Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alsd-1_05-cv-00321/USCOURTS-alsd-1_05-cv-00321-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 09:1 U.S. Arbitration Act

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1 Also before the Court are defendants’ Motion to Continue Any Pending Motion Until

the Court Determines Whether it Has Jurisdiction (doc. 12) and plaintiff’s Motion to Exceed Page

Limitations (doc. 15). In its discretion, the Court grants the Motion to Exceed Page Limitations and

will consider plaintiff’s filings in their entirety. As to the Motion to Continue, the parties’ briefs make

clear that the jurisdictional issue is an integral aspect of the Motion for Preliminary Injunction; therefore,

any ruling on the latter Motion must necessarily address the jurisdictional issue. That being the case, it

is unnecessary and impractical to “continue” a ruling on the Motion for Preliminary Injunction until

disposition of the jurisdictional issue, because both are inextricably intertwined and will be decided

concurrently. The Motion to Continue is therefore moot. Had defendants wished to present the

jurisdictional issue in a more procedurally straightforward fashion, they could have filed a motion to

dismiss on that basis. Defendants having chosen to raise their jurisdictional objection via an opposition

brief, the Court will decide that issue in the context of the Motion for Preliminary Injunction.

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

PATRIOT MANUFACTURING, INC., )

 )

Plaintiff, )

 )

v. ) CIVIL ACTION 05-0321-WS-M

 )

MICHAEL and KALIE DIXON, )

 )

Defendants. )

ORDER

This matter is before the Court on plaintiff’s Motion for Preliminary Injunction Pending

Resolution of Petition to Compel Arbitration (doc. 9). The Motion has been briefed and is now ripe for

disposition.1

I. Background.

This action stems from a civil action filed by Michael and Kalie Dixon (the “Dixons”) in the

Circuit Court of Clarke County, Alabama on or about April 26, 2005, styled Michael and Kalie

Dixon v. Patriot Homes of Alabama, Inc., et al., Case No. CV-05-074-B (the “State Court

Action”). The Dixons’ 31-page, 112-paragraph complaint purports to state a whopping 25 causes of

action against Patriot Homes of Alabama, Inc.; Cedar Ridge Homes, Inc.; and Southridge Homes, all

Case 1:05-cv-00321-WS-M Document 16 Filed 09/01/05 Page 1 of 22
2 Thankfully, this Court is not called upon to address the propriety of filing a 25-count

complaint in a dispute over a relatively straightforward mobile home sales transaction. See generally

Strategic Income Fund, L.L.C. v. Spear, Leeds & Kellogg Corp., 305 F.3d 1293, 1296 n.9 (11th

Cir. 2002) (“This court has addressed the topic of shotgun pleadings on numerous occasions in the

past, often at great length and always with great dismay.”).

3 Despite the federal cause(s) of action under the Magnuson-Moss Act, it appears that

neither Patriot nor Cedar Ridge ever sought to remove the State Court Action to federal court,

pursuant to 28 U.S.C. §§ 1331 and 1441.

4 The court file reflects that the Dixons were served with process on June 18, 2005, and

that their answers were therefore due on July 8, 2005. For reasons that are unclear, the Dixons have

never filed a responsive pleading pursuant to Rule 12, but have merely filed several legal memoranda

opposing Patriot’s requests for arbitration and injunctive relief. Such briefs cannot do service for a Rule

12 responsive pleading. Accordingly, defendants are ordered, on or before September 13, 2005, to

file a responsive pleading pursuant to Rule 12.

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arising from the Dixons’ purchase of an allegedly defective mobile home in January 2004.2 The parties

apparently are in agreement that the Dixons purchased the mobile home from a dealer named Cedar

Ridge Homes, Inc. (“Cedar Ridge”), and that the mobile home had been manufactured by Patriot

Manufacturing, Inc. (“Patriot”). According to the Dixons, the mobile home suffers from a plethora of

deficiencies, including structural and plumbing defects, cracked and warped walls, flooring defects,

electrical defects and ill-fitting doors and windows. The Clarke County Complaint alleges causes of

action against Patriot and Cedar Ridge on grounds of breach of warranty, negligence, fraud, and

violation of the Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301, et seq.3 The State Court Action

remains pending at this time.

On June 2, 2005, Patriot initiated this action against the Dixons by filing a Petition to Compel

Arbitration (doc. 1) in this District Court pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 1 et

seq.4 Cedar Ridge is not a party to this lawsuit. The Complaint asserts that federal jurisdiction is

proper pursuant to 28 U.S.C. § 1332, inasmuch as Patriot is an Indiana citizen for diversity purposes,

the Dixons are Alabama citizens, and the amount in controversy exceeds $75,000, exclusive of interest

and costs. Patriot maintains that the Dixons’ claims against it in the State Court Action are within the

scope of an enforceable arbitration agreement (the “Arbitration Agreement”) executed by the Dixons,

Case 1:05-cv-00321-WS-M Document 16 Filed 09/01/05 Page 2 of 22
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Patriot and Cedar Ridge in connection with the mobile home transaction. The Arbitration Agreement

states as follows:

“All disputes, claims or controversies of every kind or nature that may arise between or

among the Owner, Retailer, [or] Patriot ... shall be settled by binding arbitration

conducted pursuant to the provisions of 9 U.S.C. Section 1, et seq., and administered

by the American Arbitration Association (“AAA”) under its commercial Arbitration

Rules .... Without limiting the generality of the foregoing, it is the intention of the Owner,

the Retailer, and Patriot to resolve by binding arbitration all disputes, whether arising

out of tort, contract, or otherwise, arising from, concerning or related to the Home, its

design, sale, delivery, warranties, setup, repair, installation, manufacture, performance,

condition, or financing or any insurance obtained in connection with the Home, including

any dispute, controversy, claim or question of any nature whatsoever related to the

enforceability, validity, scope or interpretation of this Arbitration Agreement.”

(Petition, Exh. A, ¶ 2.)

On July 21, 2005, Patriot filed a Motion for Preliminary Injunction (doc. 9). The Motion

explains that the Dixons have pursued discovery in the State Court Action notwithstanding the

pendency of this action, and that Patriot has now filed a motion to stay in the State Court Action which

is set for hearing on September 6, 2005. In the interim, Patriot asks this Court to enter a preliminary

injunction barring the Dixons from litigating and/or engaging in discovery in the State Court Action

pending final resolution of the Petition to Compel Arbitration in federal court. In support of its Motion,

Patriot asserts that there is a substantial likelihood of success on the merits given the federal policy

favoring arbitration, that there is a substantial threat of irreparable injury if the injunction is denied

because Patriot may effectively waive its arbitration rights by participating in state court discovery, that

the threatened injury to Patriot outweighs the harm of an injunction to the Dixons, and that the public’s

interest would be promoted via such an injunction.

