Amerisourcebergen v. Roden ( 2007 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
AMERISOURCEBERGEN CORPORATION,  No. 05-55349
Plaintiff-Appellant,
v.  D.C. No.
CV-04-01061-AHS
DONALD R. RODEN,
OPINION
Defendant-Appellee.

Appeal from the United States District Court
for the Central District of California
Alicemarie H. Stotler, District Judge, Presiding
Argued and Submitted
February 5, 2007—Pasadena, California
Filed August 13, 2007
Before: Warren J. Ferguson, Eugene E. Siler, Jr.,* and
Michael Daly Hawkins, Circuit Judges.
Opinion by Judge Hawkins;
Concurrence by Judge Ferguson
*The Honorable Eugene E. Siler, Jr., Senior United States Circuit Judge
for the Sixth Circuit, sitting by designation.
9697
9700 AMERISOURCEBERGEN v. RODEN
COUNSEL
Gordon E. Krischer (argued) and Larry A. Walraven
(briefed), O’Melveny & Myers, Newport Beach, California,
for the plaintiff-appellant.
William E. Johnson (briefed and argued), Law Offices of
Richard E. Hodge, Inc., Malibu, California, for the defendant-
appellee.
OPINION
HAWKINS, Circuit Judge:
We explore once again the sometimes complex relationship
between state and federal civil proceedings when parties in
the midst of litigation on one side of the divide file factually
related proceedings on the other. Understandably concerned
with judicial economy and respect for ongoing state proceed-
ings, the district court dismissed the federal suit under the
Younger abstention doctrine. Determining that abstention was
AMERISOURCEBERGEN v. RODEN 9701
not required, we return the matter to district court to allow
appellant’s diversity action to proceed.
FACTS AND PROCEDURAL HISTORY
In 1995, Donald R. Roden (“Roden”) was hired as
President and Chief Operating Officer of Bergen Brunswig
Corporation (“BBC”), the predecessor company to Ameri-
sourceBergen Corporation (“ABC”). At this time, Roden and
BBC entered into an employment agreement (the “Agree-
ment”) providing that Roden would have his employment
with BBC consistently extended monthly on a rolling three-
year basis1 and would not be fired except for “cause,” as
defined in the Agreement. Additionally, the Agreement pro-
vided that Roden was entitled to participate in BBC’s ERISA-
governed2 Supplemental Executive Retirement Plan (the
“SERP”), as well as its interest-free loan program (the “Loan
Program”).
Four years after he was hired and two years after being pro-
moted to Chief Executive Officer (“CEO”), Roden was given
written notice of BBC’s intention to terminate his employ-
ment for a reason that apparently did not qualify as “cause”
under the Agreement and on terms that may have conflicted
with those provided for in the Agreement. Roden thereafter
filed a complaint against BBC in the Superior Court in
Orange County, California (the “California Superior Court”)
claiming that BBC breached the Agreement and that Roden
was therefore entitled to his full salary for three years past his
termination date and was, in all other respects, entitled to be
treated as BBC’s CEO until that date.3
1
In other words, on the first day of Month 1 in Year 1, Roden was guar-
anteed employment with BBC until the last day of Month 1 in Year 4.
2
Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001et seq.
3
This case was captioned as Roden v. BBC and will be hereinafter
referred to by this name.
9702 AMERISOURCEBERGEN v. RODEN
Specifically, Roden claimed that he was entitled to “esti-
mated future benefits under the SERP . . . of no less than
$8,970,000” and a due date (and interest-accrual start-date)
based on a November 30, 2002 termination date for the
$337,500 loan he took out under the Loan Program.4
Shortly thereafter, Roden and BBC entered into a Settle-
ment Agreement, and a judgment incorporating its terms was
entered on July 27, 2000 (“the Judgment”), as follows:
1. In favor of [Roden] in the amount of
$5,000,000, less legally required deductions;
2. Continuation of the benefits provided in Sec-
tions 5(d) [which includes participation in the
SERP], (e) and (i) [which includes participation
in the Loan Program] of [Roden’s] employment
contract; and
3. Reasonable attorney’s fees and costs in an
amount to be determined by the Court.
Believing BBC had not fully complied with this Judgment,
Roden sought to force compliance in California Superior
Court. After briefing and argument, that court ordered imple-
mentation of the Judgment (“First Order”) finding, in relevant
part, that Roden’s entitlement to benefits under the SERP had
“vested” and that “Roden’s $337,500 loan was not absolved
by the Judgment” but would not become due until November
30, 2002. The First Order continued (emphasis added):
[BBC] is required to accord Roden the same treat-
ment as the other senior officers of [BBC] who
received loans from this November 1998 loan pro-
4
Roden brought a number of other claims against BBC and sought dam-
ages in the millions of dollars; the above are only the demands relevant
to this appeal.
AMERISOURCEBERGEN v. RODEN 9703
gram . . . with respect to . . . any forgiveness, exten-
sions, payment of interest and the like.
BBC appealed the First Order to the California Court of
Appeal, which unanimously affirmed. 107 Cal. App. 4th 620(2003).
