FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
R.R. STREET & CO. INC.; NATIONAL
UNION FIRE INSURANCE COMPANY OF
PITTSBURGH, PA, individually and
as subrogee of R.R. Street & Co. No. 10-55361
Inc.,
Plaintiffs-Appellants,
D.C. No.
2:09-cv-06045-CAS-
v. FMO
TRANSPORT INSURANCE COMPANY,
Defendant-Appellee.
TRANSPORT INSURANCE COMPANY, a
corporation,
Plaintiff-Appellee, No. 10-55404
v. D.C. No.
R.R. STREET & CO. INC., a 2:09-cv-08368-CAS-
corporation; NATIONAL UNION FIRE FMO
INSURANCE COMPANY OF OPINION
PITTSBURGH, PA, a corporation,
Defendants-Appellants.
Appeal from the United States District Court
for the Central District of California
Christina A. Snyder, District Judge, Presiding
Argued and Submitted
June 7, 2011—Pasadena, California
Filed September 2, 2011
16763
16764 R.R. STREET & CO. v. TRANSPORT INSURANCE CO.
Before: Robert R. Beezer, Stephen S. Trott, and
Pamela Ann Rymer, Circuit Judges.
Opinion by Judge Beezer
R.R. STREET & CO. v. TRANSPORT INSURANCE CO. 16767
COUNSEL
Eric Grant, Hicks Thomas LLP, Sacramento, California, for
plaintiff-defendant-appellant R.R. Street & Co. Inc.; Bryan G.
Schumann, Lewis Brisbois Bisgaard & Smith LLP, Chicago,
Illinois, for plaintiff-defendant-appellant National Union Fire
Insurance Company of Pittsburgh, Pennsylvania.
Michael W. Wong (briefed) and Ray L. Wong (argued),
Duane Morris LLP, San Francisco, California, for the
defendant-plaintiff-appellee.
16768 R.R. STREET & CO. v. TRANSPORT INSURANCE CO.
OPINION
BEEZER, Circuit Judge:
This dispute emerges from a web of state and federal litiga-
tion over liability for damages and defense costs in certain
environmental tort suits. The appeal before us concerns two
cases that mirror each other: (1) an action for damages that
the Appellants brought in federal court and (2) a declaratory
judgment action that the Appellee brought in state court,
which Appellants later removed to federal court. The district
court declined to entertain these actions, by dismissing the
former and remanding the latter, in light of a related third
action that had been pending for several years in state court.
We must examine the propriety of this decision.
Considering the particular circumstances of this case, we
conclude that the district court had discretion under Wilton v.
Seven Falls Co., 515 U.S. 277, 289-90 (1995), and Brillhart
v. Excess Ins. Co. of Am., 316 U.S. 491 (1942), to remand the
declaratory judgment action, and that the action for damages
fell within the scope of Colorado River Water Conservation
Dist. v. United States, 424 U.S. 800 (1976). We therefore
affirm.
I
BACKGROUND
Vulcan Materials Company (“Vulcan”) manufactures a dry-
cleaning solvent called perchloroethylene (“PerSec”).1
Between the 1960s and the 1990s, R.R. Street & Co. Inc.
(“Street”) distributed PerSec. During this time, Vulcan named
Street as an additional insured under its insurance policies,
including an excess liability coverage policy that Transport
Insurance Company (“Transport”) issued to Vulcan in 1981
1
Vulcan is not a party to either of the cases on appeal.
R.R. STREET & CO. v. TRANSPORT INSURANCE CO. 16769
(the “1981 Policy”). Since the 1990s, a number of lawsuits
have been filed against Vulcan and Street alleging damage
caused by the sale, distribution, use or handling of PerSec
(collectively the “Tort Actions”). Street and Vulcan separately
defended these actions. Since 2005, the companies and their
insurers have engaged in an ongoing dispute over liability for
damages and defense costs in the Tort Actions.
A. The Vulcan Action
In January 2005, Transport filed a lawsuit in the Los Ange-
les County Superior Court seeking a declaration of its cover-
age obligations to Vulcan under four consecutive insurance
policies, including the 1981 Policy. In August 2006, two other
insurance carriers filed similar actions against Vulcan and its
primary insurers in the same court. In January 2007, these
cases were consolidated into a single complex proceeding (the
“Vulcan Action”) in Los Angeles County Superior Court.
In the meantime, Street sought reimbursement from Vulcan
for defense costs and damages in the Tort Actions. In Febru-
ary 2008, Street and its insurer, National Union Fire Insurance
Company of Pittsburgh, PA (“National Union”), filed a
breach of contract and indemnity action against Vulcan in the
Northern District of Illinois to recover these amounts (the “Il-
linois Action”). See R.R. Street & Co. v. Vulcan Materials
Co., 569 F.3d 711 (7th Cir. 2009). (We refer to Street and
National Union collectively as “Street/National Union.”) In
the Illinois Action, Street/National Union claimed that Vulcan
was liable to Street based on an indemnification provision in
the parties’ distribution contract. Id. at 713.
In April 2008, Vulcan filed the state court equivalent of a
third-party complaint against Street/National Union in the
Vulcan Action; Vulcan hoped to resolve all indemnification
claims related to the Tort Actions in a single proceeding. Vul-
can’s complaint against Street/National Union mirrored the
Illinois Action; in addition, Vulcan sought a declaration that
16770 R.R. STREET & CO. v. TRANSPORT INSURANCE CO.
its insurers were liable for any obligation Vulcan owed to
Street/National Union.
With the same claims pending in an Illinois federal court
and a California state court, Vulcan and Street/National Union
waged a battle to determine which court would hear the
claims between them.2 The state court agreed to stay the
claims against Street/National Union in the Vulcan Action
and decide them at a later stage of the litigation.
