United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
MATTHEW F. KENNELLY, UNITED STATES DISTRICT JUDGE
B.V., a Dutch company, has sued Tenneco Inc. and its
subsidiary Tenneco Automotive Operating Co. (collectively
Tenneco), alleging that they took and used for their own gain
confidential information that Koni had provided to them under
an information-sharing arrangement designed to further joint
development efforts. Koni previously filed a lawsuit in
Belgium against a Belgian subsidiary of Tenneco, asserting
patent infringement and trade secret misappropriation claims
arising from the same events. Tenneco has moved to stay the
present case pending resolution of the litigation in Belgium.
It relies on Colorado River Water Conservation District
v. United States, 424 U.S. 800 (1976).
Colorado River, "[a]bstention from the exercise
of federal jurisdiction is the exception, not the rule,
" id. at 813, and it may be invoked only in
those "exceptional circumstances" in which
abstention "would clearly serve an important
countervailing interest." Int'l Coll. of
Surgeons v. City of Chicago, 153 F.3d 356, 360 (7th Cir.
1996) (quoting Cty. of Allegheny v. Frank Mashuda
Co., 360 U.S. 185, 188-89 (1959)). A court conducts a
two-part inquiry to determine if abstention is appropriate
under Colorado River. First, the court determines
whether the state and federal suits are parallel. If they
are, the court then considers several factors to determine if
there are exceptional circumstances that justify abstention.
Tyrer v. City of S. Beloit, 456 F.3d 744, 751 (7th
fact that the other case is pending in another country does
not preclude Colorado River abstention. Though most
abstention motions arise in the context of parallel state
court litigation, the same principles apply when the other
case is a foreign lawsuit. See Finova Capital Corp. v.
Ryan Helicopters U.S.A., Inc., 180 F.3d 896, 898 (7th
case and the Belgian lawsuit qualify as parallel. Formal
symmetry is not required; "a suit is parallel when
substantially the same parties are contemporaneously
litigating substantially the same issues in another
forum." Tyrer, 456 F.3d at 752. First, the
parties are substantially the same. Koni is the plaintiff in
both cases, and the defendants, though not identical, are
part of the same corporate family: Tenneco (Belgium), the
defendant in the Belgian case, is a subsidiary of Tenneco
Automotive Operating Co., one of the defendants here. Second,
the cases arise from a common set of facts, specifically, the
various defendants' allegedly improper use of trade
secrets received from Koni regarding shock absorber valves.
And third, the cases raise similar legal issues. It is true,
as Koni notes, the Belgian lawsuit contains a patent
infringement claim that has no parallel in the present case.
But the Belgian lawsuit also includes claims for
misappropriation of trade secrets under Belgian law, albeit
with a different member of the Tenneco corporate family as a
defendant. There are also similar factual issues likely
implicated in both cases, including whether a confidentiality
agreement was breached.
fact that the cases are parallel, however, is not enough to
warrant a stay.
when there is a parallel suit pending elsewhere, a federal
court may abstain under Colorado River only where
"exceptional circumstances" exist. Based on the
Supreme Court's guidance in Colorado River and
in Moses H. Cone Memorial Hospital v. Mercury
Construction Corp., 460 U.S. 1, 23-27 (1983), the
Seventh Circuit has identified ten factors to consider in
this analysis. These are:
1) whether the [other court] 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 current forums; 5)
the source of governing law, state or federal; 6) the
adequacy of [other] 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.
Tyrer, 456 F.3d at 755. In determining whether exceptional
circumstances exist, there remains a "general
presumption against abstention." AXA Corporate
Solutions v. Underwriters Reins. Corp., 347 F.3d 272,
278 (7th Cir. 2003). A federal court has a "virtually
unflagging obligation" to exercise its jurisdiction.
Colorado River, 424 U.S. at
following factors point in favor of abstention:
• (4) The Belgian case was filed first.
• (7) The Belgian case is a good deal further along. A
decision may be reached within the next several months.
• (3) There is a legitimate concern regarding piecemeal
litigation, that is, parallel cases proceeding in two
separate court systems at the same time. As indicated
earlier, similar factual issues are involved in both cases,
and the legal issues, though not the same given differences
between federal ...