L. Cohen & Co., Inc. v. Dun & Bradstreet, Inc.

• Decision Date: 07 February 1986
• Docket Number: Civ. No. H 85-686(JAC).
• Citation: 629 F. Supp. 1419
• Court: U.S. District Court — District of Connecticut
• Parties: L. COHEN & COMPANY, INC. v. DUN & BRADSTREET, INC.

629 F. Supp. 1419

L. COHEN & COMPANY, INC. v. DUN & BRADSTREET, INC.

Civ. No. H 85-686(JAC).

United States District Court, D. Connecticut.

February 7, 1986.

John Andrew Kissel, Enfield, Conn., for plaintiff.

Eric Lukingbeal, Hartford, Conn., for defendant.

RULING ON MOTION FOR CERTIFICATION

JOSÉ A. CABRANES, District Judge:

This matter is before the court on the plaintiff's motion to certify two questions of state law to the Supreme Court of Connecticut pursuant to Connecticut Public Act 85-111 ("the Act").¹ The questions are (1) Does a credit report constitute a "product" under the Connecticut Product Liability Act, C.G.S. § 52-572m et seq.? and (2) Does Connecticut Public Act 84-468, which eliminated the need to demonstrate a "nexus with the public interest" in order to prevail in an action under the Connecticut Unfair Trade Practices Act, C.G.S. § 42-110a et seq., apply retroactively? The motion for certification is opposed by the defendant.

The Supreme Court recognized in Lehman Brothers v. Schein, 416 U.S. 386, 391, 94 S.Ct. 1741, 1744, 40 L.Ed.2d 215 (1974), that the use of certification procedures such as those provided by the Act is not obligatory but "rests in the sound discretion of the federal courts." It is therefore appropriate for a federal judge sitting in Connecticut to consider the prudential guidelines that ought to inform the use of the new certification procedures.

I.

The search for such guidelines must begin with an examination of the abstention doctrine developed over the past 50 years by the United States Supreme Court. The Court has frequently recognized that

"the doctrine of abstention, under which a District Court may decline to exercise or postpone the exercise of its jurisdiction, is an extraordinary and narrow exception to the duty of a District Court to adjudicate a controversy properly before it. Abdication of the obligation to decide cases can be justified under this doctrine only in the exceptional circumstances where the order to the parties to repair to the state court would clearly serve an important countervailing interest."

Colorado River Water Conservation District v. United States, 424 U.S. 800, 813, 96 S.Ct. 1236, 1244, 47 L.Ed.2d 483 (1976), quoting County of Allegheny v. Frank Mashuda Company, 360 U.S. 185, 188-189, 79 S.Ct. 1060, 1062-1063, 3 L.Ed.2d 1163 (1959). It has been emphasized that to deny a litigant the opportunity to raise issues of state law in a federal diversity action "merely because the answers to the questions of state law are difficult or uncertain or have not yet been given by the highest court of the state, would thwart the purpose of the jurisdictional act." Meredith v. Winter Haven, 320 U.S. 228, 234-235, 64 S.Ct. 7, 10-11, 88 L.Ed. 9 (1943).

The "exceptional circumstances" in which a federal district court may properly "decline to exercise or postpone the exercise of its jurisdiction" have been carefully limited by a series of Supreme Court decisions. See, e.g., Colorado River Water Conservation District v. United States, supra, 424 U.S. at 814-816, 96 S.Ct. at 1244-1246; County of Allegheny v. Frank Mashuda Company, supra, 360 U.S. at 189-190, 79 S.Ct. at 1063-1064. For example, abstention may be appropriate where a state court's determination of pertinent state law could moot a federal constitutional question, see, e.g., Railroad Commission of Texas v. Pullman Company, 312 U.S. 496, 61 S.Ct. 643, 85 L.Ed. 971 (1941), or where the exercise of jurisdiction by the federal court would disrupt on-going state criminal prosecutions and related activities, see, e.g., Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971), or unnecessarily interfere with a state regulatory scheme. See, e.g., Burford v. Sun Oil Company, 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424 (1943).

The Supreme Court has emphasized that the abstention doctrine must be limited to such "exceptional circumstances" in order to prevent the "added delay and expense" that may result when litigants are shuttled from one courthouse to another and sometimes back again. County of Allegheny v. Frank Mashuda Company, supra, 360 U.S. at 196, 79 S.Ct. at 1067. As the Court has observed,

it exacts a severe penalty from citizens for their attempt to exercise rights of access to the federal courts granted them by Congress to deny them "that promptness of decision which in all judicial actions is one of the elements of justice."

