Will v. Calvert Fire Insurance Company, No. 77-693

CourtUnited States Supreme Court
Writing for the CourtMr. Justice REHNQUIST announced the judgment of the Court, and delivered an opinion in which Mr. Justice STEWART
Citation98 S.Ct. 2552,57 L.Ed.2d 504,437 U.S. 655
Docket NumberNo. 77-693
Decision Date23 June 1978
PartiesHubert L. WILL, Judge, United States District Court, Northern District of Illinois, Petitioner, v. CALVERT FIRE INSURANCE COMPANY et al

437 U.S. 655
98 S.Ct. 2552
57 L.Ed.2d 504
Hubert L. WILL, Judge, United States District Court, Northern District of Illinois, Petitioner,

v.

CALVERT FIRE INSURANCE COMPANY et al.

No. 77-693.
Argued April 19, 1978.
Decided June 23, 1978.
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 656

the Rule 10b-5 claim. Thereafter that court, relying on Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483, 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. 661-667; 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. 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. 662.

(b) Where there is duplicative litigation in the state and federal courts, the deci ion 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, 494, 62 S.Ct. 1173, 1175, 86 L.Ed. 1620, even when matters of federal law are involved, Colorado River, supra, at 820, 96 S.Ct. at 1247. Pp. 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. 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, 260, 67 S.Ct. 1558, 1559, 91 L.Ed. 2041. Pp. 665-667.

Mr. Justice BLACKMUN, who is of the view that Brillhart v. Excess Ins. Co., 316 U.S. 491, 62 S.Ct. 1173, 86 L.Ed. 1620, a diversity case, has no application to this federal-issue case, concluded that the issuance of mandamus in this case

Page 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, 96 S.Ct. 1236, 47 L.Ed.2d 483, which was decided after petitioner's stay order. Pp. .667-668

Milton V. Freeman, Washington, D. C., for petitioner.

Louis Loss, Cambridge, Mass., for respondents.

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, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976), compelled the issuance of the writ. We granted

Page 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, 98 S.Ct. 716, 54 L.Ed.2d 750, and we now reverse.

I

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 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 Act.

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...

To continue reading

Request your trial
375 practice notes
  • Klauder & Nunno Enterprises v. Hereford Associates, Civ. A. No. 89-5654
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
    • October 25, 1989
    ...Constr. Corp., 460 U.S. 1, 15-16, 23, 103 S.Ct. 927, 936-937, 941, 74 L.Ed.2d 765 (1983); Will v. 723 F. Supp. 345 Calvert Fire Ins. Co., 437 U.S. 655, 666, 98 S.Ct. 2552, 2559, 57 L.Ed.2d 504 (1978); Colorado River, 424 U.S. at 818, 96 S.Ct. at 1246; Ingersoll-Rand Fin. Corp. v. Callison, ......
  • WE O'NEIL CONST. v. National Union Fire Ins., No. 89 C 909.
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • October 26, 1989
    ...state litigation is a decision 721 F. Supp. 990 which is committed to the district court's discretion. Will v. Calvert Fire Ins. Co., 437 U.S. 655, 665, 98 S.Ct. 2552, 2558, 57 L.Ed.2d 504 (1978); Interstate Material Corp. v. City of Chicago, 847 F.2d 1285, 1286 (7th Cir.1988). "The de......
  • In re Bankruptcy Court's Use of Standardized Form, No. 2:09-cv-13505.
    • United States
    • United States District Courts. 6th Circuit. United States District Court (Eastern District of Michigan)
    • January 20, 2010
    ...extraordinary situations where the petitioner can show a clear and indisputable right to the relief sought. Will v. Calvert Fire Ins. Co., 437 U.S. 655, 662, 98 S.Ct. 2552, 57 L.Ed.2d 504 (1978); Kerr v. United States District Court, 426 U.S. 394, 403, 96 S.Ct. 2119, 48 L.Ed.2d 725 (1976). ......
  • In re Federal-Mogul Global, Inc., No. 02-1426.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • July 31, 2002
    ...exercise of judicial power." Lusardi v. Lechner, 855 F.2d 1062, 1069 (3d Cir.1988) (citing Will v. Calvert Fire Ins. Co., 437 U.S. 655, 661, 98 S.Ct. 2552, 57 L.Ed.2d 504 (1978)). We therefore conclude that the District Court's decision does not justify issuance of a writ of The argume......
  • Request a trial to view additional results
375 cases
  • Klauder & Nunno Enterprises v. Hereford Associates, Civ. A. No. 89-5654
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
    • October 25, 1989
    ...Constr. Corp., 460 U.S. 1, 15-16, 23, 103 S.Ct. 927, 936-937, 941, 74 L.Ed.2d 765 (1983); Will v. 723 F. Supp. 345 Calvert Fire Ins. Co., 437 U.S. 655, 666, 98 S.Ct. 2552, 2559, 57 L.Ed.2d 504 (1978); Colorado River, 424 U.S. at 818, 96 S.Ct. at 1246; Ingersoll-Rand Fin. Corp. v. Callison, ......
  • WE O'NEIL CONST. v. National Union Fire Ins., No. 89 C 909.
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • October 26, 1989
    ...state litigation is a decision 721 F. Supp. 990 which is committed to the district court's discretion. Will v. Calvert Fire Ins. Co., 437 U.S. 655, 665, 98 S.Ct. 2552, 2558, 57 L.Ed.2d 504 (1978); Interstate Material Corp. v. City of Chicago, 847 F.2d 1285, 1286 (7th Cir.1988). "The de......
  • In re Bankruptcy Court's Use of Standardized Form, No. 2:09-cv-13505.
    • United States
    • United States District Courts. 6th Circuit. United States District Court (Eastern District of Michigan)
    • January 20, 2010
    ...extraordinary situations where the petitioner can show a clear and indisputable right to the relief sought. Will v. Calvert Fire Ins. Co., 437 U.S. 655, 662, 98 S.Ct. 2552, 57 L.Ed.2d 504 (1978); Kerr v. United States District Court, 426 U.S. 394, 403, 96 S.Ct. 2119, 48 L.Ed.2d 725 (1976). ......
  • In re Federal-Mogul Global, Inc., No. 02-1426.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • July 31, 2002
    ...exercise of judicial power." Lusardi v. Lechner, 855 F.2d 1062, 1069 (3d Cir.1988) (citing Will v. Calvert Fire Ins. Co., 437 U.S. 655, 661, 98 S.Ct. 2552, 57 L.Ed.2d 504 (1978)). We therefore conclude that the District Court's decision does not justify issuance of a writ of The argume......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT