Moses H. Cone Memorial Hospital v. Mercury Construction Corp

In Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983), the plaintiff had initially filed a complaint in state court concerning a dispute under a hospital construction contract. The defendant filed the federal court action seeking an order compelling arbitration under Sec. 4 of the United States Arbitration Act. The Supreme Court held that the stay order by the district court was appealable under 28 U.S.C. Sec. 1291 and that the district court had abused its discretion in granting the stay, rather than deciding the case. In Cone the Court stated the following appropriate abstention analysis: our task in cases such as this is not to find some substantial reason for the exercise of federal jurisdiction by the district court; rather, the task is to ascertain whether there exist 'exceptional' circumstances, the 'clearest of justifications,' that can suffice under Colorado River to justify the surrender of that jursidiction. Although in some rare circumstances the presence of state-law issues may weigh in favor of that surrender ... the presence of federal-law issues must always be a major consideration weighing against surrender. Cone, 460 U.S. at 25-26. The Court reviewed the factors to be considered in determining whether abstention under Colorado River is appropriate. The Court listed five primary factors: (1) whether federal or state law provides the basis for decision of the case; (2) whether either court has assumed jurisdiction over any res or property; (3) whether the federal forum is less convenient to the parties; (4) avoidance of piecemeal litigation; and (5) the order in which jurisdiction was obtained. Id., 460 U.S. at 15-16, 103 S.Ct. at 936-37. A court may also consider the progress that has been made in the state and federal actions. Id. These factors, however, do not comprise a mechanical checklist. Rather, they require "a careful balancing of the important factors as they apply in a given case, with the balance heavily weighed in favor of the exercise of jurisdiction." Id. at 16, 103 S.Ct. at 937. In Moses H. Cone Memorial Hosp. v. Mercury Constr., 460 U.S. 1, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983), the Court reaffirmed its view that only exceptional circumstances will warrant dismissal of federal cases in favor of a concurrent state suit. 460 U.S. at 14, 103 S.Ct. at 936. The Moses H. Cone decision also repeated the four Colorado River factors (Colorado River Water Conserv. Dist. v. United States) and added two more: (5) whether state or federal law will be applied; and (6) the adequacy of the state court to protect the parties' rights. Moses H. Cone, 460 U.S. at 23, 26, 103 S.Ct. at 941, 942. The test for determining when exceptional circumstances exist, therefore, involves the careful balancing of six factors. The weight to be given any one factor may vary greatly depending on the case; however, the balance is "heavily weighted" in favor of the federal court exercising jurisdiction. Id. at 16, 103 S.Ct. at 937. In Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983), the Supreme Court explained two of the Colorado River factors and added two more. The presence of piecemeal litigation, the Supreme Court explained, was not a significant factor where the relevant law required piecemeal resolution and the federal court issue was "easily severable from the merits of the underlying disputes." Id. at 20-21, 103 S.Ct. at 939. The Court also explained the "priority" factor. The Court stated that priority should not be measured by which party filed first, "but rather in terms of how much progress has been made in the two actions." Id. at 21, 103 S.Ct. at 940. One of the two new factors the Supreme Court enunciated in Moses H. Cone was whether state or federal law provides the rule of decision; if federal law provides the rule of decision, that is always a major consideration weighing against abstention. Id. at 26, 103 S.Ct. at 942. The other new factor was the probable inadequacy of the state court proceedings to protect the federal plaintiff's rights. Id. at 26, 103 S.Ct. at 942.