Opinion · Court of Appeals for the Ninth Circuit

AmerisourceBergen Corp. v. Roden

AmerisourceBergen Corp. v. Roden, 495 F.3d 1143 (9th Cir. 2007)

Type
Opinion
Court
Court of Appeals for the Ninth Circuit
Jurisdiction
Federal
Date
2007-08-13
Topic
litigation

How later courts describe this case

  • holding that a state’s generalized interest in judicial efficiency does not qualify as an “important state interest” under Younger
  • holding that a mere concern over potential conflict between federal and state proceedings is inadequate to satisfy Younger’s “effective injunction” element
  • holding that “each element, on its own,” must be “satisfied” and a court may not excuse a failure to meet one element by “balancing the Younger elements”
  • clarifying that the fourth element does not require “direct” interference, but only “a more general requirement that some interference with state court proceedings is a necessary—and, indeed, motivating—element of the Younger doctrine[.]”
  • considering only whether the district court properly abstained under Younger from Count I, where the parties conceded that the district court properly dismissed Count II
  • ultimately finding abstention improper due to lack of important state interests but finding the first element satisfied in a private contract dispute
  • "[A]bstention to avoid concurrent, duplicative litigation is available in some very limited circumstances-in particular, when the requested relief in federal court is a declaratory judgment.”
  • “[W]hen each of an abstention doctrine’s requirements are not strictly met, the doctrine should not be applied.”

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Cited by
139 opinions
AMERISOURCEBERGEN v. RODEN,495 F.3d 1143(9th Cir. 2007)
AMERISOURCEBERGEN CORPORATION, Plaintiff-Appellant, v. Donald R. RODEN,
Defendant-Appellee.
No. 05-55349.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted February 5, 2007.
Filed August 13, 2007.
Page 1144
Gordon E. Krischer (argued) and Larry A. Walraven (briefed), O'Melveny Myers, Newport Beach, CA, for the plaintiff-appellant.

William E. Johnson (briefed and argued), Law Offices of Richard E. Hodge, Inc., Malibu, CA, for the defendant-appellee.
Appeal from the United States District Court for the Central District of California; Alicemarie H. Stotler, District Judge, Presiding. D.C. No. CV-04-01061-AHS.
Before: WARREN J. FERGUSON, EUGENE E. SILER, JR.,fn*and HAWKINS, Circuit Judges.

Opinion by Judge HAWKINS; Concurrence by Judge FERGUSON.
MICHAEL DALY HAWKINS, Circuit Judge:
We explore once again the sometimes complex relationship between state and federal civil proceedings when parties in the midst of litigation on one side of the divide file factually related proceedings on the other. Understandably concerned with judicial economy and respect for ongoing state proceedings, the district court dismissed the federal suit under theYoungerabstention doctrine. Determining that abstention was not required, we return thePage 1145matter to district court to allow appellant's diversity action to proceed.
FACTS AND PROCEDURAL HISTORY
In 1995, Donald R. Roden ("Roden") was hired as President and Chief Operating Officer of Bergen Brunswig Corporation ("BBC"), the predecessor company to AmerisourceBergen Corporation ("ABC"). At this time, Roden and BBC entered into an employment agreement (the "Agreement") providing that Roden would have his employment with BBC consistently extended monthly on a rolling three-year basis1and would not be fired except for "cause," as defined in the Agreement. Additionally, the Agreement provided that Roden was entitled to participate in BBC's ERISA-governed2Supplemental Executive Retirement Plan (the "SERP"), as well as its interest-free loan program (the "Loan Program").

Four years after he was hired and two years after being promoted to Chief Executive Officer ("CEO"), Roden was given written notice of BBC's intention to terminate his employment for a reason that apparently did not qualify as "cause" under the Agreement and on terms that may have conflicted with those provided for in the Agreement. Roden thereafter filed a complaint against BBC in the Superior Court in Orange County, California (the "California Superior Court") claiming that BBC breached the Agreement and that Roden was therefore entitled to his full salary for three years past his termination date and was, in all other respects, entitled to be treated as BBC's. CEO until that date.3

Specifically, Roden claimed that he was entitled to "estimated future benefits under the SERP . . . of no less than $8,970,000" and a due date (and interestaccrual start-date) based on a November 30, 2002 termination date for the $337,500 loan he took out under the Loan Program.4

Shortly thereafter, Roden and BBC entered into a Settlement Agreement, and a judgment incorporating its terms was entered on July 27, 2000 ("the Judgment"), as follows:
1. In favor of [Roden] in the amount of $5,000,000, less legally required deductions;
2. Continuation of the benefits provided in Sections 5(d) [which includes participation in the SERP], (e) and (i) [which includes participation in the Loan Program] of [Roden's] employment contract; and
3. Reasonable attorney's fees and costs in an amount to be determined by the Court.


Believing BBC had not fully complied with this Judgment, Roden sought to force compliance in California Superior Court. After briefing and argument, that court ordered implementation of the Judgment ("First Order") finding, in relevant part, that Roden's entitlement to benefits under the SERP had "vested" and that "Roden's $337,500 loan was not absolved by the Judgment" but would not become due until November 30, 2002. The First Order continued (emphasis added):Page 1146
[BBC] is required to accord Roden the same treatment as the other senior officers of [BBC] who received loans from this November 1998 loan program . . . with respect to . . . anyforgiveness, extensions, payment of interest and the like.


