Providian Fincl Corp v. Coleman

• Court: Court of Appeals for the Fifth Circuit
• Decided: May 21, 2003
• Docket: 02-60943
• Status: Unpublished

Opinion

United States Court of Appeals Fifth Circuit F I L E D May 21, 2003 IN THE UNITED STATES COURT OF APPEALS Charles R. Fulbruge III FOR THE FIFTH CIRCUIT Clerk

No. 02-60943 Summary Calendar

PROVIDIAN FINANCIAL CORPORATION; PROVIDIAN BANKCORP SERVICES; PROVIDIAN NATIONAL BANK; PROVIDIAN BANK,

Plaintiffs-Appellants,

versus

ALICE COLEMAN; THOMAS J. BOYD; JOHN PERRY; JAMES EDMOND, JR., STACY ARRINGTON; DANA O’DELL,

Defendants-Appellees.

Appeal from the United States District Court for the Southern District of Mississippi (USDC No. 4:01-CV-338) _______________________________________________________

Before REAVLEY, BARKSDALE and CLEMENT, Circuit Judges.

PER CURIAM:*

We reverse and remand for further proceedings for the following reasons.

* Pursuant to 5TH CIR. R. 47.5, the Court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. 1. The district court dismissed this suit essentially on grounds that it was an

anticipatory declaratory judgment action whose merits were better left to the state courts.

The court believed that the standard for determining whether to abstain and dismiss the

action was the broad discretionary standard generally applicable to declaratory judgment

actions, as expressed in cases such as Brillhart v. Excess Insurance Co. of America, 316

U.S. 491 (1942), and Rowan Cos., Inc. v. Griffin, 876 F.2d 26 (5th Cir. 1989), cited by

the district court.

2. The district court expressly held that the more restrictive standard for staying or

dismissing an action because of the pendency of a related state court action, as set forth in

Colorado River Water Conservation District v. United States, 424 U.S. 800 (1976) and

Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1 (1983),

was inapplicable. The court held that “‘a declaratory judgment action may be dismissed

even though it fails to satisfy the stringent Colorado River/Moses Cone ‘exceptional

circumstances’ test.’” Dist. Ct. Opn. at 8 (quoting St. Paul Ins. Co. v. Trejo, 39 F.3d 585,

590 (5th Cir. 1994)).

3. We have held that where, as in this case, a party files a declaratory judgment

action, but seeks “coercive relief” in the form of an order compelling arbitration under the

Federal Arbitration Act, 9 U.S.C. §§ 1-16, in addition to seeking declaratory relief, the

applicable abstention standard is the Colorado River/Moses Cone standard. Safety Nat’l

Cas. Corp. v. Bristol-Myers Squibb Co., 214 F.3d 562, 564 (5th Cir. 2000).

2 4. Because the district court applied the wrong abstention standard, “we must

remand this cause to the district court so that it may decide in the first instance whether

abstention is warranted here in light of the appropriate standards of Colorado River and

Moses H. Cone.” Southwind Aviation, Inc. v. Bergen Aviation, Inc., 23 F.3d 948, 951

(5th Cir. 1994). Our decision is limited to a review of the district court’s decision to

abstain, and is not intended to express a view on whether Providian is entitled to a

declaratory judgment or an order compelling arbitration. We further express no opinion

on whether abstention would be warranted under the Colorado River/Moses Cone

standard.

REVERSED AND REMANDED.