River Docks, Inc. v. Roy Strom Excavating and Grading Co.
MEMORANDUM Opinion and Order. Signed by the Honorable John W. Darrah on 10/17/2016. Mailed notice. (jjr, )
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
RIVER DOCKS, INC.,
ROY STROM EXCAVATING AND
Case No. 15-cv-5709
Judge John W. Darrah
MEMORANDUM OPINION AND ORDER
Plaintiff River Docks, Inc. filed an admiralty Complaint, alleging negligence by
Roy Strom Excavating and Grading Co. related to the sinking of a barge. Plaintiff has now filed
a Motion to Enjoin Roy Strom from Asserting Compulsory Counterclaims in Other Fora .
For the reasons discussed more fully below, Plaintiff’s Motion  is denied.
On February 17, 2015, Service Welding and Shipbuilding, LLC filed a complaint in state
court against Defendant: Service Welding and Shipbuilding, LLC v. Roy Strom Excavating and
Grading Co., No. 2015 L 001627. Plaintiff filed the current federal action against Defendant;
and summons was returned executed on August 18, 2015. On August 21, 2015, Defendant filed
a “third-party complaint,” asserting two third-party claims against Plaintiff in the state-court
action. On September 24, 2015, Plaintiff moved to dismiss Defendant’s third-party claims in
state court. On January 13, 2016, Defendant’s federal Motion to Dismiss certain claims and to
stay or abstain from hearing the remaining claims pursuant to the abstention doctrine was denied
because the subject of the state action and the federal action are different. On May 12, 2015, the
state court dismissed the third-party claims against Plaintiff for failure to state a claim and due to
the federal admiralty action. The state court also informed Defendant that the third-party claims
were mandatory counterclaims in the federal action.
However, the state court granted Defendant leave to re-plead its third-party claims in
state court, over Plaintiff’s objection. Defendant was granted multiple extensions of time to replead; and, on August 1, 2016, Defendant filed its Amended Third-Party Complaint in state
court. In the Amended Third-Party Complaint, Defendant alleges that Plaintiff negligently
caused barge AGS 441B to sink because the barge was not fit for its purpose and that Plaintiff
would be unjustly enriched in the event that Defendant is found to have breached its contracts in
the state action.
Under the Anti-Injunction Act, a federal court may not enjoin “proceedings in a State
court except as expressly authorized by Act of Congress, or where necessary in aid of its
jurisdiction, or to protect or effectuate its judgments.” 28 U.S.C. § 2283. “Any doubts about the
Act’s three specifically defined exceptions ought to be resolved in favor of permitting the state
courts to proceed.” Trustees of Carpenters’ Health & Welfare Trust Fund of St. Louis v. Darr,
694 F.3d 803, 805 (7th Cir. 2012) (internal citations and quotations omitted).
Defendant argues that the Motion to Enjoin should be denied because this Court does not
have authority to enjoin Defendant from asserting third-party claims in the state-court action
under the Anti-Injunction Act. Plaintiff argues that when the original third-party complaint was
dismissed without prejudice, that ended the state action between Plaintiff and Defendant and that
there was no proceeding in a state court. See United States v. California, 507 U.S. 746, 756
(1993) (“A dismissal without prejudice terminates the action and concludes the rights of the
parties in that particular action.”); Johnson v. Du Page Airport Auth., 644 N.E.2d 802, 808
(1994) (“The effect of a dismissal without prejudice is to render the proceedings a nullity and
leave the parties in the same position as if the case had never been filed.”). The motion for
injunctive relief was filed between the Third-Party Complaint being dismissed without prejudice
and the start of another action by filing the Amended Third-Party Complaint. 735 Ill. Comp.
Stat. 5/2-201 (actions in Illinois are “commenced by the filing of a complaint”). The
Anti-Injunction Act “does not apply to state actions commenced after a motion for injunctive
relief is filed in the federal court.” Barancik v. Inv’rs Funding Corp. of New York, 489 F.2d 933,
938 (7th Cir. 1973).
Even if an injunction is not prohibited by the Anti-Injunction Act, a district court must
respect the courts of a sovereign state and determine whether an injunction is an appropriate
exercise of authority. Zurich Am. Ins. Co. v. Superior Court for State of California, 326 F.3d
816, 824 (7th Cir. 2003). The principles of equity, comity, and federalism must be considered
when a federal court is asked to enjoin a state-court proceeding. Mitchum v. Foster, 407 U.S.
225, 243 (1972). Enjoining a state-court proceeding must also be supported by “traditional
equitable requirements such as irreparable harm for which there is no adequate remedy at law.”
Zurich, 326 F.3d at 825. In this case, Plaintiff has not demonstrated an irreparable harm for
which there is no adequate remedy at law. If Defendant’s third-party complaint is frivolous,
Plaintiff can move for monetary sanctions in state court pursuant to Illinois Supreme Court Rule
See Ill. Comp. Stat. S. Ct. Rule 137; Amadeo v. Gaynor, 701 N.E.2d 1139, 1144-46 (Ill. App. Ct.
1998) (upholding sanctions for filing frivolous third-party complaint).
Plaintiff also argues that the Federal Rules regarding compulsory counterclaims weigh on
the side of enjoining Defendant. Federal Rule of Civil Procedure 13(a) lays out the requirements
for compulsory counterclaims: “A pleading must state as a counterclaim any claim that ̶ at the
time of its service ̶ the pleader has against an opposing party if the claim: (A) arises out of the
transaction or occurrence that is the subject matter of the opposing party’s claim; and (B) does
not require adding another party over whom the court cannot acquire jurisdiction.”
Fed. R. Civ. P. 13(a)(1). A counterclaim is not compulsory if “when the action was commenced,
the claim was the subject of another pending action.” Fed. R. Civ. P. 13(a)(2)(A).
As previously discussed, the admiralty action was commenced before Plaintiff was
brought into the state-court action. Therefore, any counterclaims would not be the subject of
another pending action when the federal action commenced. Moreover, enjoining the state court
proceedings would not comport with traditional equitable requirements.
Plaintiff ‘s Motion to Enjoin Roy Strom from Asserting Compulsory Counterclaims in
Other Fora  is denied.
October 17, 2016
JOHN W. DARRAH
United States District Court Judge
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