UNITED STATES DISTRICT COURT FOR THE

DISTRICT OF NEW HAMPSHIRE

Skynet Corporation

d/b/a ZeroBrokerFees.com

v. Civil No. 06-cv-218-JM

Arthur Slattery, Chairman,

New Hampshire Real Estate

Commission, et al.

O R D E R

Plaintiff Skynet Corporation (“Skynet”) brought this action

pursuant to 42 U.S.C. § 1983 and 28 U.S.C. § 2201 & 2202

(document no. 1) against the individual members of the New

Hampshire Real Estate Commission (“REC”) and New Hampshire

Attorney General Kelly A. Ayotte (collectively “defendants”), in

their official capacities, seeking declaratory and injunctive

relief. Plaintiff challenges the constitutionality of certain

provisions of the New Hampshire Real Estate Practice Act, N.H.

Rev. Stat. Ann. (“RSA”) 331-A, et seq. (“REPA”). Defendants have

moved to dismiss (document nos. 14, 17 & 20) alleging that (1)

plaintiff failed to exhaust administrative remedies prior to

bringing suit, (2) plaintiff lacks standing to bring this action,

(3) the matter is not ripe for judicial review, and (4) this

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Court should abstain from acting on the complaint pending

resolution of a separate matter currently pending before the REC. 

Plaintiff objects (document nos. 15, 18 & 21).

Standard of Review

 In considering a motion to dismiss under Fed. R. Civ. P.

12(b)(6), the court accepts the facts alleged in the complaint as

true and determines whether “relief could be granted under any

set of facts that could be proved consistent with the

allegations.” Lalonde v. Textron, Inc., 369 F.3d 1, 6 (1st Cir.

2004) (quoting Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514

(2002)). The Court draws all reasonable inferences from the

facts alleged in the plaintiff’s favor. Martin v. Applied

Cellular Tech., 284 F.3d 1, 6 (1st Cir. 2002). Dismissal of the

complaint is appropriate only if “it clearly appears, according

to the facts alleged, that the plaintiff cannot recover on any

viable theory.” Langadinos v. Am. Airlines, Inc., 199 F.3d 68,

69 (1st Cir. 2000). 

A court adjudicating a motion to dismiss under Rule 12(b)(6)

must consider the notice pleading requirements of Fed. R. Civ. P.

8(a)(2). Educadores Puertorriquenos En Accion v. Hernandez, 367

F.3d 61, 66 (1st Cir. 2004). Under Rule 8(a)(2), a complaint

Case 1:06-cv-00218-JM Document 26 Filed 03/13/07 Page 2 of 28
3

need only set forth “a short and plain statement of the claim

showing that the pleader is entitled to relief.” The complaint

must “give the defendant fair notice of what the plaintiff’s

claim is and the grounds upon which it rests.” Conley v. Gibson,

355 U.S. 41, 47 (1957). The court eschews “any reliance on bald

assertions, unsupportable conclusions, and opprobrious epithets.” 

Educadores, 367 F.3d at 68 (quoting Chongris v. Bd. of Appeals,

811 F.2d 36, 37 (1st Cir.), cert. denied, 483 U.S. 1021 (1987)). 

When ruling on a 12(b)(6) motion, the Court may consider

“only the facts alleged in the pleadings, documents attached as

exhibits or incorporated by reference in the complaint, and

matters of which judicial notice may be taken.” Nollet v.

Justices of the Trial Court, 83 F. Supp. 2d 204, 208 (D.Mass.),

aff’d, 248 F.3d 1127 (1st Cir. 2000) (unpublished opinion); C.

Wright & A. Miller, Federal Practice and Procedure Civil 2d §1357

(noting that in evaluating a Rule 12(b)(6) motion, the court

principally considers the allegations in the complaint but may

also take into account matters of public record as well as

exhibits attached to the complaint). Applying this standard, the

facts pertinent to the instant motion are discussed below.

