                               In the
 United States Court of Appeals
                  For the Seventh Circuit
                          ____________

No. 02-1278
CIGNA HEALTHCARE OF ST. LOUIS, INC., et al.,
                                                Plaintiffs-Appellants,
                                  v.

TIMOTHY N. KAISER, et al.,
                                               Defendants-Appellees.
                          ____________
             Appeal from the United States District Court
        for the Northern District of Illinois, Eastern Division.
                No. 01 C 5130—Ruben Castillo, Judge.
                          ____________
        ARGUED MAY 17, 2002—DECIDED JUNE 21, 2002
                          ____________


  Before BAUER, POSNER, and KANNE, Circuit Judges.
  POSNER, Circuit Judge. This appeal from the dismissal of
a suit seeking an order to arbitrate requires us to consider
the intersection of class actions, arbitration, and Colorado
River (parallel-proceeding) abstention. Underlying the ap-
peal is a dispute between a group of affiliated corporations
(CIGNA for short) and 288,000 (!) physicians, hospitals, and
other providers of health care with which CIGNA, an ad-
ministrator of employee health-benefits plans, has con-
tracts for the provision of health care to the participants in
the plans. Under these “managed care” contracts, as they are
known. CIGNA reimburses its contract partners for the
2                                                No. 02-1278

health-care services that they provide in fulfillment of its
obligations to participants in the plans that it administers.
The providers claim that after making these contracts
CIGNA installed a computer program for calculating the
amount it owed them that has resulted in systematic under-
payment, in breach of their contracts.
  In May 2000 the providers filed a class action in an Illi-
nois state court against CIGNA which CIGNA wanted to
but could not remove to federal court because one of the
named plaintiffs was a citizen of Texas, as is one of the
CIGNA affiliates named as defendants. However, many
of the managed-care contracts contain an arbitration clause,
and in July 2001, just days after the end of the period for
providers to opt out if they wanted from the state court
suit, CIGNA filed suit in federal district court against the
named plaintiffs in the state court suit minus the Texas
physician and the rest of the class. It based jurisdiction on
diversity of citizenship and sought an order under section
4 of the Federal Arbitration Act (Title 9 of the U.S. Code) to
compel arbitration of all disputes arising under managed-
care contracts with members of the class that contain an
arbitration clause. These are not all the disputes between
CIGNA and the class. A number of the managed-care con-
tracts (we don’t know how many) do not contain an ar-
bitration clause. But some or all of the providers that had
such contracts may have received from CIGNA a docu-
ment called “Program Requirements” that, CIGNA argues,
grafted an arbitration clause onto the contract. Because
the arbitrability of the disputes under these contracts
would have to be determined on a contract-by-contract
basis, CIGNA argues that the arbitrability of those disputes
cannot be decided in a class action and so must be resolved
by the state court. CIGNA’s position is inconsistent, since
the suit in the state court, the suit in which it concedes
that the issue of the arbitrability of these other disputes
No. 02-1278                                                    3

must be resolved, is itself a class action. However that may
be, a few days after filing its federal class action suit CIGNA
moved the state court to order arbitration of the arbitrable
disputes not encompassed by the federal suit.
   In January 2002 the district judge dismissed the suit on
the basis of the abstention doctrine created by Colorado Riv-
er Water Conservation District v. United States, 424 U.S. 800,
818-20 (1976), precipitating this appeal. By this time, because
the state court judge had refused to stay the proceedings
before him pending the resolution of CIGNA’s federal suit,
CIGNA had produced hundreds of thousands of managed-
care contracts in response to the providers’ discovery re-
quests and these contracts were being held in a document
depository in Belleville, Illinois, the site of the state court.
CIGNA was particularly disturbed by the state judge’s re-
fusal to stay discovery of the merits of the contract disputes;
it argues that discovery with respect to any dispute that
is arbitrable is the business of the arbitrators. But at least
the state judge did say that he had not by denying the stay
intended to prejudge the issue of arbitrability.
  The providers’ position on that issue is unclear, but clearly
they are not yet prepared to concede that all their contrac-
tual disputes, or even all that arise out of managed-care con-
tracts that contain an arbitration clause, are arbitrable. The
issue of arbitrability is at present before the state judge with
briefs due this month.
  A federal court is authorized to stay proceedings in a law-
suit before it because parallel proceedings are pending in
another court, either federal or state. Moses H. Cone Memorial
Hospital v. Mercury Construction Corp., 460 U.S. 1, 19 (1983);
Will v. Calvert Fire Ins. Co., 437 U.S. 655, 662-63 (1978) (plu-
rality opinion); Finova Capital Corp. v. Ryan Helicopters
U.S.A., Inc., 180 F.3d 896, 898 (7th Cir. 1999); Burns v. Watler,
931 F.2d 140, 145 (1st Cir. 1991). It should not dismiss the
4                                                 No. 02-1278

