Court Opinion

ID: 8483374
Source: CourtListenerOpinion
Date Created: 2022-11-11 19:00:24.577086+00
Date Added: 2024-06-11T16:49:45.500231
License: Public Domain

Case: 21-20093     Document: 00516542432         Page: 1     Date Filed: 11/11/2022

              United States Court of Appeals
                   for the Fifth Circuit                               United States Court of Appeals
                                                                                Fifth Circuit

                                                                              FILED
                                                                      November 11, 2022
                                  No. 21-20093                           Lyle W. Cayce
                                                                              Clerk

   Koch Project Solutions, L.L.C.,

                                                           Plaintiff—Appellant,

                                       versus

   Alliance Process Partners, L.L.C., doing business as
   International Alliance Group; Triten Corporation,

                                                         Defendants—Appellees.

                  Appeal from the United States District Court
                      for the Southern District of Texas
                            USDC No. 4:20-cv-3479

   Before Richman, Chief Judge, and Clement and Duncan, Circuit
   Judges.
   Per Curiam:*
          Koch Product Solutions, L.L.C. (KPS) appeals a stay order in its
   federal declaratory judgment action. The district court granted the stay

          *
            Pursuant to 5th Circuit 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   opinion should not be published and is not precedent except under the limited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 Circuit Rule 47.5.4.
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                                    No. 21-20093

   largely because of a related pending state court action. Because the district
   court did not abuse its discretion, we affirm.
                                          I
          KPS seeks a declaratory judgment that it has not unlawfully drawn
   employees or business away from Triten Corporation and its subsidiary
   International Alliance Group (together, Triten). KPS and Triten both
   provide project management services to clients in the energy sector. KPS
   leadership includes at least five former Triten employees, including KPS
   President, Paul Switzer. While working at Triten, each of the employees
   entered a contract that included noncompete provisions. The provisions
   prohibited inducing or attempting to induce employees to leave Triten and
   work for a competitor, and they prohibited soliciting or accepting similar
   business from Triten clients for set periods. Between 2018 and 2019, all five
   employees left their positions at Triten.
          In June 2020, Switzer filed a lawsuit in Texas state court against
   Triten for breach of contract and various state law torts. These claims arose
   out of Triten’s alleged failure to pay Switzer compensation and benefits.
   Triten responded with counterclaims against Switzer and third-party claims
   against two of KPS’s parent companies, Koch Industries and Koch
   Engineered Solutions, and against Koch officer David Dotson (collectively,
   the Koch affiliates). Among other claims, Triten alleged civil conspiracy and
   tortious interference with the noncompete provisions. Triten charged that
   Switzer and the Koch affiliates sought to draw business away from Triten by
   establishing KPS and recruiting the former Triten employees.           Triten
   referred to KPS in its claims, but it did not name KPS as a third-party
   defendant. The state district court dismissed the Koch affiliates from the

                                          2
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   lawsuit for lack of personal jurisdiction, but that decision was reversed on
   appeal.
          In October 2020, KPS filed this federal declaratory judgment action
   against Triten.           KPS brought the lawsuit pursuant to the Declaratory
   Judgment Act 1 “to remove the cloud over its name” cast by Triten’s
   allegations in state court. The federal action consists of two counts of
   tortious interference. First, KPS seeks a declaration that it did not interfere
   with its employees’ contract obligations not to solicit or accept business from
   Triten clients. Second, KPS seeks a declaration that it did not interfere with
   its employees’ contract obligations not to induce or attempt to induce Triten
   employees to leave Triten and work at a competitor.
          Triten sought to dismiss or stay the suit under the Supreme Court’s
   Brillhart 2 doctrine, whereby federal courts may exercise their discretion to
   abstain from hearing declaratory judgment actions. 3 In January 2021, the
   district court denied the motion to dismiss but granted a stay until final
   judgment in the state court action. The district court reasoned that, although
   the state court action involved additional claims and parties, “all of the
   material questions necessary to decide the issues raised in this declaratory
   judgment action are governed by state law and can be resolved in the state
   court action,” since the lawsuit arose out of the same facts and involved the
   same contractual issues. The district court ordered the parties to submit a
   joint status report every 60 days until the stay is lifted. KPS timely appealed
   the stay order.

