United States Court of Appeals For the First Circuit
No. 09-1135
SONIA I. JIMÉNEZ; LOURDES MOLINA-DOVAL,
Plaintiffs, Appellants,
v.
LUIS ALFONSO RODRÍGUEZ-PAGÁN; ALIDA RAMONA BINET-MIESES; CONJUGAL PARTNERSHIP RODRÍGUEZ-BINET; FEDERICO TOMÁS RODRÍGUEZ-BINET a/k/a Tommy Rodríguez; ISABELA BEACH COURT,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Salvador E. Casellas, U.S. District Judge]
Before
Torruella, Lipez and Howard, Circuit Judges.
Irma R. Valldejuli for appellants. Mónica I. De Jesús Santana, with whom Fiddler González & Rodríguez. PSC, was on brief, for appellees.
March 1, 2010 HOWARD, Circuit Judge. This case calls on us to navigate
the turbulent waters of Colorado River abstention. That doctrine,
established in Colorado River Water Conservation District v. United
States, 424 U.S. 800 (1976), allows federal courts in limited
instances to stay or dismiss proceedings that overlap with
concurrent litigation in state court.
The plaintiffs here originally sued in federal district
court, asserting diversity jurisdiction. They later commenced an
identical action in a Puerto Rico Commonwealth court during what
they considered to be a burdensomely long pendency of a motion to
dismiss for failure to join an indispensable party. The federal
court eventually granted the motion to dismiss, leaving the action
in the Commonwealth court to proceed alone. The plaintiffs
appealed from the federal dismissal and now ask us to reinstate the
diversity suit to its parallel track alongside the ongoing
Commonwealth litigation. The defendants argue not only that we
should affirm the dismissal for lack of an indispensable party, but
also, among other things, that the Commonwealth-court action
provides an alternative ground for disposing of the federal case
under Colorado River. We conclude that the narrow conditions for
Colorado River abstention are met here. We therefore stay the
federal proceedings pending the outcome of the Commonwealth-court
case.
-2- I. Background
Since the district court did not reach the merits, we
provide a "condensed version of the dispute." Tell v. Trs. of
Dartmouth Coll., 145 F.3d 417, 418 (1st Cir. 1998). On December
22, 1998, Manuel Molina-Godinez, the plaintiffs' decedent, sold the
defendants 100% of the stock in an apartment complex development
known as Isabela Beach Court. Molina-Godinez agreed to manage
Isabela Beach Court in exchange for a monthly fee and 18% of the
proceeds after the complex's completion and the sale of all units.
In addition, before construction began, Molina-Godinez verbally
agreed to buy one of the penthouses in Isabela Beach Court for
$220,000, and the defendants reserved the unit for him. This
agreement was later confirmed in writing. For reasons unspecified
at this stage, the defendants dispute the scope and validity of
these agreements.
On January 3, 2003, Molina-Godinez died. Construction of
Isabela Beach Court was completed at some point after his death and
all of the units were sold successfully. On March 27, 2007,
Molina-Godinez's widow, plaintiff Sonia I. Jiménez, commenced an
action in the federal district court for the District of Puerto
Rico asserting that she was entitled to half of her late husband's
18% share, which had never been paid. Additionally, she sought to
exercise his option on the penthouse apartment that had allegedly
been reserved for him. Because Jiménez was a Florida resident and
-3- the defendants were all Puerto Rico residents, she claimed that the
district court had diversity jurisdiction over the matter.
The defendants moved to dismiss for failure to join an
indispensable party under Rule 19 of the Federal Rules of Civil
Procedure. They argued that the case could not proceed without
Molina-Godinez's three other heirs, two of whom were also Puerto
Rico residents. Because joinder of the Puerto Rico heirs would
defeat complete diversity, the defendants maintained, dismissal was
compulsory.
On August 10, 2007, Jiménez amended the complaint to join
the one diverse heir while still excluding the non-diverse heirs.
She also altered her theory of the case, explaining that she was
now seeking the contractual proceeds on behalf of Molina-Godinez's
estate rather than for herself alone. She claimed that she could
adequately protect the interests of the non-diverse heirs and that,
as a result, the action did not depend on their joinder. The
amended complaint asked the court to award any judgment to the
estate, where it could be allocated to heirs and creditors by a
Puerto Rico probate court at some later date.
The addition of the diverse heir as a named plaintiff did
not, however, affect the substance of the defendants' argument.
