AMERISOURCEBERGEN CORPORATION, Plaintiff-Appellant, v. Donald R. RODEN, Defendant-Appellee.
No. 05-55349
United States Court of Appeals, Ninth Circuit
Argued and Submitted Feb. 5, 2007. Filed Aug. 13, 2007.
495 F.3d 1143
William E. Johnson (briefed and argued), Law Offices of Richard E. Hodge, Inc., Malibu, CA, for the defendant-appellee.
Before: WARREN J. FERGUSON, EUGENE E. SILER, JR.,* and HAWKINS, Circuit Judges.
Opinion by Judge HAWKINS; Concurrence by Judge FERGUSON.
MICHAEL DALY HAWKINS, Circuit Judge:
We explore once again the sometimes complex relationship between state and federal civil proceedings when parties in the midst of litigation on one side of the divide file factually related proceedings on the other. Understandably concerned with judicial economy and respect for ongoing state proceedings, the district court dismissed the federal suit under the Younger abstention doctrine. Determining that abstention was not required, we return the
FACTS AND PROCEDURAL HISTORY
In 1995, Donald R. Roden (“Roden“) was hired as President and Chief Operating Officer of Bergen Brunswig Corporation (“BBC“), the predecessor company to AmerisourceBergen Corporation (“ABC“). At this time, Roden and BBC entered into an employment agreement (the “Agreement“) providing that Roden would have his employment with BBC consistently extended monthly on a rolling three-year basis1 and would not be fired except for “cause,” as defined in the Agreement. Additionally, the Agreement provided that Roden was entitled to participate in BBC‘s ERISA-governed2 Supplemental Executive Retirement Plan (the “SERP“), as well as its interest-free loan program (the “Loan Program“).
Four years after he was hired and two years after being promoted to Chief Executive Officer (“CEO“), Roden was given written notice of BBC‘s intention to terminate his employment for a reason that apparently did not qualify as “cause” under the Agreement and on terms that may have conflicted with those provided for in the Agreement. Roden thereafter filed a complaint against BBC in the Superior Court in Orange County, California (the “California Superior Court“) claiming that BBC breached the Agreement and that Roden was therefore entitled to his full salary for three years past his termination date and was, in all other respects, entitled to be treated as BBC‘s CEO until that date.3
Specifically, Roden claimed that he was entitled to “estimated future benefits under the SERP . . . of no less than $8,970,000” and a due date (and intеrest-accrual start-date) based on a November 30, 2002 termination date for the $337,500 loan he took out under the Loan Program.4
Shortly thereafter, Roden and BBC entered into a Settlement Agreement, and a judgment incorporating its terms was entered on July 27, 2000 (“the Judgment“), as follows:
- In favor of [Roden] in the amount of $5,000,000, less legally required deductions;
- Continuation of the benefits provided in Sections 5(d) [which includes participation in the SERP], (e) and (i) [which includes participation in the Loan Program] of [Roden‘s] employment contract; and
- Reasonable attorney‘s fees and costs in an amount to be determined by the Court.
Believing BBC had not fully complied with this Judgment, Roden sought to force compliance in California Superior Court. After briefing and argument, thаt court ordered implementation of the Judgment (“First Order“) finding, in relevant part, that Roden‘s entitlement to benefits under the SERP had “vested” and that “Roden‘s $337,500 loan was not absolved by the Judgment” but would not become due until November 30, 2002. The First Order continued (emphasis added):
[BBC] is required to accord Roden the same treatment as the other senior officers of [BBC] who received loans from this November 1998 loan program . . . with respect to . . . any forgiveness, extensions, payment of interest and the like.
BBC appealed the First Order to the California Court of Appeal, which unanimously affirmed. Roden v. Bergen Brunswig Corp., 107 Cal.App.4th 620, 132 Cal.Rptr.2d 549 (2003).
