NDGS, LLC v. Radium2 Capital, Inc.

Filing 24

ORDER granting Defendant's 10 Motion to Dismiss, or in the alternative, Transfer Venue or Stay. The case is STAYED pending resolution of parallel New York state proceeding. (Written Opinion) Signed by Judge Susan Richard Nelson on 10/9/2019. (JTJ)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

Case No. 19-CV-1554 (SRN/BRT)
NDGS, LLC
Plaintiff,
MEMORANDUM OPINION
AND ORDER

v.
Radium2 Capital, Inc.,
Defendant.

James W. Moen and Joseph A. Wentzell, Wentzell Law Office, PLLC, 2812 Anthony Lane
South, Suite 200, Saint Anthony, MN 55418, for Plaintiff.
Bethany J. Rubis, Ask LLP, 2600 Eagan Woods Drive, Eagan, MN 55121; and Shanna M.
Kaminski, Varnum LLP, 160 W. Fort Street, Suite 5th Floor, Detroit, MI 48226, for
Defendant.

SUSAN RICHARD NELSON, United States District Judge
Before the Court is Defendant Radium 2 Capital, Inc.’s (“Radium2”) Motion to
Dismiss, or in the alternative, Transfer Venue or Stay Case [Doc. No. 10] seeking either
dismissal, transfer, or a stay based on, among other theories, the first-filed rule. For the
reasons set forth below, the Court grants Radium2’s Motion and orders that the case be stayed
pending resolution of the parallel New York proceedings.
I.

BACKGROUND
At the motion-to-dismiss stage, the Court construes the facts in favor of, and in the

light most favorable to, the nonmoving party (here NDGS, LLC, or “NDGS”). See
1

Awnings v. Fullerton, 912 F.3d 1089, 1101 (8th Cir. 2019) (presuming the truth of the
nonmoving party’s factual allegations in a motion to dismiss).
A.

The Parties and Related Entities

Plaintiff NDGS is a limited liability company organized under the laws of North
Dakota. (See Am. Compl. [Doc. No. 9] at 1.) NDGS operates a small chain of grocery
stores known as “Jack & Jill” in North Dakota. (Id. at 2.) NDGS is owned by Duane
Johnson (“Johnson”), who owns and operates numerous small businesses in Minnesota and
North Dakota. (Id.)
Defendant Radium2 is a New York corporation with its principal place of business
in New York. (Radium2 Mem. in Supp. of Mot. (“Radium2 Mem.”) [Doc. No. 12] at 1.)
It provides working capital to businesses and bills itself as a “merchant cash advance
company.” (Id. at 1–2; Radium2 Ex. 6 – New York Supreme Court Notice of Petition (Index
No. 801410/2019) (henceforth “NY Special Proceeding Petition”) [Doc. No. 13-5] at 10.)
B.

Factual Background

Beginning in 2018, Dan and Jenna Ross expressed interest in purchasing NDGS and
its assets (namely, the Jack & Jill grocery stores). (Am. Compl. [Doc. No. 9] at 2.)
Accordingly, Johnson and the Rosses entered into negotiations, during which the Rosses were
provided with access to NDGS’s financial and business records in order to conduct due
diligence about a possible sale. (Id.) Following negotiations, however, the Rosses decided
not to purchase NDGS or its assets. (Id.)
NDGS contends that after negotiations concluded, the Rosses used the NDGS business
and financial documents obtained during negotiations to secure a $250,000 payment from
2

Radium2 in exchange for Radium2’s right to $355,000 of NDGS’s future receivables. (Id. at
3.) NDGS asserts that Jenna Ross masqueraded as the owner and manager of NDGS, and
altered and falsified NDGS documents in order to strengthen her misrepresentations and
obtain this purchase money. (Id.) Radium2 generally agrees that the Rosses appeared to have
misrepresented their authority or position with NDGS, but takes the position that Johnson was
working in tandem with the Rosses to perpetrate fraud on Radium2. (See Radium2 Mem.
[Doc. No. 12] at 1–2, 5; Radium2 Ex. 1 [Doc. No. 13] (purportedly false articles of
organization).) Jenna Ross also executed an Affidavit of Confession of Judgment in favor of
Radium2 in which she confessed judgment, individually and personally as well as jointly and
severally, against herself and NDGS in the event of a default under the agreement between
Ross, NDGS, and Radium2. (See Radium2 Ex. 3 [Doc. No. 13-2].) After purportedly
engaging in due diligence, Radium2 approved Ross’s application for payment. (Radium2
Mem. [Doc. No. 12] at 2.)
On or about September 10, 2018, Radium2 entered into an “Agreement for the
Purchase and Sale of Future Receipts” (henceforth, the “Future Receipts Agreement”) with
Ross and, allegedly, NDGS. (See Am. Compl. [Doc. No. 9] at 3 (noting the agreement’s
existence but asserting NDGS is not bound by it); Radium2 Mem. [Doc. No. 12] at 2–3, 5
(contending the agreement binds NDGS).) Per that agreement, on September 12, 2018,
Radium2 wired $242,475 to a bank account in NDGS’s name. (See Radium2. Ex. 4 [Doc.
No. 13-3]; see also NDGS Mem. in Opp’n to Mot. (“NDGS Mem.”) [Doc. No. 17] at 4–5
(noting the funds were wired to an NDGS bank account).) NDGS contends that the Rosses
convinced Johnson that the reason the Rosses were using NDGS’s bank account was to permit
3

