Two insurance companies recognized that they had a dispute about insurance coverage for asbestos liability issues. One filed a declaratory judgment action in federal court in Illinois. Soon afterwards, the other filed a declaratory judgment action in federal court in Pennsylvania.
The Northern District of Illinois transferred the Illinois lawsuit to Pennsylvania on the ground that the material events occurred in Pennsylvania. The Pennsylvania federal court then dismissed the Pennsylvania action on the ground that it was the second action filed.
The first to file rule generally recognizes that the first case filed should take precedence over the second case that was filed if the subject matter of the two cases is identical. There are a few exceptions to the first to file rule (such as filing in a jurisdiction to obtain better law), but the Pennsylvania court held that the exceptions did not apply.
Thus, in the end the two insurance companies can only litigate one case, but that case belonged in Pennsylvania, not Illinois.
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