BBC appealed the First Order to the California Court of Appeal, which unanimously affirmed.107 Cal.App.4th 620,132 Cal. Rptr.2d 549(2003).

When Roden attempted to enforce the First Order and collect his SERP benefits, BBC opposed his request, claiming that Roden was entitled to a lesser sum under the SERP plan than he had alleged. Roden appealed this determination pursuant to company policy, and the final administrative review of the matter yielded a decision that Roden was entitled to $1,898,066 in SERP benefits. Apparently with an aim of pursuing his rights under ERISA — which allows an ERISA plan beneficiary to pursue court action if he is dissatisfied with an administrative determination of his ERISA benefits,29 U.S.C. §§ 1132(a),1133— Roden requested discovery from ABC (which, by this point, had stepped into BBC's shoes) regarding the amount of benefits he was entitled to receive under the SERP.

At this point, ABC sought to removeRoden v. BBCfrom the California courts to federal court claiming that Roden's discovery request had "transformed" the case into an ERISA action, which is removable to federal court at the defendant's request.See Metro. Life Ins. Co. v. Taylor,481 U.S. 58,107 S.Ct. 1542,95 L.Ed.2d 55(1987). The district court rejected this argument and remanded the case back to the California courts.5

Undeterred, ABC filed its own action in federal district court, requesting both a judgment that Roden breached his contract with ABC by failing to repay his $337,500 loan ("Count I"), as well as a declaration of ABC's duties and obligations to Roden under the SERP — namely, for a proper calculation of Roden's SERP benefits ("Count II"). The district court dismissed ABC's two claims,6relying on the basic premise that resolving ABC's claims at the federal level would interfere with ongoing state court proceedings regarding almost-entirely overlapping issues.7ABC appealed to this court, arguing that the district court erred in dismissing its claims.

Shortly before oral argument took place in this case, the California Superior Court entered a second order implementing the Judgment ("Second Order"). The Second Order declared that Roden was entitled to $14,432,141.74 in SERP benefits but was not entitled to any forgiveness of the loansPage 1147he had taken from ABC under the Loan Program. Both parties have appealed the Second Order to the California Court of Appeal.

In light of these recent developments — which ABC agrees will squarely resolve the issue of Roden's entitlement under the SERP — ABC concedes that the district court was within its discretion to decline to entertain Count II.See28 U.S.C. § 2201("In a case of actual controversy within its jurisdiction, . . . any court of the United States . . .maydeclare the rights and other legal relations of any interested party. . . ." (emphasis added));Gov't EmployeesIns. Co. v. Dizol,133 F.3d 1220,1225(9th Cir.1998) (en banc) ("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 court."). We are thus called upon to decideonlywhether the district court properly dismissed Count I.
DISCUSSION
If the district court had the same discretion to decline to hear claims for monetary damages as it does to decline to hear claims for declaratory relief, we would surely uphold the dismissal of Count I. Parties should be strongly discouraged from attempting to drag federal courts into disputes already significantly underway in state courts.

Moreover, we regret the significant expense — both to the parties and to the two already overburdened court systems — caused by ABC's decision to file its state-law-governed breach of contract claim in federal court when it could have just as easily filed the very same claim in the California courts, which have been competently handling these matters for over six years.

Nevertheless, we are aware of the "virtually unflagging obligation of the federal courts to exercise the jurisdiction given them,"Colo. River Water Conservation Dist. v. UnitedStates,424 U.S. 800,817,96 S.Ct. 1236,47 L.Ed.2d 483(1976), and must decide whether the district court properly understood the scope of this obligation when it dismissed Count I under the doctrine announced inYounger v. Harris,401 U.S. 37,41,91 S.Ct. 746,27 L.Ed.2d 669(1971). We conclude that it did not and that Count I was improperly dismissed underYounger.We also conclude that dismissal of Count I cannot be affirmed under either the Anti-Injunction Act,28 U.S.C. § 2283, or theRooker-Feldmandoctrine. We therefore reverse the dismissal of Count I and remand to the district court for further proceedings.I.YoungerAbstention

TheYoungerabstention doctrine, as originally articulated by the Supreme Court, "forbid[s] federal courts [from] stay[ing] or enjoin[ing] pending state court proceedings."Younger,401 U.S. at 41,91 S.Ct. 746. Roden argues that allowing ABC's breach of contract claim to proceed in federal court would be the functional equivalent of enjoining the ongoing post-judgment proceedings inRoden v.BBCand, thus, that theYoungerdoctrine required the federal court to abstain from considering, and thereby dismiss, Count I.

