Opinion
3:20cv2176
02-19-2021
Moneva WALKER, et al., Plaintiffs, v. CEDAR FAIR, L.P., et al., Defendants.
For Plaintiffs: Jonas B. Jacobson, Simon C. Franzini, Dovel & Luner, Santa Monica, CA, Kimberly A. Conklin, Richard M. Kerger, Kerger Law Firm, Toledo, Ohio. For Defendants: David R. Hudson Reminger Co., Toledo, Ohio, Justin D. Harris, Reminger Co., Sandusky, Ohio.
For Plaintiffs: Jonas B. Jacobson, Simon C. Franzini, Dovel & Luner, Santa Monica, CA, Kimberly A. Conklin, Richard M. Kerger, Kerger Law Firm, Toledo, Ohio.
For Defendants: David R. Hudson Reminger Co., Toledo, Ohio, Justin D. Harris, Reminger Co., Sandusky, Ohio.
ORDER
James G. Carr Sr., U.S. District Judge Plaintiffs filed this case as a class action, seeking recompense for themselves and other similarly situated persons unable to use their 2020 season passes at defendant Cedar Fair, L.P.’s various amusement parks during the period when Cedar Fair closed its parks due to the Covid-19 pandemic.
Pending is Cedar Fair's Motion to Stay Pursuant to the Colorado River Doctrine of Abstention of Jurisdiction and Motion for Extension of Time to Plead in Response to the Plaintiffs’ Complaint. (Doc. 14). It argues that I should stay this action in deference to a previously-filed state-court class action that raises some, but not all of the claims in this case.
For the reasons discussed below, I grant defendant's motion in part and deny it in part. I reject defendant's request for Colorado River -based abstention; I will, however, stay certain claims based on my inherent power to control the disposition of the causes on my docket.
Background
Cedar Fair operates thirteen amusement parks spread across the United States and Canada. (Doc. 11, pgID 38). Its parks sell season passes that it advertises as providing unlimited visits and certain other perks depending on the pass level that consumers purchased. (Id. , pgID 42).
The class plaintiffs seek to represent are 2020 season-pass holders at Cedar Fair parks. In their amended complaint, plaintiffs assert three Ohio-law claims: breach of contract, unjust enrichment, and money had and received. In addition, plaintiffs assert five claims under various consumer-protection statutes from California, North Carolina, Virginia, and Missouri.
Plaintiffs filed their complaint here on November 3, 2020. Several months earlier, on April 28, 2020, another plaintiff, Laura Valentine, filed a putative class action, styled Valentine on her own behalf and for others similarly situated v. Cedar Fair, L.P. , No. 2020 cv 0172 (Ohio Ct. Comm. Pl.), against Cedar Fair in the Erie County, Ohio Court of Common Pleas. (Doc. 14-1, pgID 94).
The Valentine complaint also asserted Ohio state-law claims for breach of contract, unjust enrichment, and money had and received. On September 11, 2020, the state court dismissed Valentine on the ground that the season passes were mere licenses revokable without compensation under the terms stated on Cedar Fair's websites. (Doc. 14-2, pgID 117).
The court also ruled, in the alternative, that the fact Cedar Park opened on July 9, 2020, so that it was open during some of the 2020 season, also rendered the plaintiffs’ claims meritless. See (Doc. 14-2, pgID 109-10). The state court's decision (Doc. 14-2) appears in Defendant's exhibits without pgID numbers. Citations to it will be to the page number the page would bear if numbered consecutively.
