Southern Industrial Contractors, LLC v. Neel-Schaffer, Inc. et alMEMORANDUM in Opposition re MOTION to Stay ProceedingsS.D. Miss.February 14, 20191 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF MISSISSIPPI SOUTHERN DIVISION SOUTHERN INDUSTRIAL CONTRACTORS, LLC PLAINTIFF VERSUS CIVIL ACTION NO.: 1:17-cv-00255-LG-JCG NEEL-SCHAFFER, INC., ET AL. DEFENDANTS MEMORANDUM IN SUPPORT OF RESPONSE IN OPPOSITION TO MOTION TO REINSTATE STAY Plaintiff Southern Industrial Contractors, LLC (“SIC”) appears herein to file its Memorandum in Support of Response in Opposition to the Motion to Reinstate Stay filed by Defendant, Thompson Engineering, Inc. (“Thompson”).1 INTRODUCTION This litigation arises out of a construction project known as “West Pier Facilities”, Project No. 305, located in Harrison County, Mississippi (the “Project”). The owner of the Project is the Mississippi State Port Authority (“MSPA”). On June 26, 2018, this Court entered an Order staying this lawsuit pending a decision of the Mississippi Court of Appeals in the matter of Mississippi State Port Authority vs. Southern Industrial Contractors, LLC, 2017-CA-1393, which pertained to whether SIC’s claims against the MSPA are subject to an arbitration clause.2 On December 18, 2018, the Mississippi Court of Appeals rendered its decision and concluded that SIC’s claims against the MSPA are not subject to an arbitration clause. Therefore, insofar as there will be no 1 R. Doc. 292. 2 R. Doc. 284. On March 30, 2018, Thompson had moved to stay this litigation. Thompson requested that this action be stayed pending the referenced appellate decision and further requested a stay until the conclusion of any arbitration proceeding between SIC and the MSPA pursuant to Section 3 of the Federal Arbitration Act. R. Doc. 211. Case 1:17-cv-00255-LG-JCG Document 303 Filed 02/14/19 Page 1 of 21 2 arbitration between SIC and the MSPA, the premise for the previously requested stay is moot. Accordingly, on January 31, 2019, an Order was entered lifting the stay in this matter. On February 1, 2019, two motions were filed. First, Defendants, Yates Anderson, JV, Roy Anderson Corp., and W.G. Yates & Sons Construction Company (collectively referred to as “YAJV”), filed a Motion to Stay seeking to stay this litigation until the conclusion of a separate arbitration arising out of the Project between SIC and one of its subcontractors, ADS, LLC (“ADS”).3 Second, Defendant, Thompson, filed the instant Motion to Reinstate Stay seeking to reinstate the stay in this litigation pending the conclusion of the following three (3) separate matters arising out of the Project: 1.) the arbitration between SIC and ADS; 2.) litigation in Harrison County Circuit Court between SIC and one of its subcontractors, Baker Pile Driving & Work, LLC (“Baker”); and, 3.) litigation in Harrison County Circuit Court between SIC and the MSPA. With respect to the argument asserting that this litigation should be stayed pending the SIC/ADS arbitration, Thompson’s motion merely adopts and incorporates YAJV’s motion on that issue. SIC is filing a separate response and memorandum in opposition of YAJV’s motion. Therefore, SIC adopts and incorporates its response and memorandum filed in connection with YAJV’s motion as SIC’s opposition to the instant motion insofar as Thompson contends that a stay should be granted until the conclusion of the SIC/ADS arbitration. As stated above, Thompson’s motion also asserts that this litigation should be stayed for reasons beyond the pending SIC/ADS arbitration, namely pending lawsuits 3 R. Doc. 287. Case 1:17-cv-00255-LG-JCG Document 303 Filed 02/14/19 Page 2 of 21 3 between SIC and Baker and between SIC and the MSPA. Therefore, this memorandum addresses Thompson’s contentions with respect to the Baker and MSPA matters. I. FACTUAL BACKGROUND Plaintiff, SIC, was the general contractor hired by the owner, the MSPA. The eight Defendants in this litigation, including Thompson, were private consultants and/or engineering firms which were hired as independent contractors to perform services on behalf of the owner in connection with the Project. While constructing the Project, SIC encountered two enormous underground debris fields in the locations where SIC was to drive the pilings for the building foundation, which debris was not shown on the Project plans, specifications, or other bidding documents. As a result, the Project was impossible and/or impractical to construct as designed. Therefore, SIC was directed to excavate and remove the debris and perform extra work, which caused significant delays to the Project and required SIC to incur substantial expense. SIC’s original pile driving subcontractor was Baker. After the debris disrupted the pile driving activities, Baker abandoned the Project in violation of its Subcontract which provided that “[Baker] shall