Opinion ID: 339102
Heading Depth: 2
Heading Rank: 4

Heading: Refusal to Stay State Court Proceedings

Text: 67 Edison cross-appeals from that portion of the district court order refusing to stay the Illinois state court action instituted by General, Gulf, and Scallop (cross-appellees in this portion of the appeal). Edison recognizes that the Federal Arbitration Act does not explicitly provide that a federal court must stay a state court action filed in breach of the agreement to arbitrate and raising arbitrable issues. It is contended, however, that the district court has the power 'to protect or effectuate its judgments' under 28 U.S.C. § 2283 (1970) 20 by staying General's state court action. Edison argues (1) that the refusal to exercise that power denied effect to the Congressional purpose embodied in the Act of resolving disputes speedily through arbitration and thereby avoiding the expense and delay of litigation; 21 and (2) that since the outcome of the state court action could only be either directly contradictory to the federal district court's order or totally redundant and useless, its continuation directly frustrates the purpose of the Act under which Edison sought relief. 68 Expressing reluctance to exercise the injunctive power given by § 2283 because of the fact that interference with another court's activities does not advance the relationship between the federal and state judiciaries, the district court concluded: 69 (T)here is no likelihood that this court's judgment could be considered inconsistent with the ultimate state court determination because the Illinois court is dealing with rights arising out of the Illinois Uniform Arbitration Act (Ill.Rev.Stat., ch. 10, §§ 101-123), while this court is concerned with rights which spring from a different statutory source, the Federal Arbitration Act. Consequently, there is no need to enjoin the state court proceedings since an injunction is not necessary to protect or effectuate this court's judgment. 22 70 As a general rule, where two actions involving the same cause of action are pending in a state and federal court, and are within the concurrent jurisdiction of each, both actions, in so far as they seek relief in personam, may proceed at the same time. Aetna State Bank v. Altheimer, 430 F.2d 750, 755 (7 Cir. 1970), citing Vestal, Repetitive Litigation, 45 Iowa Law Review 525, 532 (1960). See Kline v. Burke Construction Co., 260 U.S. 226, 230, 43 S.Ct. 79, 67 L.Ed. 226 (1922). The Anti-Injunction statute, 28 U.S.C. § 2283, prevents a federal court from staying state court proceedings unless one of the three exceptions specified in the statute exists. The Fifth Circuit in the case of Southern California Petroleum Corp. v. Harper, 273 F.2d 715 (5 Cir. 1960), explained the nature of § 2283: 71 Section 2283 is essentially a rule of comity, and the demand . . . that a federal court interfere with state court proceedings is directed to the discretion of the federal court. This discretion should be exercised in the light of the historical reluctance of federal courts to interfere with state judicial proceedings. Id., at 718. 72 The section evidences confidence in state courts, reinforced by a desire to avoid direct conflicts between state and federal courts. Amalgamated Clothing Workers of America v. Richman Bros. Co., 348 U.S. 511, 518, 75 S.Ct. 452, 457, 99 L.Ed. 600 (1955). 73 Although one of the exceptions to § 2283 must exist before a federal court has power to stay state court proceedings, the court has discretion to exercise that power once it exists. The power to enjoin state proceedings is discretionary, allowing the court to weigh those factors both pro and con to the issuance of a stay. While the district court might have found that the state court action would so interfere with its judgment that a stay pursuant to § 2283 was necessary to protect and effectuate that judgment, it was not required to do so. Refusal to issue the stay was within the discretion of the district court, which cannot be overturned unless clearly and prejudicially abused. Aetna State Bank v. Altheimer, supra at 757. We find no abuse of discretion. 74 The judgment of the district court is affirmed.