The court rejected the plaintiffs’ claims that when applying the rule, the first court is not the court in which the claims were first filed but rather the court in which jurisdiction first attaches to the claims.
Granting Papa John’s motion to stay under the first-to-file rule of a class action alleging it under-reimbursed its delivery drivers for vehicle-related expenses in violation of various state laws, a federal court in Kentucky found the complaint was filed three years after a similar action in the Southern District of New York; there was significant overlap between the parties—including that five of the seven named plaintiffs previously filed consents to join the other action; and the claims in the two actions substantially overlapped even though they were brought pursuant to different state laws. Nor would a stay jeopardize the plaintiffs’ ability to seek relief against Papa John’s pursuant to the relevant state laws (Hubbard v. Papa John’s International, Inc., November 15, 2019, Russell, T.).
Durling lawsuit. In May 2016, six named plaintiffs sued Papa John’s International (PJI) in the Southern District of New York (Durling) alleging that it “systematically under-reimbursed its delivery drivers for vehicular wear and tear, gas, and other driving-related expenses, thereby ensuring that all of PJI’s delivery drivers are effectively paid below minimum wage.” They brought a collective action pursuant to the FLSA on behalf of all “persons PJI employed as a delivery driver during any workweek in the maximum limitations period.” Durling also brought a class action pursuant to New York Labor Law and three other plaintiffs brought class actions pursuant to Delaware, Pennsylvania, and New Jersey law.
The federal court in New York conditionally certified a collective action in July 2018, which consisted of individuals employed as delivery drivers by corporate-owned or controlled Papa John’s stores. Just prior to that, the plaintiffs had moved to amend the complaint to add three additional named plaintiffs alleging violations of Colorado, Illinois, and Missouri law but in February 2019, the court denied the motion based on a lack of personal jurisdiction.
Instant action. In response, the attorneys representing the Durling plaintiffs filed the instant action alleging that PJI under-reimbursed its delivery drivers for expenses related to their vehicles resulting in payment below minimum wage in violation of Kentucky, Colorado, and Missouri’s minimum wage laws. Although PJI moved to stay the case pursuant to the first-to-file rule, the plaintiffs amended the complaint to add four named plaintiffs alleging violations of Florida, Illinois, Maryland, and Minnesota law. PJI then filed a second motion to stay.
First-to file-rule. In the Sixth Circuit, the court here noted, courts evaluate the following factors in applying the first-to-file rule: (1) chronology of events; (2) similarity of the parties involved; and (3) similarity of the issues or claims at stake. If these factors support application of the rule, the court then looks at equitable considerations in determining whether the rule should be applied.
Chronology of events. As to the first factor, while PJI pointed out that Durling was filed over three years prior to the instant action, the plaintiffs argued that “the first court is not the court in which claims were first filed, but rather the court in which jurisdiction first attaches to the claims.” Accordingly, they asserted, because the Southern District of New York lacked personal jurisdiction over the state-law claims of two named plaintiffs here, this court was the “first court” pursuant to the rule. Jurisdictional inquiries, however, are not considered in the inquiry, explained the court, noting the Sixth Circuit has held that “[t]he dates to compare for chronology purposes of the first-to-file rule are when the relevant complaints are filed.” And since Durling was filed almost three years before this case, this factor weighed in favor of applying the rule.
Similarity of parties. Turning to the second factor, the court found significant overlap between the parties. First, PJI was the only named defendant. Further, the putative class here—all individuals employed at PJI’s Papa John’s stores as delivery drivers in their respective states within the maximum limitation period—fell within the scope of the Durling class—all delivery driver employees at corporate-owned Papa John’s stores and jointly owned Papa John’s stores where PJI is the majority owner. In fact, observed the court, as PJI pointed out, five of the seven named plaintiffs in this action previously filed consents to join Durling before filing this suit and “3,054 of the [opted-in] members of the Durling collective action were employed by PJI at store locations in each of the jurisdictions at issue here, thus bringing them within the scope of the Rule 23 classes alleged in this case.”
Similarities of issues. Regarding the third factor, while the plaintiffs here brought class action claims under different state laws than the Durling plaintiffs, PJI argued that the primary issues were the same: whether “PJI failed to adequately reimburse delivery drivers for expenses thereby paying delivery drivers below the minimum wage.” Noting that there is “a paucity of Sixth Circuit case law explaining how to apply the first-to-file rule,” the court found that particularly true in situations where the underlying theory of the case is similar between two class actions, but the plaintiffs have brought their claims under different state laws.
Substantial overlap. After surveying decisions in the Sixth Circuit and elsewhere, the court found that even though the claims arose under different state laws, there was substantial overlap among the issues presented. Not only did the Hubbard and Durling complaints allege nearly identical facts in support of their claims, the claims were all based on the theory that PJI failed to adequately reimburse delivery drivers for expenses, thereby paying them below minimum wage. The causes of action were also similar, the court observed, as they were each brought pursuant to their respective states’ minimum wage laws. And while the plaintiffs here also alleged breach of contract and unjust enrichment claims, they were based on the same core theory that PJI paid its delivery drivers below minimum wage.
In addition, said the court, failing to apply the rule here could result in inconsistent judgments from two federal district courts and would frustrate the legitimate aim of preserving judicial economy. Thus, the concerns of judicial comity and resource preservation also supported a finding of substantial overlap.
Equitable considerations. As to equitable considerations, the court was unpersuaded by the plaintiffs’ argument that informal coordination among attorneys would be sufficient to prevent prejudice or duplicative activities and that PJI could not complain of prejudice or duplicative proceedings given that it opposed their attempts to bring their Colorado, Illinois, and Missouri state law claims in Durling. PJI, said the court, “was well within its rights to oppose Plaintiffs’ motion to amend their complaint in the Southern District of New York on personal jurisdiction grounds.” Nor would staying this action jeopardize the plaintiffs’ ability to seek relief against PJI pursuant to Kentucky, Colorado, Missouri, Florida, Illinois, Maryland, and Minnesota law.
Accordingly, the court stayed the case, noting that it would resume adjudication of the issues if any remained after completion of the Durling litigation. It also deferred ruling on PJI’s motion to dismiss the plaintiffs’ claims until the stay is lifted.
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