District Court Holds Parallel State Action No Bar to Its Proceedings; Refuses to Dismiss or Stay

Plaintiffs filed class actions, consolidated in the Eastern District of Pennsylvania, against manufacturers of hydrogen peroxide, alleging price fixing under five different states' laws.  The Court divided them into two actions, one for direct purchasers, the other for indirect purchasers who allege that they have overpaid for a particular product as a result of a defendant's anticompetitive actions.  Before the instant case was filed, parallel state claims were filed in California state court by plaintiffs also named in the federal action. 
     Defendants filed a motion to dismiss or stay the California claims in the instant case out of deference to the ongoing state action.  United States District Court Judge for the Eastern District of Pennsylvania Stewart Dalzell analyzed the parallel claims under the six Colorado River factors.  Finding that "none of these factors compels abstention, let alone favors it, dismissing or staying this case would amount to an abuse of discretion."  In his analysis, Judge Dalzell stressed that plaintiffs had advised the state court that they would ask it to suspend its jurisdiction if the district court retained its jurisdiction.  Furthermore, "CAFA itself weighs against" dismissal, since "Congress has put its thumb heavily on the federal side of the scales in class actions like these."  The fact that California law would ultimately govern the substantive inquiry thus had "little, if any, bearing."  In re: Hydrogen Peroxide Antitrust Litigation, 2006 U.S. Dist. LEXIS 18790 (E.D. Penn. Apr. 11, 2006).- A.S.