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Ford v. [24]7.ai, Inc., 18-cv-02770-BLF. (2019)

Court: District Court, N.D. California Number: infdco20190205973 Visitors: 9
Filed: Feb. 04, 2019
Latest Update: Feb. 04, 2019
Summary: ORDER PROVIDING TENTATIVE RULING RE APPLICATION OF FIRST-TO-FILE RULE; AND REQUESTING SUPPLEMENTAL BRIEFING [Re: ECF 77] BETH LABSON FREEMAN , District Judge . This is one of three putative nationwide class actions arising out of a 2017 data breach that affected customers of several large companies, including Best Buy, Delta Airlines, and Sears. Those companies had hired Defendant [24]7.ai, Inc. ("[24]7") to provided sales support to their customers, including online chat services. Plainti
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ORDER PROVIDING TENTATIVE RULING RE APPLICATION OF FIRST-TO-FILE RULE; AND REQUESTING SUPPLEMENTAL BRIEFING

[Re: ECF 77]

This is one of three putative nationwide class actions arising out of a 2017 data breach that affected customers of several large companies, including Best Buy, Delta Airlines, and Sears. Those companies had hired Defendant [24]7.ai, Inc. ("[24]7") to provided sales support to their customers, including online chat services. Plaintiffs claim that [24]7's inadequate security protocols resulted in a data breach which exposed the personal information of hundreds of thousands of customers. Plaintiffs also claim that [24]7 delayed providing notice of the breach.

The first action arising out of these events, Pica, et al. v. Delta Air Lines, Inc., et al. ("Pica"), was filed in the Central District of California on April 6, 2018. See Pica, Case No. 2:18-cv-02876-MWF-E (C.D. Cal.). The present action, Ford, et al. v. [24]7.ai, Inc. ("Ford"), was filed approximately one month later, on May 10, 2018. See Compl., ECF 1. The third action, McGarry v. Delta Air Lines, Inc., et al. ("McGarry"), was filed in the Northern District of Georgia on June 7, 2018. See McGarry, Case No. 1:18-cv-02794-TWT (N.D. Ga.). The Georgia court thereafter transferred McGarry to the Central District of California under the first-to-file rule.

[24]7 has filed a Motion to Dismiss, Transfer, or Stay, asking this Court to: (1) dismiss Ford under the first-to-file rule; (2) in the alternative, transfer Ford to the Central District of California under either the first-to-file rule or 28 U.S.C. § 1404(a); or (3) in the alternative, stay Ford under the first-to-file rule pending resolution of Pica. After completion of briefing on the motion, the Court submitted it for decision without oral argument. See Order Submitting Motion, ECF 86.

The Court tentatively has determined that Pica is the first-filed action and that application of the first-to-file rule is warranted. The Court has discretion to transfer, stay, or dismiss Ford under the first-to-file rule. See In re Bozic, 888 F.3d 1048, 1051 (9th Cir. 2018). Ordinarily, the Court would be inclined to transfer Ford rather than dismissing or staying it. However, the Ninth Circuit made clear in Bozic that a district court may transfer an action under the first-to-file rule only to a district in which venue is proper. Bozic, 888 F.3d at 1053-54. Based on Bozic, it is not clear that venue is proper in the Central District of California. See id.

Neither party addressed Bozic in the briefing. The Court will grant the parties an opportunity to do so before it makes a final decision regarding application of the first-to-file rule. The parties shall file supplemental briefs, not to exceed two pages in length, on or before February 11, 2019. The briefs shall address: (1) the effect of Bozic on this Court's authority to transfer Ford to the Central District of California; and (2) if transfer is not an option, whether the Court should dismiss or stay Ford.

IT IS SO ORDERED.

Source:  Leagle

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