Edge Inv., LLC v. Dist. of Columbia , 927 F.3d 549 ( 2019 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued January 25, 2019 Decided June 25, 2019
No. 18-7058
EDGE INVESTMENT, LLC,
APPELLANT
v.
DISTRICT OF COLUMBIA, ET AL.,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:17-cv-00621)
James D. Sadowski argued the cause for appellant. With
him on the briefs was Richard W. Luchs.
Creighton R. Magid argued the cause and filed the brief for
appellees District of Columbia Water and Sewer Authority, et al.
Curtis A. Boykin and Frederick A. Douglas entered appearances.
Karl A. Racine, Attorney General, Office of the Attorney
General for the District of Columbia, Loren L. AliKhan,
Solicitor General, Caroline S. Van Zile, Deputy Solicitor
General, and Sonya L. Lebsack, Assistant Attorney General,
were on the brief for appellees The District of Columbia, et al.
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Before: GARLAND, Chief Judge, KATSAS, Circuit Judge,
and WILLIAMS, Senior Circuit Judge.
Opinion for the Court filed by Chief Judge GARLAND.
GARLAND, Chief Judge: The plaintiff in this case appeals
from a decision staying proceedings on its federal complaint.
The district court granted the stay pursuant to the Colorado
River doctrine, which permits a federal court to stay or dismiss
a federal action in favor of a concurrent action in state court
under “exceptional circumstances.” Colo. River Water
Conservation Dist. v. United States, 424 U.S. 800, 813 (1976).
Because there are no exceptional circumstances here, we reverse
the grant of the stay. We explain our decision in some detail in
order to ensure that Colorado River is confined to its banks.
I
The facts underlying this appeal concern the efforts of Edge
Investment, LLC -- a real estate development company -- to
construct a three-story building on an undeveloped parcel of
land in Washington, D.C. Edge alleges that, by 2013, it had
nearly completed construction of the building after having
obtained various zoning and construction clearances from
District of Columbia authorities. Those included the D.C. Water
and Sewer Authority (“D.C. Water”) and the D.C. Department
of Consumer and Regulatory Affairs (DCRA). See Compl.
¶¶ 41, 57-58.
As it turned out, Edge’s building sat atop the Northeast
Boundary Tunnel Sewer, a large storm sewer that forms an
important piece of the District of Columbia’s sewer
infrastructure. When Edge learned this in December 2013, it
hired an engineering firm, which concluded that the building did
not present any danger to the Tunnel Sewer. According to D.C.
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Water, however, subsequent inspections in 2014 revealed a
crack in the Tunnel Sewer requiring demolition of the building
to prevent further damage. See id. ¶¶ 77, 98, 109-11. In April
2015, DCRA issued an order to raze the building pursuant to
D.C. Code § 6–801, which empowers the Mayor to remove
“unsafe” structures posing a threat to public safety. Compl. Ex.
N (J.A. 115). And in May 2015, a contractor for D.C. Water,
Celtic Demolition, Inc., razed the building.
On January 8, 2016, D.C. Water sued Edge, the District of
Columbia, and seven other defendants for negligence in the
Superior Court of the District of Columbia, seeking to recover
the $3.6 million it spent to raze Edge’s building and repair the
Tunnel Sewer. On October 24, 2016, Edge filed counterclaims
against D.C. Water, alleging that it had violated Edge’s due
process rights under the U.S. Constitution, engaged in a taking
without just compensation in violation of the Fifth Amendment,
trespassed, and negligently failed to timely notify Edge of the
location of the Tunnel Sewer as required by the D.C. Code. On
November 7, Edge filed a third-party complaint in Superior
Court, leveling similar allegations against the District of
Columbia. Edge’s third-party complaint also sought to quiet
title as against the District and anyone acting on its behalf,
including D.C. Water. In December 2016, the District removed
the Superior Court case to federal district court. Several months
later, the case was remanded back to Superior Court.
On April 6, 2017, Edge commenced the instant federal case
in the U.S. District Court for the District of Columbia. Edge’s
complaint named the District, D.C. Water, and several additional
defendants, including Celtic Demolition and D.C. Water’s then
general manager, George S. Hawkins. The federal complaint
asserted that the individual defendants had engaged in an
unlawful conspiracy under the Racketeer Influenced and Corrupt
Organizations Act (RICO), 18 U.S.C. § 1962(c), and that the
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District and D.C. Water had acted without properly delegated
authority under D.C. Code § 6–801(a). The remaining causes of
action substantially overlap Edge’s Superior Court
counterclaims and third-party complaint. See Compl. ¶¶ 251-85
(due process); id. ¶¶ 286-92 (unconstitutional takings); id.