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Background

I. Skynet and ZeroBrokerFees.com

Skynet is a Massachusetts company with its principal place

of business in Beverly, Massachusetts. Skynet publishes and

operates ZeroBrokerFees.com (“ZBF”), an internet site that lists

advertisements for properties for sale throughout the United

States, including New Hampshire. Neither ZBF nor any of its

officers or employees act or hold themselves out as brokers or

real estate agents with respect to any of the properties

advertised on the website. In fact, none of the officers or

employees of ZBF are licensed real estate brokers or salespeople

in any jurisdiction. The employees and officers of ZBF do not

become involved in the individual sales of any of the properties

advertised on the ZBF site. Neither ZBF, Skynet nor any

employees or agents of ZBF or Skynet collect any commission from

the sale of any of the properties advertised on the ZBF site. In

order to list a property for sale on the ZBF site, a seller must

pay a fee to ZBF in advance. The fee depends on the size and

features of the particular advertisement, but does not in any way

depend on the success of the sale or the amount of the sale price

if the sale is completed.

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II. REPA

REPA was enacted for the dual purpose of (1) regulating “the

practice of real estate brokers and salespersons in order to

ensure that they meet and maintain minimum standards which

promote public understanding and confidence in the business of

real estate brokerage;” and (2) prohibiting and prosecuting any

person who acts as a real estate broker or real estate

salesperson without a license, or who fails to comply with REPA’s

requirements for such practice. See RSA 331-A:1 & 331-A:3. The

statute provides for the establishment of the REC and the REC’s

rulemaking authority. REPA further defines what a real estate

broker or salesperson is and what activities, when they occur in

New Hampshire, must be performed by a broker or salesperson

licensed by the REC. Relevant to plaintiff’s constitutional

challenge, plaintiff identifies the following provisions of RSA

331-A:2(III), which govern what activities constitute the actions

of a broker:

 “Broker” means any person acting for another on 

commission or for other compensation, for the 

promise of such commission or other compensation, 

or any person licensed under this chapter who:

(d) Lists, offers, attempts or agrees to list real 

estate for sale, lease or exchange.

. . . 

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(h) Assists or directs in the procuring of 

prospects, calculated to result in the sale, 

exchange, purchase, rental or leasing of real 

estate.

. . . 

(j) Engages in the business of charging an advance 

fee in connection with any contract whereby the 

person undertakes to promote the sale or lease of 

real estate, through its listing in a publication 

or data base issued for such purpose, through 

referral of information concerning such real 

estate to brokers, or both,

Plaintiff further challenges the constitutionality of the

provision of REPA which sets out the penalties attached to

publishing information about properties for sale in New Hampshire

without a license as follows: “Any person acting as a real estate

broker or real estate salesperson, without a license, shall be

guilty of a class A misdemeanor if a natural person, or guilty of

a felony if any other person.” RSA 331-A:34.

The plaintiff reads these statutes on their face to prohibit

a number of ZBF’s activities. Specifically, plaintiff alleges

that ZBF engages in: listing real estate properties for sale on

the website, accepting an advance fee for the advertisement, and

providing a means by which prospective buyers of property can be

directed to sellers, all of which are prohibited by nonlicensed

persons under REPA. 

Case 1:06-cv-00218-JM Document 26 Filed 03/13/07 Page 6 of 28
1Ed Williams, a principal of ZBF, was formerly the general

manager at ISMH. Williams was terminated from ISMH in January of

2005. Williams was initially personally in the REC proceedings

against ISMH, but was dismissed from that proceeding after he

testified that he had not worked at ISMH since the end of 2004. 

7

Plaintiff alleges that these prohibitions and penalties

violate its First Amendment right to free speech both facially

and as applied to plaintiff and act as a prior restraint on

plaintiff’s exercise of its First Amendment rights. Plaintiff

further alleges that the unconstitutional burden placed on its

speech is based on content, viewpoint, and status, in that ZBF

advocates conducting real estate transactions without using real

estate brokers, and that the REC has an interest in suppressing

that viewpoint and access to services that aid those who seek to

sell their property without using a real estate broker.

III. The REC’s Action Against ISoldMyHouse.com1

The REC alleges that an action currently before the REC for

an administrative hearing on whether or not a website advertising

company has violated the prohibitions of REPA may result in the

full or partial resolution of the issues presented here by ZBF. 

