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From Products Liability Law Daily, August 12, 2015

Agricultural workers’ claims against fruit companies barred by first-filed rule

By John W. Scanlan, J.D.

More than 200 foreign agricultural workers alleging that they have sustained numerous health problems as a result of their exposure to the pesticide dibromochloropropane (DBCP) on banana farms could not bring suit in Delaware because they were barred by the “first-filed rule,” the U.S. Court of Appeals for the Third Circuit held in affirming dismissal of the claims with prejudice. The workers previously had brought materially identical claims in Louisiana and could not engage in forum shopping to find a more favorable jurisdiction (Chavez v. Dole Food Co., Inc., August 11, 2015, Nygaard, R.).

Background. In 1993, a putative class action was filed in Texas state court by agricultural workers on banana farms in Central America against Dole Food Co. and other companies, and litigation has been ongoing since then in both federal and state courts. In June 2011, a number of suits alleging claims for negligence, strict liability, and breach of implied warranty were filed in the Eastern District of Louisiana. After they were consolidated, the district court granted summary judgment to Dole because the claims were barred by the one-year statute of limitations, and the Fifth Circuit affirmed in an unpublished opinion. While Dole’s motion was pending in the district court, the same plaintiffs filed in the U.S. District Court for the District of Delaware several actions with the same causes of action against the same defendants as in the Louisiana case. Dole (joined by several defendants) moved to dismiss the Delaware suits under the “first-filed rule,” and the court agreed and dismissed them with prejudice. Several remaining defendants subsequently moved for, and were granted, dismissal on the same ground. While the Louisiana case was pending before the Fifth Circuit, the Delaware district court dismissed the claims against Chiquita Brands International for lack of personal jurisdiction. Finally, the court dismissed the claims against the remaining defendants under the first-filed rule and closed the case. The workers appealed to the Third Circuit.

First-Filed Rule. The Third Circuit affirmed the dismissal of the Delaware cases based on the first-filed rule. The workers conceded that the cases filed in the District of Delaware were duplicative and “materially identical” to the cases they previously had filed in the Eastern District of Louisiana. Concurrent jurisdiction existed in June 2012, when the Delaware cases were filed, because the fact that the Delaware cases were filed while the Louisiana cases were on appeal was irrelevant. Furthermore, the court’s decision to dismiss the cases with prejudice instead of staying or transferring them was not an abuse of discretion because the cases were duplicative, and the court found that counsel for the workers had engaged blatant forum shopping by filing in both districts with the intention of proceeding in the forum in which they fared better. Finding error in the district court’s decision could create a “no dismissal rule,” and dismissal of a second-filed action was within the court’s discretion to control its docket.

In addition, there were no exceptions to the first-filed rule present in this case. The workers’ argument that dismissal of their Delaware cases frustrated their choice of forum was “nonsensical” because they filed in Louisiana first. There was no authority for the proposition that the first-filed rule applies only when the cases are filed by different parties. Litigating in Delaware did not make “eminent sense” because the workers themselves chose to file first in Louisiana, and forum shopping never makes eminent sense, the Third Circuit said. While the workers asserted that their duplicative filing was a reasonable response to repeated “delaying tactics” by the defendants, the court determined that the defendants’ actions were not a reason to abandon the first-filed rule.

Personal jurisdiction. The federal district court in Delaware lacked general personal jurisdiction over Chiquita Brands International. Nothing suggested that the company was more active in Delaware than in other states. The company was neither incorporated in the state nor had its principal place of business there. Chiquita had no office there and did not supervise its business from that state. Although it was a national business and its products were sold across the country, national corporations are not subject to general jurisdiction in every state.

Dissent. Affirming the dismissal with prejudice under the first-filed rule was not supported by the case law and was inconsistent with the decisions of the three Courts of Appeal to have ruled on this issue, which was one of first impression in the Third Circuit, Judge Fuentes stated in a partial dissent. He noted that the claims were not heard on the merits in Louisiana because they were time-barred and, thus, because they likely were not time-barred in Delaware they were free under ordinary preclusion principles to proceed in Delaware. Judge Fuentes also disagreed with the majority’s determination that the workers had engaged in forum shopping, noting that they explicitly had stated that they filed their claims in Delaware as a precaution in case they could not have their claims heard on the merits in Louisiana. The Delaware cases should have been stayed rather than dismissed, he concluded.

The case is No. 13-4144.

Attorneys: Scott M. Hendler (Hendler Lyons Flores) for Tobias Bermudez Chavez. Caitlin J. Halligan (Gibson Dunn), and Somers S. Price, Jr. (Potter, Anderson & Corroon) for Dole Food Company Inc., Dole Fresh Fruit, Standard Fruit Co., and Standard Fruit and Steamship Co. Michael L. Brem (Schirrmeister Diaz-Arrastia Brem), and Donald E. Reid (Morris, Nichols, Arsht & Tunnell) for Dow Chemical Co.

Companies: Dole Food Company Inc.; Dole Fresh Fruit; Standard Fruit Co.; Standard Fruit and Steamship Co.; Dow Chemical Co.

MainStory: TopStory JurisdictionNews ChemicalNews DelawareNews NewJerseyNews PennsylvaniaNews

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