proceedings before it, however. See Selmon v. Portsmouth
Drive Condominium Ass’n, 89 F.3d 406, 409-10 (7th Cir. 1996),
and cases cited there. That would be illogical; the fact that
a parallel case, especially one brought by the opposing par-
ty, is pending says nothing about the merits or propriety
of the suit in the abstaining court. Logic aside, a stay “per-
mits the federal court to retain jurisdiction in case the state
court action does not meet its anticipated end. A stay has
the additional advantage of bringing the case back before
the same federal judge if a determination is needed as to the
preclusive effects of the state judgment or decisions.” Lumen
Construction, Inc. v. Brant Construction Co., 780 F.2d 691,
698 (7th Cir. 1985). In light of these considerations, the pro-
viders’ counsel was right to concede at the argument of the
appeal that the district judge’s order should be reformed
from a dismissal to a stay. Id.; LaDuke v. Burlington North-
ern R.R., 879 F.2d 1556, 1562 (7th Cir. 1989); Attwood v.
Mendocino Coast District Hospital, 886 F.2d 241, 245-46 (9th
Cir. 1989); see also Tice v. American Airlines, Inc., 288 F.3d
313, 318 (7th Cir. 2002). We note parenthetically that had the
district judge stayed the suit rather than dismissing it, we
would still have had appellate jurisdiction because “a stay
of the federal suit pending resolution of the state suit
[would mean] that there would be no further litigation in
the federal forum; the state court’s judgment on the issue
would be res judicata.” Moses H. Cone Memorial Hospital v.
Mercury Construction Corp., supra, 460 U.S. at 10; see also In
re Kozeny, 236 F.3d 615, 618 (10th Cir. 2000) (per curiam);
Schall v. Joyce, 885 F.2d 101, 104-05 (3d Cir. 1989); General
Reinsurance Corp. v. Ciba-Geigy Corp., 853 F.2d 78, 80-81 (2d
Cir. 1988).
  Abstention in favor of a parallel proceeding in another
court is disfavored, because it deprives the plaintiff of his
choice of forum in the likely event that, as just noted, the
effect of abstention is to make the decision in the parallel
No. 02-1278                                                    5

