Opinion
No. 7:22-cv-02-REW-EBA
2022-04-28
NATIONWIDE MUTUAL INSURANCE COMPANY, Plaintiff, v. KNOTT COUNTY WATER AND SEWER DISTRICT, Defendant.
Ethan Thomas Manning, Meinhart & Smith, Louisville, KY, William N. Clark, Jr., Pro Hac Vice, Cozen O'Connor, Philadelphia, PA, for Plaintiff. Jonathan C. Shaw and Harry Ryan Altman, Porter, Banks, Baldwin & Shaw, PLLC, Paintsville, KY, for Defendant.
Ethan Thomas Manning, Meinhart & Smith, Louisville, KY, William N. Clark, Jr., Pro Hac Vice, Cozen O'Connor, Philadelphia, PA, for Plaintiff.
Jonathan C. Shaw and Harry Ryan Altman, Porter, Banks, Baldwin & Shaw, PLLC, Paintsville, KY, for Defendant.
ORDER
Robert E. Wier, United States District Judge
This case involves one facet of the legal aftermath from an accidental natural gas pipeline explosion. The explosion occurred in early 2020 after apparent leakage from a Columbia Gas line. The Knott County Water and Sewer District (KCWSD) had worked near then, perhaps, on the line in the weeks prior to the explosion. The blast levelled the home of Ford Jacobs and injured some of the tenants that had rented and occupied the home at the time. The injured individuals have sued a number of defendants in state court; KCWSD is a party-defendant in that suit. DE 8 at 1–2 (Motion to Dismiss). Nationwide paid the homeowner's property loss and is subrogee to Jacobs. DE 1 (Complaint). Nationwide is not a plaintiff in the state suit; it has sued only KCWSD in this Court, asserting negligence and resulting loss.
The state record suggests 2021. DE 8-1 at ¶¶ 37–41. The discrepancy does not impact the ruling.
KCWSD, though not contesting jurisdiction, moves for Colorado River abstention. DE 8. The Court has read the full briefing, has considered the cases, and DENIES the motion. This action is not one that warrants the extraordinary result of abstention.
Of course, jurisdiction, when it applies, normally is peremptory. The federal courts’ obligation to hear cases properly before them is "virtually unflagging." Colorado River Water Conservation Dist. v. United States , 424 U.S. 800, 96 S. Ct. 1236, 1246, 47 L.Ed.2d 483 (1976). Colorado River abstention is the weakest of the abstention strains. It applies in "exceptional" cases, when driven by "considerations of wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation." Id. (citation omitted). The Supreme Court charted the concept in Colorado River and sharpened what it called the "exceptional-circumstances test" in Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp. , 460 U.S. 1, 103 S. Ct. 927, 937, 74 L.Ed.2d 765 (1983) ; see also Mason v. Lockwood, Andrews & Newnam, P.C. , 842 F.3d 383, 394 (6th Cir. 2016) (citing to Colorado River and describing abstention as an "extraordinary and narrow exception" for use in special circumstances on only the "clearest of justifications").
As Nationwide notes, then-District Judge Thapar described and analyzed this species of abstention in Total Renal Care, Inc. v. Childers Oil Co. , 743 F. Supp. 2d 609, 612–16 (E.D. Ky. 2010). That case too involved a common incidence of negligence producing many distinct losses. Id. at 614. Some claimants went to state court, and one came to federal court. Id. The common defendant invoked Colorado River , but Judge Thapar expertly parried the argument and retained jurisdiction. Id. at 616. The same fate befalls the effort of KCWSD here.
The Sixth Circuit has distilled the doctrine into two steps: First, a query for true parallel actions; Second, (and assuming gate one), assessment of a series of germane factors. None of the factors is determinative, and the evaluation is practical, not mechanical. See id. at 615 (calling for balancing with "heavy thumb on the scales" in favor of jurisdiction). The factors are:
(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 v. Compuserve Corp. , 160 F.3d 337, 340–41 (6th Cir. 1998).
Here, the actions are not "parallel" as understood in this usage. Full identicality is not required, but the state and federal cases must involve substantial duplication of parties and interests. Judge Thapar described this as "substantially the same issues and substantially the same parties." Total Renal , 743 F. Supp. 2d at 612. Further, for a state matter to be parallel, its resolution must necessarily conclude the subject matter addressed in the federal case. See Moses H. Cone , 103 S. Ct. at 943 (noting that the properly applying court "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").