them to repay money that the Rosses owed to Johnson stemming from a prior loan between a
different Johnson-owned company and a Ross-owned company. (NDGS Mem. [Doc. No.
17] at 4-5.) Per the Future Receipts Agreement, Radium2 was being repaid through daily
withdrawals from the NDGS bank account in the amount of $2,113.10. (Radium2 Ex. 2 [Doc.
No. 13-1] at 2.) On about October 25, 2018, however, Dan Ross purportedly terminated the
payments to Radium2.1 (NDGS Mem. [Doc. No. 17] at 5.)
C.

Procedural Posture

After Radium2 stopped receiving repayments, it filed the Confession of Judgment
executed by Jenna Ross in New York state court. (Id. at 6.) On November 9, 2018, based on
the confession and other evidence, Radium2 obtained a judgment in its favor against NDGS
and Jenna Ross in the amount of $363,868.99 (See Radium2 Ex. 5 - New York Supreme
Court Judgment (Index No. 18-817680) (henceforth “NY Judgment”) [Doc. No. 13-4] at 2.)
On January 29, 2019, Radium2 commenced a special proceeding against NDGS, Jenna Ross,
several other NDGS-named entities, Johnson, and Daniel Wessman in New York state court
in order to execute and recover under its November 2018 judgment. (See Radium2 Ex. 6 NY
Special Proceeding Petition [Doc. No. 13-5].) On March 5, 2019, NDGS removed the special
proceeding to the United States District Court for the Western District of New York. (See
Radium2 Ex. 8 – Notice of Removal (henceforth “Removal Notice”) [Doc No. 13-7] at 26.)
On June 13, 2019, following removal of the New York special proceeding, NDGS filed the
present case before this Court. (See Am. Compl. [Doc. No. 9].)

1

The record does not establish when, how, or why Dan Ross acquired and maintained
authority over NDGS bank accounts for the purposes of managing withdrawals.
4

On May 20, 2019, in the District Court for the Western District of New York, Radium2
sought remand back to the New York state courts. (See Radium2 Ex. 8 [Doc. No. 13-7] at
17.) After briefing on this motion in this case was completed, but before oral argument, the
District Court for the Western District of New York granted Radium2’s motion to remand
based on the ancillary doctrine and remanded the case back to New York state court. (See
Radium2 Suppl. Ex. 1 – Remand Order, No. 19-cv-286 (W.D.N.Y. Aug. 15, 2019) [Doc. No.
21-1].)
On July 15, 2019, in the present case and before this Court, Radium2 filed this motion
to dismiss or in the alternative to transfer or stay. (See Motion to Dismiss or in the alternative,
Transfer or Stay [Doc. No. 10].) Radium2 rests its motion on several grounds: (1) the firstfiled rule; (2) a forum selection clause in the Future Receipts Agreement; and (3) the ability
of this Court to transfer this action to a New York court. (Radium2 Mem. [Doc. No. 12].)
NDGS opposes the motion, and argues that (1) the first-filed rule does not apply; (2) this case
cannot be dismissed under Fed. R. Civ. P. 12(b)(3); (3) the forum selection clause in the
Future Receipts Agreement is inapplicable to NDGS; and (4) this forum is the most
convenient place for this action. (NDGS Mem. [Doc. No. 17].) The Court heard argument
on the motion on September 20, 2019. (See Minutes [Doc. No. 23].)
II.

DISCUSSION
For the reasons discussed below, the Court grants Radium2’s motion based on the

state-federal parallel proceeding abstention doctrine set forth in Colorado River Water
Conservation District v. United States, 424 U.S. 800, 818 (1976).

