Second Circuit Narrows Forum-Shopping Exception To First To File Rule In Declaratory Judgment Actions

The U.S. Court of Appeals for the Second Circuit has held that the "special circumstances" exception to the usual "first to file" rule used to determine priority when competing lawsuits have been filed in different forums does not apply merely because the plaintiff here, two insurance carriers in the first-filed action was partly motivated by a desire to select a forum with favorable law.

When a dispute involving the same parties and the same issues results in lawsuits pending in different federal courts, the "first-filed rule" creates a presumption that the earlier filed case will take priority. There are, however, two categories of exceptions to this rule that allow the later-filed case to take precedence: if a "balance of convenience" test tilts in favor of the later-filed case's forum; and if "special circumstances" exist.