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1 Vision Aviation PLLC v. Silver Airways, LLC

United States District Court, N.D. Iowa, Western Division

August 8, 2019

1 VISION AVIATION PLLC, Plaintiff,
v.
SILVER AIRWAYS, LLC, Defendant.

          ORDER ORDER REGARDING DEFENDANT'S MOTION FOR ABSTENTION AND STAY

          MARK A. ROBERTS, MAGISTRATE JUDGE.

         This matter comes before the Court pursuant to the Motion for Abstention and Stay filed June 14, 2019 by Defendant Silver Airways, LLC (“Defendant”). (Doc. 11.) Plaintiff 1 Vision Aviation, PLLC (“Plaintiff”) timely filed a resistance on June 28, 2019. (Doc. 13.) Defendant filed its reply thereto on July 5, 2019. (Doc. 14.) The matter is fully submitted. Oral argument is unnecessary.

         I. INTRODUCTION

         Plaintiff provides maintenance and repair services for aircraft from its Sioux City headquarters. Plaintiff is an Iowa professional limited liability company.[1] Defendant operates a domestic airline from its principal place of business in Orlando, Orange County, Florida. (Doc. 11-3 at 1.) In 2017, Defendant began flying its aircraft to and from Plaintiff's Sioux City facility for maintenance and repair. The terms of the parties' agreement are disputed. It appears the parties' interaction resulted in the estimates and invoices attached to Plaintiff's Complaint. (Docs. 1-1, 1-2.) At some point, a dispute arose regarding how much Plaintiff was owed by Defendant. Plaintiff also performed some work at Defendant's Florida facility.[2] At some point after the relationship soured, Plaintiff attempted to place liens on Defendant's aircraft.[3]

         The parties' interaction has now culminated in two lawsuits: this one (“the federal lawsuit”) and one pending in Florida state court (“the Florida lawsuit”). How this dispute and the two lawsuits came into being bears elaboration.[4] The work described in Plaintiff's estimates and invoices all took place in Sioux City, Iowa where Defendant delivered the aircraft. (Doc. 13-1 ¶ 12; Doc. 11-3 ¶ 8.) Defendant supplied parts to be used by Plaintiff in performing its work. (Doc. 11-3 ¶ 10; Doc. 13-1 ¶ 12.) Defendant had a right to retain unused, removed, and salvaged parts. (Doc. 13-1 ¶ 12; Doc. 11-3 ¶ 10.) Plaintiff completed the work on the aircraft, which were then returned to Defendant's facility in Florida. (Doc. 11-3 ¶ 11; Doc. 13-1 ¶ 12.) In 2017, Plaintiff's personnel performed repair and maintenance work at Defendant's Orlando, Florida facility. (Doc. 11-3 ¶ 13; Doc. 13-1 ¶ 18.) In late 2017, Plaintiff commenced its collection efforts with respect to the invoices. (Doc. 13-1 ¶ 20; Doc. 11-3 ¶ 12.)

         On April 15, 2019, a collection agency hired by Plaintiff contacted Defendant. (Doc. 13 ¶ 22; Doc. 11-1 ¶ 124). On May 13, 2019, Plaintiff's legal department emailed Defendant seeking an alleged balance due of $482, 884.50, threatening a lawsuit, and threatening to enforce liens against the aircraft. (Doc. 14-1.) Defendant claims it filed the Florida lawsuit on May 14, 2019 as a result of the April 15, 2019 collection communication. (Doc. 11-1 ¶¶ 12-13 .) The federal lawsuit was filed on May 22, 2019. (Doc. 1.) Defendant was served with the federal lawsuit on May 24, 2019. (Doc. 5.) Plaintiff was served with the Florida lawsuit on June 4, 2019. (Doc. 11-5.) Defendant served written discovery on Plaintiff with the service of summons in the Florida lawsuit for which answers may be required by August 19, 2019. (Doc. 13.)

         The Complaint in the federal lawsuit seeks money damages for breach of contract because Defendant has allegedly not paid amounts for repairing and maintaining Defendant's aircraft as shown in the invoices and estimates. (Doc. 1.) Defendant's Complaint in the Florida lawsuit alleges breach of contract based on Plaintiff's alleged failure to return parts to Defendant that were not used by Plaintiff in servicing Defendant's aircraft. (Doc. 11-3 ¶ 24.) Defendant's Florida complaint also seeks an accounting of the parts Defendant claims to have provided for use by Plaintiff in servicing the aircraft. (Doc. 11-3 ¶¶ 26-32.) Finally, the Florida complaint seeks a judgment declaring Plaintiff is not entitled to further compensation and has no valid liens on the aircraft. (Doc. 11-3 ¶¶ 33-45).

         The affidavit of Jimmy Sponder supports, inter alia, Plaintiff's allegations regarding its limited contact with Florida and that Plaintiff's employees who would be potential witnesses reside in or near the State of Iowa. (Doc. 13-1 ¶¶ 21-26.)

