Coakley Landfill Group v. IT Corp. CV-98-167-JM 02/18/00 P UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
The Coakley Landfill Group
v. Civil No. 98-167-JM Opinion No. 2000 DNH 046 IT Corporation, et a l .
O R D E R
The Coakley Landfill Group (the "Group") moves to dismiss
the cross-claims against it brought by SeaHill Construction, Inc
("SeaHill"). SeaHill objects.
Background
The Group entered into a contract with IT Corporation ("IT"
in which IT agreed to perform the work of a general contractor
for environmental remediation at the Coakley Landfill Superfund
Site. The Group also entered into a contract with Colder
Associates, Inc. ("Colder") in which Colder was to perform the
work of project engineer for the remediation, including the
preparation of material specifications and review of materials.
Substantial quantities of sand submitted by IT through its
subcontractor, SeaHill, were rejected by Colder on behalf of the
Group. The Group terminated IT for several alleged breaches of its
contract and brought suit for damages. IT brought third party
suits against members of the Group and against SeaHill and
Golder. On July 27, 1999, SeaHill filed a cross-claim against
the Group (document no. 36). The cross-claim asserts claims of
negligence (Count I), tortious interference with contractual
relationship (Count II) and violation of the New Hampshire
Consumer Protection Act (Count III). Over one year prior to the
filing of the cross-claim SeaHill brought suit against the Group
in the Rockingham County Superior Court on the same underlying
facts. The state action was dismissed on February 3, 1999 by
Judge McHugh.
The Group advances three bases for dismissal: (1) the "law
of the case"; (2) the Younger abstention doctrine; or (3) the
Colorado River abstention doctrine. SeaHill asserts that the
decision by Judge McHugh was interlocutory and not appealable
until the entire case was completed and that the state case was
stayed to permit resolution of the issues in one lawsuit.
SeaHill objects to the motion on each basis advanced by the
2 plaintiff.
1. The Younger Abstention Doctrine does not apply.
The Supreme Court has "not decide(d) the extent to which the
Younger doctrine applies to a federal action seeking only
monetary relief." Deakins v. Monaghan, 484 U.S. 193, 202 (1988).
However, it appears clear that it does not apply.
Younger abstention dictates that federal courts not interfere with state court proceedings by granting equitable relief-such as injunctions of important state proceedings or declaratory judgments regarding constitutional issues in those proceedings- when such relief could adequately be sought before the state court. See Ouackenbush v. Allstate Ins. Co., 517 U.S. 706, 716, 116 S.Ct. 1712, 135 L.Ed.2d 1 (1996); Pennzoil Co. v. Texaco, 481 U.S. 1, 10, 107 S.Ct. 1519, 95 L.Ed.2d 1 (1987) ("The first ground for the Younger decision was 'the basic doctrine of equity jurisprudence that courts of equity should not act, and particularly should not act to restrain a criminal prosecution, when the moving party has an adequate remedy at law.'") (quoting Younger, 401 U.S. at 43, 91 S.Ct. 746); Colorado River, 424 U.S. at 816-17, 96 S.Ct. 1236; Younger, 401 U.S. at 43-44, 49, 91 S.Ct. 746; see generally Erwin Chemerinsky, Federal Jurisdiction §§ 13.1-4 (2d ed. 1994) (providing a critical analysis of the
3 history, basis, and rationale of the Younger Doctrine).
Rienhardt v. Kelly, 164 F.3d 1296, 1302 (1999). The unanimous
decision in Ouackenbush that abstention doctrines derive from
equity is " . . . a strong indication that the Court is likely to
find that Younger abstention applies only to suits for injunctive
or declaratory relief and not to claims for money damages."
Chemerinsky, supra § 13.3, p. 783. This court is not being asked
to enjoin the appeal or any other aspect of the state court case.
In fact, with the consent of all parties the state court stayed
the action in its court specifically to await the outcome of this
case (document no. 44, tabs 2 and 3). I will not apply Younger
in view of the Supreme Court's strong indication, particularly
where the state court has so obviously disavowed any important
state interest by totally staying the case.
