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.
The judgment is reversed. Pp. 437 U. S.
-667; 437 U. S.
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.
(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.
(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.
, 316 U. S. 494
even when matters of federal law are involved, Colorado River,
at 424 U. S. 820
Pp. 437 U. S.
(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.
(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.
, 332 U. S. 260
Pp. 437 U. S.
MR. JUSTICE BLACKMUN, who is of the view that Brillhart v.
Excess Ins. Co., 316 U. S. 491
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.
, which was decided after petitioner's stay order.
Pp. 437 U. S.
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,
p. 437 U. S. 667
BURGER, C.J., filed a dissenting opinion, post,
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.
MR. JUSTICE REHNQUIST announced the judgment of the Court, and
delivered an opinion in which MR. JUSTICE STEWART, MR. JUSTICE
WHITE, and MR. JUSTICE STEVENS joined.
On August 15, 1977, the Court of Appeals for the Seventh Circuit
granted a petition for writ of mandamus ordering petitioner, a
Judge of the United States District Court for the Northern District
of Illinois, "to proceed immediately" to adjudicate a claim based
upon the Securities Exchange Act of 1934 and brought by respondent,
Calvert Fire Insurance Co., against American Mutual Reinsurance
Co., despite the pendency of a substantially identical proceeding
between the same parties in the Illinois state courts. 560 F.2d
792, 797. The Court of Appeals felt that our recent decision in
Colorado River Water Conservation Dist. v. United States,
424 U. S. 800
(1976), compelled the issuance of the writ. We granted
Page 437 U. S. 658
certiorari to consider the propriety of the use of mandamus to
review a District Court's decision to defer to concurrent state
proceedings, 434 U.S. 1008, and we now reverse.
Respondent Calvert writes property and casualty insurance.
American Mutual operates a reinsurance pool whereby a number of
primary insurers protect themselves against unanticipated losses.
Membership in the pool requires both the payment of premiums by
pool members and indemnification of the pool in the event that
losses exceed those upon which the premiums are calculated. Calvert
joined the pool in early 1974, but, in April of that year, notified
American Mutual of its election to rescind the agreement by which
it became a member.
In July, 1974, American Mutual sued in the Circuit Court of Cook
County, Ill., to obtain a declaration that the pool agreement
between it and Calvert was in full force and effect. Six months
later, Calvert, in its answer to that suit, asserted that the pool
agreement was not enforceable against it, because of violations by
American Mutual of the Securities Act of 1933, the Securities
Exchange Act of 1934, the Illinois Securities Act, the Maryland
Securities Law, and the state common law of fraud. With its answer,
Calvert filed a counterclaim seeking $2 million in damages from
American Mutual on all of the grounds that it set up in defense
except for the defense based on the Securities Exchange Act of
1934. Since § 27 of that Act, 48 Stat. 902, as amended, 15 U.S.C. §
78aa (1976 ed.), granted the district courts of the United States
exclusive jurisdiction to enforce the Act, Calvert, on the same
day, filed a complaint in the United States District Court for the
Northern District of Illinois seeking damages from American Mutual
for an alleged violation of Rule 10b-5, 17 CFR § 240.10b-5 (1977),
issued under § 10(b) of the Act, 15 U.S.C. § 78j(b) (1976 ed.).
Joined with this Rule 10b-5
Page 437 U. S. 659
count were claims based on each of the other grounds asserted by
it in defense to American Mutual's state court action.
In February, 1975, more than seven months after it had begun its
state court action, but less than one month after Calvert had filed
its answer and counterclaim in that action and its complaint in the
federal court, American Mutual moved to dismiss or abate the
latter. The claim for dismissal was based on the substantive
assertion that the reinsurance agreement was not a "security"
within the meaning of the 1933 or 1934 Act. The motion to abate was
based on the fact that the state proceedings, commenced six months
before the federal proceedings, included every claim and defense
except the claim for damages based on Rule 10b-5 under the 1934
In May, 1975, Judge Will substantially granted American Mutual's
motion to defer the federal proceeding until the completion of the
state proceedings, observing that a tentative trial date had
already been set by the state court. Federal litigation of the same
issues would therefore be duplicative and wasteful. He rejected
Calvert's contention that the court should proceed with the entire
case because of its exclusive jurisdiction under the 1934 Act,
noting that the state court was bound to provide the equitable
relief sought by Calvert by recognizing a valid Rule 10b-5 claim as
a defense to the state action. [Footnote 1
] Only Calvert's claim for damages under Rule
10b-5 was subject to the exclusive jurisdiction of the federal
court. Petitioner therefore stayed all aspects of Calvert's federal
action subject to the concurrent jurisdiction of both courts,
recognizing "only Calvert's very limited claim for
Page 437 U. S. 660
monetary damages under the 1934 Securities Act as a viable claim
in this court." App. to Pet. for Cert. B-9. On May 9, 1975, Judge
Will heard oral argument on the basic question of whether Calvert's
interest in the reinsurance pool is a security within the meaning
of the 1934 Act. He has not yet rendered a decision on that issue.