The defendants renewed their motion to dismiss, maintaining that
Jiménez was not an adequate representative of the estate and that
an adverse judgment could affect the non-diverse heirs' interests.
-4- According to them, neither the case's new posture nor the joinder
of the one diverse heir would lessen the indispensability of the
non-diverse heirs. The plaintiffs filed their response three days
later.
Over six months passed without any further action from
the court. On March 27, 2008, the plaintiffs sought to learn the
status of the pending motion to dismiss, but the docket does not
indicate a response from the court. On August 29, 2008, after an
additional five months, the plaintiffs filed a parallel complaint
in the Court of First Instance for the Commonwealth of Puerto Rico.
Unlike the federal action, this second suit joined all of Molina-
Godinez's heirs as parties.
On December 12, 2008, the district court granted the
defendants' motion to dismiss. Jiménez v. Rodríguez-Pagán, 254
F.R.D. 151 (D.P.R. 2008). This appeal followed. Meanwhile, the
Commonwealth action has progressed in due course and is now into
the discovery stage.
II. Discussion
The defendants-appellees present three different possible
grounds to deny appellate relief to the plaintiffs-appellants.
First, they argue that this case involves matters that fall within
the probate exception to diversity jurisdiction and thus cannot be
adjudicated in federal court. Second, they reiterate their Rule 19
claim that the non-diverse heirs remain indispensable. Finally,
-5- they ask us to abstain under Colorado River and allow the Puerto
Rico court to resolve the case. Though we reject the first of
these arguments and harbor considerable skepticism as to the
second, we ultimately agree that this case warrants Colorado River
abstention.1
A. The Probate Exception
It has been said that "[t]he probate exception is one of
the most mysterious and esoteric branches of the law of federal
jurisdiction." Dragan v. Miller, 679 F.2d 712, 713 (7th Cir.
1982). Once more unto the breach.2
The probate exception is a judge-made doctrine stemming
from the original conferral of federal equity jurisdiction in the
Judiciary Act of 1789. The ambit of that jurisdiction, coterminous
with that exercised by the framers' contemporaries in the English
courts of chancery, "did not extend to probate matters." Markham
v. Allen, 326 U.S. 490, 494 (1946). The Supreme Court accordingly
held in Markham that federal courts have no authority to "interfere
with the probate proceedings or assume general jurisdiction of the
1 Under different circumstances, we might proceed directly to the dispositive Colorado River analysis, bypassing the other two questions. In this case, however, a cursory treatment of those questions does not suffice. Were the probate exception to apply here, we would have no subject matter jurisdiction over this dispute, and we think it appropriate to determine our own jurisdiction at the outset. The Rule 19 issue merits its own analysis because it factors into our eventual determination to abstain. 2 See William Shakespeare, King Henry the Fifth, act 3, sc. 1.
-6- probate or control of the property in the custody of the state
court." Id.
Yet "stating the probate exception has proven easier than
applying it." Umsted v. Umsted, 446 F.3d 17, 20 n.2 (1st Cir.
2006). After Markham, just what would constitute "interfere[nce]
with the probate proceedings" proved notoriously difficult to pin
down. When we last had the opportunity to consider the doctrine
nearly a decade ago, we acknowledged that "the precise scope of the
probate exception has not been clearly established." Mangieri v.
Mangieri, 226 F.3d 1, 2 (1st Cir. 2000) (internal brackets
omitted).
Since then, the Supreme Court has revisited the issue and
illuminated matters somewhat. In Marshall v. Marshall, the Court
explained that
the “interference” language in Markham [is] essentially a reiteration of the general principle that, when one court is exercising in rem jurisdiction over a res, a second court will not assume in rem jurisdiction over the same res. Thus, the probate exception reserves to state probate courts the probate or annulment of a will and the administration of a decedent's estate; it also precludes federal courts from endeavoring to dispose of property that is in the custody of a state probate court. But it does not bar federal courts from adjudicating matters outside those confines and otherwise within federal jurisdiction.
547 U.S. 293, 311-12 (2006) (citations omitted). Marshall made
clear that the scope of the probate exception is "distinctly
-7- limited." Id. at 296; cf. Mooney v. Mooney, 471 F.3d 246, 248 (1st
Cir. 2006) (noting that the Supreme Court in Marshall also
emphasized the narrow scope of the domestic relations exception).
