Court Opinion

ID: 9447744
Source: CourtListenerOpinion
Date Created: 2023-08-03 22:43:30.998001+00
Date Added: 2024-06-11T17:31:10.676835
License: Public Domain

LUMBARD, Chief Judge
(concurring in part and dissenting in part).
The principles of comity and judicial economy seem to me to require us to hold that National’s decision first to litigate in the Alabama federal court the question of where the dispute should be tried precluded it from raising the question again in the Eastern District of New York after the Alabama federal court had ruled against it.
We are all agreed that a district court may protect its own jurisdiction by enjoining parties from subsequently litigating the same controversy before another district court. E. g., Remington Products Corp. v. American Aerovap, Inc., D.C.S.D.N.Y., 97 F.Supp. 644, affirmed 2 Cir., 1951, 192 F.2d 872; Crosley Corp. v. Hazeltine Corp., 3 Cir., 1941, 122 F.2d 925, certiorari denied 1942, 315 U.S. 813, 62 S.Ct. 798, 86 L.Ed. 1211; see Kerotest Manufacturing Co, v. C-O-Two Fire Equipment Co., 1952, 342 U.S. 180, 72 S.Ct. 219, 96 L.Ed. 200. Had National moved first in the Eastern District for an injunction restraining Thomas from proceeding in Alabama, the district judge ■could have issued such an order; under certain circumstances a refusal to do so might even amount to an abuse of discretion. Cresta Blanca Wine Co. v. Eastern Wine Corp., 2 Cir., 1944, 143 F.2d 1012.
In this case, however, the issue of whether the case should be litigated in Alabama or in the Eastern District of New York had first been tested by National in the Alabama district court. National moved to quash the service of summons upon it in Alabama and this motion was denied on December 10, 1959. National then moved in Alabama to dismiss the complaint, or in the alternative, for a stay of the action in the Alabama federal court or for a transfer of the action to the Eastern District of New York. These motions were denied in an order dated January 21, 1960. The prior proceedings in Alabama must be considered in deciding whether the order now being appealed was proper.
Whether a district court should enjoin a later proceeding in order to preserve its own jurisdiction is a matter resting in the discretion of the court. Tyrill v. Alcoa S. S. Co., D.C.S.D.N.Y.1958, 172 F.Supp. 363, affirmed 2 Cir., 1959, 266 F.2d 27. Similarly, a court which is asked to stay its own proceedings or is requested to refuse a declaratory-judgment suit until the merits of the same controversy are determined elsewhere is required to exercise its discretion. See Powell v. American Export Lines, Inc., D.C.S.D.N.Y.1956, 146 F.Supp. 417; Hammett v. Warner Bros. Pictures, Inc., 2 Cir., 1949, 176 F.2d 145; Crosley Corp. v. Westinghouse Electric & Mfg. Co., 3 Cir., 1942, 130 F.2d 474, certiorari denied 1942, 317 U.S. 681, 63 S.Ct. 202, 87 L.Ed. 546. Among the elements to be weighed are the convenience of the parties and the possibility of joining all those needed for a complete determination, the effectiveness of relief which can be afforded by each court, and the convenience of witnesses, as well as the priority-of-action rule, and this last factor “is not to be applied in a mechanical way regardless of other considerations.” Hammett v. Warner Bros. Pictures, Inc., supra [176 F.2d 150]. The issue before us, there*48fore, is whether, by enjoining the proceedings in Alabama after the district court in Alabama had considered and rejected National’s contentions, Judge Ray-fiel abused his discretion. I would hold that he did.
The policy behind the principle of res judicata is rooted in the need to put an end to litigation. Thus, one who “voluntarily appears, presents his case and is fully heard” should “be thereafter concluded by the judgment of the tribunal to which he has submitted his cause.” Baldwin v. Iowa State Traveling Men’s Ass’n, 1931, 283 U.S. 522, 526, 51 S.Ct. 517, 518, 75 L.Ed. 1244. The technical rules controlling the application of the doctrine of res judicata may indeed prevent it from applying here since the Alabama order was merely interlocutory, but the principles supporting the rule are surely applicable to the decision made in this case by the district court in Alabama. National chose to present to the Alabama court its contention that the entire action be concluded in the Eastern District of New York. It then had the opportunity to urge that court to stay its own proceeding because of the prior- ' ity-of-action rule and other considerations. There is no basis in the record for presuming that the court in Alabama did not weigh all these elements in passing on the motions, which called for an exercise of the court’s discretion. Nor is there any showing made in this court or below that such discretion was abused, even assuming arguendo that it would be proper for this court to consider such a claim. What the majority affirms, therefore, is a procedure which grants the plaintiff two federal forums in which to present the very same contentions addressed to the court’s discretion. If he prevails in either of the two, he is given the relief he desires.