proceed diligently with performance of this Subcontract, notwithstanding the existence of any claim, dispute, or other matter in controversy.” As a result, SIC initiated litigation against Baker in Harrison County Circuit Court in July 2015, which lawsuit is pending as Civil Action No. 24CI1:15-cv-00131.4 4 While the parties filed a joint motion to stay the Baker litigation in July 2017, an Order was never entered staying the action and SIC withdrew from the joint motion in September 2017. Nonetheless, there has been no activity in the Baker lawsuit since September 2017, other than additional counsel of record enrolling for Baker in October 2017. Case 1:17-cv-00255-LG-JCG Document 303 Filed 02/14/19 Page 3 of 21 4 In its motion to reinstate stay, Thompson submits no explanation or argument whatsoever to support its contention that this lawsuit should be stayed pending the Baker litigation. Rather, Thompson merely states that the Baker lawsuit exists arising from the Project. Thompson’s conclusory assertion that this action should be stayed due to the existence of the Baker lawsuit is unfounded and unsupported. Whether Baker was entitled to leave the Project under the terms of its Subcontract, notwithstanding the disruption to the Project caused by the debris, has no bearing on this litigation. In September 2016, the MSPA terminated SIC’s contract. As a result, SIC initiated legal proceedings in November 2016 against the MSPA in the Circuit Court of Hinds County, Mississippi, First Judicial District, Civil Action No. 25CI1:16-cv-00681, by filing a Motion to Compel Arbitration.5 In the alternative, SIC asserted a breach of contract claim against the MSPA. On September 26, 2017, the Circuit Court ruled in favor of SIC and compelled arbitration between SIC and the MSPA. Thereafter, the MSPA filed an appeal in connection with the ruling by the Circuit Court. On December 18, 2018, the Mississippi Court of Appeals rendered its decision. Therein, the Court concluded that SIC’s claims against the MSPA are not subject to an arbitration clause. The Court further concluded that SIC’s action against the MSPA was not subject to venue in Hinds County. Further review of the appellate decision was not sought. Rather, SIC and the MSPA jointly filed an Order in the Circuit Court of Hinds County requesting that SIC’s action against the MSPA be transferred to Harrison County Circuit Court, First Judicial 5 R. Doc. 292-2. Case 1:17-cv-00255-LG-JCG Document 303 Filed 02/14/19 Page 4 of 21 5 District, which Order was signed on January 3, 2019.6 Subsequent to the transfer, SIC and the MSPA filed an Agreed Order in the Circuit Court of Harrison County which consented to the consolidation of SIC’s transferred lawsuit with a separate lawsuit which the MSPA had previously filed against SIC in Harrison County, which Order was signed on January 25, 2019.7 The Agreed Order gave SIC fifteen days from the entry of the Order to file an Amended Complaint (until February 13, 2019), and then gave the MSPA fifteen days to file responsive pleadings (until February 28, 2019). Pursuant to the Agreed Order, SIC filed an Amended Complaint against the MSPA in the Circuit Court of Harrison County on February 13, 2019.8 The Amended Complaint explains that the MSPA ordered SIC to perform additional work by way of the excavation and removal of debris down to a level of 21 feet below sea level and that a Change Order was later issued acknowledging that additional time was owed to SIC as a result of the extra work. The Amended Complaint further explains that when SIC resumed the pile driving in the areas excavated for the debris removal, SIC discovered that more underground debris existed below the minus 21 foot depth specified, resulting in SIC being directed and required to perform additional extra work which caused further delay and expense to SIC. Importantly, some of the extra work was ordered after the original completion date for the Project. Nonetheless, the MSPA wrongfully terminated SIC’s contract, contending that the termination was for cause but also alternatively for convenience. The MSPA then had the Project completed by another contractor and charged SIC liquidated damages for each day from the original contract completion date 6 Exhibit “A” (Order transferring SIC’s Hinds County lawsuit). 7 Exhibit “B” (Agreed Order filed by SIC and the MSPA in Harrison County). 