The case before us does not fall within that limited
scope. "[W]here exercise of federal jurisdiction will result in a
judgment that does not dispose of property in the custody of a
state probate court, even though the judgment may be intertwined
with and binding on those state proceedings, the federal courts
retain their jurisdiction." Lefkowitz v. Bank of N.Y., 528 F.3d
102, 106 (2d Cir. 2007). The only property at issue in this case
is the proceeds from the sale of the Isabela Beach Court units and
the penthouse apartment on which Molina-Godinez allegedly held an
option to purchase. Because neither the money nor the apartment
are yet part of the decedent's estate, neither are yet in the
custody of a Puerto Rico probate court. Indeed, the very relief
sought here is enlargement of the decedent's estate through assets
not currently within it. While divvying up an estate falls
squarely within the probate exception, merely increasing it does
not. Gustafson v. zumBrunnen, 546 F.3d 398, 400 (7th Cir. 2008)
(finding that the probate exception did not apply because "the
judgment sought would just add assets to the decedent's estate"
rather than "reallocat[ing] the estate's assets among contending
claimants or otherwise interfer[ing] with the probate court's
control over and administration of the estate").
-8- B. Rule 19
We review a district court's Rule 19 determinations for
abuse of discretion. Picciotto v. Cont'l Cas. Co., 512 F.3d 9, 14-
15 (1st Cir. 2008). Because the decision to dismiss for lack of an
indispensable party "involve[s] the balancing of competing
interests and must be steeped in pragmatic considerations," id. at
14 (internal quotation marks omitted), we will reverse only if "the
district court makes an error of law or relies significantly on an
improper factor, omits a significant factor, or makes a clear error
of judgment in weighing the relevant factors." Id. at 15 (internal
citations and quotation marks omitted).
Rule 19 is designed to protect the interests of parties
who are not yet involved in ongoing litigation. To measure how
critical those interests are, the rule instructs courts to engage
in a two-part analysis. See Pujol v. Shearson Am. Exp., Inc., 877
F.2d 132, 134 (1st Cir. 1989). Parties should be joined, when
feasible, if they are "necessary" to the action according to the
criteria laid out in Rule 19(a).3 If a necessary party cannot be
3 The term "necessary" is a vestige of a superseded version of Rule 19 and no longer appears in the text. Rule 19(a) now speaks only of "Persons Required to be Joined if Feasible." Nevertheless, many circuits (including this one) continue to cling to the traditional nomenclature. See Confederated Tribes of Chehalis Indian Reservation v. Lujan, 928 F.2d 1496, 1501 n.1 (9th Cir. 1991) (O'Scainnlain, J., concurring in part and dissenting in part). Lest there be any confusion, the word is used as a term of art and signifies desirability rather than actual necessity. Parties are not truly necessary in the vernacular sense of the word "unless and until they satisfy the terms of Rule 19(b)." Id.
-9- joined in the action without divesting the court of subject-matter
jurisdiction, Rule 19(b) lays out additional criteria for
determining whether that party is "indispensable." If the court
finds that party is anything less than indispensable, the case
proceeds without her. If, on the other hand, the court finds that
the litigation cannot proceed in the party's absence, the court
must dismiss the case. See B. Fernandez & Hnos, Inc. v. Kellogg
USA, Inc., 516 F.3d 18, 23 (1st Cir. 2008).
Ultimately, the unsettled state of governing Puerto Rico
law hampers our ability to adjudicate this issue definitively.
Assuming for the purposes of argument that the district court
exercised its discretion properly in finding that the non-diverse
heirs were necessary parties under Rule 19(a), we proceed directly
to the indispensability analysis under Rule 19(b). See Delgado v.
Plaza Las Americas, Inc., 139 F.3d 1, 3 n.2 (1st Cir. 1998) (per
curiam) (noting that parties cannot be indispensable under Rule
19(b) unless they are first deemed necessary under Rule 19(a)).
The "critical question" in the Rule 19(b) context is "'whether in
equity and good conscience' the action may proceed in [the
necessary party]'s absence." B. Fernandez, 516 F.3d at 23 (quoting
Fed. R. Civ P. 19(b)). To answer that question, the district court
must consider four factors specified in the Rule:
(1)the extent to which a judgment rendered in the person's absence might prejudice that person person or the existing parties; (2) the extent to which any prejudice could be
-10- lessened or avoided by (A) protective provisions in the judgment; (B) shaping the relief; or (C) other measures; (3) whether a judgment rendered in the person's absence will be adequate; and (4) whether the plaintiff would have an adequate remedy if the action were dismissed for non-joinder.
Fed. R. Civ. P. 19(b).
