Amer Fam Life Asuc v. Anderson ( 2000 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 00-60027
(Summary Calendar)
AMERICAN FAMILY LIFE ASSURANCE COMPANY OF COLUMBUS,
Plaintiff-Appellant
versus
BOBBIE F. ANDERSON,
Defendant-Appellee
___________________________________________________
Appeal from the United States District Court
for the Southern District of Mississippi
(99-CV-418)
___________________________________________________
July 27, 2000
Before POLITZ, WIENER and BENAVIDES, Circuit Judges.
PER CURIAM:*
In this diversity case arising out of an employment dispute,
Plaintiff-Appellant American Family Life Assurance Company of
Columbus (“AFLAC”) appeals the district court’s grant of Defendant-
Appellee Bobbie F. Anderson’s motion to dismiss the federal
proceedings, thereby rendering moot AFLAC’s (1) Motion for
Preliminary Injunction, (2) Renewed Motion for Preliminary
Injunction, (3) Motion for Order to Arbitrate, and (4)Request for
an Evidentiary Hearing. The district court reasoned that granting
*
Pursuant to 5th Cir. Rule 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5th Cir. Rule 47.5.4.
Anderson’s Motion to Dismiss was appropriate under the abstention
doctrine announced by the Supreme Court in Colorado River Water
Conservation District v. United States.1 Concluding that the
district court’s ruling is inconsistent with the “virtually
unflagging obligation of the federal courts to exercise the
jurisdiction given them,”2 as we recently clarified in Black Sea
Inv., Ltd., v. United Heritage Corp.,3 we reverse and remand to the
district court for further proceedings.
I.
Facts and Proceedings
In 1996, Anderson and AFLAC entered into an employment
contract entitled “Associate’s Agreement.” It contained an
arbitration clause which stated that “[a]ny dispute arising under
this Agreement, to the maximum extent allowed by applicable law,
shall be subject to arbitration, and prior to commencing any court
action the parties agree that they shall arbitrate all
controversies.” Anderson subsequently executed two more contracts
with AFLAC, one entitled “Special Projects Coordinator’s Agreement”
and the other entitled “District Coordinator’s Agreement,” in both
of which the arbitration clause was re-affirmed.
In 1999, Anderson filed a complaint in state court in
1
424 U.S. 800, 96 S. Ct. 1236, 47 L. Ed. 2d 483 (1976).
2
Id. at 817, 96 S. Ct. 1236.
3
204 F.3d 647 (5th Cir. 2000).
2
Mississippi naming as defendants AFLAC, Life Investors Insurance
Company of America (“Life Investors”), Rainmaker Construction
L.L.C. (“Rainmaker”), and Victor A. Sheely (“Sheely”). Anderson’s
state court complaint alleges that in September 1997, AFLAC
terminated its agreement with her without sufficient notice or
justification, violating her employment contract. Anderson’s
complaint further alleges that AFLAC, Life Investors, Rainmaker and
Sheely, acted as conspirators in all wrongful actions taken against
her, and are thus jointly and severally liable for the harm that
she suffered.
In response, AFLAC filed a Motion to Compel Arbitration and
Motion to Dismiss or, in the alternative, to Stay Proceedings.
These motions were argued before the state court in June of 1999,
and five days later, AFLAC filed in federal court a Petition to
Compel Arbitration, pursuant to 9 U.S.C. § 4, and a Motion for
Preliminary Injunction to enjoin Anderson from pursuing her claim
in state court. AFLAC then timely filed a notice to remove the
state court case to federal court. In an order issued by the
district court early the following month, the case removed from
state court, was consolidated with AFLAC’s federal court motion to
compel arbitration.
Shortly thereafter, Anderson filed a motion to remand, and
approximately a month after that, AFLAC filed a Motion to
Reconsider and Vacate Order Consolidating Cases, which contained a
request that the state court case be remanded to the state court.
3
This motion was granted in an order entered at the end of
September, 1999. The state court case was remanded but the Motion
to Compel Arbitration remained in federal court. Less than two
weeks later, Anderson filed a motion in federal court to dismiss
AFLAC’s federal case. The district court granted Anderson’s motion
in an Order entered on December 13, 1999 and AFLAC now appeals.
II.
Analysis
A. Standard of Review
As the district court’s decision to dismiss on the basis of
the Colorado River abstention doctrine rests on an interpretation
of law, our review is de novo.4
B. Colorado River Abstention
“The Colorado River abstention doctrine is based on principles
of federalism, comity, and conservation of judicial resources. It
represents an ‘extraordinary and narrow exception’ to the
‘virtually unflagging obligation of the federal courts to exercise
the jurisdiction given them.’”5
The Supreme Court has not prescribed a “hard
and fast rule” governing the appropriateness
of Colorado River abstention, but it has set
4
Murphy v. Uncle Ben’s, Inc., 168 F.3d 734, 738 (5th Cir.
1999).
