Court Opinion

ID: 2814164
Source: CourtListenerOpinion
Date Created: 2015-07-02 16:01:31.973661+00
Date Added: 2024-06-11T12:45:48.694147
License: Public Domain

United States Court of Appeals
                             For the Eighth Circuit
                         ___________________________

                                 No. 14-2971
                         ___________________________

                             Nissan North America, Inc.

                        lllllllllllllllllllll Plaintiffs - Appellant

                                            v.

                                Wayzata Nissan, LLC

                       lllllllllllllllllllll Defendants - Appellee
                                       ____________

                     Appeal from United States District Court
                    for the District of Minnesota - Minneapolis
                                   ____________

                              Submitted: May 13, 2015
                                 Filed: July 2, 2015
                                  ____________

Before RILEY, Chief Judge, MURPHY and MELLOY, Circuit Judges.
                             ____________

MURPHY, Circuit Judge.

      Nissan North America, Inc. (Nissan) filed this action in the federal district
court1 seeking a declaratory judgment that its new dealership in Eden Prairie,
Minnesota did not infringe the statutorily protected "relevant market area" of Wayzata

      1
      The Honorable David S. Doty, United States District Judge for the District of
Minnesota.
Nissan, LLC (Wayzata). Wayzata then sued Nissan in state court, alleging that the
establishment of the new dealership in Eden Prairie violated Minn. Stat. Ann. § 80E,
and moved to dismiss this federal action. The district court granted the motion to
dismiss, and Nissan appeals. We affirm.

        Eighteen years after Nissan and Wayzata entered into an agreement which
established Wayzata as an authorized Nissan dealer, Nissan informed Wayzata that
it intended to establish a new dealership in Eden Prairie, eight miles from Wayzata.
Nissan then brought this action in the federal district court, requesting a declaratory
judgment that the Eden Prairie dealership neither violated their dealer agreement nor
infringed Wayzata's "relevant market area" under Minn. Stat. Ann. § 80E.14. One
month later, Wayzata sued Nissan in Minnesota state court, alleging the new
dealership violated its dealer agreement and § 80E.14, and moved to dismiss this
action for lack of subject matter jurisdiction. The district court granted the motion
to dismiss after concluding that the parties were not diverse under 28 U.S.C. § 1332.
Nissan appeals.

       A district court may dismiss or stay a declaratory judgment action when it
determines that the question in controversy would be better handled in state court.
See Royal Indem. Co. v. Apex Oil Co., 511 F.3d 788, 793 (8th Cir. 2008). The state
court proceeding "must present the same issues, not governed by federal law, between
the same parties, and the federal court must evaluate whether the claims of all parties
in interest can satisfactorily be adjudicated in that proceeding [and] whether
necessary parties have been joined." Id. at 796 (quoting Brillhart v. Excess Ins. Co.
of America, 316 U.S. 491, 495 (1942)).

       In Cincinnati Indem. Co. v. A & K Constr. Co., an indemnity company filed
a federal action for a judgment declaring that an employee of a construction company
had not been working when he was injured. 542 F.3d 623, 624 (8th Cir. 2008). The
indemnity company sued in state court as well, requesting interpretation of the same

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insurance policy. Although the trial court dismissed the federal action for lack of
jurisdiction, we vacated its judgment and remanded the case given the court's failure
to abstain "from exercising jurisdiction in [a] declaratory case where a parallel state
lawsuit is pending." Id. at 625. We reasoned that "the parties and the issues [were]
identical," state law governed, and the state proceeding was "adequate to resolve the
issues." Id.

       We reach a similar conclusion here. This action and the state court action both
seek a declaration as to whether the establishment of the Eden Prairie Nissan
dealership violated the Nissan dealer agreement or infringed Wayzata's "relevant
market area" under Minn. Stat. Ann. § 80E.14. All parties in this case are named in
the state court action, all necessary parties have been joined there, and the state
proceeding is adequate to resolve the issues of state law presented by the parties. See
Cincinnati Indem. Co., 542 F.3d at 625. The questions in controversy will therefore
be better settled in the pending state court case. See id.

       While Nissan argues that the federal district court never considered whether or
not to abstain, "dismissal for lack of subject matter jurisdiction may be affirmed on
abstention grounds" even if a trial court has failed to consider that alternative. See
Cincinnati Indem. Co., 542 F.3d at 625 (citing Martin Ins. Agency, Inc. v. Prudential
Reinsurance Co., 910 F.2d 249, 254–55 (5th Cir. 1990)); see also United States v.
Rice, 605 F.3d 473, 475 n.2 (8th Cir. 2010). Because it would be duplicative and
uneconomical for our federal courts to decide a case substantially similar to one
which has been pending for over a year in state court, we affirm the judgment
dismissing this action. See Martin Ins. Agency, Inc., 910 F.2d at 255; cf. Capitol
Indem. Corp. v. Haverfield, 218 F.3d 872, 874–75 (8th Cir. 2000).

      For these reasons, we affirm the judgment of the district court.
                      ______________________________

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