ABC counters that, although its breach of contract claim may create apotentialfor conflict with the enforcement of asinglestate court judgment, this is an insufficient basis for federal court abstention underYounger.Specifically, ABC argues that the district court incorrectly stated theYoungerdoctrine's elements and improperly expanded the "important state interest" and "conflict" elements to encompassminimalstate interests andpotentialconflicts. After reviewing the district court's dismissal de novo,see Gilbertson v.Page 1148Albright,381 F.3d 965,982n. 19 (9th Cir.2004) (en banc), we agree and hold that the district court had a "duty . . . to adjudicate [the] controversy properly before it,"Champion Int'l Corp. v. Brown,731 F.2d 1406,1408(9th Cir.1984), even if "adjudicating" this particular controversy would have amounted to little more than a ministerial entry of judgment based on the collateral estoppel effects of decisions already made by the California courts.A. Abstention and theYoungerElements

The district court dismissed Count I after concluding that "[o]n balance, it appears that all three elements ofYoungerabstention are met."

However, when a federal plaintiff seeks monetary damages (rather than injunctive or declaratory relief) in a case requiring abstention underYounger, dismissalis not the appropriate procedural remedy.See Gilbertson,381 F.3d at 968. As theGilbertsoncourt held, although "Youngerprinciples apply to actions at law as well as for injunctive or declaratory relief . . ., federal courts should not dismiss actions where damages are at issue; rather, damages actions should bestayeduntil the state proceedings are completed."Id.(emphasis added). Accordingly, even if abstention underYoungerwere required as to Count I, the district court should have stayed ABC's federal suit pending the conclusion ofRoden v.BBCin the California court system, rather than dismissing Count I altogether.

In addition,balancingtheYoungerelements, rather than determining whether each element, on its own, is satisfied, conflicts with the requirement that federal courts abstain only in those cases falling within the "carefully defined" boundaries of federal abstention doctrines.NewOrleans Pub. Serv., Inc. v. Council of City of NewOrleans,491 U.S. 350,359,109 S.Ct. 2506,105 L.Ed.2d 298(1989) ("NOPSI"). As virtually all cases discussing these doctrines emphasize, the "limited circumstances in which . . . abstention by federal courts is appropriate . . . `remain the exception rather than the rule,'"Green v. City ofTucson,255 F.3d 1086,1089(9th Cir.2001) (en banc) (quotingNOPSI,491 U.S. at 359,109 S.Ct. 2506),rev'd on other grounds by Gilbertson,381 F.3d at 968-69, and, thus, when each of an abstention doctrine's requirements are not strictly met, the doctrine should not be applied.See Middlesex County Ethics Comm. v. Garden StateBar Ass'n,457 U.S. 423,431-34,437,102 S.Ct. 2515,73 L.Ed.2d 116(1982) (abstaining only after determining that each element ofYoungerdoctrine was satisfied);NOPSI,491 U.S. at 372-73,109 S.Ct. 2506(not abstaining when one element ofYoungerdoctrine was not satisfied).

Finally, there are actuallyfourelements that must be satisfied before theYoungerdoctrine requires abstention. The district court recognized onlythreeof them, apparently taking cues from a number of our cases that have focused on only the three "Middlesexelements"8and agreeing with Roden that, to the extent a fourth element ever existed, this court's en banc decision inGilbertsondid away with it.See Gilbertson,381 F.3d at 968-69(en banc) ("[W]e recede from our statements inGreen v. City of Tucson,255 F.3d 1086,1098,1102(9th Cir.2001) (en banc), that direct interference is a threshold requirement, or element, ofYoungerPage 1149abstention. . . ."). According to the district court, abstention is required whenever "(1) there are ongoing state judicial proceedings; (2) the proceedings implicate important state interests; and (3) the state proceedings provide the plaintiff with an adequate opportunity to raise federal claims,"Meredith v. Oregon,321 F.3d 807,817(9th Cir.2003) (citingMiddlesex,457 U.S. at 432,102 S.Ct. 2515),even ifthe federal action does not enjoin the ongoing state court proceedings or have the practical effect of doing so.

This is incorrect. AsGilbertsonmakes clear, while there are only three "threshold elements" to application ofYounger, there is a vital and indispensable fourth element: the policies behind theYoungerdoctrine must be implicated by the actions requested of the federal court. In the language of theGilbertsoncourt:
If a state-initiated proceeding is ongoing, andifit implicates important state interests . . ., andifthe federal litigant is not barred from litigating federal constitutional issues in that proceeding,thena federal court action that would enjoin the proceeding, or have the practical effect of doing so, would interfere in a way thatYoungerdisapproves.
381 F.3d at 978(emphases in original). Thus, once the threeMiddlesexelements are satisfied, the court does not automatically abstain, but abstains only if there is aYounger-based reasonto abstain — i.e., if the court's action would enjoin, or have the practical effect of enjoining, ongoing state court proceedings.Id.9

Accordingly, abstaining underYoungeras to Count I was properonlyif all fourYoungerrequirements were strictly satisfied. ABC concedes the first and third threshold elements, and we agree they were both met here: the post-judgment proceedings inRoden v. BBCwere ongoing, and ABC had an opportunity to raise its federal claims in these state court proceedings.10As to the second threshold element and the fourth element, however, we find that they werenotmet here and, thus, thatYoungerabstention was improper in this case.B.YoungerAbstention Improper Because NoImportant State Interest Implicated

