libelous material were made where the defendants resided. Indeed, the court in Jaffe v. Dolan, 264 F. Supp. 845, 848 (E.D.N.Y. 1967) stated flatly that the claim arose where the libel was published, though admittedly this is an early case. This court thus concludes that the defamation claim arose, for the purposes of § 1391(a), within this district.
No. 89-5654, the breach of contract action, presents an easier problem. There the defendant, Hereford, is both a Pennsylvania resident and a New Jersey resident for these purposes, because, as the contract, letters, and Klauder affidavit indicate, it conducted business in Pennsylvania during the relevant period. Even the Hereford reply and attached affidavit acknowledge that some negotiations took place in Pennsylvania. Since Hereford is the sole defendant, the residence requirement is met. This court thus does not have to address whether the breach of contract and fraud claims arose in this jurisdiction to conclude that venue is proper under §§ 1391(a) and 1391(c).
IV. Failure to Join a Party
The next item in the defendants' litany is the plaintiffs' supposed failure to join an indispensable party. The defendants, however, never do more than identify (and only in their reply brief) some possible parties and assert that they are necessary.
Without providing some support for the argument that the parties are necessary, the defendant cannot hope to prevail. Should such parties appear later in the litigation, the rules of impleader and interpleader will be available to satisfy any concerns of the defendants. Fed.R.Civ.P. 14, 22.
Defendants argue, under the rubric of improper venue, that a pending action among the parties in New Jersey state court is the proper locus for this litigation. This is the wrong heading for such a motion, which goes rather to whether this court should abstain or, as below, to forum non conveniens. Both for factual and for legal reasons, this court does not find abstention warranted.
The primary New Jersey action, filed on July 17, 1989, was started by Klauder against Hereford, Aqua Development Company, and Recreational Development Corporation.
It alleges breach of a contract for the purchase of a condominium. The contract identified there was signed on or about April 28, 1987, and dealt specifically with the purchase of unit B205 of Aqua Beach Condominium. Since then, and after the filing of the federal suits here, Hereford has filed a third-party complaint in state court that alleges breach of a September 18, 1987 contract for the construction of twenty-four condominium units in the Aqua Beach/Ocean Cove Townhomes and Condominiums project. Hereford and Murtaugh have also directed the court's attention to a number of actions filed by Klauder or K & N in New Jersey state and federal courts based on the Hereford-K & N contract of September 18 and associated dealings. The federal suits in question stem from the September 18, 1987 contract alone.
Although the parties in the state and the federal actions are similar, the contracts at the root of the actions are not necessarily the same. Moreover, not all of the federal parties are parties to the state action, and vice versa. The actions are thus not truly concurrent, in the sense used by the Supreme Court in, for example, Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 47 L. Ed. 2d 483, 96 S. Ct. 1236 (1976). For example, the defamation action exists only in federal court. Even to the extent that the actions are concurrent -- that is, to the extent that the state action implicates the September 18 contract -- they have been only since Hereford brought its third-party action, well after the federal suits were filed. It would be anomalous, to say the least, if a later-filed state action were able to oust a federal court's jurisdiction over an earlier suit, especially where the state court action presents the parties in reverse posture. In any event, the Klauder and K & N claims are not now before the state court. This by itself would warrant denying abstention; at present there is simply no "race to the courthouse," because Klauder and K & N pursue the relief they seek only in this forum.
