Court Opinion

ID: 21558
Source: CourtListenerOpinion
Date Created: 2010-04-25 07:46:47+00
Date Added: 2024-06-11T15:04:47.871884
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS
                        FOR THE FIFTH CIRCUIT

                               No. 00-60027
                            (Summary Calendar)

AMERICAN FAMILY LIFE ASSURANCE COMPANY OF COLUMBUS,
                                              Plaintiff-Appellant

                                     versus

BOBBIE F. ANDERSON,
                                                            Defendant-Appellee

         ___________________________________________________

             Appeal from the United States District Court
               for the Southern District of Mississippi
                              (99-CV-418)
         ___________________________________________________
                             July 27, 2000

Before POLITZ, WIENER and BENAVIDES, Circuit Judges.

PER CURIAM:*

     In this diversity case arising out of an employment dispute,

Plaintiff-Appellant      American    Family     Life   Assurance     Company    of

Columbus (“AFLAC”) appeals the district court’s grant of Defendant-

Appellee   Bobbie   F.    Anderson’s    motion    to   dismiss      the   federal

proceedings,    thereby    rendering     moot     AFLAC’s     (1)   Motion     for

Preliminary    Injunction,     (2)     Renewed    Motion     for    Preliminary

Injunction, (3) Motion for Order to Arbitrate, and (4)Request for

an Evidentiary Hearing.      The district court reasoned that granting

     *
      Pursuant to 5th Cir. Rule 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5th Cir. Rule 47.5.4.
Anderson’s Motion to Dismiss was appropriate under the abstention

doctrine announced by the Supreme Court in Colorado River Water

Conservation District v. United States.1                     Concluding that the

district    court’s    ruling       is    inconsistent       with    the      “virtually

unflagging       obligation    of   the    federal    courts        to    exercise     the

jurisdiction given them,”2 as we recently clarified in Black Sea

Inv., Ltd., v. United Heritage Corp.,3 we reverse and remand to the

district court for further proceedings.

                                           I.

                              Facts and Proceedings

     In    1996,    Anderson     and     AFLAC    entered     into       an   employment

contract    entitled    “Associate’s           Agreement.”         It     contained     an

arbitration clause which stated that “[a]ny dispute arising under

this Agreement, to the maximum extent allowed by applicable law,

shall be subject to arbitration, and prior to commencing any court

action     the     parties     agree      that    they   shall           arbitrate     all

controversies.” Anderson subsequently executed two more contracts

with AFLAC, one entitled “Special Projects Coordinator’s Agreement”

and the other entitled “District Coordinator’s Agreement,” in both

of which the arbitration clause was re-affirmed.

     In    1999,    Anderson     filed     a     complaint    in     state     court    in

     1
      424 U.S. 800, 96 S. Ct. 1236, 47 L. Ed. 2d 483 (1976).
     2
         Id. at 817, 96 S. Ct. 1236.
     3
         204 F.3d 647 (5th Cir. 2000).

                                           2
Mississippi naming as defendants AFLAC, Life Investors Insurance

Company of      America    (“Life    Investors”),      Rainmaker      Construction

L.L.C. (“Rainmaker”), and Victor A. Sheely (“Sheely”).                  Anderson’s

state   court    complaint     alleges     that   in   September       1997,   AFLAC

terminated its agreement with her without sufficient notice or

justification,        violating     her   employment      contract.     Anderson’s

complaint further alleges that AFLAC, Life Investors, Rainmaker and

Sheely, acted as conspirators in all wrongful actions taken against

her, and are thus jointly and severally liable for the harm that

she suffered.

     In response, AFLAC filed a Motion to Compel Arbitration and

Motion to Dismiss or, in the alternative, to Stay Proceedings.

These motions were argued before the state court in June of 1999,

and five days later, AFLAC filed in federal court a Petition to

Compel Arbitration, pursuant to 9 U.S.C. § 4, and a Motion for

Preliminary Injunction to enjoin Anderson from pursuing her claim

in state court.        AFLAC then timely filed a notice to remove the

state court case to federal court.                In an order issued by the

district court early the following month, the case removed from

state court, was consolidated with AFLAC’s federal court motion to

compel arbitration.

     Shortly thereafter, Anderson filed a motion to remand, and

approximately     a    month   after      that,   AFLAC    filed   a    Motion    to

Reconsider and Vacate Order Consolidating Cases, which contained a

request that the state court case be remanded to the state court.

                                          3
This       motion    was   granted   in   an    order   entered   at   the   end   of

September, 1999.           The state court case was remanded but the Motion

to Compel Arbitration remained in federal court.                   Less than two

weeks later, Anderson filed a motion in federal court to dismiss

AFLAC’s federal case. The district court granted Anderson’s motion

in an Order entered on December 13, 1999 and AFLAC now appeals.

                                          II.

                                      Analysis

A.     Standard of Review

       As the district court’s decision to dismiss on the basis of

the Colorado River abstention doctrine rests on an interpretation

of law, our review is de novo.4

B.     Colorado River Abstention

       “The Colorado River abstention doctrine is based on principles

of federalism, comity, and conservation of judicial resources.                      It

represents          an   ‘extraordinary    and     narrow   exception’       to    the

‘virtually unflagging obligation of the federal courts to exercise

the jurisdiction given them.’”5

               The Supreme Court has not prescribed a “hard
               and fast rule” governing the appropriateness
               of Colorado River abstention, but it has set

       4
            Murphy v. Uncle Ben’s, Inc., 168 F.3d 734, 738 (5th Cir.
1999).
       5
       Black Sea Inv., Ltd., v. United Heritage Corp., 204 F.3d
647, 650 (5th Cir. 2000) (citations omitted) (referencing Evanston
Ins. Co. v. Jimco, Inc., 844 F.2d 1185, 1189 (5th Cir. 1988) and
Colorado River, 424 U.S. at 813, 817).

