litigation. For its own authority, Mann ignored Landis and Kerotest and instead relied on two questionable cases and one appropriate precedent.210 The two questionable cases are Rickey Land & Cattle Co. v. Miller & Lux,211 a state-federal conflict, enforcing the first-filed rule in an in rem case, and In re Georgia Power Co.,212 holding the first-filed rule to be axiomatic in both intrafederal conflicts and state-federal conflicts. The appropriate authority is Tivoli Realty, Inc. v. Interstate Circuit, Inc., enforcing the first-filed rule by reversing an antisuit injunction from the second court.213 In Mann, the court split its remedy, staying the first-filed action in regard to claims related to the second action, and staying specific claims pending plaintiffs motion for leave to add those claims in the second action.114 Readers should not assume that legal tests and remedies 23 ° Id. (quoting Serlin, 3 F.3d at 223). 2 "4See Landis v. North America Co., 299 U.S. 248, 254 (1936). 2 5 " See supra note 105. 206751 F.2d 721, 728-29 (5th Cir. 1985). 207 2 8 See id. at 728-29. ° See id. at 730-3 1. 209439 F.2d 403, 405 (5th Cir. 1971). 2 '°See id. at 407 n.2. 211218 U.S. 258, 262-63 (1910). 21289 F.2d 218, 221 (5th Cir. 1937). 213167 F.2d 155, 158 (5th Cir. 1948). 2 14 See Mann, 439 F.2d at 408. 1999] PARALLEL LITIGATION 805 applied in parallel patent cases are readily applicable to non-patent cases. Caution is appropriate here. Although there is no authority on point-- neither judicial or academic--patent cases appear to make up a greatly disproportionate number of federal parallel cases and have developed 21 somewhat distinct rules. 1 The Second Circuit uses a heavy presumption favoring the first-filed case, with Semmes Motors, Inc. v. Ford Motor Co., as a leading example.216 That presumption is qualified by the fact that Semmes was a repetitive parallel case, that is, both cases were filed by the same party. 27 It might not be as strong in reactive cases in which each party has made a bona fide choice of forum. The two cases arose from Ford's audit of Semmes's Ford dealership in New York, which included the investigation of warranty repairs and led to claims that the auditors randomly contacted customers.21 1 In the audit, Ford found several instances of warranty refunds charged to Ford where no work was done, and recommended remedial measures to Semmes.219 In response, Semmes sued Ford in New Jersey state court; Ford removed that claim to federal court, where the judge denied Semmes's request for a temporary injunction against Ford's actions and possible franchise termination.220 Semmes then sued Ford in a New York federal court, still seeking the temporary injunction to stop Ford from terminating the franchise.221 The New York federal court denied Ford's motion to stay the New York action and granted Semmes's injunction against Ford.m On appeal, the Second Circuit held the New Jersey action had priority as the first filed, that the New Jersey federal court would have been justified in enjoining Semmes from prosecuting the New York federal action, and that the result should not differ where Ford chose instead to seek a stay from the New York federal court. 23 The Second Circuit thus stayed the New York action, but did leave in effect the New York Court's injunction against Ford (that is, enjoining Ford from terminating Semmes's 2 'See, e.g., William Gluckin & Co. v. International Playtex Corp., 407 F.2d 177, 178 (2d Cir. 1969) (discussing the "customer action" factor). 216429 F.2d 1197, 1202 (2d Cir. 1970).. 21 See id. at 1198-99, 1202. "'See id. at 1200. 219 See id. 220 See id. at 1200 n.5. 221 See id. 2 USee id. at 1201. 2 2See id. at 1202. 