Even if the suits were over the same res, though, this court would remain fully justified in keeping jurisdiction. There are four basic headings for abstention, of which only one even arguably applies here. Since there are clearly no federal constitutional questions joined here which might be avoided were the action filed in state court, abstention under Railroad Comm'n v. Pullman Co., 312 U.S. 496, 85 L. Ed. 971, 61 S. Ct. 643 (1941), is improper. Likewise, since there is no question of injunctive relief against state proceedings, whether criminal or civil, Younger abstention is inappropriate. Pennzoil Co. v. Texaco, Inc., 481 U.S. 1, 95 L. Ed. 2d 1, 107 S. Ct. 1519 (1987); Huffman v. Pursue, Ltd., 420 U.S. 592, 43 L. Ed. 2d 482, 95 S. Ct. 1200 (1975); Younger v. Harris, 401 U.S. 37, 27 L. Ed. 2d 669, 91 S. Ct. 746 (1971); Schall v. Joyce, 885 F.2d 101, slip op. at 12-23 (3d Cir. 1989). This action also does not raise any especially unclear or unsettled issues of state law, particularly over questions of great public import, and so Burford abstention does not apply. Colorado River, 424 U.S. at 814; Louisiana Power & Light v. Thibodaux, 360 U.S. 25, 3 L. Ed. 2d 1058, 79 S. Ct. 1070 (1959); Burford v. Sun Oil Co., 319 U.S. 315, 87 L. Ed. 1424, 63 S. Ct. 1098 (1943). This leaves Colorado River abstention, which requires more detailed explication.
This heading of abstention invokes "considerations of 'wise judicial administration, giving regard to conservation of scarce judicial resources and comprehensive disposition of litigation.'" Colorado River, 424 U.S. at 817 (quoting Kerotest Mfg. Co. v. C-O-Two Fire Equip. Co., 342 U.S. 180, 183, 96 L. Ed. 200, 72 S. Ct. 219 (1952)). Such general considerations are, however, to be kept bridled; the "virtually unflagging obligation of the federal courts to exercise the jurisdiction given them" is only to be set aside in the "exceptional" case. Colorado River, 424 U.S. at 817, 818.
A number of factors go into decisions whether to abstain, most notably whether the first court assuming in rem jurisdiction may exclude other courts from doing the same. Others include the inconvenience of the federal forum, the goal of avoiding piecemeal litigation, the order in which jurisdiction was obtained in the competing fora, the relative progress of the state and federal proceedings, the presence or absence of concurrent jurisdiction, and the source of governing law. Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 15-16, 23, 74 L. Ed. 2d 765, 103 S. Ct. 927 (1983); Will v. Calvert Fire Ins. Co., 437 U.S. 655, 666, 57 L. Ed. 2d 504, 98 S. Ct. 2552 (1978); Colorado River, 424 U.S. at 818; Ingersoll-Rand Fin. Corp. v. Callison, 844 F.2d 133, 136 (3d Cir. 1988); Lumen Constr. Inc. v. Brant Constr. Co., 780 F.2d 691, 694 (7th Cir. 1985). In its balancing, which rests within the court's discretion, the court should keep in mind that "the circumstances which will justify [stay or dismissal] are extremely limited." 1A J. Moore, Moore's Federal Practice para. 0.203 at 2153 (1989).
It thus remains for this court to fit the facts to the framework. First, neither court has in rem jurisdiction over this action. Though the contract concerns construction, the dispute is not over a clouded title or some similar matter for which the land itself is the subject of dispute. Consequently, this first criterion weighs for neither side. Second, the federal forum is very near the state forum. Cape May Court House, the county seat of Cape May County, New Jersey, is, roughly, only sixty miles from Philadelphia. While some of the defendants would have to travel from New Jersey, as would some of their witnesses, were the action here, others would have to travel from Pennsylvania were the action in New Jersey state court. Given this proximity and the likelihood that such burden as there is would not disappear through a move to New Jersey, this factor is likewise neutral.
Third, the danger of piecemeal litigation would be present wherever the action might be brought. While the breach of contract actions are subject to arbitration and, under the Federal Arbitration Act, would produce stays in state or federal court upon motion ( Cone, 460 U.S. at 19-20), the defamation action might not be.
