Gulfstream Aerospace Corporation v. Mayacamas Corporation

485 U.S. 271

108 S.Ct. 1133

99 L.Ed.2d 296

GULFSTREAM AEROSPACE CORPORATION, Petitioner

v MAYACAMAS CORPORATION.

No. 86-1329.

Argued Dec. 7, 1987.

Decided March 22, 1988.

Syllabus

Petitioner sued respondent in state court for breach of contract. Respondent did not remove the action to federal court, but, one month later, filed a diversity action against petitioner in the Federal District Court for breach of the same contract. The District Court denied petitioner's motion to stay or dismiss the action before it, finding that the facts of the case fell short of those necessary to justify the requested discontinuance under Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483, which held that, in "exceptional" circumstances, a district court may stay or dismiss an action because of the pendency of similar state-court litigation. The Court of Appeals dismissed petitioner's appeal for lack of jurisdiction, holding that neither 28 U.S.C. § 1291 which provides for appeals from "final decisions" of the district courts—nor § 1292(a)(1)—which authorizes appeals from interlocutory orders granting or denying injunctions—allowed an immediate appeal from the District Court's order. The court also declined to treat petitioner's notice of appeal as an application for a writ of mandamus under the All Writs Act.

Held:

1. A district court order denying a motion to stay or dismiss an action when a similar suit is pending in state court is not immediately appealable under § 1291 or § 1292(a)(1). Pp. 275-288.

(a) Since the order in question does not end the litigation but ensures that it will continue in the District Court, it is not appealable under § 1291. The order does not fall within the collateral-order exception to § 1291, since it fails to satisfy the exception's "conclusiveness" requirement in that it is inherently tentative and not made with the expectation that it will be the final word on the subject addressed. Given both the nature of the factors to be considered under Colorado River and the natural tendency of courts to attempt to eliminate matters that need not be decided from their dockets, a district court usually will expect to revisit and reassess an order denying a stay in light of events occurring in the normal course of litigation. Pp. 275-288.

(b) Since the order in question relates only to the conduct or progress of litigation before the District Court, it cannot be considered an in- junction appealable under § 1292(a)(1). Petitioner's claim that the order is appealable pursuant to the doctrine of Enelow v. New York Life Ins. Co., 293 U.S. 379, 55 S.Ct. 310, 79 L.Ed. 440, and Ettelson v. Metropolitan Life Ins. Co., 317 U.S. 188, 63 S.Ct. 163, 87 L.Ed. 176, under which orders granting or denying stays of "legal" proceedings on "equitable" grounds were considered to be immediately appealable injunctions, is rejected. The Enelow-Ettelson doctrine is overruled since it is based on outmoded procedural differentiations and produces arbitrary and anomalous results in modern practice. Pp. 279-288.

2. Petitioner has failed to satisfy its burden of showing that the District Court's refusal to order a stay or dismissal of the suit before it constituted an abuse of discretion sufficient to warrant the extraordinary remedy of mandamus in the Court of Appeals. Petitioner's assertion that a party's decision to spurn removal and bring a separate federal-court suit invariably constitutes "exceptional" circumstances warranting stay or dismissal under the Colorado River doctrine is rejected. Pp. 288-290.

806 F.2d 928, (CA 9 1986), affirmed.

MARSHALL, J., delivered the opinion of the Court, in which all other Members joined, except KENNEDY, J., who took no part in the consideration or decision of the case. SCALIA, J., filed a concurring opinion, post, p. 290.

Elliot L. Bien, San Francisco, Cal., for petitioner.

Gregory H. Ward, Palo Alto, Cal., for respondent.

Justice MARSHALL delivered the opinion of the Court.

The primary issue in this case is whether a district court order denying a motion to stay or dismiss an action when a similar suit is pending in state court is immediately appealable.

I

Petitioner Gulfstream Aerospace Corporation and respondent Mayacamas Corporation entered into a contract under which respondent agreed to purchase an aircraft manufactured by petitioner. Respondent subsequently refused to make payments due, claiming that petitioner, by increasing the production and availability of its aircrafts, had frustrated respondent's purpose in the transaction, which was to sell the aircraft when demand was high. Petitioner thereupon filed suit against respondent for breach of contract in the Superior Court of Chatham County, Georgia. Respondent, declining to remove this action to federal court, filed both an answer and a counterclaim. In addition, approximately one month after the commencement of petitioner's state-court suit, respondent filed a diversity action against petitioner in the United States District Court for the Northern District of California. This action alleged breach of the same contract that formed the basis of petitioner's state-court suit.

