United States District Court, N.D. Illinois, Eastern Division
November 2, 2005.
FACTORY MUTUAL INSURANCE, CO., Plaintiff,
THE BOC GROUP, INC., CHROMALOX, INC., and TYCO VALVES & CONTROLS, LP., Defendants.
The opinion of the court was delivered by: SAMUEL DER-YEGHIAYAN, District Judge
This matter is before the court on Plaintiff Factory Mutual
Insurance Company's ("Factory Mutual") motion to abstain. For the
reasons discussed below, we grant the motion.
Factory Mutual is an Illinois insurance company that provides
insurance coverage to Hospira, Inc. ("Hospira"), a "specialty
pharmaceutical and medication delivery company" in Illinois.
(Mot. S. Rep. Ex. 1 Par. 1). Factory Mutual alleges that on or
around September 18, 2004, a Calumatic lyophilizer
("lyophilizer") sold to Hospira by Defendants had "an operational malfunction" that
caused "extensive property damage" to Hospira. (Compl. Par. 8,
11). Specifically, Factory Mutual claims that "the safety valves
on the syltherm heating loop failed to operate as designed,
and/or the pressure vessel . . . was unable to contain the
pressures within the systems." (Compl. Par. 8). Factory Mutual
claims that it has paid Hospira over $500,000 for the property
damage Hospira allegedly suffered as a result of the lyophilizer
On June 19, 2005, Factory Mutual filed the instant action in
the Circuit Court of Cook County, acting as a subrogee of Hospira
and seeking return of the money it has paid to Hospira for the
property damage under the insurance contract. Factory Mutual
brought four counts against Defendants in the complaint, which
included two state law claims of negligence and two state law
claims of strict liability. On July 13, 2005, Defendants removed
the instant action to this court, claiming diversity
Factory Mutual has now filed the instant motion, entitled
"Plaintiff's Memorandum Brief in Support of its Motion to Stay
Proceedings." (Mot. 1). However, in the text of the motion,
Factory Mutual discusses abstention. Therefore, we will treat
Factory Mutual's motion as a motion to either stay the
proceedings or to abstain from exercising jurisdiction. DISCUSSION
Factory Mutual is asking the court to either stay the
proceedings in this court while three related lawsuits are
pending in Illinois state court, or abstain from exercising
jurisdiction over the instant action. A federal court has a
"virtually unflagging obligation" to exercise the jurisdiction
provided to it by Congress. AAR Intern., Inc. v. Nimelias
Enterprises S.A., 250 F.3d 510, 517 (7th Cir. 2001). Despite
this obligation, in certain "exceptional circumstances," a
federal court, under the Colorado River Doctrine, may either
"dismiss or stay an action when there is an ongoing parallel
action in state court." LaDuke v. Burlington Northern R. Co.,
879 F.2d 1556, 1558 (7th Cir. 1989) (citing Colorado River
Water Conservation Dist. v. United States, 424 U.S. 800 (1976)).
A federal court may only decline to hear a case if there are the
"clearest of justifications" that would warrant abstention and if
the state proceedings are "an adequate vehicle" for resolving the
issues between the parties. Id. at 518. However, the Seventh
Circuit has stated that "[u]nder Colorado River, a federal
court may stay or dismiss a suit when there is a concurrent state
court proceeding and the stay or dismissal would promote `wise
judicial administration.'" AXA Corporate Solutions v.
Underwriters Reinsurance Corp., 347 F.3d 272, 276-77 (7th
The first requirement for abstention under the Colorado River
doctrine is that the federal suit and the suit in the other forum
must be parallel suits. Finova Capital Corp., 180 F.3d at 898.
If the suits are parallel, the court must consider the following factors: "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, state or federal; 6) the adequacy of
state-court action to protect the federal plaintiff's 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." TruServ Corp. v. Flegles, Inc.
419 F.3d 584, 592 (7th Cir. 2005). The Seventh Circuit has
also stated that "of these ten factors, `[p]articular weight must
be given to the presence of a federal question in the case.'"
Blue Cross and Blue Shield of Ill. v. Cruz, 396 F.3d 793, 800
(7th Cir. 2005) (citing Sverdrup Corp. v. Edwardsville Cmty.