II. Analysis.

A. Rule 65 Standard.

To be eligible for preliminary injunctive relief under Rule 65, Fed.R.Civ.P., a plaintiff must make

a showing of each of the following elements: “(1) substantial likelihood of success on the merits; (2)

irreparable injury will be suffered unless the injunction issues; (3) the threatened injury to the movant

outweighs whatever damage the proposed injunction may cause the opposing party; and (4) if issued,

Case 1:05-cv-00321-WS-M Document 16 Filed 09/01/05 Page 3 of 22
5 The spatial and thematic primacy afforded the abstention argument in the Response is

curious given the Dixons’ contemporaneously filed motion urging the Court to decide the subject matter

jurisdiction issue first. Yet the jurisdiction issue appears as little more than an afterthought in the

Response, clearly subservient to the abstention point. The Court need not reconcile these mixed signals

because the subject matter jurisdiction issue will be considered at the outset of its evaluation of the

Motion for Preliminary Injunction.

6 The Dixons’ short Response purports to “adopt any and all previous pleadings and

briefs that have already been filed in response to [Patriot]’s pleadings heretofore filed in federal court.” 

(Response, at 2.) Such a sweeping statement would have the Court sift through dozens of pages of

briefing to hazard a guess as to which arguments the Dixons would rely on here. The Dixons’ approach

also contravenes instructions given in an Order (doc. 10) dated July 22, 2005, directing the Dixons “to

incorporate any relevant arguments from their earlier Memorandum by reference to category of

argument and appropriate page numbers from same.” (Id. (emphasis added).) The Dixons

disregard this directive at their peril.

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the injunction would not be adverse to the public interest.” McDonald's Corp. v. Robertson, 147 F.3d

1301, 1306 (11th Cir. 1998); see also Burk v. Augusta-Richmond County, 365 F.3d 1247, 1263

(11th Cir. 2004). “A preliminary injunction is an extraordinary and drastic remedy not to be granted

unless the movant clearly establishes the 'burden of persuasion' as to each of the four prerequisites.”

Four Seasons Hotels And Resorts, B.V. v. Consorcio Barr, S.A., 320 F.3d 1205, 1210 (11th Cir.

2003).

In their Response to the Motion for Preliminary Injunction (doc. 11), the Dixons eschew

traditional Rule 65 analysis in favor of two arguments. First, the Dixons maintain that the Circuit Court

of Clarke County “has jurisdiction over all parties and all issues” in the underlying State Court Action,

such that Patriot “lacks any basis to file any additional pleadings” in federal court. (Response, at 1.) 

Although this argument is inartfully expressed, the Court construes it as a request that the Court engage

in Colorado River abstention here.5 Second, the Dixons contend that federal subject matter

jurisdiction is lacking because there is no diversity of citizenship once the State Court Action

defendants’ citizenship is taken into consideration.6

B. Subject Matter Jurisdiction Issue.

As a threshold matter, defendants argue that the Motion for Preliminary Injunction should be

denied because federal jurisdiction is lacking.

Case 1:05-cv-00321-WS-M Document 16 Filed 09/01/05 Page 4 of 22
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1. Diversity Jurisdiction is Present.

Like any action filed in federal court, a complaint seeking to compel arbitration pursuant to the

Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. (“FAA”), is not cognizable in the absence of federal

subject matter jurisdiction. By its terms, the FAA allows a petition to enforce an arbitration agreement

to proceed in federal court only when, “save for such agreement, [the federal court] would have

jurisdiction under Title 28, in a civil action or in admiralty of the subject matter of a suit arising out of the

controversy between the parties.” 9 U.S.C. § 4. As early as 1978, the old Fifth Circuit recognized the

requirement that “petitions to compel arbitration, brought pursuant to Section 4 of the Arbitration Act, 9

U.S.C. § 4, allege an independent ground of jurisdiction.” Commercial Metals Co. v. Balfour,

Guthrie & Co., 577 F.2d 264, 268 (5th Cir. 1978). The Supreme Court has likewise held that

“Section 4 provides for an order compelling arbitration only when the federal district court would have

jurisdiction over a suit on the underlying dispute; hence, there must be diversity of citizenship or some

other independent basis for federal jurisdiction before the order can issue.” Moses H. Cone Memorial

Hosp. v. Mercury Const. Corp., 460 U.S. 1, 25 n.32, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). The

Eleventh Circuit has consistently adhered to this bedrock jurisdictional principle. E.g., Household

Bank v. JFS Group, 320 F.3d 1249, 1253 (11th Cir. 2003); Boyd v. Homes of Legend, Inc., 188

F.3d 1294, 1298 n.8 (11th Cir. 1999); Tamiami Partners, Ltd. v. Miccosukee Tribe, 177 F.3d

1212, 1222 (11th Cir. 1999); MS Dealer Service Corp. v. Franklin, 177 F.3d 942, 945 (11th Cir.

1999); First Franklin Financial Corp. v. McCollum, 144 F.3d 1362, 1363 (11th Cir. 1998); Baltin

v. Alaron Trading Corp., 128 F.3d 1466, 1469 (11th Cir. 1997).

Recognizing the need for an independent basis of jurisdiction, Patriot invokes diversity

jurisdiction pursuant to 28 U.S.C. § 1332, which provides subject matter jurisdiction “where the matter

in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between ...

citizens of different states.” Id. On its face, the Petition to Compel Arbitration alleges complete

diversity of citizenship as between Patriot (an Indiana citizen) and the Dixons (Alabama citizens), and

asserts that the “amount in controversy exceed[s] the sum of $75,000, exclusive of interest and costs.” 

(Petition, ¶ 3.) The Dixons do not dispute these jurisdictional facts; as such, it is plain that subject

Case 1:05-cv-00321-WS-M Document 16 Filed 09/01/05 Page 5 of 22
7 This argument should have been presented not as an objection to the Petition or in an

opposition brief to the Motion for Preliminary Injunction, but rather as a Motion to Dismiss pursuant to

Rule 12(b)(7), Fed.R.Civ.P. Because the issue has been briefed by both sides and because Patriot has

not challenged the manner in which the Dixons raised their objection, the Court will consider this Rule

12(b)(7) argument, notwithstanding the Dixons’ failure to present it in a procedurally proper manner.

-6-

matter jurisdiction lies pursuant to § 1332. See Franklin, 177 F.3d at 945 (where petition to compel

arbitration alleged, and defendant did not dispute, that petitioner and respondent were of diverse

citizenship and amount in controversy exceeded $75,000, “[t]hat plainly satisfies 28 U.S.C. § 1332’s

demands”) (citation omitted).