          1
              28 U.S.C. § 2201-02.
          2
              Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491 (1942).
          3
              Id. at 495.

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                                                  II
           We must first determine our jurisdiction over this appeal. 4 KPS seeks
   appellate review pursuant to 28 U.S.C. § 1291. Under § 1291, “federal
   courts of appeals are empowered to review only ‘final decisions of the district
   courts.’” 5 “[A] decision is ordinarily considered final and appealable under
   § 1291 only if it ‘ends the litigation on the merits and leaves nothing for the
   court to do but execute the judgment.’” 6                    Most stay orders are not
   considered final because they do not end litigation; they postpone it. 7
           In abstention and related contexts, however, the Supreme Court has
   recognized an exception to this general rule. 8 The Court first identified this
   exception in Idlewild Bon Voyage Liquor Corp. v. Epstein. 9 In Idlewild, a liquor
   distributor brought a federal suit challenging the constitutionality of a state
   statute. 10 The district court stayed the lawsuit under the Pullman 11 doctrine,
   whereby federal courts abstain from deciding constitutional disputes when a
   state court’s clarification of its law would render a constitutional ruling
   unnecessary. 12 The Supreme Court held that the stay order was a final

           4
             United States v. Shkambi, 993 F.3d 388, 389 (5th Cir. 2021) (“We start, as always,
   with jurisdiction.”).
           5
               Microsoft Corp. v. Baker, 137 S. Ct. 1702, 1707 (2017) (quoting 28 U.S.C. § 1291)).
           6
             Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 712 (1996) (quoting Catlin v. United
   States, 324 U.S. 229, 233 (1945)).
           7
            Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 10 n.11 (1983);
   Kershaw v. Shalala, 9 F.3d 11, 14 (5th Cir. 1993).
           8
                Moses H. Cone, 460 U.S. at 10 n.11.
           9
                370 U.S. 713 (1962).
           10
                Id. at 714.
           11
                R.R. Comm’n of Tex. v. Pullman Co., 312 U.S. 496 (1941).
           12
                Id. at 501-02.

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   decision appealable under § 1291 but gave limited reasoning. 13 It said only
   that “[t]he Court of Appeals properly rejected the argument that the order
   of the District Court ‘was not final and hence unappealable under 28 U.S.C.
   §§ 1291, 1292,’ pointing out that ‘[a]ppellant was effectively out of court.’” 14
             Two decades later, in Moses H. Cone Memorial Hospital v. Mercury
   Construction Corp., 15 the Court relied on Idlewild’s “effectively out of court”
   exception and held once again that a stay order was appealable under § 1291. 16
   Moses H. Cone involved a stay entered under the Colorado River 17 doctrine,
   whereby federal courts may in certain exceptional circumstances abstain
   from exercising jurisdiction when there are concurrent state court
   proceedings. 18 Idlewild secured appellate jurisdiction over the stay order. 19
   In Idlewild, the “district court stay pursuant to Pullman abstention is entered
   with the expectation that the federal litigation will resume in the event that
   the plaintiff does not obtain relief in state court on state-law grounds.” 20 By
   contrast, in Moses H. Cone, “a stay . . . meant that there would be no further
   litigation in the federal forum; the state court’s judgment on the issue would

             13
                  Idlewild, 370 U.S. at 715 n.2.
             14
                  Id. (quoting Idlewild Bon Voyage Liquor Corp. v. Rohan, 289 F.2d 426, 428 (2d Cir.
   1961)).
             15
                  460 U.S. 1 (1983).
             16
                  Id. at 10.
             17
                  Colo. River Water Conservation Dist. v. United States, 424 U.S. 800 (1976).
             18
                  Id. at 817-19.
             19
                  Moses H. Cone, 460 U.S. at 10.
             20
                  Id.