The district court emphasized the first and third
factors, finding that a judgment rendered in the non-diverse heirs'
absence could potentially prejudice their interests. It reasoned
that since each heir possesses a right to part of Molina-Godinez's
estate, any ruling on the sums due to the estate under the alleged
contract would affect each heir's individual portion. In order to
adequately protect his or her interest in that portion, each heir
was therefore entitled to participate in the litigation, even to
the point of eliminating federal diversity jurisdiction.
We are not so sure. In Puerto Rico, the decedent's as-
yet undivided estate is known as a community of property. See,
e.g., Arias-Rosado v. Gonzalez Tirado, 111 F. Supp. 2d 96, 99
(D.P.R. 2000). On several occasions, the federal district court
for the District of Puerto Rico has interpreted Puerto Rico law to
provide that an individual participant in a community of property
does not impair other participants' interests merely by asserting
common legal rights to the property while the other participants
are absent. "Any judgment in favor of one or more participants
benefits all other participants in a community of property whereas
-11- an adverse judgment only prejudices the one who filed the judicial
action." Id. (internal quotation marks omitted); accord Rodriguez-
Rivera v. Rivera Rios, No. 06-1381, 2009 WL 564221, at *3 (D.P.R.
Mar. 5, 2009); Ruiz-Hance v. P.R. Aqueduct & Sewer Auth., 596 F.
Supp. 2d 223, 230 (D.P.R. 2009); Cintron v. San Juan Gas, 79 F.
Supp. 2d 16, 19 (D.P.R. 1999). In Arias-Rosado, a Rule 19
challenge to a survivorship action, the court went on to hold that
"a favorable judgment to [the individual heir litigating in federal
court] will be dispositive of the survivorship claim and benefit
the absent heirs. However, an unfavorable judgment will only
prejudice her and not the absent heirs[,] who still will have
available the suit filed in state court wherein they asserted the
survivorship claim." 111 F. Supp. 2d at 99; see also Rodriguez-
Rivera, 2009 WL 564221 at *3; Ruiz-Hance, 596 F. Supp. 2d at
229–30; Cintron, F. Supp. 2d at 19.
Taking these cases at face value, as the plaintiffs urge
us to, it appears that the federal suit here is something of a free
shot for the non-diverse heirs. Success inures to their benefit
while failure is costless. Surely there can be no impairment when
they stand to lose nothing. If the plaintiffs are providing a
correct statement of the local law, they would appear to be the
best of all possible representatives for the absentees' interests:
the kind that may very well help but cannot hurt. See Tell, 145
F.3d at 419 ("If an absent party's interests are the same as those
-12- of an existing party, and the existing party will adequately
protect those interests, this bears on whether the absent party's
interest will be impaired by its absence from the litigation.").
At this juncture, however, we cannot state this
proposition as anything other than a conditional hypothetical. The
plaintiffs' interpretation of Puerto Rico community property law is
far from certain. To begin with, the cases on which the plaintiffs
rely sound exclusively in tort. Seizing on this, the defendants
have urged us to limit the applicability of those cases to wrongful
death and survivorship actions. When pressed at oral argument, the
plaintiffs could not cite a single authority suggesting that their
interpretation of the relevant law extends to contract claims.
This puts us in an awkward position. On the one hand, we
would find it somewhat strange if the rule did indeed govern non-
torts actions yet had failed to produce any reported decisions to
that effect. It is hard to say that the district court abused its
discretion when the ostensible abuse is a matter of unsettled law.
On the other hand, none of the four cases that the plaintiffs cite
facially limits itself to tort claims. Those cases draw their
logical force not from any idiosyncrasy in Puerto Rico's tort law,
but from Puerto Rico's community-of-property law. This may make
the defendants' argument a good candidate for a distinction without
a difference. Contractual proceeds due to the decedent belong to
the undivided estate just as much as a wrongful death judgment.
-13- All things considered, we have an insufficient basis to accept
either the plaintiffs' or the defendants' readings of the case law.
A second difficulty remains. Suppose that the plaintiffs
here are successful in securing some monetary damages under the
contract, but not the full amount that they seek. Does that
constitute a successful judgment sufficient to bind the non-diverse
heirs under the plaintiffs' theory of the law, or is it instead an
adverse judgment that would leave those heirs free to double down
in the second suit? The plaintiffs do not attempt to answer this
question, and, unaware of any authority one way or the other,
neither can we.
