Opinion
Case No. 03-62154-CIV-DIMITROULEAS.
January 7, 2005
ORDER DENYING MOTION TO STAY
THIS CAUSE is before the Court on Cross-Defendant D.B.D. Management's November 8, 2004 Motion to Stay Cross-Claim [DE-76], and the Court having considered Cross-Claimant Plaintiff Spearmint Rhino's December 8, 2004 Opposition [DE-80] and D.B.D.'s December 21, 2004 Reply [DE-81], finds as follows:
1. On December 2, 2003, Plaintiff Michael J. Peter ("Peter") sued The Spearmint Rhino Companies Worldwide ("Spearmint Rhino") and D.B.D. Management, Inc. ("D.B.D.") in an eight (8) count complaint. [DE-1].
2. On September 23, 2004, Spearmint Rhino filed a cross-claim against D.B.D. Management seeking indemnity and breach of contract. [DE-65].
3. Subsequently, Spearmint Rhino also filed a complaint against DBD in state court: case number 04-15046 CACE. In the state court complaint, Spearmint Rhino asserts that DBD breached the parties trademark license agreement by, among other reasons, refusing to defend and indemnify Spearmint Rhino in this federal case.
4. In its present motion D.B.D. seeks to stay Spearmint Rhino's cross-claim.
5. Under the Colorado River doctrine, a federal court may stay or dismiss an action when there is an ongoing parallel state action only were exceptional circumstances exist. Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976);Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 15 (1983); Handy v. Shaw, Bransford, Veilleux and Roth, 325 F.3d 346, 351 (D.C. Cir. 2003); LaDuke v. Burlington Northern R.R. Co., 879 F.2d 1556, 1558 (7th Cir. 1989); Bosdorf v. Lamar Beach, 79 F. Supp. 2d 1337, 1343 (S.D. Fla. 1999). Abstention from the exercise of federal jurisdiction is the exception not the rule. Bosdorf, 79 F.Supp.2d at 1343 ("A federal court's abdication of its obligation to decide a case can be justified under Colorado River abstention only in exceptional circumstances where ordering the parties to repair to state courts serves important countervailing interests."). There is a heavy bias in favor of exercising jurisdiction. TranSouth Fin. Corp. v. Bell, 149 F.3d 1292, 1295 (11th Cir. 1998).
6. Under the Colorado River doctrine, the following factors are generally considered: (1) whether one forum has assumed jurisdiction over property; (2) the inconvenience of the federal forum; (3) the potential for piecemeal litigation; (4) the order in which the forums obtain jurisdiction; (5) whether federal or state law will be applied; and (6) the adequacy of each forum to protect the parties' rights. Moorer v. Demopolis Waterworks Sewer Bd., 374 F.3d 994, 996 (11th Cir. 2004); Bosdorf, 79 F. Supp. 2d at 1343. In addition, courts should consider the "vexatious or reactive nature of either the federal or the state litigation." Bosdorf, 79 F.Supp. 2d at 1343-44.
7. First, the Court finds that the state and federal actions here are parallel actions. Exact parallelism between the two actions is not required; the actions are considered parallel where substantially the same parties are contemporaneously litigating substantially the same issues in another forum. LaDuke, 879 F.2d at 1559; Bosdorf, 79 F. Supp. 2d at 1344 n. 13; Lisa, S.A. v. Mayorga, 232 F. Supp. 2d 1325, 1327 (S.D. Fla. 2002). In the present case, the issues are substantially the same in both the state and federal actions. The state and federal actions involve similar operative facts surrounding the same incident.
8. Next, the Court concludes that Defendants have not sufficiently established that extraordinary circumstances exist in the case to warrant abstention or stay. The first two factors of the Colorado River doctrine have no bearing on the analysis. Neither the state nor this Court has assumed jurisdiction over any res, and the inconvenience of the forum factor is irrelevant because both the federal and state forum are located in the Fort Lauderdale area.
9. There is a potential for piecemeal litigation as to the fourth factor, this Court assumed jurisdiction first. It appears that the state court action was a reaction to the cross-claim filed in this case. As to the fifth factor, state law would apply to the indemnity issue. As to the final factor, each forum would appear to be able to protect the parties' rights.
10. In sum, upon a review of all the factors of the Colorado River analysis, the record in this case, the operative facts and the applicable law, the Court concludes that Cross Defendant has not sufficiently established exceptional circumstances to warrant abstention or a stay of this matter pending the state court action. Therefore, the Court will deny Cross Defendant's request for abstention and a stay under the Colorado River doctrine.
Wherefore, Cross Defendants's Motion to Stay [DE-76] is DENIED.