Judge Will rejected two motions to reconsider his stay order,
and refused to certify an interlocutory appeal pursuant to 28
U.S.C. § 1292(b). On May 26, 1976, Calvert petitioned the Court of
Appeals for the Seventh Circuit for a writ of mandamus directing
Judge Will to proceed to adjudicate its Rule 105 claims. [Footnote 3
] Nearly 14 months later, on
August 15, 1977, the Court of Appeals granted the petition and
directed Judge Will to "proceed immediately with Calvert's claim
for damages and equitable relief under the Securities Exchange Act
of 1934." 560 F.2d at 797. [Footnote 4
Page 437 U. S. 661
We granted certiorari to consider Judge Will's contention that
the issuance of the writ of mandamus impermissibly interfered with
the discretion of a district court to control its own docket. 434
U.S. 1008 (1978).
The correct disposition of this case hinges in large part on the
appropriate standard of inquiry to be employed by a court of
appeals in determining whether to issue a writ of mandamus to a
district court. On direct appeal, a court of appeals has broad
authority to "modify, vacate, set aside or reverse" an order of a
district court, and it may direct such further action on remand "as
may be just under the circumstances." 28 U.S.C. § 2106. By
contrast, under the All Writs Act, 28 U.S.C. § 1651(a), courts of
appeals may issue a writ of mandamus only when "necessary or
appropriate in aid of their respective jurisdictions." Whereas a
simple showing of error may suffice to obtain a reversal on direct
appeal, to issue a writ of mandamus under such circumstances "would
undermine the settled limitations upon the power of an appellate
court to review interlocutory orders." Will v. United
States, 389 U. S. 90
389 U. S. 98
As we have repeatedly reaffirmed in cases such as Kerr v.
United States District Court, 426 U.
, 426 U. S. 402
(1976), and Bankers Life & Cas. Co. v. Holland,
346 U. S. 379
346 U. S. 382
"traditional use of the writ in aid of appellate jurisdiction
both at common law and in the federal courts has been to confine an
inferior court to a lawful exercise of its prescribed jurisdiction
or to compel it to exercise its authority when it is its duty to do
Roche v. Evaporated Milk Assn., 319 U. S.
, 319 U. S. 26
(1943). Calvert makes no contention that petitioner has exceeded
the bounds of his jurisdiction. Rather, it contends that the
District Court, in entering the stay order, has refused "to
exercise its authority when it is its duty to do so."
There can be no doubt that, where a district
Page 437 U. S. 662
court persistently and without reason refuses to adjudicate a
case properly before it, the court of appeals may issue the writ
"in order that [it] may exercise the jurisdiction of review given
by law." Insurance Co. v.
16 Wall. 258, 83 U. S. 270
"Otherwise the appellate jurisdiction could be defeated, and the
purpose of the statute authorizing the writ thwarted, by
unauthorized action of the district court obstructing the
at 319 U. S. 25
To say that a court of appeals has the power to direct a
district court to proceed to judgment in a pending case "when it is
its duty to do so," 319 U.S. at 319 U. S. 26
states the standard, but does not decide this or any other
particular case. It is essential that the moving party satisfy "the
burden of showing that its right to issuance of the writ is
clear and indisputable.'" Bankers Life & Cas. Co.,
supra at 346 U. S. 384,
quoting United States v. Duell, 172 U.
S. 576, 172 U. S. 52
(1899). Judge Will urges that Calvert does not have a "clear and
indisputable" right to the adjudication of its claims in the
District Court without regard to the concurrent state proceedings.
To that issue we now must turn.
It is well established that "the pendency of an action in the
state court is no bar to proceedings concerning the same matter in
the Federal court having jurisdiction." McClellan v.
Carland, 217 U. S. 268
217 U. S. 282
(1910). It is equally well settled that a district court is "under
no compulsion to exercise that jurisdiction," Brillhart v.
Excess Ins. Co., 316 U. S. 491
Page 437 U. S. 663
316 U. S. 494
(1942), where he controversy may be settled more expeditiously in
the state court. Although most of our decisions discussing the
propriety of stays or dismissals of duplicative actions have
concerned conflicts of jurisdiction between two federal district
courts, e.g., Kerotest Mfg. Co., v. C-O-Two Fire Equipment
Co., 342 U. S. 180
(1952); Landis v. North American Co., 299 U.
(1936), we have recognized the relevance of those
cases in the analogous circumstances presented here. See
424 U.S. at 424 U. S.
-819. In both situations, the decision is largely
committed to the "carefully considered judgment," id.
424 U. S. 818
of the district court.
