Bedwell v. Braztech International, LC

          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 ...