United States District Court, W.D. Washington, Seattle
ORDER ON MOTION TO DISMISS
L. ROBART, UNITED STATES DISTRICT JUDGE.
the court is Defendants Bora Gurson and RoxyCar, Inc.'s
(collectively, “Defendants”) motion to dismiss
pro se Plaintiff Brett McDonald's complaint
pursuant to Federal Rule of Civil Procedure 12(b)(1) and the
Colorado River doctrine. (MTD (Dkt. # 5).) The court
has considered the parties' submissions, the relevant
portions of the record, and the applicable law. Being fully
advised,  the court denies Defendants' motion.
January 2017, Mr. McDonald and Mr. Gurson met in Honolulu,
Hawaii, at a business seminar related to technology
investment. (Compl. (Dkt. # 1) ¶ 11); Gurson v.
McDonald, No. C17-0682JLR (W.D. Wash.), Dkt. # 1-2
(“Gurson Compl.”) ¶ 4.According to both
parties, Mr. McDonald and Mr. Gurson discussed Mr.
Gurson's artificial intelligence software, RoxyCar
Technology, which automatically buys and sells cars at auto
auctions to generate a profit. (Compl. ¶¶ 11-15);
Gurson, No. C17-0682JLR, Gurson Compl. ¶¶
3-4. Specifically, they discussed a potential role for Mr.
McDonald in the company, RoxyCar, Inc.
(“RoxyCar”) that was formed to market the software.
(Compl. ¶¶ 16); Gurson, No. C17-0682JLR,
Gurson Compl. ¶¶ 5, 8. Mr. McDonald signed a
confidentiality agreement and attended meetings with
potential investors. (Compl. ¶¶ 16, 19-22, 28-30);
Gurson, No. C17-0682JLR, Gurson Compl. ¶¶
5-6, 9. However, the business relationship between the
parties rapidly began to deteriorate, and the parties'
versions of the events diverge after this point.
March 29, 2017, Mr. Gurson filed suit in King County Superior
Court against Mr. McDonald and his marital community,
alleging breach of contract and tortious interference with
business relationships. Gurson, No. C17-0682JLR,
Gurson Compl. Mr. Gurson alleges that in early March 2017,
his negotiations with Mr. McDonald broke down before they
reached an agreement about Mr. McDonald acquiring an
ownership interest in RoxyCar. Id. ¶¶ 8,
11-12. Mr. Gurson alleges that Mr. McDonald violated the
terms of the confidentiality agreement by disclosing
confidential information to another software development
company and spoke poorly about Mr. Gurson to potential
investors who subsequently refused to invest in RoxyCar.
Id. ¶¶ 12-13, 15.
April 19, 2017, Mr. McDonald filed a pro se
complaint against Mr. Gurson, RoxyCar, and a number of John
Doe defendants in this court, alleging breach of contract,
unjust enrichment, and promissory estoppel arising out of the
same events. See McDonald v. Gurson, No. C17-0619JLR
(W.D. Wash.), Dkt. # 1 (“McDonald Compl.”). Five
days later, Mr. McDonald removed Mr. Gurson's state court
action on the basis that Mr. Gurson's state court claims
arise out of the same events. Gurson, No.
C17-0682JLR, Dkt. # 1 (“Not. of Removal”). On
July 7, 2017, this court granted Mr. Gurson's motion to
remand the state action, concluding that supplemental
jurisdiction did not provide a basis for removal and that the
forum defendant rule barred Mr. McDonald from removing the
case. Gurson, No. C17-0682JLR, Dkt. # 15
Mr. Gurson's motion to remand was still pending, the
court dismissed Mr. McDonald's complaint against Mr.
Gurson without prejudice for lack of subject matter
jurisdiction because Mr. Gurson did not adequately allege
complete diversity. McDonald, No. C17-0619JLR, Dkt.
# 11 (“Order of Dismissal”). Mr. McDonald filed
the instant action on May 9, 2017, eliminating the John Doe
defendants. (See Compl.) Mr. McDonald alleges that
he and Mr. Gurson reached an enforceable agreement that Mr.
McDonald would handle all of RoxyCar's operations in
exchange for 10 percent of the company. (Id.
¶¶ 17, 154.) Mr. McDonald alleges that Mr. Gurson
breached the agreement by firing Mr. McDonald without cause.
(Id. ¶ 155.) On May 31, 2017, Mr. Gurson filed
the motion to dismiss Mr. McDonald's complaint that is
now before the court. (See MTD.)
Gurson moves to dismiss Mr. McDonald's complaint pursuant
to Federal Rule of Civil Procedure 12(b)(1). (See
MTD at 1). Mr. Gurson argues that the court should decline to
exercise subject matter jurisdiction in deference to the
state court proceedings pursuant to the Colorado
River abstention doctrine. (See id.); Colo.
River Water Conservation Dist. v. United States, 424
U.S. 800 (1976).
12(b)(1) governs the dismissal of a claim at any time prior
to final judgment if the court lacks subject matter
jurisdiction. See Fed. R. Civ. P. 12(b)(1). A
defendant may move under Rule 12(b)(1) for a stay or
dismissal of an action pursuant to the Colorado
River doctrine. Revolon Monterey Energy LLC v. Peak
Operator LLC, No. CV 13-7048 PSG (MRW), 2013 WL
12123689, at *1 (C.D. Cal. Dec. 27, 2013) (citing Equity
Lifestyle Props., Inc. v. Cty. of San Luis Obispo, 548
F.3d 1184, 1188 (9th Cir. 2008)).
to the Supreme Court's decision in Colorado
River, federal courts recognized three
“extraordinary and narrow exceptions to the duty of a
District Court to adjudicate a controversy properly before
it.” Colorado River, 424 U.S. at 813 (quoting
Cty. of Allegheny v. Frank Mashuda Co., 360 U.S.
