Court Opinion

ID: 4321753
Source: CourtListenerOpinion
Date Created: 2018-10-17 16:00:25.8387+00
Date Added: 2024-06-11T13:43:20.404713
License: Public Domain

FILED
                                                                      United States Court of Appeals
                      UNITED STATES COURT OF APPEALS                          Tenth Circuit

                             FOR THE TENTH CIRCUIT                          October 17, 2018
                         _________________________________
                                                                          Elisabeth A. Shumaker
                                                                              Clerk of Court
 CNSP, INC., d/b/a NMSURF,

       Plaintiff - Appellant,

 and

 ALBERT CATANACH,

       Plaintiff,

 v.                                                          No. 18-2056
                                                (D.C. No. 1:17-CV-00827-MCA-KRS)
 CITY OF SANTA FE,                                            (D. N.M.)

       Defendant - Appellee.
                      _________________________________

                             ORDER AND JUDGMENT *
                         _________________________________

Before HARTZ, BALDOCK, and HOLMES, Circuit Judges.
                  _________________________________

       CNSP, Inc., d/b/a/ NMSURF (NMSURF), appeals the district court’s order

staying the underlying federal case pending resolution of parallel state-court

proceedings, pursuant to the deferral principle of Colorado River Water Conservation

       *
        After examining the briefs and appellate record, this panel has determined
unanimously to honor the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
submitted without oral argument. This order and judgment is not binding precedent,
except under the doctrines of law of the case, res judicata, and collateral estoppel. It
may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1
and 10th Cir. R. 32.1.
District v. United States, 424 U.S. 800, 817-19 (1976) (Colorado River); see D.A.

Osguthorpe Family P’ship v. ASC Utah, Inc., 705 F.3d 1223, 1231 n.11 (10th Cir.

2013) (describing a similar ruling as “deferral under the Colorado River Doctrine”).

We have jurisdiction, see Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp.,

460 U.S. 1, 9-10 & n.11 (1983) (holding appellate court had subject-matter

jurisdiction over district court’s order staying federal proceedings in deference to

parallel litigation pending in state court), and we affirm.

      I.     Background

      The underlying material facts are not in dispute. We recite the relevant facts

taken from NMSURF’s appellate briefs and the parties’ joint appendix. We also

“exercise our discretion to take judicial notice of publicly-filed records in our court

and certain other courts concerning matters that bear directly upon the disposition of

the case at hand.” United States v. Ahidley, 486 F.3d 1184, 1192 n.5 (10th Cir.

2007). Therefore, we have considered documents filed in a related removal action,

City of Santa Fe v. Catanach, No. 1:16-cv-00825 MCA/KBM (D.N.M.).

      NMSURF provides internet service to customers within a 150-mile radius of

Santa Fe, New Mexico. On April 9, 2015, it applied to the City for a permit to

consolidate two existing rooftop towers to one 30-foot tower. On April 28, 2015, the

City Planning Division responded that the proposed new tower would violate City

setback requirements. NMSURF and the City then engaged in correspondence and

meetings about NMSURF’s proposed plan for its towers.

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        A year later, on April 28, 2016, NMSURF notified the City that due to the

City’s failure to grant or deny its request, NMSURF deemed the request granted

pursuant to section 6409 of the Spectrum Act, 47 U.S.C. §1455, as implemented by

47 C.F.R. §1.40001(c)(4) (stating if a local government fails to approve or deny a

request for approval within the applicable timeframe, “the request shall be deemed

granted”). The City responded on May 13, 2016, rejecting NMSURF’s “deemed

granted” status, and more correspondence ensued. Based on its position that

permission had been deemed granted, NMSURF began modifying its towers in June

2016.

        On July 14, 2016, after discovering NMSURF’s new-tower construction, the

City filed suit in state court to enjoin further modification of the tower. The next

day, NMSURF filed an action to remove the state case to federal court, and on

September 19, 2016, the federal district court rejected the removal request and

remanded the case to state court. On October 26, 2016, the state court issued a

preliminary injunction prohibiting NMSURF from making further modifications to its

towers, but not requiring it to reverse any work it had completed. “Prior to the

injunction, NMSURF completed the consolidated tower and co-located six antennas

from the rooftop towers to the ground tower. The antennas are currently in

operation.” Aplt. Opening Br. at 10. Even so, NMSURF desires to consolidate

additional antennas and add new antennas to the new tower. Trial in the state-court

action is currently set for October 2018.

                                            3
       On April 7, 2017, plaintiff Albert Catanach, the owner of NMSURF, filed a

pro se action in federal district court against the state-court judge in his official

capacity alleging that various rulings the judge made in the state case violated his

due-process and equal-protection rights. The district court denied relief, and this

court affirmed. See Catanach v. Thomson, 718 F. App’x 595 (10th Cir. 2017).

       Meanwhile, NMSURF agreed to have its case reviewed by the City Planning

Commission. Although the City Land Use Department recommended approval of a

setback waiver, the Planning Commission denied it on June 8, 2017. 1 NMSURF filed

the underlying action on August 11, 2017, seeking (1) a determination that the City’s

denial of a setback waiver violates and is preempted by federal law; (2) a

determination that the City’s decision is arbitrary and capricious, and not supported

by substantial evidence; and (3) an order directing the City to issue the necessary

approvals to authorize NMSURF to modify, operate, and maintain its proposed

facilities. See Jt. App. at 20. After filing the federal suit, NMSURF appealed the

Planning Commission’s denial of the setback waiver to the City Council, and in

       1
         NMSURF refers to the required City permission both as a “permit” and a
“setback waiver,” which appear to refer to the same thing. Similarly, we assume
NMSURF’s reference to the City Land Development Department also means the City
Land Use Department, see Aplt. Reply Br. at 8. NMSURF characterizes the actions
of the Land Use Department as recommending approval of a setback permit, see Aplt.
Opening Br. at 11, 18; Aplt. Reply Br. at 5, but in its reply brief NMSURF complains
that the Land Use Department imposed unreasonable conditions to obtain the permit,
see Aplt. Reply Br. at 7, 8. Although we generally do not consider arguments made
for the first time in a reply brief, see Toevs v. Reid, 685 F.3d 903, 911 (10th Cir.
2012) (“Arguments not clearly made in a party’s opening brief are deemed waived.”),
consideration of this contention would not affect our conclusion that the district court
did not abuse its discretion in deeming the state and federal proceedings parallel.
                                             4
September 2017, the City Council abated its proceedings pending the outcome of the

underlying federal case.

        In this case, the district court stayed the federal action pending resolution of

the state-court proceedings. The court first determined that the state and federal

proceedings are parallel because they involve the same parties and the central legal

issue is the same in both courts. The court next applied the relevant factors to

determine whether deference to the state proceedings is appropriate, and determined

that it is.

        NMSURF appeals, arguing that the district court improperly avoided its duty

to decide the underlying federal case. Alternatively, NMSURF asserts that the

district court erred in finding the state and federal litigation are parallel.

        II.   Sprint/Younger Doctrine

        NMSURF contends that the district court incorrectly determined that it was

required to abstain. NMSURF relies on Sprint Communications, Inc. v. Jacobs,

571 U.S. 69 (2013), which addressed the Younger abstention doctrine. See id. at 78

(listing three types of proceedings satisfying the exceptional circumstances required

to “justify a federal court’s refusal to decide a case in deference to the States”

pursuant to Younger v. Harris, 401 U.S. 37 (1971) (internal quotation marks

omitted)). The district court did not address Younger abstention, nor was this

doctrine argued to the district court. More to the point, the court did not rule that it

was required to abstain; rather, it concluded that abstention was appropriate under

Colorado River’s principles of “wise judicial administration, giving regard to

                                             5
conservation of judicial resources and comprehensive disposition of litigation.”

Colorado River, 424 U.S. at 817 (brackets and internal quotation marks omitted); see

D.A. Osguthorpe Family P’ship, 705 F.3d at 1233 n.13 (recognizing that “[i]n the

strictest sense, the Colorado River doctrine is not an abstention doctrine at all.

Rather, it is a judicially crafted doctrine of efficiency that arose to fill a gap in the

federal courts’ existing inventory of abstention principles.”).

       The City urges us to apply the discretionary standard of Wilton v. Seven Falls

Co., 515 U.S. 277 (1995), instead of Colorado River’s exceptional-circumstances

test. But the Wilton standard applies to declaratory judgment actions, id. at 289-90,

while in this case the parties seek injunctive relief. Therefore, we apply the

Colorado River standard. See VonRosenberg v. Lawrence, 781 F.3d 731, 735

(4th Cir. 2015) (observing that applying the “Wilton standard to a federal complaint

seeking injunctive or monetary relief, which would otherwise be governed by the

Colorado River standard, would ignore the very different justifications for the two

abstention standards”); Royal Indem. Co. v. Apex Oil Co., 511 F.3d 788, 795 n.3

(8th Cir. 2008) (stating Wilton is not applicable “when a party seeks a good faith

injunction as well as declaratory relief”); Great Am. Ins. Co. v. Gross, 468 F.3d 199,

211 (4th Cir. 2006) (“[T]he . . . Wilton standard does not apply when a declaratory

judgment claim is joined with a nondeclaratory claim, such as a claim for damages or

                                             6
injunctive relief.”). 2 Thus, we address the district court’s application of Colorado

River.