Unit Sch. Dist. No. 7, 125 F.3d 546, 549 (7th Cir. 1997)).
Actions are considered parallel for the purposes of the
Colorado River doctrine if "substantially the same parties are
litigating substantially the same issues simultaneously in two
fora." Finova Capital Corp., 180 F.3d at 898 (quoting
Schneider Nat'l Carriers, Inc. v. Carr, 903 F.2d 1154, 1156
(7th Cir. 1990)). Cases are parallel only if "there is a
substantial likelihood that the state litigation will dispose of
all claims presented in the federal case." Fofi Hotel Co., Inc.
v. Davfra Corp., 846 F.Supp. 1345, 1352 (N.D.Ill. 1994). In the
instant action, Factory Mutual seeks abstention based on three
pending state court actions. Two of these actions are personal
injury cases brought by employees of Hospira for injuries
suffered as a result of the same lyophilizer accident referenced in this
action. The third state action is Hospira's lawsuit to recover
for the portion of the property damage from the lyophilizer
accident that was not covered by Factory Mutual. The property
damage at issue in both the Hospira suit and the instant action
are the same and the legal claims brought against the Defendants,
involving negligence and strict liability under Illinois law, are
the same. Given the similarity of the factual issues and legal
claims in the two suits, a legal determination in one would have
a preclusive effect on the other lawsuit. See Hartigan v.
Palumbo Bros., Inc., 797 F.Supp. 624, 633 (N.D.Ill. 1992)
(stating that "the issue is not whether there exists an identity
of parties in both actions, but whether the federal defendants
`may be bound' by the result in the state litigation under
principles of collateral estoppel"). The plaintiffs in these two
actions are essentially the same, given that Factory Mutual in
the instant action is merely a subrogee of Hospira. Additionally,
the Defendants in the Hospira action and the instant action are
essentially identical. In the Hospira action, the named
defendants are The BOC Group, Inc., Chromalox, Inc., and Tyco
Valves & Controls, LP. In the instant action, the named
defendants include several "BOC Edwards" companies, Chromalox,
Inc., and Tyco Valves & Controls, LP. Given all of these reasons,
we find that the Hospira state lawsuit is parallel to the instant
Factory Mutual has also shown several significant factors that
lead this court to abstain from proceeding with the instant case.
To begin, all claims in both the state and federal action are solely on Illinois law. There are no
federal questions raised in either the instant action or the
Hospira action, and all of the affirmative defenses and third
party claims raised by Defendants are based on Illinois law.
(Ans. 10-14). As the Seventh Circuit has stated, we must give
particular weight to the fact that there is no federal question
present in the instant action. Second, there is less than one
month between when the instant action was removed to this court
and when the Hospira action was filed in state court. This is not
a significant amount of time and declining to exercise
jurisdiction at this early stage in the litigation should not
prejudice Defendants in any way. Third, we conclude that the
state court action that will interpret the state law claims is
more than adequate to protect the plaintiff's rights.
A major reason for declining to exercise jurisdiction over the
instant action is the importance of avoiding piecemeal
litigation. It is clear that "the results of simultaneous
litigation of identical issues in the state and federal courts
may be both `unseemly' and a `grand waste' of the efforts of the
parties and the courts." LaDuke v. Burlington Northern R. Co.,
879 F.2d 1556, 1560 (7th Cir. 1989). There is a case pending
in the Illinois courts involving the exact same legal claims and
the exact same factual circumstances as the instant action.
Additionally, given that Hospira, a Delaware corporation, is not
diverse from the BOC Group, one of the named defendants in the
Hospira case, the Hospira action cannot be removed to federal
court. Therefore, we cannot avoid duplicating the litigation of
these essentially identical cases by consolidating them in federal court. Thus, in
the interest of efficiency and "wise judicial administration,"
AXA Corporate Solutions, 347 F.3d at 276-77, we abstain from
exercising jurisdiction over the instant action.
Based on the forgoing analysis, we abstain from exercising
jurisdiction over the instant action and dismiss the instant
action. All other pending motions are denied as moot.
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