At no point did Transport intervene in the Illinois Action,
and prior to the cases on appeal, no claims had been filed
between Street and Transport in the Vulcan Action or else-
where.3 Nevertheless, the parties and the court were aware of
the dormant claims between Street and Transport. In a Janu-
ary 2009 supplemental brief on preliminary issues in the Vul-
can Action, National Union argued that the superior court’s
initial determinations would not apply to any of Street’s
potential claims under the 1981 Policy because Street was in
a different position than Vulcan.
At a March 2009 status hearing, the parties discussed
Street’s status as an additional insured under the 1981 Policy.
Street indicated that it had made a demand for coverage under
2
Vulcan filed a motion to dismiss the Illinois Action based on its new
claims in the Vulcan Action. See R.R. Street & Co., 569 F.3d at 714. As
in this case, the district court refused to exercise jurisdiction over the Illi-
nois Action based on the Vulcan Action; however, in that case the court
relied solely on its discretion under the Declaratory Judgment Act. Id. at
714. The Seventh Circuit held that the district court abused its discretion
by applying Wilton/Brillhart to claims for damages, but the court refrained
from deciding whether Colorado River would have justified dismissal of
the action for damages. Id. at 717 & n.10.
3
Since 2006, National Union has been a defendant in the Vulcan Action
in its capacity as Vulcan’s insurer, but National Union has consistently
distinguished between its capacity as Vulcan’s insurer and its capacity as
Street’s insurer. We do not consider National Union’s involvement as Vul-
can’s insurer in our analysis of this case.
R.R. STREET & CO. v. TRANSPORT INSURANCE CO. 16771
the 1981 Policy, which Transport had rejected, but it had not
yet filed any claims against Transport in court because the
underlying Tort Actions were still pending. Street argued that
any coverage decisions regarding Vulcan should not apply to
Street because Street was covered by different primary insur-
ance policies, was in a different position than Vulcan in rela-
tion to the Tort Actions and had not participated in discovery
or case management related to Transport’s claims against
Vulcan. The state court postponed this issue, stating that it
would decide later whether Street would be bound by a deci-
sion regarding Vulcan’s coverage under the 1981 Policy.
In April 2009, the state court issued an order in the Vulcan
Action deciding three preliminary legal issues concerning the
scope of Transport’s liability to Vulcan under the 1981 Pol-
icy. The court determined the scope of Transport’s duty to
defend under the policy, interpreted the phrase “underlying
insurance,” and addressed whether horizontal exhaustion
applied to Vulcan’s claims under the policy. The court’s inter-
pretation of the 1981 Policy favored Transport’s position, so
Vulcan appealed the decision to the California Court of
Appeals.
B. The Federal and Removed Actions
On August 18, 2009, while Vulcan’s appeal was pending,
Street/National Union filed an action for damages against
Transport (the “Federal Action”) in the Central District of
California. In the Federal Action, Street/National Union
asserted claims for breach of contract, subrogation, equitable
contribution and unjust enrichment under the 1981 Policy,
seeking damages and defense costs incurred in the Tort
Actions.
A few days later, on August 20, 2009, Street/National
Union and Vulcan agreed to dismiss the claims between them
in the Vulcan Action. As of that date, Street was no longer a
party to the Vulcan Action. Upon learning that Street/National
16772 R.R. STREET & CO. v. TRANSPORT INSURANCE CO.
Union had filed the Federal Action and had been voluntarily
dismissed from the Vulcan Action, the state court judge urged
Transport to either amend its complaint to name
Street/National Union as defendants in the Vulcan Action or
file a separate action against Street/National Union that could
be consolidated with the Vulcan Action.
On November 10, 2009, Transport filed a declaratory judg-
ment action against Street and National Union in Los Angeles
County Superior Court (the “Removed Action”). Transport’s
action mirrors the Federal Action. Transport also filed in the
state court a notice stating that its declaratory judgment action
is related to the Vulcan Action.
On November 12, 2009, Transport filed in the district court
a motion to stay or dismiss the Federal Action in light of the
Vulcan Action and the Removed Action, which were then
separately pending in state court. On November 16, 2009,
before the district court ruled on Transport’s motion and
before the state court consolidated the Removed Action with
the Vulcan Action, Street removed Transport’s action to fed-
eral court. A few weeks later, the state court entered an order
relating the cases in the event that the Removed Action was
remanded to state court.
The Federal Action and the Removed Action were assigned
to the same judge, and Transport quickly moved for remand
of the Removed Action as well as dismissal of the Federal
Action. On February 8, 2010, the district court granted both
of Transport’s motions. Noting the similarities between the
two actions in federal court and the Vulcan Action, the district
court exercised its discretion under the Declaratory Judgment
Act to remand the Removed Action, and the court dismissed
the Federal Action pursuant to the principles announced in
Colorado River Water Conservation Dist. v. United States,
424 U.S. 800 (1976). Based on the Rooker-Feldman doctrine,
the court also concluded that it lacked jurisdiction to decide
R.R. STREET & CO. v. TRANSPORT INSURANCE CO. 16773
any issues addressed in the state court’s April 2009 order in
the Vulcan Action.
Street and National Union timely appealed the remand and
the dismissal, and this court consolidated the appeals. Both
the remand and the dismissal are appealable decisions. See
Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 712-13, 715
(1996). The district court had jurisdiction under 28 U.S.C.
§ 1332(a)(1), based on diversity of citizenship, and we have
jurisdiction to consider the appeals under 28 U.S.C. § 1291.
II
TRANSPORT’S MOTION TO DISMISS
Before examining the district court’s decision, we must
address a preliminary question — whether to dismiss
Street/National Union’s appeal of the remand order. Transport
argues that Street/National Union waived their right to “re-
remove” the Removed Action to federal court when they filed
a cross-complaint in the Vulcan Action. In some cases, a
defendant may waive the initial right to removal if “the defen-
dant takes actions in state court that manifest his or her intent
to have the matter adjudicated there.” Resolution Trust Corp.
v. Bayside Developers, 43 F.3d 1230, 1240 (9th Cir. 1994).
