M&A Gabaee v. Community Redevelopment Agency

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
M&A GABAEE, a California 
Limited Partnership,
Plaintiff-Appellant, Nos. 04-56134
v. 04-56740*
THE COMMUNITY REDEVELOPMENT  D.C. Nos.
CV-04-02798-SVW
AGENCY OF THE CITY OF LOS
ANGELES, a public agency; CITY OF CV-04-05424-SVW
LOS ANGELES, a municipal OPINION
corporation,
Defendants-Appellees.

Appeals from the United States District Court
for the Central District of California
Stephen V. Wilson, District Judge, Presiding
Argued and Submitted
May 5, 2005—Pasadena, California
Filed August 17, 2005
Before: Diarmuid F. O’Scannlain and Johnnie B. Rawlinson,
Circuit Judges, and Robert H. Whaley,** District Judge.
Opinion by Judge O’Scannlain
*These two appeals are consolidated for resolution in this opinion.
**The Honorable Robert H. Whaley, United States District Judge for
the Eastern District of Washington, sitting by designation.
10879
10882 M&A GABAEE v. COMMUNITY REDEVEL. AGENCY
COUNSEL
Bruce Tepper, Los Angeles, California, argued the cause for
the appellant; Fernando Villa and Amy B. Alderfer, Green-
berg Traurig, LLP, Santa Monica, California, were on the
brief.
JoAnn Victor, Jackson & Assoc., Los Angeles, California,
argued the cause for the appellees; David S. Cunningham III,
Jackson & Assoc., and Mary K. Dennis, Office of the City
Attorney of Los Angeles, California, were on the brief.
OPINION
O’SCANNLAIN, Circuit Judge:
We must decide whether Younger abstention is called for
when a parallel state-court proceeding has formally begun but
not yet reached proceedings of substance on the merits of the
case.
I
M&A Gabaee (“M&A”), a California limited partnership
formed by real estate developers, holds possession of two
pieces of property in Los Angeles, one at 1040 E. Slauson
Ave. and one at 944-1010 E. Slauson Ave. (the “1040 E.
Slauson property” and “1010 E. Slauson property” respec-
tively).1 Since acquiring these properties, M&A has sought
1
M&A owns the property at 1040 E. Slauson Ave. outright and holds
a lease on the property at 944-1010 E. Slauson Ave. through the year 2028
with an option to purchase.
M&A GABAEE v. COMMUNITY REDEVEL. AGENCY 10883
permission from the Community Redevelopment Agency of
the City of Los Angeles (the “CRA”) to develop the proper-
ties into a shopping complex.
The CRA, however, awarded the development project to
another developer, Slauson Central. In December 2003, CRA
entered into a development agreement with Slauson Central
and served M&A with a Notice of Intent to Acquire both
properties. The subsequent condemnation process proceeded
on different schedules for the two properties, and because the
parties’ arguments depend heavily on the timing of the vari-
ous events in this dispute, we describe them separately.
On March 4, 2004, the CRA Board of Commissioners
adopted a Resolution of Necessity authorizing the CRA to
acquire the 1040 E. Slauson property by eminent domain. On
March 17, the CRA filed an eminent domain action in Cali-
fornia Superior Court (the “1040 eminent domain action”).
On April 22, M&A filed an action in federal district court
seeking to enjoin the CRA from acquiring the 1040 E. Slau-
son property through eminent domain. The CRA moved to
dismiss the suit based on Younger abstention. The district
court granted the motion in June 2004, and M&A timely
appealed.
On July 14, 2004, M&A filed a separate action in federal
court seeking to enjoin the CRA from acquiring the 1010 E.
Slauson property through eminent domain. The following
day, the CRA Board adopted a Resolution of Necessity autho-
rizing the CRA to do just that. That same day, the CRA filed
an eminent domain action against the 1010 E. Slauson prop-
erty in California Superior Court (the “1010 eminent domain
action”). The CRA moved to dismiss M&A’s second federal
lawsuit, again on the basis of Younger abstention, and in Sep-
tember 2004 the district court granted the motion. Again,
M&A timely appealed.
Because the issues are so similar, we resolve both appeals
in this opinion.
