Tobias Chavez v. Dole Food Company Inc

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_______________
No. 13-4144
_______________
TOBIAS BERMUDEZ CHAVEZ, et al.,
v.
DOLE FOOD COMPANY, INC., et al.
(D. Del. No. 1-12-cv-00697)
JULIO ABREGO ABREGO, et al.,
v.
DOLE FOOD COMPANY, INC., et al.
(D. Del. No. 1-12-cv-00698)
ALVARADO ALFARO MIGUEL FRANCISCO, et al.,
v.
DOLE FOOD COMPANY, INC., et al.
(D. Del. No. 1-12-cv-00699)
JORGE LUIS AGUILAR MORA, et al.,
v.
DOLE FOOD COMPANY, INC., et al.
(D. Del. No. 1-12-cv-00700)
EDWIN AGUERO JIMENEZ, et al.,
v.
DOLE FOOD COMPANY, INC., et al.
(D. Del. No. 1-12-cv-00701)
GONZALEZ ARAYA FRANKLIN, et al.,
v.
DOLE FOOD COMPANY, INC., et al.
(D. Del. No. 1-12-cv-00702)
TOBIAS BERMUDEZ CHAVEZ, et al.,
Appellants
_______________
On Appeal from the District Court
for the District of Delaware
(Civil Nos. 1-12-cv-00697, 1-12-cv-00698, 1-12-cv-00699,
1-12-cv-00700, 1-12-cv-00701, and 1-12-cv-00702)
District Judge: Honorable Richard G. Andrews
_______________
2
Argued on June 24, 2014 before Merits Panel
Court Ordered Rehearing En Banc on September 22, 2015
Argued En Banc on February 17, 2016
Before: McKEE, Chief Judge, AMBRO, FUENTES*,
SMITH, FISHER, CHAGARES, GREENAWAY, JR.,
VANASKIE, SHWARTZ, KRAUSE, and
RESTREPO, Circuit Judges
(Opinion Filed: September 2, 2016)
Scott M. Hendler
Hendler Lyons Flores
1301 West 25th Street, Suite 400
Austin, TX 78705
Jonathan S. Massey [ARGUED]
Massey & Gail LLP
1325 G Street, N.W., Suite 500
Washington, DC 20005
Counsel for Appellants
*
The Honorable Julio M. Fuentes assumed Senior Status on
July 18, 2016.
3
Caitlin J. Halligan
Andrea E. Neuman [ARGUED]
Gibson, Dunn & Crutcher LLP
200 Park Avenue, 47th Floor
New York, NY 10166
William E. Thomson, III
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
47th Floor
Los Angeles, CA 90071
Somers S. Price, Jr.
Potter, Anderson & Corroon LLP
1313 North Market Street, 6th Floor
Wilmington, DE 19801
Counsel for Appellees Dole Food Company, Inc., Dole
Fresh Fruit, Standard Fruit Company, Standard Fruit
and Steamship Company
Michael L. Brem
Schirrmeister Diaz-Arrastia Brem, LLP
700 Milam Street, 10th Floor
Houston, TX 77002
Donald E. Reid
Morris, Nichols, Arsht & Tunnell LLP
1201 North Market Street, P.O. Box 1347
Wilmington, DE 19899
Counsel for Appellee Dow Chemical Co.
4
Timothy J. Houseal
Jennifer M. Kinkus
Young Conaway Stargatt & Taylor LLP
1000 North King Street
Rodney Square
Wilmington, DE 19801
D. Ferguson McNiel, III
Vinson & Elkins LLP
1001 Fannin Street, Suite 2500
Houston, TX 77002
Counsel for Appellee Occidental Chemical Corp.
John C. Phillips, Jr.
Phillips, Goldman, McLaughlin & Hall, P.A.
1200 North Broom Street
Wilmington, DE 19806
Counsel for Appellee AMVAC Chemical Corporation
Kelly E. Farnan
Katharine L. Mowery
Richards, Layton & Finger, P.A.
920 North King Street
One Rodney Square
Wilmington, DE 19801
Counsel for Appellee Shell Oil Co.
5
Steven L. Caponi [ARGUED]
Blank Rome LLP
1201 Market Street, Suite 800
Wilmington, DE 19801
R. Jack Reynolds
Samuel E. Stubbs
Pillsbury, Winthrop, Shaw & Pittman LLP
909 Fannin Street, Suite 2000
Two Houston Center
Houston, TX 77010
Counsel for Appellees Chiquita Brands International,
Inc., Chiquita Brands, L.L.C., Chiquita Fresh North
America, L.L.C.
Boaz S. Morag
Cleary, Gottlieb, Steen & Hamilton LLP
One Liberty Plaza
New York, NY 10006
James W. Semple
Cooch & Taylor
1000 West Street, 10th Floor
Wilmington, DE 19801
Counsel for Del Monte Fresh Produce N.A., Inc.
_______________
OPINION OF THE COURT
_______________
6
FUENTES, Circuit Judge, with whom McKEE, Chief Judge,
AMBRO, SMITH, FISHER, CHAGARES, GREENAWAY,
JR., VANASKIE, SHWARTZ, KRAUSE, and RESTREPO,
Circuit Judges, join.
The plaintiffs in these cases are foreign agricultural
workers who labored on banana plantations in Central and
South America from the 1960s through the 1980s. They
allege that their employers and certain chemical companies
knowingly exposed them to toxic pesticides over many years,
and that this exposure caused adverse health consequences
ranging from sterility, to birth defects, to a heightened risk of
cancer. Litigation against the defendants first began in Texas
state court in 1993, yet to date no court has reached the merits
of the plaintiffs’ claims.
A series of byzantine procedural developments
eventually led the plaintiffs out of Texas and into Louisiana,
where they filed several diversity-based suits in federal
district court raising tort claims against the defendants under
Louisiana law. The defendants moved to dismiss those
claims on timeliness grounds, and the plaintiffs, fearing that
the Louisiana District Court would grant those motions, filed
nearly identical suits in the District of Delaware raising
analogous tort claims under Delaware law. Because the
timeliness rules of Louisiana and Delaware are different, the
plaintiffs hoped that, even if the Louisiana District Court
concluded that their claims were time-barred under Louisiana
law, the Delaware District Court would reach the opposite
conclusion under Delaware law. These developments
eventually gave rise to three procedural questions we now
confront in this appeal.
7
Our initial inquiry concerns proper application of “the
first-filed rule.” That rule is a comity-based doctrine stating
that, when duplicative lawsuits are filed successively in two
different federal courts, the court where the action was filed
first has priority. In some cases, “first-filed” courts have
relied on the rule to enjoin litigation in other jurisdictions. In
other cases, “second-filed” courts have cited the rule to defer
consideration of a matter until proceedings have concluded
elsewhere. Application of the rule is discretionary.1 If a
second-filed court decides to invoke the rule, it also has the
discretion to decide whether to stay, transfer, or dismiss the
case before it. Here, the Delaware District Court chose to
apply the first-filed rule and then, rather than staying or
transferring the plaintiffs’ claims, it dismissed those claims
with prejudice.2 That decision effectively terminated the
plaintiffs’ cases. On appeal, the plaintiffs contend that these
dismissals were an abuse of discretion.
The second issue relates to personal jurisdiction. One
of the defendants, Chiquita Brands International, moved for
dismissal on the ground that the Delaware District Court
lacked personal jurisdiction over it. The plaintiffs argued that
personal jurisdiction was present, but, in the event that the
1
See E.E.O.C. v. Univ. of Pa., 850 F.2d 969, 972
(3d Cir. 1988), aff’d on other grounds, 493 U.S. 182 (1990)
(“[W]e review [a] district court’s order [under the first-filed
rule] for abuse of discretion.”).
2
“The label ‘with prejudice’ attached to the dismissal of a
claim signifies that the dismissal is an adjudication of the
merits and hence a bar to further litigation of the claim.”
Korvettes, Inc. v. Brous, 617 F.2d 1021, 1024 (3d Cir. 1980).
8
Delaware District Court disagreed, they asked it to transfer
their claims against Chiquita Brands International to New
Jersey, where that defendant is incorporated, rather than
dismiss them outright. The Delaware District Court held that
it lacked personal jurisdiction and refused to transfer the
claims, believing that its decision to dismiss all other
defendants under the first-filed rule merited a similar
dismissal as to Chiquita Brands International. The plaintiffs
contest that ruling on appeal.
Our third inquiry relates to the doctrine of res judicata.
While the defendants’ motions to dismiss under the first-filed
rule were pending in Delaware, the Louisiana District Court
dismissed the plaintiffs’ claims on timeliness grounds.
Certain defendants in the Delaware suits, reacting to this
development, moved to dismiss the plaintiffs’ Delaware
claims on the ground that the Louisiana dismissals ought to
bar re-litigation of related claims in another forum. The
Delaware District Court declined to reach the issue in view of
its application of the first-filed rule, but the issue nonetheless
confronts our Court today given the present posture of these
cases.
Our resolution of this appeal is therefore threefold.
First, we conclude that the Delaware District Court abused its
discretion under the first-filed rule by dismissing the
plaintiffs’ claims with prejudice. Second, we conclude that
the Delaware District Court erred by refusing to transfer the
plaintiffs’ claims against Chiquita Brands International to
another forum. And third, we conclude that the timeliness
dismissals entered by the Louisiana District Court do not
create a res judicata bar to the plaintiffs’ Delaware suits. As
these cases come to us today, there is a serious possibility that
9
no court will ever reach the merits of the plaintiffs’ claims.
More than twenty years after this litigation began, we think
that outcome is untenable—both as a matter of basic fairness
and pursuant to the legal principles that govern this
procedurally complex appeal.3
Accordingly, we will vacate the Delaware District
Court’s dismissals and remand these cases for further
proceedings.
I. Background
These cases arise from the use of the pesticide
dibromochloropropane (DBCP) on banana farms in several
countries, including Panama, Ecuador, and Costa Rica. The
plaintiffs allege that they were exposed to DBCP beginning in
the 1960s and ending sometime in the 1980s, and that their
exposure to DBCP has caused them to suffer from a number
of serious health problems. The plaintiffs have been seeking
redress for those injuries in various courts around the country
and, indeed, around the world for over twenty years.
3
By emphasizing the procedural complexity of this case, we
do not mean to suggest that the defendants have acted
improperly or unethically by seeking to defeat the plaintiffs’
claims solely on procedural grounds. Within reasonable
boundaries, the defendants are free to pursue their interests in
the courtroom in whatever manner they deem appropriate.
10
The full history of these cases has been well chronicled
elsewhere, and we will not duplicate those efforts here.4 Still,
because the complexity of this litigation’s procedural history
bears on our substantive analysis, we provide a brief
summary of that history below.
A. Procedural History in the Texas Courts
This litigation began in 1993 with the filing of a class
action in Texas state court.5 The defendants quickly adopted
a three-step strategy for defeating the plaintiffs’ claims. First,
they impleaded various foreign entities under the Foreign
Sovereign Immunities Act.6 This, in turn, provided a hook
for federal jurisdiction.7 Second, the defendants removed the
case to the United States District Court for the Southern
District of Texas. Third, the defendants asked the Texas
4
See, e.g., Blanco v. AMVAC Chem. Corp., No. N11C-07-
149 (JOH), 2012 WL 3194412, at *1–5 (Del. Super. Ct.
Aug. 8, 2012) (providing a very thorough recital of this
litigation’s many twists and turns).