2. The Court will not apply the Colorado River Doctrine.
"(T)he pendency of an action in the state court is no bar to
proceedings concerning the same matter in the Federal court
having jurisdiction." McClellan v. Garland, 217 U.S. 268, 282
4 (1910). See Donovan v. City of Dallas, 377 U.S. 408); Colorado
River Water Conservation Dist. v. United States, 424 U.S. 800
(1976). However, in Colorado River the court recognized that in
the interest of judicial economy the federal court could justify
the surrender of its jurisdiction if exceptional circumstances
exist. I_ci. at 817-818. The factors to be considered in a
Colorado River doctrine analysis must be carefully balanced as
opposed to being used as a checklist. See Moses H. Cohen
Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1
(1982) .
In Colorado River
the court set forth four factors: 1. whether property is involved in the litigation; 2. the inconvenience of the federal forum; 3. the desirability of stopping piecemeal litigation; and 4. the order in which jurisdiction was obtained by the courts. 424 U.S. at 813, 96 S.Ct. at 1244. In Moses H. Cone v. Mercury Construction Corp., 460 U.S. 1, 103 S.Ct. 927, 74 L.Ed.2d 765 (1982), the Court added two more elements; 5. whether federal law or state law controls and 6. whether the state forum will adequately protect the interests of the parties.
Gonzalez v. Cruz, 926 F.2d 1, 3 (1st Cir. 1991) .
5 Jurisdiction in this suit is based upon diversity of
citizenship and none of the claims involve federal law. However,
this is the only forum with jurisdiction over all of the parties
and, although the state forum may adequately protect the
interests of the parties, the state has already stayed its
proceedings to avoid piecemeal litigation and in the recognition
that the federal forum is more convenient. The principal
complaint in this case was filed on March 25, 1998, prior to the
date of the state court writ. It makes no sense to surrender
jurisdiction in this case under a doctrine premised upon judicial
economy when judicial economy is best served (as recognized by
the state court) by keeping the claim here. The claim will not
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Coakley Landfill Group v. IT Corp. CV-98-167-JM 02/18/00 P UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
The Coakley Landfill Group
v. Civil No. 98-167-JM Opinion No. 2000 DNH 046 IT Corporation, et a l .
O R D E R
The Coakley Landfill Group (the "Group") moves to dismiss
the cross-claims against it brought by SeaHill Construction, Inc
("SeaHill"). SeaHill objects.
Background
The Group entered into a contract with IT Corporation ("IT"
in which IT agreed to perform the work of a general contractor
for environmental remediation at the Coakley Landfill Superfund
Site. The Group also entered into a contract with Colder
Associates, Inc. ("Colder") in which Colder was to perform the
work of project engineer for the remediation, including the
preparation of material specifications and review of materials.
Substantial quantities of sand submitted by IT through its
subcontractor, SeaHill, were rejected by Colder on behalf of the
Group. The Group terminated IT for several alleged breaches of its
contract and brought suit for damages. IT brought third party
suits against members of the Group and against SeaHill and
Golder. On July 27, 1999, SeaHill filed a cross-claim against
the Group (document no. 36). The cross-claim asserts claims of
negligence (Count I), tortious interference with contractual
relationship (Count II) and violation of the New Hampshire
Consumer Protection Act (Count III). Over one year prior to the
filing of the cross-claim SeaHill brought suit against the Group
in the Rockingham County Superior Court on the same underlying
facts. The state action was dismissed on February 3, 1999 by
Judge McHugh.
The Group advances three bases for dismissal: (1) the "law
of the case"; (2) the Younger abstention doctrine; or (3) the
Colorado River abstention doctrine. SeaHill asserts that the
decision by Judge McHugh was interlocutory and not appealable
until the entire case was completed and that the state case was
stayed to permit resolution of the issues in one lawsuit.
SeaHill objects to the motion on each basis advanced by the
2 plaintiff.
