United States District Court, M.D. Tennessee, Nashville Division
RODNEY GOOD and IRON WORKERS TENNESSEE VALLEY AND VICINITY WELFARE FUND; IRON WORKERS TENNESSEE VALLEY AND VICINITY PENSION FUND, and IRON WORKERS TENNESSEE VALLEY AND VICINITY ANNUITY FUND Plaintiffs,
SOUTHERN STEEL AND CONSTRUCTION, LLC; J. WARREN “SKIP” BROCK; DEBBIE BROCK; DENNY M. RUTLEDGE, JR.; and SHARON RUTLEDGE Defendants and SOUTHERN STEEL AND CONSTRUCTION, LLC; Third Party Plaintiff,
QUALITY IRON FABRICATORS, INC. Third Party Defendant.
HOLMES, MAGISTRATE JUDGE
ORDER AND MEMORANDUM OPINION
WILLIAM L. CAMPBELL, JR. UNITED STATES DISTRICT JUDGE
before the Court is Third-Party Defendant, Quality Iron
Fabricators, Inc.'s (“Quality”) Motion to
Dismiss or stay the Third-Party Complaint of Southern Steel
and Construction, LLC, (“SSC”) or in the
Alternative to Compel Arbitration. (Doc. No. 21). Third-
Party Plaintiff SSC has responded in opposition. (Doc. No.
26). For the reasons discussed below, Quality's Motion
for Abstention is GRANTED. Quality's
Motion to Dismiss for lack of subject matter jurisdiction and
to compel arbitration of all claims is
FACTUAL AND PROCEDURAL BACKGROUND
filed their Complaint on August 11, 2017, against SSC
alleging causes of action pursuant to the Employment
Retirement Income Security Act of 1974 (“ERISA”).
(Doc. No. 1). On November 2, 2017, SSC filed an Answer to the
Complaint and a Third-Party Complaint against Quality,
asserting state law claims for breach of contract,
indemnity, and violations of the Tennessee Prompt
Pay Act. (Doc. No. 16, 17). With the exception of the
indemnity claim, the state law claims asserted by SSC against
Quality were previously asserted in a suit in the Shelby
County, Tennessee Chancery Court (“State Court
Action”), which remains open and active. (Doc. No.
December 8, 2017, Quality filed a Motion to Dismiss SSC's
Third-Party Complaint for lack of subject matter
jurisdiction. (Doc. No. 21). In the alternative, Quality
asserts the Court should exercise abstention and dismiss or
stay SSC's Third-Party Complaint given that the claims
asserted by SSC against Quality in this case are pending in
the State Court Action. (Id.). As a final
suggestion, Quality requests this Court for an Order
compelling arbitration of all of SSC's claims and staying
all third-party claims until SSC and Quality complete
arbitration. (Id.). SSC responded in opposition to
the Motion to Dismiss on January 5, 2018. (Doc. No. 26).
asserts this Court should abstain from deciding SSC's
state law claims and dismiss the third-party complaint, or
stay the third-party complaint pending resolution of the
state court action. (Doc. No. 22 at 6). The principles
underlying the doctrine of abstention “rest on
considerations of ‘wise judicial administration, giving
regard to conservation of judicial resources and
comprehensive disposition of litigation.'”
Romine v. Compuserve Corp., 160 F.3d 337, 339 (6th
Cir. 1998) (citing Colorado River Water Conservation
Dist. v. United States, 424 U.S. 800, 817 (1976). While
abstention from exercising federal jurisdiction is the
exception and not the rule, in exceptional circumstances,
“a federal district court may abstain. . . due to the
existence of a concurrent state court
proceeding…” PaineWebber, Inc. v.
Cohen, 276 F.3d 197, 206 (6th Cir. 2001) (citing
Colorado River, 424 U.S. at 817).
determining whether abstention is appropriate the Court must
first determine whether the proceedings in the state and
federal actions are parallel. Crawley v. Hamilton County
Comm'rs, 744 F.2d 28, 31 (6th Cir. 1984). The state
court proceedings need not be identical, merely
“substantially similar.” Romine v. Compuserve
Corp., 160 F.3d 337, 340 (6th Cir. 1998). There is also
no requirement that the parties in the state court
proceedings be identical to those in the federal case.
Heitmanis v. Austin, 899 F.2d 521, 528 (6th Cir.
1990). After establishing the actions are parallel, the Court
must examine whether the judicial economy warrants
abstention. Bates v. Van Buren Tp., 2004 WL 2792483,
*3 (6th Cir. 2004). The Supreme Court has identified eight
factors a district court must consider when deciding whether
to abstain from exercising its jurisdiction due to the
concurrent jurisdiction of a state court. Romine,
160 F.3d at 340-41 (collecting cases and factors).
(1) whether the state court has assumed jurisdiction over any
res or property; (2) whether the federal forum is less
convenient to the parties; (3) avoidance of piecemeal
(4) the order in which jurisdiction was obtained[;] ... (5)
whether the source of governing law is state or federal; (6)
the adequacy of the state court action to protect the federal
plaintiff's rights; (7) the relative progress of the
state and federal proceedings; and (8) the presence or
absence of concurrent jurisdiction.
considering these factors, the Court “does not rest on
a mechanical checklist, but on a careful balancing of the
important factors as they apply in a given case, with the
balance heavily weighted in favor of the exercise of
jurisdiction.” PaineWebber, Inc., 276 F.3d at
207 (citing Moses H. Cone Mem'l Hosp. v.
Mercury Constr. Corp., 460 U.S. 1, 16 (1983)).