United States District Court, D. Oregon, Portland Division
OPINION AND ORDER
V. Acosta United States Magistrate Judge
Premier Automation Contactors, Inc. ("Premier")
brought this action seeking a declaratory judgment that it
was properly insured for an underlying occurrence in Oregon
by Defendant Everest National Insurance Company
("Everest"), or in the alternative, that Everest
committed silent fraud against Premier and must be equitably
estopped from denying coverage. Premier moves to stay this
action under the doctrine established by Colorado River
Water Conservation Dist. v. United States, 424
U.S. 800 (1976), pending resolution of a related state
administrative proceeding. Everest opposes the motion,
arguing the state administrative proceeding will not resolve
the issues raised here.
court finds the actions are not substantially similar, and
the other Colorado River factors weigh in favor of a
denial of a stay. Accordingly, Premier's motion to stay
is a Michigan corporation with its principal place of
business in Michigan. (Compl, ECF No. 1, ¶ 7.) Everest
is a Delaware corporation with its principal place of
business in New Jersey. (Compl. ¶ 8.) Premier is a
contracting business that provides skilled workers to a
variety of construction companies throughout the United
States. (Compl., Ex. A, at 2.) On September 26, 2018, Tim
Rios, one of Premier's employees, suffered a fatal injury
while working at a job site in Hillsboro, Oregon.
(Id.; Def.'s Opp'n to Mot. Stay, ECF No. 20
("Def.'s Opp'n"), at 3.) At the time of Mr.
Rios's death, Premier had a liability and workers'
compensation insurance policy (the "Policy") with
Everest. (Compl. ¶ 10.) Central to the parties'
dispute is whether the Policy provided workers'
compensation coverage for work in Oregon at the time of Mr.
Rios's death. (Compl. ¶ 11.) Everest denies it
covered Premier for work in Oregon at the time of Mr.
Rios's death. (Def.'s Opp'n, at 2-3.)
January 2, 2019,  Premier filed a complaint in Oregon State
Court seeking a declaration that Everest covered Premier for
work in Oregon, or alternatively, that Everest engaged in
silent fraud and should be estopped from denying coverage.
(Compl., Ex. A.) Premier sought to avoid the prospect of
defending a wrongful death suit and avoid facing a
"noncompliant employer" penalty assessed by the
Oregon State Workers' Compensation Division for failure
to carry proper insurance. (Compl, Ex. A, at 8-9.) On
February 13, 2019, Everest timely removed the case to this
court based on diversity jurisdiction. (Compl, ECF No. 1.)
January 22, 2019, the State of Oregon entered a final order
in a civil penalty action against Premier finding it was a
"noncomplying employer." (Pl.'s Mot. Stay, ECF
No. 17, at 2.) Premier immediately appealed the order.
(Id.) The State took no action on the appeal until
July 12, 2019, when it assigned the civil penalty action to a
State Administrative Law Judge ("ALJ"). (Pl.'s
Mot. Stay, Ex. C.) Premier now asks for an indefinite stay of
the proceedings in this court pending resolution of the state
the pendency of an action in state court does not bar
proceedings concerning the same matter in a federal court
having jurisdiction. McClellan v. Carlan, 217 U.S.
268, 282 (1910). Rather, federal courts have a
"virtually unflagging obligation" to exercise their
jurisdiction. Colorado River, 424 U.S. at 817.
However, in the interest of wise judicial administration, a
federal court may abstain from exercising its jurisdiction
due to the presence of a concurrent state proceeding under
certain "limited" and "exceptional"
circumstances. Id. at 818. Thus, when faced with
parallel state and federal proceedings, the court must
ascertain whether "exceptional" circumstances and
the "clearest of justifications" exist to justify
the surrender of jurisdiction. Moses H. Cone
Mem'l Hosp. v. Mercury Constr. Corp., 460
U.S. 1, 25-26 (1983).
factors are relevant to determining whether abstention is
appropriate. The threshold question is whether the parallel
proceedings are "substantially similar." Nakash
v. Marciano, 882 F.2d 1411, 1416 (9th Cir. 1989).
"[T]he existence of a substantial doubt as to whether
the state proceedings will resolve the federal action
precludes granting of a stay." Intel Corp. v.
Advanced Micro Devices, Inc., 12 F.3d 908, 913 (9th Cir.
1993); see also Holder v. Holder, 305 F.3d 854, 870
(9th Cir. 2002) ("[I]t is 'dispositive' that the
state court judgment will not resolve all of the issues
before the federal court[.]"). The remaining
non-exclusive factors include those originally considered by
the Supreme Court in Colorado River: (1) whether
either court has assumed jurisdiction over property to the
exclusion of other courts; (2) the inconvenience of the
federal forum; (3) the desirability of avoiding piecemeal
litigation; and (4) the order in which jurisdiction was
obtained by the concurrent forums. Colorado River,
424 U.S. at 818-19. This list of considerations was
subsequently expanded by the Supreme Court to include: (5)
whether state or federal law provides the rule of decision on
the merits; and (6) whether the state-court proceeding can
adequately protect the rights of the parties. Moses,
460 U.S. at 23, 26. Finally, in the Ninth Circuit, courts
also should consider whether exercising jurisdiction would
promote forum shopping. R.R. Street & Co. Inc. v.
Transport Ins. Co., 656 F.3d 966, 979 (9th Cir. 2011).
whether a federal court should abstain from hearing a federal
claim because of parallel litigation in state court does not
rest on a "mechanical" application of these
factors. Moses, 460 U.S. at 16. Rather, when
considering abstention under the Colorado River
doctrine, a court should carefully balance these factors as
they apply in a given case. Id. The weight of these
factors may vary greatly from case to case depending on the
particular circumstances. Id. "No one factor is
necessarily determinative; a carefully considered judgment
taking into account both the obligation to exercise
jurisdiction and the combination of factors counseling
against that exercise is required." Colorado
River, 424 U.S. at 818-19. Any doubt as to whether a
factor exists should be resolved against a stay.
Travelers Indem. Co. v. Madonna, 914 F.2d 1364, 1369
(9th Cir. 1990).
asks the court to stay this proceeding pending the resolution
of a parallel state administrative proceeding. In doing so,
Premier invokes Landis v. N. Am. Co.,299 U.S. 248
(1936), for the proposition that the court has inherent
authority "to control the disposition of causes on its
docket with economy of time and effort for itself, for
counsel, and for litigants." Id. at 254.
Premier then argues that the court should grant a stay using
the factored analysis of Colorado River without
explicitly referring to that case. The court notes at the
outset that, where a party has requested a stay based on the
existence of a parallel state proceeding, the court should
analyze the motion ...