Steamfitters Local 449 Pension Fund v. Safeway Inc. et al

Filing 48

ORDER TO SHOW CAUSE. Show Cause Response due by 7/9/2014. Hearing on Motion for Preliminary Injunction set for 7/25/2014 09:00 AM in Courtroom 5, 2nd Floor, Oakland before Hon. Jeffrey S. White. Signed by Judge Jeffrey S. White on 6/24/14. (jjoS, COURT STAFF) (Filed on 6/24/2014)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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STEAMFITTERS LOCAL 449 PENSION
FUND,

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No. C 14-01670 JSW

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v.
For the Northern District of California

United States District Court

Plaintiff,
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ORDER TO SHOW CAUSE
REGARDING COLORADO RIVER
DOCTRINE

SAFEWAY, INC., et al.,
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Defendants.
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Pursuant to the Colorado River doctrine, a federal court should, under certain

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circumstances, stay its proceedings in deference to similar proceedings pending in state court.

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Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 818-19 (1976). The

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Court “may invoke the Colorado River Doctrine sua sponte.” PrivacyWear, Inc. v. QTS &

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CFTC, LLC, 2008 WL 4414994, *2 (C.D. Cal. Sept. 24, 2008) (citing Atchison, Topeka and

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Santa Fe Ry. Co. v. Bd. of Equalization of the State of California, 795 F.2d 1442, 1446-48 (9th

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Cir. 1986), vacated on other grounds, 828 F.2d 9 (1987) (raising Colorado River doctrine for

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the first time on appeal and instructing district court to stay action upon remand).

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In applying the Colorado River doctrine, district courts may stay or dismiss an action

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when there is a concurrent state proceeding involving the same matter and the existence of

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“exceptional circumstances.” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S.

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1, 14-15 (1983). Under Colorado River, the Ninth Circuit requires a “substantial similarity”

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between the state and federal proceedings, but has noted that “exact parallelism” is not required.

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Nakash v. Marciano, 882 F.2d 1411, 1416 (9th Cir. 1989).

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A court weighs several factors to determine whether to stay or dismiss an action

inconvenience of the federal forum, (3) the desirability of avoiding piecemeal litigation, (4) the

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order in which jurisdiction was obtained by the concurrent forums, (5) whether state or federal

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law provides the rule of decision on the merits, and (6) whether the state proceeding is adequate

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to protect the parties’ rights. Nakash, 882 F.2d at 1415 (citing Colorado River, 424 U.S. at 818;

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Moses H. Cone, 460 U.S. at 25-26). “These factors are to be applied in a pragmatic and flexible

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way, as part of a balancing process rather than as a mechanical checklist.” Nakash, 882 F.2d at

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For the Northern District of California

pursuant to Colorado River: (1) whether a court has assumed jurisdiction over a res, (2) the

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United States District Court

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1415 (quotations omitted).

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In Nakash, individuals and their related corporate entities filed a state suit alleging state

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claims and a violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”).

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888 F.2d at 1412-13. Later, the individuals filed a federal suit consisting of similar – but not

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identical – claims. Id. at 1413. The Ninth Circuit held that a stay was appropriate under

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Colorado River and noted that although the Supreme Court has held that federal courts have a

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“virtually unflagging obligation” to exercise jurisdiction, “this somewhat overstates the law

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because in certain circumstances, a federal court may stay its proceedings in deference to

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pending state proceedings.” Id. at 1415 (citing Colorado River, 424 U.S. at 817). The Ninth

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Circuit held that despite the lack of exact parallelism between the parties and actions, the

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actions were substantially similar because both involved disputes over the same conduct and an

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overlap of key parties. Id. at 1416-17.

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Here, Defendants represent that before Plaintiff filed the action in this Court, plaintiffs

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have filed actions, which have been consolidated, in state court in Delaware regarding the same

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proposed merger. Moreover, the plaintiffs and defendants in the state court action have reached

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a settlement. If the court approves the settlement for the class, the claims brought in the above

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captioned action would be released. Accordingly, the Court Orders the parties to Show Cause

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(“OSC”) in writing why this action should not be stayed or dismissed under the Colorado River
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doctrine. Plaintiff shall file a response to this OSC by no later than July 3, 2014. Defendants

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shall file a response by no later than July 9, 2014. The Court HEREBY CONTINUES the

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hearing on the pending motion for a preliminary injunction to July 25, 2014 at 9:00 a.m.

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IT IS SO ORDERED.

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Dated: June 24, 2014
JEFFREY S. WHITE
UNITED STATES DISTRICT JUDGE

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For the Northern District of California

United States District Court

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