This power has not always been so clear. In McClellan,
on facts similar to those presented here, this Court indicated that
the writ might properly issue where the District Court had stayed
its proceedings in deference to concurrent state proceedings.
] Such an automatic
exercise of authority may well have been appropriate in a day when
Congress had authorized fewer claims for relief in the federal
courts, so that duplicative litigation and the concomitant tension
between state and federal courts could rarely result. However, as
the overlap between state claims and federal claims increased, this
Court soon recognized that situations would often arise when it
would be appropriate to defer to the state courts.
"Ordinarily, it would be uneconomical as well as vexatious for a
federal court to proceed in a declaratory judgment suit where
another suit is pending in a state court presenting the same
issues, not governed by federal law,
Page 437 U. S. 664
between the same parties. Gratuitous interference with the
orderly and comprehensive disposition of a state court litigation
should be avoided."
at 316 U. S. 495
The decision in such circumstances is largely committed to the
discretion of the district court. 316 U.S. at 316 U. S. 494
Furthermore, Colorado River, supra
at 424 U. S. 820
established that such deference may be equally appropriate even
when matters of substantive federal law are involved in the
It is true that Colorado River
virtually unflagging obligation of the federal courts to exercise
the jurisdiction given them." 424 U.S. at 424 U. S. 817
That language underscores our conviction that a district court
should exercise its discretion with this factor in mind, but it in
no way undermines the conclusion of Brillhart
decision whether to defer to the concurrent jurisdiction of a state
court is, in the last analysis, a matter committed to the district
court's discretion. Seizing upon the phrase "unflagging obligation"
in an opinion which upheld the correctness of a district court's
final decision to dismiss because of concurrent jurisdiction does
little to bolster a claim for the extraordinary writ of mandamus in
a case such as this, where the District Court has rendered no final
We think it of considerably more importance than did the Court
of Appeals that Colorado River
came before the Court of
Appeals on appeal pursuant to 28 U.S.C. § 121 following outright
dismissal of the action by the District Court, rather than through
an effort on the part of the federal court plaintiff to seek
mandamus. Calvert contends here, and the Court of Appeals for the
Seventh Circuit agreed, that Judge Will's order deferring the
federal proceedings was "equivalent to a dismissal." 560 F.2d at
76. We are loath to rest our analysis on this ubiquitous phrase,
for, if used carelessly or without a precise definition, it may
impede, rather than assist, sound resolution of the underlying
Page 437 U. S. 665
Obviously, if Judge Will had
dismissed Calvert's action
Calvert could have appealed the order of dismissal to the Court of
Appeals, which could have required such action of Judge Will "as
may be just under the circumstances." 28 U.S.C. § 2106. Since he
did not dismiss the action, Calvert remained free to urge
reconsideration of his decision to defer based on new information
as to the progress of the state case; to this extent, at least,
deferral was not
"equivalent to a dismissal."
There are sound reasons for our reiteration of the rule that a
district court's decision to defer proceedings because of
concurrent state litigation is generally committed to the
discretion of that court. No one can seriously contend that a busy
federal trial judge, confronted both with competing demands on his
time for matters properly within his jurisdiction and with
inevitable scheduling difficulties because of the unavailability of
lawyers, parties, and witnesses, is not entrusted with a wide
latitude in setting his own calendar. Had Judge Will simply decided
on his own initiative to defer setting this case for trial until
the state proceedings were completed, his action would have been
the "equivalent" of granting the motion of American Mutual to
defer, yet such action would, at best, have afforded Calvert a
highly dubious claim for mandamus. We think the fact that the judge
accomplished this same result by ruling favorably on a party's
motion to defer does not change the underlying legal question.
Although the District Court's exercise of its discretion may be
subject to review and modification in a proper interlocutory
appeal, cf. Landis,
299 U.S. at 299 U. S.
-259, we are convinced that it ought not to be
overridden by a writ of mandamus. [Footnote 7
Page 437 U. S. 666
a matter is committed to the discretion of a district court, it
cannot be said that a litigant's right to a particular result is
"clear and indisputable." [Footnote
Calvert contends that a district court is without power to stay
proceedings, in deference to a contemporaneous state action, where
the federal courts have exclusive jurisdiction over the issue
presented. Whether or not this is so, petitioner has not purported
to stay consideration of Calvert's claim for damages under the
Securities Exchange Act of 1934, which is the only
which may not be concurrently resolved by both courts. [Footnote 9
] It is true that petitioner
has not yet ruled upon this claim. Where a district court
obstinately refuses to adjudicate a matter properly before it, a
court of appeals may issue the writ to correct "unauthorized action
of the district
Page 437 U. S. 667
court obstructing the appeal." Roche,
319 U.S. at
319 U. S. 25
citing Ex parte United States, 287 U.
