United States District Court, M.D. Alabama, Northern Division
HAROLD RAY, on behalf of himself and all others similarly situated, Plaintiff,
NATIONSTAR MORTGAGE LLC OF DELAWARE, d/b/a Champion Mortgage Company, Defendant.
REPORT AND RECOMMENDATION OF THE MAGISTRATE
M. BORDEN, UNITED STATES MAGISTRATE JUDGE.
to 28 U.S.C. § 636(b)(1), this case was referred to the
undersigned United States Magistrate Judge for review and
submission of a report with recommended findings of fact and
conclusions of law. Doc. 13. Now pending before the court is
the Motion to Stay in Favor of First-Filed Case (Doc. 29)
filed by Defendant Nationstar Mortgage LLC of Delaware, d/b/a
Champion Mortgage Company (“Nationstar”). The
parties have fully briefed the issues presented (Docs. 30, 32
& 34), and convened for oral argument before the
undersigned on January 10, 2018 regarding the motion. After
careful consideration of the parties' submissions and
arguments and the applicable law, the undersigned recommends
that the motion to stay be GRANTED.
FACTUAL AND PROCEDURAL BACKGROUND
filed this action, on behalf of himself and putative
nationwide and Alabama classes, on February 17, 2017.
Nationstar is the only defendant. Doc. 1 at 1. The claims
relate to home inspections for Nationstar's reverse
mortgage customers and include breach of contract, unjust
enrichment, and negligence. Doc. 1.
months before Ray filed this action, however, a man named
Glendale Hoggard filed a similar action against Nationstar on
behalf of himself and putative nationwide and District of
Columbia classes. He initially brought suit in the Superior
Court of the District of Columbia on December 9, 2016, but
Nationstar removed the case to United States District Court
for the District of Columbia on January 13, 2017, where it is
styled as Hoggard, et al., v. Nationstar Mortgage LLC of
Delaware, d/b/a Champion Mortgage Company,
1:17-cv-99-TK. The Hoggard case also relates to
reverse mortgage home inspections and includes claims for
breach of contract, breach of the covenants of good faith and
fair dealing, state-law statutory violations, and unjust
enrichment. Doc. 30-1.
16, 2017, the court issued a uniform scheduling order in the
instant case, and the parties commenced the discovery
process. Doc. 26. On October 19, 2017, Nationstar filed the
pending motion to stay these proceedings.
invokes the first-filed rule in arguing that this matter
should be stayed so as not to interfere with the
administration of the Hoggard case. “The
first-filed rule provides that when parties have instituted
competing or parallel litigation in separate courts, the
court initially seized of the controversy should hear the
case.” Collegiate Licensing Co. v. Am. Cas. Co. of
Reading, Pa., 713 F.3d 71, 78 (11th Cir. 2013) (citing
Merrill Lynch, Pierce, Fenner & Smith, Inc. v.
Haydu, 675 F.2d 1169, 1174 (11th Cir. 1982)). The
primary purposes of the rule, of course, are to promote
judicial economy and to avoid the potential for inconsistent
obligations and verdicts inherent in simultaneous parallel
litigation. Supreme Int'l Corp. v. Anheuser-Busch,
Inc., 972 F.Supp. 604, 606 (S.D. Fla. 1997).
the first-filed rule, “[w]here 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.” Manuel v. Convergys Corp., 430 F.3d
1132, 1135 (11th Cir. 2005) (citations omitted). In applying
this rule, the district courts of this circuit generally
employ a three-factor test based on (1) the chronology of the
cases, (2) the similarity of the parties, and (3) the
similarity of the issues. See Rudolph & Me, Inc. v.
Ornament Cent., LLC., 2011 WL 3919711, at *2 (M.D. Fla.
Sept. 7, 2011); Goldsby v. Ash, 2010 WL 1658703, at
*2 (M.D. Ala. Apr. 22, 2010). Even if the test is met, forum
shopping, bad-faith litigation tactics, or other equitable
considerations may override the presumption in favor of the
first-filed forum. See, e.g., Alltrade, Inc. v.
Uniweld Prod., Inc., 946 F.2d 622, 628 (9th Cir. 1991).
Applying these factors here, the undersigned finds that the
instant matter substantially overlaps with the first-filed
Hoggard case and that there are no significant
countervailing equitable considerations. This case must be
stayed as a result.
chronology is straightforward. The Hoggard case was
filed on December 9, 2016 and removed to federal court on
January 13, 2017. The instant case followed on February 17,
2017. Ray does not dispute this chronology or the fact that
it makes Hoggard, strictly speaking, the
“first-filed” case. Instead, he invites the court
to weigh the relative progress of the litigation in the two
forums, offering that the discovery process is more advanced
in this case than in Hoggard. See Doc. 32
at 5-6. Nationstar disputes the facts underlying Ray's
contention that the Hoggard case is farther along,
but the court need not resolve this factual dispute. Ray has
not offered any authority for the proposition that the court
may look behind the absolute time of filing in its
consideration of the first-filed rule, and the court finds
ample authority to the contrary. See, e.g.,
Strother v. Hylas Yachts, Inc., 2012 WL 4531357, at
*2 (S.D. Fla. Oct. 1, 2012) (determining the first-filed suit
based solely on the timing of the complaints); Catanese
v. Unilever, 774 F.Supp.2d 684, 688 (D.N.J. 2011)
(holding that the order in which the competing cases were
filed “is all that matters for purposes of the
rule”). Hoggard is thus the first-filed case
and the United States District Court for the District of
Columbia is entitled to a strong presumption in its favor.
Similarity of Parties
court finds that the parties are substantially similar. The
first-filed rule does not demand complete unity of parties.
E.g., GeorgiaCarry.Org, Inc. v. U.S. Army Corps
of Engineers, 2015 WL 196018, at *2 (S.D. Ga. Jan. 14,
2015). Instead, the law requires merely that “some [of]
the parties in one matter are also in the other matter,
regardless of whether there are additional unmatched parties
in one or both matters.” Intersearch Worldwide,
Ltd. v. Intersearch Grp., Inc., 544 F.Supp.2d 949, 959
n.6 (N.D. Cal. 2008) (citations omitted); see also
Strother, 2012 WL 4531357, at *2 (finding substantial
overlap in cases that “feature some different causes of
action and different parties”).
is the defendant in both actions. And the putative nationwide
classes may not be identical, but they do overlap. Ray
largely concedes this point in his brief, arguing only that
the classes are “defined differently.” Doc. 32 at
6. This is true. See Doc. 32 at 6 (setting out the
respective putative class definitions). But the variance in
class definitions does not foreclose a finding that the
parties are substantially similar. Both class definitions
cover homeowners who had reverse mortgages serviced by
Nationstar and who were assessed allegedly improper fees for
property inspections. In the Hoggard class, the
inspections must have been triggered by the homeowner's
failure to return an annual occupancy certification form to
Nationstar. Doc. 30-1 at 17. The Ray inspections may
have been triggered by any number of events as long as the
homeowner received no prior notice of the inspections. Doc. 1
at 12. Viewed side by side, the class definitions are broad
enough to encompass many of the same plaintiffs since the
classes of homeowners who failed to return an occupancy form
and who did not receive prior notification of their
inspections are not mutually exclusive. See Fuller v.
Abercrombie & Fitch Stores, Inc., 370 ...