¶¶ 335-49 (negligent supervision and negligence); id. ¶¶ 350-60(trespass); id.¶¶ 361-65 (quiet title).
On June 9 and 21, 2017, respectively, D.C. Water and
Hawkins moved to stay or dismiss the federal case in favor of
the Superior Court proceedings. The motion was based on the
Supreme Court’s decision in Colorado River Water
Conservation District v. United States, which permits deferral
under “exceptional” circumstances “due to the presence of a
concurrent state proceeding.” 424 U.S. at 818. On March 30,
2018, the district court granted the stay, concluding this was
such an exceptional case. Edge appeals.1
II
As the Supreme Court explained in Colorado River,
“[g]enerally, 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.” 424 U.S. at 817 (internal quotation marks
omitted). This, the Court said, is a consequence of the “virtually
unflagging obligation of the federal courts to exercise the
jurisdiction given them.” Id. Accordingly, “the circumstances
permitting the dismissal of a federal suit due to the presence of
1
We have jurisdiction over this appeal per Moses H. Cone
Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 10-13
(1983). See also Ambrosia Coal & Constr. Co. v. Pagés Morales, 368
F.3d 1320, 1327 n.15 (11th Cir. 2004).
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a concurrent state proceeding” must be “exceptional.” Id. at
818.2
All of the subsequent Supreme Court and D.C. Circuit cases
addressing the Colorado River doctrine have stressed the
unflagging obligation of the federal courts to exercise their
jurisdiction, which only “exceptional circumstances” can
overcome.3 Indeed, Moses H. Cone repeatedly referred to this
2
The petitioner in Moses H. Cone argued “that the Colorado
River test [was] somehow inapplicable” because in Moses H. Cone
“the District Court merely stayed the federal litigation” -- as the
district court did here -- “rather than dismissing the suit outright, as in
Colorado River.” 460 U.S. at 27. The Supreme Court rejected that
distinction. Id. at 27-28.
3
See Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716 (1996);
Wilton v. Seven Falls Co., 515 U.S. 277, 284-85 (1995); Moses H.
Cone, 460 U.S. at 16; Arizona v. San Carlos Apache Tribe of Ariz.,
463 U.S. 545, 552 (1983); see also Sprint Commc’ns, Inc. v. Jacobs,
571 U.S. 69, 77 (2013) (“Jurisdiction existing, this Court has
cautioned, a federal court’s ‘obligation’ to hear and decide a case is
‘virtually unflagging.’ Parallel state-court proceedings do not detract
from that obligation.” (quoting Colo. River, 424 U.S. at 817)); Handy
v. Shaw, Bransford, Veilleux & Roth, 325 F.3d 346, 351 (D.C. Cir.
2003) (“[T]he Supreme Court has consistently reinforced ‘the virtually
unflagging obligation of the federal courts to exercise the jurisdiction
given them,’ [and] it has sanctioned the ‘[a]bdication of the obligation
to decide cases [as] justified . . . only in the exceptional circumstances
where the order to the parties to repair to the State court would clearly
serve an important countervailing interest.’” (quoting Colo. River, 424
U.S. at 817; Moses H. Cone, 460 U.S. at 14)); Reiman v. Smith, 12
F.3d 222, 224 (D.C. Cir. 1993) (noting that the district court has an
“‘unflagging obligation’ to exercise the jurisdiction it has been
granted,” and that “stay or dismissal of a case over which the court has
jurisdiction must be regarded as exceptional”); Hoai v. Sun Ref. &
Mktg. Co., 866 F.2d 1515, 1518 (D.C. Cir. 1989) (“The Colorado
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as “Colorado River’s exceptional-circumstances test.” Moses H.
Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 16, 17,
19 (1983). So, too, have later cases. See Wilton v. Seven Falls
Co., 515 U.S. 277, 279 (1995); Handy v. Shaw, Bransford,
Veilleux & Roth, 325 F.3d 346, 349 (D.C. Cir. 2003); Reiman v.
Smith, 12 F.3d 222, 224 (D.C. Cir. 1993).
In Colorado River and Moses H. Cone, the Court described
“some of the factors relevant” to whether a case represents the
kind of exceptional circumstances required to defer to state court
proceedings. Moses H. Cone, 460 U.S. at 15. Those include
which “court first assum[ed] jurisdiction over property . . . [;]
. . . the inconvenience of the federal forum; the desirability of
avoiding piecemeal litigation; and the order in which jurisdiction
was obtained by the concurrent forums.” Id. (quoting Colo.