ISoldMyHouse.com (“ISMH”) is a company that, like ZBF, is engaged

in the business of selling advertising space on a website to

people selling real estate in New England, including properties

Case 1:06-cv-00218-JM Document 26 Filed 03/13/07 Page 7 of 28
2ISMH, unlike ZBF, has participated in other aspects of the

real estate transactions of its customer and has a financial

interest in some of the sales, including the mortgages, of the

properties advertised on its website. ISMH also engages in

giving advice regarding specific transactions to buyers and

sellers, and holds itself out as offering services defined under

REPA as broker services, but that purport to save customers money

by eliminating brokers’ fees from the real estate transaction.

8

in New Hampshire, and offering advice on conducting real estate

transactions without the involvement of a broker.2 

A complaint against ISMH was initiated by the New Hampshire

Association of Realtors. The REC conducted an investigation of

ISMH and found a reasonable basis to believe that an adjudicatory

disciplinary proceeding should take place. Accordingly, a formal

complaint against ISMH is currently pending an adjudicatory

hearing before the REC’s hearing board. Several of the specific

charges being pressed against ISMH are that ISMH engaged in

activities REPA prohibits for those who are not real estate

brokers licensed by the REC. Significant for purposes of the

instant matter, ZBF engages in very similar business activities

as ISMH. Specifically, both ISMH and ZBF engage in operating a

website that lists property for sale in New Hampshire, and both

ISMH and ZBF charge an advance fee for listing an advertisement

on the website. The REC has not yet made a determination as to

whether or not ISMH has violated the REPA and therefore, had not,

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3Attached to the pleadings in this case is a letter from

counsel for ISMH to the REC seeking a stay of the proceedings

against ISMH pending resolution of the instant action before this

Court. 

9

at the time of filing in this matter, invoked any criminal or

civil action against ISMH.3

Discussion

Defendants seek dismissal of the complaint in this matter. 

As previously stated, the defendants have raised four arguments

in support of the relief they seek. I will address each argument

in turn.

I. Exhaustion

Defendants assert that the plaintiff must exhaust those

administrative remedies available by petitioning the REC prior to

bringing a claim in this Court. Defendants contend REC

regulations require or allow the plaintiff to have petitioned the

REC for a declaratory ruling as to whether or not plaintiff’s

activities run afoul of the prohibitions set out in REPA. See

N.H. Code Admin. Reg. Rea 201.08. Defendants argue that

requiring the plaintiff to exhaust administrative remedies might

result in the REC making a determination that the REPA

prohibitions in question here do not apply to the activities of

ZBF, thereby obviating plaintiff’s constitutional challenge. 

Case 1:06-cv-00218-JM Document 26 Filed 03/13/07 Page 9 of 28
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Suits brought pursuant to 42 U.S.C. § 1983, as a general

rule, do not require exhaustion of administrative remedies before

they may be filed. Jones v. Bock, 127 S.Ct. 910, 919 ___ U.S.

___ (2007) (citing Patsy v. Bd. of Regents, 457 U.S. 496, 501,

516 (1982)); Steffel v. Thompson, 415 U.S. 452, 472-73 (1974);

Borges Colon v. Roman-Abreu, 438 F.3d 1, 19 (1st Cir. 2006). 

Even where, as here, the plaintiff has an option to initiate a

state proceeding, exhaustion of that remedy is not a prerequisite

to filing a § 1983 action in the federal court. Patsy, 457 U.S.

at 516; see Kercado-Melendez v. Aponte-Roque, 829 F.2d 255, 261

(1st Cir. 1987), cert. denied, Aponte Roque v. Kercado-Melendez,

486 U.S. 1044 (1988); Murphy v. City of Manchester, 70 F. Supp.

2d 62, 67 (D.N.H. 1999). I therefore reject this basis for

dismissing the instant suit.

II. Standing and Ripeness

Defendants next allege that plaintiff lacks standing to

bring this action because, as no action has been taken or

threatened against ZBF by the REC, plaintiff has not asserted an

actual or imminent injury that would create the case or

controversy required to establish federal court standing. 

Plaintiff counters that it has been injured by the chilling

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effect of the REPA prohibitions, and that it has a rational fear

of future prosecution for its ongoing activities that violate the

provisions of REPA as written.