Despite the complete diversity between the parties named in the Petition, the Dixons insist that

diversity jurisdiction is lacking because Cedar Ridge (which is not a named party in this action) is a

party in the State Court Action and is nondiverse as to the Dixons. Whether diversity of citizenship

exists or not in the State Court Action, and whether that action would be removable, are of no

consequence to the presence or absence of subject matter jurisdiction here. See McCollum, 144 F.3d

at 1363 (“As a matter of both § 1332’s language and common sense, whether another action is

removable or not does not affect jurisdiction in this, an independent action” to compel arbitration);

Franklin, 177 F.3d at 945 (declining to modify or reverse McCollum on this point). There can be no

doubt that the face of the Complaint properly invokes federal jurisdiction on the basis of diversity of

citizenship.

2. Application of Rule 19 to Cedar Ridge.

Alternatively, the Dixons contend that this action should be dismissed pursuant to Rule 19,

Fed.R.Civ.P., because of an indispensable party whose presence would destroy diversity jurisdiction.7

In particular, the Dixons point to Cedar Ridge, whom they identify as an Alabama citizen and therefore

non-diverse from the Dixons. Cedar Ridge is not a party here. Nonetheless, the Dixons maintain that

Cedar Ridge is indispensable to Patriot’s Petition because Cedar Ridge was a signatory to the

Arbitration Agreement. Because Cedar Ridge must be joined but such joinder would destroy diversity

jurisdiction, the Dixons argue, dismissal of this action is required. See Doctor’s Associates, Inc. v.

Distajo, 66 F.3d 438, 445 (2nd Cir. 1995) (“Where joinder of a party would destroy subject matter

Case 1:05-cv-00321-WS-M Document 16 Filed 09/01/05 Page 6 of 22
8 A missing party’s status as a joint tortfeasor does not automatically render it a

necessary party. See Temple v. Synthes Corp., 498 U.S. 5, 7, 111 S.Ct. 315, 112 L.Ed.2d 263

(1990) (“It has long been the rule that it is not necessary for all joint tortfeasors to be named as

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jurisdiction, the court must dismiss the action if that party is indispensable to the litigation.”) (citations

omitted).

In evaluating a claim that a federal action must be dismissed because of an absent indispensable

party, the Eleventh Circuit has devised the following test:

“First, the court must ascertain under the standards of Rule 19(a) whether the person in

question is one who should be joined if feasible. If the person should be joined but

cannot be (because, for example, joinder would divest the court of jurisdiction) then the

court must inquire whether, applying the factors enumerated in Rule 19(b), the litigation

may continue.”

Focus on the Family v. Pinellas Suncoast Transit Authority, 344 F.3d 1263, 1280 (11th Cir. 2003)

(citations omitted). Stated differently, the first prong of the test is whether the missing party is

“necessary” pursuant to the factors set forth in Rule 19(a). If so and if that party cannot be joined, the

analysis moves to the second part, namely, whether that party is also “indispensable” pursuant to the

factors set forth in Rule 19(b). See National Union Fire Ins. Co. v. Rite Aid of South Carolina,

Inc., 210 F.3d 246, 249 (4th Cir. 2000). Only if the missing party who cannot be joined is both

“necessary” and “indispensable” under the Rule 19 analysis is dismissal proper. In light of these

authorities, the Court will analyze the Dixons’ Rule 19 argument by, first, determining whether Cedar

Ridge is a party that “should be joined” and, second, if so, determining whether the litigation may

continue in its absence.

a. Rule 19(a) Analysis.

In assessing whether a particular person “should be joined,” Rule 19(a) counsels that a party is

“necessary” only under the following circumstances: (i) “in the person’s absence complete relief cannot

be accorded among those already parties,” (ii) disposition of the case in the person’s absence may “as

a practical matter impair or impede the person’s ability to protect” his interest, and (iii) such disposition

may “leave any of the persons already parties subject to a substantial risk of incurring double, multiple,

or otherwise inconsistent obligations.” Id.8

Case 1:05-cv-00321-WS-M Document 16 Filed 09/01/05 Page 7 of 22
defendants in a single lawsuit .... The Advisory Committee Notes to Rule 19(a) explicitly state that a

tortfeasor with the usual ‘joint-and-several’ liability is merely a permissive party to an action against

another with like liability.”) (citations omitted); United Benefit Life Ins. Co. v. Collins, 2001 WL

273902, *2 (N.D. Ala. Jan. 2, 2001) (“It is a general rule that the mere fact that parties are joint

tortfeasors or co-defendants does not render them indispensable.”).

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The Dixons assert that the Rule 19(a) test is satisfied in two respects. First, they contend,

Cedar Ridge’s status as a signatory to the Arbitration Agreement means that “full relief cannot be

accorded to the Dixons in its absence.” (Defendants’ Brief (doc. 8), at 7.) The Dixons elaborate that

their claims against Patriot and Cedar Ridge “are so intertwined that they are not severable,” and that

“the Arbitration Agreement covers all of the Dixons’ claims against both Patriot and Cedar Ridge.” (Id.

at 8.) But the Dixons have not explained, and the record does not establish, why full relief could not be

granted to them without Cedar Ridge’s presence. The Dixons seek no relief in this federal action. 

Indeed, the sole issue joined here is whether the Dixons must arbitrate their claims against Patriot. 

Regardless of how that narrow question is decided, the Dixons will in no way be precluded or

prevented from pursuing full relief against Cedar Ridge in the State Court Action, where the Dixons

have sued Cedar Ridge on two dozen theories of liability. See Franklin, 177 F.3d at 946 (confirming

that missing party is not rendered indispensable simply because state court plaintiff has couched

defendant and missing party as coconspirators and joint tortfeasors). The Court therefore rejects the

Dixons’ contention that they cannot receive full relief unless Cedar Ridge is a party in this case.

Second, the Dixons argue that Rule 19(a) is satisfied because of the “potential for inconsistent

judgments,” inasmuch as “the issue as to whether the Arbitration Agreement is valid and enforceable is

central to both the state and the federal court proceedings,” yielding a “high likelihood of incongruous

results.” (Defendants’ Brief, at 9.) There may be sound reasons for a single court to adjudicate a case

where there is a risk that one court might compel arbitration and another court might deem an

arbitration agreement invalid or unenforceable, thereby creating a factual and legal “whipsaw.” See

Owens-Illinois, Inc. v. Meade, 186 F.3d 435, 441 (4th Cir. 1999); see also PaineWebber, Inc. v.

Cohen, 276 F.3d 197, 201 (6th Cir. 2001) (deeming missing defendant a necessary party because

state court plaintiff would be faced with inconsistent procedural remedies if the federal and state courts

Case 1:05-cv-00321-WS-M Document 16 Filed 09/01/05 Page 8 of 22
9

In that regard, the Dixons have presented neither evidence nor argument to rebut

Patriot’s counsel’s representation that “the validity and applicability of arbitration ... is not an issue

presently in the state court proceeding.” (Plaintiff’s Brief (doc. 14), at 8-9.)