         III.   Colorado River Doctrine

         “We review district court decisions regarding deferral under the Colorado

River Doctrine for abuse of discretion.” D.A. Osguthorpe Family P’ship, 705 F.3d at

1231 n.11 (internal quotation marks omitted).

         “We recognize, as we must, the ‘virtually unflagging obligation of the federal

courts to exercise the jurisdiction given them.’” Id. at 1233 (quoting Colorado River,

424 U.S. at 817). “Generally, as between state and federal courts, the rule is that the

pendency of an action in the state court is no bar to proceedings concerning the same

matter in the Federal court having jurisdiction.” Colorado River, 424 U.S. at 817

(ellipsis and internal quotation marks omitted). “This duty is not, however,

absolute.” Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 709, 716 (1996).

Undoubtedly, “federal courts may decline to exercise their jurisdiction, in otherwise

exceptional circumstances, where denying a federal forum would clearly serve an

important countervailing interest, for example, where abstention is warranted by

considerations of proper constitutional adjudication, regard for federal-state relations,

         2
         NMSURF argues that the district court erred in distinguishing between
“coercive” and “remedial” relief because Sprint rejected such a distinction. See
Sprint, 571 U.S. at 80 n.6 (stating that a distinction between “coercive” and
“remedial” relief is not necessary or helpful when “determin[ing] whether a state
proceeding is an enforcement action under Younger”). But the district court’s
reference to “coercive relief,” Jt. App. at 65, was relevant to the decision to apply
Colorado River, rather than Wilton, because, as discussed above, the relief sought
includes coercive, or injunctive, relief, so Colorado River, not Wilton, applies.
                                            7
or wise judicial administration.” Id. (citations and internal quotation marks omitted).

“It is well-established that federal courts have the power to refrain from hearing,

among other things, cases which are duplicative of a pending state proceeding. This

latter principle—the avoidance of duplicative litigation—is at the core of the

Colorado River doctrine.” D.A. Osguthorpe Family P’ship, 705 F.3d at 1233

(citation and internal quotation marks omitted).

      We “first determine whether the state and federal proceedings are parallel.

Suits are parallel if substantially the same parties litigate substantially the same

issues in different forums.” Fox v. Maulding, 16 F.3d 1079, 1081 (10th Cir. 1994)

(citations and internal quotation marks omitted). The district court concluded that the

state and federal proceedings are parallel, noting that NMSURF’s description of its

arguments in the state case demonstrates that the state-court claims are similar to the

federal-court claims. See, e.g., Jt. App. at 10, ⁋ 10 (federal complaint alleging the

City sued Mr. Catanach in state court for violating a City ordinance requiring a

permit in conflict with his “deemed granted federal right”). The district court further

noted that the remand order in Catanach, No. 1:16-cv-00825 MCA/KBM, 2016 WL

10179299, at *4 (D.N.M. Sept. 19, 2016), stated, “the question of whether Section

6409 [i.e., 47 U.S.C. §1455] applies to [Plaintiffs’] tower will be significant in this

matter, [and] this question was raised as a defense to the City’s state law claim.” Jt.

App. at 67 (first and second brackets in original) (internal quotation marks omitted).

In addition, NMSURF acknowledges that claims brought under the Spectrum Act

                                            8
may be determined by “‘any court of competent jurisdiction.’” Aplt. Opening Br. at

8-9 (quoting 47 C.F.R. §1.40001(c)(5)).

