Bechtel Petroleum, Inc., Formerly Bechtel Incorporated,plaintiff/appellant, v. Thomas B. Webster, Eric S. Schrank, Van A. Bulf, Peter S.churgel, Delbert D. Hoke, Sam C. Bitetti, et al.,defendants/appellees.state of Alaska, Intervenor-defendant/appellee, 796 F.2d 252 (9th Cir. 1986)

Bechtel Petroleum, Inc. ("Bechtel") seeks reversal of the district court's dismissal of its suit to enjoin an action in Alaska state court. Bechtel contends that a state wage and hours class action suit brought by its employees must be enjoined, in part, to protect the res judicata effect of a consent judgment entered in a federal Fair Labor Standards Act ("FLSA") enforcement case brought against appellant by the Secretary of Labor.¹ 

The Anti-Injunction Act, 28 U.S.C. § 2283, generally prohibits a federal court from granting an injunction to stay proceedings in state court, but authorizes an exception for an injunction "where necessary ... to protect or effectuate its judgments." See Parsons Steel, Inc. v. First Alabama Bank, --- U.S. ----, 106 S. Ct. 768, 770, 88 L. Ed. 2d 877 (1986); see generally Golden v. Pacific Maritime Association, 786 F.2d 1425, 1428 (9th Cir. 1986). Bechtel relies on this "relitigation exception" in contending the district court erred by refusing to enjoin the state court action.

This appeal raises several difficult questions involving application of res judicata principles, including (1) whether the Secretary of Labor must be regarded as the "privy" of affected employees when bringing an FLSA enforcement action against an employer, despite the fact that employees may not participate in or object to the action; (2) if the Secretary is regarded as a privy for purposes of the FLSA, whether the Secretary has any authority to compromise employee claims based on state wage and hour acts; (3) whether employees' acceptance of backpay awards in settlement of an FLSA complaint constitutes waiver of claims based on state statutes; (4) whether an action based on a state wage and hour act involves a distinct and separate claim from that raised in an FLSA enforcement action due to the claim's source in state law or differences in available remedies; and (5) whether employees should be permitted to split a cause of action between an enforcement suit brought by the Secretary and a private state action because of the remedial policy expressed in the FLSA or the jurisdictional impossibility of raising any state claim in the federal enforcement suit.

The district court's comprehensive opinion, reported at 636 F. Supp. 486 (N.D. Cal. 1984), identifies and thoroughly discusses each of these issues. Having carefully reviewed the record and considered appellant's contentions, we conclude that the district court correctly resolved the issues presented. We therefore affirm on the basis of District Judge Orrick's well reasoned opinion, which we adopt as our own.

Furthermore, we note that a decision whether to enjoin a state court proceeding pursuant to the narrow exceptions in the Anti-Injunction Act is committed to the discretion of the district court.²  Golden, 786 F.2d at 1427-1428. Doubts as to the appropriateness of an injunction should be "resolved in favor of permitting the state courts to proceed in an orderly fashion to finally determine the controversy." Vendo Co. v. Lektra-Vend Corp., 433 U.S. 623, 630, 97 S. Ct. 2881, 2887, 53 L. Ed. 2d 1009 (1977) (plurality opinion) (quoting Atlantic Coast Line Railway Co. v. Brotherhood of Locomotive Engineers, 398 U.S. 281, 297, 90 S. Ct. 1739, 1748, 26 L. Ed. 2d 234 (1970)); see also Golden, 786 F.2d at 1427.

Judge Wisdom's words regarding the relitigation exception are particularly relevant in this case:

We take the view that a complainant must make a strong and unequivocal showing of relitigation of the same issue in order to overcome the federal courts' proper disinclination to intermeddle in state court proceedings. If we err, all is not lost. A state court is as well qualified as a federal court to protect a litigant by the doctrines of res judicata and collateral estoppel.

Southern California Petroleum Corp. v. Harper, 273 F.2d 715, 719 (5th Cir. 1960).³ 

As the district court's analysis of the difficult res judicata issues presented in this case clearly demonstrates, Bechtel has simply failed to make the "strong and unequivocal showing of relitigation" necessary to justify such an injunction. Id.; see also Golden, 786 F.2d at 1428.

AFFIRMED.