10 At most, the evidence is that Patriot (not Cedar Ridge) has filed a motion to stay the

State Court Action pending resolution of the arbitration issue in these proceedings. But there is no

evidence and no suggestion that any party has asked the state court to rule on the enforceability and

validity of the Arbitration Agreement.

-9-

reached different conclusions regarding whether arbitration clauses apply). But the Dixons have failed

to make any showing that such a risk exists here, and Meade is therefore inapposite. Indeed, they do

not suggest that they have requested injunctive or declaratory relief from the state court as to the

enforceability of the Arbitration Agreement, that Cedar Ridge has petitioned the state court to refer

their claims to arbitration, or that Cedar Ridge has even raised arbitration as an affirmative defense.9 Of

course, Cedar Ridge, like any party to an arbitration agreement, may waive its right to enforce such

agreement. See Ivax Corp. v. B. Braun of America, Inc., 286 F.3d 1309, 1315 (11th Cir. 2002)

(“an agreement to arbitrate, just like any other contract, may be waived”); Hales v. ProEquities, Inc.,

885 So.2d 100, 105 (Ala. 2003) (declaring it well settled under Alabama law that a party may waive

its right to arbitrate). On the record before it, the Court has no basis for concluding that the state court

will have occasion to decide the validity or enforceability of the Arbitration Agreement as between the

Dixons and Cedar Ridge; therefore, Cedar Ridge cannot be deemed a necessary party here. See

Legacy Wireless Services, Inc. v. Human Capital, L.L.C., 314 F. Supp.2d 1045, 1052 (D. Or.

2004) (missing signatory to arbitration agreement deemed not a necessary party because there is no

risk of another court applying arbitration clause in manner inconsistent with federal court ruling,

inasmuch as whether federal court plaintiff is subject to arbitration clause is not an issue pending in

another court).10

In any event, courts have been unsympathetic to a state court plaintiff’s objections that it is

prejudiced by having to litigate in multiple fora where, as here, the possibility of having to proceed

simultaneously in both state and federal court is a direct result of the Dixons’ decision to sue Patriot and

Cedar Ridge in state court, rather than to demand arbitration under the Arbitration Agreement. See

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Cohen, 276 F.3d at 202-03; Blimpie Int’l, Inc. v. Butterworth, 2005 WL 756218, *4 (S.D. Ind.

Mar. 9, 2005) (rejecting prejudice argument arising from parallel proceedings as to enforceability of

arbitration agreement where “any risk of parallel proceedings is attributable to [state court plaintiff]’s

state court complaint”). Finally, the unavoidable fact of the matter is that the Court can enter an order

compelling the Dixons to arbitrate their claims against Patriot, which is all the relief sought herein,

without the presence of Cedar Ridge. As such, Cedar Ridge cannot reasonably be deemed a

necessary party here. See generally Doctor's Assocs., 66 F.3d at 446 (holding, in resolving petition to

compel arbitration, that absent party was not "necessary" under Rule 19(a) because the district court

could "grant all the relief sought" by petitioner--"an order compelling arbitration"); Legacy, 314 F.

Supp.2d at 1051 (declaring that missing signatory to arbitration agreement was not necessary party

because sole issue before court was whether dispute must be arbitrated and adding missing signatory

would change neither the issue nor how it will ultimately be resolved); Private Business, Inc. v.

Alabama Exterior Supply, Inc., 2000 WL 33156437, *5 (S.D. Ala. Dec. 19, 2000) (reasoning that

Rule 19(a) threshold was not met because relief sought by federal court plaintiff, namely enforcement of

arbitration agreement as to that entity, “is not affected by the fact that the other state court defendants

are not joined”).

For the foregoing reasons, the Court concludes that the Dixons have failed to establish that

Cedar Ridge is a necessary party, for purposes of Rule 19(a).

b. Rule 19(b) Analysis.

Even if Cedar Ridge were deemed a necessary party pursuant to Rule 19(a), its non-diverse

status would not implicate jurisdictional concerns unless Cedar Ridge were also found to be an

indispensable party pursuant to the factors enumerated in Rule 19(b). Those factors include the

following: (a) whether a judgment rendered in Cedar Ridge’s absence might be prejudicial to existing

parties; (b) whether such prejudice could be lessened or avoided by protective provisions in the

judgment, the shaping of relief, or other measures; (c) whether judgment rendered in Cedar Ridge’s

absence will be adequate; and (d) whether Patriot will have an adequate remedy if the federal action is

dismissed for nonjoinder. Rule 19(b), Fed.R.Civ.P.; see also Laker Airways, Inc. v. British Airways,

Case 1:05-cv-00321-WS-M Document 16 Filed 09/01/05 Page 10 of 22
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PLC, 182 F.3d 843, 848 (11th Cir. 1999) (setting forth Rule 19(b) balancing test). Despite the precise

guidance of Rule 19(b), the Court must bear in mind that “[a] Rule 19(b) analysis is not mechanical;

rather it is conducted in light of the equities of the case at bar.” National Union, 210 F.3d at 252

(citation omitted).

The parties’ briefs have not directly addressed the Rule 19(b) factors; nonetheless, the Dixons’

position is evidently that they would be prejudiced if a judgment were rendered in Cedar Ridge’s

absence and that any such judgment would be inadequate. The Court disagrees. Irrespective of

whether the Dixons’ claims against Patriot are ordered to arbitration, which is the sole relief sought

herein, the Dixons will be able to proceed with their claims against Cedar Ridge in the State Court

Action. Based on the record before it, the Court cannot find that Cedar Ridge’s absence in this lawsuit

will work any harm on the Dixons, much less preclude entry of an adequate judgment as to Patriot’s

Petition to Compel Arbitration. To the extent that the Dixons contend that they will incur prejudice in

the form of a risk of inconsistent or incongruous results in this action and in the State Court Action, such

a concern is unwarranted and unavailing for the reasons set forth supra. There is simply no indication

that the Dixons face any real risk of the “whipsawing” phenomenon that so exercised the Meade court.