5

A.

Inapplicability of the First-Filed Rule

Radium2 asserts that the first-filed rule applies to this case. However, due to the recent
remand by the District Court for the Western District of New York of Radium2’s special
proceeding back to New York state court, this Court holds that the first-filed rule is
inapplicable, and instead, the Colorado River abstention doctrine applies.
The first-filed rule allows a court to dismiss a case that is duplicative of a parallel
proceeding already brought in another forum. U.S. Fire Ins. Co. v. Goodyear Tire & Rubber
Co., 920 F.2d 487, 488 (8th Cir. 1990) (citing Orthmann v. Apple River Campground Inc.,
765 F.2d 119, 121 (8th Cir. 1985)). The contours of the “well-established rule” compel that
“in cases of concurrent jurisdiction, ‘the first court in which jurisdiction attaches has priority
to consider the case.’ ” Id. (quoting Orthmann, 765 F.2d at 121). In situations where
duplicative proceedings have been instituted, “absent compelling circumstances . . . the firstfiled rule should apply.” Id. at 488–89 (citations omitted) (internal quotation marks omitted).
Still, the rule is “not intended to be rigid, mechanical, or inflexible,” but rather must be
“applied in a manner best serving the interests of justice.” Id. at 488 (citation omitted)
(internal quotation marks omitted).
The “compelling circumstances” that may justify a deviation from the normal
application of the first-filed rule take the form of a two-step decision process. First, courts
look for two “red flags” that may constitute compelling circumstances: (1) the party filing
first had notice that the other party planned to file suit imminently; or (2) the party filing first
seeks a declaratory judgment, since that remedy “may be more indicative of a preemptive
strike than a suit for damages or equitable relief.” Nw. Airlines, Inc. v. Am. Airlines, Inc., 989
6

F.2d 1002, 1007 (8th Cir. 1993). Second, assuming those “red flags” are not present, the
court reviews the fact pattern in the case in its entirety to identify other possible compelling
circumstances indicating bad faith or a race to the courthouse. See id. Boatmen’s First Nat’l
Bank v. Kansas Pub. Employees Retirement Sys., 57 F.3d 638, 641 (8th Cir. 1995) (citation
omitted) (internal quotation marks omitted).
The application of the first-filed rule to federal-state concurrent cases is an issue that
has divided federal courts. See Cent. States Indus. Supply, Inc. v. McCullough, 218 F. Supp.
2d 1073, 1092 (N.D. Iowa 2002) (noting “the split among the federal courts regarding the
applicability of the first-filed rule to concurrent litigation filed in a state court and a federal
court” and collecting cases); see also Pragmatic Software Corp. v. Antrim Design Sys.’s Inc.,
No. 02-cv-2595 (JRT/FL), 2003 WL 244804, at *3 (D. Minn. Jan. 28, 2003) (noting that there
is contrary authority among district courts in the Eighth Circuit as to whether the first-to-file
rule applies when the parallel actions are in federal and state court, as opposed to two federal
court actions). Still, a “recent ‘examination of legal precedent among the federal courts
reveals overwhelming support for the application of the first-filed rule to concurrent actions
only as between federal courts.’ ” Pragmatic Software Corp., 2003 WL 244804 at *4
(emphasis added) (quoting Cent. States Indus. Supply, 218 F. Supp. 2d at 1087) (collecting
cases)). Indeed, although it has not explicitly resolved the question, the Eighth Circuit has
signaled that it considers the first-filed rule to be applicable only where the two proceedings
at issue are brought in two different federal courts, not a federal court and a state court. In
Smart v. Sunshine Potato Flakes, L.L.C., the Eighth Circuit noted that the “first filed” doctrine
is “not a rule” but rather a “factor” and “is often dominant in determining which federal court
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should proceed when the parties . . . have filed [cases] in different district courts.” 307 F.3d
684, 687 (8th Cir. 2002) “However, when the issue is whether a federal court should defer
to a pending suit in state court, as in this case, the order in which jurisdiction was obtained,
while still a relevant factor in applying the abstention doctrine, is far less apt to be
determinative because of the federal court’s ‘virtually unflagging obligation’ to exercise its
jurisdiction.” Id. (emphasis added) (quoting Colorado River, 424 U.S. at 817–18). Where
the parallel proceedings at issue are federal-state, as opposed to federal-federal, the court
should apply “the more stringent Colorado River abstention” in order to ensure it is
“adequately recogniz[ing] federal courts’ virtually unflagging obligation to exercise their
jurisdiction.” Pragmatic Software Corp., 2003 WL 244804 at *4 (citation omitted) (internal
quotation marks omitted). Indeed, the Eighth Circuit has also noted that “a necessary premise
of Colorado River abstention” is a “pending parallel state and federal court proceeding . . . .”
United States v. Rice, 605 F.3d 473, 476 (8th Cir. 2010) (citation omitted) (internal quotation
marks omitted).
The present action is in federal court. The parallel proceeding instituted by Radium2
based on its New York judgment is now in New York state court, having just been remanded
back by the United States District Court for the Western District of New York. (See Radium2
Suppl. Ex. 1 – Remand Order, No. 19-cv-286 (W.D.N.Y. Aug. 15, 2019) [Doc. No. 21-1].)
Accordingly, the two parallel actions are in federal court and state court, and the Colorado
River abstention doctrine—not the first-filed rule—applies.
Radium2’s motion under that doctrine.

