Opinion ID: 73119
Heading Depth: 2
Heading Rank: 2

Heading: did the district court properly deny the

Text: APPELLANTS’ MOTION FOR A STAY OF THE STATE COURT PROCEEDINGS? Appellants also contend that the district court should have entered an order staying the state court proceedings pending the outcome of their federal suit seeking to compel arbitration. In denying their request for a stay, the district court relied on the prohibitions of the Federal AntiInjunction Act, 28 U.S.C. § 2283. The Federal Anti-Injunction Act prohibits a federal court from enjoining a state court proceeding except in three narrowly defined circumstances: (1) where there is an express congressional authorization to enjoin state proceedings; (2) where an injunction is necessary to protect a judgment that a federal court has rendered; and (3) where an injunction deciding whether to declare the rights of litigants.” Id. at 1260 (citing Wilson v. Seven Falls Co., 515 U.S. 277, 286-87 (1995)). The present case, by contrast, is not a declaratory judgment action. Instead, these appellants seek to enforce federal arbitration rights created by a federal statute, the FAA. As a result, no compelling state interest exists in having the state courts, instead of the federal courts, decide this case. Moses H. Cone indicates that, in arbitration cases, federal courts have a “virtually unflagging obligation . . . to exercise the jurisdiction given them.” Moses H. Cone, 460 U.S. at 15, 103 S. Ct. at 937. That Old Republic implicated Younger abstention, while this case involves Colorado River abstention underscores the differences that distinguish Old Republic from the present case. 11 is necessary to aid the federal court’s jurisdiction over an action. See 28 U.S.C. § 2283. Those exceptions are to be narrowly construed. See, e.g., Atlantic Coast Line Ry. Co. v. Brotherhood of Locomotive Eng’rs, 398 U.S. 281, 287, 90 S. Ct. 1739, 1743 (1970). The appellants contend that this case falls within the third exception, namely, that an injunction is necessary “in aid of [the court’s] jurisdiction.” Citing Vendo Co. v. Lektro-Vend Corp., 433 U.S. 623, 641-42, 97 S. Ct. 2881, 2893 (1977)(plurality opinion of Rehnquist, J.), the district court held to the contrary, because it believed the “aid of jurisdiction” exception applies exclusively to in rem proceedings. In Vendo Co., then-Justice Rehnquist’s plurality opinion stated that the “aid of jurisdiction” exception was intended to apply to in rem proceedings, and not to interfere with the balance of concurrent jurisdiction in personam actions. See id. However, that opinion did not command a majority of the Court, and Justice Blackmun’s concurrence, joined by one other justice, does not adopt that position. See id. at 643, 97 S. Ct. at 2893-94 (Blackmun, J., concurring in the result). We are not obligated to follow the plurality opinion in Vendo 12 Co., because plurality opinions of the Supreme Court do not bind this Court. See, e.g., United States v. Stewart, 65 F.3d 918, 924 (11th Cir. 1995), cert. denied, 516 U.S. 1134, 116 S. Ct. 958 (1996). We are obligated to follow a prior decision of this Court, see Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), and we do have a decision holding that the “aid of jurisdiction” exception can be applied to in personam actions when necessary to protect a federal court’s jurisdiction over a case. See Peterson v. BMI Refractories, 124 F.3d 1386, 1395 (11th Cir. 1997) (holding that “aid of jurisdiction” exception to antiinjunction act could be invoked to stay state court proceedings where the case had been removed from state court). The district court did not have the benefit of the Peterson decision when it issued its order in this case, but that decision is now law of the circuit. That the “aid of jurisdiction” exception applies to some in personam actions, however, does not necessarily mean that it applies to this case. In Peterson, we held that a stay of the state court proceedings was appropriate because the civil rights action initiated in the state court had been removed 13 to federal court on diversity grounds, depriving the state court of jurisdiction over the matter. See Peterson, 124 F.3d at 1395. In the present case, jurisdiction is proper in both courts. When there are concurrent jurisdiction state and federal proceedings arising out of the same transaction or occurrence, ordinarily neither forum should interfere with the other’s exercise of jurisdiction. See Atlantic Coast Line R.R. v. Brotherhood of Locomotive Eng’rs, 398 U.S. 281, 295, 90 S. Ct. 1739, 1747 (1970) (“In short, the state and federal courts had concurrent jurisdiction in this case, and neither court was free to prevent either party from simultaneously pursuing claims in both courts.”). The “aid of jurisdiction” exception applies only when an injunction is “necessary to prevent a state court from so interfering with a federal court’s consideration or disposition of a case as to seriously impair the federal court’s flexibility and authority to decide that case.” Id. In support of their position that the “aid of jurisdiction” exception applies here, appellants note that district courts have granted an injunction staying state court proceedings under this exception after determining that 14 the underlying dispute was arbitrable. See, e.g., Pervel Indus. v. TM Wallcovering, Inc., 675 F. Supp. 867 (S.D.N.Y. 1987), aff’d 871 F.2d 7 (2d Cir. 1989). In Pervel, the district court found that the “aid of jurisdiction” exception allowed it to stay parallel state court proceedings after granting an order compelling arbitration. See id. at 870. In the present case, however, no court has found the underlying dispute arbitrable and compelled the parties to arbitrate their claims. That distinction may be an important one, because when a federal district court grants a motion to compel arbitration it retains jurisdiction to confirm or vacate the resulting arbitration award under 9 U.S.C. §§ 9-10. When a federal court has ordered arbitration, a stay of the state court action may be necessary to insure that the federal court has the opportunity to pass on the validity of the arbitration award. In this case, however, that concern simply does not exist because the district court has not yet ruled on the motion to compel arbitration. Cf. Amalgamated Clothing Workers of America v. Richman Bros., 348 U.S. 511, 515-16, 75 S. Ct. 452, 455 (1955) (Anti- 15 Injunction Act exceptions do not apply merely because state court action involves legal area preempted by federal law). If the district court orders arbitration, a stay of the state court proceedings might be appropriate at that point because continued state proceedings could jeopardize the federal court’s ability to pass on the validity of the arbitration proceeding it has ordered.2 However, we need not decide that question because the premised condition, an order compelling arbitration, does not exist now. Therefore, the “aid of jurisdiction” exception to the Anti-injunction Act is inapplicable at present. See Lou v. Belzberg, 834 F.2d 730, 740 (9th Cir. 1987) (“The mere existence of a parallel action in state court does not rise to the level of interference with federal jurisdiction necessary to permit injunctive relief under the ‘necessary in aid of’ exception.”). Accordingly, we hold that no exception to the Anti-Injunction Act is applicable to this case and affirm 2 If the district court grants appellants’ motion to compel arbitration, and the appellants renew their motion for a stay of the state court proceedings, the district court can reconsider that motion then. 16 the district court’s denial of TranSouth’s motion for a stay of the parallel state court proceedings in this case. C. SHOULD THE DISTRICT COURT HAVE DISMISSED BELL’S CROSS-APPEAL? In his cross-appeal, Bell claims that the district court should not have dismissed his jury demand on the arbitrability issue and the separate fraud claim contained in his counterclaim. The district court dismissed Bell’s counterclaim when it dismissed the entire case. Because we have held the district court should not have dismissed the case on abstention grounds, the entire case is to be remanded to the district court. Bell’s contention about his jury demand and fraud claim are premature insofar as this Court is concerned. The district court is free to reconsider these matters on remand.