10884 M&A GABAEE v. COMMUNITY REDEVEL. AGENCY
II
The parties’ dispute centers on whether the CRA’s use of
the eminent domain power was aimed at a valid “public use,”
U.S. Const., amend. V; see Kelo v. City of New London, 125
S. Ct. 2655, 2662 (June 23, 2005), but this question is not
before us. Rather, we must decide whether the doctrine of
Younger abstention required the district court to dismiss
M&A’s two federal lawsuits because of the eminent domain
proceedings taking place in California state court.
[1] A federal court must abstain to avoid interference in a
state-court civil action when three tests are met. First, the pro-
ceedings must implicate important state interests; second,
there must be ongoing state proceedings; and third, the federal
plaintiff must be able to litigate its federal claims in the state
proceedings. See Am. Consumer Pub. Ass’n, Inc. v. Margo-
sian, 349 F.3d 1122, 1126 (9th Cir. 2003); Middlesex County
Ethics Committee v. Garden State Bar Ass’n, 457 U.S. 423,
433 (1982). The first and third prong are clearly met,2 and
M&A challenges only the second, arguing that there were no
ongoing state proceedings at the relevant times. We must con-
sider its argument separately for each of the two proceedings.
A
CRA filed the 1040 eminent domain action in California
2
As to the first prong, states clearly have an interest in the exercise of
their own eminent-domain power. See Hawaii Housing Authority v. Mid-
kiff, 467 U.S. 229, 244 (1984). As to the third prong, M&A will have an
opportunity to litigate its constitutional claims in state court. California
law permits M&A to challenge the taking based not only on California
state standards, but also on “[a]ny other ground provided by law.” Cal.
Civ. P. Code § 1250.360(h). Since M&A has pointed out no procedural
bar to its ability to raise its constitutional claims in California court, this
prong of the test is also satisfied. See Dubinka v. Judges of Superior
Court, 23 F.3d 218, 224 (9th Cir. 1994); Woodfeathers, Inc. v. Washington
County, 180 F.3d 1017, 1020 (9th Cir. 1999).
M&A GABAEE v. COMMUNITY REDEVEL. AGENCY 10885
Superior Court on March 17, 2004. M&A did not file its fed-
eral suit until more than a month later, on April 22, 2004.
M&A nevertheless argues that the state action was not “ongo-
ing,” because no “proceedings of substance on the merits” had
yet occurred in the state action.
[2] M&A’s argument is based on an analogy to the
Supreme Court’s holding in Hicks v. Miranda, 422 U.S. 332(1975), where the Court held that “where state . . . proceed-
ings are begun . . . after the federal complaint is filed but
before any proceedings of substance on the merits have taken
place in the federal court, the principles of Younger v. Harris
should apply in full force.”3 Id. at 349. Hicks teaches that it
is not the filing date of the federal action that matters, but the
date when substantive proceedings begin. M&A’s argument is
that the same should be true of the state action. It argues that
the existence of a merely “embryonic” state action—one in
which no substantive proceedings have taken place—does not
require a federal court to engage in Younger abstention.
M&A’s argument, however, has no support in the decisions
of the Supreme Court or this circuit. In fact, it contradicts the
whole purpose and tenor of the Supreme Court’s holdings in
Younger and Hicks.
[3] The principle behind the Supreme Court’s initial invo-
cation of the abstention doctrine in Younger was its convic-
tion that “[s]ince the beginning of this country’s history
Congress has, subject to few exceptions, manifested a desire
to permit state courts to try state cases free from interference
by federal courts.” 401 U.S. at 43. Under the system the Court
called “Our Federalism,” it explained, “the National Govern-
3
Hicks dealt with state-court criminal proceedings. There is no dispute,
however, that Younger principles also apply to civil proceedings implicat-
ing important state interests. In Hawaii Housing Authority v. Midkiff, 467
U.S. 229 (1984), the Supreme Court applied Hicks to civil proceedings
involving a state land reorganization plan.
10886 M&A GABAEE v. COMMUNITY REDEVEL. AGENCY
ment, anxious though it may be to vindicate and protect fed-
eral rights and federal interests, always endeavors to do so in
ways that will not unduly interfere with the legitimate activi-
ties of the States.” Id. at 44. Thus, the Court concluded, “the
normal thing to do when federal courts are asked to enjoin
pending proceedings in state courts is not to issue such injunc-
tions.” Id. at 45. In short, the driving principle behind Youn-
ger was that in matters of special concern to the states, federal
courts should avoid depriving the state courts of the opportu-
nity to adjudicate constitutional issues. Hicks reaffirmed and
extended this principle, holding that because “[t]he rule in
Younger v. Harris is designed to permit state courts to try
state cases free from interference by federal courts,” federal
courts must defer even to state court proceedings that are filed
after the federal action. 422 U.S. at 349 (internal quotation
marks omitted).