Even if there were some likelihood of inconsistent interpretations of the Arbitration Agreement

at the federal and state court levels, the Court agrees with the Sixth Circuit’s reasoning that the Dixons’

“fear that the federal and state courts will reach conflicting interpretations of the arbitration clauses does

not present the degree of prejudice necessary to support a conclusion that [Cedar Ridge] is an

indispensable party.” Cohen, 276 F.3d at 203; see also Snap-On Tools Corp. v. Mason, 18 F.3d

1261, 1266-67 (5th Cir. 1994) (rejecting state court plaintiff’s argument that state court defendant who

was missing from federal lawsuit was indispensable, even though arbitrability issue was common to all

potential defendants); Blimpie, 2005 WL 756218, at *4-5 (any prejudice to state court plaintiffs arising

from having to litigate claims against nondiverse defendant in state court while simultaneously arbitrating

claims against diverse defendant is minimal, and does not support conclusion that judgment is

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11 As Cohen so aptly put it, “the multiple proceedings and inconsistent results in state and

federal court that [state court plaintiff] seeks to avoid can occur whenever joint tortfeasors are not

parties to the same lawsuit. This form of prejudice, however, does not require a finding that joint

tortfeasors are necessary or indispensable parties. ... For the same reason, the potential prejudice that

[state court plaintiff] fears does not provide a basis for concluding that [missing defendant] is an

indispensable party.” Cohen, 276 F.3d at 204. The Cohen court correctly distinguished Meade on

the ground that the absent, non-diverse parties in Meade were state court plaintiffs, not state court

defendants, unlike in Cohen and the case at bar. According to Cohen, the Meade court’s

“whipsawing” concerns derived from the fact that nondiverse state court plaintiffs were not included in

the federal action, giving rise to potential inconsistencies as between the claims of diverse state court

plaintiffs (who were subject to the federal judgment) and nondiverse state court plaintiffs (who were

not). By contrast, in both Cohen and this case, the only reason why the state court plaintiff might face

inconsistent judgments is that it seeks to hold two parties to an arbitration agreement jointly and

severally liable. “As explained previously, Rule 19 was not designed to eliminate this possibility.” Id. at

205. The Court finds Cohen persuasive, and deems Meade distinguishable for the reasons expressed

by the Cohen court. See also Private Business, 2000 WL 33156437, at *4 (distinguishing Meade

because omitted parties in Meade were plaintiffs in state action while omitted parties in case at bar

were state court defendants, a distinction deemed significant because state court plaintiffs in Private

Business could incur no prejudice through missing party).

12 See generally Franklin, 177 F.3d at 946 (where both diverse and nondiverse state

court defendants were arguably covered by arbitration agreement, district court properly determined

that nondiverse state court defendant was not an indispensable party and that it could properly exercise

subject matter jurisdiction over diverse state court defendant’s petition to compel arbitration).

-12-

inadequate or that nondiverse defendant is indispensable party).11

In conducting the Rule 19 inquiry, the Eleventh Circuit has emphasized that “pragmatic

concerns, especially the effect on the parties and the litigation, control.” Focus on the Family, 344

F.3d at 1280 (citation omitted); see also In re Torcise, 116 F.3d 860, 865 (11th Cir. 1997) (similar);

Bio-Analytical Services, Inc. v. Edgewater Hospital, Inc., 565 F.2d 450, 452 (7th Cir. 1977) (“Rule

19 entails a pragmatic approach, focusing on realistic analysis of the facts of each case.”). “[A] court

does not know whether a particular person is ‘indispensable’ until it has examined the situation to

determine whether it can proceed without him.” Torcise, 116 F.3d at 866. Having performed the

case-specific, pragmatic inquiry directed by the Eleventh Circuit, the Court is of the opinion that Cedar

Ridge is not necessary to this litigation and, even if it were, Cedar Ridge is not indispensable, inasmuch

this litigation may properly continue without it.12 For that reason, the Dixons’ objections to this action

Case 1:05-cv-00321-WS-M Document 16 Filed 09/01/05 Page 12 of 22
13 In outlining the multifactor abstention test, both parties ignore Eleventh Circuit

precedent on the Colorado River doctrine in favor of a Sixth Circuit decision from 1998 that identified

a total of eight factors, including the relative progress of the state and federal proceedings, and the

presence or absence of concurrent jurisdiction. (Defendants’ Brief, at 10-11; Plaintiff’s Brief, at 11.) 

Absent any indication that these last two factors have been embraced by the Eleventh Circuit’s

formulation of the Colorado River test, the Court will not consider them separately here. In any event,

these two considerations are effectively subsumed in the existing six factors identified by the Eleventh

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predicated on subject matter jurisdiction and Rule 19 considerations are overruled.

C. Abstention Issue.

The Dixons’ next line of attack is that, even if jurisdiction is proper, the Court should abstain

from considering this matter because of the currently pending State Court Action. In making this

argument, the Dixons invoke the Colorado River doctrine of judicial economy. This doctrine

authorizes a federal district court to dismiss or stay an action where there is an ongoing parallel action in

state court, but only under “exceptional circumstances.” Moorer v. Demopolis Waterworks and

Sewer Bd., 374 F.3d 994, 997 (11th Cir. 2004); see also Ambrosia Coal and Const. Co. v. Pages

Morales, 368 F.3d 1320, 1328 (11th Cir. 2004) (“federal courts can abstain to avoid duplicative

litigation with state courts only in ‘exceptional’ circumstances”). Indeed, the Supreme Court has

framed this doctrine as an “extraordinary and narrow exception to the duty of a District Court to

adjudicate a controversy properly before it.” Colorado River Water Conservation Dist. v. United

States, 424 U.S. 800, 813, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976). In applying Colorado River, the

Court is mindful of the admonition that “[o]nly the clearest of justifications will warrant dismissal of the

federal action” under that doctrine. Ambrosia Coal, 368 F.3d at 1329 (citation omitted).

The Eleventh Circuit has identified six factors that district courts must consider in assessing

whether Colorado River abstention is proper, to-wit: (i) whether any court has assumed jurisdiction

over property, (ii) whether the federal forum is inconvenient, (iii) the potential for piecemeal litigation,

(iv) the temporal order in which each forum obtained jurisdiction, (v) whether state or federal law

governs, and (vi) whether the state court is adequate to protect the parties’ rights. See Ambrosia

Coal, 368 F.3d at 1331; McCollum, 144 F.3d at 1364-65 (citing Moses H. Cone, 460 U.S. at 19-

27).13 This Court “must weigh these factors with a heavy bias in favor of exercising jurisdiction.” 

Case 1:05-cv-00321-WS-M Document 16 Filed 09/01/05 Page 13 of 22
Circuit, and breaking them out as distinct factors would affect neither the substance nor the outcome of

the Court’s analysis.

14 The defendants cite Romine v. Compuserve Corp., 160 F.3d 337 (6th Cir. 1998), in

support of their position that this factor supports abstention. But the Romine decision explains that this

factor is “whether the state court has assumed jurisdiction over any res or property.” Id. at 341. The

Circuit Court of Clarke County unquestionably has not exercised in rem jurisdiction over the mobile

home; therefore, this factor weighs against abstention.

-14-

TranSouth Financial Corp. v. Bell, 149 F.3d 1292, 1295 (11th Cir. 1998). In applying them, the

Court is cognizant that no one factor is necessarily dispositive, and that “the factors must be considered

flexibly and pragmatically, not as a mechanical checklist.” Ambrosia Coal, 368 F.3d at 1332. The

Court will address each of these factors sequentially.

