United States District Court, S.D. Florida
ORDER TRANSFERRING CASE
N. Scola, Jr. United States District Judge.
matter is before the Court on the Defendants' motion to
dismiss or transfer case to the Southern District of Indiana.
(ECF No. 15.) The Plaintiffs filed a response (ECF No. 29)
and the Defendants replied. (ECF No. 30.) Upon careful
review, the Court grants in part and denies in
part the Defendants' motion. (ECF No.
High Tech National, LLC (“HTN”), Automotive Key
Controls LLC, (“AKC”), KAR Auction Services, Inc.
(“KAR”), and Adesa, Inc. (“Adesa”),
are related entities that act in concert to provide mobile
automotive locksmith services, car sales, and car auctions.
(ECF No. 1 at ¶ 20.) Adesa is the sole member of HTN and
AKC. (Id. at ¶¶ 10-11.) KAR is Adesa's
parent. (Id. at ¶ 13.) Plaintiffs Moore,
Alvarez, Slinger, Garbez, and Fieler are former employees of
Defendants. Plaintiff Moore is the sole member of Plaintiff
Steelers Keys (“Steelers”). (Id. at
¶ 3.) In this lawsuit, the Plaintiffs are suing the
Defendants (“the Company”) for violations of the
computer fraud and abuse act, breach of contract, tortious
interference with business relationships, deceptive and
unfair trade practices, trespass, unjust enrichment, and
various declaratory judgments regarding the former
employees' contract obligations and conduct.
(Id. at 15-27.) The Plaintiffs' claims arise out
of the Company's employment agreements which contained
certain restrictive covenants and confidentiality provisions.
(Id. at ¶ 30.)
related case, currently pending in the Southern District of
Indiana, HTL, et al. v. Weiner, et al., No.
19-cv-2489, HTN and AKC sued their former employees and
Steelers (all Plaintiffs in the Florida case) based on the
same conduct and events alleged in the complaint before this
Court. The Plaintiffs in the Indiana action (Defendants here)
assert claims for breach of contract, breach of fiduciary
duty, tortious interference with contractual relationships,
tortious interference with business expectancy, unfair
competition, conversion, and violations of the computer fraud
and abuse act. HTL, et al. v. Weiner, et al.
19-cv-2489, ECF No. 32 (S.D. Ind. Aug. 22, 2019).
Defendants now move to transfer or dismiss this case in favor
of the Indiana case-the first filed case. (ECF No. 15 at 15.)
The Defendants argue that the first-to-file rule requires the
Court to dismiss or transfer because this case and the
Indiana lawsuit involve nearly identical parties,
transactions, agreements, facts, and legal claims.
(Id.) In response, the Plaintiffs argue that because
the Florida case involves two additional defendants (Adesa
and KAR) and one additional plaintiff (Fieler), the
first-to-file rule does not apply. (ECF No. 29 at 12.) The
Plaintiffs also argue that the legal issues do not
substantially overlap. (Id. at 13.) According to the
Plaintiffs, the Indiana lawsuit is not the “first
filed” action because HTL sued Steelers in Florida on
June 20, 2019, making that case the “first filed”
action. (Id.) That case has since been voluntarily
dismissed. See High Tech National LLC v. Steelers Keys
LLC, No. 19-cv-22552, ECF No. 27 (S.D. Fla. Aug. 16,
2019) (King, J.).
November 27, 2019, the Plaintiffs filed a notice of
supplemental authority informing the Court that the Southern
District of Indiana entered an order transferring the Indiana
case to the Southern District of Florida. (ECF No. 39.) The
Defendants argue that the transfer order has no bearing on
their pending motion to dismiss or transfer because it was
entered by Magistrate Judge Dinsmore and is not final. (ECF
No. 40.) The Defendants assert that they plan to object to
the Magistrate Judge's order in Indiana.
two actions involving overlapping issues and parties are
pending in two federal courts, there is a strong presumption
across the federal circuits that favors the forum of the
first filed suit under the first-filed rule.”
Manuel v. Convergys Corp., 430 F.3d 1132, 1135 (11th
Cir. 2005). “All that need be present is that the two
actions involve closely related questions or common subject
matter . . . The cases need not be identical to be
duplicative.” Strother v. Hylas Yachts, Inc.,
No. 12-80283, 2012 WL 4531357, at *2 (S.D. Fla. Oct. 1, 2012)
(Hurley, J.). “[O]nce the court determines that the two
suits likely involve substantial overlap, it is no longer up
to the second-filed court to resolve the question of whether
both should be allowed to proceed.” In re Checking
Account Overdraft Litigation, 859 F.Supp.2d 1313, 1325
(S.D. Fla. 2012) (King, J.). “Rather, the proper course
of action is for the court to transfer the case to the
first-filed court to determine which case should, in the
interests of sound judicial administration and judicial
economy, proceed.” Id. (citations and
quotations omitted). “Moreover, we require that the
party objecting to jurisdiction in the first-filed forum
carry the burden of proving ‘compelling
circumstances' to warrant an exception to the first-filed
rule.” Manuel, 430 F.3d at 1135.
