Will v. Calvert Fire Ins. Co.
437 U.S. 655 (1978)

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U.S. Supreme Court

Will v. Calvert Fire Ins. Co., 437 U.S. 655 (1978)

Will v. Calvert Fire Insurance Co.

No. 77-693

Argued April 19, 1978

Decided June 23, 1978

437 U.S. 655

Syllabus

After Calvert Fire Insurance Co. (hereafter respondent) had advised American Mutual Reinsurance Co. (American) that respondent was rescinding its membership in a reinsurance pool that American operated, American sued respondent in an Illinois state court for a declaration that the pool agreement with respondent remained in effect. Six months later, respondent, in its answer, asserted the unenforceability of the pool agreement on the grounds that American had violated, inter alia, the Securities Act of 1933; Rule 10b-5, promulgated under the Securities Exchange Act of 1934 (hereafter 1934 Act); and the Illinois Securities Act, and counterclaimed for damages on all its defense claims except the one involving Rule 10b-5, which, under the 1934 Act's terms, was exclusively enforceable in the federal courts. Respondent on the same day filed a complaint against American in the Federal District Court for damages for American's alleged Rule 10b-5 violation, and joined therewith claims based on each of the other defensive counts made in the state court action. American moved to dismiss or abate the federal court action, the motion to dismiss being based on the contention that the reinsurance agreement was not a "security" within the meaning of the 1933 or 1934 Act, and the motion to abate being on the ground that the earlier state proceeding included all issues except the one involving Rule 10b-5. Petitioner, the District Court Judge, granted American's motion to defer the federal proceeding until completion of the state proceeding, except the Rule 10b-5 damages claim. He rejected respondent's contention that the District Court should proceed with the entire case because of its exclusive jurisdiction over that claim, and noted that the state court was bound to provide the equitable relief sought by respondent by recognizing a valid Rule 10b-5 claim as a defense to the state action. Petitioner heard argument on, but has not yet decided, the question of whether respondent's interest in the reinsurance pool constituted a "security" as defined in the 1934 Act. After petitioner had rejected motions to reconsider his stay order and refused to certify an interlocutory appeal, respondent petitioned the Court of Appeals for a writ of mandamus directing petitioner to adjudicate

Page 437 U. S. 656

the Rule 10b-5 claim. Thereafter, that court, relying on Colorado River Water Conservation Dist. v. United States,424 U. S. 800, granted the petition and directed petitioner to "proceed immediately with Calvert's claim for damages and equitable relief" under the 1934 Act.

Held: The judgment is reversed. Pp. 437 U. S. 661-667; 437 U. S. 667-668.

560 F.2d 792, reversed.

MR. JUSTICE REHNQUIST, joined by MR. JUSTICE STEWART, MR. JUSTICE WHITE, and MR. JUSTICE STEVENS, concluded:

Issuance of the writ of mandamus by the Court of Appeals impermissibly interfered with petitioner's discretion to control his docket. Pp. 437 U. S. 661-667.

(a) Though a court of appeals has the power to issue a writ of mandamus directing a district court to proceed to judgment in a pending case when it is the district court's duty to do so, the burden is on the moving party to show that its right to issuance of the writ is "clear and indisputable." P. 437 U. S. 662.

(b) Where there is duplicative litigation in the state and federal courts, the decision whether or not to defer to the state courts is largely committed to the discretion of the district court, Brillhart v. Excess Ins. Co.,316 U. S. 491, 316 U. S. 494, even when matters of federal law are involved, Colorado River, supra at 424 U. S. 820. Pp. 437 U. S. 662-664.

(c) This case, unlike Colorado River, did not involve outright dismissal of the action, and respondent remained free to urge petitioner to reconsider his decision to defer based on new information as to the progress of the state case; to that extent, deferral (contrary to respondent's argument) was not equivalent to dismissal. Pp. 437 U. S. 664-665.

(d) Though a district court's exercise of discretion may be subject to review in a proper interlocutory appeal, it ought not be overridden by a writ of mandamus. Where a matter is committed to a district court's discretion, it cannot be said that a litigant's right to a particular result is "clear and indisputable." Here, petitioner has not heedlessly refused to adjudicate the Rule 10b-5 damages claim (the only issue that may not concurrently be resolved by both the state and federal courts), and, as far as the record shows, his delay in adjudicating that claim is simply the product of a district court's normal excessive workload, compounded by "the unfortunate consequence of making the judge a litigant" in this mandamus proceeding. Ex parte Fahey,332 U. S. 258, 332 U. S. 260. Pp. 437 U. S. 665-667.

MR. JUSTICE BLACKMUN, who is of the view that Brillhart v. Excess Ins. Co.,316 U. S. 491, a diversity case, has no application to this federal issue case, concluded that the issuance of mandamus in this case

Page 437 U. S. 657

was premature. The judgment of the Court of Appeals must be reversed because the court should have done no more than require reconsideration by petitioner in light of Colorado River Water Conservation Dist. v. United States,424 U. S. 800, which was decided after petitioner's stay order. Pp. 437 U. S. 667-668.

REHNQUIST, J., announced the Court's judgment and delivered an opinion, in which STEWART, WHITE, and STEVENS, JJ., joined. BLACKMUN, J., filed an opinion concurring in the judgment, post, p. 437 U. S. 667. BURGER, C.J., filed a dissenting opinion, post, p. 437 U. S. 668. BRENNAN, J., filed a dissenting opinion, in which BURGER, C.J., and MARSHALL and POWELL, JJ., joined, post, p. 437 U. S. 668.

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