RENO, Nev. – According to a federal judge, a Nevada ammunition distributor and prominent sporting goods retailer Dick’s Sporting Goods will resolve an ongoing dispute between them in a Pennsylvania court, as opposed to a Nevada one.
On Oct. 23, 2018, Battle Born Munitions initially sued Dick’s Sporting Goods in the U.S. District Court for the Western District of Pennsylvania, alleging fraudulent inducement, negligent misrepresentation and breach of contract over a deal for the delivery of ammunition to Dick’s.
BBM previously made the move to turn its complaint against Dick’s into a class action, involving multiple vendors allegedly harmed by their products not making it onto shelves at Dick’s.
Dick’s has famously stopped selling assault-rifle weapons, and its CEO is possibly considering a run for President.
In 2016, BBM entered into an agreement to supply ammunition within Dick’s Field & Stream packaging. BBM alleged it paid two manufacturers around $4.5 million for the ammo, which was available in November 2016.
It is alleged Dick’s did not take delivery for a year and refused to pay for the product during that period, while BBM was unable to sell the merchandise to anyone else because of the distinctive package. The distributor alleged it lost $200,000 storing the ammo, while also losing $5 million on another deal because of cash flow issues.
As to the matter of the aforementioned injunction, the Third Circuit provided the following guidance on a measure called the first-filed rule, from the 1988 case E.E.O.C. v. University of Pennsylvania:
“The first-filed rule encourages sound judicial administration and promotes comity among federal courts of equal rank. It gives a court ‘the power’ to enjoin the subsequent prosecution of proceedings involving the same parties and the same issues already before another district court. That authority, however, is not a mandate directing wooden application of the rule without regard to rare or extraordinary circumstances, inequitable conduct, bad faith, or forum shopping. District courts have always had discretion to retain jurisdiction given appropriate circumstances justifying departure from the first-filed rule,” according to the ruling.
U.S. District Court for the Western District of Pennsylvania Judge Nora Barry Fischer explained an injunction was only appropriate in a situation where “the later-filed case must be ‘truly duplicative of the suit before the court” and that “a district court should generally avoid terminating a claim under the first-filed rule that has not been, and may not be, heard by another court.”
“In this Court’s estimation, the first filed rule does not apply to the present circumstances for several reasons. Initially, the two lawsuits are not truly duplicative. To this end, defendant admits that the Nevada lawsuit contains a class action claim under the Nevada Deceptive Trade Practices Act (NDTPA) which was not asserted in this case,” Fischer stated.
On Feb. 4, Fischer denied the attempt to secure a preliminary injunction on the part of Battle Born Munitions (BBM) – which would have prevented further discovery in a simultaneous pending case between these same parties in Nevada (Case No. 3:19-cv-00561), pending a final decision on the instant matter in the Pennsylvania court.
Meanwhile, in the Nevada court and as to the parallel action, their Chief Judge Miranda M. Du granted Dick’s Feb. 27 motion for summary judgment and later dismissed that case entirely on April 16.
According to Du, in the interest of judicial economy, the Nevada case was barred as duplicative and essentially identical to the Pennsylvania case under the anti-claim splitting doctrine.
“Having found the anti-claim splitting doctrine applies to this case, the Court exercises its discretion to dismiss this case with prejudice as duplicative of the PA Case. The Court will dismiss this case with prejudice because ‘dismissal of the duplicative lawsuit, more so than the issuance of a stay or the enjoinment of proceedings, promotes judicial economy and the ‘comprehensive disposition of litigation,” Du ruled.
“In dismissing the duplicative suit with prejudice,’ Court will act ‘to protect the parties from vexatious and expensive litigation and to serve the societal interest in bringing an end to disputes’ (affirming dismissal of duplicative suit with prejudice). The parties can work to resolve the remainder of this dispute by going to trial before Judge Fischer. This Court will not interfere with her rulings or her ongoing management of the PA Case.”
U.S. District Court for the Western District of Pennsylvania case 2:18-cv-01418
U.S. District Court for the District of Nevada case 3:19-cv-00561
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com