Guild Mortgage Company LLC v. Flowers et al

Filing 41

ORDER. The Court GRANTS Defendants' Motion to Stay. Dkt. # 16 . The Court stays the remaining motions (Dkts. # 8 , 22 ) pending resolution of the state court action in the California court. Signed by Judge Richard A. Jones. (KRA)

HONORABLE RICHARD A. JONES

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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GUILD MORTGAGE COMPANY
LLC,
Plaintiff,

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ORDER

v.
CHRISTOPHER FLOWERS,
CORY FLYNN, and LISA
JOLLIFFE
Defendants.

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I.

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CASE NO. 3:23-cv-01955-RAJ

INTRODUCTION

THIS MATTER is before the Court on a Motion to Confirm Arbitration Award

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filed by Plaintiff Guild Mortgage Company (“Plaintiff” or “Guild”).

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Defendants Christopher Flowers, Cory Flynn, and Lisa Jolliffe (“Defendants”) are former

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employees of Guild. Defendants filed a Cross-Motion to Vacate Arbitration Award (Dkt.

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#8) and Motion to Stay (Dkt. # 16). Guild requested oral argument, but the Court finds

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it unnecessary. The Court has considered the pending motions, supplemental briefing,

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the applicable law, and the balance of the record. For the reasons set forth below, the

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Court GRANTS the Motion to Stay and DENIES the remaining motions as moot.

ORDER - 1

Dkt. # 22.

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II.

BACKGROUND

This matter arises out circumstances in which Defendants left their positions at
Guild’s Kirkland, Washington branch to join a competitor company, CrossCountry
Mortgage, LLC (“CCM”). As discussed below, the parties arbitrated the matter; now
they dispute the arbitrator’s findings and the appropriate court to confirm or vacate the
arbitration award.
After Defendants left Plaintiff’s employ, Guild filed a Demand for Arbitration and
Statement of Claim against Defendants with JAMS, an alternative dispute resolution
organization. Guild Mortgage Company, LLC v. Christopher “Jordan” Flowers, et al.,
JAMS Ref. No. 10038185 (“Guild Arbitration”). There, Guild asserted claims for Breach
of Contract, Breach of Fiduciary Duties, Violation of California Penal Code Section 502
(“Section 502”), Conversion, Fraud, Unfair Competition, Tortious Interference with
Contract, Tortious Interference with Prospective Economic Advantage, and Unjust
Enrichment. See Dkt. # 1-2 at 1-2. The parties engaged in a nearly two-year arbitration
process which included fact and expert discovery, pre-hearing briefing, and a six-day
evidentiary hearing held in Seattle, Washington. See id. at 2-4.
Guild also filed a lawsuit against CCM for the role it played in the recruitment of
the employees and use of Guild’s information. Guild Mtg. Co. v. CrossCountry Mtg.,
No. 37-2022-00051488-CU-BT-CTL (San Diego Sup. Ct.) (“CCM litigation”). In the
CCM litigation, Guild asserted claims for Unfair Competition, Intentional Interference
with Prospective Economic Advantage, Negligent Interference with Prospective
Economic Advantage, Tortious Interference with Contract, and Violation of Section 502.
See Dkt. # 17, Ex. 2. On February 21, 2024, the San Diego Superior Court dismissed
Guild’s complaint against CCM as preempted by the California Uniform Trade Secrets
Act (“CUTSA”). See id. at Ex. 4. On April 10, 2024, Guild filed a writ in the California

