Sixth Circuit Reverses Dismissal, Under First-To-File Rule, Of Action Brought By Putative Class Members Of Earlier-Filed Class Action

Last week, in Baatz v. Columbia Gas Transmission LLC, No. 15-3208, 2016 WL 731900 (6th Cir. 2016), a panel of the Sixth Circuit Court of Appeals reversed the dismissal of a lawsuit brought by a group of landowners in Medina, Ohio against Columbia Gas Transmission for allegedly storing natural gas under their property without compensation. The district court had dismissed the lawsuit under the "first-to-file" rule on the ground that it was duplicative of a class action filed against Columbia over a year earlier by other Ohio landowners: Wilson v. Columbia Gas Transmission LLC, No. 2:12-cv-01203 (S.D. Ohio Dec. 21, 2012). While the panel concluded that the first-to-file rule applied, it nevertheless reversed the district court's dismissal because it found that the Medina landowners raised "serious concerns" about their ability to have their claims heard in the earlier-filed class action.

The first-to-file rule provides that "when actions involving nearly identical parties and issues have been filed in two different district courts, 'the court in which the first suit was filed should generally proceed to judgment.'" Certified Restoration Dry Cleaning Network, LLC v. Tenke Corp., 511 F.3d 535, 551 (6th Cir. 2007). One of the purposes of the rule is to avoid duplicative litigation, but courts must also consider whether equitable considerations, such as evidence of forum shopping, should preclude application of the first-to-file rule.

In Baatz, the Medina landowners argued that the parties to their action and the Wilson class action were not "nearly identical" because (1) although the Medina landowners were within the putative class in Wilson, the class had not yet been certified, and (2) even if the class were certified, the Medina landowners would opt out. The Sixth Circuit rejected these arguments, noting that if plaintiffs were allowed to avoid application of the first-to-file rule simply by representing that they would opt out of an earlier-filed class action, then litigants, rather than the courts, would decide when the rule applied and could unilaterally "force resource-draining duplicative class actions to proceed simultaneously."

But while the Sixth Circuit agreed that the...