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May 6, 1993



The opinion of the court was delivered by: SUZANNE B. CONLON

Plaintiffs in these four consolidated cases *fn1" sue defendants Great Lakes Dredge & Dock Company ("Great Lakes") and the City of Chicago ("the City") to recover for damages incurred when the Chicago River broke through a breach in a freight tunnel lying beneath the river and then flooded a tunnel system underneath the city's business district. The City moves to dismiss or stay this action pending the outcome of related state court litigation.


 A year ago, widescale calamity struck Chicago for the second time in barely a century. The culprit this time, however, was not the legendary cow's kick of a lantern. A piling allegedly ruptured the bottom of the Chicago River. Once the plug was pulled, the river, like water draining from a tub, flowed into a tunnel system that ran beneath its bed and throughout Chicago's financial and business center.

 The day after the flood, litigation began. Twenty-nine lawsuits were quickly filed in the Circuit Court of Cook County, Illinois, where orders were entered to consolidate the cases before a single judge and to certify a class. The City moved to dismiss the twenty-nine claims on one ground, among others, that the plaintiffs had suffered only economic loss. See Dayton Hudson Br. at 2. The state court judge dismissed the suits that contained claims for only economic loss. Id. at 2. From February 26, 1993 until April 13, 1993, a group of additional claims for real' property damage, primarily insurance subrogation cases, were filed in state court. Id. at 3; American Home's Br. at 5. As a result, the state court recently modified its case management orders to accommodate the property damage plaintiffs who have opted-out of the class action. Id.

 On February 26, 1993, the same day that the new property damage cases were initiated in state court, plaintiffs filed these cases in federal court. In light of the pending state court litigation, the City requests that this court abstain from exercising jurisdiction over these cases pursuant to Colorado River Water Conservation District v. United States, 424 U.S. 800, 47 L. Ed. 2d 483, 96 S. Ct. 1236 (1976) or, in the alternative, pursuant to Burford v. Sun Oil Co., 319 U.S. 315, 87 L. Ed. 1424, 63 S. Ct. 1098 (1943). *fn2"


 Federal courts possess a "virtually unflagging obligation" to exercise the jurisdiction given them. Colorado River, 424 U.S. at 817; Interstate Material Corp. v. City of Chicago, 847 F.2d 1285, 1287 (7th Cir. 1988). Only when exceptional circumstances exist may a federal court abstain from exercising its jurisdiction and defer to the concurrent jurisdiction of a parallel state court proceeding. Colorado River, 424 U.S. at 818; Interstate Material, 847 F.2d at 1287. The underlying consideration in Colorado River abstention is whether exceptional circumstances exist that would warrant abstaining; otherwise, concurrent proceedings in state and federal courts are perfectly acceptable, though perhaps wasteful of judicial resources. Harris Trust and Savings Bank v. Olsen, 745 F. Supp. 503, 506 (N.D. Ill. 1990).

 As a threshold matter, the court must ascertain whether parallel state proceedings actually exist. Interstate Material, 847 F.2d at 1287. Without parallel proceedings, Colorado River abstention is inapplicable. Id. Three of the four federal plaintiffs assert that the state and federal proceedings are "completely different" and, therefore, "parallelism is entirely lacking." Dayton Hudson's Br. at 6. The three plaintiffs view the state proceeding as "completely different" because they are not plaintiffs in the state proceeding and some of the plaintiffs in state court, unlike the federal plaintiffs, seek recovery for economic loss. Id. at 5-6.

 Although it is true that three federal plaintiffs are not party to the state court proceeding, Colorado River requires parallel suits; not identical suits. *fn3" Interstate Material, 847 F.2d at 1288. A suit is "parallel" when "substantially the same parties are contemporaneously litigating substantially the same issues in another forum." Id. at 1288. Formal symmetry need not exist between the state and federal actions; rather there should be a substantial likelihood that the state litigation will dispose of all claims presented in the federal case. Lumen Construction v. Brant Construction Co., 780 F.2d 691, 695 (7th Cir. 1985). The issue, therefore, is not whether there is an identity of parties in both forums, but whether the parties may be bound by the result in the state litigation under principles of collateral estoppel or issue preclusion. See Harris Trust, 745 F. Supp. at 507.