5
In reality, multiple groups of plaintiffs filed competing
lawsuits, leading to months of inter-court wrangling and
eventual consolidation in the Texas courts. We elide these
and similar details for the sake of brevity.
6
See 28 U.S.C. §§ 1330, 1603.
7
The United States Supreme Court later rejected the
defendants’ view of what kinds of foreign companies the
Foreign Sovereign Immunities Act permits a defendant to
implead. See Dole Food Co. v. Patrickson, 538 U.S. 468,
476–77 (2003).
11
District Court to dismiss the plaintiffs’ class action on the
ground of forum non conveniens.8
This strategy was successful, at least for a time. In
1995, the Texas District Court granted the defendants’
request for a forum non conveniens dismissal, thereby
sending the plaintiffs back to their home countries to try to
litigate their claims there.9 It also denied all other pending
motions as moot, including the plaintiffs’ pending motion for
class certification.10 Even so, the Texas District Court stated
8
The doctrine of forum non conveniens embodies the
principle that, “[a]lthough a plaintiff’s choice of forum should
rarely be disturbed, ‘[w]hen an alternative forum has
jurisdiction to hear the case, and when trial in the plaintiff’s
chosen forum would establish . . . oppressiveness and
vexation to a defendant . . . out of all proportion to plaintiff’s
convenience, or when the chosen forum [is] inappropriate
because of considerations affecting the court’s own
administrative and legal problems, the court may, in the
exercise of its sound discretion, dismiss the case.’” Kisano
Trade & Invest Ltd. v. Lemster, 737 F.3d 869, 873
(3d Cir. 2013) (all alterations in original except first) (second
set of internal quotation marks omitted) (quoting Windt v.
Qwest Commc’ns Int’l, Inc., 529 F.3d 183, 189
(3d Cir. 2008)).
9
See Delgado v. Shell Oil Co., 890 F. Supp. 1324, 1373
(S.D. Tex. 1995).
10
See id. at 1375.
12
that the plaintiffs could return to federal court if their home
countries refused to take jurisdiction over their claims.11
By the early-2000s, it had become clear that foreign
courts were, as the Texas District Court anticipated, unwilling
to hear these cases. As a result, the plaintiffs returned to
Texas and asked for permission to litigate their claims in the
United States. The Texas District Court, acting under the
return jurisdiction clause it included in its 1995 dismissal
order, revived the case and sent it back to Texas state court.12
11
See id. (“[I]n the event that the highest court of any
foreign country finally affirms the dismissal for lack of
jurisdiction of any action commenced by a plaintiff in these
actions in his home country or the country in which he was
injured, that plaintiff may return to this court and, upon
proper motion, the court will resume jurisdiction over the
action as if the case had never been dismissed . . . .”).
12
See Delgado v. Shell Oil Co., 322 F. Supp. 2d 798,
816−17 (S.D. Tex. 2004). In fact, the procedural questions
that arose upon the plaintiffs’ return to the United States were
more complicated still. Because of the intervening effect of
the Supreme Court’s Patrickson decision, supra note 7, the
Texas District Court concluded that it lacked subject matter
jurisdiction to decide any motion to reinstate the plaintiffs’
cases in federal court. Id. at 813–15. It therefore remanded
those cases (which had previously been consolidated) to the
Texas state courts with instructions for those courts to decide
the reinstatement question. Id. at 816–17. Note that this
entire morass was created by the defendants’ twin decisions
to invoke the Foreign Sovereign Immunities Act and seek a
forum non conveniens dismissal in the first instance.
13
The defendants challenged the reinstatement but were
unsuccessful.13 In 2009, they again removed the case to
federal court, this time claiming that Congress’s passage of
the Class Action Fairness Act in 2005 conferred federal
jurisdiction over the plaintiffs’ state-law claims, even though
the plaintiffs sued the defendants well over a decade before
the Act came into effect. The Texas District Court rejected
this argument and—again—remanded the case to state
court.14
There, the defendants obtained a denial of class
certification in 2010.15 That decision brought the Texas-
based chapter of this saga to a close.
B. Subsequent Litigation in Louisiana and
Delaware
After the denial of class certification in Texas, the
plaintiffs in these cases decided to strike out on their own and
sue the defendants on a non-class basis. They determined
13
See In re Standard Fruit Co., No. 14-05-00697-CV, 2005
WL 2230246 (Tex. App. 14th Dist. Sept. 13, 2005) (denying
defendants’ petitions for a writ of mandamus challenging the
reinstatement).
14
See App. Vol. II at 208–13 (a copy of the slip opinion in
Carcamo v. Shell Oil Co., No. 09-cv-258 (KMH) (S.D. Tex.
Dec. 18, 2009), remanding the case to state court).
15
See id. at 214 (a copy of the order in Carcamo v. Shell Oil
Co., No. 93-C-2290 (Tex. Dist. Ct. Brazoria Cty. June 3,
2010), denying the plaintiffs’ motion for class certification).
14
that it made sense to sue in either Louisiana or Delaware,16
but, given the long pedigree of this litigation, there were
potential timeliness problems in both jurisdictions.
Those problems were twofold. First, there was the
issue of cross-jurisdictional class action tolling.17 The
plaintiffs’ claims flow from state-law causes of action with
relatively short limitations periods. The plaintiffs maintain
that this is not a barrier to suit because the pendency of their
class action in Texas should have tolled any applicable
limitations period between 1993, when the putative class
action was filed, and 2010, when the Texas state court denied
class certification. At the time the plaintiffs were deciding
whether to sue in Louisiana or Delaware, however, it was
unclear whether the courts in those states would agree.18
16
See Pls.’ Br. at 11–12 (explaining that “Standard Fruit
was based in Louisiana and United Fruit (now Chiquita)
maintained corporate operations there,” while “Delaware is
the chosen State of incorporation of numerous of the
defendants, including Dow, Shell, Chiquita and Dole”).
17
In many instances, courts have concluded that the filing of
a class action complaint stops the statute of limitations clock
(that is, “tolls” it) with respect to unnamed members of the
class. By using the phrase “cross-jurisdictional class action
tolling,” we mean to describe the question of “whether a state
court would engage in [such] tolling during the pendency of a
class action in another court.” Wade v. Danek Med., Inc., 182
F.3d 281, 287 (4th Cir. 1999).
18
In the federal system, “the Supreme Court [has] held that
where class certification has been denied because of the
15
Second, even if Louisiana or Delaware were to
recognize cross-jurisdictional class action tolling, the
plaintiffs’ claims might still be untimely. Recall that the
plaintiffs’ class action was filed in Texas state court, removed
to the Texas District Court, dismissed on the ground of forum
non conveniens, and then reinstated several years later. If a
court were to conclude that the plaintiffs’ class action was not
“pending” during the period of the forum non conveniens
dismissal, the plaintiffs’ claims would likely be untimely even
if cross-jurisdictional class action tolling applied.19
failure to demonstrate that the class was sufficiently
numerous, ‘the commencement of the original class suit tolls
the running of the statute [of limitations] for all purported
members of the class who make timely motions to intervene
after the court has found the suit inappropriate for class action
status.’” In re Cmty. Bank of N. Va., 622 F.3d 275, 299
(3d Cir. 2010), as amended (Oct. 20, 2010) (second alteration
in original) (quoting Am. Pipe & Constr. Co. v. Utah, 414
U.S. 538, 553 (1974)).
The Supreme Court “later extended its holding in American
Pipe to ‘all asserted members of the class, not just as to
interveners.’” Id. (quoting Crown, Cork & Seal Co. v.
Parker, 462 U.S. 345, 350 (1983)). States, however, are free
to recognize cross-jurisdictional class action tolling or to
reject it.
19
Indeed, this issue has arisen with respect to the Delaware
statute of limitations in a related case. See infra at pages
65−68.
16
Deciding where to file suit therefore required the
plaintiffs to predict how courts in Delaware and Louisiana
would, in the absence of clear precedent, untangle the
procedural Gordian Knot that this litigation had become. The
plaintiffs eventually decided to sue in federal district court in
Louisiana. The defendants then moved for summary
judgment on the ground that the plaintiffs’ claims were time-
barred under Louisiana’s one-year statute of limitations.20
Fearing that an adverse timeliness ruling might be
forthcoming from the Louisiana District Court, the plaintiffs
decided to take action in order to preserve their ability to
litigate in another forum where their claims might be timely.21
To that end, they filed several suits in the Delaware District
Court that raised analogous state-law causes of action against
the same defendants as in Louisiana. The plaintiffs alerted
the Louisiana District Court to their actions in Delaware,22
and indeed told the Louisiana District Court that if it were to
hold that their claims were timely, they would continue to
20
See La. Civ. Code Ann. art. 3492.
21
As the plaintiffs tell it, they first began to doubt their
decision to sue in Louisiana when, about ten months after
litigation began there, the Louisiana Supreme Court granted
writs to review two cases directly raising the issue of cross-
jurisdictional class action tolling. See Pls.’ Br. at 13–14.
22
See App. Vol. II at 216–17 (Ltr. from Pls.’ Counsel to
Judge Barbier (June 4, 2012)).
17
litigate in Louisiana rather than pursue their claims
elsewhere.23
The defendants believed that this strategy—filing
duplicative lawsuits in Delaware as an insurance policy
against an adverse timeliness ruling in Louisiana—was
improper. Accordingly, Dole filed a motion to dismiss the
Delaware cases under the first-filed rule.24 The Delaware
District Court concluded that the first-filed rule applied,
meaning that it then faced a discretionary decision whether to
stay, transfer, or dismiss the proceedings.25 It chose to
dismiss the plaintiffs’ claims against Dole with prejudice,
reasoning that the plaintiffs had already sued in Louisiana and
“one fair bite at the apple [was] sufficient.”26 The Delaware
23
Id. at 216 (“If the La. Supreme Court rules that the
Plaintiffs [sic] cases are not Prescribed, the Plaintiffs would
elect to proceed in Louisiana . . . .”). Louisiana law refers to
statutes of limitations as “prescriptive periods,” and an action
is “prescribed” when the limitations clock has expired. See,
e.g., Bouterie v. Crane, 616 So. 2d 657, 660 (La. 1993)
(explaining that “a prescriptive period is a time limitation on
the exercise of a right of action”).
24
See id. at 45, ECF No. 3. The motion was filed by Dole
Food Co., Dole Fresh Fruit Co., Standard Fruit Co., and
Standard Fruit and Steamship Co.
25
Chavez v. Dole Food Co., No. 12-cv-697 (RGA), 2012
WL 3600307, at *1–2 (D. Del. Aug. 21, 2012).
26
Id. at *2. See also Chavez v. Dole Food Co., 947
F. Supp. 2d 438, 440–41 (D. Del. 2013) (denying plaintiffs’
motion for a stay and for reconsideration).
18
District Court eventually applied this reasoning to dismiss the
plaintiffs’ claims against most of the other defendants as
well.27
One additional defendant, Chiquita Brands
International, moved for dismissal on the ground that the
Delaware District Court lacked personal jurisdiction over it.