1. The Younger Abstention Doctrine does not apply.
The Supreme Court has "not decide(d) the extent to which the
Younger doctrine applies to a federal action seeking only
monetary relief." Deakins v. Monaghan, 484 U.S. 193, 202 (1988).
However, it appears clear that it does not apply.
Younger abstention dictates that federal courts not interfere with state court proceedings by granting equitable relief-such as injunctions of important state proceedings or declaratory judgments regarding constitutional issues in those proceedings- when such relief could adequately be sought before the state court. See Ouackenbush v. Allstate Ins. Co., 517 U.S. 706, 716, 116 S.Ct. 1712, 135 L.Ed.2d 1 (1996); Pennzoil Co. v. Texaco, 481 U.S. 1, 10, 107 S.Ct. 1519, 95 L.Ed.2d 1 (1987) ("The first ground for the Younger decision was 'the basic doctrine of equity jurisprudence that courts of equity should not act, and particularly should not act to restrain a criminal prosecution, when the moving party has an adequate remedy at law.'") (quoting Younger, 401 U.S. at 43, 91 S.Ct. 746); Colorado River, 424 U.S. at 816-17, 96 S.Ct. 1236; Younger, 401 U.S. at 43-44, 49, 91 S.Ct. 746; see generally Erwin Chemerinsky, Federal Jurisdiction §§ 13.1-4 (2d ed. 1994) (providing a critical analysis of the
3 history, basis, and rationale of the Younger Doctrine).
Rienhardt v. Kelly, 164 F.3d 1296, 1302 (1999). The unanimous
decision in Ouackenbush that abstention doctrines derive from
equity is " . . . a strong indication that the Court is likely to
find that Younger abstention applies only to suits for injunctive
or declaratory relief and not to claims for money damages."
Chemerinsky, supra § 13.3, p. 783. This court is not being asked
to enjoin the appeal or any other aspect of the state court case.
In fact, with the consent of all parties the state court stayed
the action in its court specifically to await the outcome of this
case (document no. 44, tabs 2 and 3). I will not apply Younger
in view of the Supreme Court's strong indication, particularly
where the state court has so obviously disavowed any important
state interest by totally staying the case.
2. The Court will not apply the Colorado River Doctrine.
"(T)he pendency of an action in the state court is no bar to
proceedings concerning the same matter in the Federal court
having jurisdiction." McClellan v. Garland, 217 U.S. 268, 282
4 (1910). See Donovan v. City of Dallas, 377 U.S. 408); Colorado
River Water Conservation Dist. v. United States, 424 U.S. 800
(1976). However, in Colorado River the court recognized that in
the interest of judicial economy the federal court could justify
the surrender of its jurisdiction if exceptional circumstances
exist. I_ci. at 817-818. The factors to be considered in a
Colorado River doctrine analysis must be carefully balanced as
opposed to being used as a checklist. See Moses H. Cohen
Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1
(1982) .
In Colorado River
the court set forth four factors: 1. whether property is involved in the litigation; 2. the inconvenience of the federal forum; 3. the desirability of stopping piecemeal litigation; and 4. the order in which jurisdiction was obtained by the courts. 424 U.S. at 813, 96 S.Ct. at 1244. In Moses H. Cone v. Mercury Construction Corp., 460 U.S. 1, 103 S.Ct. 927, 74 L.Ed.2d 765 (1982), the Court added two more elements; 5. whether federal law or state law controls and 6. whether the state forum will adequately protect the interests of the parties.
Gonzalez v. Cruz, 926 F.2d 1, 3 (1st Cir. 1991) .
5 Jurisdiction in this suit is based upon diversity of
citizenship and none of the claims involve federal law. However,
this is the only forum with jurisdiction over all of the parties
and, although the state forum may adequately protect the
interests of the parties, the state has already stayed its
proceedings to avoid piecemeal litigation and in the recognition
that the federal forum is more convenient. The principal
complaint in this case was filed on March 25, 1998, prior to the
date of the state court writ. It makes no sense to surrender
jurisdiction in this case under a doctrine premised upon judicial
economy when judicial economy is best served (as recognized by
the state court) by keeping the claim here. The claim will not
be stayed nor dismissed based upon the Colorado River doctrine.