8

The Court will analyze

B.

Application of Colorado River Abstention Doctrine

The Colorado River abstention doctrine “permits federal courts to decline to exercise
jurisdiction over cases where ‘parallel’ state court litigation is pending, meaning that there is
a ‘substantial likelihood that the state proceeding will fully dispose of the claims presented in
the federal court.’ ” Spectra Comm’n Grp, L.L.C. v. City of Cameron, 806 F.3d 1113, 1121
(8th Cir. 2015) (quoting Cottrell v. Duke, 737 F.3d 1238, 1245 (8th Cir. 2013)); see also Rice,
605 F.3d at 476 (noting the Eighth Circuit’s heightened requirement that suits are parallel
only where “there is a substantial likelihood that the state proceeding will fully dispose of the
claims presented in the federal court” (citation omitted) (internal quotation marks omitted)).
The rule stems from an understanding that courts should engage in “ ‘wise judicial
administration, giving regard to conservation of judicial resources and comprehensive
disposition of litigation.’ ” Id. (quoting Colorado River, 424 U.S. at 817). Still, Colorado
River abstention is only appropriate “where the surrender of federal jurisdiction is supported
by ‘the clearest of justifications.’ ” Id. (quoting Moses H. Cone Mem’l Hosp. v. Mercury
Constr. Corp., 460 U.S. 1, 25–26 (1983)).
Courts examine six factors to determine whether there are “exceptional
circumstances” justifying 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.
9

Id. (quoting Federated Rural Elec. Ins. Corp. v. Ark. Elec. Coops, Inc., 48 F.3d 294, 297 (8th
Cir. 1995)). The factors are not a “mechanical checklist,” and must be applied “ ‘in a
pragmatic, flexible manner with a view to the realities of the case at hand.’ ” Id. (quoting
Moses H. Cone, 460 U.S. at 16, 21).
Here, the Court finds that the New York state proceeding is a parallel proceeding that
implicates the Colorado River abstention factors. NDGS is the plaintiff in this case and one
of several respondents in the New York action, whereas Radium2 is the petitioner in the New
York case and the defendant in this case. (Compare Am. Compl. [Doc. No. 9], with Radium2
Ex. 6 NY Special Proceeding Petition [Doc. No. 13-5].) Moreover, the New York proceeding
and this case both stem from the exact same underlying facts. From Radium2’s perspective,
NDGS utilized the Rosses to obtain funds from Radium2 and is now attempting to shield
itself from liability by pointing to fraud on the part of the Rosses and avoid paying Radium2.
(See Radium2 Mem. [Doc. No. 12] at 5.) From NDGS’s perspective, the same facts show
that the Rosses used documents obtained in a contemplated sale of NDGS’s business to
fraudulently hold themselves out as owners of the company and induce Radium2 to “loan”
funds with NDGS’s future receipt as collateral. (See NDGS Mem. [Doc. No. 17] at 4–5.)
While the parties in each action are not identical, the facts underlying the claims in each case
are the same. Indeed, NDGS’s claims in this action—for declaratory judgment and injunctive
relief—request that the purchase agreement and New York judgment under which Radium2
pursues relief in the New York proceeding be declared void and unenforceable, and that
Radium2 be barred from pursuing recovery against NDGS. (Am. Compl. [Doc. No. 9] at 5–
10