At this point, ABC sought to remove Roden v. BBC from the California courts to federal court claiming that Roden‘s discovery request had “transformed” the case into an ERISA action, which is removable to federal court at the defendant‘s request. See Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987). The district court rejected this аrgument and remanded the case back to the California courts.5
Undeterred, ABC filed its own action in federal district court, requesting both a judgment that Roden breached his contract with ABC by failing to repay his $337,500 loan (“Count I“), as well as a declaration of ABC‘s duties and obligations to Roden under the SERP—namely, for a proper calculation of Roden‘s SERP benefits (“Count II“). The district court dismissed ABC‘s two claims,6 relying on the basic premise that resolving ABC‘s claims at the federal level would interfere with ongoing state court proceedings regarding almost-entirely overlapping issues.7 ABC appealed to this court, arguing that the district court erred in dismissing its claims.
Shortly before oral argument took place in this case, the California Superior Court entered а second order implementing the Judgment (“Second Order“). The Second Order declared that Roden was entitled to $14,432,141.74 in SERP benefits but was not entitled to any forgiveness of the loans
In light of these recent developments—which ABC agrees will squarely resolve the issue of Roden‘s entitlement under the SERP—ABC concedes that the district court was within its discretion to decline to entertain Count II. See
DISCUSSION
If the district court had the same discretion to decline to hear claims for monetary damages as it does to decline to hear claims for declaratory relief, we would surely uphold the dismissal of Count I. Parties should be strongly discouraged from attempting to drag federal courts into disputes already significantly under-way in state courts.
Moreover, we regret the significant expense—both to the parties and to the two already overburdеned court systems—caused by ABC‘s decision to file its state-law-governed breach of contract claim in federal court when it could have just as easily filed the very same claim in the California courts, which have been competently handling these matters for over six years.
Nevertheless, we are aware of the “virtually unflagging obligation of the federal courts to exercise the jurisdiction given them,” Colo. River Water Conservation Dist. v. United States, 424 U.S. 800, 817, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976), and must decide whether the district court properly understood the scope of this obligation when it dismissed Count I under the doctrine announced in Younger v. Harris, 401 U.S. 37, 41, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971). We conclude that it did not and that Count I was improperly dismissed under Younger. We also conclude that dismissal of Count I cannot be affirmed under either the Anti-Injunction Act,
I. Younger Abstention
The Younger abstention doctrine, as originally articulated by the Supreme Court, “forbid[s] federal courts [from] stay[ing] or enjoin[ing] pending state court proceedings.” Younger, 401 U.S. at 41. Roden argues that allowing ABC‘s breach of contract claim to proceed in federal court would be the functional equivalent of enjoining the ongoing post-judgment proceedings in Roden v. BBC and, thus, that the Younger doctrine required the federal court to abstain from considering, and thereby dismiss, Count I.
ABC counters that, although its breach of contract claim may create a potential for conflict with the enforcement of a single state court judgment, this is an insufficient basis for federal court abstention under Younger. Specifically, ABC argues thаt the district court incorrectly stated the Younger doctrine‘s elements and improperly expanded the “important state interest” and “conflict” elements to encompass minimal state interests and potential conflicts. After reviewing the district court‘s dismissal de novo, see Gilbertson v. Albright, 381 F.3d 965, 982 n. 19 (9th Cir. 2004) (en banc), we agree and hold that the district court had a “duty . . . to adjudicate [the] controversy properly before it,” Champion Int‘l Corp. v. Brown, 731 F.2d 1406, 1408 (9th Cir.1984), even if “adjudicating” this particular controversy would have amounted to little more than a ministerial entry of judgment based on the collateral estoppel effects of decisions already made by the California courts.
A. Abstention and the Younger Elements
The district court dismissed Count I after concluding that “[o]n balance, it appears that all three elements of Younger abstention are met.”