River, 424 U.S. at 818). Other recognized factors are “whether
federal or state law controls and whether the state forum will
adequately protect the interests of the parties.” Handy, 325 F.3d
at 352 (citing Moses H. Cone, 460 U.S. at 25-26).
The Court cautioned, however, that the decision to defer
“does not rest on a mechanical checklist, but on a careful
balancing of the important factors as they apply in a given case,
with the balance heavily weighted in favor of the exercise of
jurisdiction.” Moses H. Cone, 460 U.S. at 16; see Handy, 325
F.3d at 353 (same). It emphasized that “[o]nly the clearest of
justifications will warrant” deferral. Moses H. Cone, 460 U.S.
at 16 (quoting Colo. River, 424 U.S. at 819) (emphasis in Moses
River doctrine . . . instructs that only truly ‘exceptional circumstances’
will allow a federal court to stay or dismiss a federal action in favor of
a concurrent action before a state court.”); Martin-Trigona v. Smith,
712 F.2d 1421, 1426 (D.C. Cir. 1983) (“Colorado River teaches that
only the clearest justification warrants dismissal once a federal court
has jurisdiction over a claim . . . .”).
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H. Cone). And, as befits an exception so described, the Supreme
Court has found sufficient justification only in the circumstances
described in Colorado River itself,4 while this court has never
found such circumstances.
With respect to the standard that appellate courts must apply
in reviewing a district court decision to defer to parallel state
proceedings, Moses H. Cone instructed as follows:
[T]he decision whether to defer to the state courts is
necessarily left to the discretion of the district court in
the first instance. Yet to say that the district court has
discretion is not to say that its decision is
unreviewable; such discretion must be exercised under
the relevant standard prescribed by this Court. In this
case, the relevant standard is Colorado River’s
exceptional-circumstances test.
460 U.S. at 19. “Whether the [district] court applied the proper
legal standard in exercising [its] discretion . . . is a question of
law reviewed de novo.” Handy, 325 F.3d at 349; see id. at 353(holding that “the district court’s dismissal of [plaintiff’s] claim
constitutes legal error”). As the Supreme Court did in Moses H.
Cone, we conclude that “the District Court in this case abused
4
In Arizona v. San Carlos Apache Tribe of Arizona, 463 U.S. 545(1983), which the Court described as a “sequel” to Colorado River, id.
at 548, the Court approved deferring to state proceedings for the
adjudication of “certain Indian water rights in Arizona or Montana,”
id. at 553. The Court noted that “the most important consideration in
Colorado River, and the most important consideration in any federal
water suit concurrent to a comprehensive state proceeding, must be the
‘policy underlying the McCarran Amendment.’” Id. at 569-70(quoting Colo. River, 424 U.S. at 820). As discussed below, there is
no such policy or comparable interest involved in this case.
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its discretion in granting the stay” because deferral was
unwarranted under the exceptional-circumstances test. 460 U.S.
at 19.
III
In deciding whether to grant the stay, the district court ran
through a list of what it described as six “Colorado River
factors.” Edge Inv., LLC v. District of Columbia, 305 F. Supp.
3d 22, 28 (D.D.C. 2018). Following its examination of those
factors, the court stated: “In sum, the Court concludes that [one]
factor . . . is irrelevant, [two] factors . . . are neutral, and [three]
factors . . . favor abstention. Thus, the Court concludes that this
constitutes an ‘exceptional circumstance’ where abstention is
warranted.” Id. at 35.5 The district court’s approach finds
support in several other (unappealed) district court opinions in
this circuit and more in other circuits.
The problem with this kind of toting up, however, is that it
runs contrary to the Supreme Court’s direction that deferral
“does not rest on a mechanical checklist, but on a careful
balancing of the important factors as they apply in a given case,
with the balance heavily weighted in favor of the exercise of
jurisdiction.” Moses H. Cone, 460 U.S. at 16 (emphasis added);
accord Handy, 325 F.3d at 353. If, as we have held, “only truly
‘exceptional circumstances’ will allow a federal court to stay or
5
Although many courts have referred to Colorado River as an
“abstention doctrine,” the Supreme Court said it was not because it did
not rest “on considerations of state-federal comity or on avoidance of
constitutional decisions.” Moses H. Cone, 460 U.S. at 14-15. Rather,
it rested on “considerations of [w]ise judicial administration, giving
regard to conservation of judicial resources and comprehensive
disposition of litigation.” Colo. River, 424 U.S. at 817 (internal
quotation marks omitted).
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dismiss a federal action in favor of a concurrent action before a
state court,” Hoai, 866 F.2d at 1518, then it is not enough that
the factors favoring deferral outnumber those opposed (or
neutral). Rather, the factors favoring deferral must themselves
be exceptional.