806 BAYLOR LAW REVIEW [Vol. 51:4 dealership), even though the injunction had been denied by the New Jersey 22 federal court which would subsequently try the case. ' The D.C. Circuit has significantly altered its rule for parallel federal actions. As recently as 1980, it had applied a "discretionary" rule that was phrased in dispositive terms in Washington Metropolitan Transit Authority v. Ragonese: "Where two cases between the same parties on the same cause of action are commenced in two different Federal courts, the one which is commenced first is to be allowed to proceed to its conclusion first." ' Further underscoring the rule, the court stated that "[c]onsiderations of comity and orderly administration of justice dictate that two courts of equal authority should not hear the same case simultaneously." ' In applying 226 the seemingly rigid first-filed rule, the D.C. Circuit's approach was, by 1997, that "in strictly limited circumstances, we have sometimes held that comity may warrant dismissal of [a pending] action."227 The Ninth Circuit has a more discretionary approach, observing "a generally recognized doctrine of federal comity which permits a district court to decline jurisdiction over an action when a complaint involving the same parties and issues has already been filed in another district." 228 The court added that "this 'first to file' rule is not a rigid or inflexible rule to be mechanically applied, but rather is to be applied with a view to the dictates ' of sound judicial administration."229 The Tenth Circuit offers a case that illustrates the need for a stay pending appeal of a possibly dispositive second case. 230 In O'Hare International Bank v. Lambert, the bank originally sued Lambert in the Northern District of Illinois on a guarantee agreement.23 When the federal trial court initially ruled that it lacked personal jurisdiction, the bank sued again in the Western District of Oklahoma (and in federal courts in Texas and Arkansas) to protect its claim before the limitations period ran. 232 The 2 4 See id. at 1204. 225617 F.2d 828, 830 (D.C. Cir. 1980) (quoting Speed Products Co. v. Tinnerman, 171 F.2d 727, 729 (D.C. Cir. 1948) (upholding a dismissal in deference to a Virginia federal case)). 226 1d. [emphasis added](citing Hilton Hotels Corp. v. Weaver, 325 F.2d 1010, 1010 (D.C. Cir. 22 1963) 7 (per curiam)). Northwest Forest Resource Council v. Dombeck, 107 F.3d 897, 901 (D.C. Cir. 1997). 22 Pacesetter Sys., Inc. v. Medtronic, Inc., 678 F.2d 93, 94-95 (9th Cir. 1982) (citing Church of Scientology of Cal. v. United States Dep't of the Army, 611 F.2d 738, 749 (9th Cir. 1979)). 229 Pacesetter,678 F.2d at 95. 23 °See O'Hare Int'l Bank v. Lambert, 459 F.2d 328, 329 (10th Cir. 1972). 2 Id. at 329. 232 See id. at 329-30. 1999] PARALLEL LITIGATION bank then moved to stay the second action while appealing its first action; however, the Oklahoma federal court rejected the stay and granted summary judgment for the defendant on grounds unstated in the opinion.23 Meanwhile, the Seventh Circuit reversed the Illinois federal court decision on personal jurisdiction, and remanded the case for litigation on the merits.234 The bank now faced its loss in the Oklahoma federal court. 23s On appeal, the Tenth Circuit held that the Oklahoma federal court abused its discretion when it failed to stay the second-filed action while awaiting the appeal in the Seventh Circuit.23 The Tenth Circuit's test included both a strong first-filed presumption, countered by "the general rule . . . that where the judgment sought is strictly in personam, courts having concurrent jurisdiction may proceed with the litigation at least until judgment is obtained in one of them which may be set up as res judicata in the other."27 3. Stay of Derivative Suits As noted in the introduction, this discussion focuses on "true" parallel cases to the possible exclusion of derivative cases that arise out of the original dispute but involve subsequent issues that may be determined in the underlying lawsuit. A California federal case provides an example of how the test for staying derivative suits can differ from that for ordinary parallel actions.ns MD. Sass Investors Services, Inc. v. Reliance Insurance Co. was a diversity case regarding an insurance bad faith claim, filed by Sass, an investment advisor who was being sued in five other federal actions by pension fund clients for losses on bond investments recommended by Sassy 9 These actions were consolidated by the Multidistrict Panel on Litigation for pretrial proceedings in the Eastern District of Louisiana. 