3. "The Law of the Case" Doctrine.
The Group contends that the state court order granting its
state court motion to dismiss requires dismissal of SeaHill's
cross-claims in this case under the law of the case doctrine.
The law of the case doctrine
6 . . posits that when a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages in the same case.' This rule of practice promotes the finality and efficiency of the judicial process by 'protecting against the agitation of settled issues.'"
Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 816
(1988) (citing Arizona v. California, 460 U.S. 605, 618 (1983)
(dictum) and 1 B J. M o o r e , J. L u c a s & T. C u r r i e r , Moore's Federal
Practice 5 0.404[1], p . 118 (1984)).
SeaHill contends that the doctrine: (a) does not apply to
Counts II and III because they were not decided by the state
court and (b)(1) the doctrine should not be applied where the
state court has stayed its action in deference to the action in
this court and (b)(2) the state court decision is erroneous and
the doctrine should not apply.
a. New causes of action are not barred.
The state court dismissal of SeaHill's state claims was
expressly premised upon legal conclusions that SeaHill did not
meet the two criterion necessary to establish it as intended
third party beneficiary and that it was not owed a common law
7 duty of due care by the Group. Count II in the cross-claim in
this court is a tortious interference with contract claim. Count
III is a statutory consumer protection claim. These two claims
are different from those which the state court dismissed. The
law of the case doctrine, unlike the claim preclusion principles
of res judicata, bars legal issues actually decided in the prior
litigation but not those which could have been raised. See, In
Re Justice Oaks II, Ltd., 898 F.2d 1544, 1550, n.3 (11th Cir.
1990) . The state court decision does not preclude Counts II and
III.
b. State Court Orders
The state court dismissed SeaHill's third party beneficiary
contract claim (Count I) and its negligence claim (Count II) as
alleged against the Group. Count I of SeaHill's cross-claim in
this court is the same as the state court negligence claim.
The state court ruling dismissing the negligence claim was
made by the trial court and, because it disposed of only the
claims against the Group and because the entire case was stayed,
the appeal of that decision is stayed. The parties agree that the superior court order is not a final ruling for purposes of
res iudicata or collateral estoppel and is an interlocutory
order. See Germain v. Germain, 137 N.H. 82, 84 (1993); Jenkins
v. G2S Constructors, Inc., 140 N.H. 219, 223 (1995). If the
dismissal by the state court has any effect here it is because of
the law of the case doctrine.
"The law of the case doctrine applies to the decisions
entered by the state court prior to removal". 18 Moore's Federal
Practice, § 134.22(3) (c) (1) (Matthew Bender 3d Ed.). The
"doctrine should not be used to perpetuate an error that could
have been corrected in the state court system." Id. at
§ 134.22(3)(c)(ill). The SeaHill claims in this court were not
removed from state court, however.
Neither party has cited, and I have not found, any authority
to apply "law of the case" doctrine based upon an interlocutory
order in a parallel (as opposed to removed) case (even with an
identical claim and identical parties) . The Seventh Circuit in
Rekhi v. Wildwood Industries, Inc., 61 F.3d 1313, 1319 (7th Cir.
1995) clearly recognized that the doctrine of law of the case
9 applies to redetermination of rulings only in the same case.
Thus, the court stated it applies to cases removed but not to
different cases on the same claim by the same parties in
different courts. The doctrine does not apply in the case before
me,
The motion (document no. 40) is denied.
SO ORDERED.
James R. Muirhead United States Magistrate Judge
Date: February 18, 2000
cc: George R. Moore, Esq. Jeremy Ritzenberg, Esq. James C. Wheat, Esq. Patrick A. Thompson, Esq. C. Kevin Leonard, Esq. Paul M. Monzione, Esq.