The second threshold element ofYoungeris satisfied when "the State's interests in the [ongoing] proceeding are so important that exercise of the federal judicial power would disregard the comity between the States and the National Government."Pennzoil Co. v. Texaco, Inc.,481 U.S. 1,11,107 S.Ct. 1519,95 L.Ed.2d 1(1987). The district court reasoned that, because California has an "admittedly . . . important interest in the enforcement of its judgment and orders," and because resolving ABC's breach of contract claim in federal court could potentially create a conflict with the First Order (which partially resolved Roden's obligations under thePage 1150Loan Program), the second threshold element "weigh[ed] in favor of abstention."11

The Supreme Court has noted that states "have important interests in administering certain aspects of their judicial systems," and that, in particular, states have an interest in "enforcing the orders and judgments of their courts."Pennzoil,481 U.S. at 12-13,107 S.Ct. 1519. Taken out of context, these statements suggest that California's interest in enforcing the judgmentin this particular caseis of sufficient importance to meetYounger'ssecond threshold element. But we have made it clear that "[t]he importance of the [state's] interest is measured by considering its significance broadly, rather than by focusing on the state's interest in the resolution of an individual case."Baffertv. Cal. Horse Racing Bd.,332 F.3d 613,618(9th Cir.2003);see also Champion Int'l,731 F.2d at 1408("[A] challenge[to] only one . . . order, not the whole procedure" is "not a substantial enough interference with [a state's] administrative and judicial processes to justify abstention.").

Accordingly, binding precedent prevents the court from finding that California's interest in enforcing this one particular judgment — as opposed to a state's whole-sale interest in preserving its procedure for posting an appeal bond,seePennzoil,481 U.S. at 12-14,107 S.Ct. 1519, or its interest in retaining a particular contempt of court scheme,see Juidice v. Vail,430 U.S. 327,330,335,97 S.Ct. 1211,51 L.Ed.2d 376(1977) — qualifies as sufficiently "important" to satisfyYounger'ssecond threshold element.

Cognizant of this reality, Roden argues that California's interest in adjudicating conflicts in a timely fashion — as evidenced by its express goal of resolving seventy-five percent of civil cases within a year of filing,seeCal. Gov't Code § 68603; Cal. Rules of Ct, std. 2.2(f)(1) — should qualify as sufficiently "important" forYoungerabstention purposes. To support this argument, Roden cites a number of California and federal cases for the basic — and undisputed — proposition that courts have an interest in prompt resolution of the cases on their dockets.

While true, this is not the type of "important state interest" that animates theYoungerabstention doctrine. The goal ofYoungerabstention is to avoid federal court interference withuniquelystate interests such as preservation of these states' peculiar statutes, schemes, and procedures. Roden cites no case, nor could he, holding that federal courts should abstain in favor of state courts when auniversaljudicial interest — such as the prompt resolution of cases — is at stake.12Because neither California's interest in enforcement of a single state court judgment nor its interest in judicial efficiency is sufficiently important to satisfyYounger'ssecond threshold element, the district court erred when it found this element satisfied.
C.YoungerAbstention Improper Because OngoingState Court Proceedings Would Not Be Actually or EffectivelyEnjoined


Although we would be obligated to find the district court's decision to abstain underPage 1151Youngererroneous based solely on the lack of an important state interest,see supraPart LA, we also think it wise to address the district court's implicit finding that apotentialconflict with ongoing state court proceedings is sufficient to meet the fourth element ofYoungerabstention.13As the Supreme Court has held, "the mere potential for conflict in the results of adjudications does not, without more, warrant staying exercise of federal jurisdiction," much less abdicating it entirely.Colo. River,424 U.S. at 816,96 S.Ct. 1236. Rather, abstention is only appropriate in the narrow category of circumstances in which the federal court action would actually "enjoin the [ongoing state] proceeding, or have the practical effect of doing so."Gilbertson,381 F.3d at 978.

Here, deciding Count I would neither enjoin, nor have the practical effect of enjoining, the post-judgment proceedings in California Superior Court; after all, Roden has not yet filed any post-judgment motion in California Superior Court disputing his obligation to repay the loan, and ABC has not yet filed a counterclaim in the state court proceedings attempting to enforce its right to receive repayment. Thus, the district court's finding of an abstention-worthy conflict based on apotentialfor conflict was erroneous.

Roden's counterargument — that the requisite "interference with ongoing state proceedings" occurs whenever the relief sought in federal court would, if entertained, likely result in a judgment whose preclusive effect would prevent the state court from independently adjudicating the issues before it — has also been rejected. As explained by this court inGreen,255 F.3d at 1097,rev'd on other grounds byGilbertson,381 F.3d at 968-69:
[T]he possibility of a race to judgment is inherent in a system of dual sovereigns and, in the absence of "exceptional" circumstances, [Colo. River,424 U.S. 800] at818[96 S.Ct. 1236,47 L.Ed.2d 483(1976)], . . . that possibility alone is insufficient to overcome the weighty interest in the federal courts exercising their jurisdiction over cases properly before them.


