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Interstate Material Corp. v. City of Chicago

decided: June 3, 1988.

INTERSTATE MATERIAL CORPORATION, AN ILLINOIS CORPORATION, ON ITS OWN BEHALF AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFF-APPELLANT,
v.
CITY OF CHICAGO, ET AL., DEFENDANTS-APPELLEES



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division, No. 86 C 3103, Nicholas J. Bua, Judge.

Cummings, Cudahy and Posner, Circuit Judges.

Author: Cummings

CUMMINGS, Circuit Judge.

Plaintiff Interstate Material Corporation ("Interstate") challenges the district court's order that, pursuant to Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 47 L. Ed. 2d 483, 96 S. Ct. 1236, denied Interstate's motion to dissolve the stay of federal proceedings pending the resolution of a parallel action in state court. The decision to stay federal proceedings because of concurrent state litigation remains one committed to the discretion of the district court. Will v. Calvert Fire Insurance Co., 437 U.S. 655, 665, 57 L. Ed. 2d 504, 98 S. Ct. 2552 . Thus the only question on appeal is whether the district court abused its discretion. Lumen Constr., Inc. v. Brant Constr. Co., Inc., 780 F.2d 691, 695 (7th Cir. 1985). We hold that it did not and affirm the judgment.

Although the only substantive question on appeal is whether the district court abused its discretion, before reaching that question we must determine whether we have jurisdiction to do so. Interstate asserts that we have jurisdiction under 28 U.S.C. § 1292(a)(1). The City defendants*fn1 agree. Despite this agreement between the parties, we have an independent responsibility to determine whether we have subject matter jurisdiction, Wilson v. Civil Town of Clayton, 839 F.2d 375, 384 (7th Cir. 1988), and we disagree with the jurisdictional statement of the parties.

Section 1292(a)(1) grants the courts of appeal jurisdiction of appeals from "interlocutory orders" "granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions." While the list of appealable actions a district court might take regarding an injunction appears comprehensive, it does not include the non-action taken here. Although Interstate titled its motion "Motion to Dissolve Stay and for Preliminary Injunction," the challenged order in its entirety states:

For the reasons stated in this court's 6-26-86 order, Plaintiff's motion to dissolve the stay of proceedings is denied. As stated previously in the 6-26-86 order, the advanced status of the plaintiff's prior parallel state action requires this court to stay the instant proceedings until the resolution of the state case.

The order contains no disposition of, or even mention of, plaintiff's motion for a preliminary injunction; yet Interstate argues that this order "effectively denied the preliminary injunctive relief" it sought. Acceptance of Interstate's argument would defeat the intent and effect of the stay. The order deferred to the state court proceedings, in which Interstate had been granted a preliminary injunction by the Illinois Appellate Court hearing an interlocutory appeal. The district court's denial of Interstate's motion to dissolve the stay was a refusal to consider any issue on the merits of the case. It was not a collateral order concerning an injunction appealable under § 1292(a)(1).

The order denying the motion to dissolve the stay, however, is itself an appealable order. Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 11-13, 74 L. Ed. 2d 765, 103 S. Ct. 927 . An order denying a motion to dissolve a stay is equivalent to an order granting a stay of litigation and the Supreme Court in Moses Cone held that a district court order granting a stay of litigation pursuant to Colorado River is an appealable order. Id. Compare GulfStream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 108 S. Ct. 1133, 99 L. Ed. 2d 296 (holding that a district court order denying a motion to stay or dismiss because of the pendency of similar litigation in state court is not immediately appealable under Section 1291 or Section 1292(a)(1)). The Court found that an order granting a stay pursuant to Colorado River comes within the small class of decisions excepted from the final judgment rule under Cohen v. Beneficial Loan Corp., 337 U.S. 541, 93 L. Ed. 1528, 69 S. Ct. 1221 . Moses Cone, 460 U.S. at 11. Such an order meets the requirements of Cohen because it conclusively determines the disputed question, resolves an important issue completely separate from the merits of the action, and is effectively unreviewable on appeal from a final judgment. Id. at 11-12. We therefore have jurisdiction to consider Interstate's appeal insofar as it concerns the district court's refusal to dissolve the stay.

II

Colorado River, as explained and expanded by Moses Cone, controls here. In Colorado River the Court emphasized "the virtually unflagging obligation of the federal courts to exercise the jurisdiction given them," 424 U.S. at 817, but also, recognized that when there is concurrent state court litigation "exceptional circumstances may exist that permit a federal court to refrain from exercising that jurisdiction "for reasons of wise judicial administration".*fn2 Id. at 818.

A

As an initial requirement, the concurrent state and federal court proceedings must be parallel. If they are not, the Colorado River doctrine is inapplicable. See, e.g., Harris v. Pernsley, 755 F.2d 338, 346 (3d Cir. 1985); Crawley v. Hamilton County Comm'rs, 744 F.2d 28, 31 (6th Cir. 1984). Interstate argues that its state and federal actions are not parallel because the parties and issues in each suit are different. The two actions involve different defendants and potentially involve different plaintiffs. In its state action Interstate names as defendants the City of Chicago, Mayor Harold Washington, and seven city officials involved in the administration of Chicago's MBE program. Interstate's federal action again names the City of Chicago and six of the seven individual defendants, but also names Elizabeth Dole in her official capacity as Secretary of the United States Department of Transportation ("USDOT") and two federal agencies: USDOT and the Urban Mass Transportation Administration ("UMTA"). In addition, Interstate filed the state action on behalf of itself, but filed the federal action on behalf of itself and two classes: (1) the "National Class," including "all businesses in the United States which are at least 51 % minority owned, which are controlled by at least one of the minority owners, and which are or may be subject to the regulations of the [USDOT] set forth in 49 C.F.R., Part 23, and (2) the "Chicago Class," including "all businesses which now seek or have sought since January 1, 1986 to do business with the City of Chicago, which are at least 51 % minority owned and are controlled by at least one of the minority owners, and which have sought since January 1, 1986 or will seek to be certified or recertified as [MBEs] by the City of Chicago."

Interstate also argues that the issues in the two cases differ. It contends that the state action seeks relief only from the 1985 denial of Interstate's recertification as a minority business enterprise while the federal action "seeks relief against both city and federal officials based on ...


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