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   be res judicata.” 21 As a result, “the argument for finality of the District
   Court’s order [was] even clearer.” 22
           Moses H. Cone emphasized that the “effectively out of court”
   exception was narrow. “Of course,” the Court explained, “Idlewild does not
   disturb the usual rule that a stay is not ordinarily a final decision for purposes
   of § 1291, since most stays do not put the plaintiff ‘effectively out of
   court.’” 23 The exception was “limited to cases where (under Colorado River,
   abstention, or a closely similar doctrine) the object of the stay is to require all
   or an essential part of the federal suit to be litigated in a state forum.” 24
           The Court ascertained the stay’s object based on its legal
   consequences. It was not enough that a stay “have the practical effect of
   allowing a state court to be the first to rule on a common issue.” 25 Rather,
   the Court “h[e]ld only that a stay order is final when the sole purpose and
   effect of the stay is precisely to surrender jurisdiction of a federal suit to a
   state court.” 26
           Since Moses H. Cone, the Court has continued to apply this
   exception. 27 In Quackenbush v. Allstate Insurance Co., 28 the Court deemed an
   abstention-based remand order appealable under § 1291 because of its

           21
                Id.
           22
                Id.
           23
                Id. at 10 n.11.
           24
                Id.
           25
                Id.
           26
                Id.
           27
               See Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 712 (1996); Wilton v. Seven
   Falls Co., 515 U.S. 277, 280-81 (1995).
           28
                517 U.S. 706 (1996).

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   decisions in Moses H. Cone and Idlewild. 29 Based on those precedents, the
   order was appealable as a final decision under § 1291 because it “put[] the
   litigants in this case effectively out of court, and its effect [was] precisely to
   surrender jurisdiction of a federal suit to a state court.” 30 The Court
   acknowledged that “these standards do not reflect our oft-repeated
   definition of finality.” 31 Nevertheless, the Court concluded that § 1291
   appealability was “compelled by precedent.” 32
           Precedent also compels § 1291 appealability in this case. Like stay
   orders governed by Pullman and Colorado River, the stay order governed by
   Brillhart here concerns the interplay of federal and state proceedings. 33 The
   stay suspends the former in favor of the latter; its object is “precisely to
   surrender jurisdiction of a federal suit to a state court.” 34 Litigation of the
   federal suit will not resume, if at all, until final judgment in the state court
   action. The district court’s stay puts the litigants in this case “effectively out
   of court.” 35 Under these circumstances, the stay is a § 1291 final decision.
           Generally, when this court has deemed Brillhart stay orders
   appealable under § 1291, the stays have suspended federal proceedings until
   the resolution of a state court lawsuit with res judicata effect. 36 In those cases,

           29
                Id. at 712.
           30
                Id. (citing Moses H. Cone, 460 U.S. at 10 n.11) (internal citations omitted).
           31
                Id. at 713.
           32
                Id.
           33
                See Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 495 (1942).
           34
                Moses H. Cone, 460 U.S. at 10 n.11.
           35
                Id.
           36
            Granite State Ins. Co. v. Tandy Corp., 986 F.2d 94, 95 (5th Cir. 1992); see also Am.
   Guarantee & Liab. Ins. Co. v. Anco Insulations, Inc., 408 F.3d 248, 250 (5th Cir. 2005); Ford

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   the stays guaranteed that there would be no further litigation in the federal
   forum. In this case, the potential for future litigation is less clear. State law
   determines the preclusive effect of a state court judgment. 37 Under Texas
   law, res judicata requires: “(1) a prior final judgment on the merits by a court
   of competent jurisdiction; (2) identity of parties or those in privity with them;
   and (3) a second action based on the same claims as were raised or could have
   been raised in the first action.” 38 When this court has deemed Brillhart stays
   appealable under § 1291, it has not engaged in a detailed res judicata analysis.
   That is because res judicata has been self-evident: the parties have been
   identical, and the claims in the state and federal court actions have
   overlapped. 39
           Not so here. A final judgment by the state court on the merits of the
   tortious interference claims may well satisfy elements one and three, but the
   parties are not identical, and privity is uncertain. This distinction is crucial
   to the preclusion analysis. Given the fact-specific nature of privity, 40 which