(1932). Calvert, however, has neither alleged nor
proved such a heedless refusal to proceed as a basis for the
issuance of the writ here. Its petition offers only the bare
allegation that Judge Will "in effect" abated the damages claim in
deference to the state proceedings. App. 12. Judge Will has never
issued such an order, and the sparse record before us will not
support any such inference. So far as appears, the delay in
adjudicating the damages claim is simply a product of the normal
excessive load of business in the District Court, compounded by
"the unfortunate consequence of making the judge a litigant" in
this mandamus proceeding. Ex parte Fahey, 332 U.
, 332 U. S. 260
The judgment of the Court of Appeals is therefore
Calvert's answer in the state action explicitly contended that
it was "entitled to rescission of its purchase of the aforesaid
security" because of the alleged Rule 10b-5 violation. App. to Pet.
for Cert. D-5. It sought identical equitable relief in its federal
at 6. See Weiner v. Shearson, Hammill
521 F.2d 817, 822 (CA9 1975); Aetna State Bank
430 F.2d 750, 754 (CA7 1970).
The state court, however, has reached a decision on the issue.
The Circuit Court concluded that the agreement was not a security,
and therefore struck the federal issues from Calvert's answer and
counterclaim. On an interlocutory appeal, the Illinois Appellate
Court affirmed, holding that the agreement was not a security
within the meaning of either the 1933 or the 1934 Act and that, in
any event, § 2(b) of the McCarran-Ferguson Act, 15 U.S.C. § 1012(b)
(1976 ed.), preempted insurance from the reach of the federal
securities laws. American Mutual Reinsurance Co. v. Calvert
Fire Ins. Co.,
52 Ill.App.3d 922, 367 N.E.2d 104 (1977),
pet. for leave to appeal denied,
No. 50,085 (Jan. 26,
1978), cert. denied,
436 U.S. 906 (1978).
As already noted, the stay order did not apply to Calvert's
claim for damages under Rule 10b-5. Judge Will had stayed Calvert's
claim for equitable relief because the state court had jurisdiction
to rescind the agreement by recognition of a Rule 10b-5
The petition did not seek to require Judge Will to proceed with
the state law claims or the federal claim based on the 1933 Act.
560 F.2d 792, 794 n. 2.
Although Calvert's petition addressed only its Rule 10b-5
claims, the court went on to note: "The logic behind our holding in
this case supports the conclusion that the stay of 1933 Act claims,
as well as the 1934 Act claims, was improper." 560 F.2d at 797 n.
A classic example of the proper issuance of the writ to protect
eventual appellate jurisdiction is Thermtron Products, Inc. v.
Hermansdorfer, 423 U. S. 336
(1976), in which a case had been remanded to the state courts on
grounds utterly unauthorized by the controlling statute. The
dissenters in that case urged that Congress had intended to bar all
review of remand orders, not that mandamus would have been
inappropriate absent such a bar. Id.
at 423 U. S. 354
(REHNQUIST, J., joined by BURGER, C.J., and STEWART, J.,
This Court there held not that the writ should issue, but that
the Court of Appeals should have required the District Judge to
show cause why the writ should not issue. Judge Carland presented
an affidavit to this Court attempting to defend his stay order on
the basis of substantially completed state proceedings. As that
affidavit was not in the record before the Court of Appeals, this
Court did not "pass upon the sufficiency of those proceedings to
authorize the orders in question," 217 U.S. at 217 U. S. 283
but directed the Court of Appeals to do so in the first
Although, in at least one instance, we approved the issuance of
the writ upon a mere showing of abuse of discretion, La Buy v.
Howes Leather Co., 352 U. S. 249
352 U. S. 257
(1957), we warned soon thereafter against the dangers of such a
"Courts faced with petitions for the peremptory writs must be
careful lest they suffer themselves to be misled by labels such as
'abuse of discretion' and 'want of power' into interlocutory review
of nonappealable orders on the mere ground that they may be
Will v. United States, 389 U. S.
, 389 U. S. 98
Beacon Theatres, Inc. v. Westover, 359 U.
(1959), is not to the contrary. Both the Court
and the dissenters agreed that mandamus should issue to protect a
clear right to a jury trial. Id.
at 359 U. S. 511
(STEWART, J., dissenting). The Court simply
concluded that it was "not permissible," id.
359 U. S. 508
for the District Court to postpone a jury trial until after most of
the relevant issues had been settled in an equitable action before
the court. Here, we have repeatedly recognized that it is
permissible for a district court to defer to the concurrent
jurisdiction of a state court.
That a litigant's right to proceed with a duplicative action in
a federal court can never be said to be "clear and indisputable" is
made all the more apparent by our holding earlier this Term in
General Atomic Co. v. Felter, 434 U. S.
(1977), that a state court lacks the power to
restrain vexatious litigation in the federal courts. There, we
reaffirmed the principle that "[f]ederal courts are fully capable
of preventing their misuse for purposes of harassment."
at 434 U. S.