However, when a federal plaintiff seeks monetary damages (rather than injunctive or declaratory relief) in a case requiring abstention under Younger, dismissal is not the appropriate procedural remedy. See Gilbertson, 381 F.3d at 968. As the Gilbertson court held, although ”Younger principles apply to actions at law as well as for injunctive or declaratory relief . . ., federal courts should not dismiss actions where damages are at issue; rather, damages actions should be stayed until the state proceedings are completed.” Id. (emphasis added). Accordingly, even if abstention under Younger were required as to Count I, the district court should have stayed ABC‘s federal suit pending the conclusion of Roden v. BBC in the California court system, rather than dismissing Count I altogether.
In addition, balancing the Younger elements, rather than determining whether each element, on its own, is satisfied, conflicts with the requirement that federal courts abstain only in those cases falling within thе “carefully defined” boundaries of federal abstention doctrines. New Orleans Pub. Serv., Inc. v. Council of City of New Orleans, 491 U.S. 350, 359, 109 S.Ct. 2506, 105 L.Ed.2d 298 (1989) (“NOPSI“). As virtually all cases discussing these doctrines emphasize, the “limited circumstances in which . . . abstention by federal courts is appropriate . . . ‘remain the exception rather than the rule,‘” Green v. City of Tucson, 255 F.3d 1086, 1089 (9th Cir.2001) (en banc) (quoting NOPSI, 491 U.S. at 359), rev‘d on other grounds by Gilbertson, 381 F.3d at 968-69, and, thus, when each of an abstention doctrine‘s requirements are not strictly met, the doctrine should not be applied. See Middlesex County Ethics Comm. v. Garden State Bar Ass‘n, 457 U.S. 423, 431-34, 437, 102 S.Ct. 2515, 73 L.Ed.2d 116 (1982) (abstaining only after determining that each element of Younger doctrine was satisfied); NOPSI, 491 U.S. at 372-73 (not abstaining when one element of Younger doctrine was not satisfied).
Finally, there are actually four elements that must be satisfied before the Younger doctrine requires abstention. The district court recognized only three of them, apparently taking cues from a number of our cases that have focused on only the three “Middlesex elements”8 and agreeing with Roden that, to the extent a fourth element ever existed, this court‘s en banc decision in Gilbertson did away with it. See Gilbertson, 381 F.3d at 968-69 (en banc) (“[W]e recede from our statements in Green v. City of Tucson, 255 F.3d 1086, 1098, 1102 (9th Cir.2001) (en banc), that direct interference is a threshold requirement, or element, of Younger
This is incorrect. As Gilbertson makes clear, while there are only three “threshold elements” to application of Younger, there is a vital and indispensable fourth element: the policies behind the Younger doctrine must be implicated by the actions requested of the federal court. In the language of the Gilbertson court:
If a state-initiated proceeding is ongoing, and if it implicates important state interests . . . , and if the federal litigant is not barred from litigating federal constitutional issues in that proceeding, then a federal court action that would enjoin the proceeding, or have the practical effect of doing so, would interfere in a way that Younger disapproves.
381 F.3d at 978 (emphases in original). Thus, once the three Middlesex elements are satisfied, the court does not automatically abstain, but abstains only if there is a Younger-based reason to abstain—i.e., if the court‘s action would enjoin, or have the practicаl effect of enjoining, ongoing state court proceedings. Id.9
Accordingly, abstaining under Younger as to Count I was proper only if all four Younger requirements were strictly satisfied. ABC concedes the first and third threshold elements, and we agree they were both met here: the post-judgment proceedings in Roden v. BBC were ongoing, and ABC had an opportunity to raise its federal claims in these state court proceedings.10 As to the second threshold element and the fourth element, however, we find that they were not met here and, thus, that Younger abstention was improper in this case.