   Motor Credit Co. v. Lewis, 233 F.3d 575, 2000 WL 1468831, at *4 (5th Cir. 2000) (per
   curiam) (unpublished).
           37
                In re 3 Star Properties, L.L.C., 6 F.4th 595, 604-05 (5th Cir. 2021).
           38
             Cox v. Nueces Cnty., 839 F.3d 418, 421 (5th Cir. 2016) (quoting Amstadt v. U.S.
   Brass Corp., 919 S.W.2d 644, 652 (Tex. 1996)).
           39
               See Am. Guarantee, 408 F.3d at 250 (holding that a stay order was appealable
   under § 1291 when the parties were the same and the state proceeding encompassed
   common issues); Granite State, 986 F.2d at 95 (holding that a stay order was appealable
   under § 1291 when the parties were the same and the issues would “undoubtedly be
   litigated in the state court action”); Ford Motor, 2000 WL 1468831, at *4 (“Since the state
   court proceeding will resolve the declaratory judgment action’s only issue, the order
   granting the stay of proceeding is considered a final judgment for purposes of 28 U.S.C.
   § 1291.”).
           40
            EEOC v. Jefferson Dental Clinics, PA, 478 F.3d 690, 694 (5th Cir. 2007) (citing
   and then quoting Getty Oil Co. v. Ins. Co. of N. Am., 845 S.W.2d 794, 800 (Tex. 1992))

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   the parties have not briefed, we decline to rule on privity or to predict the res
   judicata effect of an unresolved state court proceeding. 41
           In any case, the possibility of future litigation does not preclude our
   jurisdiction. Our circuit precedents also hold that a stay order that causes a
   “protracted and indefinite” delay in federal court proceedings suffices to put
   plaintiffs “effectively out of court.” 42 This logic derives from Idlewild, in
   which, as noted, the Supreme Court asserted § 1291 jurisdiction over a stay
   that was “entered with the expectation that the federal litigation will resume
   in the event the plaintiff does not obtain relief in state court.” 43 In this case,
   the stay order has already delayed proceedings for over eighteen months, and
   there is no indication that delay will end. Even if federal litigation does
   ultimately continue, our jurisdiction is secure.
           Triten contends that the district court’s order is not final because the
   order requires the parties to submit periodic status reports. This argument
   lacks merit. Section 1291 finality “is to be given a practical rather than a
   technical construction.” 44 An order is final when “there is no indication that

   (“Texas courts have been clear that there is no categorical rule for privity; instead the
   courts look to ‘the circumstances of each case.’”).
           41
             Cooper v. Harris, 137 S. Ct. 1455, 1470 n.4 (2017) (determining that there was “no
   occasion to address” a fact-intensive issue “the parties have not briefed or argued”).
           42
              Hines v. D’Artois, 531 F.2d 726, 731 (5th Cir. 1976) (holding that a stay order that
   would delay proceedings for at least eighteen months was a final decision under § 1291); see
   also Occidental Chem. Corp. v. La. Pub. Serv. Comm’n, 810 F.3d 299, 306-08 (5th Cir. 2016)
   (affirming that Hines remains good law and holding that a stay order that had already
   delayed proceedings for nearly two years was a final decision under § 1291).
           43
              Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 10 (1983); see
   also Occidental, 810 F.2d at 306-07; Hines, 531 F.2d at 730-31.
           44
              Microsoft Corp. v. Baker, 137 S. Ct. 1702, 1712 (2017) (quoting Eisen v. Carlisle &
   Jacquelin, 417 U.S. 156, 171 (1974)).

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   the district court intends to revisit its decision to stay the case.” 45 Here,
   there is no such indication. The district court ordered that “this action
   should be stayed pending final adjudication in the state court action.” A
   mere request for updates on the parties’ progress does not evince any interest
   in lifting the stay before the state court action concludes.
                                                  III
           We now turn to the merits of the stay order. Under the Declaratory
   Judgment Act, federal courts “may declare the rights and other legal
   relations of any interested party seeking such declaration.” 46 They are not
   compelled to do so, however. In declaratory judgment actions, “the normal
   principle that federal courts should adjudicate claims within their jurisdiction
   yields to considerations of practicality and wise judicial administration.” 47
   The statute has long “been understood to confer on federal courts unique
   and substantial discretion in deciding whether to declare the rights of
   litigants.” 48
           The Brillhart doctrine governs the district court’s discretion to stay a
   declaratory judgment action. 49 Under Brillhart, a district court “should
   ascertain whether the questions in controversy between the parties to the

