910 F.3d 1118
10th Cir.2018Background
- Wakaya Perfection LLC (Wakaya) sued Youngevity and its principals in Utah state court; Youngevity filed a related suit in California federal court and removed the Utah action to federal court, creating concurrent federal proceedings.
- The Utah district court dismissed Wakaya’s federal case, relying on Colorado River abstention and concluding an arbitrator should decide arbitrability.
- Wakaya appealed, arguing the district court applied the wrong abstention test and wrongly delegated arbitrability to an arbitrator because Wakaya is not a signatory to the arbitration agreement.
- The Tenth Circuit reviewed abstention for abuse of discretion and arbitrability de novo.
- The Panel reversed: Colorado River abstention (a narrow doctrine for federal/state parallel suits) does not control where both parallel suits are in federal court; and non-signatory Wakaya’s arbitrability must be decided by a court absent a clear and unmistakable agreement to delegate.
Issues
| Issue | Plaintiff's Argument (Wakaya) | Defendant's Argument (Youngevity) | Held |
|---|---|---|---|
| Applicability of Colorado River abstention when both parallel cases are in federal court | Colorado River does not apply to parallel federal-federal suits; district court used wrong test | Colorado River can apply to concurrent federal litigation | Reversed: Colorado River is for federal/state parallel litigation; district court erred in applying it to two federal cases |
| Which rule should govern deference between concurrent federal cases (first-to-file vs Colorado River) | Apply first-to-file rule (use state filing date if removed); consider parties/issues similarity and equitable factors | Insisted Colorado River factors could control; argued removal date or other sequencing matters | Panel: use first-to-file as baseline; use state filing date for removed cases; consider similarity and equitable exceptions |
| Who decides arbitrability of Wakaya’s claims (court or arbitrator) | Wakaya (non-signatory) — court must decide arbitrability absent clear delegation | Youngevity argued arbitrator should decide given intertwined claims/agreements | Held: Court decides arbitrability because Wakaya did not sign arbitration agreement; question not clearly delegated to arbitrator |
| Forfeiture of challenge to Colorado River reliance | Wakaya had not forfeited because the abstention issue was raised sua sponte by the district court, preventing timely response | Youngevity argued Wakaya waived by litigating in California and failing to seek dismissal earlier | Held: No forfeiture — Wakaya did not intentionally relinquish the right and had protective reasons for filing/counterclaims in California |
Key Cases Cited
- Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976) (narrow abstention doctrine for concurrent state and federal proceedings)
- AT&T Technologies, Inc. v. Communications Workers, 475 U.S. 643 (1986) (absent clear and unmistakable delegation, courts decide arbitrability)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995) (non-signatory arbitrability issues are for courts unless parties agreed otherwise)
- Hospah Coal Co. v. Chaco Energy Co., 673 F.2d 1161 (10th Cir. 1982) (first-to-file rule as baseline for concurrent federal cases)
- Sierra Club v. Cargill, 11 F.3d 1545 (10th Cir. 1993) (reversal required when district court applies wrong legal standard)