Transport cites no authority extending this waiver principle to
the appeal of a remand order, but even if we extended it to
this case, Transport’s argument would fail. “A waiver of the
right of removal must be clear and unequivocal.” Id. (internal
quotation marks omitted). Here, there is no evidence that
Street/National Union intended to waive their right to appeal
the district court’s order. Street/National Union merely sought
to preserve their claims in state court pending the outcome of
this appeal; they have indicated at every step of the way that
they intended to pursue the appeal.
Further, Street’s post-remand filings do not deprive us of
jurisdiction to review the remand order. The case is not moot
16774 R.R. STREET & CO. v. TRANSPORT INSURANCE CO.
because an “actual controversy” still exists between Transport
and Street/National Union. See Alvarez v. Smith, ___ U.S.
___, 130 S. Ct. 576, 580-81 (2009). For these reasons, we
deny Transport’s motion to partially dismiss the appeal, and
we review the district court’s decision in its entirety.
III
STANDARD OF REVIEW
We review application of the Rooker-Feldman doctrine de
novo. Carmona v. Carmona, 603 F.3d 1041, 1050 (9th Cir.
2010). We review the district court’s decision to refrain from
deciding a declaratory judgment action for abuse of discre-
tion. Wilton v. Seven Falls Co., 515 U.S. 277, 289-90 (1995).
We also review a district court’s decision to stay or dismiss
an action based on Colorado River for abuse of discretion;
however, this standard is stricter “than the flexible abuse of
discretion standard used in other areas of law” because “dis-
cretion must be exercised within the narrow and specific lim-
its prescribed by the [Colorado River] doctrine.” Holder v.
Holder, 305 F.3d 854, 863 (9th Cir. 2002) (internal quotation
marks omitted). Thus, “[w]hether the facts of a particular case
conform to the requirements for a Colorado River stay or dis-
missal is a question of law which we review de novo.” Smith
v. Cent. Ariz. Water Conservation Dist., 418 F.3d 1028, 1032
(9th Cir. 2005).
Although the parties have filed a number of motions asking
us to consider recent developments in the state court proceed-
ings, we examine the district court’s decision based on the
state of affairs at the time of that decision. We judge “the pro-
priety of the district court’s assumption of jurisdiction” in a
declaratory judgment action “as of the time of filing, not the
time of appeal.” Emp’rs Reinsurance Corp. v. Karussos, 65
F.3d 796, 800 (9th Cir. 1995), overruled in part on other
grounds by Gov’t Emps. Ins. Co. v. Dizol, 133 F.3d 1220 (9th
Cir. 1998) (en banc). Although we have not explicitly
R.R. STREET & CO. v. TRANSPORT INSURANCE CO. 16775
addressed the scope of review for a grant of a Colorado River
motion, when reviewing the district court’s denial of a Colo-
rado River motion to stay or dismiss, we previously have held
that we consider only “the then-available facts.” Smith, 418
F.3d at 1033 n.5. We see no reason to adopt a different rule
in this case. As we noted in Smith, “ ‘[d]ocuments or facts not
presented to the district court are not part of the record on
appeal.’ ” Id. (quoting United States v. Elias, 921 F.2d 870,
874 (9th Cir. 1990)). We therefore deny the parties’ motions
requesting judicial notice, motions to supplement the record
and motions to file supplemental briefs because these motions
relate to events that occurred after the district court remanded
the Removed Action and dismissed the Federal Action. We
proceed by reviewing the district court’s decision in light of
the circumstances at the time of that decision.
IV
ROOKER-FELDMAN
[1] The district court concluded that Rooker-Feldman pro-
hibited the court from considering any of Street/National
Union’s allegations that were contrary to findings in the supe-
rior court’s April 2009 order.4 We disagree. The Supreme
Court has confined Rooker-Feldman to the narrow range of
“cases brought by state-court losers complaining of injuries
caused by state-court judgments rendered before the district
court proceedings commenced and inviting district court
review and rejection of those judgments.” Exxon Mobil Corp.
v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005).
[2] Here, there is simply “no state court judgment from
which” Street/National Union seek relief. Vacation Vill., Inc.
v. Clark Cnty., 497 F.3d 902, 911 (9th Cir. 2007) (emphasis
added). Even if we considered the April 2009 order a judg-
4
The April 2009 order decided stipulated legal questions without enter-
ing a judgment.
16776 R.R. STREET & CO. v. TRANSPORT INSURANCE CO.
ment, the order did not apply to Street/National Union.
Rooker-Feldman therefore does not deprive the district court
of jurisdiction over the claims in the Federal Action or the
Removed Action. See Johnson v. De Grandy, 512 U.S. 997,
1005-06 (1994) (noting that Rooker-Feldman does not apply
to claims that have not yet been litigated); Carmona, 603 F.3d
at 1052 (concluding that Rooker-Feldman did not apply to a
claim against a new party “even though [the claim] raise[d]
the same legal issue” as claims against prior parties).
V
DISCRETION OVER ENTERTAINING THE
ACTIONS
[3] Having determined that the district court had jurisdic-
tion to consider the claims in the Federal Action and the
Removed Action, we must now decide whether the district
court had discretion to refrain from exercising that jurisdic-
tion. Although courts usually avoid duplicative litigation
when similar cases are pending in two different federal courts,
“[g]enerally, as between state and federal courts, the rule is
that the pendency of an action in the state court is no bar to
proceedings concerning the same matter” in a federal court.
Colorado River, 424 U.S. at 817 (emphasis added) (internal
quotation marks omitted). In this case, the district court relied
on two doctrines that provide exceptions to the general rule
concerning concurrent state and federal proceedings. The
court remanded the Removed Action based on the Wil-
ton/Brillhart doctrine, and it dismissed the Federal Action
pursuant to Colorado River. We consider these doctrines in
turn.
