Cottrell, et al. v. Duke, et al., No. 12-3871 (8th Cir. 2013)
Annotate this CaseSeveral shareholder-derivative lawsuits were filed across the country, including one in Delaware state court and in federal district court, after an investigative report detailed an alleged bribery scheme involving Wal-Mart. In this appeal, at issue was whether a federal court could utilize Colorado River Water Conservation District v. United States to stay a federal shareholder-derivative proceeding that contained a valid claim within the exclusive jurisdiction of the federal courts. The district court stayed and administratively terminated the Federal proceedings in favor of a substantially similar state-court proceeding that would have the realistic effect of precluding any future proceedings in federal court. Accordingly, this order was final and appealable. The court joined its sister circuits and held that the Colorado River doctrine could not be used to stay or dismiss a federal proceeding in favor of a concurrent state proceeding when the federal proceeding contained a claim over which Federal courts have exclusive jurisdiction. Here, the district court abused its discretion by using its inherent power to control its docket as an alternative justification for the stay, a stay which effectively dismissed the federal proceeding in favor of a concurrent state dispute. The proper standard to apply, given the effect of the stay, was Colorado River. Accordingly, the court vacated and remanded for further proceedings.
Court Description: Civil case. Where the district court stayed and administratively terminated federal proceedings in favor of a substantially similar state court proceeding that would have the realistic effect of precluding any future proceedings in federal court, the order was final and appealable; the district court erred in utilizing Colorado River Water Conservation District v. United States to stay a federal shareholder-derivative proceeding which contained a valid claim within the exclusive jurisdiction of the federal courts; while the district court has inherent power to stay proceedings in the interest of controlling its docket, the stay here was an abuse of the district court's discretion; on remand, the district court may impose a more finite and less comprehensive stay if it concludes that such a stay properly balances the rights of the parties and serves the interest of judicial economy.
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.