Federal courts have a virtually unflagging obligation to exercise jurisdiction properly conferred on them. Colorado River permits dismissal or a stay because of parallel state litigation only in exceptional circumstances and only upon the clearest justification. The factors are not a mechanical checklist; they must be weighed with a strong presumption in favor of retaining federal jurisdiction.
Will v. Calvert Fire Insurance Co. did not displace Colorado River. A majority in Calvert accepted Colorado River's exceptional-circumstances framework, and Calvert principally concerned the demanding standard for mandamus review. Here, by contrast, the Court of Appeals had ordinary appellate jurisdiction to review the stay order.
Two traditional Colorado River considerations plainly did not support a stay: neither court had assumed jurisdiction over property, and the federal forum was not less convenient than the state forum. The remaining circumstances also weighed against deference rather than supplying the required exceptional justification.
Avoiding piecemeal litigation did not favor the Hospital. If the Hospital-Mercury dispute was arbitrable, the Federal Arbitration Act required enforcement of that agreement even though the Hospital's separate indemnity dispute with the non-signatory architect would proceed elsewhere. Any division of proceedings resulted from Congress's policy favoring arbitration, not from allowing the federal court to decide arbitrability.
The state action's earlier filing did not establish meaningful priority. Mercury could not seek a § 4 order until the Hospital refused arbitration, which occurred immediately before the Hospital filed its state suit; the Hospital also obtained a short-lived ex parte injunction against arbitration. More importantly, priority depends on practical progress, not filing dates alone. The federal action had advanced further on arbitrability, while the state action had seen no substantial proceedings apart from the dissolved injunction.
The stay conflicted with the Federal Arbitration Act's central policy of rapid and unobstructed enforcement of arbitration agreements. Sections 3 and 4 call for summary, expedited treatment of arbitrability. Deferring to the state case necessarily delayed Mercury's effort to obtain arbitration, even if the state court ultimately acted correctly.
Federal law supplied the rule of decision. Section 2 of the Arbitration Act creates substantive federal law favoring enforcement of covered arbitration agreements, and doubts about the scope of arbitrable issues, including defenses based on waiver or delay, must be resolved in favor of arbitration. The presence of a federal-law issue is a major reason against surrendering jurisdiction.
The state proceeding might not adequately protect Mercury's right to arbitrate. Although state courts are obliged to stay litigation under § 3 when appropriate, it was uncertain whether the state court could compel arbitration under § 4. A litigation stay alone would not help Mercury if the Hospital simply refused both to litigate and to arbitrate. This uncertainty made deference especially inappropriate.
The use of a stay rather than an outright dismissal did not lessen the defect. A Colorado River stay necessarily assumes that the parallel state proceeding will completely and promptly resolve the parties' issues. Where there is substantial doubt about the state forum's adequacy, granting either a stay or a dismissal is an abuse of discretion.