Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alsd-2_06-cv-00237/USCOURTS-alsd-2_06-cv-00237-0/pdf.json

Parties Involved:
John R. Stabler
Plaintiff
Transportation Insurance Co.
Defendant

Document Text:

1 Under the E-Government Act of 2002, this is a written opinion and therefore is

available electronically. However, it has been entered only to decide the motion or matter

addressed herein and is not intended for official publication or to serve as precedent.

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

NORTHERN DIVISION

JOHN R. STABLER, )

 )

Plaintiff, )

 )

v. ) CIVIL ACTION 06-0237-WS-M

 )

TRANSPORTATION INSURANCE )

COMPANY, )

 )

Defendant. )

ORDER

This matter is before the Court on plaintiff John Stabler’s Motion to Remand (doc. 9) this

action to the Circuit Court of Marengo County, Alabama. The Motion has been briefed and is

ripe for disposition.1

I. Background.

This case springs from a tangled web of litigation that encompasses multiple actions in

both the Circuit Court of Marengo County, Alabama and this District Court. A brief overview of

these intertwined actions will be helpful in placing this piece of the dispute in its proper context.

On December 26, 2002, plaintiff John R. Stabler (“Stabler”) sustained injuries and his coworker, Robert Lee Calhoun (“Calhoun”), was killed in an explosion at the Linden Lumber

Company, Inc. (“Linden”) plant in Marengo County, Alabama, while they were performing

assigned duties for Linden. Stabler proceeded to file suit against Linden in Marengo County

Circuit Court for recovery of workers’ compensation benefits arising from the explosion, and

later amended his complaint to assert negligence and wantonness claims against Forest Products

Engineering, Inc. (“Forest”), based on Forest’s alleged role as a general advisor and its alleged

Case 2:06-cv-00237-WS-M Document 15 Filed 07/24/06 Page 1 of 17
2 Calhoun’s widow filed a parallel lawsuit against Linden and Forest in Marengo

County, represented by the same counsel as Stabler and propounding theories of relief against

those defendants that were analogous to those interposed by Stabler.

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knowledge of the dangerous condition that culminated in the explosion.2

The parties are not in full agreement as to exactly what happened next; however, it

appears that Forest notified its insurance carrier, Transportation Insurance Company

(“Transportation”), of the pendency of the Stabler lawsuit, but that Transportation did not

immediately provide a defense or otherwise indemnify Forest. When Transportation failed to

take action within a certain time frame, Forest negotiated an agreement with Stabler to allow

entry of consent judgment against Forest in Stabler’s favor in the amount of $1 million. This

agreement was subject to the provisos that Stabler would execute said judgment only against

insurance funds (i.e., against Transportation, which had no knowledge of the agreement and did

not consent to it), not against Forest or its principal, and that Forest would assign to Stabler its

rights to the insurance proceeds allegedly owed by Transportation under said judgment. On

February 21, 2006, the Circuit Court of Marengo County entered a consent judgment in favor of

Stabler and against Forest in the amount of $1 million. On March 10, 2006, Transportation filed

a petition in intervention and motion to set aside the consent judgment, as well as a motion to

reconsider, vacate or set aside the consent judgment. Transportation’s position was that it had

had multiple communications with Forest about providing a defense before the Stabler/Forest

settlement and consent judgment occurred, that Transportation had never refused to provide a

defense, and that it had decided to defend Forest before receiving notice of the settlement and

consent judgment. As one might expect, Stabler opposed Transportation’s efforts to set aside the

consent judgment. The Court’s understanding is that Transportation’s motions to intervene and

to set aside, vacate or otherwise unwind the consent judgment remain pending in state court, and

have not yet been ruled on. Transportation has argued in that litigation that if intervention is

denied and if the consent judgment is not set aside, then Transportation will challenge whether

the consent judgment was reasonable and entered into in good faith.

With knowledge of Transportation’s pending legal challenges to the consent judgment

and without waiting for a conclusive determination by Alabama courts as to whether that consent

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3 Despite the fact that the same counsel is representing Transportation in both this

action and the Calhoun garnishment proceedings, and despite the fact that both cases were

removed to federal court by the same attorney within weeks of each other, and despite the fact

that the legal and factual issues presented in the two garnishment actions are identical, removing

counsel failed to designate these two cases as “related cases” in the civil cover sheet for the

Calhoun removal. If Stabler and Calhoun are not “related cases,” then there is no such thing. 