Article III standing is a constitutional precondition to a

federal court’s jurisdiction over a case. Wine & Spirits

Retailers, Inc. v. Rhode Island, 418 F.3d 36, 44 (1st Cir. 2005)

(citing Osediacz v. City of Cranston, 414 F.3d 136, 137 (1st Cir.

2005)). The burden of establishing standing lies with the party

invoking federal jurisdiction. Wine & Spirits, 418 F.3d at 44. 

In order to establish standing, the plaintiff must show that: (1)

it has personally suffered some actual or threatened injury, (2)

the injury can be fairly traced to the challenged conduct, and

(3) the injury would likely be redressed by a favorable decision

in the pending action. Id. (citing R.I. Ass’n of Realtors v.

Whitehouse, 199 F.3d 26, 30 (1st Cir. 1999).

Here, plaintiff alleges that REPA’s prohibition of the

activities specified in §§ 331-A:2(III)(d), (h) & (j) have

already wrought an injury on the plaintiff, by subjecting ZBF and

Skynet to the potential of criminal and civil penalties, and also

by actually chilling ZBF’s desired level of advertising

activities in New Hampshire. Plaintiff asserts a First Amendment

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interest in free speech implicated by the REPA’s restrictions on

certain of its advertising activities on the ZBF website.

Plaintiff contends that its current and ongoing activities

are in violation of the plain meaning of the statute, and that

its activities subject it to the possibility of civil penalties

and criminal prosecution, or to the requirement that it undergo

the burdensome, expensive, and time-consuming process of becoming

a real estate broker licensed by the New Hampshire REC in order

to continue its activities without the threat of prosecution.

Defendant counters that the subjective fear of potential

future penalties is insufficient to establish the actual or

imminent harm to a specific, legally protected interest which

standing requires. See Lujan v. Defenders of Wildlife, 504 U.S.

555, 560 (1992) (concrete injury to a particular legal interest,

not a hypothetical injury or problem, required for standing).

Defendant claims that as plaintiff has not been prosecuted or

threatened with prosecution by the REC, and further that the REC

has not yet expressed an opinion as to whether or not ZBF’s

activities are prohibited by REPA, plaintiff lacks a concrete

injury in fact.

Case 1:06-cv-00218-JM Document 26 Filed 03/13/07 Page 12 of 28
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Advertising is a form of commercial speech which is entitled

to some measure of First Amendment protection. United States v.

Edge Broad Co., 509 U.S. 418, 426 (1993). “[W]hen dealing with

pre-enforcement challenges to recently enacted (or, at least,

non-moribund) statutes that facially restrict expressive activity

by the class to which the plaintiff belongs, courts will assume a

credible threat of prosecution in the absence of compelling

contrary evidence.” N.H. Right to Life Political Action Comm. v.

Gardner, 99 F.3d 8, 15 (1st Cir. 1996).

While a subjective or irrational fear of prosecution would

not suffice to confer standing on the plaintiff, the existence of

a credible threat that the challenged law will be enforced does

suffice. Mangual v. Rotger-Sabat, 317 F.3d 45, 57 (1st Cir.

2003) (citations omitted). In order to demonstrate that it faces

a credible threat of prosecution, the First Amendment plaintiff

must meet an evidentiary bar that is “extremely low.” Id.

(citing N.H. Right to Life, 99 F.3d at 15 (“[C]ourts will assume

a credible threat of prosecution in the absence of compelling

contrary evidence.”). The plaintiff further claims that it does

have an objectively reasonable fear of prosecution that is

sufficient to establish standing based on the REC’s current

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prosecution of ISMH for engaging in practices similar or

identical to ZBF’s business activities. In the First Amendment

context, plaintiff can also allege an actual injury for purposes

of establishing standing when plaintiff is chilled from

exercising its right to free expression, or forgoes expression in

order to avoid enforcement consequences. N.H. Right to Life, 99

F.3d at 13 (citing Meese v. Keene, 481 U.S. 465, 473 (1987)). A

plaintiff need not wait to be prosecuted, or to have any action

taken against it, in order to obtain standing to bring a

constitutional challenge to the statute. The plaintiff must

simply intend to engage in proscribed conduct, or be chilled from

engaging in the proscribed conduct. Mangual, 317 F.3d at 56-57

(citations omitted). 