A. Wilton/Brillhart
[4] The Declaratory Judgment Act uses permissive lan-
guage. See 28 U.S.C. § 2201(a) (stating that federal courts
“may declare the rights and other legal relations of any inter-
R.R. STREET & CO. v. TRANSPORT INSURANCE CO. 16777
ested party” in a declaratory judgment action (emphasis
added)). Based on the permissive nature of the Declaratory
Judgment Act, in Brillhart v. Excess Insurance Co. of Amer-
ica, 316 U.S. 491 (1942), the Supreme Court held that a dis-
trict court has discretion to dismiss a federal declaratory
judgment action when “the questions in controversy . . . can
better be settled in” a pending state court proceeding. Id. at
495. The Court reaffirmed this principle in Wilton, holding
that a district court may decline to entertain a federal declara-
tory judgment action when state court proceedings “present[ ]
opportunity for ventilation of the same state law issues.” 515
U.S. at 290. The Court has not yet delineated “the outer
boundaries” of the so-called Wilton/Brillhart doctrine, id., but
we have allowed district courts broad discretion as long as it
furthers the Declaratory Judgment Act’s purpose of enhancing
“judicial economy and cooperative federalism,” Dizol, 133
F.3d at 1224.
[5] In Brillhart, the Court articulated three factors that
courts should consider when examining the propriety of enter-
taining a declaratory judgment action: avoiding “needless
determination of state law issues”; discouraging “forum shop-
ping”; and avoiding “duplicative litigation.” See Dizol, 133
F.3d at 1225. Although courts may also consider a number of
other factors, the three “Brillhart factors remain the philo-
sophic touchstone” for the Wilton/Brillhart analysis, id., and
they served as the basis for the district court’s decision in this
case. The district court found that the claims in the Removed
Action involved state law issues that had been or could be
considered in the Vulcan Action; that Street had engaged in
forum shopping by filing the Federal Action and removing the
Removed Action; and, most significantly, that the Removed
Action was duplicative of the Vulcan Action.
1. Determination of State Law Issues
[6] There is no question that retaining jurisdiction over the
Removed Action would have required the district court to
16778 R.R. STREET & CO. v. TRANSPORT INSURANCE CO.
decide basic issues of state law. In prior cases, we have recog-
nized that needless determination of state law issues alone
may support remand. See Huth v. Hartford Ins. Co. of the
Midwest, 298 F.3d 800, 802-04 (9th Cir. 2002) (affirming
remand of a declaratory judgment action to avoid needless
determination of state law issues even in the absence of a sim-
ilar state court proceeding). We do not end our analysis here,
however, because the presence of the Federal Action raises
other considerations in this case.
2. Forum Shopping
Street/National Union argue that the district court abused
its discretion by remanding the Removed Action instead of
staying or consolidating it with the Federal Action because
Transport’s Removed Action was “reactive.” We have
instructed that “federal courts should generally decline to
entertain reactive declaratory actions.” Dizol, 133 F.3d at
1225. For example, we held that when an insurer filed a
declaratory judgment action in federal court “during the pen-
dency of a non-removable state court action presenting the
same issues of state law,” and the insurer did so merely to
obtain “a tactical advantage from litigating in a federal
forum,” the “defensive or reactive” nature of the insurer’s
action warranted dismissal. Continental Cas. Co. v. Robsac
Indus., 947 F.2d 1367, 1371-72 (9th Cir. 1991), overruled in
part on other grounds by Dizol, 133 F.3d at 1220.
[7] The declaratory judgment action in Robsac was “an
archetype” of “ ‘reactive’ litigation,” id. at 1372, but this case
is distinguishable from Robsac. In Robsac, it was clear that
the insurance company was forum-shopping merely for strate-
gic purposes, and all of the Brillhart factors pointed in the
same direction. See id. at 1371-73. Here, Transport concedes
that it filed the Removed Action in response to the Federal
Action, but it did so not merely to seek a favorable forum but
also to seek a forum that could resolve all issues related to the
1981 Policy in one comprehensive proceeding. Additionally,
R.R. STREET & CO. v. TRANSPORT INSURANCE CO. 16779
in contrast to Robsac, both parties appear to have engaged in
some defensive maneuvering or “procedural fencing.”5
The mere fact that the district court’s decision preserved
the later-filed Removed Action instead of the earlier-filed
Federal Action is of no consequence. Although courts gener-
ally give preference to the first-filed case among concurrent
federal court proceedings, this “is not a rigid or inflexible rule
to be mechanically applied,” but rather one that yields “to the
dictates of sound judicial administration.” Pacesetter Sys.,
Inc. v. Medtronic, Inc., 678 F.2d 93, 95 (9th Cir. 1982). Tim-
ing is only one consideration when deciding whether to enter-
tain a declaratory judgment action, and the Wilton/Brillhart
factors sometimes compel a court to decline to entertain an
earlier-filed action in favor of a later-filed action. See Wilton,
515 U.S. at 280-82 (affirming dismissal of a federal action in
light of a later-filed state action); Huth, 298 F.3d at 802-04
(affirming dismissal of an earlier-filed declaratory action but
remanding a later-filed one).
3. Duplicative Litigation
If the Removed Action had been the only case pending
before the district court, there would be no question that the
court properly remanded the case. Retaining jurisdiction over
the Removed Action would have required the district court to
address the same issues of state law and policy interpretation
that the state court had been grappling with for several years
in the Vulcan Action, leading to duplicative litigation. In this
case, however, the district court had to consider not only the
Removed Action, which requests only declaratory relief, but
also the Federal Action, which includes claims for damages.
We have held that if the same action contains claims for
both monetary and declaratory relief, “the district court
5
We provide a more lengthy discussion of “forum shopping” in our Col-
orado River analysis below.