8 Exhibit “C” (Amended Complaint filed by SIC in Harrison County). Case 1:17-cv-00255-LG-JCG Document 303 Filed 02/14/19 Page 5 of 21 6 until the Project was completed by the other contractor (in excess of $4 million), without accounting for any delays including the delay acknowledged in the previously issued Change Order. As a result of the foregoing, SIC’s Amended Complaint filed in the Circuit Court of Harrison County seeks a ruling that the termination for cause and termination for convenience provisions of the construction contract are mutually exclusive, that the purported termination for cause by the MSPA was wrongful, and that MSPA is not entitled to its withholding of liquidated damages, as well as recovery of amounts for work performed and amounts resulting from the MSPA’s breaches of the construction contract.9 On July 10, 2017, SIC initiated this litigation against the Defendants, each of whom was extensively involved in the Project.10 Federal jurisdiction was invoked on the basis of diversity pursuant to 28 U.S.C. § 1332.11 SIC contends that every Defendant in this litigation had knowledge of the existence and/or whereabouts of the debris. Yet, despite this knowledge, the Defendants failed to communicate this critical information to SIC and failed to ensure that such information was properly included in the Project documents. In general, SIC’s Complaint asserts that each of the Defendants knew or should have known of the existence of the underground debris fields, and that the conduct of each of the Defendants in connection with the Project fell below the applicable standard of care, including their failure to disclose, warn and/or provide 9 Exhibit C (Amended Complaint filed by SIC in Harrison County). 10 Rec. Doc. 1. 11 The MSPA (an agency of the State of Mississippi) could never be a party to this lawsuit based upon Eleventh Amendment Immunity. Case 1:17-cv-00255-LG-JCG Document 303 Filed 02/14/19 Page 6 of 21 7 information necessary to construct the Project. SIC seeks to recover its losses resulting from the Defendants’ negligence.12 The issues which will be decided in the SIC/MSPA litigation are separate from the issues which will be decided in this lawsuit against Defendants. The disputes in state court regarding whether the termination provisions of the contract are mutually exclusive, whether the purported termination for cause was wrongful, and whether the MSPA is entitled to its withholding of liquidated damages has no bearing on whether the conduct of the Defendants in this litigation fell below the standard of care. Likewise, a determination that the Defendants in this action were negligent is unnecessary to prove the MSPA’s breaches of the construction contract. Thompson’s prior motion to stay was solely premised upon Section 3 of the Federal Arbitration Act, contending that permitting this litigation to go forward would detrimentally affect the ability of SIC and the MSPA to have a meaningful arbitration. That issue became moot when it was decided that SIC and the MSPA were not subject to a binding arbitration clause. Therefore, Thompson has now developed new arguments seeking to avoid proceeding with this lawsuit. Specifically, Thompson speculates that certain Defendants may be subject to future (non-asserted) indemnity claims by the MSPA after the conclusion of the SIC/MSPA litigation, such that the Defendants may be unable to terminate their liability arising from the Project with a settlement in this litigation. Thompson also contends, from a procedural standpoint, that 12 SIC also asserts that it was a third-party beneficiary of the contract(s) to which the Defendants were parties in connection with the Project. This claim has been dismissed as to one of the Defendants. Rec. Doc. 92. Case 1:17-cv-00255-LG-JCG Document 303 Filed 02/14/19 Page 7 of 21 8 the SIC/MSPA litigation could have res judicata effect in this litigation, such that SIC/MSPA litigation should be concluded prior to this lawsuit ensuing. For the reasons set forth below, the relief requested by Thompson is contrary to law and should be denied in its entirety. II. LAW AND ANALYSIS In its motion to reinstate stay, Thompson cites to Landis v. N. Am. Co., 299 U.S. 248, 254, 57 S. Ct. 163, 166 (1936), for the principle that “the power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants.” Thompson then argues that this Court should exercise its discretion under Landis and stay this case pending the conclusion of the state court litigation between SIC and the MSPA based upon Thompson’s contention that the Harrison County litigation could have res judicata effect on the claims asserted by SIC against the Defendants in this lawsuit. However, assuming solely for the purpose of argument that Thompson is correct regarding the potential preclusive effect of the state court litigation (which SIC denies), then the proper standard which must be applied in determining whether a stay should be granted would be that set forth by the U.S. Supreme Court in Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 96 S. Ct. 1236 (1976). “[U]nder the Colorado River doctrine, only in the ‘most extraordinary circumstances’ may the federal court stay its case where the state court's duplicative proceedings go forward.” Bar Grp., LLC v. Bus. Intelligence