693 F. App'x 487
9th Cir.2017Background
- Proposition 26 amended the California Constitution in 2010 to require voter approval for local "taxes," excluding charges for specific government services that do not exceed reasonable costs.
- DWP ratepayers filed a putative class action in federal court alleging DWP sets rates above its costs and transfers excess revenue to the City General Fund, violating Article XIII C.
- A consolidated state-court class action (Eck v. City of Los Angeles) raises substantially the same state constitutional challenge to DWP rates and transfers.
- The district court stayed the federal suit under the Colorado River abstention doctrine because the parallel state action could resolve the core state-law issue.
- Plaintiffs moved for preliminary injunctions to (1) enjoin DWP from charging current rates and (2) stop transfers to the General Fund, and separately to enjoin the state-court litigation; the district court denied all injunctions.
- The Ninth Circuit affirmed: Colorado River stay was proper; plaintiffs failed Winter factors for injunctive relief; and plaintiffs waived any coherent argument for enjoining the state action.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the federal court should stay the federal suit under Colorado River because of parallel state litigation | Plaintiffs argued federal forum appropriate and stay unnecessary despite state case | Defendants argued state action is substantially similar and should be allowed to proceed to conserve resources and resolve state-law issues | Stay affirmed — state and federal actions are substantially similar and Colorado River factors support abstention |
| Whether plaintiffs are entitled to a preliminary injunction stopping DWP from charging current rates | Plaintiffs argued ongoing harm from allegedly unlawful rates and transfers justifies injunction | Defendants argued plaintiffs failed to meet all Winter factors and equities favor no injunction | Denied — plaintiffs did not show balance of equities or public interest tipping in their favor per Winter |
| Whether plaintiffs are entitled to a preliminary injunction stopping future transfers to the City's General Fund | Plaintiffs argued transfers perpetuate constitutional violation and irreparable harm | Defendants argued injunction would disrupt municipal finances and plaintiffs failed Winter test | Denied — same Winter analysis, injunction inappropriate |
| Whether the district court should enjoin the state-court litigation in favor of the federal action | Plaintiffs sought to stay state proceedings to proceed in federal court | Defendants argued state forum is appropriate and enjoining state proceeding improper | Denied — plaintiffs offered no coherent argument; issue waived; stay of federal case appropriate |
Key Cases Cited
- Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976) (abstention may be appropriate to avoid duplicative litigation when state proceedings are parallel)
- Kerotest Mfg. Co. v. C-O-Two Fire Equip. Co., 342 U.S. 180 (1952) (favoring comprehensive disposition of litigation to conserve judicial resources)
- Nakash v. Marciano, 882 F.2d 1411 (9th Cir. 1989) (exact parallelism not required for Colorado River; substantial similarity suffices)
- Clark v. Lacy, 376 F.3d 682 (7th Cir. 2004) (parties with nearly identical interests are substantially the same for Colorado River purposes)
- Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7 (2008) (four-factor test for preliminary injunctions; plaintiffs must satisfy all elements)
- DISH Network Corp. v. FCC, 653 F.3d 771 (9th Cir. 2011) (application of Winter requires showing all preliminary-injunction elements)
- Aramark Facility Servs. v. Service Emps. Int'l Union, Local 1877, AFL-CIO, 530 F.3d 817 (9th Cir. 2008) (arguments not adequately briefed are waived)
- Caminiti & Iatarola, Ltd. v. Behnke Warehousing, Inc., 962 F.2d 698 (7th Cir. 1992) (nearly identical parties considered substantially the same for Colorado River analysis)