Opinion
No. 07-3324-cv.
January 8, 2009.
Appeal from the United States District Court for the Southern District of New York (Carter, J.).
ON CONSIDERATION WHEREOF, it is hereby ORDERED, ADJUDGED, and DECREED that the order of the district court be and hereby is AFFIRMED.
For Plaintiffs-Appellants: ANDREW L. DEUTSCH (Michael J. Simon, Joseph C. Gioconda, and Monica P. McCabe, on the brief), DLA Piper US LLP, New York, N.Y.
For Defendant-Appellee Dow Jones and Company, Inc.: Robert P. LoBue, Elizabeth Shofner, Adeel A. Mangi, and Benjamin Friedman, on the brief, Patterson Belknap Webb Tyler LLP, New York, N.Y.
For Defendant-Appellee The McGraw-Hill Companies, Inc.: R. BRUCE RICH (Benjamin E. Marks, and Jennifer H. Wu, on the brief), Weil, Gotshal Manges LLP, New York, N.Y.
Present: HON. RALPH K. WINTER, HON. ROBERT A. KATZMANN, HON. REENA RAGGI, Circuit Judges.
Plaintiffs-Appellants International Securities Exchange, LLC, and International Securities Exchange Holdings, Inc. appeal from an opinion and order of the United States District Court for the Southern District of New York (Carter, J.) (the "Stay Order"), dated July 24, 2007, staying proceedings in this declaratory judgment action pending final decision in a parallel state court action. We assume the parties' familiarity with the facts and procedural history of the case.
Our review of the Stay Order does not require a threshold determination of whether there is federal subject matter jurisdiction over the stayed declaratory judgment action. See, e.g., Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 585 (1999) ("It is hardly novel for a federal court to choose among threshold grounds for denying audience to a case on the merits."); Spargo v. N.Y. State Comm'n on Judicial Conduct, 351 F.3d 65, 74 (2d Cir. 2003) ("Despite the prudential nature of the [ Younger] abstention inquiry, we may still proceed to decide a case under Younger without addressing the plaintiffs' constitutional standing to bring suit."); Dow Jones Co. v. Harrods Ltd., 346 F.3d 357, 360 (2d Cir. 2003) (per curiam) (affirming the district court's decision declining to exercise jurisdiction under the Declaratory Judgment Act without first deciding whether the action was ripe or reflected an actual controversy).
Given the circumstances of this case, we opt to review the Stay Order without addressing whether there is federal subject matter jurisdiction over this action. Because we make no determination as to the existence of federal subject matter jurisdiction over the stayed action, we do not decide whether 28 U.S.C. § 1447(d) would prohibit this court from determining the existence of federal subject matter jurisdiction in light of the Northern District of Illinois's remand order in the parallel action.
"The question for a district court presented with a suit under the Declaratory Judgment Act . . . is `whether the questions in controversy between the parties to the federal suit, and which are not foreclosed under the applicable substantive law, can better be settled in the proceeding pending in the state court.'" Wilton v. Seven Falls Co., 515 U.S. 277, 282 (1995) (quoting Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 495 (1942)). We review the district court's decision to stay its exercise of jurisdiction over a declaratory judgment action for abuse of discretion. Wilton, 515 U.S. at 290; Brillhart, 316 U.S. at 494.
"In the declaratory judgment context, the normal principle that federal courts should adjudicate claims within their jurisdiction yields to considerations of practicality and wise judicial administration." Wilton, 515 U.S. at 288. Nonetheless, a district court may abuse its discretion by dismissing a declaratory judgment action that poses a novel question of federal law in favor of a state court proceeding. See Youell v. Exxon Corp., 74 F.3d 373, 376 (2d Cir. 1996).
In exercising its discretion to stay the declaratory judgment action in this case, the district court applied the proper standard and acknowledged the interests weighing against staying the action. The court then exercised its discretion to stay the action. The plaintiffs' complaints about the decision to stay the declaratory judgment action amount to little more than an argument that the district court should have balanced the factors differently. Reviewing the relevant factors, however, we find no abuse of discretion.
Accordingly, the order staying the action below is hereby AFFIRMED.