Advisors, Inc., 215 F. Supp. 3d 524, 543 (S.D. Tex. 2017). Case 1:17-cv-00255-LG-JCG Document 303 Filed 02/14/19 Page 8 of 21 9 In Fishman Jackson PLLC v. Israely, 180 F. Supp. 3d 476 (N.D. Tex. 2016), the Court performed a thorough analysis regarding whether the Colorado River standard or Landis standard applies when a federal court is considering a motion to stay in favor of a state court proceeding when the state court preceding will have a preclusive effect on any of the issues being considered by the federal court. After considering the applicable scenarios for each standard, the Court explained: [T]he Colorado River and Landis doctrines are not simply alternative means of reaching the same result. This court concludes that the correct view is that the Colorado River standard—and not a standard derived from Landis — applies when a court is considering a motion to stay in favor of a state court proceeding when the state court preceding will have a preclusive effect on any of the issues being considered by the federal court. This conclusion is strongly supported by the following language from the Supreme Court's opinion in Colorado River: Generally, as between state and federal courts, the rule is that “the pendency of an action in the state court is no bar to proceedings concerning the same matter in the [f]ederal court having jurisdiction....” As between federal district courts, however, though no precise rule has evolved, the general principle is to avoid duplicative litigation. This difference in general approach between state-federal concurrent jurisdiction and wholly federal concurrent jurisdiction stems from the virtually unflagging obligation of the federal courts to exercise the jurisdiction given them. Colorado River, 424 U.S. at 817–18, 96 S.Ct. 1236 (internal citations removed) (emphasis added). As other courts have recognized, this language means that “only exceptional circumstances permit a federal court to refuse to exercise its jurisdiction in deference to a concurrent state proceeding.” Cottrell, 737 F.3d at 1249 (emphasis added). Although “a district court retains its inherent power to control its docket when facing concurrent state and federal litigation,” this power is limited by the Colorado River factors. Id. “To permit a district court to rely solely on its inherent power to control its docket, when the effect of the district court's order is to accomplish the same result contemplated by Colorado River, would allow Case 1:17-cv-00255-LG-JCG Document 303 Filed 02/14/19 Page 9 of 21 10 a court to bypass the rigorous test set out by the Supreme Court.” Id. If a federal court grants a stay in favor of another federal court or for some other reason, the federal courts are not declining to exercise jurisdiction over claims properly before them. See Colorado River, 424 U.S. at 817– 18, 96 S.Ct. 1236. But when a federal district court allows a state court to finally resolve any issue properly before the federal court— whether indirectly, through principles of issue or claim preclusion, or directly, through dismissal of the cause of action—the federal court is effectively surrendering its jurisdiction to the state court. See Quackenbush v. Allstate Insurance Company, 517 U.S. 706, 722, 116 S.Ct. 1712, 135 L.Ed.2d 1 (1996) (“To be sure, the abstention doctrines and the doctrine of forum non conveniens proceed from a similar premise: In rare circumstances, federal courts can relinquish their jurisdiction in favor of another forum.”). Because of the “virtually unflagging obligation of the federal courts to exercise the jurisdiction given them,” a federal court may not relinquish jurisdiction to a state court absent the “exceptional circumstances” discussed in the Colorado River decision. Colorado River, 424 U.S. at 813, 817–18, 96 S.Ct. 1236. Id. at 485-87. See also Roi Grp., Inc. v. Stull, 2016 WL 2866791, at *4 (N.D. Tex. May 17, 2016) (“If the state court suit will have a preclusive effect on any of the issues or claims before this court or this court otherwise intends to let the state court decide a legal or factual issue, the court should apply the Colorado River test to the motion to abate.”) “The first step and a necessary prerequisite in applying the Colorado River doctrine is to determine if the federal and state court actions are parallel or concurrent proceedings.” Bar Grp., LLC v. Bus. Intelligence Advisors, Inc., 215 F. Supp. 3d 524, 543 (S.D. Tex. 2017). “Proceedings are parallel when they involve the same parties and the same claims.” Morris v. SWDI, LLC, 872 F. Supp. 2d 499, 508 (E.D. La. 2012). It is SIC’s position that this litigation does not involve the same parties or the same claims as the SIC/MSPA litigation. However, Thompson clearly believes otherwise since it has Case 1:17-cv-00255-LG-JCG Document 303 Filed 02/14/19 Page 10 of 21 11 