240 Sass then sued Reliance in this case for a declaration of coverage and bad faith for Reliance's denial of coverage.2 4 ' Subsequently, Sass moved for a stay pending the resolution of the five 233See id. at 330 234See id. 23 'see id. 236 See id. at 331. 23 1Id. (citing Princess Lida v. Thompson, 305 U.S. 456 (1939)). 239 See M.D. Sass Investors Servs., Inc. v. Reliance Ins. Co., 810 F. Supp. 1082, 1086 (N.D. Cal. 1992) 2 9Id. at 1083-84. 24°See id. at 1084. 24 'See id. 808 BAYLOR LAWREVIEW [Vol. 51:4 underlying lawsuits.12 The court noted the Ninth Circuit had no law on point displaying the criteria for staying a derivative case regarding insurance coverage pending a decision in the primary case.2 43 The court then borrowed the following list of five factors from the Third Circuit: (1) the likelihood that the declaration will resolve the uncertainty of obligation which gave rise to the controversy; (2) the covenience of the parties; (3) the public interest in the settlement of the uncertainty of obligation; (4) the availabililty and convenience of other remedies; and (5) whether the same factual question lies at the heart of both the insurance coverage dispute and the underlying action.244 The court granted the stay after precisely evaluating these factors, which differ somewhat from the Ninth Circuit's test for routine intra- 25 federal parallel cases. 1 4. Enjoining Other Federal Litigation The standard for intra-federal antisuit injunctions is almost identical to that of dismissals of duplicative litigation, with a strong first- filed presumption. That is, federal law favors dismissal of all but first-filed suits, unless there are special circumstances or the balance of convenience favors the latter suit.46 The enjoining court need not be of coordinate jurisdiction with the court where the action is enjoined. For example, 24 7 bankruptcy courts may enjoin actions in federal district courts. William Gluckin & Co. v. International Playtex Corp., is a good example of rejecting the presumption favoring the first-filed case, based on the balance of convenience of the second forum.241 Playtex is a Delaware corporation with its principal place of business in New York and three of its five manufacturing plants in Georgia.249 F. W. Woolworth & Company 242 See id. at 1085. 243 See id. at 1089. 244 1d. (citing Terra Nova Ins. Co. v. 900 Bar, Inc., 887 F.2d 1213, 1224-25 (3d Cir. 1989)). 245 See Pacesetter Sys., Inc. v. Medtronic, Inc., 678 F.2d 93, 94-95 (9th Cir. 1982); see also supra text accompanying notes 228-29. 246 See Semmes Motors, Inc. v. Ford Motor Co., 429 F.2d 1197, 1202 (2d Cir. 1970); see also Municipal Energy Agency v. Big Rivers Elec. Corp., 804 F.2d 338, 343 (5th Cir. 1986). 247 See Steelman v. All Continent Corp., 301 U.S. 278, 288-91 (1937); In re North Am. Oil & Gas Co. v. Fidelity & Deposit Co., 130 B.R. 482, 489 (W.D. Tex. 1991). 248407 F.2d 177, 180 (2d Cir. 1969). 249 See id. at 178. 1999] PARALLEL LITIGATION 809 ("Woolworth") is a New York corporation with its principal place of business in New York, though it operates retail stores throughout the nation.250 Gluckin is a New York corporation with its principal place of business in New York City.2 51 Even though these were federal question cases, these facts are pertinent to the "balance of convenience" calculation. On April 25, 1968, Playtex sued Woolworth in federal court in the Northern District of Georgia for selling a brassiere manufactured by the Gluckin Company, which Playtex alleged infringed on a Playtex patent.2 12 Gluckin was not registered to do business in Georgia, and according to the court in this case, not amenable there."3 On May 28, 1968, Gluckin sued Playtex in the Southern District of New York for a declaratory judgment of non-infringement or