In this case, none of the three factors that the court found to
favor deferral -- “avoiding piecemeal litigation,” “which court
first obtained jurisdiction over the case,” and “whether federal
law or state law controls,” Edge, 305 F. Supp. 3d at 31-33 -- was
truly exceptional. We address those factors below.6
A
The district court found that “permitting the Superior Court
Action and this case to proceed in tandem will result in
piecemeal litigation, and thus this factor strongly favors
abstention.” Id. at 32. Avoiding piecemeal litigation was
certainly a factor in Colorado River. But the circumstances
there were materially different from those in this case.
In Colorado River, the United States brought suit in federal
district court against some 1,000 nonfederal water users, seeking
a declaration of the water rights of certain federal entities and
6
With respect to the remaining three factors that the court
considered, it found that: which court first obtained jurisdiction over
property was irrelevant because the case did not involve in rem
jurisdiction over property, Edge, 305 F. Supp. 3d at 30-31; “any
inconvenience that might result from litigating in a federal forum” was
neutral “because the Superior Court and [the federal court] are located
across the street from one another,” id. at 31; and “whether the state
forum will adequately protect the interests of the parties” was neutral
because deference to the Superior Court would not prejudice Edge, id.
at 34-35.
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Indian tribes. Shortly thereafter, a defendant in that suit sought
to join the United States in ongoing state-court proceedings for
the comprehensive adjudication and administration of all water
rights within the river system at issue in the federal-court suit.
The district court dismissed the federal suit, deferring to the
state-court proceedings, and the Supreme Court affirmed the
dismissal. See Colo. River, 424 U.S. at 805-06.
As the Court subsequently explained in Moses H. Cone,
“[b]y far the most important factor in our decision to approve
the dismissal there was the ‘clear federal policy . . . [of]
avoidance of piecemeal adjudication of water rights in a river
system,’ as evinced in the McCarran Amendment,” a statute that
“represent[ed] Congress’s judgment that the field of water rights
is one peculiarly appropriate for comprehensive treatment in the
forums having the greatest experience and expertise, assisted by
state administrative officers acting under the state courts.” 460
U.S. at 16 (quoting Colo. River, 424 U.S. at 819). And as this
court likewise said in Hoai,
[T]he avoidance of piecemeal litigation as a factor that
might favor a stay . . . assumed importance in
Colorado River because the litigation there involved a
federal statute under which Congress had explicitly
recognized the availability of state systems for the
adjudication of water rights and had expressed a strong
policy favoring resolution of those rights in a single,
comprehensive forum.
866 F.2d at 1520 (emphasis added). As in Hoai, “[n]o such
policy is implicated in the case at bar.” Id.Nonetheless, even without a statutory policy, the avoidance
of piecemeal litigation remains a relevant (although perhaps less
important) factor under the Colorado River doctrine. See Moses
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H. Cone, 460 U.S. at 19-20. Here, the district court relied on
that factor, finding it relevant because “deciding D.C. Water’s
motion to dismiss in this Court would involve different tribunals
consider[ing] the same issue, thereby duplicating efforts and
possibly reaching different results.” Edge, 305 F. Supp. 3d at 32
(internal quotation marks omitted).
But the mere risk of duplicating efforts and different results
is not what the Supreme Court meant by piecemeal litigation.
See Moses H. Cone, 460 U.S. at 7 (affirming reversal of a
district court that had stayed a “federal-court suit pending
resolution of the state-court suit because the two suits involved
the identical issue”). Indeed, in Colorado River, the Court
explained that the principle of avoiding duplicative litigation
does not generally govern parallel federal-state litigation but
does govern parallel federal-federal litigation:
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 . . . . As between
federal district courts, however, though no precise rule
has evolved, the general principle is to avoid
duplicative litigation. This difference in general
approach between state-federal concurrent jurisdiction
and wholly federal concurrent jurisdiction stems from
the virtually unflagging obligation of the federal courts
to exercise the jurisdiction given them.