        NMSURF asserts that the relief it seeks in state court differs from the relief it

seeks in federal court, so the litigation is not parallel. NMSURF says it seeks

declaratory relief, as well as compensatory and punitive damages in state court, while

in federal court it asks for declaratory and injunctive relief. But in state court,

NMSURF requests relief similar to its federal request. Compare Jt. App. at 20

(federal complaint requesting an “order requiring the City to issue [NMSURF]

approvals authorizing [it] to modify, operate and maintain its proposed facilities”),

with Catanach, No. 1:16-cv-00825 MCA/KBM, Doc. 10, at 21 (answer and

counterclaims filed in removal case requesting the court to “order the city to issue a

building permit in accordance with Section 6409(a) or 47 U.S.C. §332(c)(7), and any

other approvals as necessary to allow [NMSURF] to operate their modified wireless

facility”). 3

        3
         In arguing that the relief it seeks in federal court differs from the relief it
seeks in state court, NMSURF has not cited to the “parts of the record on which [it]
relies,” as required by Fed. R. App. P. 28(a)(8)(A). We observe that NMSURF’s
state-court answer and counterclaims are not part of the record on appeal.
Nevertheless, we exercise our discretion to take judicial notice of the filings in the
related removal action, as well as related state-court records. See Ahidley, 486 F.3d
at 1192 n.5. It appears that NMSURF’s answer and counterclaims filed in the federal
removal proceeding, Catanach, No. 1:16-cv-00825 MCA/KBM, Doc. 10, were
incorporated into the state-court case when the matter was remanded. See
https://caselookup.nmcourts.gov/caselookup/app?component=cnLink&page=SearchR
esults&service=direct&session=T&sp=SD-101-CV-201601719, entry dated Sept. 23,
2016 (last visited Sept. 25, 2018).
                                             9
       NMSURF points out that its federal complaint is based in part on events that

occurred after the City filed its complaint in state court—the denial of a setback

waiver by the City Planning Commission and the City Council’s decision to abate its

review of that decision. It asserts that the Planning Commission’s denial of the

setback waiver violated its due-process rights, and that it cannot raise these claims in

state court because the opportunity for amending the pleadings has passed. But the

federal complaint does not seek relief other than rulings necessary to permit

NMSURF to proceed with its planned tower modification, and as discussed above, a

request for that relief is pending in state court.

       In its reply brief, NMSURF complains that the district court failed to address

its federal complaint’s second, third, and fourth causes of action. We generally do

not consider arguments made for the first time in a reply brief. See Toevs v. Reid,

685 F.3d 903, 911 (10th Cir. 2012) (“Arguments not clearly made in a party’s

opening brief are deemed waived.”). Even so, although NMSURF contends that

these claims are not substantially similar to claims in the state-court case, it has

presented no explanation or argument to support this contention. See Kerber v.

Qwest Pension Plan, 572 F.3d 1135, 1146 (10th Cir. 2009) (rejecting appellate claim

as inadequately briefed because the claim was addressed in only conclusory fashion).

Further, NMSURF’s answer and counterclaims filed in the removal action and

remanded to state court invoked 47 U.S.C. § 332(c), see Catanach, No. 1:16-cv-

00825 MCA/KBM, Doc. 10, at 14, 21, as did its federal complaint, see Jt. App. at 17-

18 (NMSURF’s second and third causes of action). Therefore, we see no reversible

                                             10
error in the district court’s failure to specifically address the second, third, and fourth

causes of action.

       NMSURF also notes that the parties in the state case are different from the

parties in the federal case because Infinite Interests, LLC is a state defendant but is

not a party to the federal case. NMSURF makes no attempt to explain why this

circumstance is relevant, or even to inform this court that Infinite Interests was

named in the state suit because it is the owner of record of the NMSURF property.

We fail to see how inclusion of Infinite Interests as a state-court defendant defeats

the determination that the state and federal cases are parallel.

       Proceedings may be parallel even if they “are far from identical.” D.A.

Osguthorpe Family P’ship, 705 F.3d at 1233. Based on the circumstances showing

that substantially the same parties are litigating substantially the same issues in both

the federal and state cases, we find no abuse of discretion in the district court’s

determination that the state and federal proceedings are parallel.

       Normally, we would next turn to the district court’s application of the relevant

factors for assessing whether exceptional circumstances exist warranting deferral.

See Fox, 16 F.3d at 1082. But NMSURF does not argue that the district court

misapplied the relevant factors, so any challenge to the court’s ruling is waived. See

COPE v. Kan. State Bd. of Educ., 821 F.3d 1215, 1223 (10th Cir. 2016) (“Appellants

do not raise this argument in their opening brief, and so it is waived.”).

                                            11
      IV.    Conclusion

      We affirm the district court’s order staying the underlying federal case pending

resolution of the parallel state-court proceedings.

                                            Entered for the Court

                                            Jerome A. Holmes
                                            Circuit Judge

                                           12