patent invalidity.254 On Gluckin's motion, the New York federal court enjoined Playtex from proceeding in the Georgia suit.55 Playtex then appealed the injunction.256 The Second Circuit began its analysis by noting its parallel case rule that "as a principle of sound judicial administration, the first suit should have priority, 'absent the showing of balance of convenience in favor of the second action,' . . . or unless there are special circumstances which justify giving priority to the second."257 The court then noted two special circumstances: (1) the "customer action" exception, "where the first-filed suit is against a customer of the alleged [patent] infringer while the second involves the infringer himself," and (2) "where forum shopping alone motivated the choice of the situs for the first suit."258 The second did not apply; the district court had made no finding of forum shopping, and the appellate court was unable to inferit.29 The district court, however, did utilize the first special circumstance, the "customer action" exception, to 6 enjoin the first-filed action.2 0 2 25 "See id. 'See id. 22 S See id. at 177. 23 1' See id. at 178. 24 S See id. 2 1SSee id. 26 S See id. at 177 "'tId.at 178 (quoting Remington Prods. Corp. v. American Aerovap, Inc., 192 F.2d 872, 873 (2d Cir. 1951) (citation omitted). 28 1d. at 178. 9 25 20 See id. " See id. 810 BAYLOR LAWREVIEW [Vol. 51:4 Playtex urged reversal, arguing the unfairness of the rigid application of the customer exception.261 Playtex argued that in order to justify unseating the first-filed case, more than mere customer action was needed, such as harassment or probable harassment in litigating in the first forum.262 The court rejected this argument, and instead described the need for a "flexible approach": Wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation, does not counsel rigid mechanical solution of such problems. The factors relevant to wise administration here are equitable in nature. Necessarily, an ample degree of discretion, appropriate for disciplined and experienced 2 63 judges, must be left to the lower courts. Under this approach, the customer exception would apply only when the balance of convenience favored the second forum. It did in this case, with the location of evidence and witnesses and other important factors 6 overwhelmingly pointing to New York and the second-filed action.21 Readers should note that the "customer exception rule" is limited to patent cases like Gluckin. On the other hand, the special circumstances test applies generally to parallel cases in federal courts. The Fifth Circuit has a two-part test for enjoining federal duplicative litigation: "(1) are the two pending actions so duplicative that one court should decide the subject matter of both actions; and if so, (2) which of the two courts should take the case?" 265 In Superior Savings Association v. Bank of Dallas, the plaintiff was a judgment creditor which had filed related garnishment actions against various law firms in Dallas, Texas and Cleveland, Ohio, seeking unused fees held by the garnishee firms.26 Applying the two-part test, the court first observed that in considering antisuit injunctions, "the customary rules governing the grant of injunctive 26 'See id. at 178-79. 262 See id. at 179. 263 1d. at 179 (quoting Kerotest Mfg. Co. v. C-O Two Fire Equip. Co, 342 U.S. 180, 183-84 (1951)). 2 'See id. at 179-80. 265 Superior Sav. Ass'n v. Bank of Dallas, 705 F. Supp 326, 328-29 (N.D. Tex. 1989) (citing Coumbia Plaza Corp. v. Security Nat'l Bank, 525 F.2d 620, 628-29 (D.C. Cir. 1975); Mann Mfg., Inc. v. Hortex, Inc., 439 F.2d 403, 407-08 (5th Cir. 1971)). 