6.) Put succinctly, both this forum and the New York forum are addressing the same
underlying issue: the enforceability of an agreement purportedly between Radium2 and
NDGS (as well as several individuals). Cf. Fru-Const. Corp. v. Controlled Air, Inc., 574 F.3d
527, 541 (8th Cir. 2009) (“To constitute ‘parallel proceedings,’ state and federal actions need
not be mirror images.”).
Because the two proceedings are parallel, the Court now turns to the Colorado River
abstention factors—considering each in a pragmatic, flexible manner—to determine whether
abstention is appropriate in this case.
The first factor—the presence of a res2 over which one court has established
jurisdiction—is inapplicable here. There is no res over which to exercise jurisdiction, at least
not at this point in either this case or the New York state court proceeding. As to the second
factor—the inconvenience of the federal forum—the Court also finds it to be largely
inapplicable. There is no appreciable difference in convenience between New York state
court and this Court. Indeed, in support of the New York forum, Radium2 asserts that “all of
[its] witnesses and employees are located in New York.” (Radium2 Mem. [Doc. No. 12] at
11.) In response, NDGS asserts that “[t]he main witnesses, Johnson and the Ross[’s], reside
in Minnesota,” that “Ms. Ross executed the unauthorized documents submitted to Radium2
in Minnesota in the presence of a Minnesota notary public,” and that the false documents
submitted to Johnson to convince him that NDGS was not borrowing from Radium2 were
created in Minnesota. (NDGS Mem. [Doc. No. 17] at 10.) Ultimately, the case involves a

2

A “res” is an “object, interest, or status, as opposed to a person.” See Res, Black’s
Law Dictionary (11th ed. 2019).
11

North Dakota business, owned by a Minnesota resident, being sued by a New York company,
with witnesses and documents purportedly in both locations. Such geographic variety
demonstrates that this forum is no more or less convenient than the New York state forum.
The third factor—whether maintaining separate actions may result in piecemeal
litigation—is the “predominant factor” and “is a significant concern here.” Spectra
Comm’ns Grp., LLC, 806 F.3d at 1121 (citations omitted) (internal quotation marks
omitted). This case and the New York state case involve the same issues and underlying
facts, and merely constitute different avenues through which the same issues will be
litigated.

Here, plaintiff NDGS seeks to affirmatively invalidate—via declaratory

judgment and injunctive relief—the purchase agreement purportedly between itself and
Radium2. (See Am. Compl. [Doc. No. 9].) In New York, as a defendant, NDGS seeks to
attack the validity and effect of the same purchase agreement—and judgment entered
against it based on that purchase agreement—by asserting fraud as a defense. (See Answer
& Countercl. in U.S. Dist. Ct. for W. Dist. of N.Y. [Doc. No. 13-6] at 5–13.) 3 In this
situation, this court “and [the] state court[] could reach conflicting opinions on the same
issues,” which could, in turn, “ ‘cause unwarranted friction between state and federal
courts, a result which is obviously undesirable and avoidable in this instance.’ ” Spectra
Comm’ns Grp., LLC, 806 F.3d at 1121 (quoting Emp’rs Ins. of Wausau v. Missouri Elec.
Works, Inc., 23 F.3d 1372, 1375 (8th Cir. 1994), abrogated on other grounds by Wilton v.

3

It appears these defenses are available to NDGS even in the state court proceeding.
See N.Y. C.P.L.R. 5015(a) (McKinney 2019) (permitting New York courts to relieve a
party from judgment for various reasons).
12

Seven Falls Co., 515 U.S. 277 (1995)). Moreover, the parties do not assert—and this Court
does not independently identify—any aspect of the claims or issues involved in this case
that require, as a matter of law, piecemeal litigation. Similarly, there are no uniquely
federal issues (to the extent they exist at all) that could be easily severed. Accordingly, the
third factor strongly favors abstention.
The fourth factor—which case has priority based on the “relative progress made in
the cases”—also favors abstention. In addition to the fact that the New York proceedings
were filed first and the New York court was the first to obtain jurisdiction, the New York
courts have already entered judgment on the underlying facts of this case and are currently
considering a special petition proceeding related to enforcement of that judgment. (See
NY Judgment [Doc. No. 13-4] at 2; see also Radium2 Ex. 6 NY Special Proceeding Petition
[Doc. No. 13-5].) In contrast, the present case has not proceeded beyond this motion, no
discovery has occurred, and the case is nowhere near judgment or any decision based on the
merits. Consequently, because the state proceeding is more advanced, the fourth factor favors
abstention. See Spectra Comm’ns Grp., LLC, 806 F.3d at 1122 (discussing the fourth factor
in a largely similar manner).
The fifth factor—whether state or federal law controls—similarly favors abstention.
There are no federal law claims in this action, the New York judgment, or the New York
special proceeding. Indeed, jurisdiction in this case (per NDGS’s complaint) is founded on
diversity jurisdiction. (See Am. Compl. [Doc. No. 9] at 2.) It appears that this case will be
decided on state law, although it is yet undecided which state’s law will apply.