The Valentine plaintiffs appealed to Ohio's Sixth District Court of Appeals on October 7, 2020. Plaintiffs here have submitted as an exhibit a copy of that court's docket printed November 23. 2020, which reflects that the Valentine plaintiffs filed their brief November 9, 2020. (Doc. 11-3, pgID 111-12). The exhibit does not identify how far the appeal has progressed since that time. Discussion
1. Colorado River Abstention
In Romine v. Compuserve Corp. , 160 F.3d 337, 339 (6th Cir. 1998), the Sixth Circuit described the Colorado River abstention doctrine:
In Colorado River , the Supreme Court noted that, despite the "virtually unflagging obligation of the federal courts to exercise the jurisdiction given them," 424 U.S. at 817, 96 S. Ct. 1236, considerations of judicial economy and federal-state comity may justify abstention in situations involving the contemporaneous exercise of jurisdiction by state and federal courts. As the Court explained, the principles underlying this doctrine "rest on considerations of ‘[w]ise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation."
Id. (quoting Colorado River Water Conservation Dist. v. United States , 424 U.S. 800, 817, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976) ).
The Colorado River abstention doctrine recognizes that for a federal court "and the state court to focus simultaneously on the same issue would be a waste of limited judicial resources." Red Roof Inns, Inc. v. A.C. Furniture Co. , No. 2:10-CV-525, 2012 WL 628541, at *6 (S.D. Ohio). Simultaneous litigation is especially unnecessary and wasteful when the state court litigation is sufficiently advanced that it likely will reach a final judgment in time to preclude further litigation of the same issues in the federal action. Id. (citing Atl. Coast Line R.R. v. Bhd. of Locomotive Eng'rs , 398 U.S. 281, 90 S.Ct. 1739, 26 L.Ed.2d 234 (1970) ); Emerald Logistics, Inc. v. Crutcher , No. 2:07-CV-1112, 2008 WL 3926441, at *2 (S.D. Ohio). Sixth Circuit "precedents support the conclusion that the substantial difference in the relative advancement of the state and federal proceedings justifies abstention." Bates v. Van Buren Twp. , 122 F. App'x 803, 807 (6th Cir. 2004).
Determining whether to grant a stay under Colorado River is a two-step process. As a threshold matter, I must decide whether Valentine and this case are parallel. Romine , 160 F.3d at 340. To be parallel, the actions must involve " ‘substantially the same parties contemporaneously litigating substantially the same issues,’ and ‘[t]he critical question is whether there is a substantial likelihood that the state litigation will dispose of all claims presented in the federal case.’ " Seyi-Am., Inc. v. Stamtec, Inc. , No. 3-13-0461, 2013 WL 6096794, at *3 (M.D. Tenn.) (additional internal quotation marks omitted) (quoting Huon v. Johnson & Bell, Ltd. , 657 F.3d 641, 646 (7th Cir. 2011) ).
If I find the actions are parallel, I must proceed to determine whether abstention is appropriate by considering eight factors: 1) whether the state court has assumed jurisdiction over any res or property; 2) whether the federal forum is less convenient to the parties; 3) avoidance of piecemeal litigation; 4) the order in which jurisdiction was obtained; 5) whether the source of governing law is state or federal; 6) the adequacy of the state court action to protect the federal plaintiff's rights; 7) the relative progress of the state and federal proceedings; and 8) the presence or absence of concurrent jurisdiction. Romine, supra , 160 F.3d at 341.
I need not consider the eight-factor analysis, however, because I conclude that this case and the state case are not parallel for purposes of Colorado River abstention.
In deciding whether cases are parallel for abstention purposes, "the critical question is whether there is a substantial likelihood that the state litigation will dispose of all claims presented in the federal case." Necak v. Select Portfolios Servicing, Inc. , No. 1:17 CV 1473, 2017 WL 6270238, at *1 (N.D. Ohio) (Nugent, J.). "A stay should only be granted where it would allow for a ‘quick and prompt resolution between the parties,’ such that the federal court ‘will have nothing further to do in resolving any substantive part of the case, whether it stays or dismisses.’ " Necak , 2017 WL 6270238, at *1 (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp. , 460 U.S. 1, 23-26, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983) ).
That is not the case here. To be sure, the three Ohio common-law claims here and in Valentine for breach of contract, unjust enrichment, and money had and received are virtually identical. But the five statutory claims are unique to this case.