When Roden attempted to enforce the First Order and col-
lect his SERP benefits, BBC opposed his request, claiming
that Roden was entitled to a lesser sum under the SERP plan
than he had alleged. Roden appealed this determination pursu-
ant to company policy, and the final administrative review of
the matter yielded a decision that Roden was entitled to
$1,898,066 in SERP benefits. Apparently with an aim of pur-
suing his rights under ERISA—which allows an ERISA plan
beneficiary to pursue court action if he is dissatisfied with an
administrative determination of his ERISA benefits, 29
U.S.C. §§ 1132(a), 1133—Roden requested discovery from
ABC (which, by this point, had stepped into BBC’s shoes)
regarding the amount of benefits he was entitled to receive
under the SERP.
At this point, ABC sought to remove Roden v. BBC from
the California courts to federal court claiming that Roden’s
discovery request had “transformed” the case into an ERISA
action, which is removable to federal court at the defendant’s
request. See Metro. Life Ins. Co. v. Taylor, 481 U.S. 58(1987). The district court rejected this argument and
remanded the case back to the California courts.5
Undeterred, ABC filed its own action in federal district
court, requesting both a judgment that Roden breached his
contract with ABC by failing to repay his $337,500 loan
5
It surely did not pass the district court’s notice that ABC was attempt-
ing this maneuver after several years of litigation in the state court system,
most of which had yielded unfavorable results for ABC and its predeces-
sor corporation.
9704 AMERISOURCEBERGEN v. RODEN
(“Count I”), as well as a declaration of ABC’s duties and obli-
gations to Roden under the SERP—namely, for a proper cal-
culation of Roden’s SERP benefits (“Count II”). The district
court dismissed ABC’s two claims,6 relying on the basic
premise that resolving ABC’s claims at the federal level
would interfere with ongoing state court proceedings regard-
ing almost-entirely overlapping issues.7 ABC appealed to this
court, arguing that the district court erred in dismissing its
claims.
Shortly before oral argument took place in this case, the
California Superior Court entered a second order implement-
ing the Judgment (“Second Order”). The Second Order
declared that Roden was entitled to $14,432,141.74 in SERP
benefits but was not entitled to any forgiveness of the loans
he had taken from ABC under the Loan Program. Both parties
have appealed the Second Order to the California Court of
Appeal.
In light of these recent developments—which ABC agrees
will squarely resolve the issue of Roden’s entitlement under
the SERP—ABC concedes that the district court was within
its discretion to decline to entertain Count II. See 28 U.S.C.
§ 2201 (“In a case of actual controversy within its jurisdic-
6
Because it dismissed ABC’s claims outright, the district court did not
reach the issue of whether the federal proceedings should be stayed pend-
ing conclusion of the state court proceedings, a remedy Roden requested
if his motion to dismiss was denied.
7
Specifically, the district court dismissed Count I on the basis of the
Younger abstention doctrine, and dismissed Count II based on three inde-
pendent grounds: (1) the federal court must abstain under Younger; (2) the
court should not exercise its discretion to entertain ABC’s request for
declaratory relief; and (3) ABC failed to state a claim because it failed to
allege facts sufficient to demonstrate that it qualified as a “fiduciary” of
an ERISA-governed plan. The district court, however, rejected Roden’s
arguments that dismissal of both counts was required by the Anti-
Injunction Act, 28 U.S.C. § 2283, and the Rooker-Feldman doctrine, as
well as his argument that dismissal of Count II was required under the
removal statute, 28 U.S.C. § 1446(b).
AMERISOURCEBERGEN v. RODEN 9705
tion, . . . any court of the United States . . . may declare the
rights and other legal relations of any interested party . . . .”
(emphasis added)); Gov’t Employees Ins. Co. v. Dizol, 133
F.3d 1220, 1225 (9th Cir. 1998) (en banc) (“If there are paral-
lel state proceedings involving the same issues and parties
pending at the time the federal declaratory action is filed,
there is a presumption that the entire suit should be heard in
state court.”). We are thus called upon to decide only whether
the district court properly dismissed Count I.
DISCUSSION
If the district court had the same discretion to decline to
hear claims for monetary damages as it does to decline to hear
claims for declaratory relief, we would surely uphold the dis-
missal of Count I. Parties should be strongly discouraged
from attempting to drag federal courts into disputes already
significantly underway in state courts.
Moreover, we regret the significant expense—both to the
parties and to the two already overburdened court systems—
caused by ABC’s decision to file its state-law-governed
breach of contract claim in federal court when it could have
just as easily filed the very same claim in the California
courts, which have been competently handling these matters
for over six years.
Nevertheless, we are aware of the “virtually unflagging
obligation of the federal courts to exercise the jurisdiction
given them,” Colo. River Water Conservation Dist. v. United
States, 424 U.S. 800, 817 (1976), and must decide whether
the district court properly understood the scope of this obliga-
tion when it dismissed Count I under the doctrine announced
in Younger v. Harris, 401 U.S. 37, 41 (1971). We conclude
that it did not and that Count I was improperly dismissed
under Younger. We also conclude that dismissal of Count I
cannot be affirmed under either the Anti-Injunction Act, 28
U.S.C. § 2283, or the Rooker-Feldman doctrine. We therefore
9706 AMERISOURCEBERGEN v. RODEN
reverse the dismissal of Count I and remand to the district
court for further proceedings.
I. Younger Abstention
[1] The Younger abstention doctrine, as originally articu-
lated by the Supreme Court, “forbid[s] federal courts [from]
stay[ing] or enjoin[ing] pending state court proceedings.”