Plaintiff here has specifically alleged that it is engaging

in conduct that is proscribed by the REPA and intends to continue

to do so. Further, plaintiff alleges that it has been chilled in

exercising its First Amendment rights in that, while plaintiff

continues to engage in some proscribed activities in New

Hampshire, it has limited its business activities in New

Hampshire with the specific intention of reducing the likelihood

of prosecution under REPA. I find that the existence of an

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ongoing and protracted administrative proceedings that may result

in criminal or civil sanctions, against an organization with

marked similarities to ZBF, that is at least in part due to

activities in which ZBF also engages, produces a credible threat

of prosecution sufficient for purposes of establishing standing. 

It is also worth noting that the defendants have not at any time

indicated that they do not intend to prosecute ZBF or bring

action against ZBF in the future, or that they agree that REPA is

unconstitutional, or that ZBF’s activities do not violate the

prohibitions of REPA, but instead have stated that they feel it

is necessary to keep that option available to them. The fact

that none of those things have occurred “yet” does not counter

the credible threat alleged by plaintiff. 

Further, the injury is fairly traceable to the existence of

the statute and the potential for its enforcement. Plaintiff has

sought this Court’s declaratory judgment that the provisions of

REPA prohibiting and penalizing ZBF’s activities are

unconstitutional. Accordingly, a favorable result in this Court

would clearly redress the actual and threatened injuries alleged. 

Consequently, I find that plaintiff has standing to prosecute its

constitutional claims in this Court. 

Case 1:06-cv-00218-JM Document 26 Filed 03/13/07 Page 15 of 28
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“Although a plaintiff may have standing to make a preenforcement challenge to a statue, . . . a federal court

nonetheless lacks jurisdiction to decide a controversy that is

not ripe for judicial review. The doctrine of ripeness ‘asks

whether an injury that has not yet happened is sufficiently

likely to happen’ to warrant judicial review.” Ginsberg v.

Ayotte, No. Civ. 05-CV-193-JM, 2005 WL 3454313, *5 (D.N.H. Dec.

15, 2005) (citing Gun Owners’ Action League, Inc. v. Swift, 284

F.3d 198, 205 (1st Cir.), cert. denied, 537 U.S. 827 (2002)

(further citations omitted)). To determine an issue of ripeness,

a court must evaluate “both the fitness of the issues for

judicial decision and the hardship to the parties of withholding

court consideration.” Mangual, 317 F.3d at 59 (citing Abbott

Labs. v. Gardner, 387 U.S. 136, 148 (1967)).

The inquiry into fitness, described by the First Circuit as

“both a constitutional and a prudential” one. Mangual, 317 F.3d

at 59. The fitness inquiry first seeks to determine whether it

is premature for the federal court to entangle itself in a

constitutional disagreement that may still be abstract. Id. The

inquiry, out of concern for judicial restraint, then turns to

whether a decision would result in the unnecessary resolution of

Case 1:06-cv-00218-JM Document 26 Filed 03/13/07 Page 16 of 28
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constitutional issues. Id. A plaintiff who intends to continue

the activities that place it at risk of prosecution, or who has

already been chilled in the exercise of its First Amendment

rights, is not required to wait for prosecution in order to

present a controversy ripe for consideration. Id. at 60. 

Further, a plaintiff who has already been chilled in its

expression as a result of the credible threat of enforcement of

the statute in question has alleged a controversy ripe for

consideration. Id. As the chilling effect in this case has

already come to pass according to the plaintiff’s allegations,

and as the plaintiff has also pointed to a credible threat of

prosecution based on the prosecution of ISMH, I find that this

matter is ripe for judicial determination. 

III. Abstention

Defendants’ final argument for dismissal of the complaint is

that, even if this Court could properly exercise its jurisdiction

over the matter, it should abstain. Defendants do not assert any

particular doctrine upon which they rely, but simply assert

generally that litigating this case would interfere with an

administrative scheme created under New Hampshire law that

provides for state judicial review, where challenges like those

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4Notably, the defendants do not state whether or not the

particular constitutional challenge raised by plaintiff here has

been raised in the ISMH proceedings, or whether resolution of the

ISMH matter before the REC will necessarily, or even probably,

resolve plaintiff’s claims here.