The result of this omission was that this District Court’s case assignment process could not

function properly, such that Calhoun was originally assigned to a different district judge’s

docket, notwithstanding its substantively identical posture, leaving court personnel to discover

the near-total overlap on their own and initiate transfer proceedings to place Stabler and Calhoun

on the same judge’s docket. The resulting inefficiencies could have been avoided had removing

counsel simply completed the civil cover sheet accurately, which counsel is admonished to do in

future appearances in this District Court.

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judgment would remain in place, Stabler filed Process of Garnishment against Transportation in

Marengo County Circuit Court on March 27, 2006. (The same procedure was followed in the

parallel Calhoun action.) Three days later, Stabler filed a counterclaim in the Marengo County

action seeking a declaratory judgment as to Transportation’s rights and obligations under the

subject insurance policy, and specifically requesting that the Alabama court “[e]nter a judgment

declaring that there is coverage under the aforementioned insurance policy in connection with

the” consent judgment and “[e]nter a judgment declaring that [Transportation] has an obligation

to indemnify [Forest].” (Doc. 7, at Exh. 4.)

It is at this point in our narrative that the high-velocity proliferation of litigation

commenced in earnest. On April 17, 2006, Transportation filed a Notice of Removal (doc. 1)

removing the Stabler garnishment proceeding to this District Court on grounds of diversity of

citizenship, pursuant to 28 U.S.C. § 1332, and creating the instant federal action. Several weeks

later, Transportation filed a separate Notice of Removal removing the Calhoun garnishment

proceeding to this District Court, where it now resides on the undersigned’s docket under the

caption Lula Calhoun, et al. v. Transportation Insurance Company, Civil Action No. 06-0300-

WS-M.3

 Also, on March 17, 2006, without awaiting a ruling by the state court on its previously

filed motions to intervene and to vacate the consent judgment, Transportation initiated another

federal lawsuit by filing a declaratory judgment action against Forest, Calhoun and Stabler,

asking this Court to declare that it has no obligation to pay the consent judgments against Forest,

or otherwise to defend or indemnify Forest in connection with the Marengo County suits. That

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4 Regrettably, Transportation’s counsel (the same counsel representing it both of

the garnishment proceedings) neglected to identify the garnishment actions as “related cases” in

the civil cover sheet accompanying the declaratory judgment action filing. As a result, that

action was initially assigned to yet a third district judge’s docket, requiring further expenditure

of judicial resources to disentangle the dockets of judges and place all of these obviously related

cases on the docket of a single judge. 

5 Transportation bears primary responsibility for this morass, having morphed two

lawsuits into five even though all relevant legal and factual issues had been joined or appeared

readily capable of being joined in the two pre-existing actions. That said, Stabler and Calhoun’s

counsel is not immune from blame, given their precipitous filing of Process of Garnishment

against Transportation despite actual knowledge that Transportation was challenging the validity

and enforceability of the consent judgment. See generally State Farm Mut. Auto Ins. Co. v.

Brown, 894 So.2d 643, 648 (Ala. 2004) (third party cannot bring action against responsible

party’s insurer “absent a final judgment against its insured”); Ala. Code § 6-6-390 (“no

garnishment shall issue prior to a final judgment”). Thus, escalation on both sides contributed to

the unfortunate quagmire in which this litigation now rests, with the attendant exponential

increases in burdens on both counsel and the courts (federal and state) to sift through the rubble

and restore order.

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action is captioned Transportation Insurance Co. v. Forest Products Engineering, Inc. et al.,

Civil Action No. 06-0165-WS-M, and is now on the undersigned’s docket.4

 In effect, the

declaratory judgment action requests an order nullifying the garnishment proceedings and

excusing Transportation from any liability or duty to defend in the Marengo County cases.

At latest count, then, there are no fewer than five lawsuits (three in federal court, two in

state court) pertaining to Calhoun and Stabler’s claims for damages arising from the December

2002 accident. In all of these actions, Transportation is endeavoring (either directly or

indirectly) to litigate identical coverage and liability issues.5 Stabler now seeks to have this

garnishment action remanded to Marengo County Circuit Court on the grounds that diversity of

citizenship is lacking; that the garnishment action is an ancillary proceeding and therefore not

removable; that removal is untimely and fails to include all papers filed in the underlying state

court action; that Alabama substantive law forbids removal of garnishment actions; and that

principals of comity and federalism require remand. The parties have been afforded a full

opportunity to brief these issues.

II. Legal Standard for Motion to Remand.

A removing defendant must establish the propriety of removal under 28 U.S.C. § 1441

Case 2:06-cv-00237-WS-M Document 15 Filed 07/24/06 Page 4 of 17
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and, therefore, must establish the existence of federal jurisdiction. Leonard v. Enterprise Rent a

Car, 279 F.3d 967, 972 (11th Cir. 2002) (“A removing defendant bears the burden of proving

proper federal jurisdiction.”); Tapscott v. MS Dealer Service Corp., 77 F.3d 1353, 1356 (11th Cir.