266 See id.at 327-28. .1999] PARALLEL LITIGATION relief are of 'secondary significance. "'267 The court denied the defendants' motion to enjoin the Ohio litigation, finding that the two post-judgment actions were not sufficiently duplicative to require that one be stopped.268 Additionally, special concerns arise when enjoining repetitive litigation in the United States for claims arising outside the United States that have been dismissed on forum non conveniens grounds. Injuries and deaths in foreign countries often end up as claims in state or federal courts in the United States, if there is a basis for personal jurisdiction. Whether our courts should provide a forum for such claims is controversial.269 These claims are sometimes dismissed on forum non conveniens grounds,270 but claimants are not always deterred by the first or second dismissal. Plaintiffs in these repetitive suits may be enjoined from refiling the claims in any state or federal court in the United States, assuming that the United States as a whole was found inconvenient.21 Compulsory counterclaims can be another problem. Where a party elects to file a second federal action rather than bring a compulsory counterclaim, and where the parties in the two actions are the same, the second action should be enjoined.272 The scope of the antisuit injunction may present special issues as well. In Wood v. Santa Barbara Chamber of Commerce, Inc., photographer Wood sued several defendants for copyright infringement under federal law.273 The district court dismissed Wood's claims for lack of personal jurisdiction over many of the defendants, and the running of the limitations periods as to some claims.74 Because Wood had already been litigious on these issues, the court permanently enjoined Wood from relitigating these claims, or any claims remotely connected, and the Ninth Circuit 267 1d. at 328 (citing Columbia Plaza Corp.,525 F.2d at 622 n.3 (D.C. Cir. 1975)); see also S- Fer Int'l, Inc. v. Paladion Partners, Ltd., 906 F. Supp. 211,213-14 (S.D.N.Y. 1995). 268 See id. at 331. 269 See David W. Robertson & Paula K. Speck, Access to State Courts in Transnational PersonalInjury Cases: Forum Non Conveniens and Antisuit Injunctions, 68 TEX. L. REv. 937, 938-975 (1990) [hereinafter Robertson & Speck, Access to State Courts]; infra Part IV.B.4.; see also Carl Scherz Comment, Section 71.051 of the Texas Civil Practiceand Remedies Code-The Texas Legislature'sAnswer to Alfaro: Forum Non Conveniens in Personal Injury and Wrongful Death Litigation, 46 BAYLOR L. REv. 99 (1994) [hereinafter Legislature's Answer to Alfaro]; see infra Part IV.B.4. 2"See De Melo v. Lederle Lab., 801 F.2d 1058, 1064 (8th Cir. 1986). "'See Villar v. Crowley Maritime Corp., 990 F.2d 1489, 1498-99 (5th Cir. 1993). "2 See Columbia Plaza Corp. v. Security Nat'l Bank, 525 F.2d 620, 626 (D.C. Cir. 1975). 273705 F.2d 1515, 1518 (9th Cir. 1983). 274 See id. 812 BAYLOR LAWREVIEW [Vol. 5 1:4 affirmed. 5 As might be expected, this ruling does not reflect the norm as to injunctions against future litigation. Albeit in a somewhat different setting, federal antisuit injunctions against state litigation, the Supreme Court has held that injunctions against future litigation must be narrowly drawn and limited to matters actually decided in the federal action.216 Honoring the injunction may also be problematic since the court in which the action has been enjoined is not always inclined to agree. In at least one noteworthy case, Schauss v. Metals Depository Corp., the Fifth Circuit did honor a New York federal injunction despite sufficient justification to ignore it.277 In Schauss, defendant Metals Depository Corporation ("MDC") was sued in two Texas federal courts and several Texas state courts. 278 MDC was also a defendant in a New York federal action brought by the Commodity Futures Trading Commission, in which a receiver was appointed and all creditors were joined.279 The New York federal court then enjoined the creditors from prosecuting any further actions against MDC.8 0 One of the two Texas federal courts stayed its action temporarily, in accordance with the New York injunction, to learn what effect the New York injunction had on the Texas proceeding.2-1 The New York receiver, however, failed to correspond with the Texas action, even though he was a party and aware of the proceedings.28 2 The two Texas actions were consolidated, and the Texas parties agreed on a settlement and final judgment was entered.213 The New York receiver, a non-participating party, appealed.214 The Fifth Circuit set aside the Texas federal court's judgment, which was in violation of the New York injunction, even though the New York receiver's inaction was a significant 25 cause. 