185, 188-89 (1950)). These abstention doctrines are based on
concerns of state-federal comity or avoidance of
constitutional decisions. See R.R. Comm'n of Tex. v.
Pullman Co., 312 U.S. 496, 501-02 (1943) (recognizing
abstention based on the ability of state court determinations
of state law to moot federal constitutional issues);
Burford v. Sun Oil Co., 319 U.S. 315, 332-33 (1943)
(recognizing abstention based on the presence of difficult
state law issues involving important public policy concerns);
Younger v. Harris, 401 U.S. 37, 41 (1971)
(recognizing abstention based on the use of federal
jurisdiction to restrain state criminal proceedings). Absent
these special and narrow circumstances, the federal courts
have a “virtually unflagging obligation” to
exercise their jurisdiction, even if an action concerning the
same matter is pending in state court. Colorado
River, 424 U.S. at 817.
Colorado River, the Supreme Court recognized that
there are exceptional cases where the three abstention
doctrines do not apply, but dismissal of a duplicative
federal case in favor of allowing a pending state action to
unilaterally proceed is nevertheless appropriate based on
considerations of “[w]ise judicial administration,
giving regard to conservation of judicial resources and
comprehensive disposition of litigation.” Id.
at 817 (internal quotation marks omitted and alteration in
original). However, the Court cautioned that due to
“the absence of weightier considerations of
constitutional adjudication and state-federal relations, 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”
pursuant to the other three doctrines. Id. at 818.
Court “declined to prescribe a hard and fast rule for
dismissals of this type, ” but instead identified four
factors relevant to whether Colorado River
abstention is appropriate: (1) which court first assumed
jurisdiction over the property, (2) the inconvenience of the
federal forum, (3) the desirability of avoiding piecemeal
litigation, and (4) the order in which the concurrent forums
obtained jurisdiction. Moses H. Cone Mem'l Hosp. v.
Mercury Constr. Corp., 460 U.S. 1, 15-16 (1983) (citing
Colorado River, 424 U.S. at 818-19). In Moses H.
Cone, the Supreme Court added two additional factors:
(5) whether “federal law provides the rule of decision
on the merits, ” and (6) whether the state court
proceedings are inadequate to protect the federal
litigant's rights. 460 U.S. at 23, 26. The Ninth Circuit
subsequently held that courts may consider forum shopping as
a seventh factor because “the prevention of forum
shopping would promote wise judicial administration.”
Am. Int'l Underwriters (Phil.), Inc. v. Cont'l
Ins. Co., 843 F.2d 1253, 1259 (9th Cir. 1988). Finally,
the Ninth Circuit has clarified that abstention is not
warranted unless the federal and state proceedings are
sufficiently “parallel.” Nakash v.
Marciano, 882 F.2d 1411, 1416 (9th Cir. 1989). This
threshold parallelism requirement is not met if there is
“a substantial doubt as to whether the state
proceedings will resolve the federal action.” Intel
Corp. v. Advanced Micro Devices, Inc., 12 F.3d 908, 913
(9th Cir. 1993). If abstention is appropriate, the Ninth
Circuit generally requires a stay rather than a dismissal to
ensure that “the federal forum will remain open if
‘for some unexpected reason the state forum does turn
out to be inadequate.'” Attwood v. Mendocino
Coast Dist. Hosp., 886 F.2d 241, 243 (9th Cir. 1989)
(quoting Moses H. Cone, 460 U.S. at 28).
court's decision to abstain under the Colorado
River doctrine “does not rest on a mechanical
checklist” of the relevant factors, “but on a
careful balancing of the important factors as they apply in a
given case, with the balance heavily weighted in favor of the
exercise of jurisdiction.” Moses H. Cone, 460
U.S. at 16. The relevant factors are “to be applied in
a pragmatic, flexible manner with a view to the realities of
the case at hand, ” and the “weight to be given
to any one factor may vary greatly from case to case.”
Id. Ultimately, the court must make “a
carefully considered judgment taking into account both the
obligation to exercise jurisdiction and the combination of
factors counselling against that exercise.”
Id. at 15 (quoting Colorado River, 424 U.S.
at 818-19). “Any doubt as to whether a factor exists
should be resolved against a stay” because only
“‘the clearest of justifications'”
warrants deference to parallel state proceedings.
Travelers Indem. Co. v. Madonna, 914 F.2d 1364, 1369
(9th Cir. 1990) (quoting Colorado River, 424 U.S. at
threshold question in deciding whether a Colorado
River stay is appropriate is whether the federal and
state suits are parallel.See T.K. v. Stanley, No.
C16-5506BHS, 2017 WL 2671295, at *2 (W.D. Wash. June 21,
2017) (citing Nakash, 882 F.2d at 1415). Mr. Gurson
argues that the state and federal proceedings are
sufficiently parallel because the parties' claims arise
out of the same transaction and occurrence. (See MTD
at 7 (“Both lawsuits relate to the same dealings
regarding RoxyCar between Gurson and McDonald from January
and April of 2017.”).) Mr. Gurson argues that if the
court dismisses Mr. McDonald's complaint, the state court
proceedings will resolve all of Mr. McDonald's claims
because they are compulsory counterclaims in the state court
action. (See id.); see also Wash. Super.
Ct. Civ. R. 13 (providing that a counterclaim is compulsory
“if it arises out of the transaction or occurrence that
is the subject matter of the opposing party's
claim” unless “at the time ...