The plaintiffs contested that motion, but, in the event that the
Delaware District Court concluded that personal jurisdiction
was lacking, they asked it to transfer their claims against
Chiquita Brands International to New Jersey, where that
defendant is incorporated, instead of dismissing their claims
outright. The Delaware District Court, having already
concluded that the plaintiffs’ duplicative lawsuits merited
dismissal under the first-filed rule, refused that request and
granted the motion to dismiss.28
In the meantime, things started to go badly for the
plaintiffs in Louisiana. First, the Louisiana District Court
27
The day after the Delaware District Court dismissed the
Dole defendants, Occidental Chemical Co. moved for
dismissal based on the first-filed rule. (App. Vol. II at 48,
ECF No. 24.) Other defendants, including Del Monte Fresh
Produce N.A., Inc., Dow Chemical Co., and Shell Oil Co.
later joined the motion, which the Delaware District Court
granted on March 29, 2013. (App. Vol. I at 8–9.) Although
final judgment had been entered in the Louisiana District
Court, the Delaware District Court reasoned that the first-filed
rule still applied because the propriety of the Louisiana
dismissals had been appealed to the Fifth Circuit.
28
Chavez, 947 F. Supp. 2d at 444.
19
dismissed the plaintiffs’ claims as time-barred. It reasoned
that, even if the Louisiana Supreme Court were to recognize
cross-jurisdictional class action tolling (which, to date, it had
not done), the Texas District Court’s forum non conveniens
dismissal in 1995 ended any tolling period and restarted the
clock under Louisiana’s statute of limitations.29 Shortly after
the Louisiana District Court issued its ruling, the Louisiana
Supreme Court held in an unrelated case, Quinn v. Louisiana
Citizens Property Insurance Corp.,30 that Louisiana does not
recognize cross-jurisdictional class action tolling at all.31
That holding, of course, had the effect of rendering the
plaintiffs’ claims untimely in Louisiana regardless of how one
views the effect of the 1995 forum non conveniens
29
See Chaverri v. Dole Food Co., 896 F. Supp. 2d 556, 569
(E.D. La. 2012) (“Per Louisiana law, the entrance of the final
judgment [on forum non conveniens grounds] absolutely
stopped the pendency of the case and restarted prescription.”).
The Louisiana District Court also ruled that, independent of
the dismissal order, the Texas District Court’s “denial of the
motion for class certification as moot” also restarted
Louisiana’s statute of limitations clock. Id. at 568–69.
30
118 So. 3d 1011 (La. 2012).
31
Id. at 1022 (“[O]ur analysis . . . leads us to conclude that
the [Louisiana] legislature has rejected ‘cross-jurisdictional
tolling’ in class action proceedings.”).
20
dismissal.32 The Fifth Circuit recognized this and affirmed
the Louisiana District Court’s dismissal orders on that basis.33
Quite apart from the first-filed rule, the Louisiana
District Court’s timeliness dismissals also raised potential res
judicata issues vis-à-vis the Delaware litigation. Two of the
defendants—Chiquita Brands, L.L.C. and Chiquita Fresh
North America, L.L.C.—recognized this and moved for
dismissal both under the first-filed rule and on res judicata
grounds.34 In view of its prior holdings, the Delaware District
Court dismissed the cases against these two defendants under
the first-filed rule and dismissed their res judicata motions as
32
The Delaware Supreme Court, by contrast, has since
reached the opposite conclusion, holding in a related case that
Delaware does, in fact, recognize cross-jurisdictional class
action tolling. See Dow Chem. Corp. v. Blanco, 67 A.3d 392,
399 (Del. 2013).
33
See Chaverri v. Dole Food Co., 546 F. App’x 409, 414
(5th Cir. 2013) (“Quinn makes it clear that class actions filed
in other states no longer interrupt prescription and gives no
support to an argument that such suits ever would have done
so.”).
34
App. Vol. II at 50, ECF No. 41. Chiquita Brands
International, Inc. joined in these motions, but only in the
event that the Delaware District Court denied its motion to
dismiss for lack of personal jurisdiction.
21
moot.35 These orders terminated the last of the plaintiffs’
claims.
All of this procedural history brings us, at last, to the
fundamental issue in this case: whether the Delaware District
Court’s prejudice-based dismissals were a proper exercise of
its discretion under the first-filed rule. Once the Fifth Circuit
affirmed the Louisiana District Court’s timeliness rulings, the
dismissals in Delaware threatened to prevent the plaintiffs
from ever being able to litigate the merits of their claims in
any court. Believing that this result was not a permissible
outcome under the first-filed rule, the plaintiffs appealed.36 A
divided panel of our Court affirmed the Delaware District
Court’s dismissals, the plaintiffs filed a petition for rehearing
en banc, and we granted that petition in September of 2015.37
We now turn to the proper application of the first-filed
rule in the present case.
35
Chavez v. Dole Food Co., Inc., No. 12-cv-697 (RGA),
2013 WL 5288165, at *2 (D. Del. Sept. 19, 2013).
36
The Delaware District Court exercised jurisdiction under
28 U.S.C. § 1332(a). We exercise jurisdiction over this appeal
pursuant to 28 U.S.C. § 1291.
37
See Chavez v. Dole Food Co., 796 F.3d 261(3d Cir. 2015), reh’g en banc granted, opinion vacated
(Sept. 22, 2015). Judge Fuentes dissented from the original
panel decision. See id. at 271–81.
22
II. The Delaware District Court Abused Its Discretion
under the First-Filed Rule
We initially adopted the first-filed rule in Crosley
Corp. v. Hazeltine Corp.38 That case, like all first-filed cases,
involved two duplicative actions. In the first, Crosley sued
Hazeltine in federal district court in Delaware to contest the
validity of several of Hazeltine’s patents. In the second,
Hazeltine sued Crosley in federal district court in Ohio,
alleging that Crosley had infringed several of the same
patents at issue in Delaware. Crosley asked the Delaware
District Court to enjoin the Ohio suits, but it refused. We
reversed with instructions to enter a temporary injunction.39
In doing so, we stated that “[t]he party who first brings a
controversy into a court of competent jurisdiction for
adjudication should, so far as our dual system permits, be free
from the vexation of subsequent litigation over the same
subject matter.”40
In E.E.O.C. v. University of Pennsylvania,41 we
elaborated on Crosley and discussed various scenarios where,
for equitable reasons, the presumption against duplicative
litigation might not apply. That case arose from an E.E.O.C.
investigation into the University of Pennsylvania’s decision
to deny tenure to a professor, allegedly based on the
professor’s race and sex. The E.E.O.C. subpoenaed the
38
122 F.2d 925, 929–30 (3d Cir. 1941).
39
Id. at 930.
40
Id.41
850 F.2d 969 (3d Cir. 1988).
23
professor’s tenure file, and the University resisted turning
over the relevant documents. Knowing that a subpoena
enforcement suit was imminent, the University preemptively
sued the E.E.O.C. in federal district court in the District of
Columbia. That suit, a declaratory judgment action, sought to
challenge the E.E.O.C.’s policies governing how it
investigated denials of tenure. The E.E.O.C. nonetheless
filed its subpoena enforcement action in the Eastern District
of Pennsylvania, raising the question of whether the first-filed
rule barred the Pennsylvania suit.42
We concluded that it did not. We reiterated that the
first-filed rule is “grounded on equitable principles”43 and
requires district court judges to “fashion[] a flexible response
to the issue of concurrent jurisdiction.”44 In our view, the
district court was correct to focus on the fact that “[t]he
timing of the University’s filing in the District of Columbia
indicate[d] an attempt to preempt an imminent subpoena
enforcement [action].”45 We concluded that, “[b]ecause the
first-filed rule is based on principles of comity and equity, it
should not apply when at least one of the filing party’s
motives is to circumvent local law.”46
42
See id. at 972–73.
43
Id. at 977.
44
Id. (quoting Church of Scientology of Cal. v. U.S. Dep’t of
Army, 611 F.2d 738, 750 (9th Cir. 1979)).
45
Id.46
Id. at 978.
24
Both Crosley and E.E.O.C. addressed the issue of
when a federal district court, confronted with a second-filed
action, should permit that action to continue. This appeal
raises a different question. When a district court decides to
apply the first-filed rule, it then faces the discretionary choice
whether to stay the second-filed action, transfer it, dismiss it
without prejudice, or dismiss it with prejudice, thereby
permanently terminating the case. The Delaware District
Court chose the last option. The issue we confront now is
whether that decision was an abuse of the Delaware District
Court’s discretion—a question of first impression in our
Circuit.
We begin by looking to the relevant treatises.
Speaking of the first-filed rule as a doctrine of abstention,
Wright and Miller say that “it is well settled that if the same
issues are presented in an action pending in another federal
court, one of these courts may stay the action before it or even
in some circumstances enjoin going forward in the other
federal court.”47 Wright and Miller also discuss the
possibility of transferring a second-filed case to another
47
17A Charles Alan Wright, Arthur R. Miller, Edward H.
Cooper & Vikram David Amar, Federal Practice and
Procedure: Jurisdiction § 4247, at 433–38 (3d ed. 2007).
25
forum.48 At no point do they suggest that a court ought to
dismiss a second-filed action, much less do so with prejudice.
Moore’s Federal Practice, meanwhile, states that “[i]f
the first-filed action is vulnerable to dismissal on
jurisdictional or statute of limitations grounds, the court in the
second-filed action should stay it or transfer it, rather than
outright dismiss it.”49 This guidance reflects the
commonsense proposition that, in a case raising timeliness
concerns, a court’s decision to dismiss a second-filed suit
could, if the limitations clock were to expire in the first
forum, have the effect of putting the plaintiffs entirely out of
court. Indeed, that is precisely what is threatened in this very
case.
Several of our sister circuits have also considered the
appropriateness of dismissing a case under the first-filed rule.
The Seventh, Ninth, and Fifth Circuits have all stated that
district courts should be careful to apply their discretion
under the rule so as not to cause undue prejudice to the
litigants appearing before them. These courts have therefore
48
15 Charles Alan Wright, Arthur R. Miller, Edward H.
Cooper & Richard D. Freer, Federal Practice and Procedure:
Jurisdiction § 3854 & n.12, at 339–43 (4th ed. 2013)
(collecting cases). While some of the cases collected by
Wright and Miller involve dismissals under the first-filed
rule, at no point do Wright and Miller suggest that such
dismissals are advisable or even appropriate.
49
17 Moore’s Federal Practice ¶ 111.13[1][o][ii][A] (3d ed.
updated through 2016).
26
indicated that, in most circumstances, a stay or transfer of a
second-filed action will be more appropriate than a dismissal.
We begin with the Seventh Circuit’s decision in Asset
Allocation and Management Co. v. Western Employers
Insurance Co.50 The plaintiff there sued the defendant in
federal district court in Illinois, only to have the defendant
then sue the plaintiff in federal district court in California. At
the plaintiff’s request, the Illinois District Court not only
enjoined any duplicative litigation in California, but ordered
the defendant to dismiss its California case entirely.51
While the Seventh Circuit affirmed the portion of the
district court’s order enjoining the parties from proceeding in
California, it reversed the dismissal order. It explained that if
the Illinois District Court were to dismiss the plaintiff’s
claims before litigation was “well advanced,” the parties were
free to litigate their claims in California.52 The court also
warned that statute of limitations problems could arise if the
defendant in Illinois were forced to dismiss its California
claims. It summarized its view this way: “[W]hy take
chances? It is simpler just to stay the second suit.”53
The Seventh Circuit again considered the first-filed
rule in Central States, Southeast and Southwest Areas
50
892 F.2d 566 (7th Cir. 1989).
51
Id. at 568.
52
Id. at 571.
53
Id.
27
Pension Fund v. Paramount Liquor Co.54 That case arose
from a contested arbitration, at the conclusion of which one
party filed suit to enforce the arbitration award in Missouri
and another party filed suit to annul the award in Illinois.