16780 R.R. STREET & CO. v. TRANSPORT INSURANCE CO.
should not, as a general rule, remand or decline to entertain
the claim for declaratory relief.” Snodgrass v. Provident Life
& Accident Ins. Co., 147 F.3d 1163, 1167 (9th Cir. 1998)
(internal quotation marks omitted). Snodgrass raises two con-
siderations significant to this case. First, the discretionary Wil-
ton/Brillhart standard does not apply to actions for damages,
and the court may not rely solely on this standard to dispose
of claims for damages. In Snodgrass, the district court on its
own motion used its broad discretion under the Declaratory
Judgment Act to remand the entire case even though “the
essence of” the case was “a suit for damages.” Id. We
reversed because “[c]laims that exist independent of the
request for a declaration are not subject to the Declaratory
Judgment Act’s discretionary jurisdictional rule” but instead
“invoke the ‘virtually unflagging’ obligation of the district
court to hear jurisdictionally sufficient claims.” Id. (quoting
Colorado River, 424 U.S. at 817).6
Second, if the district court must exercise jurisdiction over
claims for damages, the court should also retain similar claims
for declaratory relief to avoid piecemeal litigation. Given the
usual obligation to exercise jurisdiction over claims for dam-
ages, “[r]emanding only the declaratory component of . . . an
action will frequently produce piecemeal litigation, a result
which the Declaratory Judgment Act was intended to avoid,
rather than promote.” Id. (citations omitted); see also Dizol,
133 F.3d at 1225-26 (“If a federal court is required to deter-
mine major issues of state law because of the existence of
non-discretionary claims, the declaratory action should be
retained to avoid piecemeal litigation.”).
[8] Although this case involves two separate actions, while
Snodgrass involved a single action with claims for both mon-
etary and declaratory relief, the same basic principles apply.
If the district court must exercise jurisdiction over the Federal
6
In Snodgrass, the question whether Colorado River authorized a stay
or dismissal of the claims for damages was not before the court.
R.R. STREET & CO. v. TRANSPORT INSURANCE CO. 16781
Action, then the court should also retain jurisdiction over the
Removed Action. The two actions involve identical issues, so
remanding the Removed Action while maintaining the Fed-
eral Action would not serve the Wilton/Brillhart goals of
avoiding duplicative litigation and needless determination of
state law issues. Cf. id.; Chamberlain v. Allstate Ins. Co., 931
F.2d 1361, 1367-68 (9th Cir. 1991) (noting that refusing to
issue a declaratory judgment may result in piecemeal litiga-
tion if the court retains jurisdiction over other claims).7 In
short, we conclude the district court did not abuse its discre-
tion by remanding the Removed Action as long as Colorado
River authorized dismissal of the Federal Action. We now
turn to Colorado River.
B. Colorado River
As we noted above, courts do not possess the same discre-
tion over actions for damages that they possess over declara-
tory judgment actions. See Wilton, 515 U.S. at 286. Indeed,
when it comes to non-discretionary actions for damages, such
as the Federal Action, federal courts possess a “virtually
unflagging obligation . . . to exercise the jurisdiction given
them.” Colorado River, 424 U.S. at 817. Only in rare cases
will “the presence of a concurrent state proceeding” permit
the district court to dismiss a concurrent federal suit “for rea-
sons of wise judicial administration.” Id. at 818.
The Supreme Court recognized such a rare case in Colo-
rado River. There, the federal government brought suit
against water users in federal court, seeking a declaration of
water rights in certain rivers and tributaries in Colorado. Id.
7
Street/National Union rely heavily on Chamberlain, but this case is
distinguishable. Street/National Union assert that the district court abused
its discretion by remanding the declaratory judgment action, but in Cham-
berlain, we addressed whether the district court abused its discretion by
entertaining the action. 931 F.2d at 1366. Further, the district court in
Chamberlain did not invoke Colorado River, and we did not address it in
that case. See id. at 1366-68.
16782 R.R. STREET & CO. v. TRANSPORT INSURANCE CO.
at 805. Colorado had previously established seven water dis-
tricts to adjudicate water rights in ongoing state court pro-
ceedings. Id. at 804. After the government filed its suit in
federal court, several of the defendants in that case filed an
application joining the government as a party in the state court
proceedings for the relevant water district. Id. at 806. The dis-
trict court then dismissed the government’s federal suit in
light of the ongoing state court proceedings. On appeal, the
Supreme Court held that although none of the traditional
abstention doctrines applied, “considerations of [w]ise judi-
cial administration, giving regard to conservation of judicial
resources and comprehensive disposition of litigation,” justi-
fied dismissal of the federal suit. Id. at 817 (alternation in
original) (internal quotation marks omitted). The Court noted
several factors that supported dismissal, relying particularly
on the “highly interdependent” relationship between the
claims in the state and federal proceedings and the federal
policy, embodied in the McCarran Amendment, of avoiding
piecemeal adjudication of water rights. Id. at 819-20.
[9] The Court has carefully limited Colorado River,
emphasizing that courts may refrain from deciding an action
for damages only in “exceptional” cases, and only “the clear-
est of justifications” support dismissal. Id. at 818-19. In
Moses H. Cone Memorial Hospital v. Mercury Construction
Corp., the Court held that no exceptional circumstances justi-
fied the district court’s stay of an action to compel arbitration
under the Federal Arbitration Act. 460 U.S. 1, 19 (1983). The
Court noted that although a state court suit involving the
underlying claims was pending when the federal suit was
filed, the federal suit did not increase the risk of piecemeal lit-
igation; substantial progress had already been made in the
federal suit; federal law provided the rule of decision on the
merits of the case; and there was substantial doubt as to
whether the state court could issue the remedy sought in fed-
eral court. Id. at 19-26.