ORDER - 2

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Court of Appeals, challenging the dismissal and asking the court whether CUTSA
“supersedes and thus bars civil actions under California Penal Code [S]ection 502 based
on the unauthorized taking, copying, or using data from a computer system.” Dkt. # 40,
Ex. 1. On May 5, 2024, the California Court of Appeal summarily denied the petition.
See id. at Ex. 4. On August 8, 2024, the San Diego Superior Court issued a tentative
ruling dismissing the matter as to all parties with prejudice. See id. at Ex. 5.
The Guild Arbitration was still pending when the San Diego Superior Court first
dismissed Guild’s complaint against CCM as preempted by CUTSA. Given the court’s
ruling in the CCM litigation, the arbitrator considered the state court’s preemption ruling.
See Dkt. # 1-2 at 4. In the final award issued on September 13, 2023, the arbitrator found
that the state court’s ruling did not have preclusive effect and CUTSA did not preempt
Guild’s claims against the former employees under Section 502. See id. at 23, 29-34, 36.
On December 19, 2023, Plaintiff Guild filed the Petition to Confirm Arbitration
Award in the Western District of Washington. Dkt. # 1. Two days later, on December
21, 2023, Defendants filed the Cross-Petition to Vacate Arbitration Award. Dkt. # 8. In
the petition, Defendants argue the Court should vacate the award because the arbitrator
misapplied CUTSA when ruling in favor of Plaintiff. See generally id. On the same day,
Defendants also filed a Petition to Vacate Arbitration Award in San Diego Superior Court
in California (“California court”). Flowers v. Guild Mtg. Co. LLC, No. 37-2023-00055348CU-PA-CTL (San Diego Sup. Ct.); see Dkt. # 17, Widman Dec. ¶ 5. On January 2, 2024,
Plaintiff Guild moved to dismiss Defendants’ petition in the California court. See id.
The matter is still pending, with a hearing scheduled for December 20, 2024. 1

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This information is not in the record. The Court includes this information from the joint correspondence of the
parties sent on May 17, 2024 and June 27, 2024.

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ORDER - 3

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On February 22, 2024, in light of the concurrent proceedings in federal and state
court, Defendants filed a Motion to Stay in the instant matter. Dkt. # 16. Defendants ask
this Court to stay the federal proceedings pursuant to the Colorado River doctrine. The
parties briefed and submitted supplemental briefing on this issue. In this Order, the Court
addresses whether a stay under Colorado River is appropriate under the circumstances
presented here.
III.

LEGAL STANDARD

The Colorado River doctrine is “a form of deference to state court jurisdiction.”
Coopers & Lybrand v. Sun-Diamond Growers of CA, 912 F.2d 1135, 1137 (9th Cir.
1990); see Colorado River Water Conservation Dist. v. United States, 424 U.S. 800
(1976). “Colorado River is not an abstention doctrine, though it shares the qualities of
one.” United States v. State Water Res. Control Bd., 988 F.3d 1194, 1202 (9th Cir. 2021)
(citation omitted). “Pursuant to Colorado River, in rare cases, there are principles
unrelated to considerations of proper constitutional adjudication and regard for federalstate relations which govern in situations involving the contemporaneous exercise of
concurrent jurisdictions . . . .” Id. (internal quotation marks omitted) (quoting Colo.
River, 424 U.S. at 17).
In some cases, under Colorado River, the consideration of “wise judicial
administration, giving regard to conservation of judicial resources and comprehensive
disposition of litigation,” supports a federal court’s decision to grant a stay pending the
resolution of concurrent litigation in a different jurisdiction. Colo River, 424 U.S. at 817
(quotation omitted). As federal courts have a virtually unflagging obligation to exercise
the jurisdiction give to them, “[o]nly the clearest of justifications will warrant” a stay.
State Water Res. Control Bd., 988 F.3d at 1202 (internal quotation marks omitted)
(quoting Colo. River, 424 U.S. at 819).

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The Ninth Circuit has listed eight factors courts may consider in determining
whether a stay under Colorado River is appropriate:
(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.

State Water Res. Control Bd., 988 F.3d at 1203 (quoting R.R. St. & Co. Inc. v. Transp.
Ins. Co., 656 F.3d 966, 978-79 (9th Cir. 2011)). “These factors are not a ‘mechanical
checklist.’” Id. (quoting Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460
U.S. 1, 16). Rather, “[t]he weight to be given to any one factor may vary greatly from
case to case, depending on the particular setting of the case.” Id. (internal quotation
marks omitted) (quoting Moses H. Cone, 460 U.S. at 16). “Some factors may not apply
in some cases, and, in some cases, a single factor may decide whether a stay is
permissible.” Id. (internal citations omitted).
IV.

