Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_05-cv-00761/USCOURTS-caed-2_05-cv-00761-5/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Contract Dispute

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

EKLAND MARKETING COMPANY OF

CALIFORNIA, INC., 

NO. CIV. S-05-0761 FCD/GGH

Plaintiff,

v. MEMORANDUM AND ORDER

JAVIER ESTEBAN LOPEZ; VIVEROS

EL PINAR, S. COOP, a

cooperative organized under

the laws of Spain; and DOES 1-

100,

Defendants.

_____________________________/

----oo0oo----

This matter is before the court on defendants’ Javier

Esteban Lopez (“Lopez”) and Viveros El Pinar’s (“VEP”) motion to

stay the proceedings based upon the application of the

international abstention doctrine and the existence of a related

proceeding concurrently being litigated by the parties in Spain

(the “Spanish Action”). Plaintiff Ekland Marketing Company of

California, Inc. (“Ekland”) opposes the motion, asserting that

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1 Because oral argument will not be of material

assistance, the court orders this matter submitted on the briefs.

E.D. Cal. Local Rule 78-230(h).

2 The facts of this case, as alleged in the complaint and

set forth by plaintiffs in support of their opposition to

defendants’ motion to dismiss, are more fully set forth in the

court’s Memorandum and Order, filed September 29, 2006. (Docket

# 26).

2

international abstention doctrine does not provide for a stay of

this action. For the reasons set forth below,1 defendant’s

motion to stay is DENIED.

BACKGROUND

This case arises out of the alleged breach of contracts

relating to the production of strawberry plants.2 On or about

February 1, 2001, in Butte County, California, plaintiff and

defendant VEP entered into two Propagation Agreements. (Pl.’s

First Am. Compl. (Docket # 11), filed Dec. 29, 2005 (“FAC”), ¶

16). Plaintiff licensed the right to propagate, distribute, and

sell certain proprietary strawberry varieties derived from plant

breeding programs to defendants. (Id.) In addition, defendant

VEP agreed to follow certain agricultural practices of the

international strawberry industry. (Id. ¶ 17). In December

2002, Ekland and defendant Lopez met in San Francisco, California

to negotiate the expansion of their business dealings. (Pl.’s

Opp’n to Defs.’ Mot. to Stay (“Opp’n”), filed July 27, 2007, at

2). Ekland asserts that Lopez agreed to extend the Propagation

Agreements and also entered into two additional agreements called

Advanced Selection Contracts. (Id.) Under the Advanced

Selection Contracts, defendants agreed to evaluate advanced

selection cultivars of strawberries with the objective of

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determining the competitive characteristics and commercial

viability of these cultivars in Spain. (FAC ¶ 24).

Defendants continued to perform through 2003 under the

Propagation Agreements by accounting for and paying royalty fees

to plaintiff on strawberry varieties and cultivars produced. 

(Id. ¶ 29). However, plaintiff contends that at some point in

2004, defendants stopped paying royalties as required by the

Propagation Agreements and stopped reporting to Ekland as

required under the Advanced Selection Contracts. Plaintiff

asserts that based upon defendants failure to comply with the

terms of the applicable contracts, it terminated VEP’s exclusive

rights under the Advanced Selection Contracts and sought out

other growers in Spain.

On April 19, 2005, plaintiff filed suit in this court,

alleging breach of contract, breach of fiduciary duty, and

negligence. (Compl. (Docket # 1), filed Apr. 19, 2005). 

Plaintiff subsequently amended the complaint in December 2005,

alleging breach of the Propagation Agreement, breach of the

Advanced Selection Contract, breach of fiduciary duty,

negligence, declaratory relief, intentional interference with

contract, interference with prospective economic advantage, and

seeking preliminary and permanent injunctive relief. (FAC). On

May 26, 2005, VEP filed a complaint for damages against Ekland in

Spain, alleging that Ekland Marketing breached its contracts with

VEP by licensing other nurseries to produce and sell certain

types of strawberry plants in contradiction to the exclusive

license granted to VEP. (Defs.’ Mot. to Stay (“Mot. to Stay”),

filed July 13, 2007, at 2). 

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Defendants subsequently moved the court to dismiss

plaintiffs’ action for lack of personal jurisdiction and on forum

non conveniens grounds. As a basis for that motion, defendants

argued that a parallel proceeding was being litigated

concurrently by the parties in Spain. The court denied

defendants’ motion. (Mem. & Order (Docket # 26), filed Sept. 29,

2006). Defendants now seek to stay the action due to the pending

action in Spain. 

ANALYSIS

Defendants contend that this motion should be stayed

pursuant to the principles of the international abstention

doctrine. “This doctrine allows a court to stay or dismiss an

action where parallel proceedings are pending in the court of a

foreign nation.” Supermicro Computer, Inc. v. Digitechnic, S.A.,

145 F. Supp. 2d 1147, 1149 (N.D. Cal. 2001) (citing Schwarzer et

al., Federal Civil Procedure Before Trial, ¶ 2:1326.4 (2000)). 