Petitioner promptly moved for a stay or dismissal of the federal-court action pursuant to the doctrine of Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976). In Colorado River, we held that in "exceptional" circumstances, a federal district court may stay or dismiss an action solely because of the pendency of similar litigation in state court. Id., at 818, 96 S.Ct., at 1246; see Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 13-19, 103 S.Ct. 927, 935-938, 74 L.Ed.2d 765 (1983).¹ Petitioner argued that the circumstances of this case supported a stay or dismissal of the federal-court action under Colorado River. The District Court disagreed. Finding that "the facts of this case fall short of those necessary to justify" the discontinuance of a federal-court proceeding under Colorado River, the District Court denied petitioner's motion. See No. C 85-20658 RPA (ND Cal., Jan. 24, 1986).

Petitioner filed a notice of appeal with the United States Court of Appeals for the Ninth Circuit, alleging that the Court of Appeals had jurisdiction over the appeal under either 28 U.S.C. § 1291 ² or 28 U.S.C. § 1292(a)(1).³ Petitioner also requested the Court of Appeals, in the event it found that neither of these sections provided appellate jurisdiction, to treat the notice of appeal as an application for a writ of mandamus, brought pursuant to the All Writs Act, 28 U.S.C. § 1651,⁴ and to grant the application. The Court of Appeals dismissed the appeal for lack of jurisdiction, holding that neither § 1291 nor § 1292(a)(1) allowed an immediate appeal from the District Court's order. 806 F.2d 928, 929-930 (1987).⁵ The Court of Appeals then declined to treat petitioner's notice of appeal as an application for mandamus on the ground that the District Court's order would not cause "serious hardship or prejudice" to petitioner. Id., at 930. Finally, the Court of Appeals stated that even if the notice of appeal were to be treated as an application for mandamus, petitioner did not have a right to the writ because "[i]t was well within the district court's discretion to deny" petitioner's motion. Id., at 930-931.

We granted certiorari, 481 U.S. 1068, 107 S.Ct. 2458, 95 L.Ed.2d 868 (1987), to resolve a division in the Circuits as to whether a district court's denial of a motion to stay litigation pending the resolution of a similar proceeding in state court is immediately appealable.⁶ We now affirm.

II

Petitioner's principal contention in this case is that the District Court's order denying the motion to stay or dismiss the federal-court litigation is immediately appealable under § 1291. That section provides for appellate review of "final decisions" of the district courts. This Court long has stated that as a general rule a district court's decision is appealable under this section only when the decision "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 633, 89 L.Ed. 911 (1945).⁷ The order at issue in this case has no such effect: indeed, the order ensures that litigation will continue in the District Court. In Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949), however, we recognized a "small class" of decisions that are appealable under § 1291 even though they do not terminate the underlying litigation. Id., at 546, 69 S.Ct., at 1225. We stated in Cohen that a district court's decision is appealable under § 1291 if it "finally determine[s] claims of right separable from, and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated." Ibid. Petitioner asserts that the District Court's decision in this case falls within Cohen's "collateral order" doctrine.

Since Cohen, we have had many occasions to revisit and refine the collateral-order exception to the final-judgment rule. We have articulated a three-pronged test to determine whether an order that does not finally resolve a litigation is nonetheless appealable under § 1291. See Coopers & Lybrand v. Livesay, 437 U.S. 463, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978); see also, e.g., Richardson-Merrell Inc. v. Koller, 472 U.S. 424, 431, 105 S.Ct. 2757, 2761, 86 L.Ed.2d 340 (1985); Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 375, 101 S.Ct. 669, 674, 66 L.Ed.2d 571 (1981). First, the order must "conclusively determine the disputed question." Coopers & Lybrand v. Livesay, 437 U.S., at 468, 98 S.Ct., at 2458. Second, the order must "resolve an important issue completely separate from the...