1996), overruled on other grounds by Cohen v. Office Depot, Inc., 204 F.3d 1069 (11th Cir.

2000). Because removal infringes upon state sovereignty and implicates central concepts of

federalism, removal statutes must be construed narrowly, with all doubts resolved in favor of

remand. See University of South Alabama v. American Tobacco Co., 168 F.3d 405, 411 (11th

Cir. 1999) (explaining that strict construction of removal statutes derives from “significant

federalism concerns” raised by removal jurisdiction); Whitt v. Sherman Int’l Corp., 147 F.3d

1325, 1333 (11th Cir. 1998) (expressing preference for remand where removal jurisdiction is not

absolutely clear); Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994) (uncertainties

regarding removal are resolved in favor of remand); Newman v. Spectrum Stores, Inc., 109 F.

Supp.2d 1342, 1345 (M.D. Ala. 2000) (“Because federal court jurisdiction is limited, the

Eleventh Circuit favors remand of removed cases where federal jurisdiction is not absolutely

clear.”).

III. Analysis.

A. The § 1332(c)(1) Issue.

The critical jurisdictional question posed here is whether the “direct action” limitation of

28 U.S.C. § 1332(c)(1) applies, so as to strip this Court of diversity jurisdiction. That section

provides, in pertinent part, “that in any direct action against the insurer of a policy or contract of

liability insurance ..., to which action the insured is not joined as a party-defendant, such insurer

shall be deemed a citizen of the State of which the insured is a citizen, as well as of any State

by which the insurer has been incorporated and of the state where it has its principal place of

business.” Id. (emphasis added). Stabler is a citizen of Alabama, and Transportation’s state of

incorporation and principal place of business are Illinois; however, Forest (Transportation’s

insured) appears to be a citizen of Alabama for diversity purposes. If the “direct action” statute

applies, then Transportation assumes Forest’s Alabama citizenship, and is therefore non-diverse

as to Stabler, so as to defeat diversity jurisdiction and require remand. By contrast, if Stabler’s

Process of Garnishment is not a “direct action,” then the citizenship of Forest (which is not a

party to this garnishment action) does not count against Transportation for diversity purposes,

Case 2:06-cv-00237-WS-M Document 15 Filed 07/24/06 Page 5 of 17
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and complete diversity would remain, conferring federal jurisdiction.

At the Court’s request, the parties briefed the issue of whether these garnishment

proceedings are properly considered a “direct action” for § 1332(c)(1). The parties’ research

reveals a badly splintered division among federal courts on this question, with little binding

authority to light the way. Compare Wheelwright Trucking Co. v. Dorsey Trailers, Inc., 158 F.

Supp.2d 1298, 1301 (M.D. Ala. 2001) (“under the modern trend, a ‘direct action’ can include

post-judgment garnishments brought by a judgment creditor against the judgment debtor’s

commercial insurer”); Boston v. Titan Indem. Co., 34 F. Supp.2d 419, 424 (N.D. Miss. 1999)

(deeming garnishment proceeding a “direct action,” as insurer was being sued not for its

wrongful conduct against judgment creditor, but instead to collect judgment entered against its

insured); Reko v. Creative Promotions, Inc., 70 F. Supp.2d 998, 1003-04 (D. Minn. 1999)

(similar); Sherman v. Pennsylvania Lumbermen’s Mut. Ins. Co., 21 F. Supp.2d 543, 545 (D. Md.

1998) (similar); Prendergast v. Alliance Gen. Ins. Co., 921 F. Supp. 653, 655 (E.D. Mo. 1996)

(similar) with Hayes v. Pharmacists Mut. Ins. Co., 276 F. Supp.2d 985, 987 (W.D. Mo. 2003)

(holding that garnishment proceeding is not a direct action because plaintiff is not suing insurer

to establish insured’s liability, which has already been determined, but is instead suing insurer to

establish insurer’s liability); Freeman v. Walley, 276 F. Supp.2d 597, 600-02 (S.D. Miss. 2003)

(declaring that garnishment proceeding is not direct action because direct action is suit against

another’s insurer without joining insured and without having first obtained judgment against

insured); Hipke v. Kilcoin, 279 F. Supp.2d 1089, 1092-93 (D. Neb. 2003) (concluding that §

1332(c)(1) does not apply in garnishment context against liability insurer because direct actions

are limited to tort claims to determine liability, while garnishment is a contract claim to

determine coverage); Davis v. Carey, 149 F. Supp.2d 593, 600 (S.D. Ind. 2001) (opining that

“direct action,” as intended by Congress, is limited to cases in which creditor sues insurer

without joining insured as a defendant or first obtaining judgment against insured).