This doctrine has been expressly adopted by the Eleventh and

Seventh Circuits, but has not been ruled on by the Ninth Circuit. 

See id.; Turner Entm’t Co. v. Degeto Film GmbH, 25 F.3d 1512,

1523 (11th Cir. 1994); Finova Capital Corp. v. Ryan Helicopters,

U.S.A. Inc., 180 F.3d 896, 900-01 (7th Cir. 1999).

To the extent that the Ninth Circuit would adopt the

international abstention doctrine, the parties advance and the

court agrees that the analysis should be guided by the principles

set forth by the Supreme Court in Colorado River Water

Conservation Dist. v. United States, 424 U.S. 800 (1976) (the

“Colorado River doctrine”). See Neuchatel Swiss Gen. Ins. Co. v.

Lufthansa Airlines, 925 F.2d 1193 (9th Cir. 1991) (vacating the

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district court’s stay of an action in deference to parallel

proceedings in Geneva, Switzerland pursuant to the Colorado River

doctrine). The Colorado River doctrine provides that abstention

from the exercise of jurisdiction is based upon “considerations

of [w]ise judicial administration, giving regard to conservation

of judicial resources and comprehensive disposition of

litigation.” Id. at 817. Such considerations are similar to the

concerns of international comity, judicial efficiency, and

fairness litigants upon which the international abstention

doctrine is rooted. See Supermicro, 145 F. Supp. 2d at 1149;

Schwarzer et al., Federal Civil Procedure Before Trial, ¶

2:1326.4. Moreover, the Ninth Circuit has stated that “the fact

that the parallel proceedings are pending in a foreign

jurisdiction rather than in a state court is immaterial.” 

Neuchatel, 925 F.2d 1193 (“We reject the notion that a federal

court owes greater deference to foreign courts than to our own

state courts.”). As such, the court analyzes defendants’ motion

to stay using the analytical framework applied to motions to stay

or dismiss pursuant to the Colorado River doctrine. See Finova,

180 F.3d at 898-99 (applying the factors used in a Colorado River

abstention analysis in determining whether international

abstention was applicable). 

“Abstention from the exercise of federal jurisdiction is the

exception, not the rule.” Colorado River, 424 U.S. at 813. 

“Generally, as between state and federal courts, the rule is that

‘the pendency of an action in the state court is no bar to

proceedings concerning the same matter in the Federal court

having jurisdiction.’” Id. at 817 (quoting McClellan v. Carland,

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217 U.S. 268, 282 (1910)). Therefore, the application of the

Colorado River doctrine can be justified “only in the exceptional

circumstances where the order to the parties to repair to the

State court would clearly serve an important countervailing

interest.” Id. at 813 (internal quotations omitted). As such,

“the circumstances permitting the dismissal of a federal suit due

to the presence of a concurrent state proceedings for reasons of

wise judicial administration are considerably more limited.” Id.

at 818. The Supreme Court has stated and the Ninth Circuit has

reiterated that absent such “‘exceptional circumstances,’ federal

courts have an obligation to exercise their jurisdiction

concurrently with other courts.” Neuchatel, 925 F.2d at 1194

(citing Colorado River, 424 U.S. at 818). 

Plaintiff argues that international abstention is

inappropriate in this case because the claims brought by

plaintiffs in the Spain litigation and the federal litigation are

not duplicative, and thus, the proceedings in Spain will not

resolve this action. The Supreme Court has set forth various

factors that the district court may consider when assessing the

appropriateness of dismissal in the face of concurrent

jurisdiction. These factors include (1) assumption by either

court of jurisdiction over the res or property at dispute in the

lawsuit; (2) the inconvenience of the federal forum, (3) the

desirability of avoiding piecemeal litigation, and (4) the order

in which jurisdiction was obtained by the concurrent forums. Id.

at 818. In Moses H., the Supreme Court also found relevant to

the inquiry (5) whether federal law provides the decision on the

merits, and (6) the probable inadequacy of the state-court

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proceeding to protect the parties’ rights. Moses H. Cone

Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 23,

26 (1983). However, the Supreme Court has noted that 

[a]n order granting a Colorado River stay . . .

“necessarily contemplates that the federal court will

have nothing further to do in resolving the case”

because a district court may enter such an order only

if it has full confidence that the parallel state

proceeding will “be an adequate vehicle for the

complete and prompt resolution of the issues between

the parties.” 

Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 277

(1988) (citing Moses H., 460 U.S. at 28). As such, the Ninth

Circuit has held that where there is “substantial doubt as to

whether the state proceedings will resolve the federal action,”

the district court is precluded from granting a stay pursuant to

the Colorado River doctrine. Intel Corp. v. Advanced Micro

Devices, Inc., 12 F.3d 908, 913 (9th Cir. 1993). This

consideration is dispositive. Id. Therefore, a stay order may

be entered only where it is clear that “the parallel state

proceeding will end the litigation.” Id. (citing Gulfstream, 485

U.S. at 277); see also Turner Entm’t, 25 F.3d at 1518 n.6

(applying the international abstention doctrine where the central

issue was the same in both cases); Finova, 180 F.3d at 898

(applying the international abstention doctrine where the

“granting of relief in one forum would dispose of the claims

raised in the other”).

