American International Underwriters, (Philippines), Inc., a Philippines Corporation v. The Continental Insurance Company, a New Hampshire Corporation

This case poses two important questions. First, we must decide whether exceptional circumstances exist in this case that would justify invoking the abstention doctrine articulated in Colorado River Water Conservation District v. United States, 424 U.S. 800 , 96 S.Ct. 1236 , 47 L.Ed.2d 483 (1976). Second, we must determine whether plaintiff should be permitted to file a second action in federal court after initially choosing to litigate in state court.

Plaintiff, American International Underwriters (Philippines), Inc. (“AIU”), appeals from the dismissal of its action by the United States District Court for the Central District of California based on the abstention doctrine set forth in Colorado River. AIU originally brought suit in New York state court, alleging that defendant, The Continental Insurance Company (“Continental”), breached its obligation to plaintiff under two insurance policies. After two- and-a-half years of litigation in New York state court, AIU filed the present action in the district court, alleging the same facts and claims, but alleging jurisdiction based on diversity. The district court dismissed the complaint, citing Colorado River, and Ryder Truck Rental,…