'Metastasized' Litigation Offers Abstention, Jurisdiction Lessons - Court Rules - U.S. Tenth Circuit
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'Metastasized' Litigation Offers Abstention, Jurisdiction Lessons

To recap the entirety of the procedural history of D.A. Osguthorpe Family Partner v. ASC Utah, Inc. would require a voluminous text comparable to Joyce’s Ulysses. We’ll spare your time, and ours, as many of us are billing by the hour.

A few parties decided to develop Utah land into a golf course, ski resort, and vacation destination. The project collapsed in development and litigation ensued. Counterclaims, third parties, and litigation consolidation added enough parties and confusion to lead the Tenth Circuit to refer to it as “metastasized.”

In prior proceedings that reached the Utah Supreme Court, one of the parties sought to enforce an arbitration clause three years after litigation began. Citing the public policy of conserving judicial resources, the Utah Supreme Court denied the motion. After all, the party seeking arbitration had participated in litigation actively for three years.

Then another party, case and claim were added, followed by counterclaims and consolidation. That led to another motion to enforce arbitration, this time by the newcomer, Osguthorpe. That was also denied on the same policy grounds, though the court admitted that newly-arrived Osguthorpe was not at fault and presented the party with two options: take litigation or wait until the rest of the claims were resolved and then push for arbitration.

Osguthorpe sued in federal court seeking to force arbitration and alleging a § 1983 violation of its due-process rights by forcing litigation and depriving it of its property right to contract for arbitration.

Lose interest yet? So did the district court. They kicked the case for lack of jurisdiction under Rooker-Feldman, Younger abstention, and other “general principles of abstention.”

As for our dear Tenth Circuit, they almost agreed.

Rooker-Feldman , in this context, was misapplied. The oft-misused doctrine is confined to cases where state-court losers whine about the judges after the proceedings are final. The federal district court complaint was filed while an appeal was pending before the Utah Supreme Court.

Instead, the Colorado River doctrine of abstention should have been used. This doctrine essentially says that even where jurisdiction can happen, sometimes it shouldn’t because of the need to preserve judicial resources. Four factors should be considered in these cases:

  1. Whether the state or feds first assumed jurisdiction over the same res;
  2. Inconvenience of the federal forum;
  3. Desirability of avoiding piecemeal litigation;
  4. The order in which jurisdiction was obtained by the concurrent forums.

The first factor was not applicable. There was no “in rem” in this case. The second was also irrelevant. No party had an issue getting to the courthouse.

The third factor was the money factor in this case. The litigation spans seven years, thousands of pages in the docket, and as a result, state “court resources have already been consumed almost to exhaustion.” Here, the federal suit (which came after the state litigation) also adds to the complexity.

Considering the Colorado River factors, related case law, and the size of the Utah court’s photocopying bill, the Tenth Circuit felt it best to leave this cancerous case to the state courts.

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