Younger, 401 U.S. at 41. Roden argues that allowing ABC’s
breach of contract claim to proceed in federal court would be
the functional equivalent of enjoining the ongoing post-
judgment proceedings in Roden v. BBC and, thus, that the
Younger doctrine required the federal court to abstain from
considering, and thereby dismiss, Count I.
[2] ABC counters that, although its breach of contract claim
may create a potential for conflict with the enforcement of a
single state court judgment, this is an insufficient basis for
federal court abstention under Younger. Specifically, ABC
argues that the district court incorrectly stated the Younger
doctrine’s elements and improperly expanded the “important
state interest” and “conflict” elements to encompass minimal
state interests and potential conflicts. After reviewing the dis-
trict court’s dismissal de novo, see Gilbertson v. Albright, 381
F.3d 965, 982 n.19 (9th Cir. 2004) (en banc), we agree and
hold that the district court had a “duty . . . to adjudicate [the]
controversy properly before it,” Champion Int’l Corp. v.
Brown, 731 F.2d 1406, 1408 (9th Cir. 1984), even if “adjudi-
cating” this particular controversy would have amounted to
little more than a ministerial entry of judgment based on the
collateral estoppel effects of decisions already made by the
California courts.
A. Abstention and the Younger Elements
The district court dismissed Count I after concluding that
“[o]n balance, it appears that all three elements of Younger
abstention are met.”
AMERISOURCEBERGEN v. RODEN 9707
[3] However, when a federal plaintiff seeks monetary dam-
ages (rather than injunctive or declaratory relief) in a case
requiring abstention under Younger, dismissal is not the
appropriate procedural remedy. See Gilbertson, 381 F.3d at
968. As the Gilbertson court held, although “Younger princi-
ples apply to actions at law as well as for injunctive or declar-
atory relief . . . , federal courts should not dismiss actions
where damages are at issue; rather, damages actions should be
stayed until the state proceedings are completed.” Id. (empha-
sis added). Accordingly, even if abstention under Younger
were required as to Count I, the district court should have
stayed ABC’s federal suit pending the conclusion of Roden v.
BBC in the California court system, rather than dismissing
Count I altogether.
In addition, balancing the Younger elements, rather than
determining whether each element, on its own, is satisfied,
conflicts with the requirement that federal courts abstain only
in those cases falling within the “carefully defined” bounda-
ries of federal abstention doctrines. New Orleans Pub. Serv.,
Inc. v. Council of City of New Orleans, 491 U.S. 350, 359
(1989) (“NOPSI”). As virtually all cases discussing these doc-
trines emphasize, the “limited circumstances in which . . .
abstention by federal courts is appropriate . . . ‘remain the
exception rather than the rule,’ ” Green v. City of Tucson, 255
F.3d 1086, 1089 (9th Cir. 2001) (en banc) (quoting NOPSI,
491 U.S. at 359), rev’d on other grounds by Gilbertson, 381
F.3d at 968-69, and, thus, when each of an abstention doc-
trine’s requirements are not strictly met, the doctrine should
not be applied. See Middlesex County Ethics Comm. v. Gar-
den State Bar Ass’n, 457 U.S. 423, 431-34, 437 (1982)
(abstaining only after determining that each element of Youn-
ger doctrine was satisfied); NOPSI, 491 U.S. at 372-73 (not
abstaining when one element of Younger doctrine was not sat-
isfied).
Finally, there are actually four elements that must be satis-
fied before the Younger doctrine requires abstention. The dis-
9708 AMERISOURCEBERGEN v. RODEN
trict court recognized only three of them, apparently taking
cues from a number of our cases that have focused on only the
three “Middlesex elements”8 and agreeing with Roden that, to
the extent a fourth element ever existed, this court’s en banc
decision in Gilbertson did away with it. See Gilbertson, 381
F.3d at 968-69 (en banc) (“[W]e recede from our statements
in Green v. City of Tucson, 255 F.3d 1086, 1098, 1102 (9th
Cir. 2001) (en banc), that direct interference is a threshold
requirement, or element, of Younger abstention . . . .” )).
According to the district court, abstention is required when-
ever “(1) there are ongoing state judicial proceedings; (2) the
proceedings implicate important state interests; and (3) the
state proceedings provide the plaintiff with an adequate
opportunity to raise federal claims,” Meredith v. Oregon, 321
F.3d 807, 817 (9th Cir. 2003) (citing Middlesex, 457 U.S. at
432), even if the federal action does not enjoin the ongoing
state court proceedings or have the practical effect of doing
so.
[4] This is incorrect. As Gilbertson makes clear, while
there are only three “threshold elements” to application of
Younger, there is a vital and indispensable fourth element: the
policies behind the Younger doctrine must be implicated by
the actions requested of the federal court. In the language of
the Gilbertson court:
If a state-initiated proceeding is ongoing, and if it
implicates important state interests . . . , and if the
federal litigant is not barred from litigating federal
constitutional issues in that proceeding, then a fed-
eral court action that would enjoin the proceeding, or
have the practical effect of doing so, would interfere
in a way that Younger disapproves.
8
See, e.g., Canatella v. California, 404 F.3d 1106, 1109-10 (9th Cir.
2005); Green, 255 F.3d at 1091; Commc’ns Telesystems Int’l. v. Cal. Pub.