         II. DISCUSSION

         A. Colorado River Abstention

         Defendant contends this Court should abstain from deciding this action under Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976). In Colorado River, the Supreme Court outlined the principles that control this Court's abstention where there are pending parallel state court proceedings. Id. at 817. The Court held that, “[g]enerally, as between state and federal courts, the rule is that the pendency of an action in the state court is no bar to proceedings concerning the same matter in the Federal court having jurisdiction.” Id. (citation and quotation marks omitted). This rule “stems from the virtually unflagging obligation of the federal courts to exercise the jurisdiction given them.” Id. Accordingly, “the circumstances permitting the dismissal of a federal suit due to the presence of a concurrent state proceeding for reasons of wise judicial administration are considerably more limited than the circumstances appropriate for abstention.” Id. at 818. The Court should weigh several considerations when requested to abstain due to pending state proceedings:

It has been held, for example, that the court first assuming jurisdiction over property may exercise that jurisdiction to the exclusion of other courts.... In assessing the appropriateness of dismissal in the event of an exercise of concurrent jurisdiction, a federal court may also consider such factors as the inconvenience of the federal forum; the desirability of avoiding piecemeal litigation; and the order in which jurisdiction was obtained by the concurrent forums.

Id. (citations omitted). “No one factor is necessarily determinative.” Id. “[A] carefully considered judgment taking into account both the obligation to exercise jurisdiction and the combination of factors counseling against that exercise is required.” Id. at 818-19 (citation omitted). “Only the clearest of justifications will warrant dismissal.” Id. at 819.

         In Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., the United States Supreme Court explained two additional factors that should be addressed under Colorado River abstention: whether federal or state law controls the dispute and the adequacy of the state forum to protect the federal plaintiff's rights. 460 U.S. 1, 23-27 (1983).

         The Eighth Circuit Court of Appeals has explained that, “[a]s a threshold matter, . . . there must be pending parallel state and federal court proceedings before Colorado River is implicated.” Fru-Con Constr. Corp. v. Controlled Air, Inc., 574 F.3d 527, 535 (8th Cir. 2009) (citing In re Burns & Wilcox, Ltd., 54 F.3d 475, 477 (8th Cir. 1995), limited on other grounds by Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 710-11 (1996)). The Eighth Circuit observed that “[p]recedent establishing a comprehensive definition of ‘parallel proceedings' for purposes of Colorado River abstention is scarce in this circuit.” Id. “Although the [Eighth Circuit] has decided several cases involving such proceedings, none has discussed the specific elements of parallelism.” Id. “The prevailing view is that state and federal proceedings are parallel for purposes of Colorado River abstention when substantially similar parties are litigating substantially similar issues in both state and federal court.” Id. (emphasis in original). The Eighth Circuit concluded that “[t]his circuit requires more precision” than other circuits. Id. Fru-Con held,

The pendency of a state claim based on the same general facts or subject matter as a federal claim and involving the same parties is not alone sufficient. Rather, a substantial similarity must exist between the state and federal proceedings, which similarity occurs when there is a substantial likelihood that the state proceeding will fully dispose of the claims presented in the federal court. This analysis focuses on matters as they currently exist, not as they could be modified. Moreover, in keeping with the Supreme Court's charge to abstain in limited instances only, jurisdiction must be exercised if there is any doubt as to the parallel nature of the state and federal proceedings.

Id. (citations omitted.)

         “When any doubt exists as to the parallel nature of concurrent state and federal proceedings, the district court cannot utilize Colorado River to refuse its jurisdiction.” Cottrell v. Duke, 737 F.3d 1238, 1245 (8th Cir. 2013) (citing Fru-Con, 574 F.3d at 535). Moreover, “when a party raises an exclusively federal claim, Colorado River [abstention] is inappropriate.” Id. at 1248.

         If the proceedings are parallel, the federal court may divest itself of jurisdiction “only when . . . exceptional circumstances warrant abstention.” Fru-Con, 574 F.3d at 534 (citing Colorado River, 424 U.S. at 817-18. The Eighth Circuit identified “[s]ix non-exhaustive factors [that] have been developed to determine whether . . . exceptional circumstances warrant abstention”:

(1) whether there is a res over which one court has established jurisdiction,
(2) the inconvenience of the federal forum, (3) whether maintaining separate actions may result in piecemeal litigation, unless the relevant law would require piecemeal litigation and the federal court issue is easily severed, (4) which case has priority-not necessarily which case was filed first but a greater emphasis on the relative progress made in the cases, (5) whether state or federal law controls, especially favoring the exercise of jurisdiction where federal law controls, and (6) the adequacy of the state forum to protect the federal plaintiff's rights.

Id. (quoting Mountain Pure, LLC v. Turner Holdings, LLC, 439 F.3d 920, 926 (8th Cir. 2006)). These factors “are not intended to be exhaustive, nor are they to be mechanically applied.” Federated Rural Elec. Ins. Corp. v. Ark. Elec. Coops., Inc., 48 F.3d 294, 297 (8th Cir. 1995). They should be applied pragmatically “to advance the ‘clear federal policy' of avoiding piecemeal adjudication.” Id. (quoting Moses H. Cone, 460 U.S. at 16).

         In examining these factors, “the balance [is] heavily weighted in favor of the exercise of jurisdiction.” And:

we emphasize that our task in cases such as this is not to find some substantial reason for the exercise of federal jurisdiction by the district court; rather, the task is to ascertain whether there exist “exceptional” circumstances, the “clearest of justifications, ” that can suffice under Colorado River to justify the surrender of that jurisdiction.

Id. (quoting Moses H. Cone, 460 U.S. at 25-26) (emphasis in original).

         B. The ...


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