Opinion ID: 548469
Heading Depth: 3
Heading Rank: 3

Heading: The Desirability of Avoiding Piecemeal Litigation

Text: 27 Generally, as between state and federal courts, the rule is 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....'  Colorado River, 424 U.S. at 817, 96 S.Ct. at 1246 (quoting McClellan, 217 U.S. at 282, 30 S.Ct. at 504). However, piecemeal litigation is a factor that can support a stay under the exceptional circumstances test. Piecemeal litigation occurs when different tribunals consider the same issue, thereby duplicating efforts and possibly reaching different results. American Int'l Underwriters, 843 F.2d at 1258. 28 The district court appears to have granted the stay solely on the basis of this factor, finding it determinative. The court stated that piecemeal adjudication would necessarily result from the Court's refusal to stay the present action. Its reasoning was that Wynne could not be joined in the federal action because his presence would defeat diversity and because the Ninth Circuit forbids pendent party jurisdiction. 29 The district court is correct that this Circuit will not permit pendent party jurisdiction. See Danner v. Himmelfarb, 858 F.2d 515, 522 (9th Cir.1988), cert. denied, --- U.S. ----, 109 S.Ct. 2067, 104 L.Ed.2d 632 (1989); Safeco Ins. Co. of Am. v. Guyton, 692 F.2d 551, 555 (9th Cir.1982). Thus, Wynne could not be brought into the federal action. 30 The court also stated that [t]he dilemma presented by the Court's refusal to entertain pendent party jurisdiction would be alleviated if it could be shown that Joseph Wynne were not a necessary party to the two suits. Since this determination rests on the factual question of whether Wynne was acting solely as Madonna's agent, the court found it appropriate that Wynne be joined in the litigation for a binding determination of the issue of agency and the liability which might result. 31 The court's reasoning here weights improperly the Colorado River balance. Any doubt as to whether a factor exists should be resolved against a stay, not in favor of one. Only the clearest of justifications will warrant dismissal. Colorado River, 424 U.S. at 819, 96 S.Ct. at 1247. 32 A correct evaluation of this factor involves considering whether exceptional circumstances exist which justify special concern about piecemeal litigation. Travelers argues that there are no such circumstances here. It points out that no federal legislation evincing a federal policy to avoid piecemeal litigation is applicable. This case involves ordinary contract and tort issues and is thus unlike Colorado River where important real property rights were at stake and where there was a substantial danger of inconsistent judgments. Here there is no vastly more comprehensive state action that can adjudicate the rights of many parties or the disposition of much property. 33 Travelers' position has merit. Since at the time of the district court's stay order the state court had made no rulings whatsoever in regard to this dispute, there is no certainty that duplicative effort would result. Cf. American Int'l Underwriters, 843 F.2d at 1258 (the state court having already decided several substantive issues in the case, it was clear that the federal court would have to decide those issues anew if it exercised jurisdiction). In addition, whichever court were to first reach a judgment on the merits, that judgment would most likely have conclusive effect on the other court. See Mobil Oil Corp. v. City of Long Beach, 772 F.2d 534, 542 (9th Cir.1985). 34 Madonna counters with the argument that because Wynne cannot be made a party to the federal action, there is no assurance that Madonna's rights will be fully protected. State court, in contrast, will fully protect the rights of all parties. 35 The issue here, however, is not simply whether state court is a better forum. As Travelers argues, it is quite possible that Madonna's rights will be fully protected in federal court. The district court can resolve Travelers' breach of contract claim, Madonna's tort claims, the issue of whether Wynne was acting as Madonna's agent, and the merits of the claim against Wynne if he is found to have acted as Travelers' agent. The theoretical possibility that Wynne might have acted tortiously while not acting as Travelers' agent does not provide the exceptional circumstances necessary for a stay. 36