Upon review of these conflicting authorities, no clear consensus or majority view

emerges from the fractured lines of precedent. Although it is not eager to take sides in a debate

characterized by no clear answers, a relative dearth of appellate guidance, and superficially

sensible holdings in both camps, the Court must do so, given that the Motion to Remand and the

existence of federal jurisdiction both hinge on whether this case is a “direct action” for purposes

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of § 1332(c)(1). The Eleventh Circuit has not specifically examined whether suits by judgment

creditors against the insurers of judgment debtors qualify as direct actions; however, it has

explained that the “direct action” exception turns on “the cause of action asserted against the

defendant insurer, not the relationship of the insurer to the insured.” Fortson v. St. Paul Fire and

Marine Ins. Co., 751 F.2d 1157, 1159 (11th Cir. 1985). To be considered a “direct action” under

§ 1332(c)(1), a claim must be one in which “a party suffering injuries or damage for which

another is legally responsible is entitled to bring suit against the other’s liability insurer without

joining the insured or first obtaining a judgment against him.” Id. (emphasis added); see also

Hernandez v. Travelers Ins. Co., 489 F.2d 721, 723 (5th Cir. 1974) (similar). The method to this

madness is that if an aggrieved third party sues a tortfeasor’s insurer without first securing

judgment against the tortfeasor, then the insurer and tortfeasor are unified in their interest against

the plaintiff. In that scenario, the insurer is essentially standing in the shoes of the tortfeasor and

defending the tortfeasor’s interests by arguing that the tortfeasor is not liable to the aggrieved

plaintiff, so it is only logical to superimpose the tortfeasor’s citizenship on the insurer. By

contrast, however, if the plaintiff can wait to sue the insurer until after entry of judgment against

the tortfeasor, then the tortfeasor and plaintiff’s interests are aligned against the insurer, because

both insured and plaintiff have a compelling interest in having the judgment paid by insurance

proceeds. In that context, the insurer is litigating its own coverage and liability, not that of its

insured. Under such circumstances, where the interests of insurer and insured are adverse and

the insurer is litigating its own liability (not that of its insured), it would be counterintuitive to

ascribe the insured’s citizenship to the insurer for diversity purposes.

With due recognition of the existence of credible precedents to the contrary, the Court

adopts the definition of “direct action” as articulated by the Eleventh Circuit in Fortson and by

the old Fifth Circuit in Hernandez, and as supported by the policy rationales set forth above. 

That definition limits § 1332(c)(1) “direct actions” to those in which an aggrieved plaintiff files

suit against the wrongdoer’s insurer without either joining the wrongdoer as a defendant or first

obtaining a judgment against the wrongdoer. In this case, Stabler initiated garnishment

proceedings against Transportation only after securing a judgment against Forest,

Transportation’s insured. Indeed, Alabama law prohibited Stabler from commencing

garnishment proceedings against Transportation unless he first obtained a judgment against

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6 The above-described policy justifications against “direct action” status are

particularly apt here. Far from being aligned with Forest, Transportation is in a position of

attempting to erase a consent judgment that Forest surreptitiously and unilaterally entered into

with Stabler for the purpose of visiting seven-figure liability on Transportation. Moreover,

Transportation would be primarily litigating its own coverage defenses, rather than whether

Forest is or is not liable to Stabler, in this action. Given the widely divergent interests and

apparent rancor between them, it would be inappropriate to affix Forest’s citizenship on

Transportation or to categorize this matter as a “direct action” against Transportation.

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Forest. See Ala. Code § 6-6-390; Bailey Realty & Loan Co. v. Bunting, 19 So.2d 609, 610 (Ala.

1944). Because Stabler obtained a judgment against Forest before initiating a garnishment

action against Forest’s insurer, which judgment was a precondition to said garnishment, this case

is not a “direct action” for § 1332(c)(1) purposes.6

 Accordingly, Transportation is properly

deemed a citizen of Illinois for diversity purposes, and Forest’s Alabama citizenship does not

accrue to Transportation here. This action is between citizens of different states and involves an

amount in controversy in excess of $75,000; therefore, federal subject matter jurisdiction

properly lies pursuant to 28 U.S.C. § 1332, and remand is not warranted on jurisdictional

grounds.