424 U.S. at 817 (internal quotation marks and citations omitted).
“[T]he mere potential for conflict in the results of
adjudications,” the Court said, “does not, without more, warrant
staying exercise of federal jurisdiction.” Id. at 816. This court
has repeated, and emphasized, that same distinction between
federal-state and federal-federal parallel proceedings. See Hoai,
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866 F.2d at 1520 (“[T]he mere desire to resolve all issues
involving related facts in one court does not justify depriving
[the plaintiff] of his federal forum.”); see also Handy, 325 F.3d
at 349-50.7
Yet, mere duplication and potential inconsistency -- in their
simplest forms -- are all we have here. There are only two,
relatively confined litigations at issue: a single Superior Court
action (including a third-party complaint and counterclaims) and
a single federal-court action. Moreover, as the district court
recognized: “[t]he vast majority of the claims that Edge asserts
in federal court were also asserted in the Superior Court”;
“[b]oth cases arise from the same core set of facts”; and the
issues “will be resolved largely by reference to the same
evidence.” Edge, 305 F. Supp. 3d at 29 (internal quotation
marks omitted). In addition, the parties in the two cases are
“substantially similar”: “Specifically, Edge, D.C. Water, and
the District are the central parties to Edge’s claims in both.” Id.
at 30. These facts suggest that the doctrines of res judicata and
collateral estoppel will substantially mitigate the risk of
conflicting results. And although the district court identified
two narrow questions that preclusion principles “may not”
resolve, id. at 32-33, such hypothetical conflicts over discrete
issues do not amount to an exceptional circumstance.
In short, this case raises nothing like the “piecemeal
litigation” risks at issue in Colorado River, where the court
stayed the federal suit “against some 1,000 nonfederal water
users” in deference to a “state-court proceeding for the
7
“Although the Superior Court is a congressionally created court
and, thus, ‘federal’ in its creation, we . . . review[] the district court’s
discretionary dismissal in favor of parallel proceedings in Superior
Court under the standard applicable to a parallel state court
proceeding.” Handy, 325 F.3d at 351.
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comprehensive adjudication and administration of all water
rights within the river system.” Moses H. Cone, 460 U.S. at 13-
14 (describing the Colorado River litigation). Instead, it is a
garden-variety example of two lawsuits proceeding concurrently
in two courts. As the Eleventh Circuit noted when confronted
with an analogous claim of “piecemeal litigation,” if that
Colorado River factor supports deferral in this case, then it
“would seemingly support abstention in every federal case that
has a parallel state case.” Ambrosia Coal & Constr. Co. v.
Pagés Morales, 368 F.3d 1320, 1333 (11th Cir. 2004). But
“Colorado River’s factor concerning the avoidance of piecemeal
litigation does not favor abstention unless the circumstances
enveloping those cases will likely lead to piecemeal litigation
that is abnormally excessive or deleterious.” Id. And those
circumstances do not exist in the case at hand.
B
A second factor that the district court thought “weigh[ed]
heavily in favor of abstention” was “which court first obtained
jurisdiction over the case.” Edge, 305 F. Supp. 3d at 31. In
issuing its stay on March 30, 2018, the court explained this
consideration as follows:
The Superior Court Action was filed first. D.C. Water
filed it on January [8], 2016, and Edge filed its
counterclaims on October 24, 2016. The instant action
was not filed until April 6, 2017, [fifteen] months after
the Superior Court Action and about six months after
Edge filed its counterclaims in that case. . . . Here, not
only was the Superior Court Action filed first, it is
significantly ahead of this case. On November 17,
2017, [Superior Court] Judge Mott issued a decision on
D.C. Water’s motion to dismiss Edge’s amended
counterclaims, denying it as to six of the seven
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counterclaims. And on January 12, 2018, [Superior
Court] Judge Cordero issued a revised Scheduling
Order that established deadlines over the next year for
expert disclosure, the end of discovery, dispositive
motions, and mediation. Expert reports, to take one
example, are due in little over a month from now.
Id. (internal citations omitted). But as with the risk of piecemeal
litigation, there is nothing exceptional about the relative
progress of the two cases.
To begin, there is room to dispute the length and
significance of what transpired in each court, and Edge does.
Edge Br. 26-28. It points out that it filed its third-party
complaint in Superior Court just six months before it filed its
federal case, and thus the Superior Court had only a six-month
head start on those claims. In addition, Edge’s federal case
included some claims that had never been considered by the
Superior Court (e.g., the RICO claims, Compl. ¶¶ 293-328), so
there was no head start as to those at all. Edge further notes that
the fifteen-month and even the six-month figures are overstated
because they do not take account of five months of dormancy
between the time the District of Columbia removed the Superior
Court case to federal court and the time the case was remanded
and reassigned to a different Superior Court judge. See Edge
Br. 27.
Edge also disputes the significance of what transpired in
state court. It notes that the Superior Court did not rule on D.C.
Water’s motion to dismiss until seven months after Edge filed
its federal case. And the Superior Court issued its revised
scheduling order just two months before the district court
granted the stay. Moreover, there is no reason to think that any
expert report or other kind of discovery produced in Superior
Court could not also be of use in federal court.
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But the bottom line, under any calculation, is that D.C.
