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Konecranes, Inc. v. Hoist & Crane Service Group, Inc.

United States District Court, S.D. Ohio, Western Division

May 31, 2017

Konecranes, Inc. and Terex Utilities, Inc., d/b/a Terex Services Plaintiffs,
v.
Hoist & Crane Service Group, Inc. and David E. Backhaus and Michael Anderson and Nicolas Shafer. Defendants.

          ENTRY AND ORDER GRANTING DEFENDANTS' MOTION FOR A PARTIAL STAY OF PROCEEDINGS, DOC. 4, AND, RETAINING JURISDICTION PENDING RESOLUTION OF PERTINENT ISSUES OF STATE LAW, AND ORDERING PLAINTIFF TO FILE QUARTERLY STATUS REPORTS.

          THOMAS M. ROSE UNITED STATES DISTRICT JUDGE

         Pending before the Court is a Motion for a Partial Stay of Proceedings from Defendants: Hoist & Crane Service Group, Inc. (“Hoist & Crane”), David E. Backhaus, Michael Anderson, and Nicolas Shafer (Doc. 4). Therein, Defendants request that the federal claims against Hoist & Crane and Backhaus be stayed pending the resolution of a state action out of Wood County, Ohio. Because there are parallel claims in State and Federal court, Defendants' motion for abstention is GRANTED.

         I. Background

         This matter arose out of contractual disputes between Plaintiffs Konecrane, Inc. and Terex Utilities, Inc. (“Plaintiffs”) and Defendants David Backhaus, Michael Anderson, and Nicolas Shafer, former employees of Konecrane. As a precondition to employment, Plaintiffs mandate that certain potential employees sign a confidentiality, non-competition, non-solicitation, and non-recruiting agreement (Doc. 1, p. 77-80) in order to keep confidential and proprietary information private in the event that there ever is a separation. Backhaus, Anderson, and Shafer all signed the agreements. Over the course of several months in the summer of 2016, Backhaus, Anderson and Shafer all ended their employment relationships with Plaintiffs and began working for Hoist & Crane.

         Konecrane then filed a series of lawsuits against Hoist & Crane and former employees alleging breach of contract, violation of Ohio Uniform Trade Secrets Act, tortious interference with contract, tortious interference with business relationships, unfair competition, and civil conspiracy. The first suit was filed in September 2016 in common pleas court in Wood County, Ohio. The next, which is the genesis of this case before the Court now, was first filed on December 22, 2016 in Monroe County, Michigan. It was subsequently removed to the Montgomery County, Ohio, common pleas court on February 10, 2017, and then removed to the Southern District of Ohio on February 23, 2017.

         Hoist & Crane, and one of the employee defendants, Backhaus, now ask this Court for an order staying the federal proceedings against them until the conclusion of the Wood County state court action.

         II. Motion To Stay

         A decision to stay a proceeding is entirely within a district court's discretion. Ohio Envtl. Council v. United States Dist. Court, S. Dist. of Ohio, E. Div., 565 F.2d 393, 396 (6th Cir. 1977). “[T]he power to stay proceedings is incidental to the power inherent in every court to control the disposition of the cause on its docket with the economy of time and effort for itself, for counsel, and for litigants. How this can best be done calls for the exercise of judgment, which must weigh competing interests and maintain an even balance.” Landis v. N. Amer. Co., 299 U.S. 248, 254-55 (1936).

         In Colorado River Water Conservation Dist. v. United States, the Supreme Court explained that considerations of judicial economy and federal-state comity may justify abstention in situations involving the contemporaneous exercise of jurisdiction by state and federal courts. Romine v. Compuserve Corp., 160 F.3d 337, 339 (6th Cir. 1998). The Supreme Court explained that the principles of the doctrine “rest on considerations of ‘wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation.'” Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 817 (1976) (quoting Kerotest Mfg. Co. v. C-O Two Fire Equip. Co., 342 U.S. 180, 183 (1952)).

         1. Parallel Action

         Before the Colorado River doctrine can be applied, however, this Court must determine if the concurrent federal and state actions are indeed parallel. Suits are parallel when the federal and state actions are inextricably woven and involve substantially the same parties litigating substantially the same issues. Romine, 160 F.3d 337 at 340. Additionally, there is “no requirement that the parties in the state court proceedings be identical to those in the federal case.” Bates v. Van Buren Twp., 122 Fed. App'x 803, 806 (6th Cir. 2004). The Sixth Circuit has never held that only a perfect, or even near-perfect, symmetry of parties and causes of action would satisfy parallel requirement. Romine, 160 F.3d 337 at 340.

         Here, the suits, while not identical, are parallel. Both the Wood County action and this federal action contain substantially the same parties. Konecrane/Terex are plaintiffs, and Hoist & Crane and Backhaus are defendants in both suits. The difference in the parties is that Anderson and Shafer are added to the federal action and several individuals named in the state suit are left off of the federal claim. Nevertheless, if a party is named in a federal action but is not named in a state action, the inquiry regarding the parallelism of parties blends into the inquiry regarding the parallelism of issues. P&G v. Alberto-Culver Co., 1999 U.S. Dist. LEXIS 23140, at *9 (N.D. Ill. April 27, 1999). In this case, the major players remain the same. (Doc. 4, p. 5).

         In addition to the similar parties, the cases are parallel in that they are both about essentially the same issues: former Konecrane employees leaving the company to work for Hoist & Crane, a competitor. Both suits allege breach of contract, misappropriation of trade secrets, tortious interference with contracts and business relationships, civil conspiracy, and unfair competition. The only difference is that the Wood County case alleges unjust enrichment and the federal case does not. Here, because the parties and claims are substantially similar and flow from similar fact patterns, the Court considers the cases parallel for purposes of the Colorado River doctrine.

         2. ...


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