R.R. STREET & CO. v. TRANSPORT INSURANCE CO. 16783
[10] To decide whether a particular case presents the
exceptional circumstances that warrant a Colorado River stay
or dismissal, the district court must carefully consider “both
the obligation to exercise jurisdiction and the combination of
factors counseling against that exercise.” Colorado River, 424
U.S. at 818. Drawing from Colorado River, Moses H. Cone
and subsequent Ninth Circuit cases, we have recognized eight
factors for assessing the appropriateness of a Colorado River
stay or dismissal:8 (1) which court first assumed jurisdiction
over any property at stake; (2) the inconvenience of the fed-
eral 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 pro-
ceedings will resolve all issues before the federal court.
Holder, 305 F.3d at 870.9
The first two factors in Holder are irrelevant in this case
because the dispute does not involve a specific piece of prop-
erty, and both the federal and state forums are located in Los
Angeles. We discuss each of the remaining six factors below,
mindful that “[a]ny doubt as to whether a factor exists should
8
We generally require a stay rather than a dismissal. See Coopers &
Lybrand v. Sun-Diamond Growers of CA, 912 F.2d 1135, 1136 (9th Cir.
1990). But we do not consider this issue because Street/National Union
did not raise it on appeal. See Dream Games of Ariz., Inc. v. PC Onsite,
561 F.3d 983, 994-95 (9th Cir. 2009) (“We will not ordinarily consider
matters on appeal that are not specifically and distinctly argued in appel-
lant’s opening brief.” (internal quotation marks omitted)).
9
The Court enumerated the first four factors in Colorado River. 424
U.S. at 818-19. The fifth and sixth factors are drawn from Moses H. Cone,
460 U.S. at 23-27, and the seventh and eighth factors emerged from subse-
quent Ninth Circuit cases, see Travelers Indem. Co. v. Madonna, 914 F.2d
1364, 1367-68 (9th Cir. 1990). In Holder, we explicitly listed the first
seven factors, but we also considered the eighth factor as a preliminary
matter. See Holder, 305 F.3d at 870.
16784 R.R. STREET & CO. v. TRANSPORT INSURANCE CO.
be resolved against a stay” or dismissal. Travelers, 914 F.2d
at 1369. As indicated below, some factors may weigh for or
against the exercise of jurisdiction while others primarily
serve as a bar to stay or dismissal.
1. Piecemeal Litigation
“Piecemeal litigation occurs when different tribunals con-
sider the same issue, thereby duplicating efforts and possibly
reaching different results.” Am. Int’l Underwriters, (Philip-
pines), Inc. v. Cont’l Ins. Co., 843 F.2d 1253, 1258 (9th Cir.
1988). The mere possibility of piecemeal litigation does not
constitute an exceptional circumstance. See Travelers, 914
F.2d at 1369. Instead, the case must raise a “special concern
about piecemeal litigation,” id., which can be remedied by
staying or dismissing the federal proceeding. See Moses H.
Cone, 460 U.S. at 20-21 (noting that a stay of the federal suit
would not alleviate the possibility that some claims would be
subject to arbitration while others were decided in court).
With the Removed Action in state court, there is no ques-
tion that maintaining the Federal Action would result in piece-
meal litigation. But it would be improper for a court to stay
or dismiss a case based on a possibility of piecemeal adjudica-
tion that the court could have avoided by other means.
Because the district court could have retained jurisdiction
over the Removed Action, the proper inquiry in this case is
whether maintaining jurisdiction over the Federal Action
would result in piecemeal litigation even if the Removed
Action were not in state court. Like the district court, we con-
clude that it would.
[11] Even if the district court had stayed the Removed
Action, deciding the Federal Action and the Vulcan Action in
separate courts would result in duplication of efforts. Both the
Vulcan Action and the Federal Action are centered on
whether the 1981 Policy obligates Transport to cover damages
and defense costs in the Tort Actions. In Colorado River, the
R.R. STREET & CO. v. TRANSPORT INSURANCE CO. 16785
Court noted that the McCarran Amendment evidenced a clear
policy of avoiding “piecemeal adjudication of water rights in
a river system.” 424 U.S. at 819. Here, there is no explicit
policy of avoiding piecemeal adjudication, but like the gov-
ernment in Colorado River, Street asks the district court to
adjudicate rights that are implicated in a “ ‘vastly more com-
prehensive’ state action.” Travelers, 914 F.2d at 1369. The
state court consolidated multiple cases to create a comprehen-
sive scheme for deciding coverage in the Tort Actions. There
was a “highly interdependent” relationship between the
claims in the Federal Action and the claims in the Vulcan
Action, Colorado River, 424 U.S. at 819, and although
Street/National Union had not yet brought their claims, the
state court contemplated these claims in its plans for proceed-
ing in the Vulcan Action. The district court did not err by con-
cluding that avoidance of piecemeal litigation weighs
significantly against jurisdiction, particularly in light of the
next factor. See Am. Int’l Underwriters, 843 F.2d at 1258
(upholding a Colorado River dismissal, in part to avoid piece-
meal litigation).
2. Order of Jurisdiction
We next consider the order in which the forums obtained
jurisdiction. As a technical matter, Street is correct that the
district court was the first to exercise jurisdiction over the spe-
cific claims in the Federal Action. Prior to the Federal Action,
Vulcan had filed claims against Street/National Union in the
Vulcan Action, but no claims had been asserted between
Transport and Street/National Union.
Our analysis does not end here, however. The Supreme
Court has instructed that instead of taking a mechanical
approach, courts must apply this factor “in a pragmatic, flexi-
ble manner with a view to the realities of the case at hand.”
Moses H. Cone, 460 U.S. at 21 (giving little weight to the
dates of filing when the same relative progress had been made
in the state and federal proceedings). Here, the state court was
16786 R.R. STREET & CO. v. TRANSPORT INSURANCE CO.
the first to exercise jurisdiction over the subject matter
involved in the Federal Action. Although this might not be
relevant in every case, the progress of the Vulcan Action and
Street/National Union’s involvement in the Vulcan Action
make this an important consideration in this case.