DISCUSSION

A. Resolve All Issues
Guild asks the Court to deny Defendants’ Motion to Stay, arguing the California
court cannot resolve all issues in this case because Plaintiff would be forced to return to
Washington to enforce the judgment. Dkt. # 19 at 7-8. Defendants contend that all the
issues can be resolved by the California court and the possibility of enforcement is
irrelevant to the analysis under Colorado River. See Dkt. #16 at 10; Dkt. # 21 at 1-3.
If there is substantial doubt as to whether the foreign proceeding will resolve the
entire federal action, there is no need to even undertake this multifactor analysis. See

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ORDER - 5

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Intel Corp. v. Advanced Micro Devices, Inc., 12 F.3d 908, 913 n.7 (9th Cir. 1993). The
Supreme Court has stated:
When a district court decides to dismiss or stay under Colorado River, it presumably
concludes that the parallel state-court litigation will be an adequate vehicle for the complete
and prompt resolution of the issues between the parties. If there is any substantial doubt as
to this, it would be a serious abuse of discretion to grant the stay or dismissal at all.

Moses H. Cone, 460 U.S. at 28; see also Gulfstream Aerospace Corp. v. Mayacamas
Corp., 485 U.S. 271, 277 (1988) (declaring that a district court may enter a Colorado
River stay only if it has “full confidence” that the parallel proceedings will end the
litigation).

Thus, “the existence of a substantial doubt as to whether the [other]

proceedings will resolve the federal action precludes the granting of a stay.” Intel, 12
F.3d at 913.
First, the Court must address whether the parallel state-court litigation is
substantially similar that it could resolve all of the issues before this Court. The matters
before this Court and the California court involve the same parties and issues. Defendants
are correct that the substantive issues of whether to confirm or vacate the arbitration
award is an identical issue before this Court and the California court. See Dkt. # 16 at
10. Here, the actions meet the “substantially similar” threshold because a judgment in
the state-court action would dispose of all the federal-court claims.
Next, the Court addresses Plaintiff’s argument that potential enforcement of a
California judgment in Washington, raises substantial doubt that the state court will be
able to resolve the substantive issues completely and promptly between the parties.
Plaintiff cites to Intel Corp. v. Advanced Micro Devices, Inc., in support of this argument.
See Dkt. # 19 at 8. In that case, an action to confirm an arbitration award, the Ninth
Circuit reversed a district court’s stay under Colorado River. 12 F.3d at 913. The Ninth

ORDER - 6

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Circuit found a stay inappropriate because if the state court vacated the arbitration award,
then the case would have to return to federal court for further adjudication. See id. For
this reason, the Ninth Circuit concluded there was substantial doubt that the concurrent
state court proceedings would fully resolve the federal action, and thus, the Ninth Circuit
concluded a stay was not warranted. See id.
This case is distinguishable from Intel. There, the Ninth Circuit found substantial
doubt because the claims underlying the arbitration award were copyright claims. See
id. Thus, if the state court vacated the arbitration award, a federal court would have to
resolve the remaining issues because federal courts have exclusive jurisdiction over
copyright claims. Here, there is no exclusive federal jurisdiction issue as federal and
state courts have concurrent jurisdiction under the Federal Arbitration Act (“FAA”). See
Moses H. Cone, 460 U.S. at 25 (“[F]ederal courts’ jurisdiction to enforce the [FAA] is
concurrent with that of the state courts.”). Guild only asserted state law claims in this
matter. See Dkt. # 1-2. Therefore, the California court could confirm or vacate the
arbitration award, and all the claims and issues could be resolved in state court.
Furthermore, the Court is not persuaded that the matter of enforcement will
implicate a court’s ability to resolve all of the claims in this matter. 2 As stated earlier,
the matters before this Court and the California court involve the same parties and issues.
If the California court confirms the award, then a judgment entered in California is
subject to the full faith and credit of the courts in Washington. See Wash. Rev. Code §§
6.36.010(1), 6.36.025.