13

Finally, the sixth factor—the adequacy of the state forum to protect the federal
plaintiff’s rights—favors abstention. Nothing in the record indicates that NDGS would not
receive a fair shake in state court, “and there is no presumption that a state court is biased or
otherwise inadequate to protect” NDGS’s rights. See U.S. Fid. & Guar. Co v. Murphy Oil
USA, Inc., 21 F.3d 259, 263 (8th Cir. 1994). Moreover, to the extent NDGS is concerned
with the judgment entered against it by the New York courts, it appears that relief from that
judgment is potentially available. See N.Y. C.P.L.R. 5015(a) (McKinney 2019) (permitting
New York courts to relieve a party from judgment for various reasons). To that end, the
sixth factor favors abstention.
Ultimately, four of the six Colorado River abstention factors favor abstention; two
are largely inapplicable. Accordingly, the Court holds that abstention is warranted. The
next step is to determine the appropriate course of action: dismissal or a stay.4
The Eighth Circuit has noted that “ ‘where the basis for declining to proceed is the
pendency of a state proceeding, a stay will often be the preferable course, because it assures
that the federal action can proceed without risk of a time bar if the state case . . . fails to resolve
the matter in controversy.’ ” Royal Indem. Co. v. Apex Oil Co., 511 F.3d 788, 797 (8th Cir.
2008) (quoting Wilton v. Seven Falls Co., 515 U.S. 277, 288 n.2 (1995)); see also Selmon v.
Portsmouth Drive Condo. Ass’n, 89 F.3d 406, 409–10 (7th Cir. 1996) (noting that “a stay, not

4

Transfer is not an option because this court lacks authority to transfer an action to a
state court. See 28 U.S.C. § 1631 (2012) (permitting transfer to “any other such court . . . in
which the action or appeal could have been brought at the time it was filed or noticed”); 28
U.S.C. § 610 (2012) (“[T]he word ‘courts’ includes the courts of appeals and district courts
of the United States . . . .”); Mills v. State of Me., 118 F.3d 37, 51 (1st Cir. 1997) (noting
that section 610 includes only other federal courts, not state courts).
14

a dismissal, is the appropriate procedural mechanism for a district court to employ in deferring
to a parallel state court proceeding under the Colorado River doctrine”); U.S. Fid. & Guar.
Co., 21 F.3d at 263 (affirming stay of federal case under Colorado River abstention doctrine).
Indeed, the Supreme Court has noted that an order staying an action “does not constitute
abnegation of judicial duty. On the contrary, it is a wise and productive discharge of it. There
is only postponement of decision for its best fruition.” Louisiana Pwr. & Light Co. v. City of
Thibodaux, 360 U.S. 25, 29 (1959). Because the present action and the New York state action
are parallel proceedings, but are not identical in all respects, the Court finds that preservation
of the availability of the federal forum is important should the resolution of the New York
state case fail to dispose of all the issues presented by this case. Accordingly, the Court holds
that “postponement of [any] decision,” if such a decision should become necessary, “for its
best fruition” is the appropriate course of action and will stay this case pending resolution of
the parallel New York state court action.5
III.

CONCLUSION
In summary, the Court holds that the first-filed rule does not apply to this case.

Instead, the Colorado River abstention doctrine applies, and under that doctrine, this Court
holds that abstaining from consideration of this case is appropriate. However, because the
New York state court proceeding is not actually identical to this case, this Court orders that
this case be stayed pending resolution of the New York state court parallel proceeding in

5

The Court need not and does not reach Radium2’s arguments regarding forum non
conveniens or the purportedly applicable forum selection clause.
15

order to ensure that the federal forum remains available to the parties if the state proceeding
does not fully and finally resolve the matter.
IT IS THEREFORE ORDERED THAT:
1. Defendant’s Motion to Dismiss [Doc. No. 10], or in the alternative Transfer
Venue or Stay Case, is GRANTED;
2. This action is hereby STAYED pending resolution of the parallel proceeding
New York state court.

Dated: October 9, 2019

s/Susan Richard Nelson
SUSAN RICHARD NELSON
United States District Judge

16