Applied Underwriters, Inc., et al. v. Ricardo Lara, Commissioner, California Department of Insurance, et al.

“[W]hen one court is exercising in rem jurisdiction over a res, a second court will not assume in rem jurisdiction over the same res.” Marshall v. Marshall, 547 U.S. 293, 311 (2006). This judge-made jurisdictional limitation, often called the prior exclusive jurisdiction doctrine, reflects a practical concern that two “courts cannot possess or control the same thing at the same time.” Kline v. Burke Constr. Co., 260 U.S. 226, 235 (1922). The doctrine “precludes federal courts from endeavoring to dispose of property” in the custody of a state court. Marshall, 547 U.S. at 312. The Ninth Circuit applied the prior exclusive jurisdiction doctrine to bar in personam constitutional claims against state executive officials under 42 U.S.C. § 1983 based on its conclusion that the “gravamen” of the claims was “inherently in rem,” without any determination that any, much less all, of the requested relief would require the district court to possess or control any property in the custody of the state court. Further, in holding that the doctrine barred Petitioners’ section 1983 claims, the Ninth Circuit grafted the exception for “bad faith” applicable to cases of abstention under Younger v. Harris, 401 U.S. 37 (1971), onto the prior exclusive jurisdiction doctrine. In so doing, the court applied a standard for evaluating that exception’s applicability that conflicts with the standard applied by multiple circuits. The questions presented are: 1. Does the prior exclusive jurisdiction doctrine