B. Miscellaneous Grounds for Remand.

In addition to the jurisdictional issue, Stabler posits a host of alternative reasons for

seeking remand, including (a) this garnishment proceeding is not “separate and independent” and

can be removed only if the entire Marengo County action is removable; (b) Transportation

violated timeliness requirements for removal, and failed to include copies of all pleadings,

process and orders with its removal notice; and (c) Alabama substantive law requires that the

garnishment proceeding remain in Marengo County. These contentions may be dispatched

quickly.

Stabler argues that this action must be remanded to state court because the removed

garnishment proceeding is not a separate and independent proceeding from the matters that

remain in state court. Stabler reasons that because the garnishment proceeding is not

independent, the entire Marengo County suit would have to be removed, which could not happen

because Forest is non-diverse from Stabler. However, the clear weight of authority is that

garnishment proceedings are in fact separate and independent actions that are removable if all

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7 Nor does the Court adopt Stabler’s assertion that this garnishment action must be

classified as an ancillary proceeding under Alabama law. It is true that Alabama courts have so

held. See, e.g., Rice v. State Farm Fire & Cas. Co., 628 So.2d 582, 583 (Ala. 1993) (“a postjudgment garnishment proceeding is an ancillary proceeding seeking satisfaction of a prior

judgment, and not an original civil suit”). It is equally true, however, that federal law and not

state law controls as to whether an action is removable under 28 U.S.C. § 1441. See Randolph v.

Employers Mut. Liability Ins. Co., 260 F.2d 461, 463-64 (8th Cir. 1958) (state classification of

garnishment proceedings is in no way binding on federal court’s determination of whether

garnishment is independent action for removal purposes); Johnson v. Wilson, 185 F. Supp.2d

960, 963 (S.D. Ind. 2002) (rejecting Indiana state court’s characterization of garnishment

proceeding as ancillary as not controlling for removal analysis).

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other jurisdictional prerequisites are satisfied. See, e.g., Webb v. Zurich Ins. Co., 200 F.3d 759,

760 (11th Cir. 2000) (noting that lower court correctly denied motion to remand garnishment

proceedings that “were a separate and independent cause of action with diversity of the parties”);

Butler v. Polk, 592 F.2d 1293, 1295 (5th Cir. 1979) (opining that “garnishment actions against

third-parties are generally construed as independent suits, at least in relation to the primary

action”); Berry v. McLemore, 795 F.2d 452, 455 (5th Cir. 1986) (“The writ of garnishment, under

the clear precedent of this court, is an action separate and independent from the action giving rise

to the judgment debt.”); Hipke, 279 F. Supp.2d at 1092 (following Butler); Johnson v. Great

American Ins. Co., 213 F. Supp.2d 657, 661 (S.D. Miss. 2001) (“even though, procedurally, a

garnishment action may be filed under the same number as the case in which the judgment was

obtained, it is, in effect, an entirely separate lawsuit” and therefore removable under § 1441(a));

Reko, 70 F. Supp.2d at 1001 (“it has long been established that a garnishment proceeding is a

suit or civil action within the meaning of those terms in the removal statute”). The Court agrees

with these precedents that Stabler’s garnishment action is in fact separate and independent for

removal purposes.7

As additional alleged defects in the removal process, Stabler asserts that this action was

untimely removed and that the notice of removal is defective because it lacks copies of all papers

from the state court action. Neither argument is persuasive. To be sure, 28 U.S.C. § 1446(b)

requires a removal predicated on diversity to be completed within one year after commencement

of the action. However, the operative commencement date is March 27, 2006 (the date on which

Stabler filed process of garnishment), not the date on which the underlying Marengo County

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Circuit Court proceedings began. Transportation has plainly complied with the one-year

deadline of § 1446(b). Likewise, plaintiff is correct that § 1446(a) requires a removing

defendant to include “a copy of all process, pleadings, and orders served upon” it with its

removal papers, and that Transportation did not include all papers from the Marengo County

action with its Notice of Removal. But again, the relevant action here is the garnishment

proceeding, not the entire underlying state court lawsuit; therefore, the Court finds that

Transportation fully complied with § 1446(a) because, in effectuating removal, it was required to

include only those papers relating to the garnishment proceeding.

Also, Stabler argues that Alabama law requires that writs of garnishment issue out of and

return to the same court, and that removal is improper because it conflicts with that requirement

by altering the return court. Half-century-old Alabama precedent confirms that writs of

garnishment to enforce judgments “must issue out of and be returnable to the court that renders

the judgment.” Pepperell Mfg. Co. v. Alabama Nat. Bank of Montgomery, 75 So.2d 665, 669

(Ala. 1954). However, plaintiff reads far too much into this authority. Nothing in Pepperell

purports to bar removal of garnishment proceedings; rather, it simply states the technical

requirement that the writ itself must reflect that it was issued by and returnable to the same court. 

