Opinion
4:22-cv-00666-SEP
10-11-2022
JEFFREY MISHKIN, Plaintiff, v. VOLKSWAGEN GROUP OF AMERICA, INC., Defendant.
MEMORANDUM AND ORDER
SARAH E. PITLYK UNITED STATES DISTRICT JUDGE
Before the Court is Defendant Volkswagen Group of America, Inc.'s Motion to Dismiss or Transfer, Doc. 14, which the parties have fully briefed. For the following reasons, the Court grants the motion in part and transfers the case.
Background
Plaintiff Jeffrey Mishkin filed this case on June 23, 2022. Doc. 1. Mishkin claims he purchased a used 2013 Audi Q5 in Missouri in 2017, and that, since the time of purchase, his Q5 consumed excessive oil due to a “piston defect.” Id. ¶¶ 9, 20. Mishkin says that all 2012-through-2017-model-year Audi vehicles equipped with a 2.0-litre turbocharged engine suffer a defect preventing the piston rings from sitting properly in the grooves of the piston head. Id. ¶¶ 1-8 & n.1. The defect can apparently cause spontaneous engine failure as well as excessive oil consumption. Id. ¶¶ 1, 23. Mishkin claims that Volkswagen was aware of the defect, failed to disclose it, and misrepresented the quality of the vehicles at issue. See, e.g., id. ¶¶ 4, 40, 44, 92. Individually and on behalf of a putative Missouri class, Mishkin brings Missouri-Merchandising-Practices-Act, common-law-fraud, negligent-misrepresentation, and unjust-enrichment claims. Id. at 37-48.
On April 30, 2021, a similar case was filed in the United States District Court for the District of New Jersey. See Complaint, Rieger v. Volkswagen Grp. of Am., Inc., No. 1:21-cv-10546 (D.N.J. April 30, 2021). The operative complaint, filed October 12, 2021, alleges that all 2012-through-2017-model-year Audi vehicles equipped with a 2.0-litre turbocharged engine contain the same “piston defect” potentially causing piston failure and excessive oil consumption. Doc. 15-1 ¶ 6; see Consolidated Class Action Complaint, Rieger v. Volkswagen Grp. of Am., Inc., No. 1:21-cv-10546 (D.N.J. Oct. 12, 2021). Rieger asserts that Volkswagen was aware of the defect, failed to disclose it, and misrepresented the quality of the vehicles at issue. Doc. 15-1 ¶¶ 6-16, 189, 198-259. Rieger brings 35 counts, including a common-law-fraud claim on behalf of several individuals and a putative nationwide class of “all individuals in the United States who purchased or leased any 2012-2017 Audi vehicle equipped with the 2.0-lit[re] turbocharged engines.” Id. ¶¶ 276, 941-956.
Based on the foregoing, Volkswagen moves the Court to dismiss this case, or, alternatively, transfer it to the United States District Court for the District of New Jersey where Rieger remains pending. Doc. 14.
Discussion
Volkswagen's motion to dismiss seeks dismissal or transfer of Mishkin's Complaint based on the first-filed rule. The first-filed rule “gives priority, for purposes of choosing among possible venues when parallel litigation has been instituted in separate courts, to the party who first establishes jurisdiction.” Nw. Airlines v. Am. Airlines, 989 F.2d 1002, 1005 (8th Cir. 1993).
The well-established rule is that in cases of concurrent jurisdiction, “the first court in which jurisdiction attaches has priority to consider the case.” Orthmann v. Apple River Campground Inc., 765 F.2d 119, 131 (8th Cir. 1985). This first-filed rule “is not intended to be rigid, mechanical, or inflexible,” id. at 121, but is to be applied in a manner best serving the interests of justice. The prevailing standard is that “in the absence of compelling circumstances,” Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Haydu, 675 F.2d 1169, 1174 (11th Cir. 1982), the first-filed rule should apply.Nw. Airlines, 989 F.2d at 1005 (quoting United States Fire Ins. Co. v. Goodyear Tire & Rubber Co., 920 F.2d 487, 488-89 (8th Cir. 1990)). The first-filed rule “conserve[s] juridical resources and avoid[s] conflicting rulings.” Id. at 1006. To determine the applicability of the rule, “courts generally evaluate three factors: (1) the chronology of events, (2) the similarity of the parties involved, and (3) the similarity of the issues or claims at stake.” Baatz v. Columbia Gas Transmission, LLC, 814 F.3d 785, 790 (6th Cir. 2016) (citing Alltrade, Inc. v. Uniweld Ptods., Inc., 946 F.2d 622, 625 (9th Cir. 1991)). In applying the first-filed rule, courts have the discretion to dismiss, stay, or transfer the later-filed case. See Anheuser-Busch, Inc. v. Supreme Int'l Corp., 167 F.3d 417, 419 (8th Cir. 1999) (dismiss); Adam v. Jacobs, 950 F.2d 89, 92 (2d Cir. 1991) (stay); Midwest Motor Exp., Inc. v. Central States Se., 70 F.3d 1014, 1017 (8th Cir. 1995) (transfer). Unless jurisdictional considerations counsel otherwise, transfer is appropriate when the first-filed case pends in another federal district court. Cf. Monsanto Tech. LLC v. Syngenta Crop Protection, Inc., 212 F.Supp.2d 1101, 1102-03 (E.D. Mo. 2002).