proceeding res judicata in the proceeding that has been
stayed. See also Evans Transportation Co. v. Scullin Steel Co.,
693 F.2d 715, 718 (7th Cir. 1982). But there is no hard and
fast rule as to when parallel-proceeding abstention is prop-
er, Moses H. Cone Memorial Hospital v. Mercury Construction
Corp., supra, 460 U.S. at 15, and the close relation between
the decision to abstain and normal docket control (a district
judge is routinely required to decide how fast to move
particular cases along) makes it appropriate to give at least
some weight to the judge’s decision to abstain. Id. at 19; Will
v. Calvert Fire Ins. Co., supra, 437 U.S. at 665; Sverdrup Corp.
v. Edwardsville Community Unit School District No. 7, 125 F.3d
546, 550 (7th Cir. 1997); Burnett v. Physician’s Online, Inc., 99
F.3d 72, 76 (2d Cir. 1996).
  CIGNA points out that no federal appellate court has ever
upheld a decision to abstain in a suit seeking an order to
compel arbitration. The reason may just be, however, that
such decisions are rare. In re Mercury Construction Corp., 656
F.2d 933, 941 (4th Cir. 1981) (en banc), aff’d under the name
Moses H. Cone Memorial Hospital v. Mercury Construction
Corp., supra; Ferrari North America, Inc. v. Crown Auto Deal-
erships, No. 90-8541 (KMW), 1995 WL 614558, *4 (S.D.N.Y.
Oct. 19, 1995). Apart from a handful that have been re-
versed, we have found only five: Green Tree Financial Corp.
v. Holt, 171 F.R.D. 313, 319 (N.D. Ala. 1997); PepsiCo Inc.
v. Oficina Central de Asesoria y Ayuda Tecnica, C.A., 945 F.
Supp. 69, 70, 71 (S.D.N.Y. 1996); Lexington Ins. Co. v. Reliance
Ins. Co., Civ. A. No. 94-3642, 1995 WL 363744, at *1 (E.D. La.
June 16, 1995); Gerling-Konzern Globale Rueckversicherungs-
AG v. Selcke, No. 93 C 4429, 1993 WL 443404, at *3 (N.D. Ill.
Oct. 29, 1993); E.C. Ernst, Inc. v. Potlatch Corp., 462 F. Supp.
694, 700-01 (S.D.N.Y. 1978). It is not as if any appellate court
had held that abstention is never appropriate in a suit to
compel arbitration. None has. CIGNA cites We Care Hair
Development, Inc. v. Engen, 180 F.3d 838 (7th Cir. 1999), a case
6                                                  No. 02-1278

much like this, it is true—except that there was no issue of
abstention. The only issue was whether the federal court
had jurisdiction to compel arbitration notwithstanding
the parallel proceeding in the state court. We held that it
did, but this holding obviously would not have precluded
abstention, which presupposes jurisdiction, had abstention
been sought. In Bio-Analytical Services, Inc. v. Edgewater Hos-
pital, Inc., 565 F.2d 450, 454 and n. 5 (7th Cir. 1977), we ex-
plicitly left open the issue presented by this appeal.
  CIGNA’s principal argument for abstention, as distinct
from its futile invocation of inapposite authority, is that the
providers’ state court suit was an effort to derail its contrac-
tual right to arbitration. It points out that “federal courts
will not ‘permit a party to a contract to circumvent an arbi-
tration clause by commencing litigation in a state court.’ ” In
re Mercury Construction Corp., supra, 656 F.2d at 941. But
what exactly is “circumvention” in this context? The right to
arbitrate arguably conferred by the parties’ contract may be
contested. The providers had a perfect right to sue for
breach of contract. The arbitration clause is a defense to the
further prosecution of the suit in court that CIGNA was
entitled to raise in the state court proceeding and has raised
there. And who is derailing whom? By leaving out the non-
diverse named plaintiff in its suit to compel arbitration,
CIGNA attempted to deprive the state court of its opportu-
nity to order arbitration of those disputes with the providers
that arise out of contracts containing explicit arbitration
clauses.
  The arbitration clauses do more than provide a potential
defense, however. Because CIGNA can satisfy the require-
ments for diversity jurisdiction with respect to a suit against
the named plaintiffs (minus the Texan) and the rest of the
class, it was entitled to bring this suit for an order under 9
U.S.C. § 4 to compel arbitration. (And if CIGNA was play-
ing games in not naming the Texan, the class lawyers in the
No. 02-1278                                                   7