contended that the SIC/MSPA litigation could have res judicata effect on this litigation.13 Assuming solely for the purpose of argument that if Thompson is correct that the actions are sufficiently parallel (which SIC denies), “exceptional circumstances” must also exist to justify the requested stay under Colorado River. See Biel v. Bekmukhamedova, 964 F. Supp. 2d 631, 637 (E.D. La. 2013). (“Even if the state and federal cases were sufficiently parallel, this case lacks the ‘exceptional circumstances’ necessary to justify abstention under Colorado River.”) As explained in African Methodist Episcopal Church v. Lucien, 756 F.3d 788, 798 (5th Cir. 2014), “[t]here are six factors that the court must balance on a case-by- case basis to determine whether exceptional circumstances warrant abstention [under Colorado River]: 1) assumption by either court of jurisdiction over a res, 2) relative inconvenience of the forums, 13 “The preclusive effect of a judgment is defined by claim preclusion and issue preclusion, which are collectively referred to as ‘res judicata.’ ”Taylor v. Sturgell, 553 U.S. 880, 892, 128 S. Ct. 2161, 2171 (2008). “The Fifth Circuit has established four elements that must be satisfied for a claim to be barred by res judicata: ‘(1) the parties must be identical in the two actions; (2) the prior judgment must have been rendered by a court of competent jurisdiction; (3) there must be a final judgment on the merits; and (4) the same claim or cause of action must be involved in both cases.’ ” Anderson v. Bank of Am.,2009 WL 3647516, at *3 (S.D. Miss. Nov. 3, 2009). While a non-party defendant can assert res judicata so long as it is in “privity” with the named defendant, “[t]he Fifth Circuit stated that ‘[f]or res judicata purposes, this court has held that privity exists in just three, narrowly-defined circumstances: (1) where the non-party is the successor in interest to a party's interest in the property; (2) where the non-party controlled the prior litigation; and (3) where the non-party's interests were adequately represented by a party to the original suit.’ ” Id. at *4. To the extent Thompson raises the doctrine of collateral estoppel in addition to res judicata, “[c]ollateral estoppel is a derivative of res judicata with a more narrow focus.” Walker v. Kerr-McGee Chem. Corp., 793 F. Supp. 688, 694 (N.D. Miss. 1992). “While res judicata encompasses questions which might have been litigated, collateral estoppel applies only to questions actually litigated in a prior suit.” Id. Case 1:17-cv-00255-LG-JCG Document 303 Filed 02/14/19 Page 11 of 21 12 3) avoidance of piecemeal litigation, 4) the order in which jurisdiction was obtained by the concurrent forums, 5) to what extent federal law provides the rules of decision on the merits, and 6) the adequacy of the state proceedings in protecting the rights of the party invoking federal jurisdiction.” “In weighing these factors, the balance is skewed ‘heavily’ in favor of exercising jurisdiction.” Biel, 964 F. Supp. 2d at 637. The first of the Colorado River factors weighs against a stay as no court has assumed jurisdiction over any res. See Stewart v. W. Heritage Ins. Co., 438 F.3d 488, 492 (5th Cir. 2006). (“Neither the state nor federal court has assumed jurisdiction over any res in this case…This factor supports exercising federal jurisdiction.”); Extreme Energy Servs., LLC v. Gator Energy Operating, LLC, 2011 WL 2747710, at *4 (W.D. La. June 24, 2011). (“Despite Gator's creative argument that a res is involved in this litigation, there is no evidence that either court has taken control or asserted jurisdiction over a piece of property, a vessel, or any other res.”) The second factor also weighs against a stay as both the U.S. District Court for the Southern District of Mississippi and the Harrison County Circuit Court are located in the same geographic location. See U.S. Fire Ins. Co. v. Hous. Auth. of New Orleans, 917 F. Supp. 2d 581, 590 (E.D. La. 2013). (“[B]oth the federal and state courts are in the same geographic location. This factor therefore weighs against abstention and supports an exercise of this Court's jurisdiction.”) Likewise, the third factor weighs against staying this lawsuit. The Fifth Circuit explained in Black Sea Inv., Ltd. v. United Heritage Corp., 204 F.3d 647, 650–51 (5th Cir. 2000): Case 1:17-cv-00255-LG-JCG Document 303 Filed 02/14/19 Page 12 of 21 13 Duplicative litigation, wasteful though it may be, is a necessary cost of our nation's maintenance of two separate and distinct judicial systems possessed of frequently overlapping jurisdiction. The real concern at the heart of the third Colorado River factor is the avoidance of piecemeal litigation, and the concomitant danger of inconsistent rulings with respect to a piece of property. When, as here, no court has assumed jurisdiction over a