Because the Missouri suit was filed first, the district court in
Illinois dismissed the case before it—without prejudice—
under the first-filed rule.55 The Seventh Circuit concluded
that the district court erred by doing so, stating that the
dismissal “created an unwarranted risk of legal prejudice.”56
The better rule, the court explained, is that “[w]hen comity
among tribunals justifies giving priority to a particular suit,
the other action (or actions) should be stayed, rather than
dismissed, unless it is absolutely clear that dismissal cannot
adversely affect any litigant’s interests.”57
The Ninth Circuit adopted a similar approach in
Alltrade, Inc. v. Uniweld Products, Inc.58 That case arose
from Uniweld’s attempt to seek cancellation of several of
54
203 F.3d 442 (7th Cir. 2000).
55
See Cent. States, Se. & Sw. Areas Pension Fund v.
Paramount Liquor Co., 34 F. Supp. 2d 1092, 1095–96
(N.D. Ill. 1999) (dismissing the action without prejudice).
56
Paramount Liquor Co., 203 F.3d at 445.
57
Id. at 444; see also Gleash v. Yuswak, 308 F.3d 758, 760
(7th Cir. 2002) (stating that that “[e]ven when prudence calls
for putting a redundant suit on hold, it must be stayed rather
than dismissed unless there is no possibility of prejudice to
the plaintiff”).
58
946 F.2d 622 (9th Cir. 1991).
28
Alltrade’s federal trademark registrations before the
Trademark Trial and Appeal Board. Neither side was
satisfied with the outcome of that proceeding, leading
Uniweld to file suit in Florida and Alltrade to file suit in
California. The California court, applying the first-filed rule,
dismissed the case before it. On appeal, the Ninth Circuit
vacated that decision. Looking to the Seventh Circuit’s
decision in Asset Allocation for guidance, it expressed the
concern that if the Florida court were to terminate Uniweld’s
first-filed case without reaching the merits, Alltrade “would
have to file a new suit in California and would risk
encountering statute of limitations problems.”59 A stay, on
the other hand, would avoid any prejudice to the parties. If
the litigation were to proceed in Florida, “the stay [in
California] could be lifted and the second-filed action
dismissed or transferred.”60
Finally, the Fifth Circuit considered the proper
application of the first-filed rule in Burger v. American
Marine Officers Union.61 The plaintiff there sued the same
defendants twice, first in Florida and then again in Louisiana.
The Louisiana District Court dismissed the case—with
prejudice—under the first-filed rule.62 The Fifth Circuit
59
Id. at 629.
60
Id. (quoting W. Gulf Mar. Ass’n v. ILA Deep Sea Local
24, 751 F.2d 721, 729 n.1 (5th Cir. 1985)).
61
No. 97-31099, 1999 WL 46962 (5th Cir. Jan. 27, 1999)
(unpublished per curiam opinion).
62
See Burger v. Am. Mar. Officers Union, No. 97-cv-2085
(GTP), 1997 WL 599301, at *2 (E.D. La. Sept. 26, 1997).
29
vacated that decision. It noted that, after the Louisiana court
had dismissed the case, the Florida court dismissed several of
the defendants for lack of personal jurisdiction. The
Louisiana court’s prejudice-based dismissal thereby created a
situation in which the plaintiff was barred from litigating the
merits of his claims in another forum where personal
jurisdiction might be present. The Fifth Circuit explained that
“[w]hen the jurisdiction of the first-filed court to hear the
dispute is uncertain, it is an abuse of discretion to dismiss the
claims in the second-filed court with prejudice, as it creates
the risk that the merits of the claims could never be
addressed.”63 Instead, the Louisiana court “should have
either granted a stay or dismissed the claims . . . without
prejudice.”64
The through-line connecting these cases is the
proposition that a court exercising its discretion under the
first-filed rule should be careful not to cause unanticipated
prejudice to the litigants before it. We agree with that
proposition and today incorporate it into the jurisprudence of
our Circuit.
In addition to reflecting the wisdom of our sister
circuits, this conclusion is consistent with, and perhaps even a
necessary consequence of, our obligations under Article III.
The “mandate . . . [to] hear cases within [our] statutory
jurisdiction is a bedrock principle of our judiciary.”65 In
63
Burger, 1999 WL 46962, at *2.
64
Id. at *3.
65
In re One2One Commc’ns, LLC, 805 F.3d 428, 439
(3d Cir. 2015) (Krause, J., concurring).
30
Quackenbush v. Allstate Insurance Co.,66 the Supreme Court
considered how this mandate intersects with various
abstention doctrines. It began by reiterating that “federal
courts have a strict duty to exercise the jurisdiction that is
conferred upon them by Congress.”67 It is true, the Court
explained, that “a federal court has the authority to decline to
exercise its jurisdiction when it ‘is asked to employ its
historic powers as a court of equity.’”68 Even so, the Court
went on to underscore the fact that, in suits for damages “at
law,” its precedents generally only “permit a federal court to
enter a stay order that postpones adjudication of the dispute,
not to dismiss the federal suit altogether.”69
Quackenbush thus drew a distinction between two of
the Supreme Court’s abstention precedents, Louisiana Power
& Light Co. v. City of Thibodaux70 and County of Allegheny
v. Frank Mashuda Co.71 In Thibodaux, the plaintiff’s claims
arose under a Louisiana statute that, up to that point, had not
yet been interpreted by the Louisiana courts. The district
court stayed the federal proceedings “until the Supreme Court
of Louisiana ha[d] been afforded an opportunity to interpret
66
517 U.S. 706 (1996).
67
Id. at 716.
68
Id. at 717 (quoting Fair Assessment in Real Estate Ass’n,
Inc. v. McNary, 454 U.S. 100, 120 (1981) (Brennan, J.,
concurring)).
69
Id. at 719 (emphasis omitted).
70
360 U.S. 25 (1959).
71
360 U.S. 185 (1959).
31
[the law].’”72 The Thibodaux Court concluded that this
decision was appropriate in view of the federal interest in
“avoiding the hazards of serious disruption by federal courts
of state government or needless friction between state and
federal authorities.”73 In County of Allegheny, by contrast,
the district court in Pennsylvania “had not merely stayed
adjudication of the federal action pending the resolution of an
issue in state court, but rather had dismissed the federal action
altogether.”74 Our Court vacated the dismissal on appeal, and
the Supreme Court affirmed.75 Quackenbush explained that
the divergent outcomes in these cases flowed from the
distinction between dismissing an action and merely staying
it.76 As Quackenbush put it, “[u]nlike the outright dismissal
or remand of a federal suit . . . an order merely staying the
action ‘does not constitute abnegation of judicial duty.’”77
For present purposes, the teaching of Quackenbush is
that “where there is no other forum” with the power to hear a
case, “relinquishing jurisdiction is not abstention; it’s
abdication.”78 In other words, judge-made canons of comity
72
Thibodaux, 360 U.S. at 26.
73
Id. at 28.
74
Quackenbush, 517 U.S. at 721.
75
Cty. of Allegheny, 360 U.S. at 198.
76
Quackenbush, 517 U.S. at 721.
77
Id. (quoting Thibodaux, 360 U.S. at 29).
78
One2One Commc’ns, LLC, 805 F.3d at 440 (Krause, J.,
concurring).
32
and equity cannot supplant a district court’s duty to decide
cases within its jurisdiction. Consistent with this principle, a
district court should generally avoid terminating a claim
under the first-filed rule that has not been, and may not be,
heard by another court.
Our own abstention jurisprudence has long directed
district courts to stay, rather than dismiss, potentially
duplicative federal suits.79 As we explained in Feige v.
Sechrest,80 a stay “retains the sensitivity for concerns of
federalism and comity implicated by . . . abstention, while
preserving appellants’ right to litigate their claims in the
federal forum should the [state] courts, for jurisdictional or
other reasons, fail to adjudicate them.”81 In this way, a stay
order does not “abdicate [a district court’s] judicial duty to
exercise its jurisdiction,” but rather “postpone[s] the exercise
of that jurisdiction until [related] proceedings . . . reach their
conclusion.”82
79
See, e.g., Ingersoll-Rand Fin. Corp. v. Callison, 844 F.2d
133, 138 (3d Cir. 1988) (“In the unusual circumstances of this
case, where federal policy counsels deferral to a state
proceeding which is not strictly parallel, some matters
arguably will remain for resolution after the state proceedings
are concluded. Therefore, we think the better practice here is
to stay the federal action rather than dismissing it.”).
80
90 F.3d 846 (3d Cir. 1996).
81
Id. at 851.
82
Id.33
The benefits of staying a second-filed suit are just as
persuasive in the context of the first-filed rule. Because a
stay confines litigants to the first forum until proceedings
there have concluded, a stay will generally avoid wasted
judicial efforts, conflicting judgments, and unnecessary
friction between courts. In addition, a second-filed court will
rarely need to reach the merits of the stayed case. The far
more likely result is that the matter will reach a final
resolution in the first court. In the few instances where there
is no res judicata (or other) bar that would prevent litigation
in the second forum, it will generally be because the second
suit is not truly duplicative of the first. In those
circumstances, a second-filed court has an obligation,
consistent with Quackenbush, to take jurisdiction over the
plaintiffs’ claims.
We therefore conclude that, in the vast majority of
cases, a court exercising its discretion under the first-filed
rule should stay or transfer a second-filed suit. Even a
dismissal without prejudice may create unanticipated
problems. A dismissal with prejudice will almost always be
an abuse of discretion.
Note that we say “almost always,” not “always.” The
factual circumstances giving rise to duplicative litigation are
too variable to adopt a blanket, hard-and-fast rule, and there
may well be circumstances in which a district court is correct
to respond to a second-filed suit with a prejudice-based
dismissal. For example, “if the second suit is harassing,
vexatious, [or] an abuse of process, the proper
disposition . . . is dismissal with prejudice, so that the plaintiff
34
cannot refile the suit.”83 Similarly, if the duplicative litigation
results from the plaintiff’s own failure to follow the rules,
such as by repeatedly failing to timely serve process, a
prejudice-based dismissal may be appropriate.84 Blatant
forum shopping or gamesmanship by one or both parties may
also merit such a result.85
This, of course, brings us to the issue at the heart of the
present litigation. The defendants insist that what happened
here was forum shopping. In their view, the plaintiffs had an
obligation to research the timeliness rules in both Louisiana
and Delaware and then, having done so, take their “best shot”
at finding a forum willing to hear the merits of their claims.
If the plaintiffs chose poorly, and their claims were dismissed
as time-barred, that result might be unfortunate—but, the
defendants insist, such a possibility does not require federal
courts to entertain duplicative lawsuits.
83
Asset Allocation, 892 F.2d at 571 (punctuation modified).
84
See, e.g., Serlin v. Arthur Andersen & Co., 3 F.3d 221,
224 (7th Cir. 1993) (stating that dismissing a second-filed suit
with prejudice may be appropriate when such a dismissal is
“entirely a consequence of the plaintiff’s own failure to
follow the rules”).
85
Alternatively, some courts have reacted to gamesmanship
by refusing to apply the first-filed rule at all. See, e.g., CBS
Interactive Inc. v. Nat’l Football League Players Ass’n, Inc.,
259 F.R.D. 398, 409 (D. Minn. 2009) (“Given the likely
forum-shopping by both CBS Interactive and Defendants, the
Court declines to rigidly apply the first-filed rule . . . .”).
