A quick one from the Ninth Circuit in a federal condemnation case. In Montanore Minerals Corp. v. Bakie, No.15-35707 (Aug. 16, 2017), the court, somewhat surprisingly concluded that a condemnation in federal court should have been stayed by the district court pending resolution of a state court quiet title action.
We say "somewhat surprisingly" because the standard of appellate review in the case is abuse of discretion, which gives a lot of leeway to the district court, and often, in our experience, results in it taking a lot to convince the court of appeals that it should reverse. Not here.
Although there were no less than eight -- count em, eight -- "factors" which the court of appeals had to analyze and balance (what I call "throw into a blender and hit the on switch") to determine whether Colorado River abstention was warranted.
Eight factors? And you thought our Penn Central and Murr three-and-more factors were bad? Move over, brother:
(1) which court first assumed jurisdiction over any property at stake; (2) the inconvenience of the federal forum; (3) the desire to avoid piecemeal litigation; (4) the order in which the forums obtained jurisdiction; (5) whether federal law or state law provides the rule of decision on the merits; (6) whether the state court proceedings can adequately protect the rights of the federal litigants; (7) the desire to avoid forum shopping; and (8) whether the state court proceedings will resolve all issues before the federal court.
Slip op. at 9.
The case involved a question of who owned certain unpatented mining claims in Montana. At first the plaintiff (and eventual condemnor), which wanted to build a tunnel to exploit its own mining claims, tried to obtain easements from the owners of the unpatented claims with which the tunnel would interfere. No deal. So it filed a state court lawsuit seeking a judgment that those unpatented claims were invalid. That went up and down through the Montana state court system, ultimately resulting in an order by the trial court that the claims were valid. During the course of that case, the plaintiff/tunnel digger apparently got tired of waiting, and filed a federal condemnation action which it was allowed to do. One of the claims of that lawsuit also asked whether the unpatented claims were valid. The state court stayed its proceedings in light of the federal litigation.
Ultimately, the federal district court refused to proceed with part of the condemnation action -- the question of the validity of the unpatented claims (actually, it dismissed the claim) -- but allowed the condemnation itself to proceed. The court eventually entered an order awarding the unpatented claims owners a big fat zero as compensation, at which point the case went to the Ninth Circuit on the question of whether under the Colorado River doctrine, the district court should have abstained in favor of the ongoing Montana case.
Short answer: yes.
We won't go through all of the eight factors which the court considered to reach its conclusion that the district court really should have waited. This is one of those cases where there was such a parallel between the ongoing state court action and the federal case, that the federal court really should have waited:
On balance, the Colorado River factors strongly counsel in favor of a stay. The state court first assumed jurisdiction over the Subject Claims; proceeding with the federal case presented a risk of piecemeal litigation; the state court had jurisdiction over the case for several years, and had made substantial progress, by the time the federal proceeding was filed; state law provides the rule of decision on the merits, and the case presents complex state law questions better addressed by the state court; the state court can adequately protect the federal rights at issue; Montanore’s actions strongly suggest that it was forum shopping by filing in federal court; and the suits are sufficiently parallel for Colorado River to apply.
Slip op. at 18-19 (footnote omitted).
Seeing no way to disentangle the two parallel litigations, the court of appeals concluded the district court abused its discretion and should have abstained.
Montanore Minerals Corp. v. Bakie, No. 15-35707 (9th Cir. Aug. 16, 2017)