In sum, we are ill equipped to rule on this question of
Puerto Rico law. As this question may very well determine the non-
diverse heirs' indispensability here, we are equally ill equipped
to rule on the ultimate question of joinder. Under different
circumstances, we would consider certifying the underlying question
to the Supreme Court of Puerto Rico. See Muniz-Olivari v. Stiefel
Labs., Inc., 496 F.3d 29, 39–40 (1st Cir. 2007). As the next
section makes clear, though, that consideration is obviated by the
parallel litigation ongoing in the Commonwealth court.
C. Colorado River Abstention
It has long been established that the presence of
parallel litigation in state court will not in and of itself merit
abstention in federal court. See McClellan v. Carland, 217 U.S.
-14- 268, 282 (1910); Stanton v. Embrey, 93 U.S. 548, 554 (1876).
Concurrent federal-state jurisdiction over the same controversy
does not generally lessen the federal courts' "virtually unflagging
obligation . . . to exercise the jurisdiction given them." Colo.
River, 424 U.S. at 817. At the same time, the Supreme Court in
Colorado River acknowledged that this obligation is not infinite.
In special cases, the pendency of a similar action in state court
may merit federal abstention based on "considerations of wise
judicial administration" that counsel against duplicative
lawsuits.4 Id. (internal brackets and quotation marks omitted).
This "fourth category" of abstention has come to be known as the
Colorado River doctrine.5 See Fuller Co. v. Ramon I. Gill, Inc.,
782 F.2d 306, 309 n.3 (1st Cir. 1986) (observing that Colorado
River created a fourth category of abstention beyond the "three
traditional branches").
4 As with other forms of abstention, our decision to decline jurisdiction under Colorado River may be sua sponte. See Bellotti v. Baird, 428 U.S. 132, 143 n.10 (1976); Guillemard-Ginorio v. Contreras-Gomez, 585 F.3d 508, 517–18 (1st Cir. 2009); Currie v. Group Ins. Comm'n, 290 F.3d 1, 9 n.7 (1st Cir. 2002). We therefore have discretion to review the matter on appeal even if it was not raised in the court below. 5 The first three forms of abstention are Pullman-type (avoiding a constitutional determination by allowing a state court to construe state law), Burford-type (deferring to a state regarding difficult questions of state law that involve significant policy considerations), and Younger-type (invoking federal jurisdiction to restrain criminal proceedings). See Colo. River, 424 U.S. at 814–17; Villa Marina Yacht Sales, Inc. v. Hatteras Yachts, 915 F.2d 7, 12 n.8 (1st Cir. 1990).
-15- The crevice in federal jurisdiction that Colorado River
carved is a narrow one. Of all the abstention doctrines, it is to
be approached with the most caution, with "[o]nly the clearest of
justifications" warranting dismissal. Colo. River, 424 U.S. at
819. Our authority to find such a clear justification is confined
by an "exceptional-circumstances test," Moses H. Cone Mem'l Hosp.
v. Mercury Const. Corp., 460 U.S. 1, 16 (1983), whose non-exclusive
list of factors we have drawn from Colorado River and its progeny:
(1) whether either court has assumed jurisdiction over a res; (2) the [geographical] inconvenience of the federal forum; (3) the desirability of avoiding piecemeal litigation; (4) the order in which the forums obtained jurisdiction; (5) whether state or federal law controls; (6) the adequacy of the state forum to protect the parties' interests; (7) the vexatious or contrived nature of the federal claim; and (8) respect for the principles underlying removal jurisdiction.
Rio Grande Cmty. Health Ctr. v. Rullan, 397 F.3d 56, 71–72 (1st
Cir. 2005). "No one factor is necessarily determinative; a
carefully considered judgment taking into account both the
obligation to exercise jurisdiction and the combination of factors
counselling against that exercise is required." Colo. River, 424
U.S. at 818–19. Furthermore, "the decision whether to dismiss a
federal action because of parallel state-court litigation 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
-16- H. Cone, 460 U.S. at 16. Unsurprisingly, the cases that satisfy
this test are few and far between.
Yet those cases, "though exceptional, do nevertheless
exist." Colo. River, 424 U.S. at 818. From time to time, we have
exercised our discretion (or affirmed the lower court's exercise of
its own discretion) to decline jurisdiction under Colorado River,
notwithstanding the presumption in favor of assuming jurisdiction.
See, e.g., Rivera-Feliciano v. Acevedo-Vila, 438 F.3d 50 (1st Cir.
2006); Currie v. Group Ins. Comm'n, 290 F.3d 1 (1st Cir. 2002);
Liberty Mut. Ins. Co. v. Foremost-McKesson, Inc., 751 F.2d 475 (1st
Cir. 1985).