B. Younger Abstention Improper Because No Important State Interest Implicated
The second threshold element of Younger is satisfied when “the State‘s interests in the [ongoing] proceeding are so important that exercise of the federal judicial power would disregard the comity between the States and the National Govеrnment.” Pennzoil Co. v. Texaco, Inc., 481 U.S. 1, 11, 107 S.Ct. 1519, 95 L.Ed.2d 1 (1987). The district court reasoned that, because California has an “admittedly . . . important interest in the enforcement of its judgment and orders,” and because resolving ABC‘s breach of contract claim in federal court could potentially create a conflict with the First Order (which partially resolved Roden‘s obligations under the
The Supreme Court has noted that states “have important interests in administering certain aspects of their judicial systems,” and that, in particular, states have an interest in “enforcing the orders and judgments of their courts.” Pennzoil, 481 U.S. at 12-13. Taken out of context, these statements suggest that California‘s interest in enforcing the judgment in this particular casе is of sufficient importance to meet Younger‘s second threshold element. But we have made it clear that “[t]he importance of the [state‘s] interest is measured by considering its significance broadly, rather than by focusing on the state‘s interest in the resolution of an individual case.” Baffert v. Cal. Horse Racing Bd., 332 F.3d 613, 618 (9th Cir.2003); see also Champion Int‘l, 731 F.2d at 1408 (“[A] challenge[ ] [to] only one . . . order, not the whole procedure” is “not a substantial enough interference with [a state‘s] administrative and judicial processes to justify abstention.“).
Accordingly, binding precedent prevents the court from finding that California‘s interest in enforcing this one particular judgment—as opposed to a state‘s wholesale interest in preserving its procedure for posting an appeal bond, see Pennzoil, 481 U.S. at 12-14, or its interest in retaining a particulаr contempt of court scheme, see Juidice v. Vail, 430 U.S. 327, 330, 335, 97 S.Ct. 1211, 51 L.Ed.2d 376 (1977)—qualifies as sufficiently “important” to satisfy Younger‘s second threshold element.
Cognizant of this reality, Roden argues that California‘s interest in adjudicating conflicts in a timely fashion—as evidenced by its express goal of resolving seventy-five percent of civil cases within a year of filing, see
While true, this is not the type of “important state interest” that animates the Younger abstention doctrine. The goal of Younger abstention is to avoid federal court interference with uniquely state interests such as preservation of these states’ peculiar statutes, schemes, and procedures. Roden cites no case, nor could he, holding that federal courts should abstain in favor of state courts when a universal judicial interest—such as the prompt resolution of cases—is at stake.12 Because neither California‘s interest in enforcement of a single state court judgment nor its interest in judicial efficiency is sufficiently important to satisfy Younger‘s second threshold element, the district court erred when it found this element satisfied.
C. Younger Abstention Improper Because Ongoing State Court Proceedings Would Not Be Actually or Effectively Enjoined
Although we would be obligated to find the district court‘s decision to abstain un-
Here, deciding Count I would neither enjoin, nor have the practical effect of enjoining, the post-judgment proceedings in California Superior Court; after all, Roden has not yet filed any post-judgment motion in California Superior Court disputing his obligation to repay the loan, and ABC has not yet filed a counterclaim in the state court proceedings attempting to enforce its right to receive repayment. Thus, the district court‘s finding of an abstention-worthy conflict based on a potential for conflict was erroneous.
Roden‘s counterargument—that the requisite “interference with ongoing state proceedings” occurs whenever the relief sought in federal court would, if entertained, likely result in a judgment whose preclusive effect would prevent the state court from independently adjudicating the issues before it—has also been rejeсted. As explained by this court in Green, 255 F.3d at 1097, rev‘d on other grounds by Gilbertson, 381 F.3d at 968-69:
[T]he possibility of a race to judgment is inherent in a system of dual sovereigns and, in the absence of “exceptional” circumstances, [Colo. River, 424 U.S. 800] at 818 [96 S.Ct. 1236, 47 L.Ed.2d 483 (1976)], that possibility alone is insufficient to overcome the weighty interest in the federal courts exercising their jurisdiction over cases properly before them.