Indeed, the Supreme Court has rejected the notion that federal courts should abstain whenever a suit involves claims or issues simultaneously being litigated in state court merely because whichever court rules first will, via the doctrines of res judicata and collateral estoppel, preclude the other from deciding that claim or issue.See Vendo Co. v. Lektro-VendCorp.,433 U.S. 623,641-42,97 S.Ct. 2881,53 L.Ed.2d 1009(1977);Atl. Coast Line R.R. Co. v. Bhd. of LocomotiveEng'rs,398 U.S. 281,295-96,90 S.Ct. 1739,26 L.Ed.2d 234(1970).Kline v. Burke Const. Co.,260 U.S. 226,43 S.Ct. 79,67 L.Ed. 226(1922);see also Noel v. Hall,341 F.3d 1148,1159(9th Cir.2003);Bennett v. Medtronic,Inc.,285 F.3d 801,806-07(9th Cir.2002). Although abstention to avoid concurrent, duplicative litigation is available in some very limited circumstances — in particular, when the requested relief in federal court is a declaratory judgment,see Wilton v. Seven Falls Co.,515 U.S. 277,115 S.Ct. 2137,132 L.Ed.2d 214(1995) — the general rule remains that stated inKline,260 U.S. at 230,43 S.Ct. 79:
Each court is free to proceed in its own way and in its own time, without referencePage 1152to the proceedings in the other court. Whenever a judgment is rendered in one of the courts and pleaded in the other, the effect of that judgment is to be determined by the application of the principles of res [judicata and collateral estoppel] by the court in which the action is still pending in the orderly exercise of its jurisdiction, as it would determine any other question of fact or law arising in the progress of the case.


Thus, as long as the action requested of the federal court — here, issuing an ordinary judgment requiring an individual to pay breach of contract damages — does not enjoin or "have the practical effect of enjoining the ongoing state court proceedings — here, California's post-judgment proceedings inRoden v. BBC— then abstention is not warranted.See Gilbertson,381 F.3d at 978. It is clear to us that retaining jurisdiction over, and proceeding with, Count I would not have enjoined or in any way impeded the ongoing litigation inRoden v. BBC.Rather, theRoden v. BBCproceedings would have been free to continue simultaneously with the federal suit, and ABC would have simply been bound by the rulings of the California state courts under the doctrine of collateral estoppel to the extent the state courts decided the relevant issues before the federal court did.14Concurrent consideration, not abstention, is the solution, and the district court therefore erred in finding that the potential conflict was one theYoungerdoctrine required the court to avoid.See Colo. River,424 U.S. at 817-20,96 S.Ct. 1236.

For the reasons discussed above, the district court erred in dismissing Count I on the basis ofYoungerabstention. As the following two sections explain, although this court "may affirm on any basis supported by the record even if the district court did not rely on that basis," Count I cannot be dismissed under either the Anti-Injunction Act,28 U.S.C. 2283, or theRooker-Feldmandoctrine.United States v.Washington,969 F.2d 752,755(9th Cir.1992) (internal quotation marks and citation omitted).15II. Anti-Injunction Act,28 U.S.C. § 2283

The Anti-Injunction Act prohibits federal courts from "grant[ing] an injunction to stay 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. Whereas theYoungerdoctrine has been expanded to prohibit federal courts from issuing an injunctionor its functionalequivalentwhen doing so would interfere with an ongoing state court proceeding, the plain language of § 2283 speaksonlyto actual injunctions. Count I of ABC's federal complaint does not request an injunction; thus, the Anti-Injunction Act does not require its dismissal.Page 1153

Moreover, even if the statute still applies to certain requests for declaratory relief,see H.J. Heinz Co. v. Owens,189 F.2d 505(9th Cir.1951)16— a remedy closely related to a formal injunction — it certainly does not apply to requests for money damages that, if granted, would render state court litigation nugatory due to preclusion doctrines. This could arguably be the province of the judicially createdYoungerdoctrine, but is certainly not the province of an unambiguous statute that says nothing about the type of relief ABC requests in Count I. Because abstention is improper underYounger, it is afortioriimproper under the Anti-Injunction Act, and this theory of dismissal is rejected.III.Rooker-FeldmanDoctrine

"TheRooker-Feldmandoctrine provides that federal district courts lack jurisdiction to exercise appellate review over final state court judgments."Henrichs v. Valley ViewDen,474 F.3d 609, (313 (9th Cir.2007);see also Rookerv. Fid. Trust Co.,263 U.S. 413,44 S.Ct. 149,68 L.Ed. 362(1923);D.C. Ct.App. v. Feldman,460 U.S. 462,103 S.Ct. 1303,75 L.Ed.2d 206(1983). Roden argues that this doctrine prohibits the district court from entertaining ABC's breach of contract action because doing so would effectively reverse the California Superior Court's decision thatit— not a federal court — would interpret and enforce the original judgment inRoden v. BBC.

Roden's argument is incorrect and demonstrates a misunderstanding of theRooker-Feldmandoctrine. ABC did not ask the district court to interpret or enforce theRoden v. BBCjudgment, nor did it seek to reverse any of the California Superior Court's decisions; indeed, Count I makes no mention of the state court's Judgment whatsoever. Rather, the most ABC has asked a federal court to do is redress an injury (i.e., its alleged loss of $337,500 plus interest) that the California court has chosen not to redress.17As this court recently explained inHenrichs,474 F.3d at 614, "[p]reclusion, notRooker-Feldman, applies when `a federal plaintiff complains of an injury that was not caused by the state court, but which the state court has previously failed to rectify.'" (quotingNoel v. Hall,341 F.3d 1148,1164(9th Cir.2003)).