Not only is such double litigation unfair to the party forced to rebut the same arguments in two proceedings before different courts, but it presents an opportunity, for unseemly conflict between coordinate federal courts and causes wasteful delay in judicial administration. In Hoffman v. Blaski, 1960, 363 U.S. 335, 80 S.Ct. 1084, 4 L.Ed.2d 1254, the Supreme Court held that with regard to a question of statutory construction, a decision made by one Court of Appeals was not binding on a court sitting in another circuit which was asked to construe the same statute in the same case. The question there was one of law, and since the first decision was not res judicata, the Court of Appeals hearing the second application was free to apply the law as it understood it. Here, however, both the Alabama and New York motions were addressed to the discretion of the court, and the Alabama court, to which the first application was made, exercised its discretion after a full hearing in favor of the defendant. It was improper for the New York court to consider the same issue and decide that the balance of convenience favored the New York proceeding. The forceful dissent written by Justice Frankfurter, with whom Justices Harlan and Brennan joined, in Hoffman v. Blaski, 363 U.S. at pages 345-350, 80 S.Ct. at pages 1090-1093, seems particularly persuasive in a ease such as this one, in which two motions addressed to the discretion of the court are presented successively to district courts in different circuits.
National chose to present its reasons for consolidation of the cases to the district judge in Alabama. Having been refused there, the next step it should have been required to take if the administration of justice is not to descend to chaos, was to seek review of that decision in the proper court. A district court’s refusal to stay proceedings or to transfer may not be a final appealable order under 28 U.S.C. §§ 1291, 1292, but both this circuit and the Fifth Circuit would grant relief by mandamus if the district court’s action amounted to an abuse of discretion. Ford Motor Co. v. Ryan, 2 Cir., 1950, 182 F.2d 329, 330; Ex parte Chas. Pfizer & Co., 5 Cir., 1955, 225 F.2d 720; see International Nickel Co. v. Martin J. Barry, Inc., 4 Cir., 1953, 204 F.2d 583, 585. See also La Buy v. Howes Leather Co., 1957, 352 U.S. 249, *49259-260, 77 S.Ct. 309, 1 L.Ed.2d 290. National, however, instead of testing whether the Alabama district judge had abused his discretion, preferred to move for the same relief in another circuit. This, I believe, it should not be permitted to do.
Nor is Rule 13(a) of the Federal Rules of Civil Procedure authority for holding that it is proper for a district court to enjoin a proceeding elsewhere regarding a claim which would be a compulsory counterclaim to an action pending before the court issuing the injunction. For the reasons stated above, I would hold that under the present circumstances, even if the second action were identical to the first, the first court could not reconsider what had been presented for the discretion of the second court and decided by it. But even absent a determination by the second court, the fact that a claim which would be a compulsory counterclaim in the first action is being asserted in the second should not justify the first court’s issuance of an injunction. The penalty for failure to assert a compulsory counterclaim is that “if the action proceeeds to judgment without the interposition of a counterclaim * * * the counterclaim is barred.” Notes of Advisory Committee on Rules, Rule 13, Note 7. Assertion of the claim before judgment is not prohibited, and there is no authority in the Rules for enjoining the separate prosecution of compulsory counterclaims elsewhere than in the federal court where the first claim is filed. The possibility of double litigation must be avoided by the exercise of judicial restraint by courts which are asked to stay proceedings instituted after the first complaint regarding any transaction or occurrence, or by the issuance of injunctions against parties initiating such proceedings when the balance of convenience is in favor of a full disposition of all issues in the first forum. But to issue an injunction entirely on the basis of the compulsory counterclaim rule would unduly subordinate all other considerations to the priority-of-action principle, since it would be the first forum where the transaction or occurrence is made the subject of litigation that would control all claims arising out of it.
I agree with the majority that the district court’s directives that the Alabama case be transferred and consolidated were erroneous.
For these reasons I would reverse the order of the district court in all respects.