Commercial Litigation and Arbitration

International Abstention v. Colorado River Abstention — Different Outcome on Appealability

In Groeneveld Transport Efficiency v. Eisses, , 2008 U.S. App. LEXIS 22005 (6th Cir. Oct. 20, 2008) (unpublished), a dispute between an employee and employer, the employee had sued first in Ontario. The employer then sued here. The District Court abstained in deference to the Canadian action, under the doctrine of international abstention, defined in the Sixth Circuit opinion as follows:

[T]he criteria established for applying the international abstention doctrine established by Finova Capital Corp. v. Ryan Helicopters U.S.A. Inc., 180 F.3d 896 (7th Cir. 1999 ...[—] whether "substantially the same parties are litigating substantially the same issues in the two fora," ... and then considered a number of factors including: (1) the identity of the court that first assumed jurisdiction; (2) the relative inconvenience of the federal forum; (3) the need to avoid piecemeal litigation; (4) the order in which the respective proceedings were filed; (5) whether federal or foreign law provides the rule of decision; (6) whether the foreign action protects the federal plaintiff's rights; (7) the relative strength of the federal and foreign proceedings; and (8) the vexatious or contrived nature of the federal claim.....

The Sixth Circuit then followed an Eighth Circuit decision holding that an order based on international abstention is unappealable:

In Boushel v. Toro Co., 985 F.2d 406, 408 (8th Cir. 1993), the Eighth Circuit also considered a case in which civil claims (against a corporate manufacturer) were filed both in the U.S. District Court and in Canada. Just as the facts in this case, the Eighth Circuit found that "[t]he claims in the foreign and federal action overlap to a large degree, but do not overlap completely." ... And just as in the instant case, in Boushel, "the district court took pains to make clear that it was issuing a stay of the federal action, not dismissal," and noted "that if the Boushel interests were unable to obtain complete relief in the Quebec action they are free to continue the federal action." .... Because of the lack of complete overlap in the U.S. and foreign litigation, and because the district court explicitly contemplated the possibility for further litigation in the U.S., the Eighth Circuit found that the district court's order was not final.

The Sixth Circuit acknowledged that, if the District Court had abstained under Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976), its order would be appealable. “In this case, however, the basis for the stay was not the Colorado River doctrine, but the international abstention doctrine. Although in theory, the international abstention doctrine may be modeled on the Colorado River doctrine, the Supreme Court has never held that a stay based on international abstention is a "final ruling." Finding the collateral order doctrine also inapt, the Sixth Circuit held that it lacked jurisdiction to entertain the appeal.

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