1 27 See id. at 1526. 276 See Chick Kam Choo v. Exxon Corp., 486 U.S. 140, 151 (1988); see also Deus v. Allstate Ins. Co., 15 F.3d 506, 524 (5th Cir. 1994). 277757 F.2d 649, 653 (5th Cir. 1985). 278 1d. at 651-52. 279 See id. at 651. 2 '°See id. 281 2 2 See id. at 652. 1 See id. 23 " See id. 2 4 See id. at 653. 285 See id. at 655. 1.999] PARALLEL LITIGATION 813 III. INTRASTATE PARALLEL LITIGATION Texas courts will defer to the plaintiffs choice of forum,86 but this factor is nullified in reactive suits with two plaintiffs in different courts, especially in declaratory judgment actions where the court determines that the declaratory judgment plaintiff was forum shopping.287 Even with deference to the plaintiffs choice, courts are inclined to economize excessive litigation with a presumption favoring the first-filed case, unless special factors compel a different decision. A. Consolidationand TransfersIn Texas~ 1. Consolidation Within One Court Based on concerns of economy, convenience, and the avoidance of inconsistent judgments and jurisdictional conflicts, Texas law presumptively disfavors duplicative litigation among its state courts.288 A primary remedy for multiple cases having a common question of law or fact is transfer to the same court, and either (1) ordering of a joint trial, or (2) consolidating them for all purposes, both pursuant to rule 174(a) of the Texas Rules of Civil Procedure (based substantially on Rule 42 of the Federal Rules of Civil Procedure).289 In addition, Rule 41 of the Texas Rules of Civil Procedure (based on Rule 21 of the Federal Rules of Civil Procedure), provides in part that actions may be jointly tried or consolidated at any time before submission to the jury, on motion by any party or by the court.2 90 Neither the parties nor the claims need to be identical, and the decision is discretionary.29 2. Transfers within a Judicial District Duplicative cases pending in the same court require only consolidation, not transfer. Transfer is required to consolidate duplicative cases pending in different courts in the same judicial district. Transfers between district courts in the same judicial district are governed by section 24.303 of the Texas Government Code92 and Rule 330(e) of the Texas Rules of Civil 26 See McIntosh v. Copeland, 894 S.W.2d 60, 65 (Tex. App.-Austin 1995, writ denied). 2 .See infra Part I11.B.1. 288 See Cleveland v. Ward, 116 Tex. 1,285 S.W. 1063, 1071 (1926). 289 Tex. R. Civ. P. 174(2). 2 9Tex. R. Civ. P. 41. 291 See Owens-Coming Fiberglas Corp. v. Martin, 942 S.W.2d 712, 716 (Tex. App.-Dallas 1997, no writ). 292 TEX. GOV'T CODE ANN. § 24.303 (Vernon 1988). BAYLOR LAWREVIEW [Vol. 51:4 Procedure. 29 . Transfers between other courts in the same district use section 74.121 of the Texas Government Code.294 3. Transfers Between Different Judicial Districts in the Same State Texas venue laws offer five grounds for moving cases to another district or county that might be used to transfer and consolidate related actions; none of the following cases are examples of parallel litigation. a. Improper Venue Section 15.063(1) of the Texas Civil Practice and Remedies Code provides for transfer from an incorrect venue to a correct one.2 95 Upon defendant's motion and plaintiffs failure to establish venue, the presumption favoring plaintiffs choice is defeated and defendant may choose, limited of course to appropriate venues.219 Plaintiffs may not use this section to correct mistaken filings, thus permitting defendants a presumptive choice after one filing mistake by plaintiffs.2 97 b. Impartiality Section 15.063(2) of the Texas Civil Practice and Remedies Code permits a change of venue if the moving party shows an inability to obtain an impartial civil trial in the transferee district'.298 c. Consent Section 15.063(3) of the Texas Civil Practice and Remedies Code permits a transfer if the parties previously agreed to venue in another county,299 for example by designating a contract's place of performance;1°° by attorney stipulation during the lawsuit; °' or presumably by a choice of forum agreement. 