In this case, the proceedings in Spain will not end

litigation of the issues raised in this federal litigation. The

complaint filed by VEP in the Spanish Action does not address the

Propagation Agreements and seeks only to enforce the Advanced

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Selection Contracts. (Ex. A to Decl. of Francis M. Goldsberry

III in Supp. of Mot. to Stay (“Goldsberry Decl.”), filed July 13,

2007). Ekland’s counterclaim in the Spanish Action seeks only a

judicial declaration of termination of the licenses issued to

VEP. (Decl. of Jose Massaguer in Opp’n to Mot. to Stay

(“Massaguer Decl.”), filed July 27, 2007, ¶ 11). Ekland does not

seek damages for breach of contract in Spain. (Id.) Nor does

the Spanish Action include Ekland’s claims for tortious

interference with contracts brought in this litigation. (Opp’n

at 5 n.2). As such, even if the court stayed the action in order

to allow the courts in Spain to resolve at least some of the

issues, there is a strong likelihood that this court would

subsequently have to resolve other related issues. If Ekland

prevailed in the Spanish Action, plaintiff’s tort claims as well

as their claims for damages would remain to be adjudicated by

this court. If VEP prevailed in the Spanish Action, plaintiff’s

tort claims as well as the breach of contract claims relating to

the Propagation Agreements would still remain to be adjudicated

by this court. 

The Ninth Circuit’s opinions in Smith v. Central Arizona

Water Conservation District, 418 F.3d 1029 (9th Cir. 2005), and

Intel Corp. v. Advanced Micro Devices, Inc., 12 F.3d 908 (9th

Cir. 1993), are helpful to the court’s analysis of the

applicability of an abstention doctrine to the facts of this

case. In Smith, the court found that the Colorado River doctrine

did not apply because, in the state court action, the plaintiffs

sought a determination of their rights under different contracts

than those at issue in the federal court action. 418 F.3d at

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3 However, even if the court were to address these

factors, the analysis would weigh against granting a stay in this

case. There is no property at issue, the relative convenience of

the forums does not necessarily favor litigation in Spain, the

court would have to engage in piecemeal litigation because

resolution of the Spanish Action is not determinative of the

resolution in this action, and this court obtained jurisdiction

prior to the Spanish court. 

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1033. As such, in Smith, the analysis of the merits in the

federal case would be different than the analysis of the merits

in the state case. In this case, VEP’s complaint in the Spanish

Action addresses the parties’ obligations under the Advanced

Selection Contracts, not the Propagation Agreements. Moreover,

plaintiff’s complaint in this action not only alleges breach of

contract claims, but also tort claims. Therefore, as in Smith,

the merits analysis in each action would differ. In Intel, the

Ninth Circuit held that abstention was not warranted because the

case could return to federal court, depending upon resolution of

an arbitration issue in state court. Similarly, in this case,

whether the Spanish Action is resolved in favor of VEP or Ekland,

issues would remain for this court to adjudicate. 

Because there is “substantial doubt as to whether the state

proceedings will resolve the federal action,” the court is

precluded from granting defendants’ motion to stay the

proceedings pursuant to the international abstention doctrine. 

See Intel Corp. v. Advanced Micro Devices, Inc., 12 F.3d 908, 913

(9th Cir. 1993). Because the Ninth Circuit has found that this

factor is dispositive, “it is unnecessary for [the court] to

weigh the other factors included in the [] analysis. See id. at

913 n.7.3

///// 

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4 In their submissions, the parties dispute the proposed

timelines relating to both this litigation and the Spanish

Action. However, the court does not address this issue herein as

it is irrelevant to whether the court should decline to exercise

jurisdiction pursuant to the international abstention doctrine.

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CONCLUSION

Applying the principles of the Colorado River doctrine,

international abstention is a narrow exception, appropriate only

in extraordinary circumstances. See Fireman’s Fund, 87 F.3d at

297; O’Neill v. United States, 50 F.3d 677, 688 (9th Cir. 1995). 

Such extraordinary circumstances are not present in this case. 

See Neuchatel, 925 F.2d at 1195 (“This case involves ordinary

contract and tort issues and is thus unlike Colorado River where

important real property issues were at stake and where there was

a substantial danger of inconsistent judgments.”). As such, the

court cannot surrender its “obligation to exercise [its]

jurisdiction concurrently with other courts.” Id. at 1194. 

Therefore, defendants’ motion to stay the action pending

resolution of the Spanish Action is DENIED.4 The parties are

directed to file a revised Joint Status Report within twenty (20)

days of the issuance of this order. 

IT IS SO ORDERED.

DATED: August 8, 2007

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