6.07.2007

E.D. Mich. Notes Split Re Application of Colorado River Doctrine in Situations Involving Parallel Proceeding in Foreign Court

Per Grammar, Inc. v. Custom Foam Systems, Ltd., 482 F.Supp.2d 853 (E.D. Mich. Mar. 22, 2007):

A federal court has a “virtually unflagging obligation” to exercise the jurisdiction bestowed upon it. Colorado River Water Conservation Dist. et al. v. United States, 424 U.S. 800, 817-18, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976). This obligation should be avoided in only a few “extraordinary and narrow” circumstances. ( Id.)

. . .

This doctrine is almost always used in situations where the parallel proceeding is in a state court, but is applied in the same manner when a federal court proceeding is parallel to a court proceeding in a foreign country.FN5 See Finova Capital Corp. v. Ryan Helicopters USA, Inc., 180 F.3d 896, 898 (7th Cir.1999).

FN5. There appears to be a split of the circuits on this issue. The Seventh and Eleventh Circuits appear to agree with the rationale given in Finova. The Eighth Circuit, however, seems to have created a new test in dicta for abstention in international cases, with the following factors: “[1] the similarity of the two actions, [2] the degree of progress already made in the [foreign] action, [3] the adequacy and appropriateness of the [foreign] forum, ... [4] notions of international comity[,] and [5] [notions of] judicial efficiency.” Boushel v. Toro Co., 985 F.2d 406, 409 n. 2 (8th Cir.1993) cited in Goldhammer v. Dunkin' Donuts, Inc., 59 F.Supp.2d 248, 252-53 (D.Mass.1999). I will apply the standard Colorado River analysis in this case, however, as I find that test to be better supported by precedent and because I believe it to be the more rigorous standard.

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