35
To be sure, there is some merit to the defendants’
assertions. A plaintiff who sues in two jurisdictions
simultaneously may be required to litigate in the first forum
once the court there has expended substantial judicial
resources.86 A plaintiff’s negligence in researching the
applicable timeliness rules may also have adverse
consequences. If it is crystal clear that, under the limitations
period in one forum, a plaintiff’s claims will be untimely, and
it is crystal clear that, under the limitations period in a second
forum, a plaintiff’s claims will be timely, it may well be the
case that a plaintiff who erroneously sues in the first forum
will have to live with the consequences of the inevitable
dismissal. But that outcome, should it come to pass, will be a
function of the first forum’s substantive law of res judicata
and claim preclusion. Whether and to what extent those
principles apply is a separate question from the proper
application of the first-filed rule. To put it another way, the
first-filed rule is just one of many doctrines that cabin
86
For example, the Federal Rules of Civil Procedure only
permit a plaintiff to dismiss a suit voluntarily, without court
approval, “before the opposing party serves either an answer
or a motion for summary judgment,” or by stipulation of all
parties. Fed. R. Civ. P. 41(a)(1)(A). Principles of estoppel
may also limit a plaintiff’s choices. The plaintiffs here, for
example, told the Louisiana District Court that they filed the
Delaware cases only to preserve their right to litigate there in
the event of an adverse timeliness ruling. If the Louisiana
District Court had concluded that the plaintiffs’ claims were
in fact timely, the plaintiffs arguably would have been
estopped from litigating anywhere else.
36
duplicative litigation. It does not need to do all of the work
on its own.
Moreover, we are skeptical of the defendants’
characterization of the facts giving rise to the present appeal.
The assertion that the plaintiffs engaged in impermissible
forum shopping depends on the proposition that the plaintiffs
acted improperly by trying to preserve their right to litigate in
two different jurisdictions. In view of the unusual
circumstances surrounding these cases, we simply disagree.
While reasonable minds may differ about what
constitutes forum shopping in any particular case, the term
generally denotes some attempt to gain an unfair or unmerited
advantage in the litigation process. But here, the plaintiffs
were indifferent as to which court would hear their claims;
they simply wanted a court to hear their claims. Indeed, the
traditional rule is that a timeliness dismissal in one
jurisdiction does not bar litigation of the same claim in
another forum with a longer limitations period.87 Nor were
87
Wright and Miller characterize the traditional rule as
stating that “dismissal on limitations grounds merely bars the
remedy in the first system of courts, and leaves a second
system of courts free to grant a remedy that is not barred by
its own limitations rules.” 18A Charles Alan Wright, Arthur
R. Miller & Edward H. Cooper, Federal Practice and
Procedure: Jurisdiction § 4441, at 224 (2d ed. 2002).
Similarly, the Restatement (Second) of Judgments says that a
timeliness dismissal generally “operates as a bar in the
jurisdiction in which it is rendered” but “does not preclude an
action in another jurisdiction if that jurisdiction would apply a
statute of limitations that has not yet run.” Restatement
37
the plaintiffs negligent in failing to research the applicable
timeliness rules in Louisiana and Delaware. The law was
simply unclear. Once the Texas state court denied the
plaintiffs’ motion for class certification in 2010—nearly two
decades after this litigation began—the plaintiffs could only
guess whether other jurisdictions would recognize cross-
jurisdictional class action tolling and conclude that their
claims were timely. Louisiana and Delaware addressed that
issue only after the plaintiffs filed suit in Louisiana—and
even then reached divergent conclusions.88
Whatever else the first-filed rule demands, it does not
require litigants to see through a glass darkly in order to
predict whether a court will consider their claims timely. In
our view, the defendants have not pointed to a single
advantage, “either legally, practically, or tactically,” that the
(Second) of Judgments § 19 cmt. f & Reporter’s Note to cmt.
f (1982).
88
Compare Blanco, 67 A.3d at 397 (stating that the
Supreme Court’s rationale in American Pipe “is equally
sound regardless of whether the original class action is
brought in the same or in a different jurisdiction as the later
individual action”), with Quinn, 118 So. 3d at 1022 (“We
believe the rationale of the courts rejecting ‘cross-
jurisdictional tolling’ is the one most consistent with our
interpretation of the provisions of Louisiana’s tolling statute .
. . .”).
38
plaintiffs sought by suing in two different jurisdictions.89 The
plaintiffs were not trying to game the system by filing
duplicative lawsuits. They were trying to find one court, and
only one court, willing to hear the merits of their case.
Accordingly, we hold that the Delaware District Court
abused its discretion under the first-filed rule by dismissing
these cases with prejudice.
III. Personal Jurisdiction over Chiquita Brands
International
This brings us to the second issue in this appeal. The
Delaware District Court concluded that it lacked personal
jurisdiction over one of the defendants, Chiquita Brands
International, and granted its motion to dismiss. The
plaintiffs appeal that decision.90 While the Delaware District
Court did not err by holding that personal jurisdiction was
wanting, we conclude that it did err by dismissing Chiquita
Brands International from this litigation altogether. Instead,
89
Young v. Cuddington, 470 F. Supp. 935, 938 (M.D. Pa.
1979) (in the absence of evidence of forum shopping,
transferring a plaintiff’s case, which would have been time-
barred in Pennsylvania, to a district court in a state with a
longer statute of limitations).
90
We review the Delaware District Court’s dismissal for
lack of personal jurisdiction de novo, Eurofins Pharma U.S.
Holdings v. BioAlliance Pharma S.A., 623 F.3d 147, 155
(3d Cir. 2010), and we review its decision denying the
plaintiffs’ request to conduct jurisdictional discovery for
abuse of discretion, id. at 157.
39
the Delaware District Court had a statutory obligation to
transfer the claims against that defendant to another district
court where personal jurisdiction would be present.
Personal jurisdiction over a defendant may be either
general or specific.91 A court exercises general jurisdiction
over a defendant when the plaintiff’s claim arises out of that
defendant’s “continuous and systematic” contacts with the
forum state.92 Specific jurisdiction, by contrast, is present
“when the cause of action arises from the defendant’s forum
related activities.”93 The plaintiffs do not assert that the
Delaware District Court had specific jurisdiction over
Chiquita Brands International, limiting our analysis to the
question of general jurisdiction alone.
The Supreme Court recently revisited the issue of
general jurisdiction in Daimler AG v. Bauman.94 There, the
Supreme Court explained that general jurisdiction over a
foreign corporation typically arises only when that
corporation’s “affiliations with the State are so continuous
and systematic as to render [it] essentially at home in the
91
Helicopteros Nacionales de Colombia S.A. v. Hall, 466
U.S. 408, 414 nn.8–9 (1984).
92
Vetrotex Certainteed Corp. v. Consol. Fiber Glass Prods.
Co., 75 F.3d 147, 151 n.3 (3d Cir. 1996) (citing Helicopteros,
466 U.S. at 414 n.9, 416; Burger King Corp. v. Rudzewicz,
471 U.S. 462, 473 n.15 (1985)).
93
Id. at 151 (quoting N. Penn Gas Co. v. Corning Nat. Gas
Corp., 897 F.2d 687, 690 (3d Cir. 1990)).
94
134 S. Ct. 746 (2014).
40
forum State.”95 Daimler also explained that a corporation is
generally “at home” in its “place of incorporation and
principal place of business.”96 Applying these principles, one
of our sister circuits has commented that it is “incredibly
difficult to establish general jurisdiction [over a corporation]
in a forum other than the place of incorporation or principal
place of business.”97
Against this backdrop, Chiquita Brands International
argues that it was never “at home” in Delaware, and we agree.
The company is not incorporated there, does not maintain an
office there, and does not supervise its business there. While
the plaintiffs recognize as much, they contend that Chiquita
Brands International engaged in other contacts with Delaware
sufficient to create general jurisdiction there. On the record
before us, we discern no error in the Delaware District
Court’s conclusion to the contrary.
But that is not the end of the matter. Chiquita Brands
International is incorporated in New Jersey, and the plaintiffs
asked the Delaware District Court to transfer their claims
against Chiquita to the New Jersey District Court if it
concluded that personal jurisdiction was lacking. The
Delaware District Court refused. Following the plaintiffs’
95
Id. at 761 (alteration in original) (quoting Goodyear
Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919
(2011)) (internal quotation marks omitted).
96
Id. at 760 (internal citations and quotation marks omitted).
97
Monkton Ins. Servs., Ltd. v. Ritter, 768 F.3d 429, 432
(5th Cir. 2014) (emphasis added).
41
lead, it focused on the federal statute governing transfer of
venue, 28 U.S.C. § 1406(a), which states that if a district
court concludes that a plaintiff has sued “in the wrong
division or district,” the district court “shall dismiss, or if it be
in the interest of justice, transfer [the] case to any district or
division in which it could have been brought.”98 The
Delaware District Court concluded that “[t]he policies behind
the first-filed rule mean that transferring the case to New
Jersey would not be in the interest of justice.”99
We disagree. In the first place, the statutory provision
applicable in these circumstances is arguably not
28 U.S.C. § 1406(a), but rather 28 U.S.C. § 1631, which
governs transfer when there is “a want of jurisdiction.”100 In
any event, the statutory directive is the same—namely, a
district “shall, if it is in the interest of justice, transfer [the
case] to any other such court in which the action or appeal
could have been brought at the time it was filed.”101 Here, we
conclude that the interest of justice requires transfer rather
than dismissal. The Delaware District Court’s contrary
determination flowed solely from its mistaken application of
the first-filed rule. As we have explained previously, that rule
protects comity among federal courts and prevents the
98
28 U.S.C. § 1406(a).
99
Chavez, 947 F. Supp. 2d at 444.
100
See Fed. Home Loan Bank of Bos. v. Moody’s Corp., 821
F.3d 102, 114 (1st Cir. 2016) (concluding that the phrase
“‘want of jurisdiction’ encompasses both personal and subject
matter jurisdiction”).
101
28 U.S.C. § 1631.
42
needless duplication of judicial efforts; it does not
mechanistically support permanent dismissal of a plaintiff’s
claims.
We will therefore vacate the Delaware District Court’s
dismissal of Chiquita Brands International and remand with
instructions to grant the plaintiffs’ request for a transfer to the
District of New Jersey.
IV. The Delaware Actions Are Not Barred by
Res Judicata
This brings us to the final and most doctrinally
complex issue in this appeal—namely, whether the Louisiana
District Court’s timeliness dismissals ought to have a claim-
preclusive effect in Delaware. The Delaware District Court
did not rule on this issue in light of its application of the first-
filed rule, but both sides have briefed the issue before us.102
While we could, and perhaps normally would, remand the
issue for consideration by the Delaware District Court in the
first instance, there are countervailing reasons to address the
res judicata question sooner rather than later.
It is true that “[w]e ordinarily decline to consider
issues not decided by a district court, choosing instead to
allow that court to consider them in the first instance.”103
Still, we have made exceptions for disputes of particularly
102
See Pls.’ Opening Br. at 25–28; Joint Defs.’ Br. at 31–36;
Pls.’ Reply Br. at 14–21.
103
Forestal Guarani S.A. v. Daros Int’l, Inc., 613 F.3d 395,
401 (3d Cir. 2010).
43
long “vintage,” particularly when as a “matter of judicial
economy” it makes sense to “accelerate [a case’s] resolution
to the extent reasonably possible.”104
If a case were ever in need of judicial acceleration, it is
this one. We see little utility in remanding the res judicata
question when that issue raises what is, at bottom, a pure
question of law. We will therefore resolve the res judicata
question now.