Util. Comm’n, 196 F.3d 1011, 1015 (9th Cir. 1999); Woodfeathers, Inc. v.
Washington County, Or., 180 F.3d 1017, 1020 (9th Cir. 1999); Partington
v. Gedan, 880 F.2d 116, 121 (9th Cir. 1989).
AMERISOURCEBERGEN v. RODEN 9709
381 F.3d at 978 (emphases in original). Thus, once the three
Middlesex elements are satisfied, the court does not automati-
cally abstain, but abstains only if there is a Younger-based
reason to abstain—i.e., if the court’s action would enjoin, or
have the practical effect of enjoining, ongoing state court pro-
ceedings. Id.9
[5] Accordingly, abstaining under Younger as to Count I
was proper only if all four Younger requirements were strictly
satisfied. ABC concedes the first and third threshold elements,
and we agree they were both met here: the post-judgment pro-
ceedings in Roden v. BBC were ongoing, and ABC had an
opportunity to raise its federal claims in these state court pro-
ceedings.10 As to the second threshold element and the fourth
element, however, we find that they were not met here and,
thus, that Younger abstention was improper in this case.
B. Younger Abstention Improper Because No Important
State Interest Implicated
The second threshold element of Younger is satisfied when
“the State’s interests in the [ongoing] proceeding are so
important that exercise of the federal judicial power would
disregard the comity between the States and the National
9
As to Roden’s contention that Gilbertson did away with the fourth ele-
ment, Gilbertson did overrule Green’s holding that “ ‘direct interference’
is a threshold requirement . . . of Younger abstention,” 381 F.3d at 968-69(emphasis added), but it left intact the more general requirement that some
interference with state court proceedings is a necessary—and, indeed,
motivating—element of the Younger doctrine, see id. at 976 (“There is no
doubt that interference with state proceedings is at the core of the comity
concern that animates Younger.”); id. at 976-77 (“[I]nterference is
undoubtedly the reason for Younger restraint, or the end result to be
avoided. However, the Supreme Court has never required that interference
be ‘direct’ in the manner we described in Green.”).
10
Note that, here, the third element is automatically satisfied because
Count I is a state law breach of contract claim and, accordingly, raises no
federal questions whatsoever.
9710 AMERISOURCEBERGEN v. RODEN
Government.” Pennzoil Co. v. Texaco, Inc., 481 U.S. 1, 11
(1987). The district court reasoned that, because California
has an “admittedly . . . important interest in the enforcement
of its judgment and orders,” and because resolving ABC’s
breach of contract claim in federal court could potentially
create a conflict with the First Order (which partially resolved
Roden’s obligations under the Loan Program), the second
threshold element “weigh[ed] in favor of abstention.”11
The Supreme Court has noted that states “have important
interests in administering certain aspects of their judicial sys-
tems,” and that, in particular, states have an interest in “en-
forcing the orders and judgments of their courts.” Pennzoil,
481 U.S. at 12-13. Taken out of context, these statements sug-
gest that California’s interest in enforcing the judgment in this
particular case is of sufficient importance to meet Younger’s
second threshold element. But we have made it clear that
“[t]he importance of the [state’s] interest is measured by con-
sidering its significance broadly, rather than by focusing on
the state’s interest in the resolution of an individual case.”
Baffert v. Cal. Horse Racing Bd., 332 F.3d 613, 618 (9th Cir.
2003); see also Champion Int’l, 731F.2d at 1408 (“[A] chal-
lenge[ ] [to] only one . . . order, not the whole procedure” is
“not a substantial enough interference with [a state’s] admin-
istrative and judicial processes to justify abstention.”).
Accordingly, binding precedent prevents the court from
finding that California’s interest in enforcing this one particu-
lar judgment—as opposed to a state’s wholesale interest in
preserving its procedure for posting an appeal bond, see Penn-
zoil, 481 U.S. at 12-14, or its interest in retaining a particular
contempt of court scheme, see Juidice v. Vail, 430 U.S. 327,
330, 335 (1977)—qualifies as sufficiently “important” to sat-
isfy Younger’s second threshold element.
11
As discussed above, the district court’s decision to balance, or weigh,
the Younger factors was in error.
AMERISOURCEBERGEN v. RODEN 9711
Cognizant of this reality, Roden argues that California’s
interest in adjudicating conflicts in a timely fashion—as evi-
denced by its express goal of resolving seventy-five percent
of civil cases within a year of filing, see Cal. Gov’t Code
§ 68603; Cal. Rules of Ct., std. 2.2(f)(1)—should qualify as
sufficiently “important” for Younger abstention purposes. To
support this argument, Roden cites a number of California and
federal cases for the basic—and undisputed—proposition that
courts have an interest in prompt resolution of the cases on
their dockets.
[6] While true, this is not the type of “important state inter-
est” that animates the Younger abstention doctrine. The goal
of Younger abstention is to avoid federal court interference
with uniquely state interests such as preservation of these
states’ peculiar statutes, schemes, and procedures. Roden cites
no case, nor could he, holding that federal courts should
abstain in favor of state courts when a universal judicial
interest—such as the prompt resolution of cases—is at stake.12
Because neither California’s interest in enforcement of a sin-
gle state court judgment nor its interest in judicial efficiency
is sufficiently important to satisfy Younger’s second threshold
element, the district court erred when it found this element
satisfied.