Court finds that the first-to-file rule applies. The Indiana
action was filed first, on June 20, 2019. The Florida action
was filed on August 29, 2019. (ECF No. 1.) The two lawsuits
substantially overlap. In the Indiana action, HTL and AKC are
suing their former employees for deceptive trade practices,
including diversion of funds, equipment, and inventory for
the purpose of competing and harming HTL and AKC's
business. See HTL, et al. v. Weiner, et al., No.
19-cv-2489 at ECF No. 32. HTL and AKC allege that their
former employees violated their non-compete and
non-disclosure agreements and misappropriated HTL's
documents, data, and information. (Id. at 2-3.) In
the Florida action, the former employees are suing HTL, AKC,
and their corporate parents (Adesa and KAR). (ECF No. 1.)
Here, the employees challenge the restrictive covenants in
their employment agreements arguing that they are overly
broad and improperly restrictive. (Id. at ¶
32.) These are the same agreements at issue in the Indiana
lawsuit. The Florida lawsuit also includes allegations
related to Moore's formation of a competing business,
Steelers. (Id. at ¶ 38.) On March 22, 2019,
Steelers entered into a lease agreement with HTL. The parties
dispute the validity of this lease in both lawsuits. Compare
HTL, et al. v. Weiner, et al., No. 19-cv-2489 at ECF
No. 32 ¶¶ 9-10 and ECF No. 1 at ¶ 62. The only
unique legal issue identified by the Plaintiffs in their
opposition is Fieler's count for unjust enrichment. (ECF
No. 29 at 13.) In the Florida action, Fieler sues the
Defendants for their unjust enrichment from using credit
cards issued in Fieler's name. Fieler is not named in the
Indiana action. The Court will not allow the inclusion of one
additional Plaintiff to defeat the strong presumption in
favor of the first-filed case.
Plaintiffs have not presented compelling reasons to defeat
the first-to-file rule. The Plaintiffs argue that the Indiana
lawsuit is not the first-filed case because HTL sued Steelers
in the Southern District of Florida before the Indiana
action. (ECF No. 29 at 13.) The case referenced by
Plaintiffs, High Tech National LLC v. Steelers Keys
LLC, No. 19-cv-22552, ECF No. 27 (S.D. Fla. Aug. 16,
2019) (King, J.), was voluntarily dismissed. When a case is
voluntarily dismissed, it is not considered the first filed
case. See Ambient Healthcare, Inc. v. Columbia
Casualty Co., No. 12-61054, 2012 WL 12864330, at *5
(S.D. Fla. Dec. 12, 2012) (Rosenbaum, J.).
Plaintiffs also argue that the Defendants have engaged in
forum shopping because they first sued Steelers in Florida.
On June 20, 2019, HTL sued Steelers in the Southern District
of Florida regarding a lease agreement. No. 19-cv-22552-JLK.
On the same day, HTL and AKC sued Wiener in the Southern
District of Indiana for conspiring and competing against HTL
and AKC. According to Defendants, at the time they filed the
two separate actions, they did not know that the Steelers
lease agreement was part of the larger Wiener conspiracy.
Once they discovered the extent of the conspiracy, they
dismissed the Florida lawsuit and moved to amend the Indiana
lawsuit to add Steelers and the former employees. The Court
finds that this does not rise to the level of improper forum
shopping cited by Plaintiffs. Plaintiffs' cases include
situations in which a plaintiff voluntarily dismissed a case
after transfer and then refiled against the same parties in
the transferor district with additional jurisdictional facts.
(ECF No. 29 at 15 (citing Farm Boy Co-Op & Feed Co.,
LLC v. Red River Clothing, Inc., 2010 WL 935747 (D.
Minn. March 12, 2010))). Nor is this a case in which the
Plaintiffs voluntarily dismissed after learning which judge
was assigned to the case. (Id. (citing Am.
Newland Communities, LP v. Axis Specialty Ins. Co., 2011
WL 5359335 (S.D. Cal. Nov. 7, 2011))). HTL and AKC's
decision to pursue all claims in one lawsuit and resolve all
issues on a global basis promotes judicial economy and
preserves finite judicial resources.
Plaintiffs assert that the traditional § 1404 factors
militate against transfer. (ECF No. 29 at 17.) The
Plaintiffs, however, fail to cite a case in which the
first-to-file rule was defeated by a venue analysis under the
§ 1404 factors. Defendants often move, on an alternative
basis, to transfer under § 1404. In such cases, courts
decline to address the § 1404 factors when the
first-to-file rule is dispositive. See, e.g., Women's
Choice Pharmaceuticals, LLC v. Rock Pharmaceuticals,
Inc., No. 16-62074, 2016 WL 6600438, at *5 (S.D. Fla.
Nov. 8, 2016) (Bloom, J.) (“The Court declines to
address Defendant's argument for transfer pursuant to 28
U.S.C. § 1404 as the application of the first-to-file
rule is dispositive.). Accordingly, this Court finds that the
first-to-file rule is dispositive and declines to address the
§ 1404 argument asserted by the Plaintiffs.