           45
             Am. Guarantee & Liab. Ins. Co. v. Anco Insulations, Inc., 408 F.3d 248, 250 (5th
   Cir. 2005) (citing Moses H. Cone, 460 U.S. at 12-13).
           46
                28 U.S.C. § 2201(a).
           47
                Wilton v. Seven Falls Co., 515 U.S. 277, 288 (1995).
           48
                Id. at 286.
           49
              Sherwin-Williams Co. v. Holmes Cnty., 343 F.3d 383, 389 (5th Cir. 2003).
   Although commonly referred to as Brillhart “abstention,” the term is “not entirely
   accurate.” Med. Assur. Co., Inc. v. Hellman, 610 F.3d 371, 378 (7th Cir. 2010).
   “Abstention” normally refers to “judicially-created doctrines,” whereas the discretion to
   stay or dismiss an action under the Declaratory Judgment Act comes from the statute itself.
   Id.

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   federal suit . . . can better be settled in the proceeding pending in the state
   court.” 50
           We review the district court’s decision to stay federal court
   proceedings pending the outcome of a state court action for abuse of
   discretion. 51 Although discretion “is broad, it is not unfettered.” 52 A district
   court abuses its discretion “unless [it] addresses and balances the purposes
   of the Declaratory Judgment Act and the factors relevant” to the Brillhart
   doctrine. 53       In St. Paul Insurance Co. v. Trejo, 54 we identified seven
   nonexclusive factors to guide a district court’s exercise of discretion in a
   Brillhart stay:
           (1) whether there is a pending state action in which all of the
           matters in controversy may be fully litigated;
           (2) whether the plaintiff filed suit in anticipation of a lawsuit
           filed by the defendant;
           (3) whether the plaintiff engaged in forum shopping in bringing
           the suit;
           (4) whether possible inequities in allowing the declaratory
           plaintiff to gain precedence in time or to change forums exist;
           (5) whether the federal court is a convenient forum for the
           parties and witnesses;

           50
                Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 495 (1942).
           51
             Am. Guarantee & Liab. Ins. Co. v. Anco Insulations, Inc., 408 F.3d 248, 250 (5th
   Cir. 2005).
           52
              St. Paul Ins. Co. v. Trejo, 39 F.3d 585, 590 (5th Cir. 1994) (quoting Travelers Ins.
   Co. v. La. Farm Bureau Fed’n, Inc., 996 F.2d 775, 778 (5th Cir. 1993)).
           53
             Vulcan Materials Co. v. City of Tehuacana, 238 F.3d 382, 390 (5th Cir. 2001)
   (quoting Trejo, 39 F.3d at 590).
           54
                39 F.3d 585 (5th Cir. 1994).

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           (6) whether retaining the lawsuit would serve the purposes of
           judicial economy; and
           (7) whether the federal court is being called on to construe a
           state judicial decree involving the same parties and entered by
           the court before whom the parallel state suit between the same
           parties is pending. 55
           Every circuit has a similar test.56 Across circuits, the Brillhart inquiry
   is grounded in three fundamental concerns: federalism, fairness, and
   efficiency. 57
                                                 A
           The first Trejo factor considers “whether there is a pending state court
   action in which all of the matters in controversy may be fully litigated.” 58 A
   parallel state court proceeding raises Brillhart concerns about federalism and
   efficiency. 59 Duplicative litigation in federal court, especially over matters of
   state law, should be avoided. 60
           The existence of a pending parallel state court proceeding is not
   dispositive, but it is an “important factor” in the analysis. 61 When a related
   state court proceeding “is not ‘parallel’ because it does not involve all the
   same parties or issues,” the district court must consider “the extent of

           55
                Id. at 590-91.
           56
               Sherwin-Williams Co. v. Holmes Cnty., 343 F.3d 383, 390 (5th Cir. 2003)
   (collecting cases).
           57
                Id. at 390-91.
           58
                Trejo, 39 F.3d at 590.
           59
                Sherwin-Williams, 343 F.3d at 394.
           60
                See id. at 391-92.
           61
                Id. at 394.