Stabler’s Process of Garnishment plainly satisfies Pepperell, inasmuch as it was both issued by

and returnable to Marengo County Circuit Court. That the garnishee opted to remove that

Process of Garnishment in no way ran afoul of Pepperell or violated the requirement that the

writ itself state that it is returnable to the same court that entered it. The Court will not read into

Pepperell a constraint on federal jurisdiction that is not there, nor will it extrapolate from that

decision some sort of blanket prohibition on removal of garnishment actions in Alabama. See

generally Superior Beverage Co. v. Schieffelin & Co., 448 F.3d 910, 917 (6th Cir. 2006) (“A state

statute cannot divest a federal court of diversity jurisdiction.”).

C. Abstention.

A cornerstone of Stabler’s Motion to Remand is that this action should be remanded to

state court pursuant to principles of comity and federalism because the state court is presently

confronting identical legal and factual issues to those presented in the instant garnishment action,

requiring this Court to rehash issues that are also being litigated in Marengo County. (Motion, at

2, 6, 10-12; Reply Brief, at 2.) Transportation’s opposition brief is strangely silent on this

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critical point.

It is well established 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.” Ambrosia

Coal and Const. Co. v. Pages Morales, 368 F.3d 1320, 1328 (11th Cir. 2004) (citation omitted). 

However, both Eleventh Circuit case law on comity and federalism, as well as the doctrine of

Colorado River abstention, lend strong support to Stabler’s position that federal jurisdiction

should not be exercised in these circumstances. Both lines of authority proceed from the premise

that while a federal court is not precluded from exercising jurisdiction if there is also a pending

parallel state court action, “a district court is under no compulsion to exercise that jurisdiction

where the controversy may be settled more expeditiously in the state court.” Will v. Calvert Fire

Ins. Co., 437 U.S. 655, 662-63, 98 S.Ct. 2552, 57 L.Ed.2d 504 (1978) (per Rehnquist, J., with

three Justices concurring and one Justice concurring in the judgment) (internal citations and

quotation marks omitted).

1. Comity and Federalism in the Eleventh Circuit.

In Merrill Lynch, Pierce, Fenner & Smith v. Haydu, 675 F.2d 1169 (11th Cir. 1982), the

Eleventh Circuit applied principles of federalism, comity and practicality to affirm the dismissal

of a federal action where there was a parallel state action proceeding simultaneously. The Haydu

court explained that “[p]rinciples of comity come into play when separate courts are presented

with the same lawsuit,” and that in such circumstances “one court must yield its jurisdiction to

the other.” Id. at 1173. In determining which court should yield jurisdiction, Haydu articulated

the following rules of thumb: (a) “a court having jurisdiction over all matters in dispute should

have jurisdiction of the case” to avoid fragmenting the dispute for resolution in two different

fora; and (b) “[i]n absence of compelling circumstances, the court initially seized of a

controversy should be the one to decide the case.” Id. at 1173-74. In addition to comity

considerations, Haydu emphasized the federalism concerns which “require that a federal court

‘tread lightly’ when a state proceeding is already underway. ... Gratuitous interference with the

orderly and comprehensive disposition of a state court litigation should be avoided.” Id. at 1173.

Application of Haydu principles to this case counsels heavily in favor of abstention. The

Marengo County court has jurisdiction over all aspects of this multifaceted dispute, including the

state law claims as between Stabler and Forest. Those claims could not be litigated in federal

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8 But see Hawthorne Savings F.S.B. v. Reliance Ins. Co. of Illinois, 421 F.3d 835,

852 (9th Cir. 2005) (indicating that “[i]t is not clear to what extent comity remains an

independent basis for abstention, available even when none of the settled comity-based

abstention doctrines such as Burford and Colorado River apply”).

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court, inasmuch as Stabler and Forest are both Alabama citizens, such that diversity jurisdiction

would be lacking. Common sense dictates that it would be far more efficient to allow a court

with jurisdiction over all dimensions of a dispute to rule on it in toto than it would to carve the

dispute into pieces, allocating certain issues for state court decision and others for federal court

decision, all the while hoping that no inconsistencies emerge in the two tribunals’ overlapping

rulings. Moreover, the Marengo County Circuit Court has been confronting issues arising from

the December 2002 Linden explosion since March 2003, while this related garnishment action

was removed in April 2006. Finally, this Court finds that to allow this garnishment proceeding

to go forward in federal court would, to a near certainty, lead to gratuitous interference with the

state court proceedings. At this very moment, the issue of the legitimacy of the consent

judgment against Transportation is squarely before the Marengo County Circuit Court. No doubt

Transportation intends to reiterate those same arguments here in opposition to garnishment. 

