Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_05-cv-02556/USCOURTS-caed-2_05-cv-02556-5/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

---

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 This motion was determined to be suitable for decision *

without oral argument. L.R. 78-230(h).

1

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

ECO RESOURCES, INC., a Texas )

corporation, )

) 2:05-cv-2556-GEB-DAD

Counter-claimant, )

)

v. ) ORDER*

)

CITY OF RIO VISTA, a California )

municipality, )

) 

Counter-defendant. )

)

The City of Rio Vista (“the City”) moves to dismiss or stay

this action. ECO Resources, Inc. (“ECO”) opposes the motion.

BACKGROUND

On October 30, 2003, the City and ECO entered into a

contract entitled “City of Rio Vista Water and Wastewater System

Service Contract” (“the Contract”), wherein ECO agreed to furnish

services necessary to operate and maintain the City’s wastewater and

water treatment facilities. After the Contract was executed,

disagreements arose between the parties, which resulted in the City

Case 2:05-cv-02556-GEB -DAD Document 48 Filed 07/17/06 Page 1 of 6
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

cancelling the Contract and replacing ECO with a third party on

August 1, 2005. 

On November 10, 2005, the City filed suit against ECO and

Steven Richardson, an employee of ECO, in Solano County Superior Court

alleging various claims concerning ECO’s management, operation, and

maintenance of certain wastewater facilities under the Contract. ECO

and Richardson removed the suit to federal court on December 14, 2005,

based on diversity of citizenship. After removal, ECO filed

counterclaims against the City for breach of contract, indemnity,

declaratory relief, trade libel, and defamation. 

The City subsequently filed a motion to remand the entire

action based on lack of subject matter jurisdiction. The portion of

the motion seeking to remand the City’s complaint was granted because

complete diversity of citizenship was lacking. However, the motion

did not affect ECO’s counterclaims against the City since diversity

jurisdiction exists. 

The City now moves for a stay or dismissal of ECO’s

counterclaims for non-declaratory relief under the Colorado River

abstention doctrine. The City also moves for a stay or dismissal of

ECO’s counterclaim for declaratory relief under the broader abstention

standard articulated in Brillhart v. Excess Insurance Company, 316

U.S. 491 (1942). The motion under the Colorado River abstention

doctrine will be addressed first.

DISCUSSION

I. Colorado River Abstention Doctrine

The Colorado River abstention doctrine is based on

principles of federalism, comity, and conservation of

judicial resources. It represents an “extraordinary

and narrow exception” to the “virtually unflagging

obligation of the federal courts to exercise the

jurisdiction given them.” The Supreme Court has not

Case 2:05-cv-02556-GEB -DAD Document 48 Filed 07/17/06 Page 2 of 6
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

prescribed a “hard and fast rule” governing the

appropriateness of Colorado River abstention, but it

has set forth six factors that may be considered and

weighed in determining whether exceptional

circumstances exist that would permit a district court

to decline exercising jurisdiction: (1) assumption by

either court of jurisdiction over a res; (2) the

relative inconvenience of the forums; (3) the avoidance

of piecemeal litigation; (4) the order in which

jurisdiction was obtained by the concurrent forums; (5)

whether and to what extent federal law provides the

rules of decision on the merits; and (6) the adequacy

of the state proceedings in protecting the rights of

the party invoking federal jurisdiction.

Black Sea Investment, Ltd. v. United Heritage Corp., 204 F.3d 647 (5th

Cir. 2000) (citations omitted). In assessing whether a factor

balances in favor of or against abstention, “[a]ny doubt as to whether

a factor exists should be resolved against [abstention] . . . .” 

Travelers Indem. Co. v. Madonna, 914 F.2d 1364, 1369 (9th Cir. 1990).

The City argues “exceptional circumstances” exist based on

four of the Colorado River abstention factors: (1) the state forum is

more convenient for the litigation; (2) the desirability of avoiding

piecemeal litigation; (3) the state court obtained jurisdiction first;

and (4) the controlling nature of state law in the pending action. 

(Mot. at 5-7.) ECO counters that none of these factors justify

abstention. (Opp’n at 9-17.)

A. Convenience of the State Forum

The City argues the geographic location of the state forum

is more convenient for the litigation, since the City is located only

twenty-five miles from the state courthouse, but is located

approximately fifty miles from the federal courthouse. (Mot. at 5.) 

This relative distance between the fora is “not sufficiently great [to

cause] this factor [to] point[] toward abstention.” Travelers Indem.

Co., 914 F.2d at 1368.

