Hintze, Stanley v. Hintze, Perry
3:23-cv-00685
W.D. Wis.Apr 24, 2024Background
- Plaintiff Stanley J. Hintze and Defendant Perry D. Hintze were shareholders in RS Industries, Inc., an Iowa corporation.
- Plaintiff filed a first lawsuit in Iowa state court, alleging RSI breached their shareholder agreement in 2020 by failing to notify him of Defendant’s resignation and right to purchase shares.
- Plaintiff then filed this second lawsuit in federal court in Wisconsin, contending that Defendant violated the agreement in 2023 by selling shares without first offering them to existing shareholders.
- Defendant did not contest jurisdiction but moved to dismiss or stay the federal case pending resolution of the Iowa state case.
- The Iowa case is further along and scheduled for trial, while the federal case was in its early stages with no significant proceedings yet.
- Both cases involve disputes around Plaintiff’s alleged right to purchase Defendant’s RSI shares.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether court should abstain or stay case | Federal case should proceed; different violations claimed | Court should abstain or stay pending Iowa resolution | Dismissed without prejudice for efficiency |
| Overlap of issues between cases | Two distinct breaches, different time periods | Substantial overlap; issues duplicative | Substantial overlap; Iowa case first |
| Efficiency and judicial economy | Federal court should not delay for state proceedings | State case nearer resolution, federal case would duplicate | Preceding with Iowa case is more efficient |
| Prejudice from stay or dismissal | Dismissal would harm ability to pursue remedies | Dismissal causes no undue prejudice; re-filing allowed | No prejudice; can reopen case after Iowa |
Key Cases Cited
- Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976) (establishes when federal courts may abstain from exercising jurisdiction due to concurrent state proceedings)
- Clinton v. Jones, 520 U.S. 681 (1997) (district courts have broad discretion to stay proceedings for judicial efficiency)
- Clark v. Lacy, 376 F.3d 682 (7th Cir. 2011) (parallel proceedings are a prerequisite for some abstention doctrines)