Water filed its Superior Court complaint just fifteen months
before Edge filed its federal case, that Edge filed its third-party
Superior Court complaint just six months before Edge filed its
federal case, and that when the latter was filed, it included some
claims that had never been considered by the Superior Court at
all. Those relatively brief periods are readily distinguishable
from the head start at issue in Tyrer v. City of South Beloit, the
out-of-circuit case the defendants cited at oral argument as best
supporting their position that this factor is exceptional. Oral
Arg. at 45:09; see Tyrer v. City of S. Beloit, 456 F.3d 744, 755
(7th Cir. 2006) (“By the time that [plaintiff] filed his federal
suit, his state suit had been ongoing for approximately four
years.”). Compare Hoai, 866 F.2d at 1516-17 (reversing stay
where the state action was commenced approximately twelve
months before federal lawsuit), with Reiman, 12 F.3d at 224-25(noting that a factor favoring deferral was that “the suit had been
before the District of Columbia courts for a long time” -- seven
years -- but holding that the district court had failed to
adequately justify deferral and remanding for further
consideration).
On appeal, the defendants emphasize how much more the
Superior Court action has surpassed its federal counterpart since
the district court issued the stay challenged here. That is hardly
surprising, of course, because it is a necessary consequence of
halting the federal proceeding. It is for that reason that an
appellate court evaluates the relative progress of the two cases
from the “time that the District Court decided to refuse to
adjudicate the case.” Moses H. Cone, 460 U.S. at 22.8 And as
8
If we were to evaluate relative progress by the time of the
decision on appeal, that factor would place a heavy thumb on the scale
of affirming stays and could eviscerate appellate review in many
cases.
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we have explained, the relative progress of the two cases was
not exceptional as of that date.
C
The final factor upon which the district court relied was
“whether federal law or state law controls.” Edge, 305 F. Supp.
3d at 33. The court acknowledged the Supreme Court’s
direction that, “‘[a]lthough in some rare circumstances the
presence of state-law issues may weigh in favor of . . . surrender,
the presence of federal-law issues must always be a major
consideration weighing against surrender’” of federal
jurisdiction. Id. (quoting Moses H. Cone, 460 U.S. at 26). Thus,
the district court further acknowledged that “Edge’s federal
claims would normally be ‘a major consideration weighing
against surrender.’” Id. (quoting Moses H. Cone, 460 U.S. at
26). Nonetheless, the court “conclude[d] that this factor favors
abstention for two reasons.” Id.
1. The district court’s first reason was that “the Superior
Court has concurrent jurisdiction over all of Edge’s federal
claims, which are brought under the U.S. Constitution and
RICO.” Id. Relying on a passage in Moses H. Cone, the court
said that “this reduces the importance of Edge’s federal law
claims in the abstention analysis,” because the “source-of-law
factor has ‘less significance’ when ‘the federal courts’
jurisdiction . . . is concurrent with that of the state courts.’” Id.(quoting Moses H. Cone, 460 U.S. at 25).9 In Moses H. Cone,
9
Moses H. Cone did not present this point as a general principle,
but rather merely noted that “the source-of-law factor has less
significance here than in [Will v. Calvert Fire Insurance Co., 437 U.S.
655 (1978)], since the federal courts’ jurisdiction to enforce the
Arbitration Act [which was at issue in Moses H. Cone] is concurrent
with that of the state courts,” while jurisdiction to enforce the statute
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however, the quoted passage was immediately followed by this
reminder:
But we emphasize that our 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.
460 U.S. at 25-26 (emphasis in original).
Thus, the fact that a state court has concurrent jurisdiction
over a plaintiff’s federal claims does not itself constitute an
exceptional circumstance warranting deferral to a state
proceeding. It could hardly be otherwise, since “[c]oncurrent
jurisdiction has been a common phenomenon in our judicial
history, and exclusive federal court jurisdiction over cases
arising under federal law has been the exception rather than the
rule.” Tafflin v. Levitt, 493 U.S. 455, 459 (1990) (internal
quotation marks omitted). Rather, as the district court
acknowledged, “‘the presence of federal-law issues must always
be a major consideration weighing against surrender.’” Edge,
305 F. Supp. 3d at 33 (quoting Moses H. Cone, 460 U.S. at 26)
(emphasis added). At most, the presence of federal issues may
be less of a factor weighing against deferral when the state court
has concurrent jurisdiction than in the uncommon situation in
which federal jurisdiction is exclusive. See supra note 9.
that was at issue in Calvert (the Securities Exchange Act of 1934) is
not concurrent. 460 U.S. at 25 (emphasis added). The latter
circumstance is uncommon. See Tafflin v. Levitt, 493 U.S. 455, 459
(1990).