C. Younger Abstention Improper Because Ongoing State
Court Proceedings Would Not Be Actually or
Effectively Enjoined
[7] Although we would be obligated to find the district
court’s decision to abstain under Younger erroneous based
12
Moreover, hearing ABC’s breach of contract claim in federal court
may actually further (rather than detract from) the goal of expeditious case
resolution, as there is currently no claim pending in the California Supe-
rior Court requiring a determination of Roden’s liability under the Loan
Program, and there is no means by which the California Superior Court
could order Roden to repay ABC (if, in fact, he is legally obligated to do
so) based on the claims currently pending before it.
9712 AMERISOURCEBERGEN v. RODEN
solely on the lack of an important state interest, see supra Part
I.A, we also think it wise to address the district court’s
implicit finding that a potential conflict with ongoing state
court proceedings is sufficient to meet the fourth element of
Younger abstention.13 As the Supreme Court has held, “the
mere potential for conflict in the results of adjudications does
not, without more, warrant staying exercise of federal juris-
diction,” much less abdicating it entirely. Colo. River, 424
U.S. at 816. Rather, abstention is only appropriate in the nar-
row category of circumstances in which the federal court
action would actually “enjoin the [ongoing state] proceeding,
or have the practical effect of doing so.” Gilbertson, 381 F.3d
at 978.
[8] Here, deciding Count I would neither enjoin, nor have
the practical effect of enjoining, the post-judgment proceed-
ings in California Superior Court; after all, Roden has not yet
filed any post-judgment motion in California Superior Court
disputing his obligation to repay the loan, and ABC has not
yet filed a counterclaim in the state court proceedings
attempting to enforce its right to receive repayment. Thus, the
district court’s finding of an abstention-worthy conflict based
on a potential for conflict was erroneous.
Roden’s counterargument—that the requisite “interference
with ongoing state proceedings” occurs whenever the relief
sought in federal court would, if entertained, likely result in
a judgment whose preclusive effect would prevent the state
court from independently adjudicating the issues before it—
has also been rejected. As explained by this court in Green,
255 F.3d at 1097, rev’d on other grounds by Gilbertson, 381
F.3d at 968-69:
13
See AmerisourceBergen Corp. v. Roden, No. 04-1061 (C.D. Cal. Feb.
1, 2005) (order granting motion to dismiss) (“[Although] the issues in
[ABC’s] federal complaint are not necessarily coextensive with the state
court proceedings, [they are] substantially related to the claims in the state
court proceeding [and, thus,] any decision in the federal forum could
potentially conflict with the state court proceedings.”).
AMERISOURCEBERGEN v. RODEN 9713
[T]he possibility of a race to judgment is inherent in
a system of dual sovereigns and, in the absence of
“exceptional” circumstances, [Colo. River, 424 U.S.]
at 818, . . . that possibility alone is insufficient to
overcome the weighty interest in the federal courts
exercising their jurisdiction over cases properly
before them.
Indeed, the Supreme Court has rejected the notion that fed-
eral courts should abstain whenever a suit involves claims or
issues simultaneously being litigated in state court merely
because whichever court rules first will, via the doctrines of
res judicata and collateral estoppel, preclude the other from
deciding that claim or issue. See Vendo Co. v. Lektro-Vend
Corp., 433 U.S. 623, 641-42 (1977); Atl. Coast Line R.R. Co.
v. Bhd. of Locomotive Eng’rs, 398 U.S. 281, 295-96 (1970).
Kline v. Burke Const. Co., 260 U.S. 226 (1922); see also Noel
v. Hall, 341 F.3d 1148, 1159 (9th Cir. 2003); Bennett v.
Medtronic, Inc., 285 F.3d 801, 806-07 (9th Cir. 2002).
Although abstention to avoid concurrent, duplicative litigation
is available in some very limited circumstances—in particu-
lar, when the requested relief in federal court is a declaratory
judgment, see Wilton v. Seven Falls Co., 515 U.S. 277 (1995)
—the general rule remains that stated in Kline, 260 U.S. at230:
Each court is free to proceed in its own way and in
its own time, without reference to the proceedings in
the other court. Whenever a judgment is rendered in
one of the courts and pleaded in the other, the effect
of that judgment is to be determined by the applica-
tion of the principles of res [judicata and collateral
estoppel] by the court in which the action is still
pending in the orderly exercise of its jurisdiction, as
it would determine any other question of fact or law
arising in the progress of the case.
9714 AMERISOURCEBERGEN v. RODEN
Thus, as long as the action requested of the federal court—
here, issuing an ordinary judgment requiring an individual to
pay breach of contract damages—does not enjoin or “have the
practical effect of” enjoining the ongoing state court
proceedings—here, California’s post-judgment proceedings in
Roden v. BBC—then abstention is not warranted. See Gilbert-
son, 381 F.3d at 978. It is clear to us that retaining jurisdiction
over, and proceeding with, Count I would not have enjoined
or in any way impeded the ongoing litigation in Roden v.
BBC. Rather, the Roden v. BBC proceedings would have been
free to continue simultaneously with the federal suit, and
ABC would have simply been bound by the rulings of the
California state courts under the doctrine of collateral estoppel
to the extent the state courts decided the relevant issues before
the federal court did.14 Concurrent consideration, not absten-
tion, is the solution, and the district court therefore erred in
finding that the potential conflict was one the Younger doc-
trine required the court to avoid. See Colo. River, 424 U.S. at
817-20.