18

plaintiff has made are most appropriately resolved. Defendants

assert in particular that because the ISMH proceeding is

currently pending before the REC, and it involves some of the

same provisions of REPA that are challenged here, abstention

would allow the REC to resolve the ISMH matter without federal

interference. Plaintiff could then simply file a petition for

Declaratory Ruling with the REC.4

Plaintiff counters that under the doctrine of Burford v. Sun

Oil Co., 319 U.S. 315, 338-39 (1943), abstention is not warranted

where the Court has jurisdiction to entertain an action, unless

the matter involves complex, policy-laden issues of unclear state

law that or where this Court’s consideration of the matter before

it would interfere with the state’s regulatory process. 

Plaintiff further argues that abstention is not warranted in a

case presenting a facial challenge to a statute, particularly in

the First Amendment context. See City of Houston, Tex. v. Hill,

482 U.S. 451, 467-68 (1987) (citing Zwickler v. Koota, 389 U.S.

241, 252 (1967), for the proposition that forcing a plaintiff who

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has initiated federal action to endure delay of state court

proceedings may exacerbate the first amendment violation

alleged). 

The abstention doctrines represent exceptions, applicable in

particular circumstances, to the general rule that a federal

court must exercise its jurisdiction when that jurisdiction has

been properly invoked. Colo. River Water Conservation Dist. v.

United States, 424 U.S. 800, 817 (1976) (“Federal courts have a

“virtually unflagging obligation . . . to exercise the

jurisdiction given them.”). Although not specifically enumerated

by defendant, there are several abstention doctrines that are

relevant to whether this Court should abstain in this case. I

will consider these seriatim.

A. Burford Abstention 

Under the rule of Burford, abstention is appropriate when

the exercise of jurisdiction by the federal court would result in

the federal court becoming a forum to decide detailed state

regulatory matters in a manner that interferes with the state’s

operation of its own regulatory system. See Bath Mem’l Hosp. v.

Me. Health Care Fin. Comm’n, 853 F.2d 1007, 1012 (1st Cir. 1988);

Pub. Serv. Co. v. Patch, 962 F. Supp. 222, 234 (D.N.H. 1997). 

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The Burford abstention rule requires federal courts to abstain

from exercising their jurisdiction, and thereby from interfering

with proceedings or orders of state administrative agencies

where: “difficult questions of state law bearing on policy

problems of substantial public import whose importance transcends

the result in the case then at bar” or where the “exercise of

federal review of the question in a case and in similar cases

would be disruptive of state efforts to establish a coherent

policy with respect to a matter of substantial public concern.” 

New Orleans Pub. Serv., Inc. v. Council of New Orleans, 491 U.S.

350, 354-58, 361 (1989). 

Neither prong of the test for abstention is satisfied in

this case. First, this case presents neither a state law claim

nor any federal claim that entangles itself with difficult

questions of unsettled state law. Second, while there is the

potential for this Court to render a decision in conflict with

regulatory policy announced or to be announced by the REC,

abstention is not required simply because an administrative

process exists, presenting the possibility that such a conflict

might arise. McNeese v. Bd. of Educ., 373 U.S. 668, 674 (1963). 

In fact, in a case such as this, where a federal constitutional

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challenge is lodged against a state statute, a federal court

cannot abstain simply because its ruling might conflict with

state law. See id. 

In this case, the Court need not inquire beyond the actual

language of the challenged statute in order to determine whether

or not the statute is facially unconstitutional. See Bath Mem’l,

853 F.2d at 1014; Med. Malpractice Joint Underwriting Ass’n v.

Pfeiffer, 832 F.2d 240, 244 (1st Cir. 1987) (citing Zablocki v.

