Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_07-cv-00280/USCOURTS-cand-4_07-cv-00280-3/pdf.json

Parties Involved:
NMSBPCSLDHB
Defendant
Washington Mutual Bank
Plaintiff

Document Text:

United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

WASHINGTON MUTUAL BANK,

Plaintiff, No. C 07-0280 PJH

v. ORDER DENYING MOTION TO

DISMISS OR IN THE ALTERNATIVE,

NMSBPCSLDHB, et al., TO STAY

Defendants.

_______________________________/

Defendant’s motion to dismiss plaintiff’s complaint or in the alternative, to stay the

action on Brillhart abstention grounds, came on for hearing before this court on December

19, 2007. Plaintiff, Washington Mutual Bank (“plaintiff”), appeared through its counsel,

Anna S. McLean and Peter S. Hecker. Defendant NMSBPCSLDHB (“defendant”),

appeared through its counsel, Jeffrey G. Huron. Having read the parties’ papers and

carefully considered their arguments and the relevant legal authority, and good cause

appearing, the court hereby DENIES defendant’s motion, for the reasons stated at the

hearing, and summarized as follows. 

In view of plaintiff’s removal of defendants’ state court complaint on diversity

grounds, and its subsequent relation to the instant declaratory judgment action, no parallel

state court action is actually pending at this juncture. Defendants argue that,

notwithstanding an absence of a parallel proceeding currently pending, such a proceeding

will be pending in future. Specifically, defendants propose either dismissing the related

action and re-filing it in state court with a proper claim against a California defendant

(defendants concede that diversity jurisdiction over the related complaint is established on

fraudulent joinder grounds), or seeking remand of the related action in the event the court

Case 4:07-cv-00280-PJH Document 50 Filed 12/21/07 Page 1 of 3
United States District Court

For the Northern District of California

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were to dismiss the instant action. Defendants have also proposed seeking leave of court

to amend the related action in order to re-state a valid claim against the California

defendant first, at which point defendants could then seek remand to state court. 

Regardless whether any of these actions would ultimately destroy diversity jurisdiction and

require a pending state court proceeding, however, all of these options are speculative at

this point. Moreover, the parties have been diligently prosecuting the instant action before

the court, and dispositive motion briefing is complete. In essence, then, defendants are

seeking dismissal or a stay of an action that is ready for consideration on the merits, based

on no more than their promise that future parallel state court proceedings are forthcoming,

which might properly avoid federal subject matter jurisdiction. 

Under this scenario, the court is unpersuaded that Brillhart abstention is either

warranted or advisable. See, e.g., Gov’t Employees Ins. Co. v. Dizol, et al., 133 F.3d 1220,

1225 (9th Cir. 1998)(Brillhart abstention depends on consideration of three factors: first, the

“needless determination of state law issues;” second, whether a declaratory action has

been filed as a means of forum shopping; third, the need to avoid duplicative litigation). 

First, it is unclear that the court will be avoiding the needless consideration of state law

issues by abstaining from judgment in the instant action, since the pending related action

currently states a proper basis for subject matter jurisdiction on diversity grounds, and

therefore requires this court’s consideration. Second, the court finds no basis for

concluding that plaintiff has engaged in impermissible forum shopping by virtue of filing the

instant declaratory judgment action. Indeed, the court finds defendants’ state court action,

filed more than 10 months after the present action was filed, more worthy of suspicion in

this regard. Finally, the court will not avoid duplicative litigation at this juncture, by

abstaining from judgment in the present case. For as already stated, the court’s jurisdiction

over both the present action and the related action is currently proper. And since the cases

are related, the court is in a position to consolidate and/or streamline the litigation of both. 

In sum, and for all the above reasons, the court DENIES defendants’ motion to

Case 4:07-cv-00280-PJH Document 50 Filed 12/21/07 Page 2 of 3
United States District Court

For the Northern District of California

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dismiss the instant declaratory judgment action or in the alternative, to stay it. Rather, the

court will proceed to hear and determine the pending dispositive motion. Accordingly, the

parties are hereby notified that plaintiff’s motion for summary judgment will be heard on

January 30, 2008, during the court’s regular law and motion calendar. The motion to

dismiss currently scheduled for that same date, is hereby VACATED. 

 

IT IS SO ORDERED.

Dated: December 21, 2007 ______________________________

PHYLLIS J. HAMILTON

United States District Judge

Case 4:07-cv-00280-PJH Document 50 Filed 12/21/07 Page 3 of 3