A. The Inquiry under Semtek
The plaintiffs’ claims in Louisiana were dismissed as
time-barred by a federal district court sitting in diversity and
applying Louisiana law. The question we confront is whether
the Louisiana dismissals prevent a federal district court in
Delaware, sitting in diversity and applying Delaware’s
timeliness rules, from reaching the merits of the plaintiffs’
claims.
The Supreme Court’s decision in Semtek International
Inc. v. Lockheed Martin Corp.105 tells us how to approach this
question. Semtek instructs us that the preclusive effect of a
timeliness dismissal entered by a federal court, whether
exercising its diversity or federal question jurisdiction, is
always a question of federal law.106 Semtek also recognizes
104
R & J Holding Co. v. Redev. Auth. of Cty. of
Montgomery, 670 F.3d 420, 429 (3d Cir. 2011).
105
531 U.S. 497 (2001).
106
Id. at 507–08.
44
that, at common law, the traditional rule was that “expiration
of the applicable statute of limitations merely bars the remedy
and does not extinguish the substantive right, so that
dismissal on that ground does not have claim-preclusive
effect in other jurisdictions with longer, unexpired limitations
periods.”107 Notwithstanding this traditional rule, Semtek
held that, in a case raising issues of cross-jurisdictional claim
preclusion resulting from a diversity court’s dismissal,
faithfulness to Erie requires courts assessing the claim-
preclusive effect of that dismissal to look to the substantive
law of the state where the federal diversity court sits.108 This
means that the claim-preclusive effect of a dismissal issued
by a federal diversity court varies by jurisdiction.109
107
Id. at 504. The rule’s pedigree goes back to at least
1834, when Justice Story noted in Bank of the United
States v. Donnally, 33 U.S. 361 (1834), that a dismissal under
a Virginia statute of limitations would “operate as a bar to a
subsequent suit in the same state; but not necessarily as an
extinguishment of the contract elsewhere.” Id. at 370.
108
Semtek, 531 U.S. at 508. Semtek characterized the goal
of the Supreme Court’s watershed decision in Erie Railroad
Co. v. Tompkins, 304 U.S. 64 (1938), as aiming to prevent
“‘substantial variations [in outcomes] between state and
federal litigation’ which would ‘[l]ikely . . . influence the
choice of a forum.’” Semtek, 531 U.S. at 504 (punctuation
modified and bracketed text in original) (quoting Hanna v.
Plumer, 380 U.S. 460, 467–68 (1965)).
109
Semtek, 531 U.S. at 508 (“Since state, rather than federal,
substantive law is at issue there is no need for a uniform
federal rule.”).
45
Semtek itself dealt with the claim-preclusive effect of
a timeliness dismissal entered by a federal diversity court
sitting in California. Under the rule Semtek announced, “the
claim-preclusive effect” of that dismissal “is governed by a
federal rule that in turn incorporates California’s law of claim
preclusion.”110
Semtek thus directs us to evaluate the res judicata
effects of the Louisiana District Court’s timeliness dismissals
by looking to Louisiana’s law of claim preclusion. When we
do so, we have little trouble concluding that Louisiana courts
treat timeliness dismissals as judgments on the merits that
have claim-preclusive effects.111 But that, in and of itself,
does not decide the issue we now confront.
We begin by noting that there is an important
ambiguity in Semtek itself. Semtek alludes only briefly to the
fact that a state might apply two rules simultaneously: first,
that a timeliness dismissal precludes re-litigation of the same
claims within that state; and second, that a timeliness
dismissal does not bar litigation of the same claims in a court
outside that state.112 To frame the problem in the context of
110
Id. at 509.
111
See, e.g., Sours v. Kneipp, 923 So. 2d 981, 984 (La. Ct.
App. 2006) (“[A] judgment [on statute of limitations grounds]
is not a mere interlocutory judgment deciding preliminary
matters, but a final judgment on the merits that terminates the
action with prejudice.”).
112
The respondent in Semtek, Lockheed Martin Corp.,
argued that a diversity court’s timeliness dismissal is always
claim-preclusive in other jurisdictions by operation of Federal
46
this appeal, the fact that timeliness dismissals are claim-
preclusive within Louisiana may not necessarily mean that
such dismissals extinguish related claims in other states with
longer limitations periods.
While fact patterns raising this issue are perhaps
uncommon, they are not unheard of. The Supreme Court of
Connecticut, for example, addressed the issue of cross-
jurisdictional claim preclusion in Advest, Inc. v. Wachtel.113
That case arose after a state court in Connecticut dismissed a
suit on timeliness grounds and the plaintiffs in that action
then commenced an arbitration proceeding in New York. The
defendants in the first action asked the state court to enjoin
the arbitration proceedings as claim-precluded, which the
Rule of Civil Procedure 41(b). The Supreme Court rejected
that proposition. In doing so, it looked to the provision of the
Rules Enabling Act stating that a federal rule “shall not
abridge, enlarge or modify any substantive right.” Semtek,
531 U.S. at 503 (quoting 28 U.S.C. § 2072(b)). It reasoned
that “if California law left petitioner free to sue on [a] claim
in Maryland even after the California statute of limitations
had expired, the federal court’s extinguishment of that right
(through Rule 41(b)’s mandated claim-preclusive effect of its
judgment) would seem to violate this limitation.”
Id. at 503−04. This reasoning seems to recognize that a state
might adopt, as a principle of its own substantive law, the
view that a timeliness dismissal in its own courts is not claim-
preclusive in other states.
113
668 A.2d 367 (Conn. 1995).
47
state court refused to do.114 The Connecticut Supreme Court
affirmed that decision on appeal. It stated that while “the
running of Connecticut’s statute of limitations precludes the
defendants in the present action from bringing the same claim
in Connecticut, it does not automatically bar their pursuit of
such a claim in another jurisdiction.”115
The Seventh Circuit, too, noted in Reinke v. Boden116
that states might adopt different policies about intra- and
extra-jurisdictional claim preclusion. The plaintiff there sued
in Minnesota state court, lost at summary judgment on
timeliness grounds, and then sued again in federal district
court in Illinois. The defendant moved for summary
judgment in Illinois on the ground of res judicata, and the
Illinois District Court granted the motion. The Seventh
Circuit reversed. It explained that “[i]n the context of the
intersystem use of res judicata . . . the intent of the first forum
to save the judicial resources of the second cannot be so
readily presumed.”117 With this distinction in mind, the
Seventh Circuit surveyed Minnesota jurisprudence and
concluded that Minnesota courts did not necessarily intend
for timeliness dismissals to be claim-preclusive outside
Minnesota.118 Other courts have cited Reinke, even post-
Semtek, to support the proposition that a state might apply res
114
Id. at 368–69.
115
Id. at 371.
116
45 F.3d 166 (7th Cir. 1995).
117
Id. at 171.
118
Id. at 172.
48
judicata principles differently when an allegedly duplicative
suit is filed in another court system.119
Unlike the Connecticut Supreme Court, the Louisiana
Supreme Court has not directly addressed the issue of
whether Louisiana timeliness dismissals are claim-preclusive
in other jurisdictions. The Louisiana Court of Appeal,
however, has indicated that the dismissal of a plaintiff’s claim
as time-barred in one court system is not necessarily claim-
preclusive in another.
The key case is Griffin v. BSFI Western E & P, Inc.120
The plaintiffs there sued in Louisiana state court on a variety
of state-law claims and then filed a second, diversity-based
suit in federal district court in Louisiana arising from the
same facts.121 The federal suit raised both federal question
119
See, e.g., Havens v. Mabus, 759 F.3d 91, 99
(D.C. Cir. 2014) (distinguishing intra-system claim
preclusion from “determining the effect of a dismissal . . . on
a second suit brought in a different court and, most important
here, applying a different statute of limitations”); see also
Joseph v. Athanasopoulos, 648 F.3d 58, 68 (2d Cir. 2011)
(certifying to the New York Court of Appeals the question of
whether a timeliness dismissal under one of that state’s civil
practice rules “amount[s] to an adjudication ‘on the merits’
for res judicata purposes, such that the plaintiff cannot litigate
her claim in another jurisdiction with a longer, unexpired
limitations period”).
120
812 So. 2d 726 (La. Ct. App. 2002).
121
Id. at 729.
49
claims and pendent state-law claims. The Louisiana District
Court dismissed certain of the plaintiffs’ federal claims on
timeliness grounds under the applicable federal statute of
limitations and dismissed some of the state-law claims
without prejudice.122 The defendants then moved to dismiss
the state suit as res judicata in light of the federal dismissals.
The Louisiana trial court granted the motion, but the Court of
Appeal reversed.
The Court of Appeal began its analysis by stating that
“[t]he dismissal of an action under a federal statute of
limitations constitutes a final judgment on the merits in
federal court, and is res judicata as to successive actions
arising from the same transaction filed in other federal
courts.”123 Even so, the court recognized that “a claim
dismissed under a traditional statute of limitations does not
automatically preclude consideration of the substantive merits
by a different or foreign court system, especially ‘in other
jurisdictions with longer, unexpired limitations periods.’”124
Relying in part on the Seventh Circuit’s decision in
Reinke, the Griffin Court reasoned that, in a cross-
jurisdictional situation, Louisiana’s law of claim preclusion
incorporates basic notions of equity and fairness.
Accordingly, a court in such a situation should consider “the
goal of res judicata principles,” including that “litigation must
eventually have an end,” while remaining sensitive to “the
122
Id. at 732–33.
123
Id. at 731.
124
Id. at 732 (quoting Semtek, 531 U.S. at 504).
50
plaintiff’s right of access to the courts.”125 Griffin explained
that when the Louisiana District Court dismissed the
plaintiffs’ claims under the federal statute of limitations, it
had “refused to consider . . . tolling based on acts of the
defendants,” which was “an exception recognized in
Louisiana.”126 Consequently, the Court of Appeal concluded
that “the federal and state time limitation rules are too
different to foster both the goals of res judicata and the
plaintiffs’ right to present his claim to a court.”127 In such
circumstances, where two sovereigns would apply two
different limitations periods, “[d]efendants may not justly
deny plaintiffs their day in court by erecting only a procedural
screen.”128
Other Louisiana cases have occasionally echoed this
appreciation for the distinction between intra- and extra-
125
Id.126
Id. at 735.
127
Id.
128
Id.
51
jurisdictional claim preclusion.129 One way to resolve the res
judicata question in this appeal, therefore, would be to
conclude that even if a Louisiana timeliness dismissal bars re-
litigation of the same claims within Louisiana, it does not bar
litigation of those claims elsewhere.
As it turns out, however, our resolution of these cases
does not depend on the distinction between intra- and extra-
jurisdictional claim preclusion. While we have wrestled with
that distinction before,130 such an analysis raises certain deep
129
See Barnett v. Nichols, 824 So. 2d 485, 489 (La. Ct. App.
2002) (concluding that the timeliness dismissal of a RICO
claim in federal court did not bar a state-court suit arising
from the same facts, in part because the claims were being
litigated in “different judicial systems” and were “not subject
to the same prescriptive periods”); Tolis v. Bd. of Supervisors
of La. State Univ. & Agric. & Mech. Coll., 655 So. 2d 747,
757 (La. Ct. App. 1995), vacated on procedural grounds, 660
So. 2d 1206 (La. 1995) (Barry, J., concurring) (“[T]he res
judicata effect of a dismissal based on prescription depends in
part on whether the successive actions are within the same or
different system of courts.” (internal quotation marks and
citation omitted)).