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   similarity between the pending state court and federal court cases.” 62 The
   greater the overlap, the more likely that a stay will promote federalism and
   efficiency. 63
           The district court ruled that the first factor favored a stay. The court
   reasoned that the factual and legal issues coincided because “the state court
   action arises out of the same facts and circumstances, and involves the same
   contractual issues as this declaratory judgment action.”              The court
   recognized that KPS was not a party to the state court proceeding but did not
   deem this distinction significant because KPS had the same interests as
   Switzer and the Koch affiliates.
           The district court correctly determined that the federal and state court
   proceedings are connected. Both involve claims of tortious interference
   based on the same set of noncompete provisions in the same set of contracts.
   The related state court proceeding governing state law issues raises concerns
   about federalism and efficiency that favor a stay.
                                            B
           The next three Trejo factors consider whether the declaratory
   judgment plaintiff filed suit in anticipation of a lawsuit filed by the defendant,
   engaged in forum shopping in bringing the action, and would create potential

           62
                Id. at 394 n.5.
           63
                See id. at 390, 394.

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   inequities by gaining precedence in time or changing forums. 64 These factors
   raise Brillhart concerns about fairness. 65
          The district court ruled that, on the whole, these fairness factors
   favored a stay. As to the second factor, the court correctly recognized that
   the federal proceeding was “not filed in anticipation of, but in response to”
   the state proceeding. Nevertheless, the court concluded that this response
   was unfair. Because “KPS’s interests in this declaratory action are the same
   as the interests of [its] president, Switzer, and [its] parent companies in the
   state court action,” the declaratory action was “in fact, an effort by KPS not
   only to forum shop, but also to gain precedence by having this court instead
   of the state court decide the issues raised by the tortious interference claims
   asserted in both actions.”
          The district court did not abuse its discretion in concluding that KPS
   sought to forum shop and to gain unfair precedence. It is true that a mere
   preference for a federal forum “does not necessarily demonstrate
   impermissible forum selection.” 66 An out-of-state plaintiff may properly
   invoke federal jurisdiction to avoid the potential bias of a state forum. 67
   Protecting out-of-state defendants like KPS is “the traditional justification
   for diversity jurisdiction.” 68 In this case, however, the record adequately
   supports the district court’s determination that the declaratory action was
   not a mere effort to avoid state court bias. The overlap between the state and
   federal proceedings suggests that KPS intends to reassign adjudication of

          64
               St. Paul Ins. Co. v. Trejo, 39 F.3d 585, 590-91 (5th Cir. 1994).
          65
               Sherwin-Williams, 343 F.3d at 391.
          66
               Id. at 399.
          67
               Id.
          68
               Id.

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   shared legal and factual issues to the federal court. KPS says as much in its
   federal complaint. In KPS’s words, “[t]his declaratory judgment action
   arises from Defendants’ public and erroneous allegations that KPS is
   unlawfully competing with Defendants.” KPS seeks declarations of non-
   interference “so that it may fairly compete in the marketplace without the
   distraction and harm associated with Defendants’ meritless contentions.”
   The purpose of its lawsuit is to have the federal court declare Triten’s state
   court allegations wrong.
           This court has previously drawn a connection between the degree of
   overlap in state court proceedings and procedural inequity. 69 When federal
   and state court actions are related, the federal action risks “changing forums
   or subverting the real plaintiff’s advantage in state court.” 70 These risks
   dissipate when the federal action pertains to separate claims. In this case, the
   relationship between the state and federal proceedings threatens
   impermissible meddling with Triten’s lawsuit. This threat supports the
   district court’s conclusion that, in sum, the fairness factors favor a stay.

           69
              See Sherwin-Williams, 343 F.3d at 399 (rejecting unfairness when there was no
   “race to res judicata”); Ironshore Specialty Ins. Co. v. Tractor Supply Co., 624 F. App’x 159,
   167-68 (5th Cir. 2015) (per curiam) (unpublished) (denying procedural inequity when “the
   state court action did not involve the same parties or the same legal issues,” thereby
   negating the risk of preclusion).
           70
             Sherwin-Williams, 343 F.3d at 399 (quoting Travelers Ins. Co. v. La. Farm Bureau
   Fed’n, Inc., 996 F.2d 775, 777 (5th Cir. 1993)).

