Walli v. Fluor Daniel Northwest, Inc., 1999-ERA-18 (ALJ Aug. 18, 1999)

U.S. Department of Labor

Office of Administrative Law Judges 50 Fremont Street, Suite 2100 San Francisco, CA 94105 (415) 744-6577 (415) 744-6569 (FAX)

DATE: August, 18, 1999

CASE NUMBER 1999-ERA-18

In the Matter of

RANDALL WALLI, CLYDE KILLEN, PEDRO NICACIO,
SHANE O'LEARY, and JAMES STULL,
    COMPLAINANTS,

    v.

FLUOR DANIEL NORTHWEST, INC.,
    RESPONDENT.

   The above-captioned matter arises from a complaint filed on February 25, 1999 under the provisions of section 211 of the Energy Reorganization Act of 1974, as amended, 42 U.S.C. §5851. In brief, the complainants allege that the respondent violated the provisions of section 211 by laying them off from their jobs and otherwise diminishing their opportunities to be employed as pipefitters at the Department of Energy's Hanford (Washington) Nuclear Site. In an Order issued on May 25, 1999 it was directed that all discovery concerning this matter be completed by August 6, 1999 and that a trial on the merits would commence on September 27, 1999. On August 5, 1999, the five complainants in this matter and all four complainants in a similar matter now pending before Administrative Law Judge Alexander Karst jointly filed a civil action in a Superior Court for the State of Washington alleging that the discriminatory conduct alleged in these two matters also violated the laws of the State of Washington. Six days later, these same complainants filed motions requesting that all proceedings in this matter and the matter pending before Judge Karst be stayed until the conclusion of the parallel state court proceeding. On August 16, 1999, the respondent filed a reply strongly opposing these motions.

   All parties appear to agree that the complainants' stay request is governed by the standards set forth in the Supreme Court's decisions in Colorado River Water Conservation District v. United States, 424 U.S. 800 (1976), and Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1 (1982). In the Colorado River decision, the Supreme Court observed that federal courts have a "virtually unflagging obligation" to exercise their jurisdiction and that abdication of this obligation can be justified "only in the exceptional circumstances" where it "would clearly serve an important countervailing interest." 424 U.S. at 813, 817. Further, the Court held that although there may be exceptional circumstances where considerations of judicial economy make it appropriate to dismiss or stay a federal court action so that the matter in dispute can be resolved in a pending state court action, any such determination can be made only after considering a variety of factors. 424 U.S. at 818. Among these factors, the Court held, are (1) whether one court has assumed jurisdiction over particular property, (2) the inconvenience of the federal forum, (3) the desirability of avoiding piecemeal litigation, and (4) the order in which jurisdiction was obtained by the concurrent forums. Id. In the Cone decision, the Court observed that the weight to be given to the various factors may vary greatly from case to case, but that when weighing such factors the balance is "heavily weighted in favor of the exercise of [federal] jurisdiction." 460 U.S. at 16. The Court also identified two additional factors that should be considered: (5) whether federal law provides the rule of decision on the merits, and (6) whether the state court proceeding are inadequate to protect the rights of the federal litigant. 460 U.S. at 23, 26. In Cone, the Court also observed that "when a district court decides to dismiss or stay under Colorado River, it presumably concludes that the parallel state-court litigation will be an adequate vehicle for the complete and prompt resolution of the issues between the parties" and added that if there is "any substantial doubt as to this, it would be a serious abuse of discretion to grant the stay or dismissal at all." 460 U.S. at 28. In subsequent decisions, the Ninth Circuit has identified a seventh relevant factor: the discouragement of forum shopping. American International Underwriters (Philippines), Inc. v. Continental Insurance Company, 843 F.2d 1253 (9th Cir. 1988).

   In this case, the complainants contend that the first two Colorado River factors are inapplicable but that the remaining two Colorado River factors favor granting a stay. In addition, the complainants assert that a stay should be granted because the state court proceeding will be resolved sooner and will take place in a forum that has the authority to enforce procedural requirements with sanctions that are beyond the authority of administrative law judges. As well, the complainants contend, the action in the state court will enable them to use subpoenas to obtain relevant evidence from third parties who cannot be compelled to testify in this proceeding. Such evidence, the complainants assert, is of crucial importance in this case and is likely to be in the possession of as many as seven subcontractors who are involved in on-going contractual relationships with the respondent and its corporate parent. In contrast, the respondent contends that all six factors identified in the Colorado River and Cone decisions support denial of the complainants' stay request. The respondent also disputes the contention that the state proceeding will be resolved any sooner than this proceeding and contends that administrative law judges have sufficient authority to enforce their procedural orders. In addition, the respondent contends that the complainants' alleged need to use compulsory process to compel the production of evidence from the third-party subcontractors is a mere "pretext."

