Rocky Mountain Biologicals, Inc. v. Titus

Filing 19

ORDER STAYING CASE - granting in part motion 3 and reserving ruling on motion to dismiss 3 and motion for remand 6 . Status Report due by 2/1/2018. Signed by Judge Donald W. Molloy on 11/16/2017. (dle)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
MISSOULA DIVISION

ROCKY MOUNTAIN
BIOLOGICALS, INC., a Montana
Corporation,

CV 17–129–M–DWM

Plaintiff,

ORDER

vs.
JAMES D. TITUS,
Defendant.

In August 2017, Plaintiff Rocky Mountain Biologicals, Inc. (“Rocky
Mountain”) sued its former Director of Sales James Titus (“Titus”) in the Montana
Fourth Judicial District Court, Missoula County. (See Mont. Compl., Doc. 10.)
Rocky Mountain sought declaratory relief as to whether Titus was terminated for
“cause” or resigned with “good reason” under the terms of the parties’
Employment Agreement and whether he was entitled to severance pay or other
benefits under that Agreement. (Id.) On September 18, 2017, Titus timely
removed the action to this Court. (Doc. 1.) Now, Titus insists the matter should
be dismissed in light of an earlier-filed action in New Hampshire state court, (Doc.
3), and Rocky Mountain insists the matter should be heard in the Montana state
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court in which it was originally filed, (Doc. 6). Argument was heard on both
motions on November 16, 2017.
Once a court has satisfied itself, as here, that it has jurisdiction, see 28
U.S.C. § 1332, it “must also be satisfied that entertaining the action is
appropriate,”1 Gov’t Employees Ins. Co. v. Dizol, 133 F.3d 1220, 1222–23 (9th
Cir. 1998) (en banc). The Supreme Court’s list of non-exclusive Brillhart2 factors
“remain the philosophic touchstone” guiding such a determination. Id. at 1225.
The factors are: “(1) the district court should avoid needless determination of state
law issues; (2) it should discourage litigants from filing declaratory actions as a
means of forum shopping; and (3) it should avoid duplicative litigation.” Id.
(citation omitted). Essentially, courts “must balance concerns of judicial
administration, comity, and fairness to the litigants.” Chamberlain v. Allstate, Ins.
Co., 931 F.2d 1361, 1367 (9th Cir. 1991). “If there are parallel state proceedings
involving the same issues and parties pending at the time the federal declaratory
action is filed, there is a presumption that the entire suit should be heard in state

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While a court is not required to consider whether abstention is appropriate
sua sponte, both parties have raised the issue here, making its consideration
mandatory. Dizol, 133 F.3d at 1225.
2

Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491 (1942); see also Wilton
v. Seven Falls Co., 515 U.S. 277 (1995).
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court.” Dizol, 133 F.3d at 1225. “The pendency of a state court action does not,
of itself, require a district court to refuse federal declaratory relief. Nonetheless,
federal courts should generally decline to entertain reactive declaratory actions.”
Id. (citation omitted).
Both parties agree that this action was properly removed, 28 U.S.C. § 1441,
and that this Court has diversity jurisdiction, 28 U.S.C. § 1332. But, they ask the
Court to decline to entertain the action, either in favor of a remand to the Montana
court (Rocky Mountain) or dismissal in light of the earlier-filed New Hampshire
state action (Titus). In the New Hampshire state action, Rocky Mountain has
moved to dismiss for lack of personal jurisdiction. At oral argument, counsel
indicated that matter is set for hearing before the New Hampshire court on
December 1, 2017. Because the propriety of abstention and the application of the
Brillhart factors heavily depends on whether the state action in New Hampshire
will proceed to the merits, a temporary stay of this matter is appropriate.
Accordingly, IT IS ORDERED that Titus’ motion (Doc. 3) is GRANTED in
PART. This matter is stayed pending the New Hampshire court’s personal
jurisdiction determination. In the interim, the Court RESERVES ruling on the
Titus’ request for dismissal (Doc. 3) and Rocky Mountain’s request for remand
(Doc. 6).
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IT IS FURTHER ORDERED that the parties shall provide written
notification to this Court within ten (10) days of the New Hampshire court’s
decision, attaching a copy of that decision. If no such decision is reached by
February 1, 2018, the parties shall file a status report indicating any further
developments in the New Hampshire case and the Court will reconsider the
propriety of its stay at that time. See Fed. R. Civ. P. 1 (requiring courts administer
proceedings as to “secure the just, speedy, and inexpensive determination of every
action and proceeding” (emphasis added)).
Dated this 16th day of November, 2017.

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