The cases Plaintiff cites in support of this argument are

distinguishable from the issue of potential enforcement. See Dkt. # 19 at 8.

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To think otherwise would force courts to decline exercising jurisdiction and grant a stay under Colorado River
whenever defendant resided in a different state because litigants can raise the issue of enforcement in any case.

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ORDER - 7

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The Court concludes that a decision from this Court or the California court would
resolve all the issues in this case. Therefore, this threshold factor has been satisfied and
the Court finds it to be a neutral in the Colorado River analysis.
B. Jurisdiction Over Property
Neither party asserts that there is jurisdiction over property in this case. See Dkt.
# 16 at 12; Dkt. # 19 at 9. Accordingly, the Court finds that this factor is not applicable.
C. Inconvenience of the Federal Forum
Defendants do not argue that the Western District of Washington is an
inconvenient forum. See Dkt. # 16 at 12. Plaintiff asserts that Washington is the most
convenient forum and should weigh in favor of denying the stay “because Defendants
reside in Washington and have repeatedly asserted that Washington is the most
convenient forum to them.” See Dkt. # 19 at 8.
Generally, if each court is equally convenient, courts find this factor neutral or
weighing against a stay. See Montanore Minerals Corp. v. Bakie, 867 F.3d 1160, 1167
(9th Cir. 2017) (finding this factor neutral where party disputing convenience
acknowledged neither forum had a significant advantage as to convenience). Here, the
parties do not meaningfully dispute the convenience or inconvenience of Washington
State as a forum for resolving this matter. Accordingly, the Court finds the inconvenience
of the federal forum is a neutral factor.
D. Piecemeal Litigation
Defendants argue a stay is appropriate because “both courts are being asked to
decide whether the arbitration award should be confirmed or vacated.” Dkt. # 16 at 12.
Plaintiff asserts this factor favors denying a stay, reiterating the argument that if the
California action proceeds to judgment, Guild will still have to domesticate and enforce
the judgment in Washington. See Dkt. # 19 at 9.

ORDER - 8

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In Colorado River, the “paramount” consideration was the danger of piecemeal
litigation. See Moses H. Cone, 460 U.S. at 19. “Piecemeal litigation occurs when
different tribunals consider the same issue, thereby duplicating efforts and possibly
reaching different results.” R.R. St. & Co. Inc., 656 F.3d at 979 (internal quotation marks
and citations omitted). Parallel petitions to vacate and confirm arbitration awards in
federal and state court can create piecemeal litigation because “two different courts
[decide] the same issues independently” which raises “a real possibility of inconsistent
judgments.” NitGen Co. v. SecuGen Corp., No. 04-cv-02912, 2004 WL 2303929, at *5
(N.D. Cal. Oct. 12, 2004); see, e.g., Scottsdale Ins. Co. v. Parmerlee, No. 19-mc-80298,
2020 WL 1332146, at *5 (N.D. Cal. Mar. 23, 2020) (finding parallel petitions to confirm
and vacate an arbitration award created “a significant risk of duplication of effort . . .
weigh[ing] heavily in favor of deferring to the state court”); Hinman v. Fujitsu Software
Corp., No. 05-cv-03509, 2006 WL 358073, at *3 (N.D. Cal. Feb. 13, 2006) (finding
desirability of avoiding piecemeal litigation weighed in favor of granting a stay where
the parallel litigation concerned whether the arbitration award should be confirmed or
vacated).
The risks of duplicative efforts and inconsistent judgments are present in this
matter. The parallel petitions to confirm and vacate the arbitration award pending in the
California court and this Court are very similar to the circumstances in NitGen,
Parmerlee, and Hinman. The Court acknowledges that the California court has not yet
ruled in the parallel Guild Arbitration matter but finds this does not alleviate the danger
of piecemeal litigation in this case.
The related CCM litigation pending in California heightens risks of duplicative
efforts and inconsistent judgments in this matter. The Court observes that the California
CCM litigation involves, as Plaintiff characterizes, “differently situated” parties than the