The only other issue encompassed by the writ was Calvert's Rule
10b-5 claim for equitable relief. It is not disputed here that the
state court has jurisdiction to rescind the agreement as Calvert
requests. That being conceded, we find no merit in Calvert's
further argument that the statutory grant of exclusive jurisdiction
in any way distinguishes this aspect of the case from our earlier
decisions in which both the state and federal courts had power to
grant the desired relief.
MR. JUSTICE BLACKMUN concurring in the judgment.
The plurality's opinion, ante
at 437 U. S.
-663, appears to me to indicate that it now regards
as fully compatible the Court's decisions in Brillhart v.
Excess Ins. Co., 316 U. S. 491
(1942), a diversity case, and Colorado River Water Conservation
Dist. v. United States, 424 U. S. 800
(1976), a federal issue case. I am not at all sure that this is so.
I -- as were MR. JUSTICE STEWART and MR JUSTICE STEVENS -- was in
dissent in Colorado River,
and if the holding in that case
is what I think it is, and if one assumes, as I do not, that
has any application here, the Court cut back on
Mr. Justice Frankfurter's rather sweeping language in
316 U.S. at 316 U. S.
Page 437 U. S. 668
Because Judge Will's stay order was issued prior to this Court's
decision in Colorado River,
and he therefore did not have
such guidance as that case affords in the area, I join in the
Court's reversal of the Court of Appeals' issuance of a writ of
mandamus. The issuance was premature. The Court of Appeals should
have done no more than require reconsideration of the case by Judge
Will in light of Colorado River.
"Although the District Court had jurisdiction of the suit under
the Federal Declaratory Judgments Act, it was under no compulsion
to exercise that jurisdiction. The petitioner's motion to dismiss
the bill was addressed to the discretion of the court. . . . The
motion rested upon the claim that, since another proceeding was
pending in a state court in which all the matters in controversy
between the parties could be fully adjudicated, a declaratory
judgment in the federal court was unwarranted. The correctness of
this claim was certainly relevant in determining whether the
District Court should assume jurisdiction and proceed to determine
the rights of the parties. Ordinarily, it would be uneconomical, as
well as vexatious, for a federal court to proceed in a declaratory
judgment suit where another suit is pending in a state court
presenting the same issues, not governed by federal law, between
the same parties. Gratuitous interference with the orderly and
comprehensive disposition of a state court litigation should be
MR. CHIEF JUSTICE BURGER, dissenting.
I am in general agreement with MR. JUSTICE BRENNAN's dissenting
opinion. I write separately only to emphasize that I consider it
unnecessary to determine in the context of this case whether it
would ever be appropriate to give res judicata
effect to a
state court judgment implicating a claim over which the federal
courts have been given exclusive jurisdiction. Our concern here is
simply with the propriety of a federal court's delaying
adjudication of such a claim in deference to a state court
proceeding. As MR. JUSTICE BRENNAN correctly notes, whatever the
proper resolution of the res judicata
issue, a federal
court remains under an obligation to expeditiously consider and
resolve those claims which Congress explicitly reserved to the
federal courts. With this minor caveat, I join MR. JUSTICE BRENNAN
in his dissent.
MR. JUSTICE BRENNAN, with whom THE CHIEF JUSTICE, MR. JUSTICE
MARSHALL, and MR. JUSTICE POWELL join, dissenting.
This case falls within none of the three general abstention
categories, and the opinion of my Brother REHNQUIST therefore
Page 437 U. S. 669
strains to bring it within the principles that govern in a very
narrow class of "exceptional" situations that involve "the
contemporaneous exercise of concurrent jurisdictions." Colorado
River Water Conservation Dist. v. United States, 424 U.
, 424 U. S.
-818 (1976). In so straining, the opinion reaches a
result supported by neither policy nor precedent, ignores difficult
legal issues, misapprehends the significance of the proceedings
below, and casts doubt upon a decision that has stood unquestioned
for nearly 70 years. Moreover, there lurks an ominous potential for
the abdication of federal court jurisdiction in the opinion's
disturbing indifference to "the virtually unflagging obligation of
the federal courts to exercise the jurisdiction given them,"
at 424 U. S. 817
-- for obedience to that obligation becomes all the more important
when, as here, Congress has made that jurisdiction exclusive. I
Because this case came to the Court of Appeals on respondent
Calvert Fire Insurance Co.'s motion for a writ of mandamus to
compel Judge Will to adjudicate its claims for damages and
equitable relief under the Securities Exchange Act of 1934 (1934
Act), I agree with my Brother REHNQUIST that it is essential to
determine precisely what obligation the District Court had to
adjudicate respondent's 1934 Act claims. That, however, is as far
as my agreement goes.
