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Commercial Litigation and Arbitration

New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
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Wilton Abstention — Although Court Has Discretion to Abstain If Federal Plaintiff Seeks Only Declaratory Relief, There Is a 5-Way Circuit Split If Complaint Seeks Both Coercive (Damages, Injunction) and Declaratory Relief

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Rolon v. Univision TV Group, Inc., 2012 U.S. Dist. LEXIS 141019 (D. P.R. Sept 27, 2012):

Univision also argues that this Court has discretion to abstain under Wilton v. Seven Falls, 515 U.S. 277 (1995), because Plaintiffs request declaratory relief. While this would be true if Plaintiffs had only requested declaratory relief, the fact that the complaint also requests damages adds an exponential and unnecessary degree of complexity to this analysis.

Normally, if a federal plaintiff seeks coercive relief, such as damages or an injunction, a district court may abstain only in the presence of "exceptional circumstances." Colorado River, 424 U.S. at 817. In contrast, a different standard applies if what is sought is declaratory relief. In that case, "a district court has broad discretion to stay the federal action as long as the necessary parties have been joined in the state court proceeding and the claims of all parties in interest can satisfactorily be adjudicated by that tribunal." Massachusetts Biologic Laboratories of the University of Massachusetts v. MedImmune, LLC, 2012 WL 2552317, *3 (D.Mass. 2012)(citing Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 495 (1942); Wilton v. Seven Falls Co., 515 U.S. 277, 281-90 (1995)).

The problem lies where the district court is faced with a mixed complaint, seeking both declaratory and coercive relief. In this situation, there is a gargantuan split among the Circuits on the question of which standard to apply. At least five distinct approaches have emerged. See New England Ins. Co. v. Barnett, 561 F.3d 392, 395-96 (5th Cir. 2009) (cataloguing the approaches). As of today, the First Circuit has yet to take a clear position on which of these approaches it will choose, or whether it will fashion its own. MedImmune, 2012 WL 2552317 *5.

Given that the Court believes abstention under the tougher "exceptional circumstances" test is appropriate here, it will decline to address Univision's argument regarding Seven Falls and Brillhart at this juncture.

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New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.

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