Court Opinion

ID: 42530
Source: CourtListenerOpinion
Date Created: 2010-04-25 21:21:49+00
Date Added: 2024-06-11T17:16:54.858108
License: Public Domain

[DO NOT PUBLISH]

              IN THE UNITED STATES COURT OF APPEALS

                      FOR THE ELEVENTH CIRCUIT
                       ________________________
                                                            FILED
                                                       U.S. COURT OF
                               No. 04-16484               APPEALS
                           Non-Argument Calendar     ELEVENTH CIRCUIT
                        ________________________     SEPTEMBER 8, 2005
                                                      THOMAS K. KAHN
                    D. C. Docket No. 02-21931-CV-KMM       CLERK

LISA, S.A.
a Panamanian corporation,

                                                      Plaintiff-Appellant,

                                   versus

DIONISIO GUTIERREZ MAYORGA,
JUAN JOSE GUTIERREZ MAYORGA, et al.,

                                                      Defendants-Appellees.

                        ________________________

                 Appeal from the United States District Court
                     for the Southern District of Florida
                       _________________________

                            (September 8, 2005)

Before BIRCH, BARKETT and COX, Circuit Judges.

PER CURIAM:
      In this interlocutory appeal, Lisa, S.A., challenges the decision of the district

court denying its motion to vacate a stay of the proceedings. We reverse and remand.

      In February 1999, Lisa filed a state court action in Miami-Dade County, Florida

against various individuals and corporate defendants alleging that Lisa, a shareholder,

has been improperly deprived of its share of the profits from a large-scale, vertically-

integrated chicken production operation headquartered in Guatemala. Lisa alleges

that a substantial portion of the funds rightfully belonging to Lisa were diverted to

Florida accounts and/or used to purchase assets located in Florida. Lisa’s second

amended complaint includes two counts of dealing with stolen property in violation

of Section 812.019, Florida Statutes, a count seeking a constructive trust over real and

personal property of which Lisa claims to be the rightful owner, and the imposition

of an equitable lien over all such property. In July of 2002, Lisa filed a similar action

in the Southern District of Florida against a larger group of defendants. Lisa’s federal

complaint arises out of the same general grievance as its state action but

predominantly seeks, among other things, in personam relief under Federal and

Florida RICO.

      On October 15, 2002, the district court issued an order staying the federal

action in deference to the state action on the grounds of both judicial economy and

the Colorado River doctrine.       See Colorado River Water Conservation Dist. v.

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United States, 424 U.S. 800, 96 S. Ct. 1236 (1976). In Lisa, S.A. v. Dionisio

Gutierrez Mayorga, No. 02-16302 (11th Cir. Dec. 15, 2003), the Defendants argued

that the stay was one of very limited duration, and we held that the district court did

not abuse its discretion in granting the stay. On July 20, 2004, nearly two years after

entry of the stay order, Lisa filed a motion to vacate the order granting the stay. That

motion was denied. This appeal followed.

      As a threshold matter, we conclude that we have jurisdiction to hear Lisa’s

appeal. Review pursuant to 28 U.S.C. § 1291 is appropriate in abstention-based stay

orders because such stays effectively put the litigant out of federal court.

Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 116 S. Ct. 1712 (1996); Am. Mfrs.

Mut. Ins. Co. v. Edward D. Stone, Jr. & Assoc., 743 F.2d 1519, 1522-24 (11th Cir.

1984). While we would normally be unable to review a motion to vacate such an

order after having already affirmed the stay on appeal, we agree with Lisa that the

district court’s order denying Lisa’s motion to vacate the stay represents a substantial

alteration of the original stay, providing jurisdictional grounds under Stone for us to

review the order.

      The district court erred in concluding that the Colorado River doctrine provides

grounds for a stay in this case. As explained in Colorado River, “[g]enerally, as

between state and federal courts, the rule is that ‘the pendency of an action in the state

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court is no bar to proceedings concerning the same matter in the Federal court having

jurisdiction.’” Colorado River, 424 U.S. at 817, 96 S. Ct. at 1246 (quoting McClellan

v. Carland, 217 U.S. 268, 282, 30 S. Ct. 501, 505 (1910)). Rather, federal courts

have a “virtually unflagging obligation . . . to exercise the jurisdiction given them.”

Id. Because the facts here do not present the “exceptional circumstances” which

would allow the court to abstain from exercising its jurisdiction in order to avoid

duplicitous litigation with the state court, it was error for the court to deny Lisa’s

motion on that ground. See Ambrosia Coal & Constr. Co. v. Pagés Morales, 368
F.3d 1320, 1328 (11th Cir. 2004).

      We also conclude that it was an abuse of discretion for the district court to deny

Lisa’s motion to vacate the stay on the ground of judicial economy. The district court

initially characterized the stay order as one of limited duration, pending resolution of

certain threshold issues in state court that might eliminate duplicitous litigation in

federal court. “Threshold issues including forum non conveniens, failure to state a

claim, and issues of personal and subject matter jurisdiction all remain before the

state court. The resolution of these issues may resolve or moot issues currently before

this Court.” (R.4-393 at 2.) However, at the time the district court issued the order

denying Lisa’s July 20, 2004, motion to vacate the stay, the stay order had been in

effect for more than two years, and none of the threshold matters in the state action

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had been finally resolved. The stay, therefore, has proven to be “immoderate.” See

Ortega Trujillo v. Conover & Co. Communs., Inc., 221 F.3d 1262, 1264 (11th Cir.

2000).

      The decision of the district court, denying Lisa’s motion to vacate the stay is,

therefore, REVERSED, and the case is REMANDED to the district court for further

proceedings consistent with this opinion.

      REVERSED AND REMANDED.

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