1. Assumption of Jurisdiction over Property.

The Dixons contend that this factor militates in favor of abstention because their mobile home

“is at issue, and the state court has already assumed jurisdiction over it.” (Defendants’ Brief, at 11.) 

This argument misapplies Colorado River. As the case law makes clear, this factor only applies when

one court or the other is asserting in rem jurisdiction over property. See Ambrosia Coal, 368 F.3d at

1332 (“Because the relevant cases are not proceedings in rem, neither court has jurisdiction over

property, and the first Colorado River factor does not favor abstention.”).14 In the absence of an

evidence that the state court has assumed in rem jurisdiction over the mobile home or any other

property, this factor does not support abstention.

2. Relative Convenience of Fora.

The Dixons argue that the Circuit Court of Clarke County is a more convenient forum to the

parties because “[u]nlike the federal district court, the state court is familiar with the underlying

proceeding and has the authority to dispose of all issues involved in the case.” (Defendants’ Brief, at

11.) Again, the Dixons misconstrue Colorado River, this time by incorrectly importing concepts

relating to other factors into the “relative convenience” analysis. The Eleventh Circuit has made clear

that courts considering this factor “should focus primarily on the physical proximity of the federal forum

to the evidence and the witnesses.” Ambrosia Coal, 368 F.3d at 1332; Romine v. Compuserve

Case 1:05-cv-00321-WS-M Document 16 Filed 09/01/05 Page 14 of 22
15 As the Seventh Circuit recently explained in a slightly different context, “[i]f there is to

be a duplicative proceeding exception, it is for Congress to add it to the FAA; it is not for us to create

because one party may have put itself in a bad position.” Reliance Ins. Co. v. Raybestos Products

Co., 382 F.3d 676, 680 (7th Cir. 2004). Furthermore, given the rarity of Colorado River abstention,

“[a]spects of the same case often proceed simultaneously in state and in federal court.” Id. at 679.

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Corp., 160 F.3d 337, 341 (6th Cir. 1998) (second factor counsels against abstention where both

federal and state courthouses are located in the same city). There is no dispute that the Dixons live in

Mobile County, Alabama, which is precisely where this District Court sits. If anything, this forum is

more convenient for the Dixons than that in the State Court Action, which requires them to trek to

Clarke County. Besides, a party cannot reasonably be heard to complain that a forum is inconvenient

when that forum is the very division of the very federal district where that party lives. This factor cuts

against abstention. 

3. Potential for Piecemeal Litigation.

The Eleventh Circuit has taken a dim view of efforts to secure Colorado River abstention in the

arbitration context based on the potential for piecemeal litigation. See McCollum, 144 F.3d at 1364

(explaining that federal proceeding to compel arbitration does not give rise to piecemeal litigation of

merits, and that if arbitration is granted, “that is piecemeal litigation that the parties and federal policy

have together made mandatory”); see also Moses H. Cone, 460 U.S. at 20-21 (opining that litigation

of arbitrability issue in federal rather than state court does not cause piecemeal resolution of underlying

dispute, and in any event the arbitrability issue is easily severable from the merits); Snap-On Tools, 18

F.3d at 1265 (“even if some piecemeal litigation does result, that sometimes is the inevitable result of a

congressional policy strongly favoring arbitration”); Blimpie, 2005 WL 756218, at *7 (“piecemeal

litigation may be the inevitable result of a federal policy favoring arbitration, and is not the result of a

choice between a federal and state forum”).15

The Dixons nonetheless urge the Court to find McCollum distinguishable because the

Arbitration Agreement in this case “purports to apply to all of the claims in the underlying state action,”

rendering “piecemeal litigation of the dispute ... completely unnecessary.” (Defendants’ Brief, at 12

n.3.) Given the posture of this dispute, however, piecemeal litigation is plainly necessary to effectuate

Case 1:05-cv-00321-WS-M Document 16 Filed 09/01/05 Page 15 of 22
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the federal policy favoring arbitration, irrespective of whether the relevant arbitration agreement covers

all or merely some of the claims pending in the state court litigation. The Dixons would have this Court

abdicate the arbitration determination to a state court, despite federal jurisdiction over same, simply

because a nondiverse state court defendant might also seek arbitration. Such an approach might

consolidate decisionmaking over the arbitration question in a single forum, but it would disserve the

federal policy favoring arbitration by cutting federal courts out of the loop. As one appellate court has

explained in circumstances substantially similar to those here, “the desire to avoid litigating a single issue

in multiple forums is insufficient to overcome the strong federal policy supporting arbitration.” Cohen,

276 F.3d at 207; Ambrosia Coal, 368 F.3d at 1333 (piecemeal litigation factor favors abstention only

where such piecemeal litigation would be “abnormally excessive or deleterious,” and mere fact that

state and federal cases will both have to deal with validity of agreement is insufficient). Contrary to the

Dixons’ position, there are no “unique circumstances” in this case warranting a departure from the

sound principles articulated in McCollum as to the “piecemeal litigation” factor. Thus, that factor does

not favor abstention.

4. Order in which Each Forum Obtained Jurisdiction.

Patriot filed its Petition to Compel Arbitration in federal court on June 2, 2005, some five

weeks after the Dixons initiated the State Court Action on April 26, 2005. The record does not reflect

when Patriot was served with process in the State Court Action; however, Patriot represents that it was

served on May 2, 2005, exactly one month before it filed its lawsuit here. Patriot further represents

that it had no prior indication that the Dixons would refuse to honor the Arbitration Agreement so as to

allow it a reasonable opportunity to file its Petition. (Plaintiff’s Brief, at 12.) Under similar

circumstances, courts have held that the fact that a state court obtained jurisdiction several weeks

before the federal court is insufficient to warrant abstention. In McCollum, for instance, the Eleventh

Circuit rejected a contention similar to the Dixons’ where the state court action predated its federal

counterpart by three weeks, reasoning that the petitioner could not have filed its action to compel

arbitration much earlier than it did and that the record did not reflect prior knowledge by the petitioner

that the respondent would not honor the arbitration agreement. 144 F.3d at 1365.

Case 1:05-cv-00321-WS-M Document 16 Filed 09/01/05 Page 16 of 22
16 In that regard, the Dixons’ representation that the State Court Action has “reached the

discovery stage” (Defendants’ Brief, at 14) is not compelling on the issue of the relative timing and

progress of the actions.

17 The existence of state law issues in tandem with federal law issues favors abstention

only where the questions of state law are so complex that a state court would be best suited to resolve

them. See Ambrosia Coal, 368 F.3d at 1334 (“no aspect of this case appears to render the presence

of state law, alongside federal claims, an arrow in the defendants’ abstention quiver”). No such

intricacies of state law are apparent here.