Here, there is no dispute that Rieger is the first-filed case. Rieger was filed on April 30, 2021, and this case was filed on June 23, 2022. Thus, the chronology of events favors transfer of this case.
Next, the first-filed rule “applies when the parties in the two actions ‘substanital[ly] overlap,' even if they are not perfectly identical.” Baatz, 814 F.3d at 790 (quoting Save Power Ltd. v. Syntek Fin. Corp., 121 F.3d 947, 950-51 (5th Cir. 1997)). The Court “must evaluate the identity of the parties by looking at overlap with the putative class.” Id. at 791. Should the New Jersey court certify the nationwide Rieger class, Mishkin would be a class member (which he admits). Doc. 18 at 5. Thus, Volkswagen and Mishkin “would be parties to both actions,” and “[t]his overlap satisfies the similarity of the parties factor,” favoring transfer. Baatz, 814 F.3d at 791.
Finally, the Court considers “the similarity of the issues or claims at stake.” Id. Mishkin argues that the issues in this case and Rieger are not similar because Mishkin's complaint “is brought on behalf of all persons or entities in Missouri who purchased or leased a Class Vehicle and asserts Missouri state law claims,” while the Rieger complaint “is brought on behalf of a nationwide class with some state law subclasses that do not include a Missouri subclass and the only cause of action that potentially encompasses Missouri residents is the single nationwide class claim.” Doc. 18 at 5 (emphasis in original, internal citations omitted). But in both suits, the plaintiffs seek to represent classes alleging that Volkswagen improperly manufactured, marketed, and sold certain Audi vehicles with defective pistons, and both lawsuits assert fraud claims. All claims in both suits arise from the same conduct, which would be proved with similar evidence leading to similar relief. See Orndorff v. Ford Motor Co., 2020 WL 1550760, at *3 (E.D. Penn. Mar. 31, 2020); cf. Evans v. J.P. Morgan Chase Bank, N.A., 2014 WL 12600285, at *1 (W.D. Mo. Feb. 12, 2014) (“[I]n the putative class context, requiring an exact identity among the parties and claims would make it so the first-filed rule would never apply, undercutting its purpose of judicial efficiency.” (quoting Worthington v. Bayer Healthcare, LLC, 2012 WL 1079716, *4 n.3 (D.N.J. Mar. 30, 2012)). Thus, Mishkin's claims are substantially similar to those raised in Rieger.
Despite the manifest similarities between this case and Rieger, Mishkin argues that the Court should decline to apply the first-filed rule because motions to dismiss are pending in both cases and because evidence would become “stale” if the case were dismissed. Doc. 18 at 6. But Mishkin provides the Court with no authority supporting the proposition that mere similarity of posture forecloses application of the first-filed rule when it would otherwise apply. And Mishkin's unelaborated concerns about “stale” evidence are not “compelling circumstances” justifying departure from the first-filed rule. Nw. Airlines, 989 F.2d at 1005 (quoting Merrill Lynch, 675 F.2d at 1174). Thus, the Court applies the first-filed rule and transfers the case. See Midwest Motor Exp., Inc., 70 F.3d at 1017.
In the single case cited by Mishkin, a court declined to apply the first-filed rule where parallel motions for conditional certification were already pending, duplicative discovery had already been conducted, and the ruling in the first-filed case had been stayed pending a potential settlement. See Haworth v. New Prime, Inc., 448 F.Supp.3d 1060, 1064 (W.D. Mo. 2020). This case, in which a Rule 16 conference has not yet been held, is not similarly situated to that one. Moreover, the Haworth court noted that “[p]erhaps the costs associated with two courts addressing two overlapping motions for conditional certification would have weighed in favor of applying the first-to-file rule earlier in this case ....” Id. at 1064 n.2.
Accordingly, IT IS HEREBY ORDERED that Defendant Volkswagen Group of America Inc.'s Motion to Dismiss or Transfer is GRANTED IN PART. Doc. [14].
IT IS FURTHER ORDERED that this case is TRANSFERRED to the United States District Court for the District of New Jersey. Cf. E.D. Mo. L.R. 4.06.
IT IS FINALLY ORDERED that the Rule 16 Scheduling Conference set for October 28, 2022, is VACATED, and Volkswagen's remaining motions related to that conference are DENIED as moot. Docs. [22], [24].