[12] Between the filing of the Vulcan Action in 2005 and
the filing of the Federal Action in 2009, the state court made
significant progress in the Vulcan Action. The court already
interpreted the relevant provisions of the 1981 Policy and was
positioned to fully adjudicate the broader coverage dispute
between Vulcan and Transport. The court had conducted dis-
covery, initiated a phased approach to the litigation and issued
an order concerning foundational legal matters. In fact, much
of this progress occurred after Vulcan brought Street/National
Union into the action in 2008. Cf. Colorado River, 424 U.S.
at 820 (noting “the existing participation by the Government”
in similar state court proceedings). Additionally, both the par-
ties and the court acknowledged Street/National Union’s unli-
tigated claims against Transport, and the state court expressly
reserved any decisions regarding these claims for a later phase
of the litigation. Considering the realities of this case, the dis-
trict court properly concluded that the state court’s progress
in the Vulcan Action weighs against jurisdiction.
3. Source of Law
[13] As with most insurance coverage disputes, state law
provides the rules of decision for all of Street/National
Union’s claims, but we consider this a neutral factor here.
“[A]lthough ‘the presence of federal-law issues must always
be a major consideration weighing against surrender’ [of
jurisdiction], the ‘presence of state-law issues may weigh in
favor of that surrender only ‘in some rare circumstances.’ ”
Travelers, 914 F.2d at 1370 (quoting Moses H. Cone, 460
U.S. at 26). This case does not present such “rare circum-
stances.” The complexity of the Vulcan Action and related
matters stems from the number of policies and insurers, not
R.R. STREET & CO. v. TRANSPORT INSURANCE CO. 16787
from the type of law involved in the action. Because the cases
here involve “routine issues of state law,” such as breach of
contract, indemnification and subrogation, this factor does not
weigh against jurisdiction. See id. (concluding the same where
the cases involved state law claims for misrepresentation,
breach of fiduciary duty and breach of contract).
4. Adequacy of State Court
A district court may not stay or dismiss the federal proceed-
ing if the state proceeding cannot adequately protect the rights
of the federal litigants. For example, if there is a possibility
that the parties will not be able to raise their claims in the
state proceeding, a stay or dismissal is inappropriate. See
Moses H. Cone, 460 U.S. at 26 (emphasizing that the state
court might lack the power to enter the order that the plaintiff
was seeking in federal court); Holder, 305 F.3d at 869 n.5
(noting that the state court probably lacked jurisdiction to hear
the plaintiff’s federal ICARA claim).
[14] Here, there is no question that the state court has
authority to address the rights and remedies at issue in this
case. In fact, Street/National Union concede that the state
court can adequately resolve the parties’ claims. Like source
of law, however, this factor “is more important when it
weighs in favor of federal jurisdiction.” Travelers, 914 F.2d
at 1370 (internal quotation marks omitted).
5. Forum Shopping
Forum shopping refers to “[t]he practice of choosing the
most favorable jurisdiction or court in which a claim might be
heard.” BLACK’S LAW DICTIONARY 726 (9th ed. 2009). To
avoid forum shopping, courts may consider “the vexatious or
reactive nature of either the federal or the state litigation.”
Moses H. Cone, 460 U.S. at 17 n.20. We have affirmed a Col-
orado River stay or dismissal when it was readily apparent
that the federal plaintiff was engaged in forum shopping. See
16788 R.R. STREET & CO. v. TRANSPORT INSURANCE CO.
Nakash v. Marciano, 882 F.2d 1411, 1417 (9th Cir. 1989)
(plaintiff brought claims in federal court after three and a half
years of litigating in state court); Am. Int’l Underwriters, 843
F.2d at 1255-56 (after filing in state court, plaintiff brought
suit in federal court to avoid the state court’s unfavorable evi-
dentiary rules).
The district court did not expressly rely on this factor in its
brief Colorado River analysis, and given the circumstances of
this case, we do not believe this factor weighs significantly
for or against jurisdiction. Each party contends that the other
engaged in forum shopping. Transport argues that Street
engaged in forum shopping by filing the Federal Action
instead of filing its claims in the Vulcan Action. Indeed,
Street/National Union had been third parties in the Vulcan
Action since April 2008, but they filed the Federal Action
only after the superior court’s April 2009 order, which
favored Transport, and only after convincing Vulcan to dis-
miss Street/National Union from the Vulcan Action. On the
other hand, as of at least March 2009, Transport knew that
Street was a defendant in the Tort Actions and was listed as
an additional insured on the 1981 Policy, yet Transport never
filed any claims for declaratory relief against Street until after
Street filed the Federal Action.
We decline the parties’ invitation to referee their finger-
pointing match. The chronology of events suggests that both
parties took a somewhat opportunistic approach to this litiga-
tion, but we cannot classify either party’s actions as mere
forum shopping. As we noted in our Brillhart discussion
above, Transport sought a comprehensive forum, not merely
a favorable one. In this sense, Transport’s attempt to consoli-
date Street/National Union’s claims with the Vulcan Action is
no different than the application by the defendants in Colo-
rado River to join the government as a party to state water
district proceedings. See Colorado River, 424 U.S. at 820
n.25.
R.R. STREET & CO. v. TRANSPORT INSURANCE CO. 16789
[15] Neither can we say that Street/National Union were
merely forum shopping by filing the Federal Action. Prior to
filing the Federal Action, Street/National Union had not pre-
viously asserted their claims against Transport, and we are
cautious about labeling as “forum shopping” a plaintiff’s
desire to bring previously unasserted claims in federal court.
“[T]he desire for a federal forum is assured by the constitu-
tional provision for diversity jurisdiction and the congressio-
nal statute implementing Article III.” First State Ins. Co. v.
Callan Assocs., Inc., 113 F.3d 161, 162 (9th Cir. 1997). In
this particular case, we cannot say that forum shopping
weighs significantly for or against jurisdiction.