293 TEx. R. Civ. P. 330(e) 294TEx.Gov'T CODE ANN. § 74.121 (Vernon 1998). 295 TEx.Civ. PRAC. & REM. CODE ANN. § 15.063(1) (Vernon 1986). 29 6 See WTFO, Inc. v. Braithwaite, 899 S.W.2d 709, 714 (Tex. App.-Dallas 1995, no writ). 29 f See Tenneco, Inc. v. Salyer, 739 S.W.2d 448, 449 (Tex. App.-Corpus Christi 1987, no writ).298 TEX. CIv. PRAC. & REM. CODE ANN. § 15.063(2) (Vernon 1986); see also Wilson v. Texas Parks & Wildlife Dep't, 853 S.W.2d 825, 829 (Tex. App.-Austin 1993), rev'd, 886 S.W.2d 259 (Tex. 1994). 299 Tex. Civ. Prac. & Rem. Code Ann. § 15.063(3) (Vernon 1986). 3 °°See WTFO, 899 S.W.2d at 716. 3 'See Farris v. Ray, 895 S.W.2d 351, 352 (Tex. 1995). 1999] PARALLEL LITIGATION 815 d. Incbnvenient Forum Prior to September 1, 1995, the three grounds listed above were the only means in Texas of transferring a case between districts for consolidation purposes. In 1995, the Texas legislature substantially rewrote Texas venue law and added an "inconvenient forum" transfer provision-section 15.002(b) of the Texas Civil Practice and Remedies Code02 that resembles the federal venue transfer provision, 28 U.S.C. § 1404(a). 3 The motion must be filed prior to or with the answer. Thus, duplicative litigation in different districts within Texas may be resolved by a successful motion to transfer under section 15.002(b), followed by a motion to consolidate under Rule 174(a) of the Texas Rules of Civil Procedure. There are no transfer cases on point nor will there be, because decisions to or not to transfer are not appealable and are not grounds for 3 reversible error. ' e. MultidistrictTransfer Rule 11 of the Texas Rules of Judicial Administration provides a multidistrict litigation procedure similar to the federal one, authorizing the transfer of cases with "material questions of fact and law in common with another case pending in another court in another county .... ,"3o Like the federal version, the transfer is limited to pretrial proceedings including summary judgment. The Rule has no provisions for consolidation, and provides to the contrary that the assignment "under this rule terminates 302 TEx. Civ. PRAC. & REM. CODE ANN. § 15.002(b) (Vernon Supp. 2000). For the convenience of the parties and witnesses and in the interest of justice, a court may transfer an action from a county of proper venue under this subchapter or Subchapter C to any other county of proper venue on motion of a defendant filed and served concurrently with or before the filing of the answer, where the court finds: (1) maintenance of the action in the county of suit would work an injustice to the movant considering the movant's economic and personal hardship; (2) the balance of interests of all the parties predominates in favor of the action being brought in the other county; and (3) the transfer of the action would not work an injustice to any other party. Id. 30328 U.S.C. § 1404(a) (1993). 304 S TEX. Civ. PRAC. & REM. CODE ANN. § 15.002(c) (Vernon Supp. 2000). 305TEX. R. JUD. ADMIN. 11.1, reprinted in TEX. GoV'T CODE ANN., tit. 2, subtit. F app. (Vernon 1998). 816 BA YLOR LAW REVIEW [Vol. 51:4 when ... all pretrial proceedings are completed . . . ."06 Whether a party could then use Texas Civil Practice and Remedies Code section 15.002(b) as the basis for an inconvenient forum transfer to the common forum for consolidation for trial is unclear. That result is not permitted in the equivalent federal practice under 28 U.S.C. § 1407.307 B. Stays, Dismissals and Injunctions: Texas and Other States 1. Gen [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/4100911. Public record. Not legal advice.