Indeed, the Supreme Court has rejected the notion that federal courts should abstain whenever a suit involves claims or issues simultaneously being litigated in state court merely because whichever court rules first will, via the doctrines of res judicata and collateral estoppel, preclude the other from deciding that claim or issue. See Vendo Co. v. Lektro-Vend Corp., 433 U.S. 623, 641-42, 97 S.Ct. 2881, 53 L.Ed.2d 1009 (1977); Atl. Coast Line R.R. Co. v. Bhd. of Locomotive Eng‘rs, 398 U.S. 281, 295-96, 90 S.Ct. 1739, 26 L.Ed.2d 234 (1970). Kline v. Burke Const. Co., 260 U.S. 226, 43 S.Ct. 79, 67 L.Ed. 226 (1922); see also Noel v. Hall, 341 F.3d 1148, 1159 (9th Cir.2003); Bennett v. Medtronic, Inc., 285 F.3d 801, 806-07 (9th Cir.2002). Although abstention to avoid concurrent, duplicative litigation is available in some very limited circumstances—in particular, when the requested relief in federal court is a declaratory judgment, see Wilton v. Seven Falls Co., 515 U.S. 277, 115 S.Ct. 2137, 132 L.Ed.2d 214 (1995)—the general rule remains that stated in Kline, 260 U.S. at 230:
Each court is free to proceed in its own way and in its own time, without refer-
ence to the proceedings in the other court. Whenever a judgment is rendered in one of the courts and pleaded in the other, the effect of that judgment is to be determined by the application of the principles of res [judicata and collateral estoppel] by the court in which the action is still pending in the orderly exercise of its jurisdiction, as it would determine any other question of fact or law arising in the progress of the case.
Thus, as long as the action requested of the federal court—here, issuing an ordinary judgment requiring an individual to pay breach of contract damages—does not enjoin or “have the practical effect of” enjoining the ongoing state court proceedings—here, California‘s post-judgment proceedings in Roden v. BBC—then abstention is not warranted. See Gilbertson, 381 F.3d at 978. It is clear to us that retaining jurisdiction over, and proceeding with, Count I would not have enjoined or in any way impeded the ongoing litigation in Roden v. BBC. Rather, the Roden v. BBC proceedings would have been free to continue simultaneously with the federal suit, and ABC would have simply been bound by the rulings of the California state courts under the doctrine of collateral estoppel to the extent the state courts decided the relevant issues before the federal court did.14 Concurrent consideration, not аbstention, is the solution, and the district court therefore erred in finding that the potential conflict was one the Younger doctrine required the court to avoid. See Colo. River, 424 U.S. at 817-20.
For the reasons discussed above, the district court erred in dismissing Count I on the basis of Younger abstention. As the following two sections explain, although this court “may affirm on any basis supported by the record even if the district court did not rely on that basis,” Count I cannot be dismissed under either the Anti-Injunction Act,
II. Anti-Injunction Act, 28 U.S.C. § 2283
The Anti-Injunction Act prohibits federal courts from “grant[ing] an injunction to stay proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments.”
III. Rooker-Feldman Doctrine
“The Rooker-Feldman doctrine provides that federal district courts lack jurisdiction to exercise appellate review over final state court judgments.” Henrichs v. Valley View Dev., 474 F.3d 609, 613 (9th Cir.2007); see also Rooker v. Fid. Trust Co., 263 U.S. 413, 44 S.Ct. 149, 68 L.Ed. 362 (1923); D.C. Ct. App. v. Feldman, 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983). Roden argues that this doctrine prohibits the district court from entertaining ABC‘s breach of contract action because doing so would effectively reverse the California Superior Court‘s decision that it—not a federal court—would interpret and enforce the original judgment in Roden v. BBC.
Roden‘s argument is incorrect and demonstrates a misunderstanding of the Rooker-Feldman doctrine. ABC did not ask the district court to interpret or enforce the Roden v. BBC judgment, nor did it seek to reverse any of the Califоrnia Superior Court‘s decisions; indeed, Count I makes no mention of the state court‘s Judgment whatsoever. Rather, the most ABC has asked a federal court to do is redress an injury (i.e., its alleged loss of $337,500 plus interest) that the California court has chosen not to redress.17 As this court recently explained in Henrichs, 474 F.3d at 614, “[p]reclusion, not Rooker-Feldman, applies when ‘a federal plaintiff complains of an injury that was not caused by the state court, but which the state court has previously failed to rectify.‘” (quoting Noel v. Hall, 341 F.3d 1148, 1164 (9th Cir.2003)).