6. Parallel Suits
The final factor, and one that features prominently in this
appeal, is whether the state court proceeding sufficiently par-
allels the federal proceeding. Although we have not always
required “exact parallelism,” the two actions must be “sub-
stantially similar.” Nakash, 882 F.2d at 1416. We have held
that “ ‘the existence of a substantial doubt as to whether the
state proceedings will resolve the federal action precludes’ ”
a Colorado River stay or dismissal. Smith, 418 F.3d at 1033
(quoting Intel Corp. v. Advanced Micro Devices, Inc., 12 F.3d
908, 913 (9th Cir. 1993)).
As Street/National Union note, prior to the cases on appeal,
there was doubt about whether the Vulcan Action would
resolve Street/National Union’s claims against Transport. No
claims had been filed between Transport and Street/National
Union, and the state court had expressly reserved the question
of whether collateral estoppel would apply to these claims
once the court entered a judgment concerning Vulcan’s
claims. See Intel Corp. 12 F.3d at 913 (concluding that there
was no parallel proceeding where the state court proceeding
would resolve all issues only if the state courts confirmed the
arbitration award and collateral estoppel applied to all other
claims based on that award).
16790 R.R. STREET & CO. v. TRANSPORT INSURANCE CO.
Nevertheless, even Street/National Union concede that the
Removed Action will resolve all issues raised in the Federal
Action. The question for us is whether the district court
abused its discretion by considering the Removed Action in
its Colorado River analysis. According to Street/National
Union, the district court erred by considering the Removed
Action because the action was not in state court at the time of
the district court’s decision. We disagree.
Courts generally rely on the state of affairs at the time of
the Colorado River analysis. See Moses H. Cone, 460 U.S. at
21-22 (considering the existence of a state court action that
was filed after the federal court proceeding). We think this
state of affairs includes the court’s discretion to remand the
Removed Action. To say that the district court could not con-
sider the Removed Action because it was not pending in state
court at the specific moment the court dismissed the Federal
Action would be contrary to the Court’s instruction that the
Colorado River factors are “to be applied in a pragmatic, flex-
ible manner with a view to the realities of the case at hand.”
Id. at 20. It would also ignore the underlying purpose of the
Colorado River doctrine.
[16] The Colorado River doctrine promotes “wise judicial
administration.” Colorado River, 424 U.S. at 817. We require
a parallel suit to ensure “comprehensive disposition of litiga-
tion.” See id. Otherwise, a stay or dismissal will neither con-
serve judicial resources nor prevent duplicative litigation. For
example, in Holder, we reversed a Colorado River stay
because the plaintiff likely could not have brought his federal
claim in the state court proceeding. 305 F.3d at 868-70. Simi-
larly, in Intel Corp., we concluded that a stay is inappropriate
when there is a good chance that the federal court would have
to decide the case eventually because the state proceeding will
not resolve all of the issues in the federal case. 12 F.3d at 913.
Here, there is no question that with the Removed Action in
state court, the state proceedings will resolve all issues, and
R.R. STREET & CO. v. TRANSPORT INSURANCE CO. 16791
the goal of “comprehensive disposition of litigation” will be
met.
Street/National Union compare this case to Kirkbride v.
Continental Casualty Co., 933 F.2d 729 (9th Cir. 1991), but
the facts distinguish this case from Kirkbride. In Kirkbride,
we held that Colorado River did not support the district
court’s remand of a case because “there was no concurrent or
pending state court proceeding when the appellees moved for
remand” since “the entire case” had been removed to federal
court. Id. at 734. In Kirkbride, there was only one action, and
the court relied on Colorado River to remand that action. Id.
There was no equivalent of the Vulcan Action and therefore
no concern about piecemeal adjudication. All related claims
were in a single proceeding that would be completely
resolved in either state or federal court. Id.
[17] As we noted above when examining the risk of piece-
meal litigation, the Removed Action alone cannot justify dis-
missal of the Federal Action. Nevertheless, because other
factors affirmatively support dismissal, we do not think it was
improper for the court to consider its discretion to remand the
Removed Action for the limited purpose of determining
whether the Vulcan Action would resolve all claims between
the parties. Like the source of law and the adequacy of state
court proceedings, this factor may weigh in favor of jurisdic-
tion, but it does not in itself weigh against it. Because the
combined Vulcan Action and Removed Action would resolve
all of the parties’ claims, this factor does not bar dismissal.10
[18] Ultimately, “the decision whether to dismiss a federal
action because of parallel state-court litigation” hinges on “a
careful balancing of the [relevant] factors . . . with the balance
heavily weighted in favor of the exercise of jurisdiction.”
10
In this case, the district court could be certain that the Vulcan Action
and the Removed Action would be consolidated upon remand because the
state court had already issued an order to this effect.
16792 R.R. STREET & CO. v. TRANSPORT INSURANCE CO.
Moses H. Cone, 460 U.S. at 16. Although Street/National
Union’s right to a federal forum for their unasserted claims
weighs in favor of jurisdiction, we conclude that the district
court did not err by declining jurisdiction over the Federal
Action. None of the factors that would preclude a Colorado
River stay or dismissal—issues of federal law, inadequacy of
the state court forum, or a possibility that the state court pro-
ceeding will not resolve the dispute—are concerns in this
case. Because the avoidance of piecemeal litigation and the
progress made in the Vulcan Action strongly weigh against
jurisdiction, we conclude that the district court did not err by
dismissing the Federal Action as an “exceptional” case under
Colorado River.
CONCLUSION
We do not take lightly the district court’s decision not to
entertain an action for damages. In this case, however, the dis-
trict court did not abuse its discretion by deciding that the par-
ties’ claims should be resolved in the more comprehensive
Vulcan Action. The district court had discretion under Wil-
ton/Brillhart to remand the Removed Action, and the court’s
concerns about piecemeal litigation and interfering with the
progress made in the Vulcan Action sufficiently supported
dismissal under Colorado River.
AFFIRMED.