disputed res, there is no such danger. This factor therefore weighs against abstention.14 With respect to the fourth factor, the relevant inquiry is “how much progress has been made in the two actions.” Murphy v. Uncle Ben's, Inc., 168 F.3d 734, 738 (5th Cir. 1999). In this federal court litigation, all parties consented to a stipulated ESI Order15 and the parties engaged in extensive discovery before the prior stay was entered. As Thompson previously explained to the Court, approximately 271 gigabytes of data have been produced by the parties to this lawsuit consisting of hundreds of thousands of documents.16 In addition, depositions have been conducted, and SIC and Defendants have each produced expert reports. Moreover, two Defendants have filed dispositive motions on the merits.17 In fact, this action was set for trial commencing in March 2019 before the prior stay was entered.18 On the other hand, in the state court litigation, the only matter that has been accomplished is a determination as to whether SIC and the MSPA are subject to an arbitration clause. SIC just recently filed its Amended 14 See also Gator Energy, supra. (“[W]hen as in this case, jurisdiction has not been assumed over a res, this [third] factor does not weigh in favor of abstention.”); Am. Home Assur. Co. v. Roxco, Ltd., 81 F. Supp. 2d 674, 680 (S.D. Miss. 1999) (“[T]he ‘avoidance of piecemeal litigation’ factor might weigh in favor of abstention only in cases which ‘involve jurisdiction over a res or property,’ since only in such cases is ‘there ... a danger of inconsistent rulings affecting property ownership.’ ”) (citing Evanston Ins. Co. v. Jimco, Inc., 844 F.2d 1185, 1192 (5th Cir. 1988)) 15 R. Doc. 134. 16 R. Doc. 210, p. 4. (Explaining that a gigabyte approximates between 75,000 and 77,000 pages.) 17 R. Doc. 49; R. Doc. 194. 18 R. Doc. 100. Case 1:17-cv-00255-LG-JCG Document 303 Filed 02/14/19 Page 13 of 21 14 Complaint on February 13, 2019, and the MSPA’s responsive pleadings are due on February 28, 2019. No discovery or depositions have occurred, and no expert reports have been exchanged. No scheduling order has been entered. Accordingly, since substantially more progress has been made in this lawsuit, the fourth factor also favors a denial of the request for stay. Regarding the fifth and sixth factors, the Fifth Circuit has held that neither can weigh in favor of abstention as a matter of law. See Lucien, 756 F.3d at 801. (“We have made clear that the sixth factor, like the fifth, can only be neutral or weigh against abstention; it cannot weigh in favor of abstention.”) Regarding the fifth factor, while the case will be decided pursuant to well-established state law governing negligence claims, as opposed to federal law, “the presence of state law questions is less weighty in the abstention analysis when the applicable state law is well-settled, as it is here.” Bates v. Laminack, 938 F. Supp. 2d 649, 666 (S.D. Tex. 2013). With respect to the sixth factor, it is SIC’s position that this federal forum is more suited to protect the rights of SIC as compared to the state court forum determining the rights of SIC as a foreign company against the MSPA, a local state agency. Notably, Thompson’s motion to reinstate stay contains absolutely no analysis whatsoever supporting the contention that the SIC/MSPA litigation could have preclusive effect on this lawsuit. Nonetheless, assuming solely for the purpose of argument that Thompson is correct, then this lawsuit could only be stayed under “exceptional circumstances” as determined by the Colorado River factors. Because not a single one of those factors weighs in favor of this Court “effectively surrendering its jurisdiction to the state court”, the relief requested by Thompson should be denied given Case 1:17-cv-00255-LG-JCG Document 303 Filed 02/14/19 Page 14 of 21 15 the “virtually unflagging obligation of the federal courts to exercise the jurisdiction given them.” On the other hand, assuming that Thompson is incorrect regarding the preclusive effect of the Harrison County litigation such that the Colorado River standard is inapplicable, Thompson’s request for a stay still lacks merit under Landis v. N. Am. Co, supra. (the standard proposed by Thompson.) In Bar Grp., LLC v. Bus. Intelligence Advisors, Inc., 215 F. Supp. 3d 524 (S.D. Tex. 2017), the Court considered a motion to stay a federal lawsuit pending state court litigation. The Court first considered whether the actions were parallel. The Court concluded that the actions were not parallel, but nonetheless applied the Colorado River factors to show that a stay would not be warranted even if the actions were parallel. The Court then considered whether a stay could be warranted under Landis, and held that “because the parties before this Court and before the New York court are not identical, Landis