United States District Court, Central District of Illinois, Springfield Division
September 30, 1991
INDIANA LUMBERMENS MUTUAL INSURANCE COMPANY, PLAINTIFF,
SPECIALTY WASTE SERVICES, INC., AND J & S ASBESTOS REMOVAL, INC., DEFENDANTS.
The opinion of the court was delivered by: Richard Mills, District Judge:
"Colorado River Doctrine" and Illinois Code of Civil
Procedure § 2-619(a)(3).
Does § 2-619 apply to a federal court hearing a diversity
case pursuant to 28 U.S.C. § 1332.
Defendant Specialty Waste Services, Inc.'s motion to
Indiana Lumbermens Mutual Insurance Company (hereafter,
Indiana Lumbermens) was the surety on a project to remove
asbestos at the State Farm Insurance headquarters in
Bloomington, Illinois. The principal on the surety bond and the
party obligated to perform the work was J & S Asbestos, Inc.
State Farm terminated J & S Asbestos based on allegedly poor
performance and demanded Indiana Lumbermens complete the work.
Indiana Lumbermens contracted with Specialty Waste Services,
Inc. (hereafter, Specialty Waste) to complete the work.
Both J & S Asbestos and Specialty Waste agreed to indemnify
Indiana Lumbermens for any losses incurred on the project
attributable to their conduct and both posted letters of
State Farm made a claim against Indiana Lumbermens for
damages caused by the late completion of the work. Indiana
Lumbermens settled State Farm's claim and drew down on the
letter of credit from J & S Asbestos.
In 1989, Indiana Lumbermens filed suit in the Circuit Court
of Cook County seeking money damages from Specialty Waste and
J & S Asbestos. Thereafter, Specialty Waste filed suit against
Indiana Lumbermens and the Bank of Alton to stay Indiana
Lumbermens from drawing on the letter of credit posted by
Specialty Waste. Specialty Waste then succeeded in getting the
Cook County suit transferred to Madison County. While Indiana
Lumbermens was trying to get a hearing on a motion to
voluntarily dismiss the case pursuant to § 2-1005 of the
Illinois Code of Civil Procedure, Specialty Waste filed an
answer and counterclaim. Indiana Lumbermens motion to
voluntarily dismiss was originally allowed, but that order was
vacated after the Judge was alerted that Specialty Waste had
filed a counterclaim before the dismissal order was entered. J
& S Asbestos has been voluntarily dismissed from the Madison
County case wherein it was a Defendant because Indiana
Lumbermens was made whole when it drew down J & S Asbestos'
letter of credit.
Turning to the proceedings in this court, Specialty Waste
filed a motion for an extension of time to answer or otherwise
plead until January 14, 1991. On January 3, 1991, J & S
Asbestos answered the complaint and filed a counterclaim
seeking $500,000 in damages. On January 14, 1991, Specialty
Waste filed this motion to dismiss. Indiana Lumbermens has
filed an answer to the counterclaim on March 12, 1991.
Specialty Waste has not yet answered the complaint.
Specialty Waste's motion to dismiss this case is based on
§ 2-619(a)(3) of the Illinois Code of Civil Procedure. Indiana
Lumbermens contends that § 2-619 should not be applied by a
federal court and that if it is applicable in federal court,
this case still should not be dismissed pursuant to it.
Under § 2-619 of the Illinois Code of Civil Procedure, a case
may be dismissed if there is "another action pending between
the same parties for the same cause." Defendant states that the
federal district courts in this circuit "have uniformly applied
the provisions of Section 2-619" and that the Seventh Circuit
Court of Appeals noted this practice with apparent approval in
Aetna Casualty & Surety Co. v. Kerr-McGee Chemical Corp.,
875 F.2d 1252 (7th Cir. 1989). Defendant concludes that "Based on
the clear decision of the Seventh Circuit Court of Appeal in
Aetna . . . this Court should dismiss this proceeding. . . ."
Specialty Waste is correct that many district courts have
applied § 2-619(a)(3). See e.g., Ball v. Deere & Co.,
684 F. Supp. 1455 (C.D.Ill. 1988); Schiller v. Packaging Store,
Inc., 690 F. Supp. 711 (N.D.Ill. 1988); General Electric Co. v.
Lofton, 675 F. Supp. 1107 (N.D.Ill. 1987). Nonetheless, there
remains with this Court serious doubt about whether § 2-619
should be applied in federal court.