[9] For the reasons discussed above, the district court erred
in dismissing Count I on the basis of Younger abstention. As
the following two sections explain, although this court “may
affirm on any basis supported by the record even if the district
court did not rely on that basis,” Count I cannot be dismissed
under either the Anti-Injunction Act, 28 U.S.C. 2283, or the
Rooker-Feldman doctrine. United States v. Washington, 969
F.2d 752, 755 (9th Cir. 1992) (internal quotation marks and
citation omitted)).15
14
Indeed, since ABC instituted its federal action, the California Superior
Court has made a further determination regarding Roden’s obligation to
repay his $337,500 loan: in its Second Order, the court decided that Roden
was not entitled to any loan forgiveness on loans he had taken from ABC
under the Loan Program.
15
Roden also argues that dismissal of Count I should be affirmed either
because ABC’s filing of its federal complaint was the functional equiva-
lent of an untimely removal under 28 U.S.C. § 1446(b) or because BBC’s
AMERISOURCEBERGEN v. RODEN 9715
II. Anti-Injunction Act, 28 U.S.C. § 2283[10] The Anti-Injunction Act prohibits federal courts from
“grant[ing] an injunction to stay proceedings in a State court
except as expressly authorized by Act of Congress, or where
necessary in aid of its jurisdiction, or to protect or effectuate
its judgments.” 28 U.S.C. § 2283. Whereas the Younger doc-
trine has been expanded to prohibit federal courts from issu-
ing an injunction or its functional equivalent when doing so
would interfere with an ongoing state court proceeding, the
plain language of § 2283 speaks only to actual injunctions.
Count I of ABC’s federal complaint does not request an
injunction; thus, the Anti-Injunction Act does not require its
dismissal.
[11] Moreover, even if the statute still applies to certain
requests for declaratory relief, see H.J. Heinz Co. v. Owens,
189 F.2d 505 (9th Cir. 1951)16 —a remedy closely related to
a formal injunction—it certainly does not apply to requests
for money damages that, if granted, would render state court
litigation nugatory due to preclusion doctrines. This could
arguably be the province of the judicially created Younger
doctrine, but is certainly not the province of an unambiguous
statute that says nothing about the type of relief ABC requests
in Count I. Because abstention is improper under Younger, it
is a fortiori improper under the Anti-Injunction Act, and this
theory of dismissal is rejected.
counsel orally entered into a “forum selection agreement” during a Supe-
rior Court hearing providing that all claims would be heard in the Califor-
nia Superior Court. Both arguments are raised for the first time on appeal;
thus, the court will not consider them. United States v. Alisal Water Corp.,
370 F.3d 915, 923 (9th Cir. 2004).
16
While the relevant holding of H.J. Heinz—that a federal court abuses
its discretion under 28 U.S.C. § 2201 to issue a declaratory judgment
when doing so would conflict, in principle, with the Anti-Injunction Act—
may not be good law now that the Younger doctrine has come into exis-
tence and essentially supplanted the need for this particular aspect of the
H.J. Heinz holding, we express no opinion on this matter.
9716 AMERISOURCEBERGEN v. RODEN
III. Rooker-Feldman Doctrine
[12] “The Rooker-Feldman doctrine provides that federal
district courts lack jurisdiction to exercise appellate review
over final state court judgments.” Henrichs v. Valley View
Dev., 474 F.3d 609, 613 (9th Cir. 2007); see also Rooker v.
Fid. Trust Co., 263 U.S. 413 (1923); D.C. Ct. App. v. Feld-
man, 460 U.S. 462 (1983). Roden argues that this doctrine
prohibits the district court from entertaining ABC’s breach of
contract action because doing so would effectively reverse the
California Superior Court’s decision that it—not a federal
court—would interpret and enforce the original judgment in
Roden v. BBC.
[13] Roden’s argument is incorrect and demonstrates a mis-
understanding of the Rooker-Feldman doctrine. ABC did not
ask the district court to interpret or enforce the Roden v. BBC
judgment, nor did it seek to reverse any of the California
Superior Court’s decisions; indeed, Count I makes no mention
of the state court’s Judgment whatsoever. Rather, the most
ABC has asked a federal court to do is redress an injury (i.e.,
its alleged loss of $337,500 plus interest) that the California
court has chosen not to redress.17 As this court recently
explained in Henrichs, 474 F.3d at 614, “[p]reclusion, not
Rooker-Feldman, applies when ‘a federal plaintiff complains
of an injury that was not caused by the state court, but which
the state court has previously failed to rectify.’ ” (quoting
Noel v. Hall, 341 F.3d 1148, 1164 (9th Cir. 2003)).
[14] Thus, even if all of ABC’s contentions with regard to
its breach of contract claim had been resolved adversely to
ABC in state court—a scenario belied by the First and Second
Orders issued by the California Superior Court, which have
17
In fact, ABC is not even doing this much, as it is content with the sub-
stance of the California Superior Court’s Judgment and Orders finding
Roden’s loan due as of November 30, 2002 (First Order) and finding
Roden ineligible for any loan forgiveness (Second Order).