does not authorize staying or dismissing the instant action.” Id. at 545. Similarly, in this case, the parties are not “identical” in the state and federal actions, and therefore, Landis is inapplicable. Moreover, under Landis, “[t]he party seeking a stay bears the burden of justifying a delay tagged to another legal proceeding.” Wedgeworth v. Fibreboard Corp., 706 F.2d 541, 545 (5th Cir. 1983). “[T]he suppliant for a stay must make out a clear case of hardship or inequity in being required to go forward, if there is even a fair possibility that the stay for which he prays will work damage to some one else.” Id. (citing Landis, 299 U.S. at 255, 57 S. Ct. at 166.) “Further, before granting a stay pending the resolution of another case, the court must carefully consider the time reasonably expected for Case 1:17-cv-00255-LG-JCG Document 303 Filed 02/14/19 Page 15 of 21 16 resolution of the ‘other case,’ in light of the principle that ‘stay orders will be reversed when they are found to be immoderate or of an indefinite duration.’ ” Wedgeworth, 706 F.2d at 545. Assuming that the Harrison County lawsuit will have no preclusive effect on this litigation (which would require a Colorado River analysis), this litigation will then ultimately have to proceed and Thompson’s sole remaining basis for requesting a stay under Landis is Thompson’s contention that it could be subject to a future (non- asserted) indemnity claim by the MSPA after the conclusion of the SIC/MSPA litigation. Notably, Thompson does not cite to a single authority supporting its position that a stay could be warranted due to a speculative future indemnity claim. Thompson’s apprehension that an indemnity claim could subject Thompson to double exposure is misplaced. As Thompson states in its brief, a party is not entitled to double recovery for the same injury. As Thompson also recognizes, this lawsuit will undoubtedly proceed significantly quicker than the Harrison County litigation.19 Therefore, SIC will not be able to be awarded any damages against the MSPA that SIC has already recovered from the Defendants in this litigation. As such, there is no possibility that the MSPA will seek indemnity from the Defendants in the future for the same damages that SIC recovers from the Defendants in this action, as SIC will not be entitled to a double recovery from the MSPA. In addition, the result of this lawsuit will allow the Defendants to likely be successful in opposing any attempt by the MSPA from seeking indemnity, as the extent of Defendants liability will have already been 19 As previously stated, this action was set for trial commencing in March 2019 before the prior stay was entered. R. Doc. 100. Case 1:17-cv-00255-LG-JCG Document 303 Filed 02/14/19 Page 16 of 21 17 established in this matter and SIC will have already been compensated for all damages determined to be caused by Defendants’ negligence as a result of this action. In other words, the only damages which SIC will be able to recover in the SIC/MSPA litigation would be those damages which were determined to have not been caused by the Defendants, such that the MSPA would have no basis to seek recovery from the Defendants for indemnity.20 Thompson’s assertion that it might be challenging to settle this litigation based upon the possibility of future (non-asserted) indemnity claims by the MSPA also does warrant a stay, and Thompson has not submitted any authorities even suggesting that potential difficulties in achieving settlement merit foreclosing a party’s ability to proceed with pursing its rights through litigation. In fact, Thompson’s concerns regarding indemnity are unfounded; SIC does not seek double recovery, but rather only desires to be made whole for the damages it has incurred. Furthermore, there are numerous potential avenues by which this case could be settled despite the remote possibility that a future indemnity claim could be asserted. Counsel for the Defendants are experienced and capable litigators and surely are aware of obvious as well as creative solutions which could result in an amicable resolution, not the least of which would be to 20 Further, as Defendants are well-aware, the MSPA, as a state agency, may arguably be able to resist payment of a money judgment in certain scenarios. Unless and until the MSPA actually pays a money judgment rendered in favor of SIC, any indemnity claim by the MSPA against Defendants would not be ripe. SIC submits that Defendants strategy is to require SIC to first obtain a money judgment for all damages against the MSPA, and then argue that SIC has already been compensated for its damages. Meanwhile, Defendants hope that the MSPA will successfully resist payment of that judgment such that any indemnity claim by the MSPA against Defendants will never become ripe. This scenario (should the MSPA and Defendants