Court Opinion

ID: 9403983
Source: CourtListenerOpinion
Date Created: 2023-06-21 21:01:09.611614+00
Date Added: 2024-06-11T17:20:10.529954
License: Public Domain

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                                            UNPUBLISHED

                               UNITED STATES COURT OF APPEALS
                                   FOR THE FOURTH CIRCUIT

                                              No. 22-1296

        AUTO MONEY NORTH, LLC,

                            Plaintiff - Appellant,

                     v.

        FENTRESS BROWN,

                            Defendant - Appellee.

        Appeal from the United States District Court for the District of South Carolina, at Rock
        Hill. J. Michelle Childs, District Judge. (0:21-cv-00393-JMC)

        Submitted: May 24, 2023                                           Decided: June 20, 2023

        Before DIAZ and THACKER, Circuit Judges, and MOTZ, Senior Circuit Judge.

        Affirmed by unpublished per curiam opinion.

        ON BRIEF: Lindsey W. Cooper Jr., M. Linsay Boyce, LAW OFFICES OF L. W.
        COOPER JR., LLC, Charleston, South Carolina; M. Dawes Cooke, Jr., BARNWELL
        WHALEY PATTERSON & HELMS, LLC, Charleston, South Carolina, for Appellant.
        James R. Faucher, Drew Brown, BROWN, FAUCHER, PERALDO & BENSON, PLLC,
        Greensboro, North Carolina, for Appellee.

        Unpublished opinions are not binding precedent in this circuit.
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        PER CURIAM:

               Auto Money North, LLC, appeals the district court’s order declining to exercise

        jurisdiction over Auto Money North’s declaratory judgment action based on the pendency

        of a parallel action in state court. On appeal, Auto Money North argues that the court

        abused its discretion in determining that consideration of the relevant factors favored

        abstention. For the following reasons, we affirm.

               We review for an abuse of discretion a district court’s decision declining to exercise

        jurisdiction over a declaratory judgment action while a parallel action is pending in state

        court. Med. Mut. Ins. Co. of N.C. v. Littaua, 35 F.4th 205, 208 (4th Cir. 2022). The district

        court’s discretion to abstain in such a situation is broad. Id. Under the Declaratory

        Judgment Act, a district court with proper jurisdiction “may declare the rights and other

        legal relations of any interested party seeking such declaration, whether or not further relief

        is or could be sought.” 28 U.S.C. § 2201(a). “The Supreme Court has repeatedly

        characterized the Declaratory Judgment Act as an enabling Act,” Penn-Am. Ins. Co. v.

        Coffey, 368 F.3d 409, 412 (4th Cir. 2004) (internal quotation marks omitted), which

        “merely permits federal courts to hear those cases rather than granting litigants a right to

        judgment,” Littaua, 35 F.4th at 208 (internal quotation marks omitted).

               We have stated that the “two principal criteria guiding the policy in favor of

        rendering declaratory judgments are (1) when the judgment will serve a useful purpose in

        clarifying and settling the legal relations in issue, and (2) when it will terminate and afford

        relief from the uncertainty, insecurity, and controversy giving rise to the proceeding.”

        Aetna Cas. & Sur. Co. v. Quarles, 92 F.2d 321, 325 (4th Cir. 1937) (internal quotation

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        marks omitted). We also have recognized that hearing declaratory judgment actions in

        federal court while a parallel state case is pending “is ordinarily uneconomical, vexatious,

        and risks a gratuitous interference with state court litigation.” Littaua, 35 F.4th at 208

        (internal quotation marks omitted). Accordingly, we require consideration of four factors

        (the “Nautilus factors”) in the decision whether to hear such a declaratory judgment action:

               (1) whether the state has a strong interest in having the issues decided in its
               courts; (2) whether the state courts could resolve the issues more efficiently
               than the federal courts; (3) whether the presence of overlapping issues of fact
               or law might create unnecessary entanglement between the state and federal
               courts; and (4) whether the federal action is mere procedural fencing, in the
               sense that the action is merely the product of forum-shopping.

        Id. at 208-09 (internal quotation marks omitted); see Nautilus Ins. Co. v. Winchester

        Homes, Inc., 15 F.3d 371, 376-77 (4th Cir. 1994), abrogated in part on other grounds by

        Wilton v. Seven Falls Co., 515 U.S. 277 (1995).

               We have reviewed the record and conclude that the district court did not abuse its

        broad discretion in determining that each of the four factors favors abstention. With respect

        to the first factor, we agree with the district court that North Carolina’s courts have a strong

        interest in determining the applicability of the North Carolina Consumer Finance Act, and

        that Auto Money North failed to show a compelling federal interest strong enough to

        overcome North Carolina’s significant interest in the application of its laws. Indeed, with

        respect to the second factor, the North Carolina state courts can ably apply North Carolina

        law. Turning to the third factor, we note that, in the North Carolina action, Appellee

        brought suit against Auto Money North alleging that it had engaged in unlawful loan

        practices in violation of North Carolina law. In the present case, Auto Money North sought

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        to litigate whether North Carolina or South Carolina law applied to the loan agreements at

        issue, in addition to raising a breach of contract claim. Therefore, we agree with the district

        court that litigating this action would necessarily involve determinations of facts and law

        at issue in the North Carolina action. Finally, as to the fourth factor, Auto Money North

        filed suit immediately after Appellee brought the North Carolina action, and Auto Money

        North unsuccessfully attempted to achieve a federal hearing by removing the North

        Carolina action to district court. Moreover, Auto Money North has had ample opportunity

        to litigate these issues in several cases brought in North Carolina’s state courts.

               We therefore conclude that the district court did not abuse its discretion in finding

        that the four Nautilus factors favored abstention and dismissing the action. Accordingly,

        we affirm the district court's order. We dispense with oral argument because the facts and

        legal contentions are adequately presented in the materials before the court and argument

        would not aid the decisional process.

                                                                                         AFFIRMED

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