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2. The court also found this to be “a rare case involving
highly unusual state-law issues.” Edge, 305 F. Supp. 3d at 33
(internal quotation marks omitted). The complaint and briefing,
the court said, “raise a number of novel, unusual, or difficult
questions of state law.” Id. (internal quotation marks omitted).
To start, we note that neither the Supreme Court nor this
court has ever listed the novelty or difficulty of a state-law issue
as a factor indicating the kind of exceptional circumstances
required for deferring to parallel state proceedings under
Colorado River. The presence of novel or difficult state-law
questions in federal court litigation is not exceptional. Federal
courts exercising diversity jurisdiction frequently decide just
such questions.10 And where the question is truly perplexing,
this circuit has an alternative mechanism -- certification -- for
clarifying questions of District of Columbia law. See D.C. Code
10
See, e.g., JPMorgan Chase Bank, N.A. v. Johnson, 719 F.3d
1010, 1015 (8th Cir. 2013) (“Because the case presents a matter of
first impression in Arkansas, we must predict, as best we can, how the
Arkansas Supreme Court would decide it.”); Pisciotta v. Old Nat’l
Bancorp, 499 F.3d 629, 635 (7th Cir. 2007) (“When faced with a
novel question of state law, federal courts sitting in diversity have a
range of tools at their disposal.”); Med. Lab. Mgmt. Consultants v. Am.
Broadcasting Cos., Inc., 306 F.3d 806, 812 (9th Cir. 2002) (addressing
a question of first impression under state law by “mak[ing] a
reasonable determination of the result the highest state court would
reach if it were deciding the case” (internal quotation marks omitted));
Rolick v. Collins Pine Co., 925 F.2d 661, 664 (3d Cir. 1991) (“When
presented with a novel issue of law, or where applicable state
precedent is ambiguous, absent or incomplete, we must determine or
predict how the highest state court would rule.”); Dean v. Dean, 821
F.2d 279, 283 & n.4 (5th Cir. 1987) (resolving a “novel” question of
state law without “any controlling decision” from the state courts by
“mak[ing] an educated guess as to how the [state] Supreme Court
would rule”).
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§ 11–723(a) (providing that the D.C. Court of Appeals “may
answer questions of law certified to it by . . . a Court of Appeals
of the United States . . . if . . . it appears to the certifying court
there is no controlling precedent in the decisions of the District
of Columbia Court of Appeals”).
In any event, the state-law issues that concerned the district
court are not exceptionally novel or difficult. The court listed
those issues as follows:
[W]hether D.C. Code § 6–801 and D.C. Code
§ 42–3131 . . . provided the requisite authority to raze
the Building; whether the Mayor properly delegated
her legal authority to raze the Building to DCRA under
D.C. Code §§ 6–801(a) and 42–3131.01(c); whether
D.C. Code § 6–801(a) required DCRA to conduct an
examination . . . before razing the Building; whether
Edge is a member of the protected class envisioned by
the [Underground Facilities Protection Act]; and
whether the “public duty” doctrine bars Edge’s
negligent supervision claim . . . .
There are also state law issues embedded in many of
Edge’s federal claims, such as whether D.C. Water’s
status under District of Columbia law . . . shields it
from a federal constitutional takings claim; whether
Edge received proper notice under D.C. Code
§ 6–903 . . . ; and whether Edge has properly pleaded
common law fraud, one of the predicate acts alleged in
the RICO claims.
Edge, 305 F. Supp. 3d at 33-34 (citations to district court
pleadings omitted). Although some of those specific issues may
be novel, they do not appear unusually difficult, and they fall
within broader categories that are quite familiar to federal
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courts. Indeed, this court routinely resolves questions under the
D.C. Code, including questions of delegation.11 Likewise, we
routinely resolve a broad range of questions under the common
law of the District of Columbia, including questions regarding
the scope of the public-duty doctrine.12
D.C. Water further points out that Edge’s constitutional due
process claims are dependent on whether Edge has a property
interest under state law. D.C. Water Br. 24. But federal courts
regularly evaluate the existence of state property rights in the
course of deciding federal due process and takings claims. See,
e.g., Bd. of Regents of State Colls. v. Roth, 408 U.S. 564, 577
11
See, e.g., Rumber v. District of Columbia, 487 F.3d 941, 945
(D.C. Cir. 2007) (resolving a challenge to “the District government’s
delegation of eminent domain authority to the [National Capital
Revitalization Corporation] . . . [under] D.C. Code §§ 2–1219.01-
1219.29”); Shook v. D.C. Fin. Responsibility & Mgmt. Assistance
Auth., 132 F.3d 775, 783 (D.C. Cir. 1998); see also, e.g., Williams v.