Thus,even ifall of ABC's contentions with regard to its breach of contract claim had been resolved adversely to ABC in state court — a scenario belied by the First and Second Orders issued by the California Superior Court, which have both come out in ABC's favor with respect to Roden's obligations under the Loan Program —Rooker-Feldmanwould not bar ABC's federal claim; rather, res judicata or collateral estoppel would. Accordingly, this theory of dismissal is rejected, as well.
CONCLUSION
It appears that ABC's federal action is an attempt to secure a binding and enforceable court judgment requiring Roden to repay the $337,500 loan previously extended to him by BBC. Although most ofPage 1154the essential issues have already been decided in state court (and thus collateral estoppel will presumably forbid relitigation of these issues in federal court), there is no legal doctrine preventing ABC from asking a federal court — rather than a state court — to enter an enforceable judgment against Roden, if one be appropriate. While ABC offers no explanation for its choice of forum — indeed, it seems that it would have been equally effective, and far more efficient, for ABC to seek a breach of contract judgment in state court — this court is powerless to prevent ABC from exercising its right, as a plaintiff, to choose its forum. Indeed, because dismissal of Count I cannot be justified underYounger, the Anti-Injunction Act, or theRooker-Feldmandoctrine, the district court's order must be reversed in part, and Count I must be remanded to the district court for further proceedings.AFFIRMED IN PART; REVERSED AND REMANDED IN PART.Costs on appeal to Appellants.
FERGUSON, Circuit Judge, concurring:
This case concerns a district court's efforts to promote judicial economy and counter an apparent attempt at forum-shopping. Despite our appreciation of the district court's position and our frustration with the plaintiffs strategy, we are, as the majority explains, forced to reverse the decision below. I write separately to clarify what I understand to be the doctrinal conundrum before us. Ultimately, the problem of duplicative litigation will require legislative redress.Younger v. Harris,401 U.S. 37,43-44,91 S.Ct. 746,27 L.Ed.2d 669(1971), re fleets a "longstanding public policy against federal court interference with . . . state functions." I agree with the majority that the principles ofYoungerdo not apply to this case, where the only remaining claim in the federal forum concerns collection on a loan. However, in my view, our consideration of the duplicative state and federal proceedings would be incomplete without discussion ofColorado River Water Conserv. Dist. v. UnitedStates,424 U.S. 800,817-19,96 S.Ct. 1236,47 L.Ed.2d 483(1976), which provides the only abstention-like1doctrine founded primarily on the interest of judicial economy.SeeJames C. Rehnquist,Taking Comity Seriously:How to Neutralize the Abstention Doctrine, 46 Stan. L. Rev. 1049, 1092 (1994); Rex E. Lee Richard G. Wilkins,AnAnalysis of Supplemental Jurisdiction and Abstention withRecommendations for Legislative Action, 1990 BYU L. Rev. 321, 356-57 (1990).Colorado Riverheld that, even where a "case falls within none of the abstention categories, there are principles unrelated to considerations of proper constitutional adjudication and regard for federal-state relations which govern in situations involving the contemporaneous exercise of concurrent jurisdictions, either by federal courts or by state and federal courts. These principles rest on considerations of wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation."424 U.S. at 817,96 S.Ct. 1236(internal punctuation omitted) (quotingKerotest Mfg. Co. v. C-O-Two Fire Equip. Co.,342 U.S. 180,183,72 S.Ct. 219,96 L.Ed. 200(1952)).Page 1155Colorado Riverenumerated four factors that courts may consider in determining whether "considerations of wise judicial administration" outweigh the duty to exercise federal jurisdiction: (1) whether the state court was the first to assume jurisdiction over a property; (2) the relative inconvenience of the federal forum; (3) the desirability of avoiding piecemeal litigation; and (4) the order in which the courts obtained jurisdiction.424 U.S. at 818,96 S.Ct. 1236. InMoses Cone,460 U.S. at 23,103 S.Ct. 927, the Supreme Court added two more considerations: (5) whether federal law provides the rule of decision on the merits; and (6) whether the state court proceeding can adequately address the rights of the federal plaintiff. Our circuit has also added — and repeatedly emphasized — another factor: (7) whether the exercise of jurisdiction would encourage forum-shopping.Fireman's Fund Ins. Co. v. Quackenbush,87 F.3d 290,297(9th Cir.1996);see, e.g., Holder,305 F.3d at 870,871;Nakash v. Marciano,882 F.2d 1411,1417(9th Cir.1989).