ORDER - 9

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parties in the instant matter. Dkt. 19 at 2. However, the Court would be remiss if it
ignored that, “CUTSA preemption of a Section 502 claim based on Defendants’ alleged
taking of confidential information[,]” the central dispute of this arbitration award, “has
also been litigated in the same state court in which the parallel petitions to vacate and
confirm have been filed, that issue has already been presented to the state appellate court
once, and it will soon be decided in the context of a forthcoming appeal.” Dkt. # 39 at
4-5. California courts have already dedicated considerable judicial resources to review
the same underlying set of facts under the same law and will continue to do so as the
CCM matter is appealed.
The parallel petitions regarding the arbitration award in this matter alone are
enough to create a danger of piecemeal litigation.

The judicial resources already

expended by California courts in adjudicating the CCM litigation magnifies this risk.
Accordingly, the Court finds that the desirability of avoiding piecemeal litigation weighs
heavily in favor of granting a stay in this matter.
E. Order in Which the Forums Obtained Jurisdiction
Defendant argues a stay is appropriate because the California case is more
advanced, despite it being the later-filed case. See Dkt. # 16 at 11. Plaintiff argues that
the Court should deny the motion to stay because this case was filed first, and the cases
are equally developed. See Dkt. # 19 at 8-9.
Under Colorado River, courts consider the order in which jurisdiction was
obtained. Priority “should not be measured exclusively by which complaint was filed
first, but rather in terms of how much progress has been made in the two actions.” Moses
H. Cone, 460 U.S. at 21; see Nakash v. Marciano, 882 F.2d 1411, 1415 (9th Cir. 1989)
(finding that this factor weighed in favor of granting a stay where the state suit was
initiated over three years earlier and had progressed “far beyond” the federal case).

ORDER - 10

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This Court obtained jurisdiction only slightly before the California court. After
the briefing concluded in this matter, the parties informed this Court that the state court
briefing was completed, and a hearing was set for June 7, 2024. 3 Later, the parties in this
case informed this Court that the California matter was reassigned and the hearing was
rescheduled for December 20, 2024. 4 As this Court obtained jurisdiction just slightly
before the state court and the proceedings are equally far along at this point, this factor is
neutral.
F. Federal Law or State Law

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Defendants assert the Court should grant a stay in this matter, arguing the
California court should vacate or confirm the award because Defendants’ challenge
pertains to preemption under a California statute. See Dkt. # 16 at 6-9. Specifically,
Defendants assert that California has a strong public policy interest in the enforceability
of restrictive covenants for employees. Dkt. # 16 at 8. Plaintiff argues that a stay is
inappropriate because this Court may confirm or vacate the arbitration award pursuant to
federal law, under the FAA. See Dkt. #19 at 9-11.
The presence of federal or state law issues is a major consideration under the
Colorado River doctrine. See Travelers, 914 F.2d at 1370. The presence of state law
issues weighs in favor of a staying federal proceedings “only in some rare
circumstances.” Id. (quote and citation omitted); accord Moses H. Cone, 460 U.S. at 26.
Rare circumstances are not present when the state law issues are “routine” matters that
the federal court is fully capable of deciding, such as misrepresentation, breach of
fiduciary duty, and breach of contract. See Travelers, 914 F.2d at 1370. When “state

