Opinion ID: 461209
Heading Depth: 3
Heading Rank: 2

Heading: The Colorado River Factors

Text: 24 As an alternative ground for its holding that the dismissal of Bergeron's state law claims was warranted, the district court invoked the principles set forth in Colorado River Water Conservation District v. United States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976) and recently reaffirmed in Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). In Colorado River, the Supreme Court identified several factors that counsel in favor of dismissal in situations involving the exercise of concurrent jurisdiction by federal or federal and state courts, and promote the public interest in  '[w]ise judicial administration, ... conservation of judicial resources and comprehensive disposition of litigation.'  424 U.S. at 817, 96 S.Ct. at 1246 (quoting Kerotest Manufacturing Co. v. C-O-Two Fire Equipment Co., 342 U.S. 180, 183, 72 S.Ct. 219, 221, 96 L.Ed. 200 (1952)). 25 These factors include (1) which court first assumed jurisdiction over any res or property involved in the action; (2) the inconvenience of the federal forum; (3) the desirability of avoiding piecemeal litigation; (4) the order in which jurisdiction was obtained by the concurrent forums; and (5) whether federal law supplies the rule of decision. Moses H. Cone, 460 U.S. at 13-26, 103 S.Ct. at 936-40. In promulgating this test, the Supreme Court cautioned that federal courts have a virtually unflagging obligation to exercise the jurisdiction given them, and that [o]nly the clearest of justifications will warrant dismissal. Colorado River, 424 U.S. at 817, 819, 96 S.Ct. at 1246. 7 26 On appeal, Bergeron argues that the federal district court in New Hampshire erred in concluding that the Colorado River factors counseled in favor of dismissal of his state law claims against the trust, the trustee and the bank. We agree. We need not address Bergeron's argument to the extent that it relates to his claims against Loeb's estate and the executrix, because we have already determined that the Nevada Supreme Court's decision precluded these claims. 27 Considering the Colorado River factors in turn, we do not think that the Nevada state district court's assumption of in rem jurisdiction over the trust res compels dismissal here. 8 In Princess Lida v. Thompson, 305 U.S. 456, 59 S.Ct. 275, 83 L.Ed. 285 (1939), the Supreme Court considered whether a federal district court could properly exercise concurrent jurisdiction over a suit involving the administration and control of a trust res that was already within the exclusive jurisdiction of the Pennsylvania Court of Common Pleas. In determining that the federal district court was without jurisdiction to hear the suit, the Princess Lida Court wrote, 28 Certain it is ... that if both courts were to proceed they would be required to cover the same ground. This of itself is not conclusive of the question of the District Court's jurisdiction, for it is settled that where the judgment sought is strictly in personam, both the state court and the federal court, having concurrent jurisdiction, may proceed with the litigation at least until judgment is obtained in one of them which may be set up as res judicata in the other. On the other hand, if the two suits are in rem, or quasi in rem, so that the court, or its officer, has possession or must have control of the property which is the subject of the litigation in order to proceed with the cause and grant the relief sought the jurisdiction of the one court must yield to that of the other. We have said that the principle applicable to both federal and state courts that the court first assuming jurisdiction over property may maintain and exercise that jurisdiction to the exclusion of the other, is not restricted to cases where property has been actually seized under judicial process before a second suit is instituted, but applies as well where suits are brought to marshal assets, administer trusts, or liquidate estates, and in suits of similar nature where, to give effect to its jurisdiction, the court must control the property. The doctrine is necessary to the harmonious cooperation of federal and state tribunals. While it has no application to a case in a federal court based upon diversity of citizenship, wherein the plaintiff seeks merely an adjudication of his right or his interest as a basis of a claim against a fund in the possession of a state court, this is not such a case. No question is presented in the federal court as to the right of any person to participate in the res or as to the quantum of his interest in it. The contentions are solely as to administration and restoration of corpus. 29 305 U.S. at 465-67, 59 S.Ct. at 280-81 (footnotes omitted). See also Kittredge v. Stevens, 126 F.2d 263 (1st Cir.), cert. denied, 317 U.S. 642, 63 S.Ct. 34, 87 L.Ed. 517 (1942). Here, in contrast to the situation in Princess Lida, Bergeron's claims against the trust appear to be unrelated to the administration of the trust corpus. Instead, he seeks merely an adjudication of his right or his interest as a basis of a claims against a fund in the possession of a state court. Princess Lida, 305 U.S. at 466, 59 S.Ct. at 280. Therefore, the fact that the Nevada state district court in an ex parte order has asserted in rem jurisdiction over the trust res, see note 5, supra, does not warrant dismissal of Bergeron's claims that a constructive trust should be imposed on the res in his favor. See FSLIC v. Krueger, 435 F.2d 633, 636-37 (7th Cir.1970). 30 Consideration of the remaining Colorado River factors does not alter this conclusion. The adjudication of Bergeron's claims to the trust corpus will not necessarily be more inconvenient in New Hampshire than it would in Nevada. Bergeron is a New Hampshire resident, the Manchester Union Leader is published in New Hampshire, and Bergeron's complaint alleges actions which occurred in New Hampshire in purported violation of New Hampshire law. There does not appear to be any threat of piecemeal litigation here. Not only are Bergeron's claims unrelated to the administration of the trust, but there is nothing in the record to suggest that the trust is the subject of any litigation whatever in the Nevada courts. Compare Heritage Land Co. v. FDIC, 572 F.Supp. 1265, 1267 (W.D.Okla.1983) (Defendant's motion to dismiss granted where plaintiff sought refuge in federal court only after it had flailed about in state court for months and as it was facing imminent judgment.). Similarly, since Bergeron's federal action is not in rem, it is of little consequence that the Nevada court may have assumed jurisdiction of the trust res before Bergeron initiated the federal action in New Hampshire. Although Bergeron's complaint does not state a federal claim, it is clear that this factor alone does not justify the surrender of a federal court's diversity jurisdiction. Moses H. Cone, 460 U.S. at 23-26, 103 S.Ct. at 941-42.