Should the state court vacate the consent judgment, then this action will be moot because there

will no longer be a judgment on which Stabler might execute via writ of garnishment. Should

the state court leave the consent judgment intact, then Transportation will effectively be asking

this Court to overrule that determination and vacate the consent judgment. At best, conducting

separate garnishment proceedings in federal court in these circumstances is superfluous and

utterly unhelpful to resolving the parties’ dispute. At worst, it is interfering and meddling in

state court business, raising the specter of inconsistent rulings and doing violence to bedrock

principles of federalism and comity.

The foregoing analysis strongly supports abstention of federal jurisdiction. Simply put,

“[a]lthough comity is clearly a discretionary judicial concept, the concerns embodied therein and

the equities asserted here compel a state court resolution of this matter.” Haydu, 675 F.2d at

1174.8

2. Colorado River Abstention.

Although Stabler’s briefs do not mention it by name, the Colorado River doctrine of

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judicial economy is implicit in Stabler’s requests that this Court not exercise jurisdiction. The

Colorado River 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, 368 F.3d at 1328 (“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) the relative inconvenience of the fora, (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. This Court “must weigh these factors

with a heavy bias in favor of exercising jurisdiction.” TranSouth Financial Corp. v. Bell, 149

F.3d 1292, 1295 (11th Cir. 1998). No one factor is necessarily dispositive; rather, “the factors

must be considered flexibly and pragmatically, not as a mechanical checklist.” Ambrosia Coal,

368 F.3d at 1332. “One factor alone can be the sole motivating reason for the abstention.” 

Moorer, 374 F.3d at 997.

Although the first two Colorado River factors do not favor abstention, the others point

emphatically in that direction. If federal jurisdiction is exercised here, piecemeal (or worse,

duplicative) litigation will ensue with 100% certainty, as the parties will be litigating issues

relating to coverage and the legitimacy and enforceability of the consent judgment in both these

garnishment proceedings and in the ongoing state court litigation. Such repetition and

fragmentation may be easily and painlessly avoided, with no attendant incursions on the rights of

any party, if this Court abstains. Additionally, the Marengo County Circuit Court has been

vested with jurisdiction concerning this dispute for more than three years, so it obtained

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jurisdiction long before this District Court did. For this Court to leap into the breach now would

be grossly inefficient, as it would oblige the undersigned to catch up on three years of underlying

litigation to adjudge fairly the legal issues presented in the garnishment action, whereas the state

court is already intimately acquainted with these circumstances and will need to ascend no such

learning curve antecedent to its rulings. Furthermore, the substantive legal issues presented in

the garnishment proceeding sound exclusively in state law, such that a state court would be

better equipped than a federal court to resolve them. And there is no indication that the state

court is in any way inadequate to safeguard Transportation’s rights in this matter or that

Transportation will not be afforded a full, fair opportunity to air its arguments against coverage,

viability of the consent judgment, and enforcement of the consent judgment against it in the

Marengo County Circuit Court. (Of course, if the state court denies Transportation that

opportunity by refusing to allow it to intervene, then circumstances would be far different and

the abstention question will need to be revisited.) Lastly, the state court is currently weighing

ripe motions that, if granted, would moot this entire garnishment action by causing the

underlying judgment to evaporate. It would be foolhardy to charge ahead with federal litigation

under these circumstances. In sum, the undersigned is of the opinion that the unique and unusual

posture of this action renders it one of those extraordinary cases in which Colorado River

abstention would be highly appropriate to prevent undue encroachment on state court

proceedings, waste of federal judicial resources, and duplication of effort by parallel courts,

where the state court is far better equipped (in terms of familiarity with both the case and the

governing state law) to rule on the merits than is the undersigned.

3. Stay vs. Remand.

The Court is well aware that federal courts have a “virtually unflagging obligation ... to

exercise the jurisdiction given them.” Moorer, 374 F.3d at 997 (citing Colorado River, 424 U.S.

at 817-18); but see 31 Foster Children v. Bush, 329 F.3d 1255, 1274 (11th Cir. 2003) (pointing

out that “‘virtually’ is not ‘absolutely’”). Nonetheless, this is one those “limited” or

“exceptional” cases in which Colorado River abstention is warranted to prevent piecemeal

litigation, to avoid misallocation of judicial resources, and to allow for efficient resolution of

identical legal issues raised in federal proceedings that significantly postdate their state court

counterparts. Separate and apart from Colorado River abstention, the doctrines of comity and

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9 Given that Stabler’s briefs contain no analysis of whether remand is permissible

under the comity/federalism principles they cite, and given that Transportation’s briefs neglect to

address the comity/federalism issue at all, the undersigned examines the propriety of remand on

abstention grounds with no assistance from the parties’ written submissions.