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This information is not in the record. The Court includes this information from the joint correspondence of the
parties sent on April 11, 2024.
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This information is not in the record. The Court includes this information from the joint correspondence of the
parties sent on May 17, 2024 and June 27, 2024.
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and federal courts have concurrent jurisdiction over a claim, this factor becomes less
significant.” Nakash, 882 F.2d at 1416 (citation omitted).
Courts have indicated a stay is appropriate in matters where state law provides
“the most important rule of decision.” Jolly v. Intuit Inc., 485 F. Supp. 3d 1191, 1204
(N.D. Cal. 2020). Courts in the Ninth Circuit typically find this factor weighs in favor
of a stay where the parallel state court litigation involves legal issues arising under the
FAA. See, e.g., Jolly, 485 F. Supp. 3d at 1204 (weighing factor in favor of granting a
stay in a matter seeking to compel arbitration where the arbitration agreement was to be
interpreted pursuant to California law); Parmerlee, 2020 WL 1332146, at *5 (finding
factor weighed in favor of granting a stay where “the claims at issue in the arbitration
[were] state law claims for breach of insurance contract and bad faith”); Hinman, 2006
WL 358073, at *3 (finding state law predominated and favored granting a stay where the
petition to vacate an arbitration award primarily raised California law issues); NitGen
Co., 2004 WL 2303929, at *6 (granting a stay and finding state law predominated, despite
the petitioner’s First Amendment challenge to the arbitration award, where the parties
agreed to be bound by California law in the arbitration agreement); cf. Rd. Runner Sports,
Inc. v. McCoy, No. 20-cv-1539, 2021 WL 3439421, at *4 (S.D. Cal. June 2, 2021)
(finding federal law predominated and weighed against granting a stay where petition to
vacate argued the arbitration award violated United State Supreme Court authority).
Here, the legal issue arises under the FAA, which state and federal courts
concurrent jurisdiction. See Moses H. Cone, 460 U.S. at 25. Defendants’ challenge to
the arbitration award raises a preemption issue that is not “routine,” and instead concerns
a state law issue that “state courts are in a better position to decide than federal courts.”
High Sierra Holistics, LLC v. Dep’t of Tax’n, No. 19-cv-270, 2020 WL 8838245, at *4
(D. Nev. June 30, 2020); see also Travelers, 914 F.2d at 1370; see, e.g., Montanore

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Minerals Corp., 867 F.3d at 1168-69 (finding “rare circumstances” weighed in favor of
a stay because the legal issues in the case went “beyond what we have identified as
routine state law issues”); Morisada Corp. v. Beidas, 939 F.Supp. 732, 740 (D. Haw.
1995) (finding claims asserted under Hawaii’s Trade Secrets Act weighed in favor of a
stay). Accordingly, the Court finds California state law will predominate and provide the
most important rule of decision in the review of the arbitration award. Therefore, this
factor weighs in favor of granting a stay in this matter.
G. State Court Proceedings Can Adequately Protect the Rights of the Litigants
Defendants argue this factor favors a stay because Guild is a California citizen and
“California courts are best equipped to deal with the issues of California law and policy
that are at stake in the petitions to confirm and vacate.” Dkt. # 16 at 10-11. Plaintiff
argues that the state proceedings would be inadequate because Guild would have to return
to Washington to domesticate the judgment. Dkt. # 19 at 11.
For the adequacy factor, the Ninth Circuit looks “to whether the state court might
be unable to enforce federal rights.” Seneca Ins. Co., Inc. v. Strange Land, Inc., 862 F.3d
835, 845 (9th Cir. 2017). “A district court may not stay or dismiss the federal proceeding
if the state proceeding cannot adequately protect the rights of the federal litigants.” R.R.
St. & Co., 656 F.3d at 981. This factor does not evaluate the competency of the state
judiciary, but instead considers whether the state court lacks power to provide the remedy
the plaintiff seeks. See Moses H. Cone, 460 U.S. at 26-27.
The California court will be able to enforce federal rights and protect the rights of
the federal litigants in this matter. As discussed in Section IV.F. supra, state and federal
courts have concurrent jurisdiction under the FAA to resolve and provide a remedy in
this matter. Plaintiff’s argument that it will have to seek relief in Washington to
domesticate and enforce a judgment is unavailing. For the same reasons discussed in

ORDER - 13

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Section IV.A. supra, the potential issue of enforcement does not implicate a court’s
ability to resolve all the issues or impair the rights of the parties. Therefore, the Court
finds this factor is neutral.
H. Forum Shopping
Defendants maintain that Plaintiff engaged in forum shopping by filing the
Petition to Confirm Arbitration Award in the Western District of Washington. See Dkt.
# 16 at 9-10; Dkt. # 21 at 6. Defendants assert Guild chose Washington as a forum to
avoid an adverse ruling on CUTSA preemption, which Guild faced in the CCM litigation.
See Dkt. # 16 at 9-10. Defendants also assert that Guild seeks to evade review of the
arbitration award under the California Arbitration Act.