These factors appear to weigh against the exercise of federal jurisdiction in the case before us, but the Supreme Court's strict interpretation ofColorado Rivermakes clear that the current doctrine cannot solve the problem we face.See Moses Cone,460 U.S. at 25-26,103 S.Ct. 927("[W]e emphasize that our task . . . is not to find some substantial reason for theexerciseof federal jurisdiction by the district court; rather, the task is to ascertain whether there exist `exceptional' circumstances, the `clearest of justifications,' that can suffice underColorado Riverto justify thesurrenderof that jurisdiction."). "The issue . . . is not simply whether state court is a `better' forum" to resolve the issues pending before the federal court.Travelers Indem. Co. v. Madonna,914 F.2d 1364,1369(9th Cir.1990).Colorado Riverapplies only in "exceptional cases," and such cases are "exceedingly rare."Smith v. Cent. Ariz. Water Conserv. Dist.,418 F.3d 1028,1033(9th Cir.2005). "[T]he [general] rule [remains] that the pendency of an action in the state court is no bar to proceedings concerning the same matter in the [f]ederal court having jurisdiction."Colorado River,424 U.S. at 817,96 S.Ct. 1236(quotation and internal punctuation omitted). Because the case before the panel presents an ordinary contract dispute, I do not believe thatColorado Riverpermits the district court to decline to exercise jurisdiction.SeeTravelers Indemn,914 F.2d at 1369(stay vacated where "ordinary contract and tort issues");Neuchatel Swiss Gen'lIns. Co. v. Lufthansa Airlines,925 F.2d 1193,1195(9th Cir.1991) (stay vacated where "unexceptional commercial dispute");but see Nakash,882 F.2d at 1415(affirming stay in trademark case);id.(stating that the language of "exceptional circumstances" and a "virtually unflagging obligation" "somewhat overstates the law").

Nonetheless, I question whether this outcome serves the principles underlyingColorado River.The Supreme Court's decision was based on "considerations of wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation."424 U.S. at 817,96 S.Ct. 1236. I appreciate the strict requirement that federal courts exercise their jurisdiction in federal question jurisdiction cases but am unconvinced of the value of this approach in diversity matters, particularly where a state suit was filed prior to a federal action.Colorado Riverhighlighted the factor of which court was first in time.Id.at 818,96 S.Ct. 1236. More recently, MosesCone,460 U.S. at 23-25,103 S.Ct. 927, emphasized the significance of whether federal law provides the rule of decision on the merits. In my view, where a nearlyPage 1156identical case is already pending in state court and there is clearly no federal question before the federal court, the latter forum should be permitted to stay its proceeding pending the outcome of the state suit.

The procedural history of the instant matter provides just one example of the problems that remain unresolvable within our current statutory scheme. Roden filed a state action against AmerisourceBergen's predecessor in 1995. Five years later, after settlement and an appeals process, AmerisourceBergen attempted to remove the proceeding to federal court, alleging federal question jurisdiction. Finding no federal law claim, the district court remanded the action to the state forum. AmerisourceBergen responded by initiating this federal lawsuit, which the district court then dismissed on the ground ofYoungerabstention.

The timing of these lawsuits makes us particularly sympathetic to the judicial economy concerns prioritized by the district court. I note that we could affirm the district court's decision to defer to the forum where the first suit was filed if that first court had been a federal court. When two cases involving the same parties and issues are filed in two different federal districts, the first-to-file rule permits the second district court to exercise its discretion to transfer, stay, or dismiss the second suit in the interests of efficiency and judicial economy.Cedars-Sinai Med. Ctr. v. Shalala,125 F.3d 765,769(9th Cir.1997).

Awkwardly, it is only because the court presiding over Roden's lawsuit is a state court that we do not permit deference to it. Our reason is federal courts' "virtually unflagging obligation to exercise the jurisdiction given them."Holder,305 F.3d at 867(quotingColorado River,424 U.S. at 817,96 S.Ct. 1236). In the context of diversity cases such as this one, however, perhaps the obligation should be redefined.

As we recognized almost three decades ago,
The need for fashioning a flexible response to the issue of concurrent jurisdiction has become more pressing in this day of increasingly crowded federal dockets. . . . [I]ncreasing calendar congestion in the federal courts makes it imperative to avoid concurrent litigation in more than one forum whenever consistent with the rights of the parties. A court may choose not to exercise its jurisdiction when another court having jurisdiction over the same matter has entertained it and can achieve the same result.
Church of Scientology of Cal. v. U.S. Dep't of Army,611 F.2d 738,750(9th Cir.1979) (quotation and internal punctuation omitted). That rationale applies today with equal, if not greater, force.