Johnson, 776 F.3d 865, 873-74 (D.C. Cir. 2015); Williams v.
Martinez, 586 F.3d 995, 998-1001 (D.C. Cir. 2009). Similarly, other
circuits routinely resolve questions of state statutory interpretation,
including whether delegations of state statutory authority are lawful.
See, e.g., Hughes v. City of Cedar Rapids, 840 F.3d 987, 997-98 (8th
Cir. 2016); Maxwell’s Pic–Pac, Inc. v. Dehner, 739 F.3d 936, 941-42
(6th Cir. 2014); Rancho Lobo, Ltd. v. Devargas, 303 F.3d 1195,
1206-07 (10th Cir. 2002); Hillery v. Rushen, 720 F.2d 1132, 1134-35
(9th Cir. 1983).
12
See, e.g., McGaughey v. District of Columbia, 684 F.3d 1355,
1358-59 (D.C. Cir. 2012) (determining whether the “public duty”
doctrine barred a claim); see also, e.g., Feld v. Fireman’s Fund Ins.
Co., 909 F.3d 1186, 1194, 1197-98 (D.C. Cir. 2018); Momenian v.
Davidson, 878 F.3d 381, 390-91 (D.C. Cir. 2017); Robinson v. Wash.
Metro. Area Transit Auth., 774 F.3d 33, 38-40 (D.C. Cir. 2014);
Novak v. Capital Mgmt. & Dev. Corp., 570 F.3d 305, 313-15 (D.C.
Cir. 2009).
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(1972) (“Property interests, of course, are not created by the
Constitution. Rather they are created and their dimensions are
defined by existing rules or understandings that stem from an
independent source such as state law—rules or understandings
that secure certain benefits and that support claims of
entitlement to those benefits.”); 3883 Conn. LLC v. District of
Columbia, 336 F.3d 1068, 1072-73 (D.C. Cir. 2003)
(determining whether D.C. law creates a property interest,
protected by the Fifth Amendment, in preliminary building
permits).
3. Finally, D.C. Water argues that one of the state-law
issues noted by the district court is not just novel or difficult, but
also “an important issue of state law” that is “best left to the
Superior Court for determination.” D.C. Water Br. 26-27. The
issue is “whether the duty imposed on D.C. Water by the
[Underground Facilities Protection] Act was delegable or non-
delegable” to its contractor. Id. at 26. The district court did not
rely on such an argument. Nor does D.C. Water explain why
this issue is exceptionally appropriate for Superior Court
adjudication. Indeed, D.C. Water does not expound upon the
point at all beyond the phrases just quoted.
Perhaps D.C. Water means that the delegation issue is so
important to the structure of the District government that it
should be resolved by the District’s own courts. But the District
government itself did not give any indication that it regarded this
-- or any other issue -- as important in that way. To the contrary,
the District neither moved for a stay under Colorado River (or
any other doctrine) nor joined the other defendants’ motion. See
D.C. Mot. to Dismiss, Dkt. 24, No. 17-cv-00621-TJK (June 9,
2017).13 Even in this court, the District declined to submit a
13
In fact, the District originally removed the Superior Court case
to the federal district court. (It was later remanded.)
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substantive brief, filing only a two-sentence statement that it
“join[ed] the arguments presented” in D.C. Water’s brief. D.C.
Br. 1.
In any case, whether a state entity’s duty is properly
delegable is again the kind of issue that federal courts can and
do resolve.14 And, also again, it pales in comparison (and
importance) to the “comprehensive” state statutory scheme that
regulated the waters of the Colorado River. See Colo. River,
424 U.S. at 804, 819.
IV
For the foregoing reasons, we conclude that none of the
relevant Colorado River factors, alone or in combination,
provide the “exceptional circumstances” required to suspend a
federal court’s “virtually unflagging obligation” to exercise its
jurisdiction. 424 U.S. at 813, 817. Accordingly, we reverse the
order granting the motion to stay the federal proceedings.
So ordered.
14
See, e.g., Doe v. Vigo Cnty., Ind., 905 F.3d 1038, 1044 (7th Cir.
2018); M.J. ex rel. Beebe v. United States, 721 F.3d 1079, 1084-85
(9th Cir. 2013); Hansen v. Bd. of Trustees of Hamilton Se. Sch. Corp.,
551 F.3d 599, 615 (7th Cir. 2008); Wilson v. City of New York, 89
F.3d 32, 36-37 (2d Cir. 1996).