United States District Court, N.D. Illinois, Eastern Division
JAMES BULL, on behalf of himself and a certified class, Plaintiff,
ILLINOIS UNION INSURANCE COMPANY, Defendant.
MEMORANDUM OPINION AND ORDER
Z. Lee United States District Judge
James Bull (“Bull”), as representative of a
certified class and the assignee of U.S. Coachways, brings
this action against Defendant Illinois Union Insurance
Company (“IUIC”). Bull alleges that IUIC breached
its obligations to defend and indemnify U.S. Coachways in a
separate suit brought by Bull and the class he represents.
IUIC has moved to dismiss, or in the alternative, transfer
this case in light of related litigation pending in the
Eastern District of New York. For the following reasons, the
Court transfers this action to the Eastern District of New
York pursuant to 28 U.S.C. § 1404(a). All other motions
will be addressed by the transferee court.
resident of Ohio, is the representative of a nationally based
certified class that entered into a settlement with U.S.
Coachways in a prior suit: Bull v. U.S. Coachways,
Inc., No. 1:14-cv-05789 (N.D. Ill. settled Nov. 9, 2016)
(“the Underlying Action”). Compl. ¶¶ 1,
3, 28, ECF No. 1. The suit claimed that U.S. Coachways had
violated the Telephone Consumer Protection Act (TCPA).
Id. ¶ 7. Under the terms of the settlement,
U.S. Coachways stipulated to paying $50, 000 of $49, 932, 375
in return for Bull's agreement to seek recovery from U.S.
Coachways' insurer, IUIC, and pursue only IUIC in
satisfying the judgment. Id. ¶¶ 28-30;
Def.'s Mem. Supp. Mot. Dismiss or Transfer 5, ECF No. 10.
the course of the Underlying Action, U.S. Coachways notified
IUIC of the suit and requested a determination of coverage
for liability under the TCPA. Compl. ¶¶ 16, 19.
IUIC's claims agent, ACE North American Claims, responded
on January 13, 2015, and denied coverage. Id. ¶
20; Def.'s Mem. at 3-4. Counsel for Bull thereafter sent
a demand letter to IUIC on July 23, 2015. Compl. ¶ 23.
In his demand letter, Bull apprised IUIC of his intention to
seek an assignment of the policy and requested IUIC's
participation in settlement negotiations. Id. Again,
ACE North American Claims issued a letter declining to
participate and reiterating the denial of coverage.
Id. ¶ 24; Def.'s Mem. at 4. The Underlying
Action eventually settled. Compl. ¶ 26. The settlement
agreement received final approval on November 9, 2016, and
became effective on December 11, 2016. Id.
November 29, 2016, shortly after receiving a copy of the
settlement agreement, IUIC filed a declaratory judgment
action in the Eastern District of New York, IUIC v. U.S.
Bus Charter & Limo, Inc. et al., No. 1:16-cv-06602
(E.D.N.Y. filed Nov. 29, 2016) (“the New York
Action”), seeking a ruling that it owes no coverage
obligations pertaining to the Underlying Action. Id.
¶ 42; Def.'s Mem. at 5-6. Bull is a defendant in the
New York Action. Compl. ¶ 42.
on December 19, 2016, Bull filed this diversity action on
behalf of himself and the certified class. Compl. ¶
Bull seeks damages for breach of insurance contract,
asserting rights assigned to him by the insured, U.S.
Coachways, as part of the settlement of the Underlying
Action. Compl. ¶ 2. Before the Court is IUIC's
motion to dismiss in favor of its first-filed suit, or in the
alternative, to transfer this case to the Eastern District of
New York, where its suit is pending.
U.S.C. § 1404(a) provides that “[f]or the
convenience of the parties and witnesses, in the interest of
justice, a district court may transfer any civil action to
any other district or division where it might have been
brought.” 28 U.S.C. § 1404(a). Once an appropriate
alternate forum is identified, a court undertakes a
two-pronged inquiry into both convenience and the interests
of justice to decide whether transfer is warranted.
Research Automation, Inc. v. Schrader-Bridgeport
Int'l, Inc., 626 F.3d 973, 978 (7th Cir. 2010). The
movant has the burden of establishing, “by reference to
particular circumstances, that the transferee forum is
clearly more convenient.” Coffey v. Van Dorn Iron
Works, 796 F.2d 217, 219-20 (7th Cir. 1986). The factors
relevant to the convenience inquiry include “the
availability of and access to witnesses, and each party's
access to and distance from resources in each forum, ”
as well as “the location of material events and the
relative ease of access to sources of proof.”
Research Automation, 626 F.3d at 978. With regard to
the interests of justice, a court will consider “docket
congestion and likely speed to trial” in each forum,
“each court's relative familiarity with the
relevant law, ” “the respective desirability of
resolving controversies in each locale, ” and
“the relationship of each community to the
controversy.” Id. The interest of justice
inquiry “may be determinative, warranting transfer or
its denial even where the convenience of parties and
witnesses points toward the opposite result.”
Id. Because ruling on a motion to transfer venue
requires an “individualized, case-by-case consideration
of convenience and fairness, ” the district court is
afforded broad discretion and substantial deference in
weighing the factors for and against transfer.
Coffey, 796 F.2d at 219.
first-to-file rule stands for the principle that a suit
“may be dismissed ‘for reasons of wise judicial
administration . . . whenever it is duplicative of a parallel
action already pending in another federal court.'”
Serlin v. Arthur Andersen & Co., 3 F.3d 221, 223
(7th Cir. 1993) (alteration in original) (quoting Ridge
Gold Standard Liquors v. Joseph E. Seagram & Sons,
Inc., 572 F.Supp. 1210, 1213 (N.D. Ill. 1983)). Although
circuits follow the principle in varying degrees, the Seventh
Circuit does not rigidly adhere to the first-to-file rule.
Research Automation, 626 F.3d at 980-82. On the
contrary, the Seventh Circuit has held that “the
first-filed case may proceed where the principles that govern
requests for transfer do not indicate otherwise.”
Id. at 980. Thus, the first-filed status of a case
is relevant to the transfer inquiry, but not dispositive.
The First-to-File Rule
initial matter, IUIC contends that the first-to-file rule
provides for dismissal of this, the second-filed action.
Def.'s Mem. at 6. As noted, however, no such mechanical
rule exists in the Seventh Circuit. Research
Automation, 626 F.3d at 980, 982. Instead, filing
priority is one of many factors relevant in the §
1404(a) analysis, and transfer, rather than dismissal, is the
appropriate remedy. Id.; see Hecker v. Petco Animal
Supplies, Inc., No. 16 C 10857, 2017 WL 2461546, at *2-3
(N.D. Ill. June 7, 2017) (collecting Seventh Circuit
precedent dictating transfer, rather than dismissal, of the
second-filed action). Therefore, IUIC's motion to dismiss
pursuant to the first-to-file rule is denied.
Bull raises two objections to allowing the order of filing to
even influence determination of whether to transfer his case.
Pl.'s Resp. 5-6, ECF No. 18. He asserts that because his
suit requests coercive relief, in that it asks the court to
order IUIC to pay damages rather than merely declare
IUIC's obligations to do so, it should take priority over
IUIC's declaratory action. Id. Moreover, he
asserts the declaratory action should be disfavored as
improperly anticipatory. Id. In reply, IUIC claims
that bringing a declaratory judgment action is “the