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federalism as espoused by the Eleventh Circuit in Haydu demand abstention. Otherwise, the

issues of insurance coverage, legitimacy of the consent judgment, and enforcement of that

consent judgment against Transportation would be litigated on a dual-track, presented to both

this Court and the Marengo County Circuit Court for resolution. In fact, those issues have

already been presented to the state court, and at least some of them are ripe for ruling by the state

court at this time. For this Court to swoop in at the last minute and pluck those state law issues

from the jaws of the state court that has been grappling with this case for more than three years

would be the epitome of unwise, inefficient judicial administration and would amount to flagrant

disregard of fundamental principles of comity and federalism. Under the circumstances,

abstention is the only appropriate course.

The remaining obvious question is whether this action should be remanded or stayed

pending resolution of issues concerning coverage, liability of Transportation, and enforceability

of the consent judgment in state court.9

 The Eleventh Circuit recently held that “a stay, not a

dismissal, is the proper procedural mechanism for a district court to employ when deferring to a

parallel state-court proceeding under the Colorado River doctrine.” Moorer, 374 F.3d at 998. 

More importantly, the Supreme Court has held that “federal courts have the power to dismiss or

remand cases based on abstention principles only where the relief being sought is equitable or

otherwise discretionary.” Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 731, 116 S.Ct. 1712,

135 L.Ed.2d 1 (1996) (affirming appeals court determination that district court improperly

remanded damages action based on abstention principles); see also Pompey v. Broward County,

95 F.3d 1543, 1552 n.12 (11th Cir. 1996) (“It is doubtful that federal district courts may dismiss

claims for damages under abstention principles.”); Superior Beverage, 448 F.3d at 913

(construing Quackenbush as holding that “a federal court’s discretion to abstain from exercising

jurisdiction does not extend so far as to permit a court to dismiss or remand, as opposed to stay,

an action at law”); Myles Lumber Co. v. CNA Financial Corp., 233 F.3d 821, 823 (4th Cir. 2000)

(in the abstention context, “a threshold requirement that must be satisfied for a case to be subject

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to remand is that the complaint seek either equitable or otherwise discretionary relief”). This

garnishment proceeding is in the nature of an action for damages, not one seeking injunctive or

declaratory relief, inasmuch as Stabler seeks exclusively to recover certain funds from

Transportation. Therefore, under Quackenbush and its progeny, it would be clear error for this

Court to remand on abstention grounds. Rather, the appropriate (and indeed, the only

permissible) remedy is for this action to be stayed until such time as the overlapping issues have

been resolved by the state court.

IV. Conclusion.

For all of the foregoing reasons, the Motion to Remand (doc. 9) is denied. The Court

finds that subject matter jurisdiction properly lies pursuant to 28 U.S.C. § 1332, that the alleged

defects in the removal process are not fatal to removal, and that Alabama substantive law in no

way deprives this Court of jurisdiction. However, the Court also finds that principles of comity,

federalism, avoidance of duplicative litigation in multiple fora, and efficient utilization of

judicial resources render this case one of those extraordinary cases in which abstention is proper

pursuant to Haydu and the Colorado River doctrine. For that reason, this action is stayed until

such time as the Marengo County Circuit Court has fully resolved the issue of the viability of the

consent judgment. Additionally, if Transportation is allowed to intervene in the state court

action, the stay shall remain in place until such time as the Marengo County Circuit Court has

adjudicated the issues of whether Transportation’s insurance policy provides coverage to Forest

for the claims at issue, and whether Transportation may be held legally responsible for paying

the consent judgment.

To facilitate the Court’s ability to monitor the status of this action, the parties are

ordered to file joint status reports on or before the fourth Friday of every month, beginning in

August 2006. These reports should, at a minimum, delineate the present status of the Marengo

County Circuit Court litigation vis a vis the consent judgment, as well as the coverage and

liability issues that lie at the heart of these stayed garnishment proceedings. Should any ruling

from the state court render these proceedings moot, or should Stabler wish to withdraw his

garnishment proceeding pending resolution of this cluster of legal issues that stand between him

and recovery under the Transportation policy, the parties must promptly notify the Court in

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writing.

DONE and ORDERED this 21st day of July, 2006.

s/ WILLIAM H. STEELE 

UNITED STATES DISTRICT JUDGE

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