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                                                    C
           The fifth Trejo factor considers “whether the federal court is a
   convenient forum for the parties and witnesses.” 71 This factor “primarily
   address[es] efficiency considerations.” 72
           The district court ruled that the federal and state courts were equally
   convenient, so this factor was neutral. KPS does not dispute the convenience
   of the federal court, but it argues that this convenience militates in its favor.
   We are not rigid in prescribing the role that convenience must play in the
   district court’s analysis. 73 The district court did not abuse its discretion in
   ruling this factor neutral.
                                                    D
           The sixth Trejo factor considers “whether retaining the lawsuit would
   serve the purposes of judicial economy.” 74 Federal courts “should avoid
   duplicative or piecemeal litigation where possible.” 75 Judicial economy
   corresponds primarily to Brillhart’s concern about efficiency. 76 Judicial
   economy may also implicate concerns about federalism and comity,

           71
                St. Paul Ins. Co. v. Trejo, 39 F.3d 585, 591 (5th Cir. 1994).
           72
                Sherwin-Williams, 343 F.3d at 391.
           73
              See, e.g., Ironshore Specialty Ins. Co. v. Tractor Supply Co., 624 F. App’x 159, 168
   (5th Cir. 2015) (per curiam) (unpublished) (holding that this factor “weighs against
   dismissal” when there was no indication that the federal court was inconvenient); RLI Ins.
   Co. v. Wainoco Oil & Gas Co., 131 F. App’x 970, 973 (5th Cir. 2005) (per curiam)
   (unpublished) (finding no abuse of discretion when the federal and state forums were both
   of “relative convenience” and the district court ruled this factor “neutral”).
           74
                Trejo, 39 F.3d at 591.
           75
                Sherwin-Williams, 343 F.3d at 391.
           76
                Id.

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   especially when duplicative litigation could produce conflicting judgments on
   matters of state law. 77
           The district court held that this factor favored a stay. The court
   reasoned that the declaratory judgment action would produce inefficient
   piecemeal litigation because the state lawsuit involves claims besides tortious
   interference that the federal lawsuit would not resolve. By contrast, “all
   issues raised by the claims asserted in this declaratory judgment action can
   be resolved in the state court proceeding.”
           The district court correctly concluded that a stay would serve judicial
   economy. The resolution of the state lawsuit may or may not resolve the
   claims in the federal lawsuit. As the district court noted, however, there is
   no question that the federal lawsuit will not resolve the claims in the state
   lawsuit. For example, the federal lawsuit will not resolve claims by Switzer
   against Triten for compensation that Triten allegedly failed to pay him.
   When state court proceedings involve claims or parties beyond those in the
   federal declaratory judgment action, this court has held that efficiency
   concerns counsel against asserting jurisdiction. 78 A stay may not avoid
   piecemeal or duplicative litigation, but proceeding with the federal action
   ensures it.
           The federal action also raises concerns about federalism. Duplicative
   litigation in the federal court about state law matters—tortious interference

           77
                Id.
           78
             See id. (“A federal court should be less inclined to hear a case if necessary parties
   are missing from the federal forum, because that leads to piecemeal litigation and
   duplication of effort in state and federal courts.”); Am. Emps.’ Ins. Co. v. Eagle Inc., 122 F.
   App’x 700, 703-04 (5th Cir. 2004) (per curiam) (unpublished) (affirming a stay order when
   “a federal court cannot rule conclusively” on all the issues raised in the state court
   proceedings so “it would not be more efficient for a federal court to initially hear the
   claims”).

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                                             No. 21-20093

   with Triten’s contracts—creates “the potential for inconsistent state and
   federal court judgments.” 79 A stay reduces this risk. For reasons of
   efficiency as well as federalism, this factor favors a stay.
                                                    E
           The seventh Trejo factor considers “whether the federal court is being
   called on to construe a state judicial decree involving the same parties and
   entered by the court before whom the parallel state suit between the same
   parties is pending.” 80           This factor addresses Brillhart’s concern about
   federalism. 81
           Because this case does not involve the construction of a state judicial
   decree, the district court deemed this factor “not relevant.” KPS contends
   that the absence of a state decree is not irrelevant but rather disfavors a stay.
   This court has not dictated the weight that district courts must place on the
   absence of a state decree. One decision held that it “weighs strongly” in
   favor of the declaratory judgment plaintiff, 82 while another approved of the
   district court’s determination that this factor was “not implicated.” 83 KPS
   does not give any reason why the absence of a state judicial decree warrants
   special significance in this case. In fact, KPS concedes that there is “no
   meaningful dispute” on this point.                    Given the variation in acceptable

           79
                Sherwin-Williams, 343 F.3d at 391.
           80
                St. Paul Ins. Co. v. Trejo, 39 F.3d 585, 591 (5th Cir. 1994).
           81
                Sherwin-Williams, 343 F.3d at 392.
           82
             AXA Re Prop. & Cas. Ins. Co. v. Day, 162 F. App’x 316, 321 (5th Cir. 2006) (per
   curiam) (unpublished).
           83
             RLI Ins. Co. v. Wainoco Oil & Gas Co., 131 F. App’x 970, 973 (5th Cir. 2005) (per
   curiam) (unpublished).