   After fully considering the arguments of the parties, it has been determined that it would be legally impermissible to grant the stay requested by the complainants. There are three reasons for this determination.

   First, of the six factors identified as relevant by the Supreme Court, three are inapplicable, one strongly favors denial of the complainants' request, and two involve a variety of considerations which, on balance, weigh against granting a stay. In particular, factors one (jurisdiction over particular property), two (inconvenience of the federal forum), and six (ability of the state court to protect the rights of the parties ) are clearly inapplicable and factor five (whether federal law provides the rule for decision) strongly favors denial of a stay. Moreover, although evaluation of the two remaining factors (avoidance of piecemeal litigation and the order in which the parallel actions were commenced) is somewhat more complex, in the final analysis these factors also must be viewed as favoring denial of the complainants' request. For example, although it might appear that granting a stay would avoid piecemeal litigation by allowing this entire matter to be resolved in the state court litigation, in fact this result would be likely to occur only if the complainants were to fully prevail in the state court proceeding. In contrast, if the complainants were to lose in the state court they would still presumably be able to resume their action in this forum by pointing out that, because of the differences in the burden of proof in the two proceedings, the doctrines of collateral estoppel and res judicata do not apply. This possibility is highly significant because, as previously noted, the Supreme Court specifically held in Cone that if there is "any substantial doubt" about whether a parallel state court action will result in a "complete and prompt" resolution of the issues between the parties, it would be "a serious abuse of discretion to grant the stay or dismissal at all." 460 U.S. at 28. It is also noted that the fact that the complainants have requested a stay rather than a dismissal in this action is a further indication that the state action will not result in a complete resolution of all the issues between the parties and even suggests an additional ground for denying the motion---the possibility of forum shopping. Likewise, examination of the order in which the parallel actions were commenced also supports denial of a stay. Although the Supreme Court noted in Cone that analysis of this factor involves more than simply examining the dates on which the relevant complaints were filed and should primarily focus on "how much progress has been made in the two actions," it is clear that neither type of inquiry favors granting a stay. Indeed, the record shows that the complaint in the state action was not filed until almost six months after the beginning of this proceeding and that although the discovery process in the state action has only just begun, the discovery process in this proceeding is nearly complete.

   Second, the complainants are unconvincing in asserting that the issues in this case are likely to be resolved substantially sooner in courts of the State of Washington than in this forum. Although it is true that the resolution of some whistleblower cases can be delayed for prolonged periods, materials submitted by the respondent indicate that there are delays of comparable length in obtaining judgments from the trial courts of the State of Washington. It is noted, moreover, that under recently-amended regulations, at least some remedies recommended in the initial decisions of administrative law judges must become effective immediately. See 29 C.F.R. §24.7(c)(2). The complainants are also unconvincing in asserting that administrative law judges

lack sufficient authority to impose sanctions for violations of procedural orders. Although administrative law judges lack the power to fine or jail parties who fail to obey procedural orders, in almost every case the availability of other types of sanctions is more than adequate to ensure full compliance.

   Third, although it appears that evidence which may be highly relevant to the issues in this case is in the possession of third-party subcontractors who cannot be compelled to testify or provide evidence in proceedings under section 211 of the Energy Reorganization Act, this circumstance alone is insufficient to warrant a conclusion that all proceedings in this matter must be stayed pending a final resolution of the state court proceeding. Although the Cone decision directs that consideration be given to the adequacy of state court proceedings, nothing in either the Colorado River or Cone decisions indicates that there should be a converse inquiry into the adequacy of the federal forum's authority. Indeed, it could be argued that such an inquiry would amount to second guessing judgments already made by Congress.

   In concluding, it is noted that although it would be impermissible to stay further proceedings in this matter until a final decision in the parallel state court action, there is apparently no prohibition against recognizing the fact that during the course of discovery in the state proceeding the parties to this case are likely to obtain otherwise unavailable evidence from the third-party subcontractors and that some of this evidence could be highly relevant to the issues in this proceeding. For this reason, it has been determined that the commencement of the trial of this matter should be postponed for at least six months so that the parties will have an opportunity to offer into evidence in this proceeding any relevant information that they may be able to obtain from these subcontractors during the course of discovery in the state proceeding. Such evidence, for example, may be found in the deposition testimony of employees of the third-party subcontractors or in documents obtained from these subcontractors in response to state court subpoenas. Formal notice of the new trial date will be issued following a conference call which will be held in the near future for the purpose of determining the availability of attorneys and witnesses.

   This ruling has been arrived at in collaboration with Judge Karst, who will soon be issuing a parallel decision.

      Paul A. Mapes
      Administrative Law Judge