First State Insurance v. Callan Associates, Inc.

First State Insurance Company (First State) appeals the dismissal of its suit against Callan Associates, Inc. (Callan), by the district court. The case involves one more variation of the problem where an insurance company seeks to invoke federal diversity jurisdiction in a dispute with its insured. Although occasionally stigmatized as “forum shopping,” the desire for a federal forum is assured by the constitutional provision for diversity jurisdiction and the congressional statute implementing Article III. While federal courts already sustain a heavy burden of litigation, their doors cannot be closed to a suitor who qualifies under the rigorous criteria for federal jurisdiction. In the proper case, as this one has turned out to be, the obligation to exercise jurisdiction is “virtually unflagging.” Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 817 , 96 S.Ct. 1236, 1246 , 47 L.Ed.2d 483 (1976). Accordingly, we reverse the district court and remand.

PROCEEDINGS

On July 19, 1994, First State, a Delaware corporation with its principal place of business in Massachusetts, brought this suit against Callan, a California corporation with its principal place of…