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                                          No. 21-20093

   interpretations, the district court did not abuse its discretion in rejecting the
   relevance of this factor.
                                                F
          The seven Trejo factors are “nonexclusive.” 84 KPS asserts additional
   concerns about unfairness that would result if the state court action were to
   preclude the federal court action.                As explained above, however, the
   preclusive effect of the state court’s ruling is unknown. This unsubstantiated
   fear does not bear on the analysis.
          In addition to considering the Trejo factors, a district court must also
   “address[] and balance[] the purposes of the Declaratory Judgment Act.” 85
   KPS argues that the stay order defies the purposes of the statute by
   obstructing KPS’s attempt to clarify its rights. It is true that “[a] proper
   purpose of section 2201(a) is to allow potential defendants to resolve a
   dispute without waiting to be sued.” 86                However, the district court
   reasonably concluded that a stay was consistent with that purpose. Triten
   had already sought to resolve the dispute in some measure by asserting
   related claims in state court.
          In sum, we conclude that the district court did not abuse its discretion
   in granting the stay. The presence of a related pending action in state court
   implicates Brillhart’s concerns about federalism, fairness, and efficiency that
   support the district court’s stay decision.

          84
               Sherwin-Williams, 343 F.3d at 388.
          85
             Vulcan Materials Co. v. City of Tehuacana, 238 F.3d 382, 390 (5th Cir. 2001)
   (quoting St. Paul Ins. Co. v. Trejo, 39 F.3d 585, 590 (5th Cir. 1994)).
          86
               Sherwin-Williams, 343 F.3d at 397.

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                                                 IV
           Finally, we turn to the parties’ motions for judicial notice. Both
   concern documents from the related state court proceedings.
           Under Federal Rule of Evidence 201, a court “may judicially notice a
   fact that is not subject to reasonable dispute.” 87 Such facts include those that
   “can be accurately and readily determined from sources whose accuracy
   cannot reasonably be questioned.” 88 An appellate court may take judicial
   notice of facts, “even if such facts were not noticed by the trial court.” 89 On
   several occasions, this court has taken judicial notice of court proceedings
   relevant to the case being decided. 90
           We grant both motions. The state court proceedings are relevant to
   this action because they elucidate the nature of the claims the parties have
   made and the defenses they have raised, and they show the status of those
   proceedings. Of course, our notice of these documents does not mean that
   we accept the assertions in the state court pleadings as true. Rule 201 permits
   judicial notice only of facts that are “not subject to reasonable dispute.” 91
   The test for indisputability is stringent. Assertions in pleadings that are not
   otherwise obvious cannot clear Rule 201’s “‘indisputability’ hurdle.” 92

           87
                Fed. R. Evid. 201(b).
           88
                Id. 201(b)(2).
           89
           United States v. Herrera-Ochoa, 245 F.3d 495, 501 (5th Cir. 2001); see also Fed.
   R. Evid. 201(d) (“The court may take judicial notice at any stage of the proceeding.”).
           90
             See, e.g., Alexander v. Verizon Wireless Servs., L.L.C., 875 F.3d 243, 248 n.8 (5th
   Cir. 2017); United States v. Verlinsky, 459 F.2d 1085, 1089 (5th Cir. 1972); Paul v. Dade
   Cnty., 419 F.2d 10, 12 (5th Cir. 1969).
           91
                Fed. R. Evid. 201(b).
           92
                Taylor v. Charter Med. Corp., 162 F.3d 827, 830 (5th Cir. 1998).

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                                *        *         *
         For the reasons stated, we AFFIRM the district court’s stay order
   and GRANT the parties’ motions for judicial notice.

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