Thus, even if all of ABC‘s contentions with regard to its breach of contract claim had been resolved adversely to ABC in state court—a scenario belied by the First and Second Orders issued by the California Superior Court, which have both come out in ABC‘s favor with respect to Roden‘s obligations under the Loan Program—Rooker-Feldman would nоt bar ABC‘s federal claim; rather, res judicata or collateral estoppel would. Accordingly, this theory of dismissal is rejected, as well.
CONCLUSION
It appears that ABC‘s federal action is an attempt to secure a binding and enforceable court judgment requiring Roden to repay the $337,500 loan previously extended to him by BBC. Although most of
AFFIRMED IN PART; REVERSED AND REMANDED IN PART. Costs on appeal to Appellants.
FERGUSON, Circuit Judge, concurring:
This case concerns a district court‘s efforts to promote judicial economy and counter an apparent attempt at forum-shopping. Despite our appreciation of the district court‘s position and our frustration with the plaintiff‘s strаtegy, we are, as the majority explains, forced to reverse the decision below. I write separately to clarify what I understand to be the doctrinal conundrum before us. Ultimately, the problem of duplicative litigation will require legislative redress.
Younger v. Harris, 401 U.S. 37, 43-44, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971), reflects a “longstanding public policy against federal court interference with . . . state functions.” I agree with the majority that the principles of Younger do not apply to this case, where the only remaining claim in the federal forum concerns collection on a loan. However, in my view, our consideration of the duplicative state and federal proceedings would be incomplete without discussion of Colorado River Water Conserv. Dist. v. United States, 424 U.S. 800, 817-19, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976), which provides the only abstention-like1 doctrine founded primarily on the interest of judicial econоmy. See James C. Rehnquist, Taking Comity Seriously: How to Neutralize the Abstention Doctrine, 46 Stan. L. Rev. 1049, 1092 (1994); Rex E. Lee & Richard G. Wilkins, An Analysis of Supplemental Jurisdiction and Abstention with Recommendations for Legislative Action, 1990 BYU L. Rev. 321, 356-57 (1990).
Colorado River held that, even where a “case falls within none of the abstention categories, there are principles unrelated to considerations of proper constitutional adjudication and regard for federal-state relations which govern in situations involving the contemporaneous exercise of concurrent jurisdictions, either by federal courts or by state and federal courts. These principles rest on considerations of wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigаtion.” 424 U.S. at 817 (internal punctuation omitted) (quoting Kerotest Mfg. Co. v. C-O-Two Fire Equip. Co., 342 U.S. 180, 183, 72 S.Ct. 219, 96 L.Ed. 200 (1952)).
These factors appear to weigh against the exercise of federal jurisdiction in the case before us, but the Supreme Court‘s strict interpretation of Colorado River makes clear that the current doctrine cannot solve the problem we face. See Moses Cone, 460 U.S. at 25-26 (“[W]e emphasize that our task . . . is not to find some substantial reason for the exercise of federal jurisdiction by the district court; rather, the task is to ascertain whether there exist ‘exceptional’ circumstances, the ‘clearest of justifications,’ that can suffice under Colorado River to justify the surrender of that jurisdiction.“). “The issue . . . is not simply whether state court is a ‘better’ forum” to resolve the issues pending before the federal сourt. Travelers Indem. Co. v. Madonna, 914 F.2d 1364, 1369 (9th Cir.1990). Colorado River applies only in “exceptional cases,” and such cases are “exceedingly rare.” Smith v. Cent. Ariz. Water Conserv. Dist., 418 F.3d 1028, 1033 (9th Cir.2005). “[T]he [general] rule [remains] that the pendency of an action in the state court is no bar to proceedings concerning the same matter in the [f]ederal court having jurisdiction.” Colorado River, 424 U.S. at 817 (quotation and internal punctuation omitted). Because the case before the panel presents an ordinary contract dispute, I do not believe that Colorado River permits the district court to decline to exercise jurisdiction. See Travelers Indemn., 914 F.2d at 1369 (stay vacated where “ordinary contract and tort issues“); Neuchatel Swiss Gen‘l Ins. Co. v. Lufthansa Airlines, 925 F.2d 1193, 1195 (9th Cir. 1991) (stay vacated where “unexceptional commercial dispute“); but see Nakash, 882 F.2d at 1415 (affirming stay in trademark case); id. (stating that the language of “exceptional circumstances” and a “virtually unflagging obligation” “somеwhat overstates the law“).