On the same day Calvert filed its answer to the state suit
instituted against it -- an answer containing a defense under the
1934 Act that the state court was required to recognize under the
Supremacy Clause -- it commenced an action in Federal District
Court seeking relief under the 1934 Act, the Securities Act of
1933, and various state provisions. The District Court stayed all
claims alleged in this complaint, other than Calvert's claim for
money damages under Rule 10b-5 of the 1934 Act, pending the outcome
of the state suit. Although the District Court did not formally
stay the Rule 10b-5 damages claim, and heard oral argument on the
Page 437 U. S. 670
issue underlying the claim -- whether a participatory interest
in a reinsurance pool is a "security" -- the District Court has yet
to rule on this issue, so Calvert's Rule 10b-5 damages claim, like
the rest of its federal suit, remains in suspension.
Section 27 of the 1934 Act, 15 U.S.C. § 78aa (1976 ed.), gives
the federal courts exclusive
jurisdiction over claims
arising under the Act. This jurisdictional grant evinces a
legislative desire for the uniform determination of such claims by
tribunals expert in the administration of federal laws and
sensitive to the national concerns underlying them. When Congress
thus mandates that only federal courts shall exercise jurisdiction
to adjudicate specified claims, the "well established" principle
] -- accepted by my
Brother REHNQUIST, ante
at 437 U. S. 662
-- of McClellan v. Carland, 217 U.
, 217 U. S. 282
(1910), that "the pendency of an action in the state court is no
bar to proceedings concerning the same matter in the Federal court
having jurisdiction," governs a multo fortiori.
relying on the completely inapposite case of Brillhart v.
Excess Insurance Co., 316 U. S. 491
(1942), the opinion of my Brother REHNQUIST disregards the
principle and all but ignores the analysis set
forth in Colorado River Water Conservation Dist. v. United
our most recent pronouncement on a district
court's authority to defer to a contemporaneous state
the District Court dismissed a diversity
suit for a declaratory judgment because of the pendency in state
court of a suit between the same parties and involving the same
subject matter. The Court of Appeals reversed, holding that the
dismissal was an abuse of discretion. In reversing the Court of
Appeals, this Court reasoned:
"Although the District Court had jurisdiction of the suit
under the Federal Declaratory Judgments Act, it
Page 437 U. S. 671
was under no compulsion to exercise that jurisdiction.
The petitioner's motion to dismiss the bill was addressed to the
discretion of the court. Aetna Casualty Co. v. Quarles,
F.2d 321; Maryland Casualty Co. v. Consumers Finance
101 F.2d 514; American Automobile Ins. Co. v.
103 F.2d 613. . . . The motion rested upon the claim
that, since another proceeding was pending in a state court in
which all the matters in controversy between the parties could be
fully adjudicated, a declaratory judgment
in the federal
court was unwarranted. The correctness of this claim was certainly
relevant in determining whether the District Court should assume
jurisdiction and proceed to determine the rights of the parties.
Ordinarily, it would be uneconomical, as well as vexatious, for a
federal court to proceed in a declaratory judgment suit
where another suit is pending in a state court presenting the same
issues, not governed by federal law,
between the same
Brillhart v. Excess Insurance Co., supra
316 U. S.
-495 (emphasis added). As is readily apparent,
crucial to this Court's approval of the District Court's dismissal
of the suit in Brillhart
were two factors absent here.
First, because the federal suit was founded on diversity, state,
rather than federal, law would govern the outcome of the federal
suit. Second, and more significantly, the federal suit was for a
declaratory judgment. Under the terms of the provision empowering
federal courts to entertain declaratory judgment suits, 28 U.S.C. §
2201, the assumption of jurisdiction over such suits is
discretionary. That section provides:
"In a case of actual controversy within its jurisdiction . . .
any court of the United States, upon the filing of an appropriate
declare the rights and other legal relations
of any interested party seeking such declaration. . . ."
(Emphasis added.) It was primarily because federal jurisdiction
over declaratory judgment suits is
Page 437 U. S. 672
discretionary that Brillhart
found the District Court's
deference to state court proceedings permissible. This is clear
from the lower court cases approvingly cited by Brillhart
-- American Automobile Insurance Co. v. Freundt,
613 (CA7 1939); Maryland Casualty Co. v. Consumers Finance
101 F.2d 514 (CA3 1938); and Aetna Casualty Co.
92 F.2d 321 (CA4 1937) -- all of which emphasized
that a district court's discretion to dismiss a federal declaratory
judgment suit in favor of a pending state suit is a product of the
permissive nature of declaratory judgment jurisdiction. [Footnote 2/2
] Obviously, neither the logic
nor the holding of Brillhart
is pertinent where, as here,
federal jurisdiction is not only nondiscretionary, but
The unpersuasive grope for supporting precedent in which the
opinion of my Brother REHNQUIST engages is especially lamentable in
light of our decision only two Terms ago in Colorado River
Water Conservation Dist. v. United States.
we addressed the precise issue presented here: the
circumstances in which it is appropriate for a federal district
court to stay a proceeding before it is deference to a parallel
state court proceeding in situations falling within none of the
traditional categories for federal abstention. We explained that,
in contrast to situations in which jurisdiction is concurrent in
two or more federal courts,
Page 437 U. S. 673
where the action paralleling a federal suit is in a state court,
the federal court's power to dismiss the suit before it in
deference to the parallel proceeding is limited by the "virtually
unflagging obligation of the federal courts to exercise the
jurisdiction given them." 424 U.S. at 424 U. S. 817
Because a federal district court's power is so limited, the
circumstances that justify federal court inaction in deference to a
state proceeding must be "exceptional." Id.
