Opinion ID: 2967593
Heading Depth: 1
Heading Rank: 4

Heading: jurisdiction

Text: where an important federal right is implicated and state proceedings may be inadequate to protect the federal right, id., or where retention of jurisdiction would create needless friction with important state policies, Quackenbush, 517 U.S. at 717-18 (explaining the historic framework for abstention and noting that the Supreme Court's absten- tion jurisprudence reflect[s] a doctrine of abstention appropriate to our federal system, whereby the federal courts, exercising a wise dis- cretion, restrain their authority because of scrupulous regard for the rightful independence of the state governments and for the smooth working of the federal judiciary. (internal quotation marks omitted)). 12 That state law is implicated in this breach of contract action do[es] not weigh in favor of abstention, particularly since both parties may find an adequate remedy in either state or federal court. Luksch, 887 F.2d at 498; see also Black Sea Investment Ltd. v. United Heritage Corp., 204 F.3d 647, 651 (5th Cir. 2000) (noting that these factors only rarely can be used to support abstention); Ryan v. Johnson, 115 F.3d 193, 200 (3d Cir. 1997) (When the state court is adequate, how- ever, th[is] factor carries little weight.); Bethlehem Contracting Co. v. Lehrer/McGovern, Inc., 800 F.2d 325, 328 (2d Cir. 1986) ([The adequacy of the state forum], like choice of law, is more important when it weighs in favor of federal jurisdiction. It is thus of little weight here.). Moreover, in a diversity case, such as this one, federal courts regularly grapple with questions of state law, and abstention on the basis of the presence of state law, without more, would undermine diversity jurisdiction. Evans Transp. Co. v. Scullin Steel Co., 693 F.2d 715, 717 (7th Cir. 1982) ([U]ntil Congress decides to alter or elimi- nate the diversity jurisdiction we are not free to treat the diversity liti- gant as a second-class litigant, and we would be doing just that if we allowed a weaker showing of judicial economy to justify abstention in a diversity case than in a federal-question case.). Thus, the district court abused its discretion by concluding that the presence of Virginia law and the fact that the dispute adequately could be litigated in state court militated in favor of abstention. 3. Jurisdiction Over The Property In analyzing the last factor as one weighing in favor of abstention, the district court concluded that the state court has jurisdiction over the property, apparently basing this conclusion on the fact that the State Lien Action is an in rem action. As noted above, however, the district court did not rule that the State Lien Action is parallel to the Federal Contract Action, supra at 5 & n.3, and we have concluded that the State Lien Action is not parallel. Therefore, the district court erred by referencing the State Lien Action in its exceptional circum- stances analysis. Moreover, both the State Contract Action and the Federal Contract Action are in personam proceedings; thus, neither of the parallel proceedings has jurisdiction over the property. Accord- ingly, this factor weighs against abstention.9 ____________________________________________________________ 9 Related to the jurisdiction over res factor of the Colorado River doctrine is the Princess Lida doctrine, see Princess Lida of Thurn & Taxis 13 4. Order of Priority And Reactive Nature of Filings Finally, Gannett contends that the district court did not properly take into account the order in which jurisdiction was obtained or the reactive nature of the state court filings as factors weighing in favor of retaining jurisdiction. The Supreme Court has emphasized that the order of filing should be viewed pragmatically, meaning that priority should not be measured exclusively by which complaint was filed first, but rather in terms of how much progress has been made in the two actions. Moses H. Cone, 460 U.S. at 21. Because the State Con- tract Action was filed within a day of the Federal Contract Action and both had progressed at similar paces, the district court correctly found that this factor does not weigh heavily in favor of abstention.10 See Colorado River, 424 U.S. at 820 (concluding that abstention was appropriate even though the federal suit was filed first); Kruse v. Snowshoe, 715 F.2d 120, 124 (4th Cir. 1983) (noting that the district court did not abuse its discretion in declining to abstain where state ____________________________________________________________ v. Thompson, 305 U.S. 456, 465-66 (1939), which holds that a federal court may not exercise jurisdiction when granting the relief sought would require the court to control property over which another court already has jurisdiction. The Princess Lida doctrine is inapplicable, however, because the Federal Contract Action is an action entirely for money dam- ages. See, e.g., Al-Abood v. El-Shamari, 217 F.3d 225, 232 (4th Cir. 2000) (holding that the Princess Lida doctrine does not apply where the federal action does not depend on or involve exercising jurisdiction over th[e] res). 10 The district court held that this factor was neutral and did not weigh either for or against abstention. In the context of Colorado River abstention, however, it is inaccurate to state that this factor is of no weight. As the Moses H. Cone Court emphasized, our task in cases such as this is not to find some substantial reason for the exercise of federal jurisdiction by the district court; rather, the task is to ascertain whether there exist `exceptional' circumstances, the`clearest of justifications,' . . . to justify the surrender of jurisdiction. Moses H. Cone, 460 U.S. at 25-26. Thus, although this factor does not weigh heavily in favor of exer- cising federal jurisdiction, it counsels against abstention. See, e.g., Mur- phy v. Uncle Ben's Inc., 168 F.3d 734, 738-39 (5th Cir. 1999) (holding that where the state and federal suits are proceeding at similar paces, this factor weighs against abstention). 14 and federal actions were filed within two days of one another and similar progress had been made in each). Similarly, the district court did not abuse its discretion in determining that the state court filings were not vexatious or reactive. III. In sum, while legitimate concerns stemming from the important principles of comity and federalism certainly will weigh in favor of abstention in another case, none of these concerns, reflected in the Colorado River factors, weigh in favor of abstention in this case. We are mindful that the task in a Colorado River abstention case is to ascertain whether there exist exceptional circumstances, the clearest of justifications, . . . to justify the surrender of jurisdiction. Moses H. Cone, 460 U.S. at 25-26 (internal quotation marks omitted). Because no factor or combination of factors in this case gives rise to exceptional circumstances, the clearest of justifications, warranting abstention, we are left with a definite and firm conviction that the court below committed a clear error of judgment in the conclusion it reached upon a weighing of the relevant factors, Westberry, 178 F.3d at 261, and failed to exercise its discretion in accordance with the Colorado River `exceptional circumstances test.' New Beckley, 946 F.2d at 1074 (citation omitted). Were we to affirm in this case, virtu- ally all cases involving parallel litigation would warrant abstention under Colorado River, a result that is foreclosed by Supreme Court precedent. Accordingly, we reverse the district court's judgment stay- ing the action and remand for the district court to reinstate proceed- ings consistent with this opinion. REVERSED AND REMANDED 15