Michael Ford v. [24]7.ai, Inc.

• Court: Court of Appeals for the Ninth Circuit
• Decided: July 18, 2020
• Docket: 19-15462
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUL 16 2020 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

MICHAEL FORD; et al., No. 19-15462

Plaintiffs-Appellants, D.C. No. 5:18-cv-02770-BLF

v. MEMORANDUM* [24]7.AI, INC.,

Defendant-Appellee.

Appeal from the United States District Court for the Northern District of California Beth Labson Freeman, District Judge, Presiding

Argued and Submitted July 9, 2020 Pasadena, California

Before: PAEZ and BADE, Circuit Judges, and ZOUHARY,** District Judge.

This putative class action arises out of a 2017 data breach, in which

Plaintiffs-Appellants allege their payment card data and other personally

identifiable information were compromised due to Defendant-Appellee’s

data-security system. The district court determined that another action arising out

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable Jack Zouhary, United States District Judge for the Northern District of Ohio, sitting by designation. of the same data breach, Pica v. Delta Air Lines, Inc., No. 19-55300 (9th Cir.)

(“Pica”), was commenced prior to this action (“Ford”), and dismissed Ford with

prejudice on first-to-file grounds.

We have jurisdiction under 28 U.S.C. § 1291. “We review a court’s

decision to accept or decline jurisdiction based on the first-to-file rule for abuse of

discretion.” Alltrade, Inc. v. Uniweld Prods., Inc., 946 F.2d 622, 625 (9th Cir.

1991) (citation omitted). We vacate the district court dismissal and remand with

instructions to stay the proceedings pending resolution of Pica.

The first-to-file rule is “a generally recognized doctrine of federal comity

which permits a district court to decline jurisdiction over an action when a

complaint involving the same parties and issues has already been filed in another

district.” Pacesetter Sys., Inc. v. Medtronic, Inc., 678 F.2d 93, 94–95 (9th Cir.

1982) (citations omitted). A district court applying the rule may transfer, stay, or

dismiss the second-filed case. See Cedars-Sinai Med. Ctr. v. Shalala, 125 F.3d

765, 769 (9th Cir. 1997).

Plaintiffs-Appellants contend that the first-to-file rule should not apply to

this action at all. We do not decide that issue; regardless of whether Pica or Ford

should be deemed “first-filed,” the district court abused its discretion in dismissing

Ford. Under our case law, “where the first-filed action presents a likelihood of

dismissal, the second-filed suit should be stayed, rather than dismissed.” Alltrade,

2 Inc., 946 F.2d at 629 (citation omitted). The Pica action plainly presented a

likelihood of dismissal: When the district court dismissed the Ford action, the

district court in Pica had already issued a tentative order dismissing that case with

prejudice. Accordingly, we conclude the district court abused its discretion in

dismissing Ford. We vacate the district court order and remand with instructions

to stay the proceedings pending resolution of Pica.

Plaintiffs-Appellants shall recover their costs on appeal.

VACATED AND REMANDED.