                                           4
            forth six factors that may be considered and
            weighed in determining whether exceptional
            circumstances exist that would permit a
            district    court   to    decline   exercising
            jurisdiction: (1) assumption by either court
            of jurisdiction over a res; (2) the relative
            inconvenience of the forums; (3) the avoidance
            of piecemeal litigation; (4) the order in
            which jurisdiction was obtained by the
            concurrent forums; (5) whether and to what
            extent federal law provides the rules of
            decision on the merits; and (6) the adequacy
            of the state proceedings in protecting the
            rights   of    the  party   invoking   federal
            jurisdiction.6

“In assessing the propriety of abstention according to these

factors, a federal court must keep in mind that ‘the balance

[should    be]   heavily   weighted       in   favor   of   the   exercise   of

jurisdiction.’”7 Weighing the Colorado River factors with this

strong presumption in mind, we conclude that in this case the

balance tips decisively against abstention.

     (1) Assumption by Either Court of Jurisdiction Over a Res

     This case “does not involve any res or property over which any

court, state or federal, has taken control. ... [T]he absence of

this factor weighs against abstention.”8

     (2) Relative Inconvenience of the Forums

     6
         Black Sea, 204 F.3d at 650 (citing Murphy, 168 F.3d at 738).
     7
      Black Sea, 204 F.3d at 650 (citing Moses H. Cone Mem. Hosp.,
460 U.S. at 16).
     8
         Murphy, 168 F.3d at 738.

                                      5
     The federal and state courts are located in close geographic

proximity within the state of Mississippi. This factor thus weighs

against abstention.9

     (3) Avoidance of Piecemeal Litigation

     With respect to Colorado River abstentions, the concern with

piecemeal litigation is less significant with arbitration disputes

than with disputes involving a res.              The fact that if AFLAC obtains

an arbitration order, Anderson will be forced to resolve some

issues with AFLAC in arbitration and to resolve the other issues

with AFLAC, Life Investors, Rainmaker, and Sheely in different

forums “is not the result of any choice between federal and state

courts;     it    occurs   because   the       relevant   federal    law     requires

piecemeal        resolution   when   necessary       to    give     effect    to   an

arbitration agreement. Under the Arbitration Act, an arbitration

agreement must be enforced notwithstanding the presence of other

persons who are parties to the underlying dispute but not to the

arbitration agreement.”10

     Moreover, although avoidance of piecemeal litigation is a

legitimate concern in considering abstention, “[t]he real concern

at the heart of the third Colorado River factor is . . . the

concomitant danger of inconsistent rulings with respect to a piece

of property. When, as here, no court has assumed jurisdiction over

     9
          See id; Black Sea, 204 F.3d at 650.
     10
          Moses H. Cone Mem. Hosp., 460 U.S. at 20.

                                           6
a disputed res, there is no such danger.”11                    Given the need to

balance the above concerns, this factor is neutral with respect to

abstention.

                  (4) Order in Which Jurisdiction Was Obtained

       “[P]riority        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.”12                    Although the arbitration

dispute was first brought in state court, no real progress had been

made prior to its removal to federal court.                     Similarly, no real

progress had been made in federal court prior to the dismissal of

AFLAC’s Motion to Compel Arbitration.                  Finally, no real progress

has been made in the related suits that were remanded to state

court.      “As     the   state     and   federal      suits   are    proceeding      at

approximately         the    same     pace,     this     factor      weighs    against

abstention.”13

       (5) Whether State or Federal Law Will Be Applied

       AFLAC’s Motion to Compel Arbitration arises under federal law,

specifically 9 U.S.C. § 4 (the Federal Arbitration Act).                      Even were

it not the case that federal law governs the issue, however, “our

       11
            Id.
       12
            Moses H. Cone Mem. Hosp., 460 U.S. at 21.
       13
            Black Sea, 204 F.3d at 651 (citing Murphy, 168 F.3d at 738-
39).

                                            7
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,’ that can suffice

under     Colorado      River     to     justify    the    surrender   of     that

jurisdiction.”14        The district court correctly decided that this

factor weighs against abstention.

     (6) Adequate Protection in State Court

     There is no indication in the instant case that AFLAC’s

interests would not be adequately protected in state court.                   It is

clear, however, that this factor “can only be a neutral factor or

one that weighs against, not for, abstention.”15                    This factor

therefore remains neutral.

     All six of the Colorado River abstention factors are either

neutral    with    respect      to     abstention   or    counsel   against    it.

Considering       the    strong      presumption    against    Colorado       River

abstention, it is not appropriate in this case.

                                         III.

                                     Conclusion

     For the reasons states above, we reverse the district court’s

     14
          Moses H. Cone Mem. Hosp., 460 U.S. at 26, 103 S. Ct. 927.
     15
          Id at 1193.

                                           8
judgment of dismissal and remand this case to that court for

further consistent proceedings.

REVERSED AND REMANDED.

                                  9