In our view, this is such a case. Applying the factors,
we conclude that while some are neutral to our inquiry, the balance
of them strongly favors abstention. We begin with the neutral
factors, which may be summarized quickly. The federal and Puerto
Rico forums are equally convenient (second factor); the Puerto Rico
forum is well equipped to protect the parties' interests (sixth
factor), see United States v. Fairway Capital Corp., 483 F.3d 34,
43 (1st Cir. 2007) (holding that the adequacy of the state forum is
relevant only when it would disfavor abstention); there is nothing
vexatious or contrived about the plaintiffs' federal lawsuit
(seventh factor); and removal jurisdiction is irrelevant here
(eighth factor).
-17- So far, so good. But the sum of the other four factors
convinces us that deference to the Commonwealth court is the
appropriate result here. The first factor, the involvement of a
res, tilts toward abstention due to the plaintiffs' claim for the
penthouse apartment in Isabela Beach Court. Though the plaintiffs
characterize this as a suit over monetary damages, both versions of
the complaint request the court to enforce the decedent's alleged
option on the apartment. There is therefore a possibility for
inconsistent dispositions of property.6
The third factor, avoidance of piecemeal litigation, also
favors abstention, although it requires a bit more explanation.
The "piecemeal litigation" to be avoided is something more than
just the repetitive adjudication that takes place in all cases
implicating Colorado River doctrine. Concurrent federal-state
6 In Levy v. Lewis, the Second Circuit observed that the res prong of the Colorado River analysis was more concerned with the disposition of property than the actual exercise of in rem jurisdiction:
The principle is often stated as a matter of jurisdiction: that a second court cannot have jurisdiction to proceed in rem if jurisdiction over the res is maintained by another court. Nevertheless, as the Court appeared to recognize, the principle involved is more accurately described as a prudential doctrine in which a second court with concurrent jurisdiction will exercise its discretion to defer to another court for the sake of comprehensive disposition of rights in a particular piece of property or in a fund.
635 F.2d 960, 965–66 (2d Cir. 1980). We agree with this assessment.
-18- jurisdiction over the same action will necessarily involve some
degree of "routine inefficiency that is the inevitable result of
parallel proceedings." Villa Marina Yacht Sales, Inc. v. Hatteras
Yachts, 915 F.2d 7, 16 (1st Cir. 1990). That inefficiency was not
significant to the Supreme Court's decision in Colorado River and
has not contributed to any of this circuit's subsequent case law.
Were it otherwise, courts could abstain in any diversity action
that overlapped with a state-court action. "Piecemeal litigation"
must instead refer to some additional factor that places the case
beyond the pale of duplicative proceedings. Put differently, "[a]
duplication of effort, while wasteful, is not exceptional."
Gentron Corp. v. H. C. Johnson Agencies, Inc., 79 F.R.D. 415, 418
(E.D. Wis. 1978).
We have therefore held that
[d]ismissal is not warranted simply because related issues otherwise would be decided by different courts, or even because two courts otherwise would be deciding the same issues. Rather, concerns about piecemeal litigation should focus on the implications and practical effects of litigating suits deriving from the same transaction in two separate fora, and weigh in favor of dismissal only if there is some exceptional basis for dismissing one action in favor of the other.
KPS & Assocs., Inc. v. Designs by FMC, Inc., 318 F.3d 1, 10–11 (1st
Cir. 2003) (internal quotation marks and citations omitted). The
canonical example of such an exceptional basis is a clear federal
policy in favor of unified proceedings pursuant to a federal
-19- statute that is at issue in the case. See Colo. River, 424 U.S. at
819–20 (finding abstention appropriate because the federal law at
issue evinced a clear policy against piecemeal adjudication of
river system water rights); cf. Moses H. Cone, 460 U.S. at 20
(finding abstention inappropriate because the Federal Arbitration
Act requires piecemeal litigation if necessary to give effect to an
arbitration agreement). But there are other reasons why the
piecemeal litigation factor might loom large in a given case. On
multiple occasions, we have found an exceptional basis that
counsels in favor of abstention, even though no particular federal
policy was in play. See, e.g., Rivera-Feliciano, 438 F.3d at 50
(holding that "in light of the many underlying unresolved issues of
Puerto Rican law[,] it would be better to avoid piecemeal
litigation"); Currie, 290 F.3d at 10 (finding a risk of piecemeal
litigation that rises above routine inefficiency where parallel
state-court case was already on appeal and involved an issue of
state law which could moot or otherwise inform the federal
litigation); Liberty Mut. Ins. Co., 751 F.2d at 477 (finding an
exceptional basis where there existed a "real possibility" that an
insurance policy might be interpreted differently in each forum,
leaving the insured with insufficient coverage after years of
paying premiums).
