Tuesday, August 22, 2006

D.R.I. Considers Abstention Pursuant to Colorado River Doctrine

Per U.S. v. Fairway Capital Corp., 433 F. Supp. 2d 226 (D.R.I. June 8, 2006):

Claimant argues that this Court should abstain from deciding its equitable claim based on the abstention doctrine set forth by the United States Supreme Court in Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976). Under this doctrine, a federal court may, in exceptional circumstances, exercise its discretion in choosing to abstain when there is a parallel proceeding pending in state court. Id. at 817-18; Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 19 (1983). Federal courts have a "virtually unflagging obligation ... to exercise the jurisdiction given them." Colorado River, 424 U.S. at 817. In deciding whether to refrain from acting, therefore, district courts should maintain a "heavy presumption favoring the exercise of jurisdiction." Villa Marina Yacht Sales, Inc. v. Hatteras Yachts, 915 F.2d 7, 13 (1st Cir.1990).

The First Circuit has recognized a non-exhaustive list of factors, based on the United States Supreme Court's decision in Colorado River and its subsequent decision in Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 19 (1983), that a court should consider in determining whether to abstain from its unflagging obligation to exercise jurisdiction:

(1) Whether either court has assumed jurisdiction over a res; (2) the [geographical] inconvenience of the federal forum; (3) the desirability of avoiding piecemeal litigation; (4) the order in which the forums obtained jurisdiction; (5) whether state or federal law controls; (6) the adequacy of the state forum to protect the parties' interests; (7) the vexatious or contrived nature of the federal claim; and (8) respect for the principles underlying removal jurisdiction.

Rio Grande Cmty. Health Ctr., Inc. v. Rullan, 397 F.3d 56, 71-72 (1st Cir.2005) (quoting KPS & Assocs., Inc. v. Designs by FMC, Inc., 318 F.3d 1, 10 (1st Cir.2003)).

In order to apply the Colorado River doctrine, a parallel state proceeding must exist such that substantially the same parties are litigating substantially the same issues in the state and federal forums. See McLaughlin v. United Virginia Bank, 955 F.2d 930, 935 (4th Cir.1992). …[T]he action pending before the [Virgin Islands] Territorial Court is sufficiently parallel to warrant consideration of the Colorado River doctrine.

In balancing the factors that are relevant to the present case, however, it is apparent that the requisite exceptional circumstances needed to justify abstention do not exist.


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