Consequently, dismissal would not necessarily remove the risk of piecemeal litigation (for example, on challenging the results of arbitration). In any event, the state actions are not presently parallel. Although defendants have recently created some potential parallelism through their third-party complaint in the state law action, the actual issues joined in state court and in federal court are complementary. Either side could, as far as the information before this court allows it to conclude, raise the remaining issues in the other forum. Finally, defendants have not demonstrated that diversity jurisdiction would prove inadequate to cover these controversies. All of the state and federal actions filed by Klauder or K & N are diverse. It is possible, as Hereford argues, that the third-party complaint it recently filed might have New Jerseyites on opposite sides. They have not shown this, though, as the complaint lists only John Doe third-party defendants and K & N. Besides, the John Does they sue are subcontractors to K & N. Hereford would lose nothing by suing only K & N, because, as contractor, K & N is liable for the breaches of its subcontractors (unless a novation absolves it). As Professor Corbin has observed, "A duty can never be escaped by assignment or delegation." 4 A. Corbin, Corbin on Contracts § 866, at 455 (1951); see also, e.g., Brooks v. Hayes, 133 Wis. 2d 228, 395 N.W.2d 167, 170 (1986); Restatement (Second) of Contracts § 318(3) and comment d (1981). K & N is quite capable of impleading its errant subcontractors here, and there is no information before this court that leads it to believe that diversity would fail there.
Fourth in the list of relevant factors is the order in which the courts obtained jurisdiction. Though this is a bit more complex than usual, this comes out in favor of federal jurisdiction. The initial state law action, which did not involve the contract in question here, was filed after the libel action but before the breach of contract action. Since then, Hereford has filed its own breach of contract action as a third-party plaintiff in the state law action, implicating for the first time the September 18 contract. It is thus quite clear that this court took jurisdiction over the libel suit first; indeed, the state court still has no pending suit on libel. The September contract also first became the subject of suit in federal court, though it has been appended to a previously-filed state action by recent pleadings. This factor thus comes out in favor of this court's jurisdiction. The fifth factor -- progress -- likewise comes out to this forum's advantage. The dispute in question here has not yet been raised in state court. Admittedly, there is little difference; neither action has proceeded for more than a few months. But such advantage as there is goes to this forum. Number six, concurrent jurisdiction, is irrelevant here. Since the suit is here in diversity, both fora may exercise jurisdiction. Finally, the source of governing law is very likely New Jersey, given the place of performance. This factor comes out as defendants would wish.
So, then, most factors come out essentially neutrally. While one -- the source of governing law -- points toward New Jersey, the progress of the suit and its correlate, the order in which the courts obtained jurisdiction, point toward Pennsylvania. Even a rudimentary balancing, with the pans first weighted, as Colorado River mandates, toward federal jurisdiction, does not result in the exceptional circumstance that would warrant our jurisdictional abnegation. See Colorado River, 424 U.S. at 819 ("only the clearest of justifications will warrant dismissal").
VI. Forum Non Conveniens
The movants have asked that these actions be dismissed under forum non conveniens.15 This doctrine, which had its federal origin in Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 91 L. Ed. 1055, 67 S. Ct. 839 (1947), and Koster v. Lumbermens Mut. Cas. Co., 330 U.S. 518, 91 L. Ed. 1067, 67 S. Ct. 828 (1947), is used to divest a plaintiff of its choice of forum when another forum has jurisdiction and when trial in the original forum would prove grossly oppressive to the defendant, relative to the plaintiff's convenience, or when sound judicial administration would dictate a shift. Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241, 70 L. Ed. 2d 419, 102 S. Ct. 252 (1981); Koster, 330 U.S. at 524. The ultimate question is thus whether trial in the plaintiff's chosen forum will best serve both justice and convenience. Koster, 330 U.S. at 527; Lony v. E.I. Du Pont de Nemours & Co., 886 F.2d 628, slip op. at 8-9 (3d Cir. 1989); Lacey v. Cessna Aircraft Co., 862 F.2d 38, 42 (3d Cir. 1988).
Such a determination is left to the "'structured discretion'" of the trial judge. Lony, at 632 (quoting Pain v. United Technologies Corp., 205 U.S. App. D.C. 229, 637 F.2d 775, 781 (D.C.Cir. 1980)). The court must first determine whether an alternative forum exists. If so, the court must balance various public and private interest factors laid out in Gilbert to determine whether the cases before it should be dismissed. Lony, slip op. at 9; Lacey, 862 F.2d at 43. The factors may be laid out as follows:
A. Private Interest
1. Relative ease of access to sources of proof;