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Transfer Warranted Where Second-Filed Court Would Otherwise “Substitute Judgment” of First-Filed Court

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The so-called “first-filed rule” of jurisdiction provides that, subject to a variety of exceptions, the first court to receive a cause of action should resolve the litigation to the exclusion of the second. According to a recent decision by Chief Judge Gregory M. Sleet, a necessary adjunct to this principle is that the second court need not delve into matters that are peculiarly within the first tribunal’s purview.

In the Every Penny Counts litigation, which IPLaw360 (subscription) has treated elsewhere, the Delaware court found that uncertainty surrounding the availability of personal jurisidiction in the initial Florida court cannot constitute a reason for filing a parallel action in Delaware. Instead, the resolution of that question rests solely with the Florida court.

The Court continued: “With the institution of a separate action in this court, [plaintiff] essentially asks this court to substitute its judgment for that of the first-filed Florida court on the scope of the Florida court’s jurisdiction.” As a result, the Court transferred the second-filed action to Florida.

Bank of America, N.A. v. S.I.P. Assets LLC & Every Penny Counts Inc., C.A. No. 07-159-GMS (D. Del. Sept. 11, 2007) (Sleet, C.J.).

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