The opinion of the court was delivered by: MIRIAM CEDARBAUM, Senior District Judge
Defendant International Modeling and Talent Association
("IMTA") moves under the Colorado River abstention doctrine to
dismiss the complaint filed by plaintiff Georges Mouchantaf. For
the reasons that follow, IMTA's motion is granted.
On December 28, 2004, Mouchantaf commenced this action in the
Supreme Court of New York County. The complaint alleges that in
1987 Mouchantaf co-founded IMTA with his business partner, Helen
Rogers, for the purpose of organizing annual conventions and
events in which aspiring models and actors are presented to
professionals in the entertainment industry. In 1991, Mouchantaf
sold his interest in IMTA to George Chesteen, the current owner
and chief officer of IMTA, pursuant to a stock purchase
agreement. Under that agreement, Mouchantaf contracted to work
for IMTA for a period of three years at a stipulated salary. At
the end of that period, IMTA was required to pay Mouchantaf 10%
of its gross annual income in excess of $1.7 million. The
agreement also contained a perpetual non-compete provision that
precludes Mouchantaf from ever competing with IMTA.
The complaint also alleges that in early 2004, Mouchantaf
started a new business, International Presentation of Performers
("iPOP"), for the purpose of organizing events to showcase aspiring actors and models to entertainment professionals. When
IMTA learned about iPOP, it contacted Mouchantaf's prospective
clients and informed them that Mouchantaf was in breach of his
non-compete obligation under the 1991 stock purchase agreement.
Mouchantaf commenced an action for (1) a declaration that the
non-compete agreement is unenforceable, (2) an injunction to
prevent IMTA from tortiously interfering with Mouchantaf's
business relations, and (3) damages for IMTA's failure to pay him
all sums due under the stock purchase agreement.
On January 13, 2005, IMTA removed this action to federal court
on diversity grounds, and then moved to dismiss the complaint.
IMTA contends that there is a pending state action involving the
same parties, facts, and legal issues, and that this court should
accordingly abstain under Colorado River Water Conservation
Dist. v. United States, 424 U.S. 800 (1976).
On October 1, 2004, nearly three months before this action was
commenced, IMTA filed a complaint in the Superior Court of
Arizona, Maricopa County, against Mouchantaf and his Arizona
corporation, World Talent, Inc. The complaint alleges that
Mouchantaf violated the non-compete agreement by soliciting
IMTA's customers to participate in events organized by iPOP. IMTA
seeks damages arising from Mouchantaf's breach of the noncompete
agreement, as well as injunctive relief to prevent him from
competing with IMTA. On December 6, 2004, IMTA's action against Mouchantaf and World
Talent was consolidated with another action brought by IMTA
against Mouchantaf's former business partner, Helen Rogers, based
on similar allegations of breach of a non-compete agreement. On
November 15, 2004, World Talent filed an answer, and Mouchantaf
moved to dismiss the action for improper venue or, in the
alternative, to transfer the action to New York. On November 6,
2004, World Talent amended its answer, asserting counterclaims
and seeking (1) a declaration that the non-compete agreement is
unenforceable, and (2) damages for IMTA's tortious interference
with World Talent's business relations and for IMTA's defamatory
statements to third-parties. Mouchantaf's motion to dismiss or
transfer was denied by the Arizona court on January 7, 2005.
Discovery in the Arizona action has been proceeding.
Abstention under Colorado River rests on "considerations of
wise judicial administration, giving regard to conservation of
judicial resources and comprehensive disposition of litigation."
Colorado River, 424 U.S. at 817. Colorado River abstention,
however, is an "extraordinary and narrow exception to a federal
court's duty to exercise its jurisdiction," and applies only "in
exceptional circumstances where the order to the parties to
repair to state court would clearly serve a countervailing interest." FDIC v. Four Star Holding Co., 178 F.3d 97, 101 (2d
To determine whether abstention is appropriate, a federal court
"must weigh six factors, with the balance heavily weighted in
favor of the exercise of jurisdiction." Burnett v. Physician's
Online, Inc., 99 F.3d 72, 76 (2d Cir. 1996) (quoting Moses H.
Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 16
(1983)) (internal quotation marks omitted). The six factors are:
"(1) assumption of jurisdiction over a res; (2) inconvenience of
the forum; (3) avoidance of piecemeal litigation; (4) order in
which the actions were filed; (5) the law that provides the rule
of decision; and (6) protection of the federal plaintiff's
rights." FDIC, 178 F.3d at 101; accord Burnett,
99 F.3d at 76. The decision to abstain does not depend "on a mechanical
checklist, but on a careful balancing of the important factors as
they apply in a given case." FDIC, 178 F.3d at 101.
Before considering the factors set forth in Colorado River, a
threshold determination is "whether the state and federal
proceedings are indeed parallel, i.e., whether substantially the
same parties are litigating the same issues in a state forum."
Kshel Realty Corp. v. City of New York, No. 01 Civ. 9039 (LMM),
2003 WL 21146650, *5 (S.D.N.Y. May 16, 2003) (quoting United
Nat'l Ins. Co. v. Waterfront N.Y. Realty, Corp., 948 F. Supp. 263, 271 (S.D.N.Y. 1996)) (internal quotation marks omitted);
accord Great South Bay Medical Care, P.C. v. Allstate
Insurance Co., 204 F. Supp.2d 492, 497 (S.D.N.Y. 2002). IMTA and
Mouchantaf are both parties to the Arizona action. The gravamen
of the two actions is virtually identical. Both actions center on
the enforceability of the non-compete agreement and on IMTA's
allegedly tortious interference with Mouchantaf's business
relations. While the Arizona action involves additional
defendants not parties here, that fact does not render the
proceedings non-parallel. See Great South Bay,
204 F. Supp.2d at 497. The fact that Mouchantaf asserts an additional claim for
sums due under the agreement likewise does not distinguish the
actions for purposes of Colorado River. Mouchantaf has not
argued that he is precluded from asserting this claim, which
involves the same parties and the same contract, in the Arizona
action. See Wiggin & Co. v. Ampton Invs., Inc.,
66 F. Supp.2d 549, 553 (S.D.N.Y. 1999) (Colorado River abstention was
warranted where plaintiff "can assert (as counterclaims) the same
claims raised here" in the parallel state action); see also
Telesco v. Telesco Fuel and Masons' Materials, Inc.,
765 F.2d 356, 362 (2d Cir. 1985); Great South Bay,
204 F. Supp.2d at 497. Consideration of Colorado River abstention in this case is
therefore appropriate. A. Assumption of jurisdiction over res
There is no res or property involved in the dispute between
IMTA and Mouchantaf. The absence of a res is a factor that weighs
slightly in favor of retaining jurisdiction. See Woodford v.
Community Action Agency of Greene County, Inc., 239 ...