Redhail, 434 U.S. 374, 380 n.5 (1978) (federal court jurisdiction

over a direct challenge to the legality of a state statute under

the federal constitution cannot be avoided simply because the

issue concerns a coherent state policy, at least where there are

no pending or ongoing concurrent state proceedings). This case

does not require the Court to delve into complicated questions,

interpretations, or applications of state law, or to pass

judgment on a state administrative agency’s application of the

law. The jurisdiction of this Court is properly invoked to

answer a challenge to the constitutionality of a state statute,

and, in doing so, this Court will not unduly intrude into the

machinations of any state administrative body. Accordingly,

Burford abstention is inappropriate in the circumstances

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presented here. See Fragoso v. Lopez, 991 F.2d 878, 883 (1st

Cir. 1993); Bath Mem’l, 853 F.2d at 1015; Patch, 962 F.Supp. at

235.

B. Pullman Abstention

Where state law is uncertain, and a pending state court case

might clarify the law and render the federal court’s ruling

unnecessary, a federal court may abstain under the doctrine set

forth in R.R. Comm’n v. Pullman Co., 312 U.S. 496, 499-500

(1941). When considering whether to abstain under Pullman, the

First Circuit has required that a court consider: “(1) whether

there is substantial uncertainty over the meaning of the state

law at issue; and (2) whether a state court’s clarification of

the law would obviate the need for a federal constitutional

ruling.” Ford Motor Co. v. Meredith Motor Co., 257 F.3d 67, 71

(1st Cir. 2001); see also Erwin Chemerinsky, Federal Jurisdiction

§ 12.2.1, at 737 (3d ed. 1999).

Defendants have not identified any unclear issue of state

law, as opposed to federal constitutional law, in this dispute. 

Instead, defendants here argue that because ISMH’s case is

pending before the REC and shares some factual similarity to the

prosecution anticipated by ZBF, that the REC may resolve some of

Case 1:06-cv-00218-JM Document 26 Filed 03/13/07 Page 22 of 28
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the issues raised by plaintiff in the ISMH case. Defendants also

argue that this Court should abstain so that plaintiff can bring

a petition for a declaratory ruling to the REC to determine

whether or not REPA applies to ZBF’s activities. Defendants do

not identify any portion of the REPA that requires clarification

that should be conducted by the state courts prior to this

Court’s exercising jurisdiction over the plaintiff’s

constitutional challenge. The claim raised here by plaintiff is

solely a question of the federal constitutionality of certain

provisions of the REPA. If state law questions are not

ambiguous, abstention is inappropriate. Mangual, 317 F.3d at 63

(citing Examining Bd. of Eng’rs, Architects & Surveyors v. Flores

de Otero, 426 U.S. 572, 598 (1976)).

 Further, defendants have identified one matter pending

before the REC concerning issues similar to those raised here. 

And while defendants assert that judicial review is available in

the ISMH matter in the state courts, they have not demonstrated

how review of that matter would resolve plaintiff’s

constitutional question. Defendants also have not identified any

other matter currently pending before any state court that might,

upon state court resolution, obviate the need for a federal court

Case 1:06-cv-00218-JM Document 26 Filed 03/13/07 Page 23 of 28
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decision in this matter. Even in the event that the state courts

could eventually rule on one or more of the issues raised here,

“[a] federal court should not abstain simply to give a state

court the first opportunity to vindicate federal rights.” 

Rivera-Puig v. Garcia-Rosario, 983 F.2d 311, 322 (1st Cir. 1992)

(citing McNeese, 373 U.S. at 672). Accordingly, Pullman

abstention is not warranted here.

C. Younger Abstention 

Since the Supreme Court’s decision in Younger v. Harris, 401

U.S. 37 (1971), deference a federal court should accord to state

institutions has been extended from state criminal courts and

proceedings to ongoing civil and administrative proceedings, as

long as the proceedings: (1) are judicial in nature; (2)

implicate important state interests; and, (3) afford the federal

plaintiff adequate opportunity to raise federal constitutional

claims and defenses. See Middlesex County Ethics Comm. v. Garden

State Bar Ass’n, 457 U.S. 423, 432 (1982). The Younger doctrine

does not provide an exception to federal jurisdiction where no

state judicial proceedings have commenced. Pfeiffer, 832 F.3d at

243 (citing Haw. Hous. Auth. v. Midkiff, 467 U.S. 229, 238-39

(1984)). Even assuming that in this instance the available

Case 1:06-cv-00218-JM Document 26 Filed 03/13/07 Page 24 of 28
25

procedures before the REC are judicial in nature, that they

implicate the important state interest in regulating real estate

transactions, and that the ability to appeal REC decisions to the

state courts provides an adequate opportunity to raise federal

constitutional issues, the fact is that no such proceeding is

currently pending against the plaintiff in this matter. While

plaintiff has the option to seek a declaratory ruling before the

REC which would be appealable to the state courts, the plaintiff

chose not to avail itself of that option, and this Court has no

obligation to abstain from deciding this matter because plaintiff

has another option.