be successful in such arguments) would result in a huge windfall to Defendants and essentially vitiate SIC’s ability to recover from Defendants for their negligent acts and omissions. Case 1:17-cv-00255-LG-JCG Document 303 Filed 02/14/19 Page 17 of 21 18 engage in a mediation and choose to include the MSPA to reach a global settlement. However, it is extremely unlikely that Defendants will put forth any effort towards a settlement in the event this lawsuit is stayed, as realistically, Defendants would be relieved of any pressure and all possibility of having to engage in litigation for the foreseeable future. As stated above, although Landis grants this Court general discretionary power to stay proceedings (when the state court action will have no preclusive effect), “a stay may not be ‘immoderate or of an indefinite duration.’ ” Brown v. Kenner Police Dep't, 2017 WL 5157563, at *1 (E.D. La. Nov. 7, 2017). (citing McKnight v. Blanchard, 667 F.2d 477, 479 (5th Cir. 1982).) “[A] stay would be indefinite when it is contingent upon the litigation of a district court case in another forum, a trial court decision in that forum, an appellate court decision, and discretionary review by the Supreme Court.” Consolidation Coal Co. v. United States, 102 Fed. Cl. 489, 494 (2011). Here, Defendants wish to stay this litigation until the conclusion of a state court lawsuit between SIC and the MSPA as well as until the conclusion of any appeal and discretionary review by the Mississippi Supreme Court, which lawsuit has essentially just commenced and could be prolonged for years to come. Such an excessive stay of this litigation would essentially be “indefinite” and unduly prejudice SIC which is entitled to pursue its legitimate claims against Defendants. As stated in SIC’s opposition to YAJV’s motion to stay, “[i]t is not without cause that the legal maxim ‘justice delayed is justice denied’ is held dear within the mind of the Nation—our society of laws demands those laws be both interpreted and applied with quick dispatch in service of the ‘Justice’ established by our constitutional order.” Case 1:17-cv-00255-LG-JCG Document 303 Filed 02/14/19 Page 18 of 21 19 Virtual Fleet Mgmt., LLC v. Land Air Sea Sys., Inc., 2017 WL 10276709, at *4 (E.D. Tex. Nov. 29, 2017). SIC requests that this lawsuit be permitted to proceed and that the requested stay be denied. III. CONCLUSION For these reasons, SIC respectfully requests that this Honorable Court deny the Motion to Reinstate Stay in its entirety. THIS the 14th day of February, 2019. Respectfully submitted, SOUTHERN INDUSTRIAL CONTRACTORS, LLC By: /s/ Christopher Solop Christopher Solop, MSB No. 7687 Lynn Patton Thompson, MSB No. 10256 Davis House, MSB No. 105315 Steven B. Loeb, LA Bar Roll No. 19443 (pro hac vice) John T. Andrishok, LA Bar Roll No. 24942 (pro hac vice) Jacob E. Roussel, LA Bar Roll No. 34742 (pro hac vice) Attorneys for Southern Industrial Contractors, LLC OF COUNSEL: Biggs, Ingram & Solop, PLLC 111 Capitol Building, Suite 101 111 East Capitol Street Jackson, MS 39211 Telephone: 601-987-4822 Facsimile: 601-713-9920 Email: csolop@bislawyers.com lynn.thompson@bislawyers.com dhouse@bislawyers.com Case 1:17-cv-00255-LG-JCG Document 303 Filed 02/14/19 Page 19 of 21 20 BREAZEALE, SACHSE & WILSON, L.L.P. One American Place, 23rd Floor Post Office Box 3197 Baton Rouge, Louisiana 70821-3197 Telephone: 225-387-4000 Fax: 225-381-8029 Email: steven.loeb@bswllp.com; john.andrishok@bswllp.com jacob.roussel@bswllp.com CERTIFICATE OF SERVICE I hereby certify that a copy of the foregoing has this date been electronically filed with the Clerk of Court by using the ECF system which will send a notice of electronic filing to the following ECF participants: Judson R. Jones jjones@mhdlaw.com David W. Mockbee dmockbee@mhdlaw.com Attorneys for Neel-Schaffer, Inc. Christopher Daniel Meyer cmeyer@burr.com Charles W. Daniels, Jr. bdaniels@burr.com Attorneys for Thompson Engineering, Inc. Kathryn Breard Platt kplatt@gallowaylawfirm.com Ryan M. Hall rhall@gallowaylawfirm.com Attorneys for Quality Engineering Services, Inc. Ronald A. Yarbrough ryarbrough@brunini.com Case 1:17-cv-00255-LG-JCG Document 303 Filed 02/14/19 Page 20 of 21 21 Samuel C. Kelly skelly@brunini.com R. Lane Bobo lbobo@brunini.com Attorneys for T.L. Wallace Construction, Inc. Samuel D. Gregory sdgregory@bakerdonelson.com Cable Matthew Frost cfrost@bakerdonelson.com M. David Kurtz - PHV dkurtz@bakerdonelson.com Attorneys for CH2M Hill, Inc. William R. Purdy bpurdy@bradley.com Ralph B. Germany, Jr. rgermany@bradley.com Slates C. Veazey sveazey@bradley.com Attorneys for W.G. Yates & Sons Construction Company, Roy Anderson Corp., and Yates Anderson, JV THIS the 14th day of February, 2019. /s/ Christopher Solop Christopher Solop Case 1:17-cv-00255-LG-JCG Document 303 Filed 02/14/19 Page 21 of 21