Medicine Shoppe Intern., Inc. v. Tambellini

191 F. Supp. 2d 1065, 2002 U.S. Dist. LEXIS 10641, 2002 WL 257334
CourtDistrict Court, E.D. Missouri
DecidedFebruary 12, 2002
Docket4:01CV435FRB
StatusPublished
Cited by2 cases

This text of 191 F. Supp. 2d 1065 (Medicine Shoppe Intern., Inc. v. Tambellini) is published on Counsel Stack Legal Research, covering District Court, E.D. Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Medicine Shoppe Intern., Inc. v. Tambellini, 191 F. Supp. 2d 1065, 2002 U.S. Dist. LEXIS 10641, 2002 WL 257334 (E.D. Mo. 2002).

Opinion

191 F.Supp.2d 1065 (2002)

MEDICINE SHOPPE INTERNATIONAL, INC., Plaintiff,
v.
Gordon TAMBELLINI, et al., Defendants.

No. 4:01CV435FRB.

United States District Court, E.D. Missouri, Eastern Division.

February 12, 2002.

*1066 Stephen H. Rovak, Partner, Sonnenschein and Nath, St. Louis, MO, Steven M. Cockriel, Associate, Philip J. Christofferson, Cockriel Law Office, L.L.C., St. Louis, MO, for Plaintiff.

Robert L. Rodenbush, Lathrop and Gage, St. Louis, MO, Blaine C. Kimrey, Lathrop and Gage, Kansas City, MO, Peggy *1067 C. Hughes, Montgomery & Purdue, Seattle, WA, for Defendants.

MEMORANDUM AND ORDER

BUCKLES, United States Magistrate Judge.

Presently pending before the Court is defendants Gordon Tambellini, Mari A. Tambellini, and Tambellini Pharmacy, Inc.'s Motion to Stay Based on Burford Abstention or, Alternatively, to Transfer Based on Forum Non Conveniens (filed July 23, 2001/Docket No. 24). All matters are pending before the undersigned United States Magistrate Judge, with consent of the parties, pursuant to 28 U.S.C. § 636(c).

Plaintiff Medicine Shoppe International, Inc. (MSI), a Delaware corporation with its principal place of business in St. Louis County, Missouri, brings this anticipatory breach of contract action alleging that defendants Gordon Tambellini, Mari A. Tambellini, and Tambellini Pharmacy, Inc.'s planned closure of their franchise Medicine Shoppe Pharmacy in Raymond, Washington, breaches the License Agreement entered into by defendants as licensees and MSI as licensor. Defendants Gordon Tambellini and Tambellini Pharmacy, Inc., are citizens of the State of Washington. Defendant Mari A. Tambellini is a citizen of the State of California. Plaintiff MSI invokes this Court's diversity jurisdiction inasmuch as complete diversity of citizenship exists between the parties and the amount in controversy exceeds $75,000.00.

Defendants move to stay any further action in federal court arguing that the Burford abstention doctrine dictates this Court's deferral to Washington state courts for determination of the complex regulatory scheme at issue here. In the alternative, defendants move to transfer this cause to the United States District Court for the Western District of Washington pursuant to 28 U.S.C. § 1404(a) for the convenience of the parties and witnesses, in the interests of justice. Plaintiff has responded to defendants' motion to which defendants have replied.

A. Burford Abstention

Section XII of the License Agreement at issue here states:

This License Agreement shall be deemed for all purposes to have been made in the State of Missouri and shall be governed by and construed under and in accordance with the laws of the State of Missouri except as to matters covered by the Washington State Franchise Investment [Protection] Act.

(Compl., Exh. 1 at p. 8.)

Defendants argue that because resolution of the instant cause of action will necessarily entail interpretation of Washington's Franchise Investment Protection Act and thus potentially disrupt the State of Washington's regulatory, unified process for protecting Washington franchisees, the federal court should abstain from determining the instant matter under the abstention doctrine articulated by the Supreme Court in Burford v. Sun Oil Co., 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424 (1943).

In Burford, a diversity action was filed in the United States District Court, Western District of Texas, attacking the validity of an order of the Texas Railroad Commission granting Burford a permit to drill four wells, with an underlying argument that the Commission's order deprived complainants of due process. Specifically, the oil company sought to challenge the state agency's action under a general regulatory system devised by Texas' state legislature for the conservation of oil and gas in Texas. The federal district court, while recognizing that it had jurisdiction over the cause of action, nevertheless dismissed the cause determining that such cases were *1068 better left to be determined by the Texas state courts. See Sun Oil Co. v. Burford, 124 F.2d 467, 468 (5th Cir.1941) (subsequent history omitted). Recognizing the potential confusion and needless conflict resulting from the federal court's interpretation of this complex state regulatory scheme, the Supreme Court determined that under such circumstances, the district court's abstention was proper. Burford, 319 U.S. at 325-27, 63 S.Ct. 1098. In Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976), the Supreme Court further elaborated on Burford's abstention doctrine:

The doctrine of abstention, under which a District Court may decline to exercise or postpone the exercise of its jurisdiction, is an extraordinary and narrow exception to the duty of a District Court to adjudicate a controversy properly before it. Abdication of the obligation to decide cases can be justified under this doctrine only in the exceptional circumstances where the order to the parties to repair to the State court would clearly serve an important countervailing interest.
. . . . .
Abstention is also appropriate where there have been presented difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the result in the case then at bar.... It is enough that exercise of federal review of the question in a case and in similar cases would be disruptive of state efforts to establish a coherent policy with respect to a matter of substantial public concern.

Colorado River Water, 424 U.S. at 813-14, 96 S.Ct. 1236 (internal quotation marks and citations omitted).

A federal court's abstention from determining matters otherwise within its jurisdiction is "the exception and not the rule," only to be used "in the extraordinary and narrow circumstances where it would clearly serve an important countervailing interest." Melahn v. Pennock Ins., Inc., 965 F.2d 1497, 1506 (8th Cir.1992) (internal quotation marks and citation omitted). The Burford abstention doctrine applies "when a state has established a complex regulatory scheme supervised by state courts and serving important state interests, and when resolution of the case demands specialized knowledge and application of complicated state laws." Bilden v. United Equitable Ins. Co., 921 F.2d 822, 825 (8th Cir.1990); see also Arkansas Medical Soc'y, Inc. v. Reynolds, 6 F.3d 519, 528-29 (8th Cir.1993); Melahn, 965 F.2d at 1506.

Washington's Franchise Investment Protection Act, Wash.Rev.Stat. § 19.100 (FIPA), was enacted to deal with sales abuses and unfair practices in the franchising of goods and services. See Corp v. Atlantic Richfield Co.,

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