The majority is correct that current abstention doctrine mandates a reversal, but this case presents a problem that requires a larger solution. Although theColorado Riverdoctrine does not provide a basis for the dismissal below, its underlying principle of wise judicial administration counsels in favor of permitting a stay. The first-to-file rule, crafted in the interest of judicial economy, allows a federal district court to stay a proceeding where another matter involving the same issues and parties is already pending before a different district court. Similarly, where the first suit was filed in a state court and the second suit is a diversity jurisdiction case with no federal question at issue, I believe the federal court should maintain the discretion to stay its proceeding pending the outcome in the state forum. Absent legislation to that effect, however, I must concur.
  1. The Honorable Eugene E. Siler, Jr., Senior United States Circuit Judge for the Sixth Circuit, sitting by designation. ↩
  2. In other words, on the first day of Month 1 in Year 1, Roden was guaranteed employment with BBC until the last day of Month 1 in Year 4. ↩
  3. Employee Retirement Income Security Act of 1974,29 U.S.C. §§ 1001el seq. ↩
  4. This case was captioned asRoden v. BBCand will be hereinafter referred to by this name. ↩
  5. Roden brought a number of other claims against BBC and sought damages in the millions of dollars; the above are only the demands relevant to this appeal. ↩
  6. It surely did not pass the district court's notice that ABC was attempting this maneuver after several years of litigation in the state court system, most of which had yielded unfavorable results for ABC and its predecessor corporation. ↩
  7. Because it dismissed ABC's claims outright, the district court did not reach the issue of whether the federal proceedings should be stayed pending conclusion of the state court proceedings, a remedy Roden requested if his motion to dismiss was denied. ↩
  8. Specifically, the district court dismissed Count I on the basis of theYoungerabstention doctrine, and dismissed Count II based on three independent grounds: (1) the federal court must abstain underYounger;(2) the court should not exercise its discretion to entertain ABC's request for declaratory relief; and (3) ABC failed to state a claim because it failed to allege facts sufficient to demonstrate that it qualified as a "fiduciary" of an ERISA governed plan. The district court, however, rejected Roden's arguments that dismissal of both counts was required by the Anti-Injunction Act,28 U.S.C. § 2283, and theRooker-Feldmandoctrine, as well as his argument that dismissal of Count II was required under the removal statute,28 U.S.C. § 1446(b). ↩
  9. See, e.g., Canatella v. California,404 F.3d 1106,1109-10(9th Cir.2005);Green,255 F.3d at 1091;Commc'ns Telesystems Int'l. v. Cal. Pub. Util. Comm'n,196 F.3d 1011,1015(9th Cir.1999);Woodfeathers, Inc. v.Washington County, Or.,180 F.3d 1017,1020(9th Cir. 1999);Partington v. Gedan,880 F.2d 116,121(9th Cir. 1989). ↩
  10. As to Roden's contention thatGilbertsondid away with the fourth element,Gilbertsondid overruleGreen'sholding that "`directinterference' is a threshold requirement . . . ofYoungerabstention,"381 F.3d at 968-69(emphasis added), but it left intact the more general requirement thatsomeinterference with state court proceedings is a necessary — and, indeed, motivating — element of theYoungerdoctrine,see id.at 976 ("There is no doubt that interference with state proceedings is at the core of the comity concern that animatesYounger.");id.at 976-77 ("[I]nterference is undoubtedly the reason forYoungerrestraint, or the end result to be avoided. However, the Supreme Court has never required that interference be `direct' in the manner we described inGreen."). ↩
  11. Note that, here, the third element is automatically satisfied because Count I is a state law breach of contract claim and, accordingly, raises no federal questions whatsoever. ↩
  12. As discussed above, the district court's decision to balance, or weigh, theYoungerfactors was in error. ↩
  13. Moreover, hearing ABC's breach of contract claim in federal court may actually further (rather than detract from) the goal of expeditious case resolution, as there is currently no claim pending in the California Superior Court requiring a determination of Roden's liability under the Loan Program, and there is no means by which the California Superior Court could order Roden to repay ABC (if, in fact, he is legally obligated to do so) based on the claims currently pending before it. ↩
  14. See AmerisourceBergen Corp. v. Roden, No. 04-1061 (C.D.Cal. Feb. 1, 2005) (order granting motion to dismiss) ("[Although] the issues in [ABC's] federal complaint are not necessarily coextensive with the state court proceedings, [they are] substantially related to the claims in the state court proceeding [and, thus,] any decision in the federal forum couldpotentiallyconflict with the state court proceedings.") ↩
  15. Indeed, since ABC instituted its federal action, the California Superior Court has made a further determination regarding Roden's obligation to repay his $337,500 loan: in its Second Order, the court decided that Roden was not entitled to any loan forgiveness on loans he had taken from ABC under the Loan Program. ↩
  16. Roden also argues that dismissal of Count I should be affirmed either because ABC's filing of its federal complaint was the functional equivalent of an untimely removal under28 U.S.C. § 1446(b) or because BBC's counsel orally entered into a "forum selection agreement" during a Superior Court hearing providing that all claims would be heard in the California Superior Court. Both arguments are raised for the first time on appeal; thus, the court will not consider them.United States v. Alisal Water Corp.,370 F.3d 915,923(9th Cir.2004). ↩
  17. While the relevant holding ofH.J. Heinz— that a federal court abuses its discretion under28 U.S.C. § 2201to issue a declaratory judgment when doing so would conflict, in principle, with the Anti-Injunction Act — may not be good law now that theYoungerdoctrine has come into existence and essentially supplanted the need for this particular aspect of theH.J. Heinzholding, we express no opinion on this matter. ↩
  18. In fact, ABC is not even doing this much, as it is content with the substance of the California Superior Court's Judgment and Orders finding Roden's loan due as of November 30, 2002 (First Order) and finding Roden ineligible for any loan forgiveness (Second Order). ↩
  19. Although sometimes referred to as such, theColoradoRiverdoctrine is technically not a form of abstention.424 U.S. at 813,96 S.Ct. 1236("We hold that the dismissal cannot be supported under th[e] doctrine [of abstention] in any of its forms.");see Moses H. ConeMem I Hosp. v. MercuryConstr. Corp.,460 U.S. 1,14,103 S.Ct. 927,74 L.Ed.2d 765(1983) (explaining basis ofColorado River); Holder v.Holder,305 F.3d 854,867n. 4 (9th Cir.2002). ↩