424 U. S. 818
Just how "exceptional" such circumstances must be was made clear by
our admonition that
"the circumstances permitting the dismissal of a federal suit
due to the presence of a concurrent state proceeding for reasons of
wise judicial administration are considerably more limited than the
circumstances appropriate for abstention."
Since we had previously noted that
"'[a]bdication of the obligation to decide cases can be
justified under [the abstention] doctrine only in the exceptional
circumstances where the order to the parties to repair to the State
court would clearly serve an important countervailing
at 424 U. S. 813
quoting County of Allegheny v. Frank Mashuda Co.,
360 U. S. 185
360 U. S.
-189 (1959), the circumstances warranting dismissal
"for reasons of wise judicial administration" must be rare
Such rare circumstances were present in Colorado River.
There, the decisive factor in favor of staying the concurrent
federal proceedings was "[t]he clear federal policy," evinced by
the McCarran Amendment, of
"avoid[ing the] piecemeal adjudication of water rights in a
river system . . . a policy that recognizes the availability of
comprehensive state systems for adjudication of water rights as the
means for achieving [this] goa[l]."
424 U.S. at 424 U. S. 819
No comparable federal policy favoring unitary state adjudication
exists here. In fact, as evinced by the exclusive jurisdiction of
the federal courts to determine 1934 Act claims, the relevant
federal policy here is the precise opposite of that found to
require deference to the concurrent state proceeding in
Page 437 U. S. 674
Ignoring wholesale the analytical framework set forth in
whose vitality is not questioned, the
opinion of my Brother REHNQUIST seemingly focuses on one of the
four secondary factors found to support the federal dismissal in
that case -- the fact that the state proceedings were initiated
before the federal suit -- and finds that factor sufficient to
insulate the District Court's actions here from mandamus review.
Even putting aside the opinion's case-reading errors -- its
flouting of McClellan,
its misreliance on
and its misapplication of Colorado
-- and analyzing this case on the opinion's own
erroneous terms, the conclusion is still compelled that the
District Court had no authority to stay Calvert's 1934 Act claims.
Quite conveniently, the opinion of my Brother REHNQUIST avoids any
discussion of the possible res judicata
estoppel effects the state court's determination of Calvert's 1934
Act defense would have on Calvert's 1934 Act claims for affirmative
relief in federal court. [Footnote
] To be sure, the preclusive effect of a state court
determination of a claim within the exclusive jurisdiction of the
federal courts is an unresolved and difficult issue. See
Note, Res Judicata: Exclusive Federal Jurisdiction
and the Effect of Prior State-Court Determinations, 53 Va.L.Rev.
1360 (1967). For myself, I confess to serious doubt that it is ever
appropriate to accord res judicata
effect to a state court
determination of a claim over which the federal courts have
exclusive jurisdiction; for surely state court determinations
should not disable federal courts from ruling de novo
purely legal questions surrounding such federal claims. See
Cotler v. Inter-County
Page 437 U. S. 675
526 F.2d 537 (CA3 1975); McGough
v. First Arlington National Bank,
519 F.2d 552 (CA7 1975);
Clark v. Watchie,
513 F.2d 994 (CA9 1975). As recognized
by Judge Learned Hand in Lyons v. Westinghouse Electric
222 F.2d 184, 189 (CA2 1955),
"the grant to the district courts of exclusive jurisdiction over
the action . . . should be taken to imply an immunity of their
decisions from any prejudgment elsewhere."
I recognize that it may make sense, for reasons of fairness and
judicial economy, to give collateral estoppel effect to specific
findings of historical facts by a state court's adjudicating an
exclusively federal claim raised as a defense, see Granader v.