Case 2:05-cv-02556-GEB -DAD Document 48 Filed 07/17/06 Page 3 of 6
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

B. Avoiding Piecemeal Litigation

The City argues allowing ECO to continue litigating these

claims in federal court “will result in piecemeal litigation that will

waste the resources of all involved and may result in inconsistent

results.” (Mot. at 5.) “Piecemeal litigation occurs when different

tribunals consider the same issue, thereby duplicating efforts and

possibly reaching different results.” Am. Int’l Underwriters, Inc. v.

Cont’l Ins. Co., 843 F.2d 1253, 1258 (9th Cir. 1988). However,

abstention “is not warranted simply because related issues . . .

w[ill] be decided by different courts, or even because two courts 

. . . w[ill] be deciding the same issues. . . . [S]omething more than

a concern for judicial efficiency must animate a federal court’s

decision to give up jurisdiction.” Villa Marina Yacht Sales, Inc. v.

Hatteras Yachts, 915 F.2d 7, 16 (1st Cir. 1990). “A correct

evaluation of this factor involves considering whether exceptional

circumstances exist which justify special concern about piecemeal

litigation.” Travelers Indem. Co., 914 F.2d at 1369 (emphasis

added). This has not been shown by the City.

C. The Order in which Jurisdiction Was Obtained 

The City argues since the state court obtained jurisdiction

before the federal court, the factor concerning the order in which

jurisdiction was obtained favors abstention. (Mot. at 6-7.) ECO

counters, inter alia, that “this factor should be measured in terms of

how much progress has been made in each action, rather than the filing

date.” (Opp’n at 12.) The City concedes neither action “has . . .

progressed significantly . . . .” (Mot at 7.) 

This factor “should not be measured exclusively by which

[action] was filed first, but rather in terms of how much progress has

Case 2:05-cv-02556-GEB -DAD Document 48 Filed 07/17/06 Page 4 of 6
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

5

been made in the two actions.” Moses H. Cone Memorial Hosp. v.

Mercury Const. Corp., 460 U.S. 1, 21 (1983). “The mere existence of a

case on the state docket in no way . . . justif[ies] abstention.” 

Travelers Indem. Co., 914 F.2d at 1370 (citation and quotation marks

omitted). Rather, the City has the burden of showing that the state

proceeding is further along than the federal proceeding. The City has

not satisfied this burden.

D. Predominant Issues and Controlling Law

The City argues that since ECO’s counterclaims are based on

state law, abstention is appropriate so that a state court may decide

the issues. (Mot. at 7.) ECO rejoins that “only in ‘rare

circumstances [will] the presence of state law issues weigh in favor

of [the] surrender [of jurisdiction]” and “[t]here are no such ‘rare

circumstances’ present here.” (Opp’n at 13.) 

“‘[S]tate-law issues may weigh in favor of [abstention]’

only ‘in some rare circumstances.’” Travelers Indem. Co., 914 F.2d at

1370 (quoting Moses H. Cone, 460 U.S. at 26). “Since this case

involves routine issues of state law--[trade libel, defamation,] and

breach of contract--which the [C]ourt is fully capable of deciding,

there are no such ‘rare circumstances’ here.” Id. This factor has

not been shown to weigh in favor of abstention.

Since none of the factors advanced by the City favor its

motion under the Colorado River abstention doctrine, the motion is

denied.

II. Brillhart Abstention 

The City argues in a conclusory manner that ECO’s

counterclaim for declaratory relief should be dismissed or stayed

under Brillhart because “the Colorado River test . . . does not apply

Case 2:05-cv-02556-GEB -DAD Document 48 Filed 07/17/06 Page 5 of 6
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

6

where the Declaratory Judgments Act, 28 U.S.C. § 2201, is involved.” 

(Mot. at 4 (internal quotation marks and citation omitted).) ECO

counters that Colorado River applies and Brillhart is inapplicable

since ECO has brought counterclaims seeking both declaratory and nondeclaratory relief. (Opp’n at 17.) 

“A district judge is . . . entitled to disregard a ground

raised” for dismissal or abstention that has not been developed in a

motion. Nat’l Metalcrafters, Div. of Keystone Consol. Indus. v.

McNeil, 784 F.2d 817, 825 (7th Cir. 1986). Therefore, this part of

the motion is denied.

CONCLUSION

For the reasons stated, the City’s motion for a dismissal or

stay is denied.

IT IS SO ORDERED.

Dated: July 17, 2006

/s/ Garland E. Burrell, Jr.

GARLAND E. BURRELL, JR.

United States District Judge

Case 2:05-cv-02556-GEB -DAD Document 48 Filed 07/17/06 Page 6 of 6