130
We previously addressed the issue of extra-jurisdictional
claim preclusion in Paramount Aviation Corp. v. Agusta, 178
F.3d 132 (3d Cir. 1999). We there considered the proper
application of New Jersey’s “entire controversy doctrine,”
which we described as “an extremely robust claim preclusion
device that requires adversaries to join all possible claims
stemming from an event or series of events in one suit.”
Id. at 135. Conducting an extensive Erie analysis, we stated
52
that “New Jersey’s main justification for the doctrine, its
interest in preserving its judicial resources, is minimized
when none of the prior litigation took place in New Jersey
state courts.” Id. at 142. We therefore concluded that federal
principles of claim preclusion, not the entire controversy
doctrine, governed the effects of a diversity dismissal in the
New Jersey District Court, largely because “New Jersey has
no significant interest in controlling the dockets of other court
systems.” Id. at 144.
Few courts have considered whether and to what extent
Semtek and Paramount Aviation are compatible. At least one
court has concluded that the two cases work hand-in-glove.
On this view, Semtek says that, consistent with Erie, we
assess the claim-preclusive effects of a judgment issued by a
federal court sitting in diversity by looking to the substantive
law of the relevant state, and Paramount Aviation tells us that
New Jersey’s entire controversy doctrine is more akin to a
procedural rule, not a substantive one, and that, under Erie, a
federal court need not apply it. See Yantia N. Andre Juice
Co. v. Kupperman, No. 05-cv-01049 (WJM), 2005 WL
2338854, at *3 n.2 (D.N.J. Sept. 23, 2005) (“In Semtek, the
Court held that federal common law governs the claim-
preclusive effect of a dismissal by a federal court sitting in
diversity. The federal common law applicable in our case,
however, is provided by Paramount . . . .” (internal quotation
marks and citation omitted)).
Our Court has addressed the issue once in a non-
precedential opinion, McHale v. Kelly, 527 F. App’x 149 (3d
Cir. 2013). Because the claims at issue there were precluded
irrespective of whether we applied New Jersey or federal law,
53
questions about the structure of our federal system that are
perhaps better left for another day.131 Instead, having
reviewed the relevant Louisiana precedents, we are confident
that a Louisiana court would decline to apply res judicata to
we declined to decide “whether Semtek or Paramount
Aviation controls.” Id. at 151.
131
For example, in Thomas v. Washington Gas Light Co.,
448 U.S. 261 (1980), a four-justice plurality of the Supreme
Court expressed the view that, in the context of the Full Faith
and Credit Clause, states lack the power to determine the
extraterritorial effects of their own judgments. The Court
feared that the opposite conclusion would “risk[] the very
kind of parochial entrenchment on the interests of other States
that it was the purpose of the Full Faith and Credit Clause and
other provisions of Art. IV of the Constitution to prevent.”
Id. at 272.
At least one scholar has therefore noted that there may be
some tension between Thomas (states cannot dictate the
consequences of their judgments in other jurisdictions) and
Semtek (the exterritorial import of a timeliness dismissal
entered by a diversity court depends on state law—including,
perhaps, the state’s views on extraterritorial claim
preclusion). See Stephen B. Burbank, Semtek, Forum
Shopping, and Federal Common Law, 77 Notre Dame L.
Rev. 1027, 1052 (2002) (“Perhaps . . . the [Supreme] Court
believes that whether a state court judgment dismissing a case
on limitations grounds is preclusive in subsequent litigation in
another state depends upon the rendering court’s views on a
question it is without power to decide.”).
54
the plaintiffs’ claims even without invoking the logic of
Griffin and similar cases.
B. Louisiana’s Law of Res Judicata Does Not
Bar the Plaintiffs’ Claims
We begin with an important foundational principle.
The Louisiana Supreme Court has stated that res judicata is
such a drastic procedural device that “any doubt concerning
[its] application . . . must be resolved against its
application.”132 Or, as the Fifth Circuit has put it,
“Louisiana’s doctrine of res judicata can only be invoked if
all essential elements are present and established beyond all
question.”133
What’s more, Louisiana’s rules of claim preclusion
are not absolute. The Louisiana Supreme Court has explained
that “[o]ne of the goals of res judicata is to promote judicial
economy and fairness,” and that applying the doctrine
“blindly or mechanically . . . does not foster judicial economy
132
Kelty v. Brumfield, 633 So. 2d 1210, 1215 (La. 1994).
133
Lafreniere Park Found. v. Broussard, 221 F.3d 804, 809
(5th Cir. 2000).
55
or fundamental fairness to the parties.”134 Courts should
therefore not use res judicata “as a scythe applied
mechanically to mow down claims where the party asserting
the claim is not at fault for the lack of adjudication of that
claim in the first suit.”135
At common law, Louisiana’s doctrine of res judicata
included a safety valve for “exceptional circumstances”
sufficient to overcome “the policies favoring preclusion of a
second action.”136 When Louisiana adopted a new statute
134
Terrebonne Fuel & Lube, Inc. v. Placid Ref. Co., 666
So. 2d 624, 635 (La. 1996). While Terrebonne involved
application of federal, not state, principles of res judicata, we
nonetheless consider it instructive because the Louisiana
Supreme Court has since explained that Terrebonne’s
discussion of claim preclusion is relevant to construing
Louisiana’s own res judicata statute. See Oliver v. Orleans
Par. Sch. Bd., 156 So. 3d 596, 619 (La. 2014) (“While
Terrebonne was decided under federal law, we noted in a
footnote that the 1991 amendment adding La. R.S. 13:4232
‘was also enacted to include similar exceptions . . . .’”
(quoting Terrebonne, 666 So. 2d at 632 n.4)).
135
Terrebonne, 666 So. 2d at 635.
136
Id. at 632 (citing Restatement (Second) of
Judgments § 26).
56
governing res judicata in 1990, it codified this exception.137
The relevant statutory provision states that “[a] judgment
does not bar another action by the plaintiff . . . [w]hen
exceptional circumstances justify relief from the res judicata
effect of the judgment.”138 Courts considering whether to
apply this exception “exercise [their] equitable discretion to
balance the principle of res judicata with the interests of
justice,” recognizing that relief is appropriate “only in truly
exceptional cases.”139
Louisiana courts have held that the statutory exception
to res judicata “generally applies to complex procedural
situations in which litigants are deprived of the opportunity to
present their claims due to unanticipated quirks in the
system.”140 So, for example, the Court of Appeal applied the
exception in Simmons v. Baumer Foods, Inc.,141 a wrongful
death and workman’s compensation case that bounced around
137
Id. at 632 n.4 (explaining that res judicata is governed in
Louisiana by La. Rev. Stat. Ann. § 13:4231, but that a
“companion statute,” La. Rev. Stat. Ann. § 13:4232, contains
various exceptions under which the normal rules of claim
preclusion do not apply).
138
La. Rev. Stat. Ann. § 13:4232(A)(1).
139
Oleszkowicz v. Exxon Mobil Corp., 156 So. 3d 645, 647
(La. 2014) (quoting 1990 cmt. to La. Rev. Stat.
Ann. § 13:4232).
140
Id. at 648 (quoting Kevin Assocs., LLC v. Crawford, 917
So. 2d 544, 549 (La. Ct. App. 2005)).
141
55 So. 3d 789 (La. Ct. App. 2010).
57
from court to court without the plaintiffs ever having had the
opportunity to present their claims on the merits before the
defendants invoked res judicata as a bar to relief. In those
circumstances, where the plaintiffs had “vigorously pursued
their claims but the substance of [those] claims . . . [had] yet
to be addressed,” the Court of Appeal concluded that the
“pursuit of justice ha[d] been derailed by . . . procedural
determinations” and an exception to res judicata was
appropriate.142
Federal courts, too, have applied Louisiana’s statutory
exception to res judicata in appropriate circumstances. The
Eighth Circuit, for example, relied on the exception in
Follette v. Wal-Mart Stores, Inc.143 That case arose from, of
all things, an exploding can of hairspray. The plaintiffs, who
were Louisiana residents, initially sued in federal district
court in Texas, in part because the one-year Louisiana statute
of limitations had already run. The Texas court transferred
the case back to Louisiana, where the district court dismissed
the case on timeliness grounds. The plaintiffs then brought
another suit in federal court in Arkansas, suing under a
different cause of action with a longer limitations period.
This raised the question of whether the previous dismissal in
Louisiana created a res judicata bar vis-à-vis the Arkansas
suit. The Eighth Circuit concluded that it did not. Surveying
the cases applying Louisiana’s equitable exception to res
judicata, it concluded that Louisiana courts were hesitant to
invoke principles of claim preclusion when doing so would
142
Id. at 794.
143
41 F.3d 1234 (8th Cir. 1994), on reh’g on another issue,
47 F.3d 311 (8th Cir. 1995).
58
create a “procedural windfall” for defendants,144 especially
when “[t]he merits of the plaintiffs’ claims had not [yet] been
reached.”145
The logic of Simmons and Follette applies with equal
force to the situation we confront now. As in Simmons, the
plaintiffs here have “vigorously pursued their claims” only to
be met at every moment with procedural hurdles.146 We
believe that a Louisiana court, faced with these facts, would
conclude that the byzantine procedural history of this case
merits an exception to Louisiana’s normal rules of claim
preclusion.
As Wright and Miller recognize, “[a]mong the weakest
cases for preclusion would be one in which the plaintiffs were
legitimately surprised by the limitations ruling in the first
action; unlike a dismissal for failure to state a claim, there is
nothing to be done about a limitations bar unless it is to find a
forum with a longer period.”147 Just so. In this case, the
plaintiffs had no way to predict that the Louisiana Supreme
Court would reject cross-jurisdictional class action tolling in
Quinn, thereby rendering their claims untimely in Louisiana
courts. While parties should be prevented from “burdening
courts with claims already litigated,” we must be “mindful of
144
Id. at 1238 (quoting Billiot v. LeBeouf Bros. Towing Co.,
640 So. 2d 826, 829 (La. Ct. App. 1994)).
145
Id.146
Simmons, 55 So. 3d at 794.
147
18A Federal Practice and Procedure:
Jurisdiction § 4441, supra note 87, at 231.
59
not barring plaintiffs from having their day in court by
overzealously preventing them from having two days in
court.”148 We think a Louisiana court would reach the same
conclusion.149
The defendants’ contrary arguments are not
persuasive. While the defendants recognize that, under
Semtek, Louisiana law controls our res judicata analysis, they
contend that Louisiana has adopted, as a principle of its own
substantive law, the view that federal rules of claim
preclusion dictate the effects of judgments entered by federal
diversity courts. On this account, neither Louisiana’s res
judicata statute nor its equitable exception should inform our
analysis. In support of this proposition, the defendants rely
on a single unpublished opinion of the Fifth Circuit.150
148
Rick v. Wyeth, No. 08-cv-1287 (ADM), 2010 WL
3894063, at *4 (D. Minn. Sept. 23, 2010), aff’d, 662 F.3d
1067 (8th Cir. 2011).
149
The commentary to the relevant Louisiana statute
explains that exceptions to claim preclusion ought not apply
“where the plaintiff has simply failed to assert a right or
claim . . . through oversight or lack of proper preparation.”
1990 cmt. to La. Rev. Stat. Ann. § 13:4232. For the reasons
explained above, we do not think this is such a case.
150
Frank C. Minvielle LLC v. Atl. Ref. Co., 337 F. App’x
429, 434 (5th Cir. 2009) (“Louisiana courts have repeatedly
confirmed that federal law is applicable to consideration of
whether a federal court judgment has res judicata effect.”