2. The Parties’ Contentions
Cedar Fair argues that the two cases are parallel because they both relate to Cedar Fair's failure to refund the fees for the 2020 season passes. That argument misapprehends the distinction between the Ohio common-law claims and the statutory consumer-protection claims.
The contract claims address whether Cedar Fair was within its rights to close its parks for some months without providing any refund. The court in Valentine held that Cedar Fair was entitled to do so based on the language stated on its websites. (Doc 14-2, pgID 103).
The consumer-protection claims are distinct because they do not challenge whether Cedar Fair was entitled not to provide a refund. Instead, they allege that by advertising the passes as providing unlimited visits to the amusement parks, Cedar Fair "misleadingly omitted or concealed that they would not return any pass fees even if they did not provide the promised pass benefits." (Doc. 11, pgID 66).
Thus, rather than allege that Cedar Fair acted impermissibly in withholding refunds, the additional claims here allege that Cedar Fair violated consumer-protection statutes in the way it advertised and described the passes. That was so, plaintiffs here allege, because Cedar Fair failed to make clear that that it could close the parks without providing compensation. The events plaintiffs rely on for those claims are Cedar Fair's alleged conduct in persuading them to purchase the passes; not its conduct in closing the parks without refunds.
Cedar Fair argues that plaintiffs’ consumer-protection claims are "irrational" and "logically impossible." That's because, it claims, they presuppose that Cedar Fair was aware beforehand that a pandemic would force it to close its parks. (Doc. 16, pgID 142). Whatever the merits of that argument, I will address it in the dispositive motion context if Cedar Fair raises it. I will not address it here.
3. The Cases Are Not Parallel
"Cases are not considered parallel if there is an issue that would not be resolved by the state court upon the completion of the state court action." Kopacz v. Hopkinsville Surface & Storm Water Util. , 714 F. Supp. 2d 682, 688 (W.D. Ky. 2010).
As the Supreme Court has explained
When a district court decides to dismiss or stay under Colorado River , it presumably concludes that the parallel state-court litigation will be an adequate vehicle for the complete and prompt resolution of the issues between the parties. If there is any substantial doubt as to this, it would be a serious abuse of discretion to grant the stay or dismissal at all.
Moses H. Cone , 460 U.S. at 28, 103 S.Ct. 927. Thus, "[i]f a state court action and a federal action are truly parallel, resolution of the state court action will also resolve all issues in the federal action. Wright v. Linebarger Googan Blair & Sampson, LLP , 782 F. Supp. 2d 593, 603 (W.D. Tenn. 2011). That is not the case here.
The state court has decided that Cedar Fair did not breach its agreement with pass holders and that it was not unjustly enriched by the decision not to provide refunds. The question here is whether its alleged failure to state clearly that it could close the park without providing refunds violated various state consumer-protection statutes. When Valentine becomes final, whether it is affirmed or reversed, it will not address the consumer-protection claims.
Accordingly, I deny Cedar Fair's motion for Colorado River abstention.
4. A Partial Stay is Appropriate Under Landis v. North American Co., 299 U.S. 248, 254–55, 57 S.Ct. 163, 81 L.Ed. 153 (1936).
My rejection of Cedar Fair's Colorado River argument does not, however, mean that this case necessarily must proceed as pled. Colorado River abstention is only one of a number of grounds for abstention that the Supreme Court has recognized. Regardless of those specific abstention doctrines, courts retain the inherent authority to manage the proceedings in cases on their dockets.
The power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants. How this can best be done calls for the exercise of judgment, which must weigh competing interests and maintain an even balance.
Landis , 299 U.S. at 254-55, 57 S.Ct. 163.
In determining whether to grant a motion for a stay, a court may consider " ‘[1)] the potentiality of another case having a dispositive effect on the case to be stayed, [2)] the judicial economy to be saved by waiting on a dispositive decision, [3)] the public welfare, and [4)] the hardship/prejudice to the party opposing the stay, given its duration." Bounty Minerals, LLC v. Chesapeake Expl., LLC , No. 5:17CV1695, 2017 WL 5971699, at *3 (N.D. Ohio) (Lioi, J.) (quoting Michael v. Ghee , 325 F. Supp. 2d 829, 831 (N.D. Ohio 2004) (Carr, J.)).