AMERISOURCEBERGEN v. RODEN 9717
both come out in ABC’s favor with respect to Roden’s obliga-
tions under the Loan Program—Rooker-Feldman would not
bar ABC’s federal claim; rather, res judicata or collateral
estoppel would. Accordingly, this theory of dismissal is
rejected, as well.
CONCLUSION
It appears that ABC’s federal action is an attempt to secure
a binding and enforceable court judgment requiring Roden to
repay the $337,500 loan previously extended to him by BBC.
Although most of the essential issues have already been
decided in state court (and thus collateral estoppel will pre-
sumably forbid relitigation of these issues in federal court),
there is no legal doctrine preventing ABC from asking a fed-
eral court—rather than a state court—to enter an enforceable
judgment against Roden, if one be appropriate. While ABC
offers no explanation for its choice of forum—indeed, it
seems that it would have been equally effective, and far more
efficient, for ABC to seek a breach of contract judgment in
state court—this court is powerless to prevent ABC from
exercising its right, as a plaintiff, to choose its forum. Indeed,
because dismissal of Count I cannot be justified under Youn-
ger, the Anti-Injunction Act, or the Rooker-Feldman doctrine,
the district court’s order must be reversed in part, and Count
I must be remanded to the district court for further proceed-
ings.
AFFIRMED IN PART; REVERSED AND
REMANDED IN PART. Costs on appeal to Appellants.
FERGUSON, Circuit Judge, concurring:
This case concerns a district court’s efforts to promote judi-
cial economy and counter an apparent attempt at forum-
shopping. Despite our appreciation of the district court’s posi-
9718 AMERISOURCEBERGEN v. RODEN
tion and our frustration with the plaintiff’s strategy, we are, as
the majority explains, forced to reverse the decision below. I
write separately to clarify what I understand to be the doctri-
nal conundrum before us. Ultimately, the problem of duplica-
tive litigation will require legislative redress.
Younger v. Harris, 401 U.S. 37, 43-44 (1971), reflects a
“longstanding public policy against federal court interference
with . . . state functions.” I agree with the majority that the
principles of Younger do not apply to this case, where the
only remaining claim in the federal forum concerns collection
on a loan. However, in my view, our consideration of the
duplicative state and federal proceedings would be incomplete
without discussion of Colorado River Water Conserv. Dist. v.
United States, 424 U.S. 800, 817-19 (1976), which provides
the only abstention-like1 doctrine founded primarily on the
interest of judicial economy. See James C. Rehnquist, Taking
Comity Seriously: How to Neutralize the Abstention Doctrine,
46 Stan. L. Rev. 1049, 1092 (1994); Rex E. Lee & Richard
G. Wilkins, An Analysis of Supplemental Jurisdiction and
Abstention with Recommendations for Legislative Action,
1990 BYU L. Rev. 321, 356-57 (1990).
Colorado River held that, even where a “case falls within
none of the abstention categories, there are principles unre-
lated to considerations of proper constitutional adjudication
and regard for federal-state relations which govern in situa-
tions involving the contemporaneous exercise of concurrent
jurisdictions, either by federal courts or by state and federal
courts. These principles rest on considerations of wise judicial
administration, giving regard to conservation of judicial
1
Although sometimes referred to as such, the Colorado River doctrine
is technically not a form of abstention. 424 U.S. at 813 (“We hold that the
dismissal cannot be supported under th[e] doctrine [of abstention] in any
of its forms.”); see Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp.,
460 U.S. 1, 14 (1983) (explaining basis of Colorado River); Holder v.
Holder, 305 F.3d 854, 867 n.4 (9th Cir. 2002).
AMERISOURCEBERGEN v. RODEN 9719
resources and comprehensive disposition of litigation.” 424
U.S. at 817 (internal punctuation omitted) (quoting Kerotest
Mfg. Co. v. C-O-Two Fire Equip. Co., 342 U.S. 180, 183
(1952)).
Colorado River enumerated four factors that courts may
consider in determining whether “considerations of wise judi-
cial administration” outweigh the duty to exercise federal
jurisdiction: (1) whether the state court was the first to assume
jurisdiction over a property; (2) the relative inconvenience of
the federal forum; (3) the desirability of avoiding piecemeal
litigation; and (4) the order in which the courts obtained juris-
diction. 424 U.S. 818. In Moses Cone, 460 U.S. at 23, the
Supreme Court added two more considerations: (5) whether
federal law provides the rule of decision on the merits; and (6)
whether the state court proceeding can adequately address the
rights of the federal plaintiff. Our circuit has also added—and
repeatedly emphasized—another factor: (7) whether the exer-
cise of jurisdiction would encourage forum-shopping. Fire-
man’s Fund Ins. Co. v. Quackenbush, 87 F.3d 290, 297 (9th
Cir. 1996); see, e.g., Holder, 305 F.3d at 870, 871; Nakash v.
Marciano, 882 F.2d 1411, 1417 (9th Cir. 1989).
These factors appear to weigh against the exercise of fed-
eral jurisdiction in the case before us, but the Supreme
Court’s strict interpretation of Colorado River makes clear
that the current doctrine cannot solve the problem we face.
See Moses Cone, 460 U.S. at 25-26 (“[W]e emphasize that
our task . . . is not to find some substantial reason for the exer-
cise of federal jurisdiction by the district court; rather, the task
is to ascertain whether there exist ‘exceptional’ circum-
stances, the ‘clearest of justifications,’ that can suffice under
Colorado River to justify the surrender of that jurisdiction.”).