[4] The principle of deference to state courts would be sub-
verted by M&A’s suggestion that federal courts should ignore
pending state-court proceedings, and proceed to adjudicate
matters of state concern themselves, so long as the state pro-
ceedings have not yet reached the substance of the dispute.
Under the logic of Younger and Hicks, it makes no difference
what stage the state-court proceedings are at: what matters is
that the existence of a pending state-court action unmistakably
signals the state’s willingness and readiness to adjudicate the
dispute.
[5] Nor does M&A’s argument find support in the language
of the Supreme Court’s own application of its Younger juris-
prudence. In Hicks, for instance, the Court held abstention to
be appropriate “where state . . . proceedings are begun against
the federal plaintiffs.” 422 U.S. at 349 (emphasis added). It is
self-evident that, absent some unusual use of language, a law-
suit begins when it is filed. See Agriesti v. MGM Grand
Hotels, Inc., 53 F.3d 1000, 1001 (9th Cir. 1995) (“Because no
action has been filed in state court against defendants, there
are no ongoing state judicial proceedings to which this court
M&A GABAEE v. COMMUNITY REDEVEL. AGENCY 10887
can defer” (emphasis added)); cf. EEOC v. Pan Am. World
Airways, Inc., 897 F.2d 1499, 1505 n.4 (9th Cir. 1990) (citing
cases holding that a statutory reference to the “commence-
ment” of a lawsuit refers to the time of filing). In Hawaii
Housing Authority, the Court used similar language: “Younger
abstention is required . . . when state court proceedings are
initiated before any proceedings of substance on the merits
have taken place in the federal court.” 467 U.S. at 238(emphasis added) (internal quotation marks omitted). Again,
a state proceeding is surely “initiated” no later than when it
is filed (or, at the latest, when the defendant is served). Even
more tellingly, the Court wrote:
Under Younger-abstention doctrine, interests of
comity and federalism counsel federal courts to
abstain from jurisdiction whenever federal claims
have been or could be presented in ongoing state
judicial proceedings that concern important state
interests.
Id. at 237-38 (emphasis added). By indicating that Younger
abstention is appropriate even when federal claims have not
yet been presented in state court but could be, this language
makes M&A’s argument untenable.
As support for its argument, M&A relies heavily on lan-
guage from an Eighth Circuit case, Aaron v. Target Corp.,
357 F.3d 768 (8th Cir. 2004), in which the court reversed a
district court’s refusal to abstain and wrote that the district
court had “erred by concentrating on filing dates rather than
by examining all the facts and context of the two actions.” Id.
at 777. The court also wrote that “a court should examine
what was actually taking place in both settings” and that
“[w]hether proceedings of substance have taken place in
either court is a key factor.” Id. at 775 (emphasis added).
Taken at face value, this language could support M&A’s
argument by suggesting that a district court must consider
10888 M&A GABAEE v. COMMUNITY REDEVEL. AGENCY
whether proceedings of substance have taken place in state
court as well as in federal court. We doubt, however, that the
cited passage of Aaron was intended to be read as M&A
would read it; in any event, we reject it insofar as it implies
that the propriety of Younger abstention depends on whether
the parallel state-court proceeding has yet reached the sub-
stance of the dispute.
The facts of Aaron are somewhat similar to those now
before us: it was a federal lawsuit seeking to enjoin state-court
condemnation proceedings against the plaintiffs’ property. Id.
at 770. The plaintiffs had filed the federal suit and moved for
a preliminary injunction before the state court action com-
menced. Id. at 772. The district court refused to abstain on the
ground that federal “proceedings of substance on the merits”
commenced with the preliminary-injunction motion and at
that time there was no ongoing state proceeding. Id. at 773.
The Eighth Circuit reversed, holding that “the federal case
was not really advanced in proceedings of substance on the
merits” because little more than motions for an injunction and
TRO had taken place. Id. at 776 (internal quotation marks
omitted). The core of Aaron’s holding was thus that mere
motions for an injunction do not qualify as “proceedings of
substance” in federal court. Neither the holding nor any lan-
guage in Aaron suggests that federal courts should refuse to
defer to a pending state-court proceeding simply because it
has not yet reached the merits of the claim.