Applying that analysis here produces different results for plaintiffs’ common-law claims than for their consumer-protection claims.
The state trial court already has dismissed plaintiffs’ breach of contract, unjust enrichment, and money had and received claims on the merits. It is reasonable to expect that the state appellate court will render a decision on plaintiffs’ appeal before the parties litigate the statutory clams to final judgment here. Final judgment in the state case most likely will preclude me from issuing a contrary decision on the state common-law claims. Relitigating issues that will be subject to issue preclusion as this case proceeds would be wasteful and futile.
The fact "the state court proceeding has progressed considerably further than the ... federal action[ ], ... weighs strongly in favor of deferring to the former." Romine , 160 F.3d at 341–42. This factor weighs even more heavily when the state court action already is on appeal. See Bates v. Van Buren Twp. , 122 F. App'x 803, 803, 808 (6th Cir. 2004) (finding that when a parallel state court case is on appeal, the reasons for abstention are stronger); Bd. of Educ. of Valley View Comm. Unit Sch. Dist. v. Bosworth , 713 F.2d 1316, 1321–22 (7th Cir. 1983) (same).
As a result, any time spent attempting to relitigate those claims here would be a waste of resources both for me and the parties. Plaintiffs have not advanced any reason why avoiding that waste of resources would be contrary to the public interest.
For the same reasons, plaintiffs will suffer no hardship or prejudice as a result of the stay. If they fail to convince the Ohio appellate court that the trial court's dismissal was wrong, they will be precluded from relitigating the dismissed claims here.
Were I now to allow plaintiffs to pursue their common-law claims again and the Ohio reviewing courts affirmed the trial court's ruling, the parties and I will have wasted considerable resources in an aborted attempt to relitigate the same issues already decided there. Should the Ohio courts reverse, plaintiffs may request that I lift the stay, and I will consider the issue anew. Either way, the length of the stay is limited, as the Ohio courts will reach a decision before this case could go to trial or even just to summary judgment.
I "will not order the parties to engage in potentially futile or misdirected discovery that could be rendered moot by a decision from [another proceeding]." Lincoln Elec. Co. v. Miller Elec. Mfg. Co. , No. 1:06CV2981, 2011 WL 976586, at *3 (N.D. Ohio) (Lioi, J.).
For these reasons I stay the three Ohio common-law claims – Counts one through three of the amended complaint – pending a final decision by the Ohio courts in Valentine. Counsel shall keep me informed of the developments in that case. This case will proceed on the statutory consumer-protection-related claims - Counts four through eight - which will not be addressed in the Valentine appeal.
I note that Cedar Fair's website contains a choice of law provision designating Ohio law as controlling. (Doc. 14, pgID 98). It would appear, though I do not now decided, that, if that is so as to all season passes regardless of where the plaintiffs reside or the location of the parks, plaintiffs should amend their complaint to state their statutory claims solely under Ohio law.
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Conclusion
I will stay these proceeding as to the Ohio common-law claims that are duplicative of those in Valentine. I will not stay the plaintiffs’ statutory consumer-protection claims, as the Valentine plaintiffs have not included such claims in their action.
Accordingly, it is hereby
ORDERED THAT:
1. Defendant's motion to stay this case (Doc. 14) is granted in part and denied in part. Counts one through three of the amended complaint be, and the same hereby are, stayed pending a final decision by the Ohio courts in Valentine ; when such occurs, the parties shall so inform the undersigned;.
2. As to Counts four through eight, the motion to stay be, and the same hereby is overruled.
3. Proceedings as to counts four through eight be, and the same hereby are, held in abeyance pending a status/scheduling conference, which the Clerk shall forthwith set.
So ordered.