We think the potential implications of proceeding in
federal court without the non-diverse heirs provides the requisite
-20- exceptional basis here. The absence of the additional heirs in the
federal action means that in all likelihood the district court
would be unable to resolve the defendants' contractual liability to
them if the case is allowed to continue. The district court could
determine the defendants' obligations to the diverse heirs, but the
defendants would need to look to the Commonwealth court to
determine their obligations to the non-diverse heirs under the same
contract. The Commonwealth action, by contrast, includes all of
the heirs and can therefore comprehensively adjudicate the
defendants' liability. This disparity in inclusiveness thus
creates a greater practical risk of piecemeal litigation than the
baseline inefficiencies of the average exercise of concurrent
federal-state jurisdiction. Recognizing this, other circuits have
found Colorado River abstention more appropriate when non-diverse
parties are joined in the state-court action but not the federal
action. See Sto Corp. v. Lancaster Homes, Inc., 11 F. App'x 182,
188 (4th Cir. 2001); Federated Rural Elec. Ins. Corp. v. Ark. Elec.
Coops., Inc., 48 F.3d 294, 298 (8th Cir. 1995); Cont'l Cas. Co. v.
Robsac Indus., 947 F.2d 1367, 1373 (9th Cir. 1991), overruled on
other grounds, Gov't Employees Ins. Co. v. Dizol, 133 F.3d 1220
(9th Cir. 1998). We agree. This potential for fragmented
adjudication, to be distinguished from merely duplicative
-21- adjudication, warrants consideration in the Colorado River
analysis.7
We move next to the fifth factor, whether state or
federal law controls, which weighs particularly heavily here. Not
only does the dispute here turn entirely on issues of Puerto Rico
law, see Liberty Mut. Ins. Co., 751 F.2d at 477 (finding it
significant that "no federal issues are raised . . . and no federal
interest would be served by retaining jurisdiction over the case"),
but the issues that would inform our jurisdictional analysis remain
unsettled. We have previously held that under this part of the
exceptional-circumstances test, abstention may be preferable when
the "parties' claims present particularly novel, unusual or
difficult questions of legal interpretation." Elmendorf Grafica,
Inc. v. D.S. Am. (East), Inc., 48 F.3d 46, 52 (1st Cir. 1995);
accord KPS & Assocs., 318 F.3d at 11. As we described above, the
plaintiffs' ability to maintain complete diversity in this case
hinges on our Rule 19 analysis. That analysis, in turn, hinges in
part on the question of whether the non-diverse heirs' interests
could be impaired if they are not joined as parties to the suit.
We cannot intelligently answer that question without some clear
indication as to whether Puerto Rico courts would apply the
7 To be sure, it may not weigh as strongly as a clear federal policy of the sort that was considered in Colorado River, but it at least diminishes the presumption in favor of exercising federal jurisdiction.
-22- plaintiffs' proposed community-of-property rule to causes of action
other than tort claims. From our vantage point, we cannot say
definitively one way or the other. The local law that would
underlie our determination on compulsory joinder would be best left
to the Puerto Rico courts to sort out.8
The sixth factor, the order in which the courts obtained
jurisdiction, similarly points toward abstention. The label for
this factor is something of a misnomer, as "the relative progress
of the suits is more important than the strict order in which the
courts obtained jurisdiction." Gonzalez v. Cruz, 926 F.2d 1, 4
(1st Cir. 1991). "[T]he order in which jurisdiction was taken is
not a mechanical concept automatically favoring the party who files
first, but rather a concept that favors the case that is the more
advanced at the time the Colorado River balancing is being done."
Elmendorf, 48 F.3d at 52. We thus "measure which action -- the
suit in the federal court or that in the state court -- is the more
advanced in a 'pragmatic, flexible manner, with a view to the
realities of the case at hand.'" Id. (quoting Moses H. Cone, 460
U.S. at 21). A quick comparison of the two docket sheets at issue
here reveals that while the federal action foundered on
jurisdictional questions, leaving only this appeal, the
8 Because the Commonwealth action includes the non-diverse heirs, this question is not likely at issue there. Our deferral therefore means that the question will not be resolved until a future case. We think this delay is still preferable to our attempting to settle a state-law question of first impression here.