(internal quotation marks omitted)).
60
The defendants are wrong. It is true that, before
Semtek, Louisiana courts stated that the claim-preclusive
effect of all federal judgments was controlled by federal
principles of claim preclusion.151 Some Louisiana courts
have said the same thing after Semtek, but only in cases
involving federal question jurisdiction.152 The defendants do
not point to a single case in which a Louisiana court has
chosen to ignore Semtek outright by looking to federal law,
rather than state law, to assess the claim-preclusive effects of
a judgment issued by a federal district court sitting in
diversity.
To the contrary, federal district courts in Louisiana
“appl[y] Louisiana law to determine the preclusive effect of
151
See, e.g., Pilie & Pilie v. Metz, 547 So. 2d 1305, 1309
(La. 1989) (“[F]ederal law must be applied in determining the
basic res judicata effects of the diversity judgment in the
present case.”).
152
See, e.g., Green v. Iberia Par. Sch. Bd., 945 So. 2d 940,
943 (La. Ct. App. 2006) (“[F]ederal law is applicable to
consideration of whether a federal court judgment has res
judicata effect.”) (considering effect of a judgment entered by
a federal court exercising both its federal question jurisdiction
and supplemental jurisdiction over state-law claims).
61
[their] prior [diversity] judgments.”153 The defendants’
contrary argument—that Semtek tells us to look to Louisiana
law, which then tells us to look back to federal law—is the
jurisprudential equivalent of holding two mirrors up to one
another, and we are comfortable rejecting it.
Next, the defendants rely on another Fifth Circuit case,
Steve D. Thompson Trucking, Inc. v. Dorsey Trailers, Inc.,154
to argue that the plaintiffs’ Delaware suits are barred by res
judicata.155 That case involved parallel actions pending in
153
Commercializadora Portimex, S.A. de CV v. Zen-Noh
Grain Corp., 373 F. Supp. 2d 645, 650 (E.D. La. 2005)
(applying Semtek). Another unpublished opinion of the Fifth
Circuit suggests that Louisiana district courts are applying
Semtek correctly. See Tigert v. Am. Airlines Inc., 390
F. App’x 357, 362 (5th Cir. 2010) (citing Semtek for the
proposition that Louisiana law controls the preclusive effect
of a diversity judgment entered by a federal district court
sitting in Louisiana).
154
870 F.2d 1044 (5th Cir. 1989).
155
In fact, the defendants fail to cite a different case,
Austin v. Super Valu Stores, Inc., 31 F.3d 615 (8th Cir. 1994),
that arguably helps them more. The plaintiffs there brought a
diversity suit in the Eastern District of Louisiana, lost on
timeliness grounds, and then brought a second diversity suit
in the District of Minnesota. The Minnesota District Court
applied Louisiana law to conclude that the first dismissal was
claim-preclusive and dismissed the case. The Eighth Circuit
affirmed.
62
federal district courts in Louisiana and Mississippi. The
Louisiana District Court dismissed the plaintiffs’ claims as
time-barred under the applicable Louisiana statute of
limitations. The defendants then moved to dismiss the
Mississippi action as res judicata. The Mississippi District
Court denied the motion, but the Fifth Circuit reversed. In its
view, “[a]llowing plaintiffs who fail to comply with
applicable statutes of limitations to move to the next state
over would have the undesirable effect of encouraging forum
shopping and rewarding dilatory conduct.”156
While we appreciate that there are certain parallels
between Thompson Trucking and the situation we confront
today, we do not think Thompson Trucking is persuasive in
the present context.
First, Thompson Trucking predated Semtek, leaving the
Fifth Circuit free to reason that “the effect of a prior federal
diversity judgment is controlled by federal rather than state
Importantly, the District Court in Austin said that the
plaintiff had “pointed to nothing in . . . Louisiana law
suggesting that a judgment that would be considered final and
on the merits in the context of a second action brought in the
same jurisdiction would not be considered to be final and on
the merits in the context of a[n] action brought in another
jurisdiction.” Austin v. Super Valu Stores, Inc., No. 4-92-cv-
1059 (HHM), 1994 WL 409473, at *4 (D. Minn. May 17,
1994). Here, cases applying Louisiana’s equitable exception
to res judicata indicate precisely that.
156
Thompson Trucking, 870 F.2d at 1046.
63
res judicata rules.”157 Under Semtek, that is no longer correct.
As Wright and Miller point out in their discussion of the case,
the Fifth Circuit “applied federal preclusion principles
without asking whether either Louisiana or Mississippi law
would preclude a second action in Mississippi.”158
Second, Thompson Trucking focused extensively on
what it characterized as the plaintiffs’ impermissible forum
shopping. While we understand these concerns—and indeed
might find them persuasive in the appropriate case—they
carry little weight here for the straightforward reason that the
plaintiffs have not engaged in what we consider to be forum
shopping. As we explained earlier, the plaintiffs were not
scouring multiple jurisdictions for more advantageous
substantive law or more sympathetic fact-finders. Instead,
they were trying to find one court—and only one court—
willing to reach the merits of their claims.
Accordingly, we conclude that Louisiana’s statutorily-
codified equitable exception to res judicata applies to the
present facts. Consistent with Semtek, we therefore hold that
the timeliness dismissals entered by the Louisiana District
Court do not create a res judicata bar to the plaintiffs’
Delaware suits. Rather than affirm the Delaware District
Court’s dismissals on this alternative ground, we will remand
these cases for further proceedings.
157
Id. at 1045.
158
18A Federal Practice & Procedure: Jurisdiction § 4441
n.27, supra note 87, at 232.
64
V. Issues on Remand
Among the issues the Delaware District Court will
address on remand is the question of whether the plaintiffs’
claims are timely under Delaware’s applicable statute of
limitations.159 The Delaware District Court recently
addressed that issue in a related case, Marquinez v. Dole
Food Co.160 While Marquinez acknowledged that Delaware
accepts cross-jurisdictional class action tolling,161 it
nonetheless concluded that any such tolling ended in 1995.
Marquinez therefore held that Delaware’s two-year statute of
limitation had long since expired.162
In reaching that conclusion, Marquinez relied on an
extremely fine-grained interpretation of what occurred in
Texas in 1995. In particular, Marquinez drew a distinction
between the question of whether the Texas District Court’s
1995 dismissal on forum non conveniens grounds restarted
Delaware’s statute of limitations clock, and whether the
contemporaneous denial of the pending motion for class
certification as moot did so.163 It is true, Marquinez noted,
159
Judges Fisher, Chagares and Vanaskie would prefer to
leave any consideration of the proper application of the
Delaware statute of limitations to the Delaware District Court
on remand in the first instance.
160
45 F. Supp. 3d 420 (D. Del. 2014).
161
Id. at 422 (citing the Delaware Supreme Court’s decision
in Blanco, 67 A.3d at 394).
162
Id. at 423.
163
Id. (citing Chaverri, 896 F. Supp. 2d at 568).
65
that the Delaware Superior Court’s Blanco decision addressed
the first question, and in fact concluded that the Texas District
Court’s “original decision to dismiss did not start plaintiff’s
Delaware statute of limitations.”164 But, said Marquinez, the
Delaware Superior Court “did not reach the [other] question,
which forms an alternative basis to end tolling.”165
Contrary to Marquinez’s characterization, Blanco in
fact summarized the defendants’ argument that the
“plaintiff[s] cannot rely on the [Texas] actions to toll the
statute of limitations because all pending motions, including
one for class certification, were denied as moot.”166 In
denying the defendants’ motion for judgment on the
pleadings, the Blanco Court appears to have rejected that
assertion. Indeed, Blanco went further still, stating that the
“defendants have attempted to tranquilize these claims
through repeated forum shopping removals and technical
dismissals, playing for time and delay and striving to prevent,
or arguably frustrate, the claims from ever being heard on the
merits in any court.”167
We also note that when the Texas District Court
dismissed the class action in 1995, it did more than include a
return clause in its dismissal order.168 It also entered
164
Blanco, 2012 WL 3194412, at *12 (emphasis added).
165
Marquinez, 45 F. Supp. 3d at 423.
166
Blanco, 2012 WL 3194412, at *5.
167
Id. at *12.
168
See supra note 11.
66
injunctions that barred the named plaintiffs and “[a]ll
persons . . . who receive actual notice of this judgment” from
commencing any related actions “in any court in the United
States.”169
Both the return clause and the injunctions may be
relevant under Delaware law. For example, in Mergenthaler
v. Asbestos Corporation of America,170 the Delaware Superior
Court held that that “a court-imposed stay will result in a
tolling of the statute of limitations where it prevents a
plaintiff from discovering the identity of an otherwise
unknowable defendant.”171 In support of that proposition,
169
Final Judgment at 2, Delgado v. Shell Oil Co., No. 94-cv-
1337, ECF No. 393 (S.D. Tex. Oct. 27, 1995). The full
sentence from the Texas District Court’s judgment stated:
“All persons in active concert or participation with plaintiffs
and intervenors who receive actual notice of this judgment by
personal service or otherwise, including, but not limited to,
the attorneys who have appeared in these actions and their
law firms, as well the officers, agents, servants, and
employees of any of these persons, are PERMANENTLY
ENJOINED from commencing or causing to be commenced
any action involving a DBCP-related claim in any court in the
United States, and from filing an intervention in Rodriguez,
Erazo, or any other pending action in a court in the United
States, on behalf of any plaintiff or intervenor plaintiff in
Delgado, Jorge Carcamo, Valdez, and Isae Carcacmo.” Id.
at 2–3.
170
500 A.2d 1357 (Del. Super. Ct. 1985).
171
Id. at 1365.
67
Mergenthaler cited Braun v. Sauerwein,172 where the
Supreme Court stated that when a plaintiff “has been disabled
to sue, by a superior power, without any default of his own . .
. unless the statutes cease to run during the continuance of the
supervening disability, he is deprived of a portion of the time
within which the law contemplated he might sue.”173
Nor did Marquinez acknowledge that when the Texas
District Court reinstated the class action in 2004, it framed its
decision as “a direct continuation of the prior proceedings
over which the court expressly stated its intent to retain
jurisdiction.”174 Rather than look to these sources, Marquinez
focused on cases from other jurisdictions that applied the state
law of Louisiana and Hawaii, rather than the law of
Delaware.175
We leave it to the Delaware District Court on remand
to consider these issues and to perform its “duty . . . to
ascertain from all the available data what the state law is and
apply it rather than to prescribe a different rule, however
superior it may appear from the viewpoint of ‘general
law.’”176
172
77 U.S. 218 (1869).
173
Id. at 222–23.
174
Delgado, 322 F. Supp. 2d at 813.
175
See Marquinez, 45 F. Supp. 3d at 423, 425 n.9.
176
West v. Am. Tel. & Tel. Co., 311 U.S. 223, 237 (1940).
68
VI. Conclusion
For over two decades, the plaintiffs have been
knocking on courthouse doors all over the country and,
indeed, the world, only for those doors to remain closed. The
Delaware District Court concluded that, pursuant to the first-
filed rule, its doors must remain shut as well.
That conclusion was in error. Neither the first-filed
rule nor Louisiana’s doctrine of res judicata is fatal to the
plaintiffs’ Delaware claims. We revive this litigation now,
more than two decades after it began, while expressing our
sincerest hope that it proceeds with more alacrity than it has
to the present date.
Accordingly, we will vacate the Delaware District
Court’s dismissals and remand these cases for further
proceedings consistent with this Opinion.
69