the plaintiff asks that this Court abstain from exercising its jurisdiction over a claim in favor of state court determination.
As stated in Colorado River, "abstention from the exercise of federal jurisdiction is the exception, not the rule." Id. at 813. Moreover, the Court stated that "a federal court should [not] exercise its judicial discretion to dismiss a suit merely because a State court could entertain it." Id. (citation omitted). The Court then identified the three situations in which abstention would be appropriate: First, "'in cases presenting a federal constitutional issue which might be mooted or presented in a different posture by a state court determination of pertinent state law.'" Id., quoting County of Allegheny v. Frank Mashuda Co., 360 U.S. 185, 189, 3 L. Ed. 2d 1163, 79 S. Ct. 1060 (1959). Second, "where there have been presented difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the result in the case then at bar. Id. Finally, the Court stated that "abstention is appropriate where, absent bad faith, harassment, or a patently invalid state statute, federal jurisdiction has been invoked for the purpose of restraining state criminal proceedings." 96 S. Ct. at 1245 (citation omitted). This case, and the concomitant arguments of counsel relating to the present motions, does not fall within any of these categories.
However, the Supreme Court has held that abstention may be appropriate "in situations involving the contemporaneous exercise of concurrent jurisdictions, either by federal courts or by state and federal courts. These principles rest on considerations of 'wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation.'" Id. at 1246, quoting Kerotest Mfg. Co. v. C-O-Two Fire Equipment Co., 342 U.S. 180, 183, 96 L. Ed. 200, 72 S. Ct. 219 (1952). The Court, cautioning that dismissal is warranted only on finding "the clearest of justifications," set forth three non-exclusive factors to be considered by the Court before abstaining: "the inconvenience of the federal forum ... the desirability of avoiding piecemeal litigation ... and the order in which jurisdiction was obtained by the concurrent forums." 96 S. Ct. at 1247.
The Second Circuit, after consideration of Colorado River, instructs that "[a] district court may decline to exercise its jurisdiction in 'exceptional circumstances' based on 'considerations of wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation.'" Bethlehem Contracting Co. v. Lehrer/McGovern, Inc., 800 F.2d 325, 326 (2d Cir. 1986) (citations and internal quotation omitted). The Bethlehem Court then iterated two additional factors set forth by the Supreme Court for consideration on the issue of abstention: "whether state or federal law supplies the rule of decision, and whether the state court proceeding will adequately protect the rights of the party seeking to invoke federal jurisdiction." 800 F.2d at 327, citing Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 14-16, 74 L. Ed. 2d 765, 103 S. Ct. 927 (1983). Thus, although whether or not to stay or dismiss an action on abstention grounds is a matter within the discretion of the Court, "a federal court ... has a 'virtually unflagging obligation' to exercise  jurisdiction, even if an action concerning the same matter is pending in state court." Id., citing Colorado River, 424 U.S. at 817-18.
After considering all of the factors, and taking note of the strong tendency to exercise jurisdiction, the Court declines to dismiss the federal action or stay its progression pending the state court action. First, the plaintiff chose this forum, and chose it before filing in state court. Second, dismissal would not necessarily avoid piecemeal litigation. The action in this Court is characterized as a "collections case." Whether it is properly called a collections case or an admiralty case, the fact remains that the state action is neither. It is a state law fraud action. The fact that certain parties to each are the same and that certain factual issues may be in common does not mean that resolution of each case will result in piecemeal litigation. See 800 F.2d at 328. Third, the plaintiff has failed to show that the federal forum is in any way inconvenient. Fourth, as stated in the federal Complaint, federal law applies to the federal claim, and fraud is a state law cause of action. Thus, the rule of decision for each claim is from the forum in which the claims were filed. Moreover, even if the rule of decision, or relevant substantive law were from state law, it would not be given much weight by this Court in favor of granting the plaintiff's motion. See Id. Fifth, the mere fact that the state forum will provide an adequate protection for the interests of the parties with respect to the federal claims is afforded little weight in favor of the plaintiff's motion. As stated in Bethlehem, "this factor, like choice of law, is more important when it weighs in favor of federal jurisdiction." Id.
Accordingly, the plaintiff's motion for dismissal or a stay of the instant case is DENIED.
C. Motion For Extension Of Time For Discovery
The defendant's motion for an extension of the discovery deadline is referred to the sound discretion of the Magistrate Judge.
For the foregoing reasons, the Court hereby DENIES the plaintiff's motion and refers the defendant's motion to the Magistrate Judge.
IT IS SO ORDERED.
Dated Nov. 24, 1996
at Binghamton, New York
Thomas J. McAvoy
Chief U.S. District Judge
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