D. Colorado River Abstention

In Colo. River, the Supreme Court identified certain

“exceptional circumstances” under which federal courts might

abstain from hearing a matter in the interest of judicial

administration and economy. See 424 U.S. at 817. To decide

whether or not the circumstances of a case are sufficiently

exceptional to warrant abstention a federal court looks to: (1)

whether another forum has assumed jurisdiction over a res; (2)

the inconvenience of the federal forum; (3) the desirability of

avoiding piecemeal litigation; (4) the order in which the forums

Case 1:06-cv-00218-JM Document 26 Filed 03/13/07 Page 25 of 28
26

obtained jurisdiction: (5) whether federal law or state law

controls; (6) whether the state forum will adequately protect the

interest of the parties; and (7) whether the federal litigation

is contrived or vexatious. See id.; Rivera-Puig, 983 F.2d at

320-21. 

Applying these factors to this case, it is clear that no

exceptional circumstances are presented that warrant abstention

in this case. The only action pending concerning ZBF’s

activities in New Hampshire is this federal action. There is

simply no state action pending against this plaintiff to which

this Court should defer. Further, there is no reason to suppose

that this Court is any less convenient than any other New

Hampshire forum. Also, as previously discussed, the questions

presented here are purely a matter of federal law, and while this

Court has no doubt that the state court is well-equipped to

protect the federal constitutional rights of the litigants before

it, there is no reason that this Court should abstain simply to

give the State court that opportunity. Federal law will control

the outcome of this matter, and this Court can serve as the

single forum for all of plaintiff’s claims if defendants choose

not to bring any state action before the resolution of this

Case 1:06-cv-00218-JM Document 26 Filed 03/13/07 Page 26 of 28
5On March 7, 2007, I issued an endorsed order on the motion

to quash staying the deposition in question until the motion to

dismiss was ruled upon.

27

matter. Finally, there is no basis to find, and defendants do

not assert, that the federal litigation in this matter is in any

way contrived or vexatious.

I find, therefore, that there are not exceptional

circumstances in this case warranting abstention in this matter,

and, therefore, I will not decline to exercise this Court’s

properly invoked jurisdiction. 

Motions to Stay Discovery and Quash Subpoena

Defendants have moved to stay the current discovery plan

issued by the Court and to have the Court schedule a new

scheduling/pretrial conference to amend the discovery plan and

timeline for litigating this case (document no. 22). Defendants

have also moved to quash a subpoena in this matter (document no.

24), pending resolution of their motion to dismiss.5 Plaintiff

did not assent to either motion (document nos. 23 & 25). Because

the motion to dismiss has been denied, these matters are now ripe

for consideration. Accordingly, the parties are directed to

submit proposed revised discovery plans and timelines for

litigating this case within twenty (20) days of the date of this

Case 1:06-cv-00218-JM Document 26 Filed 03/13/07 Page 27 of 28
28

Order. The stay of the deposition that I ordered in response to

plaintiff’s motion is vacated and the deposition may proceed.

Conclusion

Having considered defendants’ arguments concerning

exhaustion, standing, ripeness and abstention, I find that none

offer a basis for dismissing this action at this time. 

Accordingly, the motion to dismiss is denied.

SO ORDERED.

____________________________________

James R. Muirhead

United States Magistrate Judge

Date: March 13, 2007

cc: Charles G. Douglas, III, Esq.

Steven M. Simpson, Esq.

Valerie J. Bayham, Esq.

William H. Mellor, Esq.

Jason R.L. Major, Esq.

James William Kennedy, Esq.

Case 1:06-cv-00218-JM Document 26 Filed 03/13/07 Page 28 of 28