Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_10-cv-00346/USCOURTS-casd-3_10-cv-00346-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1331 Fed. Question

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 1 - 10cv346-WQH-BLM

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

LUIS DEL RIO, Individually and on

Behalf of All Others Similarly Situated,

Plaintiffs,

CASE NO. 10cv346-WQH-BLM

ORDER

vs.

CREDITANSWERS, LLC,

Defendant.

HAYES, Judge:

The matter before the Court is Plaintiff’s Ex Parte Application for an Order Enjoining

Defendant from Further Proceeding in 416th District Court of Collin County, Texas, Case

Number 416-00625-2010, Alternatively, Motion for Temporary Stay (“Application for

Injunction”). (Doc. # 4).

I. Background

On February 11, 2010, Plaintiff Luis Del Rio (“Del Rio”) initiated this action by filing

a Complaint in this Court. (Doc. # 1). The Complaint alleges that Del Rio and Defendant

CreditAnswers, LLC (“CreditAnswers”), a “for-profit debt settlement company,” entered into

a “contract of adhesion” on April 20, 2008. (Doc. # 1 ¶¶ 21, 42). The Complaint asserts seven

causes of action: (1) violation of California Business and Professions Code § 17200; (2)

violation of the Consumer Legal Remedies Act, Cal. Civ. Code § 1770(a)(7), 1770(a)(19); (3)

violation of the Credit Repair Organizations Act, 15 U.S.C. § 1678; (4) intentional interference

with contractual relations; (5) tort in essence; (6) negligence per se; and (7) declaratory relief.

Case 3:10-cv-00346-WQH-BLM Document 9 Filed 04/01/10 Page 1 of 4
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 2 - 10cv346-WQH-BLM

The Complaint includes class action allegations related to three purported California classes.

On February 15, 2010, CreditAnswers filed a complaint against Del Rio in Texas state

court, seeking declaratory relief related to an alleged June 19, 2009 contract between Del Rio

and CreditAnswers. (Doc. # 4, Ex. A ¶ 8).

On February 17, 2010, Del Rio was personally served in the Texas case. (Id.)

On March 9, 2010, Del Rio filed a proof of service in this case, indicating that

CreditAnswers was served in this case on February 19, 2010. (Doc. # 3).

On March 9, 2010, Del Rio filed the Application for Injunction. (Doc. # 4). Del Rio

“requests this Court enjoin [CreditAnswers] from any further participation, prosecution or

proceeding in the Texas Case pursuant to this Court’s authority under the All-Writs Act and

the Anti-Injunction Act, or alternatively, for a temporary stay of the Texas Case so that the

Court may hear this cause on a regularly noticed motion....” (Doc. # 4 at 9). Del Rio contends

that this relief is appropriate because, by filing the Texas case, CreditAnswers “is intentionally

and wrongfully attempting to usurp this Court’s jurisdiction.” (Doc. # 4 at 5).

On March 11, 2010, CreditAnswers filed an opposition to the Application for

Injunction. (Doc. # 7). CreditAnswers contends that “no emergency exists to justify ex parte

relief” and “the Anti-Injunction Act prohibits the relief [Del Rio] seeks.” (Doc. # 7 at 2, 5).

II. Discussion

The All Writs Act allows federal courts to “issue all writs necessary or appropriate in

aid of their respective jurisdictions and agreeable to the usages and principles of law.” 28

U.S.C. § 1651. The All Writs Act is limited by the Anti-Injunction Act, which prevents a

federal court from enjoining the “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.” 28 U.S.C. § 2283. “The [Anti-Injunction] Act creates a presumption in favor of

permitting parallel actions in state and federal court.” Bennett v. Medtronic, Inc., 285 F.3d

801, 806 (9th Cir. 2002). “Rooted firmly in constitutional principles, the [Anti-Injunction] Act

is designed to prevent friction between federal and state courts by barring federal intervention

in all but the narrowest of circumstances. Accordingly, the limited exceptions to the

Case 3:10-cv-00346-WQH-BLM Document 9 Filed 04/01/10 Page 2 of 4
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 3 - 10cv346-WQH-BLM

Anti-Injunction Act will not be enlarged by loose statutory construction. Rather, any doubts

as to the propriety of a federal injunction against state court proceedings will be resolved in

favor of permitting the state courts to proceed, which means that we will uphold an injunction

only on a strong and unequivocal showing that such relief is necessary.” Sandpiper Vill.