-23- Commonwealth action is already well into the discovery stage.9 The
Commonwealth's head start into the merits lessens the federal
court's need to exercise jurisdiction. See Colo. River, 424 U.S.
at 820 (stating that an absence of any federal proceedings beyond
a motion to dismiss favors the surrender of jurisdiction).
Considering all of these factors, we conclude that this
is one of the rare instances meriting Colorado River abstention.
Because of the possibility for inconsistent dispositions of a res,
the heightened potential for piecemeal litigation, the exclusive
reliance on Puerto Rico law, the unsettled nature of aspects of
that law that would inform our jurisdictional analysis, and the
more advanced progress of the litigation in the Puerto Rico court
system, we are convinced that the wisest judicial administration of
this case is to defer to the judgment of the Puerto Rico court.
9 Neither the parties nor, apparently, the Court of First Instance's Spanish-language docket specify how close to trial the Puerto Rico case actually is. Yet a significant disparity in favor of the Commonwealth court is clear enough. As the Seventh Circuit recently observed in an analogous situation, "[a]lthough the precise status of discovery is not apparent from the record before us, it is clear that various depositions have been taken in the state case. At the very least, the controversy appears to be closer to a resolution in the state proceedings than in the federal." Tyrer v. City of South Beloit, 456 F.3d 744, 755 (7th Cir. 2006) (internal brackets and quotation marks omitted). Since a court engaging in Colorado River analysis should "look at the total situation as it stands at the time of appeal," Lumen Const., Inc. v. Brant Const. Co., Inc., 780 F.2d 691, 697 n.4 (7th Cir. 1985), we take judicial notice of the progress of the parallel Commonwealth litigation.
-24- Having come to this conclusion, we must next decide
whether the appropriate disposition is a dismissal or a stay of the
proceedings. In Moses H. Cone, the Supreme Court committed this
question to the discretion of the lower courts, finding "no
occasion in this case to decide whether a dismissal or a stay
should ordinarily be the preferred course of action when a district
court properly finds that Colorado River counsels in favor of
deferring to a parallel state-court suit." 460 U.S. at 28
(footnote omitted); see also Arizona v. San Carlos Apache Tribe of
Ariz., 463 U.S. 545, 570 n.21 (1983). Most circuits to have
considered the issue have held that a stay is always preferable
because it may likely produce the same practical result as a
dismissal while still leaving the docket open in case loose ends
remain at the conclusion of the state proceedings. See Moorer v.
Demopolis Waterworks & Sewer Bd., 374 F.3d 994, 998 (11th Cir.
2004); Cigna Healthcare of St. Louis, Inc. v. Kaiser, 294 F.3d 849,
851-52 (7th Cir. 2002); Mahaffey v. Bechtel Assoc. Prof'l Corp.,
D.C., 699 F.2d 545, 546–47 (D.C. Cir. 1983) (per curiam); see also
Lops v. Lops, 140 F.3d 927, 960 n.24 (11th Cir. 1998) (Kravitch,
J., dissenting); but see Cox v. Planning Dist. I Cmty. Mental
Health & Mental Retardation Servs. Bd., 669 F.2d 940, 943 (4th Cir.
1982) (holding that dismissal is appropriate so long as "the
determinative issues will unfailingly be resolved within the
-25- parameters of the state-court litigation . . . as no further action
by the district court is anticipated").
There is no need to decide this issue categorically here.
In this Circuit, Colorado River abstention has historically
resulted in a stay, see, e.g., Rivera-Feliciano; Currie; Liberty
Mut. Ins. Co., and we elect to continue that trend in this case.
Although we do not anticipate any unresolved issues remaining after
the Commonwealth case concludes, we see no harm to judicial economy
in going the more cautious route. See LaDuke v. Burlington N. R.R.
Co., 879 F.2d 1556, 1562 (7th Cir. 1989) (noting that a stay
"protects the rights of all the parties without imposing any
additional costs or burdens on the district court") (footnote
III. Conclusion
Like the district court, we think that this case should
ultimately be resolved in the Puerto Rico judicial system. But we
reach this conclusion not because of the probate exception or Rule
19, but rather because of exceptional circumstances that satisfy
Colorado River's demanding test for abstention. Accordingly, we
vacate the district court's dismissal and remand with instructions
to stay all further proceedings.
It is so ordered. Costs to neither party.
-26-