Opinion ID: 465371
Heading Depth: 2
Heading Rank: 6

Heading: entry of judgment against texaco would violate the due process clause

Text: 8 The district court held that Texaco's claims under the Securities and Exchange Act of 1934 are not barred by res judicata because they are matters of exclusive federal jurisdiction. 15 U.S.C. Sec. 78aa. The court relied on Marrese v. American Academy of Orthopaedic Surgeons, --- U.S. ---, 105 S.Ct. 1327, 84 L.Ed.2d 874 (1985), for the proposition that a statutory grant of exclusive jurisdiction may create an exception to the general rule that decisions of state courts be accorded full faith and credit by federal courts. 28 U.S.C. Sec. 1738. The court concluded that 15 U.S.C. Sec. 78aa is such an exception and that the Texas court's rejection of Texaco's defenses based on federal securities laws were therefore not binding on a federal court. This was error In Murphy v. Gallagher, 761 F.2d 878 (2d Cir.1985), we held that 15 U.S.C. Sec. 78aa does not create an exception to the general requirement of full faith and credit. Since federal law does not bar state courts from exercising jurisdiction over defenses based on the Securities and Exchange Act of 1934, see, e.g., Will v. Calvert Fire Ins., 437 U.S. 655, 98 S.Ct. 2552, 57 L.Ed.2d 504 (1978); Weiner v. Shearson, Hammill & Co., 521 F.2d 817, 822 (9th Cir.1975); Shareholders Management v. Gregory, 449 F.2d 326, 327 (9th Cir.1971); Aetna State Bank v. Altheimer, 430 F.2d 750, 754 (7th Cir.1970), state court determinations relating to those issues are binding on subsequent federal court proceedings to the extent required by 28 U.S.C. Sec. 1738. 9 We discuss Texaco's due process claim more fully infra at 1153-1154 10 28 U.S.C. Sec. 2283 reads: 2283. Stay of State court proceedings A court of the United States may not grant an injunction to stay proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments. 11 Pennzoil concedes that two of the four circumstances, the so-called Burford exception, named after Burford v. Sun Oil Co., 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424 (1943), and the exceptional circumstances doctrine enunciated in Colorado River, supra, 424 U.S. at 818, 96 S.Ct. at 1246, do not apply in the present case. Burford calls for federal courts to decline jurisdiction where there have been presented difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the result of the case at bar ... [or when] 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, Colorado River, supra, 424 U.S. at 814, 96 S.Ct. at 1244. The exceptional circumstances doctrine applies to the rare case where consideration of '[w]ise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation demand abstention. Moses H. Cone, supra, 460 U.S. at 15, 103 S.Ct. at 936 (quoting Colorado River, supra, 424 U.S. at 817, 96 S.Ct. at 1246). Courts must weigh a range of factors when determining whether exceptional circumstances abstention is in order. Moses H. Cone, supra, 460 U.S. at 15-16, 103 S.Ct. at 936-37 12 Dillingham v. Putnam, 14 S.W. 303 (Tex.1890) (quoted with approval in Nelson v. Krusen, 678 S.W.2d 918, 921-22 (Tex.1984)), held that a law conditioning the right of appeal on posting a supersedeas bond, regardless of whether appellant could post the bond, violated the Texas constitution's guarantee of the right to appeal. The law, however, unlike the lien and bond provisions at issue here, barred litigants from appealing. The cases cited supra demonstrate that the Texas courts have not read Dillingham to protect the right to stay enforcement of judgments pending appeal. Furthermore, Pullman abstention may not be predicated on the possibility that a state court could interpret the broad language of the state constitution to overrule a state statute or rule. Hawaii Housing Authority, supra, 104 S.Ct. at 2327 n. 4; Examining Board v. Flores de Otero, 426 U.S. 572, 598, 96 S.Ct. 2264, 2279, 49 L.Ed.2d 65 (1976); Wisconsin v. Constantineau, 400 U.S. 433, 438-39, 91 S.Ct. 507, 511, 27 L.Ed.2d 515 (1971) 13 Middlesex Ethics Comm. v. Garden State Bar Ass'n, 457 U.S. 423, 102 S.Ct. 2515, 73 L.Ed.2d 116 (1982); Moore v. Sims, 442 U.S. 415, 99 S.Ct. 2371, 60 L.Ed.2d 994 (1979); Trainor v. Hernandez, 431 U.S. 434, 97 S.Ct. 1911, 52 L.Ed.2d 486 (1977); Juidice v. Vail, 430 U.S. 327, 97 S.Ct. 1211, 51 L.Ed.2d 376 (1977); Huffman v. Pursue, Ltd., 420 U.S. 592, 95 S.Ct. 1200, 43 L.Ed.2d 482 (1975); Younger v. Harris, 402 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971)