Condo. Ass’n, Inc. v. Louisiana-Pacific Corp., 428 F.3d 831, 842 (9th Cir. 2005) (quotations

omitted).

The Application for Injunction is based upon the “necessary in aid of ... jurisdiction”

exception to the Anti-Injunction Act. 28 U.S.C. § 2283. This exception authorizes injunctive

relief “to prevent a state court from so interfering with a federal court’s consideration or

disposition of a case as to seriously impair the federal court’s flexibility and authority to decide

that case.” Atlantic Coast Line R.R. Co. v. Bhd. of Locomotive Eng’rs, 398 U.S. 281, 295

(1970). “This exception arose from the settled rule that if an action is in rem, the court first

obtaining jurisdiction over the res may proceed without interference from actions in other

courts involving the same res. Although the ... exception has since been expanded to include

some in personam actions, it remains that an injunction is justified only where a parallel state

action threatens to render the exercise of the federal court’s jurisdiction nugatory.” Sandpiper,

428 F.3d at 843-44 (quotations omitted); see also Bennett, 285 F.3d at 807 (“[I]njunctions are

permitted where an in personam action bears substantial similarity to an in rem action.”)

(citing U.S. v. Alpine Land & Reservoir, 174 F.3d 1007, 1013-14 (9th Cir. 1999) (water rights

sufficiently similar to in rem actions)). “[T]he general rule is still that where a suit is strictly

in personam there is no objection to a subsequent action in another jurisdiction, either before

or after judgment, although the same issues are to be tried and determined, because the

subsequent action neither ousts the jurisdiction of the court in which the first suit was brought,

nor does it delay or obstruct the exercise of that jurisdiction, nor lead to a conflict of authority

where each court acts in accordance with the law.” Sandpiper, 428 F.3d at 844 (quotation

omitted).

In Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998), the Ninth Circuit upheld

an injunction barring a federal class member from pursuing a state class action involving

Case 3:10-cv-00346-WQH-BLM Document 9 Filed 04/01/10 Page 3 of 4
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 4 - 10cv346-WQH-BLM

claims that were similar to those raised in a nationwide class action that was nearing resolution.

See id. at 1025. The Hanlon “decision clearly recognized that a competing state class action

covering a portion of the federal class posed a significant danger to the delicate and transitory

process of approving a settlement agreement, and thereby threatened the district court’s ability

to resolve the litigation.” Sandpiper, 428 F.3d at 845. Similarly, in In re Diet Drugs, 282 F.3d

220 (3d Cir. 2002), the court affirmed an order enjoining a parallel state action relying upon

the “necessary in aid of ... jurisdiction” exception. In that case, as in Hanlon, the federal

nationwide class action was nearing settlement at the time the state action was filed. See id.

at 237. “In light of the sensitive stage of the federal litigation, the Third Circuit reasoned that

the state court action ‘might interfere with the District Court’s oversight of the settlement at

that time, given the careful balancing it embodied’ and, therefore, posed ‘a serious threat to the

District Court’s ability to manage the final stages of this complex litigation.’” Sandpiper, 428

F.3d at 845 n.22 (quoting In re Diet Drugs, 282 F.3d at 236-37).

Del Rio has not shown that this action is in a “sensitive stage,” id., or that this in

personam action “bears substantial similarity to an in rem action,” Bennett, 285 F.3d at 807.

The Complaint was only recently served, and CreditAnswers has yet to file a response. Del

Rio has failed to make a “strong and unequivocal showing” that this situation falls outside “the

general rule ... that where a suit is strictly in personam there is no objection to a subsequent

action in another jurisdiction.” Sandpiper, 428 F.3d at 842, 844 (quotation omitted). Based

upon the current record, the Court concludes that injunctive relief is not warranted.

III. Conclusion

Plaintiff’s Ex Parte Application for an Order Enjoining Defendant from Further

Proceeding in 416th District Court of Collin County, Texas, Case Number 416-00625-2010,

Alternatively, Motion for Temporary Stay is DENIED. (Doc. # 4).

DATED: April 1, 2010

WILLIAM Q. HAYES

United States District Judge

Case 3:10-cv-00346-WQH-BLM Document 9 Filed 04/01/10 Page 4 of 4