[6] Thus, because a parallel state action was ongoing, the
district court was correct to abstain in the federal action con-
cerning the 1040 E. Slauson property, Case No. 04-56134.
B
[7] The order of events is slightly different with regard to
the 1010 E. Slauson property. The federal action was filed on
July 14, 2004, and the state eminent domain proceeding was
not filed until the following day, July 15, 2004. Thus, M&A
M&A GABAEE v. COMMUNITY REDEVEL. AGENCY 10889
argues, the state action was not “ongoing” when the federal
proceeding was initiated. From the above discussion it should
be clear that this argument is specious. Hicks and Hawaii
Housing Authority establish that Younger abstention applies
even when the state action is not filed until after the federal
action, as long as it is filed before proceedings of substance
on the merits occur in federal court.
Despite M&A’s contention to the contrary, that is the well-
settled law in this circuit. In Polykoff v. Collins, 816 F.2d
1326 (9th Cir. 1987), we explained:
Whether the state proceedings are “pending” is not
determined by comparing the commencement dates
of the federal and state proceedings. Rather, absten-
tion under Younger may be required if the state pro-
ceedings have been initiated “ ‘before any
proceedings of substance on the merits have taken
place in the federal court.’ ”
Id. at 1332 (citing Hawaii Housing Authority, 467 U.S. at
238); see also Comm. Telesys. Intern. v. Cal. Pub. Util.
Comm’n, 196 F.3d 1011, 1016 (9th Cir. 1999) (as an alterna-
tive ground, applying Younger abstention in a civil case seek-
ing injunctive relief where the federal action was filed before
the state action); cf. Confederated Salish v. Simonich, 29 F.3d
1398, 1405 (9th Cir. 1994) (stating that Younger abstention
would generally be applicable although the federal case was
filed first, but holding it inapplicable for reasons, not relevant
here, related to the type of relief sought).
M&A cites Beltran v. California, 871 F.2d 777 (9th Cir.
1988), for the proposition that “Younger abstention requires
that the federal courts abstain when state court proceedings
were ongoing at the time the federal action was filed.” Id. at
782 (emphasis added); see also Canatella v. California, 304
F.3d 843, 850 (9th Cir. 2002) (“We consider whether the state
court proceedings were ongoing as of the time the federal
10890 M&A GABAEE v. COMMUNITY REDEVEL. AGENCY
action was filed.” (citing Beltran, 871 F.2d at 782)). It is true
that, taken literally, this language from Beltran and Canatella
would imply that the relevant date is the filing date of the fed-
eral action rather than the date when proceedings of substance
on the merits begin. That implication, however, would not
only be incompatible with the Supreme Court’s clear instruc-
tion in Hicks and Hawaii Housing Authority that the federal
filing date is not determinative;4 it would also flatly contradict
Polykoff and the other Ninth Circuit cases cited in the preced-
ing paragraph.
[8] The context of those lines from Beltran and Canatella
makes clear that no such dramatic rift with precedent was
intended. In Beltran, we were faced with the question of what
to do when state judicial proceedings had occurred but had
ended by the time the federal district court decided whether
or not to abstain. The court’s statement that “Younger absten-
tion requires that the federal courts abstain when state court
proceedings were ongoing at the time the federal action was
filed,” then, was meant only to reject the proposition that
abstention was unwarranted if the state proceedings had ter-
minated after the federal filing but before the federal decision
regarding abstention. Canatella cites Beltran’s reference to
the federal filing date, but the distinction was irrelevant in that
case because nothing had changed in state court between the
federal filing date and the district court’s decision on absten-
tion. 304 F.3d at 848.
[9] Because a state action was initiated with regard to the
1010 E. Slauson property before any proceedings of substance
had occurred in the corresponding federal action, the district
court was correct to dismiss Case No. 04-56740.
4
See Hicks, 422 U.S. at 349 (“[W]here state . . . proceedings are begun
against the federal plaintiffs after the federal complaint is filed but before
any proceedings of substance on the merits have taken place in the federal
court, the principles of Younger v. Harris should apply in full force.”)
M&A GABAEE v. COMMUNITY REDEVEL. AGENCY 10891
III
For the foregoing reasons, the judgment of the district court
in each of the cases under review is AFFIRMED.5
5
M&A’s request that we take judicial notice of various documents
related to the state-court proceeding is DENIED as moot.