United States District Court, D. Alaska
Suzanne M. Bedwell, Plaintiff,
v.
Braztech International, LC, Defendant.
ORDER AND OPINION [RE: MOTIONS AT DOCKETS 19 AND
32]
JOHN
W. SEDWICK SENIOR JUDGE
I.
MOTIONS PRESENTED
At
docket 19 defendant Braztech International, LC
(“Braztech”) moves pursuant to the
“first-to-file” rule for an order dismissing,
staying, or transferring this action. Braztech supports the
motion with a memorandum at docket 20 and a declaration of
counsel at docket 21. Plaintiff Suzanne M. Bedwell
(“Bedwell”) opposes the motion at docket 23.
Braztech replies at docket 27.
At
docket 32 Bedwell moves pursuant to Rule 15(a)(2) for leave
to file a second amended complaint. She supports her motion
with, among other things, the affidavit of Ernest D.
Bedwell.[1] Bedwell's proposed Second Amended
Class Action Complaint (“SACAC”) is at docket
32-1. Braztech opposes Bedwell's motion at docket 38.
Bedwell replies at docket 39.
At
docket 37 the court granted the parties' joint
motion[2] to vacate the oral argument that was
scheduled for March 24, 2017, on Braztech's motion.
Neither party requested that oral argument be rescheduled,
and the court finds that oral argument would not further
assist the court.
II.
BACKGROUND
According
to the complaint, Braztech, a Florida company, is the
exclusive importer and wholesaler of “Rossi brand .357
Magnum revolvers” in the United States.[3]The revolvers come
in four models: R46202, R46102, R97206, and
R97104.[4] Bedwell owns the R46202 model. In 2015 she
accidentally dropped it as she was exiting her vehicle,
causing the gun to discharge a round of ammunition that
struck her minor son, R.Z.B., in the leg. In this putative
nationwide class action Bedwell alleges that Rossi .357
Magnums are unreasonably dangerous and defective because they
are prone to accidental discharge when dropped.
Bedwell
commenced this class action on September 16,
2016.[5] Although the caption of her complaint
states that she is proceeding “as mother and next
friend of R.Z.B., ” Bedwell is not actually suing on
behalf of her minor son under Rule 17(c). Instead, she is
proceeding strictly on her own behalf as the owner of an
allegedly defective Rossi .357 Magnum.[6] Bedwell's
First Amended Class Action Complaint states claims for (1)
breach of warranty; (2) negligent failure to warn; (3)
negligent failure to test; (4) strict liability; and (5)
violation of the Florida Deceptive and Unfair Trade Practices
Act (“FDUTPA”). The putative class is defined as
“All individuals in the United States and its
territories who own a Rossi brand .357 Magnum
revolver.”[7]
Bedwell's
complaint expressly disclaims any personal injury claims or
damages.[8]On the same day that Bedwell filed this
action, Bedwell's husband Ernest D. Bedwell (“Mr.
Bedwell”) filed a complaint in the Alaska Superior
Court against Braztech and the company that sold Bedwell the
Rossi .357 Magnum, Three Bears Alaska, Inc. (“Three
Bears”): Bedwell v. Braztech, et al., No.
3AN-16-08939 CI (Alaska Sup. Ct.) (“the Alaska
Action.”).[9] Mr. Bedwell's complaint seeks damages
for personal injuries that R.Z.B. suffered and emotional
distress that Mr. Bedwell suffered as a result of the
accident. Braztech and Three Bears have counter-sued Bedwell
for apportionment of fault.[10] The Alaska Action is currently
pending.
Approximately
four months before Bedwell filed her putative class action,
two Alabama residents, William and Oma Louise Burrow, filed a
nationwide class action in the United States District Court
for the Southern District of Florida (“the Florida
Action”) against Braztech and Forjas Taurus, S.A., the
Brazilian company that manufactures Rossi .357 Magnum
revolvers and Rossi .38 Special revolvers.[11] Mr. and Mrs.
Burrow allege that they own a Rossi .38 Special revolver, and
Mrs. Burrows was injured when she dropped it, causing it to
accidentally discharge a round of ammunition that struck her
in the leg.[12] The Burrows allege that both types of
Rossi revolvers are unreasonably dangerous and defective
because they are prone to accidental discharge when
dropped.[13] The Burrows' complaint states claims
for (1) violation of the FDUTPA; (2) negligence (including
failure to test); (3) strict liability; (4) breach of express
warranty; (5) breach of implied warranty of merchantability;
(6) violation of the Magnuson-Moss Warranty Act; (7)
negligent failure to disclose, failure to warn, concealment,
and misrepresentation; (8) fraudulent concealment and
intentional failure to warn; and (9) declaratory relief. The
putative class is defined as “All individuals in the
United States who own a Revolver, ” which includes
several models of Rossi .38 Special revolvers and all four
models of Rossi .357 Magnum revolvers that are at issue in
Bedwell's complaint.[14]
In
light of the Florida Action, Braztech moves for an order
dismissing, staying, or transferring this action pursuant to
the first-to-file rule. After briefing on Braztech's
motion was complete, Bedwell filed her pending motion for
leave to amend her complaint to add her husband as a
plaintiff and the same two state law claims that he is
currently litigating in the Alaska Action (with Mrs. Bedwell
also added to those claims). Mr. Bedwell states in his
affidavit that if the court grants Bedwell's motion then
he will file for voluntary dismissal of the Alaska
Action.[15]
III.