Id. at 196-197, 79 S.Ct. at 1067-1068, quoting Forsyth v. Hammond, 166 U.S. 506, 513, 17 S.Ct. 665, 668, 41 L.Ed. 1095 (1897). Our Court of Appeals has likewise recognized that "at best, a suit becomes more costly and its disposition is delayed" as a result of abstention, while "at worst, abstention transforms our dual court system into a jurisprudential labyrinth from which even the hardiest litigant is unlikely to emerge." Griffin Hospital v. Commission on Hospitals, 782 F.2d 24, 26 (2d Cir.1986) (Kaufman, J.).

II.

It has been widely noted that certification offers federal courts a means of obtaining definitive interpretations of state law that entails fewer costs and delays than does abstention. See, e.g., Bellotti v. Baird, 428 U.S. 132, 150-151, 96 S.Ct. 2857, 2867-2868, 49 L.Ed.2d 844 (1976); Griffin Hospital v. Commission on Hospitals, supra, 782 F.2d at 26. As a result, the conditions necessary for certification are more flexible and more discretionary than the conditions necessary for abstention. See Fiat Motors v. Mayor and Council of Wilmington, 619 F.Supp. 29, 33 (D.Del. 1985) (Wright, J.), comparing Louisiana Power & Light Co. v. Thibodaux, 360 U.S. 25, 27 n. 2, 79 S.Ct. 1070, 1072 n. 2, 3 L.Ed.2d 1058 (1959) (approving a federal district court's stay of its own proceedings to permit the parties to seek a definitive interpretation of state law from the state courts) with County of Allegheny v. Frank Mashuda Company, supra, 360 U.S. at 188-189, 79 S.Ct. at 1062-1063 (disapproving district court's use of abstention).

However, "while certification may engender less delay and create fewer additional expenses for litigants than would abstention, it entails more delay and expense than would an ordinary decision of the state question on the merits by the federal court." Lehman Brothers v. Schein, supra, 416 U.S. at 394, 94 S.Ct. at 1746 (Rehnquist, J., concurring). See also Clay v. Sun Insurance Office, 363 U.S. 207, 224-227, 80 S.Ct. 1222, 1232-1234, 4 L.Ed.2d 1170 (1960) (Black, J., dissenting) (criticizing certification on the ground that "litigants have a right to have their lawsuits decided without unreasonable and unnecessary delay or expense"); American Fidelity Bank & Trust Company v. Heimann, 683 F.2d 999, 1022 (6th Cir.1982) (recognizing "the inevitable delay inherent in the certification process"). Accordingly, courts and commentators have recognized that "the costs to the litigants and the burden of judicial review imposed on a state's highest court militate against liberal recourse to certification." Fiat Motors v. Mayor and Council of Wilmington, supra, 619 F.Supp. at 34. See also 1A (Part 2) J. Moore, Moore's Federal Practice ¶ 0.2035 (1985) (observing that "due regard for the interests of the states in conserving their judicial resources requires that the district courts be careful in their use of certification procedures").

The burden on the litigants and the state judiciary may be particularly great where, as here, the certification process is available not only to the United States Supreme Court and the federal courts of appeals but also to any federal district court that is presented with an unsettled question of Connecticut law. Almost one-quarter of all civil cases filed in the federal district courts each year are predicated on diversity of citizenship, see Annual Report of the Director of the Administrative Office of the U.S. Courts (1986) (noting that in the year ended June 30, 1985, of the 273,670 civil cases commenced in district courts, 61,101 were based on diversity), and many of the remaining cases raise pendent state claims or otherwise require a determination of state law. Only rarely has the precise issue of state law presented in these cases been previously decided by the highest court of that state.

Consequently, a federal district court in Connecticut must annually decide scores of questions of state law that have never reached the Connecticut Supreme Court. Issues of Connecticut law must also be decided, from time to time, by other federal trial and appellate courts. It would impose an unreasonable and unnecessary burden on the Connecticut Supreme Court if the certification process were to be invoked routinely whenever a federal court was presented with an unsettled question of Connecticut law.²

Instead, the federal courts ought to resort to certification only when doing so would, in the context of the particular case, "save time, energy and resources and help build a cooperative judicial federalism." Lehman Brothers v. Schein, supra, 416 U.S. at 391, 94 S.Ct. at 1744. The decision whether to invoke the certification process is therefore best left, at least in most circumstances, to "the sound discretion" of the individual federal judge. See id. at 393, 94 S.Ct. at 1745 (Rehnquist, J., concurring) ("a sensible respect for the experience and competence of the various integral parts of the federal judicial system suggests that we go slowly in telling the courts of appeals or the district courts how to go about deciding cases where federal jurisdiction is based on diversity of citizenship, cases which they see and decide far more often than we do"); In re Puerto Rico Electric Power Authority, 687 F.2d 501, 504 (1st Cir.1982) ("the district court is closer than we are to the local law and is also better able to weigh such possible adverse factors flowing from certification as delay, expense and so forth").

Accordingly, certification, like abstention, may appropriately be invoked to avoid the...