See id.

Plaintiff asserts

Defendants forum shopped by petitioning to vacate the award in San Diego after Plaintiff
filed the Petition to Confirm in federal court. See Dkt. # 16 at 11-12. Further, Plaintiff
asserts Defendants have used procedural tactics to advance the pace of the action pending
in San Diego while slowing down the pace of this action. See id. at 1, 11-12.
“When evaluating forum shopping under Colorado River, [courts] consider
whether either party improperly sought more favorable rules in its choice of forum or
pursued suit in a new forum after facing setbacks in the original proceeding.” Seneca
Ins. Co., 862 F.3d at 846. The Ninth Circuit recently noted: “It typically does not
constitute forum shopping where a party ‘acted within his rights in filing a suit in the
forum of his choice,’ Travelers, 914 F.2d at 1371, even where ‘[t]he chronology of events
suggests that both parties took a somewhat opportunistic approach to th[e] litigation,’
R.R. St. & Co., 656 F.3d at 981.” Id.
In Montanore, the Ninth Circuit found that forum shopping concerns weighed in
favor of a stay where a Plaintiff litigated a case in state court for six years and only filed
in federal court shortly after receiving an adverse ruling from the state court. 867 F.3d

ORDER - 14

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1160 at 1169-70. Similarly, in Nakash, the Ninth Circuit found that forum shopping
weighed in favor of a stay where the Plaintiff litigated in state court for three and a half
years before bringing claims in federal court. 882 F.2d at 1417.
The parties’ tactics in this matter does not arise to the conduct at issue in
Montanore or Nakash. Here, Plaintiff has demonstrated legitimate, non-forum shopping
purposes for filing the action in this court, including streamlining the enforcement of
judgment because Defendants reside in Washington.

convinced Defendants engaged in forum shopping by petitioning to vacate the arbitration
award in the California court. Both parties had legitimate, non-forum shopping purposes
for filing the parallel actions in Washington and California. Accordingly, the Court
concludes the forum shopping factor is neutral.
I. Evaluation of All Factors

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Likewise, the Court is not

In the Court’s Colorado River analysis, no factors support denying the motion to
stay and many factors are neutral. The courts in Washington and California are equally
convenient locations to resolve this dispute. Although this Court had jurisdiction over
the Guild Arbitration matter first, the parallel litigation is equally far along. 5 The
California court is capable and competent to resolve all the issues presented in this matter.
The parties’ conduct in this matter has not implicated forum shopping concerns.
The Court finds that the unusual circumstances in this case make it appropriate to
grant a stay under the Colorado River doctrine. The main dispute in this matter is not a
“routine” matter of state law. Additionally, in matters arising under the FAA that
implicate state law considerations, courts in the Ninth Circuit consistently defer to state
courts when deciding to grant stays under Colorado River. 6 The parallel petitions to
The only analysis this Court has undertaken is contained in this Order.
The Court observes that the supplemental briefing in this matter indicates that courts deny motions to stay where
state law issues predominating are the only factor favoring a stay. Dkts. # 39, 40. However, this issue is not
dispositive because other factors in this matter also weigh in favor of granting a stay.

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ORDER - 15

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confirm and vacate the award are sufficient to find the avoidance of piecemeal litigation
factor favors granting a stay. The related CCM litigation adds weight to the piecemeal
litigation factor because if this Court stepped in after substantial consideration from
California courts, it could lead to inconsistent judgments, which is a central concern of
the piecemeal litigation factor under Colorado River. After examining all the factors, the
Court finds that the weight of the factors supports the decision to grant a stay in this
matter.
V.

CONCLUSION

For the reasons stated above, the Court GRANTS Defendants’ Motion to Stay.
Dkt. # 16. The Court stays the remaining motions (Dkts. # 8, 22) pending resolution of
the state court action in the California court.
Dated this 29th day of August, 2024.

A

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The Honorable Richard A. Jones
United States District Judge

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ORDER - 16