Applegate v. Devitt, 74--1710

• Decision Date: 14 January 1975
• Docket Number: No. 74--1710,74--1710
• Citation: 509 F.2d 106
• Parties: Allen APPLEGATE, Petitioner, v. Honorable Edward J. DEVITT, United States District Judge for the District of Minnesota, Respondent.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 106

509 F.2d 106

Allen APPLEGATE, Petitioner, v. Honorable Edward J. DEVITT, United States District Judge for the District of Minnesota, Respondent.

No. 74--1710.

United States Court of Appeals Eighth Circuit.

Submitted Dec. 13, 1974.

Decided Jan. 14, 1975.

Harvey E. Skaar, Minneapolis, Minn., for petitioner.

Charles Quaintance, Jr., Minneapolis, Minn., for respondent.

Before LAY and BRIGHT, Circuit Judges, and TALBOT SMITH, Senior District Judge. ^*

PER CURIAM.

In this case the petitioner asks us to issue a writ of mandamus to Chief Judge Devitt of the district court for the District of Minnesota, requiring him to vacate a stay of proceedings in an action brought by Allen Applegate, the petitioner, against Interstate Steel Company, an Illinois corporation and a respondent herein.

The meager record before us discloses that Applegate served as a sales representative in Minnesota for Interstate's steel products until his agency contract was terminated on October 2, 1973, under circumstances giving rise to disputes between the parties. Interstate commenced an action against Applegate in the Circuit Court for Cook County (Chicago), Illinois, in November 1973, seeking damages and an injunction against his alleged use of its customer lists and trade secrets in his present business. It served Applegate with a summons and complaint on November 14, 1973. On December 26, 1973, Applegate filed a diversity action against Interstate in federal district court for the District of Minnesota for past due commissions in the sum of $40,000 and other relief. The district court, by order filed May 23, 1974, stayed, on motion of Interstate, Applegate's federal action pending final disposition of the Illinois state action. Applegate contemporaneously dismissed his action in federal court and commenced a new but virtually identical action for his commissions in Minnesota state court. Interstate promptly removed the state action to federal court under 28 U.S.C. § 1441(a). It then moved to stay proceedings on the basis of Judge Devitt's stay order issued on May 23, 1974, in the earlier action in federal court. Judge Devitt granted a stay of proceedings on September 16, 1974, and Applegate thereupon brought the instant application for a writ of mandamus.

At oral argument and by brief, counsel for Applegate charged that Interstate's Illinois counsel brought the action in Illinois in bad faith and after misrepresenting that Interstate desired to engage in settlement negotiations. An affidavit by Applegate's counsel, which stands unrebutted, recites that he (Applegate's counsel) first spoke with Interstate's Chicago counsel on October 12, 1973, and that six days later Interstate's counsel indicated, by letter, interest in a settlement and advised him that '(y)ou will be hearing from me soon again shortly after Mr. Evans (apparently an official of Interstate) returns to the country.' The affidavit goes on to recite that, without further word or explanation, Interstate filed the state action against Applegate in the Circuit Court for Cook County. Applegate's counsel, in the same affidavit, also questions the good faith of Interstate in bringing the state court action for an injunction against the alleged disclosure of its trade secrets by Applegate in view of its failure even to seek a temporary injunction. Additionally, Applegate's counsel asserts that cases in the Circuit Court of Cook County are delayed for at least three years before trial.

We note that such affidavit, although dated May 17, 1974, was not filed with the federal district court until September 17, 1974, and that the facts stated therein may not, therefore, have been considered by Judge Devitt at the hearing of May 20, 1974, on Interstate's initial motion for an order staying the federal court proceedings.

Also, at oral argument before us, Applegate's counsel stressed the great delay incident to obtaining any relief in the Illinois action. He asserted that if Applegate were to seek to present his claim for commissions as a permissive counterclaim in the Illinois action and were to demand a jury trial on the claim, the case would not be reached for trial for another five years.

Applegate and Interstate disagree on the effect which a judgment in the state action in Illinois will have upon the federal action. Applegate's counsel stated in oral argument that the two actions are sufficiently different that a judgment in the state action under the existing pleadings will not be res judicata with respect to the federal action. Interstate, relying upon Mattel, Inc. v. Louis Marx & Co., 353 F.2d 421 (2d Cir. 1965), contends that all issues raised in the two actions could and should be tried in the state action and thereby implies that a judgment in the state action could prove res judicata with respect to the federal action. We will assume that the state and federal actions approach identity and will accept Interstate's counsel's characterization, during oral argument, of the federal action as 'duplicitous' of the state action.

The precise question now presented--whether a district court may stay proceedings in an action pending the outcome of a similar or identical state court action filed before the federal action--has not been before this court in more than 70 years. In Barber Asphalt Paving Co. v. Morris, 132 F. 945 (8th Cir. 1904), this court granted mandamus relief to a petitioner whose federal court diversity action for damages for breach...