 Although identity of parties is not dispositive, the defendants in both the state and the federal proceedings are the same. The plaintiffs in the state and federal suits are not identical, but they share equivalent litigation interests. The resolution of the issues in the state court proceedings would substantially dispose of the key issues in this federal suit. See Indiana Insurance Co. v. Caldwell Enterprises, Inc., No. 92 C 41, 1992 U.S. Dist. LEXIS 11495 (N.D. Ill. Aug. 5, 1992) (finding parallel state and federal proceedings brought by different plaintiffs against single tortfeasor). The claims in both forums arise from the same operative facts involving similar, and in many instances, identical allegations of tortious conduct. Indeed, the principal issue that must be decided by either court is whether, in light of state immunity provisions and other traditional tort defenses, defendants are liable to the plaintiffs for damages suffered when the Chicago River flooded the city's business district. The additional issue present in the state court action, but absent from the federal cases (propriety of recovering for purely economic loss), is insufficient to destroy the parallel nature of the two proceedings. In short, the state and federal proceedings are sufficiently parallel to require further analysis of whether abstention is warranted.

 Having determined that the state and federal proceedings are substantially similar, the court must next determine whether there exist exceptional circumstances that justify deference to the state court proceedings. Caminiti and Iatarola, Ltd. v. Behnke Warehousing, 962 F.2d 698, 701 (7th Cir. 1992). There are at least ten factors that the court may consider in deciding whether exceptional circumstances are present: (1) whether the state has assumed jurisdiction over property; (2) the inconvenience of the federal forum; (3) the desirability of avoiding piecemeal litigation; (4) the order in which jurisdiction was obtained by the concurrent forums; (5) the source of governing law; (6) adequacy of the state court action to protect the federal plaintiffs' rights; (7) the relative progress of state and federal proceedings; (8) the presence or absence of concurrent jurisdiction; (9) the availability of removal; and (10) the vexatious or contrived nature of the federal claim. *fn4" LaDuke v. Burlington Northern R.R., 879 F.2d 1556, 1559 (7th Cir. 1989). No single factor is necessarily determinative. Caminiti, 962 F.2d at 701, citing Colorado River, 424 U.S. at 818-19. Instead, the decision to stay or dismiss a federal action because of parallel state court litigation "does not rest on a mechanical checklist, but on a careful balancing of the important factors as they apply in a given case, with the balance heavily weighted in favor of the exercise of jurisdiction." Interstate Material, 847 F.2d at 1289, quoting Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 16, 74 L. Ed. 2d 765, 103 S. Ct. 927 (1983).

 The undesirability of piecemeal litigation, though applicable here to some degree, does not weigh heavily in favor of a stay. Indeed, the threat of piecemeal litigation is not comparable to the principal case relied upon by the City. See Arkwright-Boston Manufacturers Mutual Insurance Co. v. City of New York, 762 F.2d 205 (2d Cir. 1985). Arkwright involved more defendants (three) than do the federal cases. In addition, the fewer claims in this court, coupled with the presence of only two defendants, enables this court to implement an efficient case management system that speeds resolution of the federal cases and reduces the potential for conflict inherent whenever concurrent litigation occurs. There exists, of course, some potential for conflict; however, that potential "does not, without more, warrant staying exercise of federal jurisdiction." Colorado River, 424 U.S. at 816. And additional elements do not favor a stay.

 The order in which the courts obtained jurisdiction does not weigh heavily in either direction. Although the first flurry of flood cases entered state court nearly ten months before the federal plaintiffs filed these cases, priority of jurisdiction is not measured exclusively in terms of which complaint was filed first. Moses H. Cone, 460 U.S. at 21. Instead, priority of jurisdiction is measured by the relative progress that has occurred in the two forums. Id. For the most part, the state cases have progressed only to the point of a ruling on one of the City's motions to dismiss. *fn5" The state court recently modified its case management orders to accommodate the additional property damage plaintiffs, who have only recently filed claims and who have opted-out of the class action. See Dayton Hudson's Br. at 3; American Home's Br. at 5. In addition, depositions have only recently been noticed; none have yet been taken. Id.; City's Reply at 6. The state class plaintiffs have propounded ten interrogatories and fifteen document requests to the two defendants. See Dayton Hudson's Br. at 10. Relatively few documents have been produced, and only last week did Great Lakes answer interrogatories ...

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