-17-

The critical insight here is that, contrary to the Dixons’ position, this factor is not a mere

mechanical assessment of the chronological order in which the two suits were initiated, but rather

focuses on “the progress of the proceedings and whether the party availing itself of the federal forum

should have acted earlier.” TranSouth, 149 F.3d at 1295; see also Central Reserve Life Ins. Co. v.

Kiefer, 211 F.R.D. 445, 449-50 (S.D. Ala. 2002) (timing and progress of concurrent suits weigh

against abstention where federal plaintiff commences federal action at nearly the earliest opportunity

after defendant refuses to arbitrate). The Dixons having made no showing that the State Court Action

has progressed materially16 or that Patriot could or should have filed its Petition to Compel Arbitration

sooner than it did, this factor does not weigh in favor of abstention.

5. Applicable Law.

The applicable law factor unambiguously favors the exercise of federal jurisdiction. “Here,

federal law provides the rule of decision because the petition has been brought solely under the FAA.” 

Central Reserve, 211 F.R.D. at 450; see also McCollum, 144 F.3d at 1365 (“The petition was

brought pursuant to the Federal Arbitration Act, 9 U.S.C. § 3-4, and thus any legal interpretation will

be of federal law.”); Snap-On Tools, 18 F.3d at 1266 (in action to compel arbitration, federal law

provides rule of decision on the merits, so this factor cuts against abstention). Although the Dixons

maintain that this factor is mitigated by the existence of concurrent federal and state jurisdiction and the

existence of state law issues as to enforceability of the Arbitration Agreement, the fact remains that

Patriot’s petition implicates federal law.17 As the Supreme Court has opined, “the presence of federallaw issues must always be a major consideration weighing against” abstention. Moses H. Cone, 460

U.S. at 23. Plainly, the federal rule of decision in this case disfavors abstention.

Case 1:05-cv-00321-WS-M Document 16 Filed 09/01/05 Page 17 of 22
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6. Adequacy of State Court to Protect Parties’ Rights.

Undoubtedly, Alabama courts can apply the FAA and enforce parties’ rights to arbitration

thereunder. See McCollum, 144 F.3d at 1365 (“the Alabama Supreme Court has accepted that an

Alabama court may compel arbitration under § 4, as long as the underlying transaction involves

interstate commerce”) (citing Old Republic Ins. Co. v. Lanier, 644 So.2d 1258, 1260 (Ala. 1994)). 

Given the availability of FAA relief at the state court level, there is no reason to believe that state court

remedies are inadequate to protect Patriot’s alleged right to have this matter submitted to arbitration. 

Therefore, this factor favors abstention. See Central Reserve, 211 F.R.D. at 450 (“Adequacy of state

court to protect rights is a factor slightly in favor of the Defendant.”); TranSouth, 149 F.3d at 1295

(state court’s ability to eventually grant complete relief weighs slightly in favor of abstention). 

Nonetheless, this factor by itself does not provide the requisite exceptional circumstances for Colorado

River abstention. See Cohen, 276 F.3d at 209; McCollum, 144 F.3d at 1365 (mere fact that

petitioner may receive relief at some point from state court on arbitration issue does not provide the

“clearest of justifications” necessary to warrant refusing to exercise jurisdiction).

7. Conclusion.

 Balancing these elements in toto, the Court cannot find the “extraordinary circumstance” or the

“clearest of justifications” required to warrant abstention. McCollum, 144 F.3d at 1365 (quoting

Moses H. Cone, 460 U.S. at 26-27). Indeed, Moses H. Cone teaches that where subject matter

jurisdiction exists, federal courts have a “virtually unflagging obligation” to exercise it. 460 U.S. at 15. 

The court’s 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 ... to justify

the surrender of that jurisdiction.” Id. at 25-26. This guidance in turn implies “that dismissal is

warranted in light of a concurrent state court action only when a balancing of relevant factors, heavily

weighted in favor of the exercise of jurisdiction, shows the case to be exceptional.” McCollum, 144

F.3d at 1364 (citations omitted). The Moses H. Cone factors do not show this case to be exceptional;

therefore, Colorado River abstention is unwarranted, and this Court will exercise its jurisdiction over

the Petition.

Case 1:05-cv-00321-WS-M Document 16 Filed 09/01/05 Page 18 of 22
18 As noted supra, despite being invited to do so, the Dixons have failed to tailor any of

their arguments to the context of the Motion for Preliminary Injunction, or to address the Rule 65

criteria in any respect. As a result, the Court is left to speculate as to how the Dixons’ objections to the

Petition (as set forth in their brief filed prior to submission of the Motion for Preliminary Injunction)

might translate into a Rule 65 analysis. Notwithstanding this oversight, the Court surmises that the

Dixons’ arguments are aimed primarily at the “substantial likelihood of success on the merits” element of

the four-pronged Rule 65 inquiry. See, e.g., McDonald's Corp. v. Robertson, 147 F.3d 1301, 1306

(11th Cir. 1998).

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D. Application of Rule 65 Framework.

Having dispatched the Dixons’ contentions that the Motion for Preliminary Injunction should not

be heard because either federal subject matter jurisdiction is lacking or Colorado River abstention is

warranted, the Court can finally turn to the merits of the Rule 65 Motion. The Motion posits two

different formulations of the relief sought: (a) “a temporary injunction of all claims against Patriot

Manufacturing, Inc., Patriot Homes of Alabama, Inc., and Southridge Homes, in the [State Court

Action] pending resolution of the Petition to Compel Arbitration”; and (b) “an order enjoining the

[Dixons] from engaging in discovery in the [State Court Action] until the parties have had an

opportunity to brief the issues in this matter and for this Court to issue a final order on arbitration.” 

(Motion (doc. 9), at 1, 4.)

The Dixons object to the Motion on grounds that the Agreement is unenforceable because it

allegedly fails to comply with the disclosure requirements of the Magnuson-Moss Act and because it

allegedly is unconscionable. (Defendants’ Brief, at 15-28.)18 The Court cannot even reach these issues

because a fundamental defect with Patriot’s Motion categorically bars the preliminary injunctive relief it

seeks.

Under any reasonable interpretation of the Motion for Preliminary Injunction, Patriot is asking

this Court to stay the State Court Action until such time as a final ruling on the Petition to Compel

Arbitration can be entered. Such a request is foreclosed by the prohibitions of the Federal AntiInjunction Act, 28 U.S.C. § 2283 (the “Act”). Pursuant to the Act, a federal court can enjoin a state

court proceeding only in the following narrowly circumscribed circumstances: (1) where there is an

express congressional authorization to enjoin state proceedings; (2) where an injunction is necessary to

Case 1:05-cv-00321-WS-M Document 16 Filed 09/01/05 Page 19 of 22
19 These exceptions derive directly from the language of the Act, which provides as

follows: “A court of the United States may not grant 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.” 28 U.S.C. § 2283.