Initially, we must disagree with Specialty Waste's
characterization of Aetna. The Seventh Circuit stated in Aetna
The district courts in this circuit have generally
applied section 2-619(a)(3) without extended
discussion of the [Erie Railroad Co. v. Tompkins,
304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938)]
issue, relying on Judge Will's detailed analysis in
Seaboard Finance Co. v. Davis, 276 F. Supp. 507,
512-517 (N.D.Ill. 1967). Since Aetna does not
challenge the district court's application of
section 2-619(a)(3) in this appeal, we will apply
the Illinois statute without deciding whether it is
properly controlling in federal diversity
Aetna, 875 F.2d at 1255 (citations omitted and emphasis our
own). Further, the Seventh Circuit's application of §
2-619(a)(3) in a case where the nonmoving party did not contest
the choice of law provides no guidance in this case where
Plaintiff has strongly objected to the application of §
The application of § 2-619(a)(3) by federal districts courts
was strongly criticized in a recent article. See Hedinger, The
Use of 2-619(a)(3) in Federal Courts: An Inappropriate
Diversion of Colorado River, 78 Ill.B.J. 5 (1990). In that
article, Hedinger notes that two factors weighed heavily in the
Seaboard Finance decision. First, the Plaintiff in that case
was a California citizen who initially filed his suit in
California and only later filed a parallel action in Illinois.
Second, the Illinois state courts would almost certainly have
refused to hear the action based on § 2-619. Because the
Plaintiff had chosen both forums, refusing to hear the case in
Illinois would not force the Plaintiff to try its case in an
unfriendly forum, which was the historical purpose of the
diversity statute. Therefore, the failure to apply § 2-619 in
the federal court would have simply encouraged forum
Hedinger observed that "although Seaboard Finance may have
reached a desirable result, it did so at the expense of the
clear mandate of the diversity statute." And while the Colorado
River doctrine, a post Seaboard Finance development, has given
the federal courts an independent means to avoid duplicative
litigation, many district courts in Illinois have conjoined §
2-619 and the Colorado River doctrine. See Byer Museum of Arts
v. North River Ins. Co., 622 F. Supp. 1381 (N.D.Ill. 1985).
In Colorado River Water Conservation District v. United
States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976), the
Supreme Court stated that "Generally, 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 the Federal court having jurisdiction. . . .'"
Colorado River, 424 U.S. at 817, 96 S.Ct. at 1246 (quoting
McClellan v. Carland, 217 U.S. 268, 282, 30 S.Ct. 501, 505, 54
L.Ed. 762 (1910)). By contrast, as between federal courts,
duplicative litigation is to be avoided. "This difference in
general approach . . . stems from the virtually unflagging
obligation of the federal courts to exercise the jurisdiction
given them." Colorado River, 424 U.S. at 817, 96 S.Ct. at 1246
The Court must agree with Hedinger that Seaboard Finance's
determination that federal courts sitting in Illinois should
apply § 2-619 is no longer valid in the wake of the Colorado
Alternatively, the Court finds that even if § 2-619(a)(3) was
applicable, this case should still not be dismissed pursuant to
that section. Defendant J & S Asbestos is a party in this
action, but is not a party in either state court action.
Specialty Waste asserts that if we dismiss this case, J & S
Asbestos can litigate in Madison County. But it is not
sufficient that the same parties could be included in a pending
action elsewhere, § 2-619(a)(3) allows for dismissal where
"there is another action pending between the same parties for
the same cause." (Emphasis ours.)
It is also significant that J & S Asbestos is not merely a
Defendant named by Indiana Lumbermens, but is a cross-plaintiff
seeking $500,000. While § 2-619(a)(3)'s "same parties"
requirement can be satisfied where the parties are
"substantially the same", see e.g., Catalano v. Aetna Cas. &
Sur. Co. of Illinois, 105 Ill. App.3d 195, 61 Ill.Dec. 94,
434 N.E.2d 31 (1982); Baker v. Salomon, 31 Ill. App.3d 278,
334 N.E.2d 313 (1975), the absence of J & S Asbestos and its
half-million dollar counterclaim from the state court action
would prevent this Court from find the parties in this case to
be "substantially the same" as those in the state court action.
For the reasons stated above, we hold that Illinois Code of
Civil Procedure § 2-619(a)(3) does not apply to federal courts
sitting in Illinois. Alternatively, we find that even if that
section applied in federal court, this case should not be
dismissed pursuant to it.
Ergo, Defendant Specialty Waste's motion to dismiss pursuant
to section 2-619(a)(3) of the Illinois Code of Civil Procedure