FORD v. 24 AI INC (2020)

MEMORANDUM **

This putative class action arises out of a 2017 data breach, in which Plaintiffs-Appellants allege their payment card data and other personally identifiable information were compromised due to Defendant-Appellee's data-security system. The district court determined that another action arising out of the same data breach, Pica v. Delta Air Lines, Inc., No. 19-55300, 812 Fed.Appx. 591 (9th Cir. 2020) (“Pica”), was commenced prior to this action (“Ford”), and dismissed Ford with prejudice on first-to-file grounds.

We have jurisdiction under 28 U.S.C. § 1291. “We review a court's decision to accept or decline jurisdiction based on the first-to-file rule for abuse of discretion.” Alltrade, Inc. v. Uniweld Prods., Inc., 946 F.2d 622, 625 (9th Cir. 1991) (citation omitted). We vacate the district court dismissal and remand with instructions to stay the proceedings pending resolution of Pica.

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.” Pacesetter Sys., Inc. v. Medtronic, Inc., 678 F.2d 93, 94–95 (9th Cir. 1982) (citations omitted). A district court applying the rule may transfer, stay, or dismiss the second-filed case. See Cedars-Sinai Med. Ctr. v. Shalala, 125 F.3d 765, 769 (9th Cir. 1997).

Plaintiffs-Appellants contend that the first-to-file rule should not apply to this action at all. We do not decide that issue; regardless of whether Pica or Ford should be deemed “first-filed,” the district court abused its discretion in dismissing Ford. Under our case law, “where the first-filed action presents a likelihood of dismissal, the second-filed suit should be stayed, rather than dismissed.” Alltrade, Inc., 946 F.2d at 629 (citation omitted). The Pica action plainly presented a likelihood of dismissal: When the district court dismissed the Ford action, the district court in Pica had already issued a tentative order dismissing that case with prejudice. Accordingly, we conclude the district court abused its discretion in dismissing Ford. We vacate the district court order and remand with instructions to stay the proceedings pending resolution of Pica.

Plaintiffs-Appellants shall recover their costs on appeal.

VACATED AND REMANDED.