Nonetheless, I question whether this outcome serves the principles underlying Colorado River. The Supreme Court‘s decision was based on “considerations of wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation.” 424 U.S. at 817. I appreciate the strict requirement that federal courts exercise their jurisdiction in federal question jurisdiction cases but am unconvinced of the value of this approach in diversity matters, particularly where a state suit was filed prior to a federal action.
Colorado River highlighted the factor of which court was first in time. Id. at 818. More recently, Moses Cone, 460 U.S. at 23-25, emphasized the significance of whether federal law provides the rule of decision on the merits. In my view, where a nearly
The procedural history of the instant matter provides just one example of the problems that remain unresolvable within our current statutory scheme. Roden filed a state action against AmerisourceBergen‘s predecessor in 1995. Five years later, after settlement and an appeals process, AmerisourceBergen attempted to remove the proceeding to federal court, alleging federal question jurisdiction. Finding no federal law claim, the district court remanded the action to the state forum. AmerisоurceBergen responded by initiating this federal lawsuit, which the district court then dismissed on the ground of Younger abstention.
The timing of these lawsuits makes us particularly sympathetic to the judicial economy concerns prioritized by the district court. I note that we could affirm the district court‘s decision to defer to the forum where the first suit was filed if that first court had been a federal court. When two cases involving the same parties and issues are filed in two different federal districts, the first-to-file rule permits the second district court to exercise its discretion to transfer, stay, or dismiss the second suit in the interests of efficiency and judicial economy. Cedars-Sinai Med. Ctr. v. Shalala, 125 F.3d 765, 769 (9th Cir.1997).
Awkwardly, it is only because the court presiding over Roden‘s lawsuit is a state court that we do not permit deference to it. Our reason is federal courts’ “virtually unflagging obligation to exercise the jurisdiction given them.” Holder, 305 F.3d at 867 (quoting Colorado River, 424 U.S. at 817). In the context of diversity cases such as this one, however, perhaps the obligation should be redefined.
As we recognized almost three decades ago,
The need for fashioning a flexible response to the issue of concurrent jurisdiction has become more pressing in this day of increasingly crowded federal dockets. . . . [I]ncreasing calendar congestion in the federal courts makes it imperative to avoid concurrent litigation in more than one forum whenever consistent with the rights of the parties. A court may choose not to exercise its jurisdiction when another court having jurisdiction over the same matter has entertained it and can achieve the same result.
Church of Scientology of Cal. v. U.S. Dep‘t of Army, 611 F.2d 738, 750 (9th Cir.1979) (quotation and internal punctuation omitted). That rationale applies today with equal, if not greater, force.
The majority is correct that current abstention doctrine mandates a reversal, but this case presents a problem that requires a larger solution. Although the Colorado River doctrine does not provide a basis for the dismissal below, its underlying principle of wise judicial administration counsels in favor of permitting a stay. The first-to-file rule, crafted in the interest of judicial economy, allows a federal district court to stay a proceeding where another matter involving the same issues and parties is already pending before a different district court. Similarly, where the first suit was filed in a state court and the second suit is a diversity jurisdiction case with no fеderal question at issue, I believe the federal court should maintain the discretion to stay its proceeding pending the outcome in the state forum. Absent legislation to that effect, however, I must concur.