20 According to the Eleventh Circuit, the “aid of jurisdiction” exception applies only if the

injunction is “necessary 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.” TranSouth, 149 F.3d at 1297 (quoting Atlantic Coast Line R.R. v. Brotherhood of

Locomotive Eng'rs, 398 U.S. 281, 295, 90 S.Ct. 1739, 26 L.Ed.2d 234 (1970)).

-20-

protect a judgment rendered by a federal court; or (3) where an injunction is necessary to aid the

federal court’s jurisdiction of the action. See TranSouth, 149 F.3d at 1296.19 “Those exceptions are

to be narrowly construed.” Id. This statute is consistent with the widely-recognized proposition that

“[w]hen there are concurrent jurisdiction state and federal proceedings arising out of the same

transaction or occurrence, ordinarily neither forum should interfere with the other’s exercise of

jurisdiction.” Id. at 1297.

In the arbitration context, however, federal courts granting petitions to compel arbitration have

repeatedly deemed a stay of parallel state court proceedings necessary under the “aid of jurisdiction”

exception.20 See, e.g., CitiFinancial, Inc. v. Lipkin, 143 F. Supp.2d 657, 663 (N.D. Miss. 2000)

(stay of state court action “is required to protect or effectuate the court’s judgment and order that the

controversy between the parties be submitted to arbitration”); We Care Hair Development, Inc. v.

Engen, 180 F.3d 838, 844 (7th Cir. 1999) (district court did not abuse discretion in staying state court

lawsuit because contrary ruling would have threatened validity of the district court’s order compelling

arbitration); Reliance Nat’l Ins. Co. v. Seismic Risk Ins. Svcs., Inc., 962 F. Supp. 385, 390-91

(S.D.N.Y. 1997) (finding that stay issued in conjunction with order compelling arbitration falls within

Act’s exceptions and enjoining state court proceeding to protect jurisdiction and to bar irreparable

injury); Kellogg, Brown & Root, Inc. v. Bragg, 250 F. Supp.2d 664, 669 (S.D. W.Va. 2003)

(ordering parties to proceed to arbitration and staying pending state court action); Central Reserve,

211 F.R.D. at 451 (staying parallel state court proceeding under “aid of jurisdiction” exception to Act).

In its brief in support of the Motion for Preliminary Injunction, Patriot invokes the “aid of

Case 1:05-cv-00321-WS-M Document 16 Filed 09/01/05 Page 20 of 22
-21-

jurisdiction” exception and relies on the Eleventh Circuit’s TranSouth decision in support of same. 

(Plaintiff’s Brief, at 15-16.) Unfortunately for Patriot, TranSouth’s holding unequivocally slams the

door on its ability to receive preliminary injunctive relief. In particular, the TranSouth panel held as

follows:

“If the district court orders arbitration, a stay of the state court proceedings might be

appropriate at that point because continued state court proceedings could jeopardize

the federal court’s ability to pass on the validity of the arbitration proceeding it has

ordered. However, we need not decide that question because the premised

condition, an order compelling arbitration, does not exist now. Therefore, the

‘aid of jurisdiction’ exception to the Anti-Injunction Act is inapplicable at

present.”

TranSouth, 149 F.3d at 1297-98 (emphasis added) (affirming district court’s denial of stay of state

court action pursuant to “aid of jurisdiction” exception); see also Zurich American Ins. Co. v.

Superior Court for State of California, 326 F.3d 816, 826-27 (7th Cir. 2003) (district court erred in

entering preliminary injunction enjoining concurrent state proceedings pending resolution of petition to

compel arbitration, where such injunction did not satisfy “aid of jurisdiction” exception to AntiInjunction Act without showing that state court was indifferent or hostile to FAA rights).

This is precisely the situation here. Patriot is requesting a preliminary injunction whose purpose

and effect could only be to stay the state court proceedings as between the Dixons and Patriot pending

final resolution of the Petition to Compel Arbitration. But TranSouth makes clear that the AntiInjunction Act bars any such injunction unless and until an order compelling arbitration has been

entered. By seeking to stay the State Court Action antecedent to disposition of the Petition to Compel

Arbitration, Patriot has placed cart before horse. The Anti-Injunction Act clearly forbids this Court

from staying state court proceedings based on a mere substantial likelihood that Patriot will succeed on

the merits, which is the most the Court could find in ruling on the pending Motion. Patriot having failed

to come forward with any authority construing the Anti-Injunction Act as authorizing a stay of a state

court action prior to final disposition of a petition to compel arbitration, and TranSouth being squarely

prohibitive of any such stay, the Court cannot grant the relief sought in the Motion for Preliminary

Injunction, irrespective of how the Rule 65 considerations play out. Because the requested injunction

Case 1:05-cv-00321-WS-M Document 16 Filed 09/01/05 Page 21 of 22
21 In that regard, the Court seeks to give effect to Congress’s clear intent in the FAA “to

move the parties to an arbitrable dispute out of court and into arbitration as quickly and easily as

possible.” Moses H. Cone, 460 U.S. at 22; see also McCollum, 144 F.3d at 1365 (noting the

“federal policy embodied in the FAA in favor of swift enforcement of arbitration agreements”).

-22-

would plainly violate the Anti-Injunction Act, the Motion for Preliminary Injunction must be denied.

III. Conclusion.

For all of the foregoing reasons, the Court overrules the Dixons’ objections to this action on

grounds of lack of subject matter jurisdiction, failure to join an indispensable party, and Colorado

River abstention. The Dixons’ Motion to Continue (doc. 12) is moot. Patriot’s Motion for Preliminary

Injunction (doc. 9) is denied pursuant to the Anti-Injunction Act. That said, the Court perceives no

reason why the Petition to Compel Arbitration cannot be finally resolved at this time.21 The parties

have extensively addressed the merits of the Petition already in connection with briefing the Motion for

Preliminary Injunction, and there do not appear to be any factual disputes requiring discovery,

evidentiary hearing or trial. Nonetheless, in an effort to ensure that the parties have had ample

opportunity to present all arguments and authorities they deem appropriate regarding the merits of the

Petition to Compel Arbitration, it is ordered that the parties may submit supplemental briefs, supported

by legal authority and exhibits as appropriate, on or before September 19, 2005. These supplemental

briefs should not be redundant of previous filings, but must be confined to newly raised issues and

arguments. In light of the considerable briefs already submitted, no further responses or replies are

authorized. The Dixons are also ordered to file a Rule 12 responsive pleading on or before

September 13, 2005. 

If the Court determines that oral argument is necessary, the parties will be notified and a hearing

will be scheduled. Otherwise, the Petition to Compel Arbitration will be taken under submission after

September 19, 2005.

DONE and ORDERED this 1st day of September, 2005.

s/ WILLIAM H. STEELE 

UNITED STATES DISTRICT JUDGE

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