The actions are not parallel for two clear reasons. First, Nationwide presses its claim only in federal court. Neither its loss nor its interest pends or has protection in the state forum. Although Nationwide could have gone to Knott Circuit Court, it also had the right to invoke diversity and litigate federally. Unlike in the Romine context, which featured duplicative class actions, Nationwide here stands alone in this Court and is absent in the state tribunal. The broad roster of state parties does also include KCWSD, but the distinction in parties-plaintiff here eliminates parallelism. Nationwide is only a federal-court litigant. Again, as in Total Renal , "here, TRC [federal plaintiff] is not a party to any of the state court actions at all. Accordingly, none of those actions will vindicate TRC's claims." See also Great Am. Ins. Co. v. Gross , 468 F.3d 199, 208 (4th Cir. 2006) ("Turning to whether the present action is parallel to the actions in Alabama state court, while it is true that the parties in Colorado River were not identical to the parties in the ‘parallel’ state action, at least the federal plaintiff was a party to the state action. ") (emphasis added). Simply put, the state resolution would not address or conclude the current federal dispute.
Further, though the state and federal cases address the same originating event, the issues diverge significantly. Nationwide's claim is a subrogation matter addressing only property loss. The multiple individual state plaintiffs seek recovery for personal injury and list a host of components. Further, the state plaintiffs target multiple defendants in seeking to impose liability—Nationwide sues only KCWSD. As with Judge Thapar's "preposterous" brake-job hypothetical (one negligent act producing a varied parade of distinct losses and claimants), there is no reason here to treat the state case as parallel and warranting abstention.
Although the lack of parallelism concludes the analysis, the Romine factors also point toward retention, not abstention. They certainly do not clearly signal justification to abstain. Thus, there is no res before the state court. There is no or little comparative convenience gap, a matter largely in the eye of the beholder. Factors 1 and 2 favor retention. The state case has temporal priority relative to filing date, and state law controls. Further, the state litigation has progressed comparatively, and the matter is one of concurrent jurisdiction. These factors (numbers 4–7, and 8) point toward abstention.
"If the actions are not parallel, the inquiry is at an end, and abstention is not appropriate." Total Renal , 743 F. Supp. 2d at 613.
That said, diligent discovery management can take advantage of some state progress and avoid unnecessary federal duplication.
Critically, to the Court, the state action will not, as postured, capably protect Nationwide's interest. Though it is true that Nationwide could litigate at the state level, it has validly chosen federal court. That is the status quo under assessment; in the current formulation, the absence of extant state protection cuts sharply in favor of retention because neither Nationwide nor its interest is present in the state case.
And although there is some lack of efficiency in having two fora examine the same originating event, that does not threaten the type of piecemeal litigation the Colorado River Court recognized—thus, there is not competing or potentially incongruous litigation concerning one resource. That the state result and federal result might differ is a feature of dual sovereignty; this is not the worry of Colorado River , which readily acknowledged that state and federal concurrent litigation normally is proper. As Colorado River noted: "Generally, as between state and federal courts, the rule is that ‘the pendency of an action in the state court is no bar to proceedings concerning the same matter in the Federal court having jurisdiction[.]’ " Colorado River , 96 S. Ct. at 1246 (quotation omitted). Further, "the mere potential for conflict in the results of adjudications, does not, without more, warrant staying exercise of federal jurisdiction." Id. at 1245. Remember, Colorado River involved the resolution of claims against a unitary and finite resource, water. Sorting the fallout from the gas explosion here, represented by distinct tort claims, is not the same thing. See Total Renal , 743 F. Supp. 2d at 616 (discussing primary factor of piecemeal litigation and inconsistency potential: "[b]ut that is not really the danger that Colorado River was concerned about. In Colorado River , the state and federal litigation both concerned rights to the same water ").
And KCWSD has procedural remedies if apportionment is its worry.
The federal and state actions are not parallel. The abstention factors signal no clear warrant to abstain. For these reasons, the Court DENIES DE 8.
See 17A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 4247 (3d ed. 1999) (April 2022 Update) ("After Cone there will be rare cases in which ‘exceptional circumstances’ will exist justifying stay or dismissal because of a concurrent state proceeding, but in most cases neither stay nor dismissal will be proper and the federal court will be obliged to exercise its jurisdiction.").