417 F.2d 75 (CA6 1969), but there are reasons why
even such a limited preclusive effect should not be given state
court determinations. It is at least arguable that, in creating and
defining a particular federal claim, Congress assumed that the
claim would be litigated only in the context of federal court
procedure -- a fair assumption when the claim is within exclusive
federal jurisdiction. For example, Congress may have thought the
liberal federal discovery procedures crucial to the proper
determination of the factual disputes underlying the federal
All this is not to say that I disagree with the refusal of the
opinion of my Brother REHNQUIST to decide what preclusive effects
the state court's determination of Calvert's Rule 10b-5 defense
would have in Calvert's federal action, so much as it is to expose
the opinion's error in failing even to consider the res
/collateral estoppel problem in evaluating the
District Court's obligation to adjudicate Calvert's Rule 10b-5
claim. In my view, regardless of whether the state court judgment
would be given res judicata
or collateral estoppel effect,
it was incumbent upon the District Court -- at least in the absence
of other overriding reasons -- expeditiously to adjudicate at least
Calvert's 1934 Act claims. If res judicata
accorded the prior state court judgment, the exclusive
Page 437 U. S. 676
given the federal courts over 1934 Act claims would be
effectively thwarted, and the policy of uniform and effective
federal administration and interpretation of the 1934 Act
frustrated. A stay having so undesirable consequence could possibly
be justified only by compelling circumstances absent here. On the
other hand, if the state court adjudication is not given res
or collateral estoppel effect, the 1934 Act claims
will have to be adjudicated in federal court in any event, and
there would be no reason for staying the federal action, since
nothing that transpires in the state proceedings would affect the
adjudication of the federal claims. Thus, regardless of the proper
disposition of the res judicata
question, it is clear that a district court should not stay claims
over which the federal courts have exclusive jurisdiction. See
Cotler v. Inter-County Orthopaedic Assn., supra; Lecor, Inc. v.
United States District Court,
502 F.2d 104 (CA9 1974).
Whether evaluated under the "clear abuse of discretion" standard
set forth in La Buy v. Howes Leather Co., 352 U.
, 352 U. S. 257
(1957), or under the prong of Will v. United States,
389 U. S. 90
389 U. S. 95
(1967), and Roche v. Evaporated Milk Assn., 319 U. S.
, 319 U. S. 26
(1943), that permits the use of mandamus "to compel [an inferior
court] to exercise its authority when it is its duty to do so," the
issuance of the writ of mandamus by the Court of Appeals was
proper; there is simply a complete dearth of "exceptional"
circumstances countervailing the District Court's "unflagging
obligation" to exercise its exclusive jurisdiction. The opinion of
my Brother REHNQUIST asserts, however, that the District Court "has
not purported to stay consideration of Calvert's claim for damages
under the Securities Exchange Act of 1934," but, rather, has simply
"not yet ruled upon this claim." Ante
at 437 U. S. 666
While technically accurate, this characterization of the status of
the proceedings below utterly ignores two important facts that shed
Page 437 U. S. 677
a little illumination on the true procedural posture of this
case. First, at the time the Court of Appeals granted the writ,
Calvert's Rule 10b-5 damages action had been before Judge Will for
more than 2 1/2 years without a ruling on the basic legal issue
underlying the claim. Second, and, for me, dispositive, the
District Court indicated that it would give the state court's
determination that the disputed transaction did not involve a
"security" within the meaning of the 1934 Act res judicata
effect, App. to Brief for Respondent Calvert Fire Insurance Co.
E-1, thereby depriving Calvert of a federal court determination of
a legal issue within the exclusive jurisdiction of the federal
This Court has held that mandamus will lie to correct a district
court's improper deference to pending state court proceedings,
McClellan v. Carland, 217 U. S. 268
(1910), and to preserve a proper federal court determination of a
federal issue, Beacon Theatres, Inc. v. Westover,
359 U. S. 500
(1959). Where, as here, both of these justifications are present,
the propriety of the issuance of the writ cannot be questioned. I
would affirm the Court of Appeals.
See, e.g., Thermtron Products, Inc. v. Hermansdorfer,
423 U. S. 336
423 U. S.
-345 (1976); Meredith v. Winter Haven,
320 U. S. 228
320 U. S.
These decisions recognized, however, that, even where a federal
suit seeks only declaratory relief, a district court does not have
unbridled authority to dismiss the actions in deference to a
concurrent state suit. For example, the court in Maryland
Casualty Co. v. Consumers Finance Service,
101 F.2d at 515,
"The granting of the remedy of a declaratory judgment is . . .
discretionary with the court, and it may be refused if it will not
finally settle the rights of the parties or if it is being sought
merely to determine issues involved in cases already pending.
Aetna Casualty & Surety Co. v. Quarles,
4 Cir., 92
F.2d 321. It may not be refused, however, merely on the ground that
another remedy is available. . . or because of the pendency of
another suit, if the controversy between the parties will not
necessarily be determined in that suit."
Because the Court of Appeals held that "the district court
should not have deferred to the state court on grounds of
federalism in light of Colorado River,
" it found it
"reach the difficult issue of whether the conclusion of the
state proceedings would have a collateral estoppel effect on the
Rule 105 claim for damages over which the court had retained
jurisdiction, but declined to resolve."
560 F.2d 792, 797.