STANDARDS OF REVIEW
The
first-to-file rule is “a generally recognized doctrine
of federal comity which permits a district court to decline
jurisdiction over an action when a complaint involving the
same parties and issues has already been filed in another
district.”[16] “The decision and the discretion
[to apply the first-to-file rule] belong to the district
court.”[17] Under most circumstances, considerations
of “‘economy, consistency, and
comity'”[18] dictate that “the court which
first acquired jurisdiction should try the lawsuit and no
purpose would be served by proceeding with a second
action.”[19] But “[t]he
‘first-to-file' rule is not a rigid or inflexible
rule to be mechanically applied;” it is discretionary
and “is to be applied with a view to the dictates of
sound judicial administration.”[20] At the same
time, because the first-to-file rule is well-designed to
promote judicial efficiency, it “should not be
disregarded lightly.”[21] “When found to be
applicable, the rule gives courts the power to transfer,
stay, or dismiss the case.”[22]
Bedwell's
motion is governed by Rule 15(a). Rule 15(a) states that
after the time to amend pleadings as a matter of course has
expired, “a party may amend its pleading only with the
opposing party's written consent or the court's
leave.” Although “the grant or denial of an
opportunity to amend is within the discretion of the District
Court, ”[23] the “court should freely give
leave when justice so requires.”[24] “Rule
15's policy of favoring amendments to pleadings should be
applied with ‘extreme
liberality.'”[25]
IV.
DISCUSSION
A.
Bedwell's Motion for Leave to Amend
Courts
consider the four “Foman factors” when
determining whether to grant leave to amend: “(1) bad
faith on the part of the movant; (2) undue delay; (3)
prejudice to the opposing party; and (4) futility of the
proposed amendment.”[26] Prejudice to the opposing
party is the factor that “carries the greatest
weight.”[27] “Absent prejudice, or a strong
showing of any of the remaining Foman factors, there
exists a presumption under Rule 15(a) in favor of
granting leave to amend.”[28] “The party opposing
the amendment bears the burden of showing why the amendment
should not be granted.”[29]
Braztech
raises a number of arguments in opposition to Bedwell's
motion to amend. None are persuasive. Braztech concludes that
the proposed amendment is a “belated attempt to avoid
the first-to-file rule” that “is not made in good
faith, ”[30] but does not make a strong showing that
the amendment would unduly delay the litigation or that
Bedwell was motivated by bad faith. Braztech also argues that
the amendment is futile because, even with the amendment,
Bedwell's complaint is subject to the first-to-file rule.
Bedwell's proposed amendment is not futile. “An
amendment is futile when ‘no set of facts can be proved
under the amendment to the pleadings that would constitute a
valid and sufficient claim or
defense.'”[31] Braztech does not contend that
Bedwell's claims are invalid; it merely contends that
they are subject to dismissal, transfer, or stay under the
first-to-file rule.
Finally,
Braztech argues that it will be prejudiced because it
“would be required to defend substantially similar
proposed class claims in two different forums” if the
amendment is allowed and the first-to-file rule is not
applied.[32] Braztech's feared prejudice will
come to fruition only if the court declines to apply the
first-to-file rule. As discussed below, Braztech's fears
are unwarranted. Bedwell's motion for leave to amend will
be granted.
B.
The First-to-File Rule
When
deciding whether to apply the first-to-file rule, “a
court analyzes three factors: chronology of the lawsuits,
similarity of the parties, and similarity of the
issues.”[33] Bedwell does not dispute that the first
two factors are satisfied because the Florida Action was
filed first and the parties in the two cases are
substantially similar.[34]Instead, she argues that the third
factor is not satisfied.
The
third factor is satisfied if the issues in both cases are
merely “substantially similar;” they need not be
identical.[35] “To determine whether two suits
involve substantially similar issues, [courts] look at
whether there is ‘substantial overlap' between the
two suits.”[36] Courts have found substantial overlap
even where one suit involved additional substantive
claims[37] or claims arising under different
states' laws.[38]What matters is whether the central issue
or ...