“The issue . . . is not simply whether state court is a ‘better’
forum” to resolve the issues pending before the federal court.
Travelers Indem. Co. v. Madonna, 914 F.2d 1364, 1369 (9th
Cir. 1990). Colorado River applies only in “exceptional
cases,” and such cases are “exceedingly rare.” Smith v. Cent.
9720 AMERISOURCEBERGEN v. RODEN
Ariz. Water Conserv. Dist., 418 F.3d 1028, 1033 (9th Cir.
2005). “[T]he [general] rule [remains] that the pendency of an
action in the state court is no bar to proceedings concerning
the same matter in the [f]ederal court having jurisdiction.”
Colorado River, 424 U.S. at 817 (quotation and internal punc-
tuation omitted). Because the case before the panel presents
an ordinary contract dispute, I do not believe that Colorado
River permits the district court to decline to exercise jurisdic-
tion. See Travelers Indemn., 914 F.2d at 1369 (stay vacated
where “ordinary contract and tort issues”); Neuchatel Swiss
Gen’l Ins. Co. v. Luftansa Airlines, 925 F.2d 1193, 1995 (9th
Cir. 1991) (stay vacated where “unexceptional commercial
dispute”); but see Nakash, 882 F.2d at 1415 (affirming stay in
trademark case); id. (stating that the language of “exceptional
circumstances” and a “virtually unflagging obligation”
“somewhat overstates the law”).
Nonetheless, I question whether this outcome serves the
principles underlying Colorado River. The Supreme Court’s
decision was based on “considerations of wise judicial admin-
istration, giving regard to conservation of judicial resources
and comprehensive disposition of litigation.” 424 U.S. at 817.
I appreciate the strict requirement that federal courts exercise
their jurisdiction in federal question jurisdiction cases but am
unconvinced of the value of this approach in diversity matters,
particularly where a state suit was filed prior to a federal
action.
Colorado River highlighted the factor of which court was
first in time. Id. at 818. More recently, Moses Cone, 460 U.S.
at 23-25, emphasized the significance of whether federal law
provides the rule of decision on the merits. In my view, where
a nearly identical case is already pending in state court and
there is clearly no federal question before the federal court,
the latter forum should be permitted to stay its proceeding
pending the outcome of the state suit.
The procedural history of the instant matter provides just
one example of the problems that remain unresolvable within
AMERISOURCEBERGEN v. RODEN 9721
our current statutory scheme. Roden filed a state action
against AmerisourceBergen’s predecessor in 1995. Five years
later, after settlement and an appeals process, Amerisource-
Bergen attempted to remove the proceeding to federal court,
alleging federal question jurisdiction. Finding no federal law
claim, the district court remanded the action to the state
forum. AmerisourceBergen responded by initiating this fed-
eral lawsuit, which the district court then dismissed on the
ground of Younger abstention.
The timing of these lawsuits makes us particularly sympa-
thetic to the judicial economy concerns prioritized by the dis-
trict court. I note that we could affirm the district court’s
decision to defer to the forum where the first suit was filed if
that first court had been a federal court. When two cases
involving the same parties and issues are filed in two different
federal districts, the first-to-file rule permits the second dis-
trict court to exercise its discretion to transfer, stay, or dismiss
the second suit in the interests of efficiency and judicial econ-
omy. Cedars-Sinai Med. Ctr. v. Shalala, 125 F.3d 765, 769
(9th Cir. 1997).
Awkwardly, it is only because the court presiding over
Roden’s lawsuit is a state court that we do not permit defer-
ence to it. Our reason is federal courts’ “virtually unflagging
obligation to exercise the jurisdiction given them.” Holder,
305 F.3d at 867 (quoting Colorado River, 424 U.S. at 817).
In the context of diversity cases such as this one, however,
perhaps the obligation should be redefined.
As we recognized almost three decades ago,
The need for fashioning a flexible response to the
issue of concurrent jurisdiction has become more
pressing in this day of increasingly crowded federal
dockets . . . . [I]ncreasing calendar congestion in the
federal courts makes it imperative to avoid concur-
rent litigation in more than one forum whenever con-
9722 AMERISOURCEBERGEN v. RODEN
sistent with the rights of the parties. A court may
choose not to exercise its jurisdiction when another
court having jurisdiction over the same matter has
entertained it and can achieve the same result.
Church of Scientology of Cal. v. U.S. Dep’t of Army, 611 F.2d
738, 750 (9th Cir. 1979) (quotation and internal punctuation
omitted). That rationale applies today with equal, if not
greater, force.
The majority is correct that current abstention doctrine
mandates a reversal, but this case presents a problem that
requires a larger solution. Although the Colorado River doc-
trine does not provide a basis for the dismissal below, its
underlying principle of wise judicial administration counsels
in favor of permitting a stay. The first-to-file rule, crafted in
the interest of judicial economy, allows a federal district court
to stay a proceeding where another matter involving the same
issues and parties is already pending before a different district
court. Similarly, where the first suit was filed in a state court
and the second suit is a diversity jurisdiction case with no fed-
eral question at issue, I believe the federal court should main-
tain the discretion to stay its proceeding pending the outcome
in the state forum. Absent legislation to that effect, however,
I must concur.