5
Black Sea Inv., Ltd., v. United Heritage Corp., 204 F.3d
647, 650 (5th Cir. 2000) (citations omitted) (referencing Evanston
Ins. Co. v. Jimco, Inc., 844 F.2d 1185, 1189 (5th Cir. 1988) and
Colorado River, 424 U.S. at 813, 817).
4
forth six factors that may be considered and
weighed in determining whether exceptional
circumstances exist that would permit a
district court to decline exercising
jurisdiction: (1) assumption by either court
of jurisdiction over a res; (2) the relative
inconvenience of the forums; (3) the avoidance
of piecemeal litigation; (4) the order in
which jurisdiction was obtained by the
concurrent forums; (5) whether and to what
extent federal law provides the rules of
decision on the merits; and (6) the adequacy
of the state proceedings in protecting the
rights of the party invoking federal
jurisdiction.6
“In assessing the propriety of abstention according to these
factors, a federal court must keep in mind that ‘the balance
[should be] heavily weighted in favor of the exercise of
jurisdiction.’”7 Weighing the Colorado River factors with this
strong presumption in mind, we conclude that in this case the
balance tips decisively against abstention.
(1) Assumption by Either Court of Jurisdiction Over a Res
This case “does not involve any res or property over which any
court, state or federal, has taken control. ... [T]he absence of
this factor weighs against abstention.”8
(2) Relative Inconvenience of the Forums
6
Black Sea, 204 F.3d at 650 (citing Murphy, 168 F.3d at 738).
7
Black Sea, 204 F.3d at 650 (citing Moses H. Cone Mem. Hosp.,
460 U.S. at 16).
8
Murphy, 168 F.3d at 738.
5
The federal and state courts are located in close geographic
proximity within the state of Mississippi. This factor thus weighs
against abstention.9
(3) Avoidance of Piecemeal Litigation
With respect to Colorado River abstentions, the concern with
piecemeal litigation is less significant with arbitration disputes
than with disputes involving a res. The fact that if AFLAC obtains
an arbitration order, Anderson will be forced to resolve some
issues with AFLAC in arbitration and to resolve the other issues
with AFLAC, Life Investors, Rainmaker, and Sheely in different
forums “is not the result of any choice between federal and state
courts; it occurs because the relevant federal law requires
piecemeal resolution when necessary to give effect to an
arbitration agreement. Under the Arbitration Act, an arbitration
agreement must be enforced notwithstanding the presence of other
persons who are parties to the underlying dispute but not to the
arbitration agreement.”10
Moreover, although avoidance of piecemeal litigation is a
legitimate concern in considering abstention, “[t]he real concern
at the heart of the third Colorado River factor is . . . the
concomitant danger of inconsistent rulings with respect to a piece
of property. When, as here, no court has assumed jurisdiction over
9
See id; Black Sea, 204 F.3d at 650.
10
Moses H. Cone Mem. Hosp., 460 U.S. at 20.
6
a disputed res, there is no such danger.”11 Given the need to
balance the above concerns, this factor is neutral with respect to
abstention.
(4) Order in Which Jurisdiction Was Obtained
“[P]riority should not be measured exclusively by which
complaint was filed first, but rather in terms of how much progress
has been made in the two actions.”12 Although the arbitration
dispute was first brought in state court, no real progress had been
made prior to its removal to federal court. Similarly, no real
progress had been made in federal court prior to the dismissal of
AFLAC’s Motion to Compel Arbitration. Finally, no real progress
has been made in the related suits that were remanded to state
court. “As the state and federal suits are proceeding at
approximately the same pace, this factor weighs against
abstention.”13
(5) Whether State or Federal Law Will Be Applied
AFLAC’s Motion to Compel Arbitration arises under federal law,
specifically 9 U.S.C. § 4 (the Federal Arbitration Act). Even were
it not the case that federal law governs the issue, however, “our
11
Id.
12
Moses H. Cone Mem. Hosp., 460 U.S. at 21.
13
Black Sea, 204 F.3d at 651 (citing Murphy, 168 F.3d at 738-
39).
7
task in cases such as this is not to find some substantial reason
for the exercise of federal jurisdiction by the district court;
rather, the task is to ascertain whether there exist ‘exceptional
circumstances,’ the ‘clearest of justifications,’ that can suffice
under Colorado River to justify the surrender of that
jurisdiction.”14 The district court correctly decided that this
factor weighs against abstention.
(6) Adequate Protection in State Court
There is no indication in the instant case that AFLAC’s
interests would not be adequately protected in state court. It is
clear, however, that this factor “can only be a neutral factor or
one that weighs against, not for, abstention.”15 This factor
therefore remains neutral.
All six of the Colorado River abstention factors are either
neutral with respect to abstention or counsel against it.
Considering the strong presumption against Colorado River
abstention, it is not appropriate in this case.
III.
Conclusion
For the reasons states above, we reverse the district court’s
14
Moses H. Cone Mem. Hosp., 460 U.S. at 26, 103 S. Ct. 927.
15
Id at 1193.
8
judgment of dismissal and remand this case to that court for
further consistent proceedings.
REVERSED AND REMANDED.
9