state suit may have been playing games in naming him,
in order to prevent removal to federal court.) If, however,
CIGNA is seeking relief equally available from the state
court, the district court had compelling reasons of judi-
cial economy to abstain, because the procedure favored by
CIGNA involves an awkward split of the issue of ar-
bitrability between contracts that contain an arbitration
clause and contracts claimed to incorporate such a clause
by reference in another document, and also because while
the issue of arbitrability is about to be briefed in the state
court there has been no movement in CIGNA’s federal suit.
There hasn’t even been a determination that the suit can be
maintained as a class action—and suits against defendant
classes, though authorized, Fed. R. Civ. P. 23(a) (a class may
“sue or be sued”); Kaucky v. Southwest Airlines Co., 109 F.3d
349, 350 (7th Cir. 1997); Consolidated Rail Corp. v. Town of
Hyde Park, 47 F.3d 473, 483 (2d Cir. 1995); 7A Charles Alan
Wright et al., Federal Practice and Procedure § 1770, p. 395 (2d
ed. 1986), are rare birds. We have called them “exceptional,”
Channell v. Citicorp National Services, Inc., 89 F.3d 379,
387 (7th Cir. 1996), and Professor Coffee has with harmless
exaggeration called them “as rare as unicorns.” John C.
Coffee, Jr., “Class Action Accountability: Reconciling Exit,
Voice, and Loyalty in Representative Litigation, 100 Colum.
L. Rev. 370, 388 (2000); see also Thomas E. Willging et al.,
“An Empirical Analysis of Rule 23 to Address the Rule-
making Challenges,” 71 N.Y.U.L. Rev. 74, 119-20 (1996). So
a lively passage of arms can be anticipated in the district
court (should we reverse) over whether treating CIGNA’s
suit as a class action would be appropriate.
  The arbitration clause incorporated by reference (if it is
incorporated by reference and thus made applicable to
disputes arising under the contracts that do not contain an
arbitration clause) may, for all we know, be identical to the
clause contained in the contracts, and that would mean that
8                                                 No. 02-1278

two judges, one state and one federal, would be addressing
the identical issue. And given the state court’s head start,
the state proceeding would probably wind up before the
federal and preclusion would attach, and then CIGNA
would have gained nothing but delay from its maneuvers.
Delay may be what it wants; sufficient unto the day is the
evil thereof.
   For all these reasons, we do not think the case governed
by the refusal of the Supreme Court in Dean Witter Reynolds
Inc. v. Byrd, 470 U.S. 213, 221 (1985), to be “persuaded by the
argument that the conflict between two goals of the [Fed-
eral] Arbitration Act—enforcement of private agreements
and encouragement of efficient and speedy dispute res-
olution—must be resolved in favor of the latter in order to
realize the intent of the drafters.” The Court explained that
“the preeminent concern of Congress in passing the Act was
to enforce private agreements into which parties had en-
tered, and that concern requires that we rigorously enforce
agreements to arbitrate, even if the result is ‘piecemeal’
litigation, at least absent a countervailing policy manifested
in another federal statute. By compelling arbitration of state-
law claims, a district court successfully protects the contrac-
tual rights of the parties and their rights under the Arbitra-
tion Act.” To the same effect see Moses H. Cone Memorial
Hospital v. Mercury Construction Corp., supra, 460 U.S. at 20.
The issue in Dean Witter was whether arbitration of pendent
state-law claims should be deferred to allow the district
court to decide the main, federal claim, assumed to be
nonarbitrable; it was not whether a state or a federal court
should decide whether the pendent claims were arbitrable.
The choice is not, not yet anyway, between judicial and
arbitral resolution of the parties’ dispute.
  Granted, there is more to the Federal Arbitration Act than
the creation of a remedy in federal district courts for breach
No. 02-1278                                                    9

of a contractual undertaking to arbitrate a dispute. With
regard to contracts in interstate commerce, which CIGNA’s
managed-care contracts are acknowledged to be, the Act
makes arbitration clauses “valid, irrevocable, and enforce-
able, save upon such grounds as exist at law or in equity for
the revocation of any contract.” 9 U.S.C. § 2. This provision
forbids a state to discriminate against arbitration clauses;
it must give them the same respect it gives ordinary con-
tracts. Doctor’s Associates, Inc. v. Casarotto, 517 U.S. 681, 687
(1996); Koveleskie v. SBC Capital Markets, Inc., 167 F.3d 361,
367 (7th Cir. 1999); S+L+H S.p.A. v. Miller-St. Nazianz, Inc.,
988 F.2d 1518, 1526-27 (7th Cir. 1993); Circuit City Stores, Inc.
v. Adams, 279 F.3d 889, 892 (9th Cir. 2002); PaineWebber Inc.
v. Elahi, 87 F.3d 589, 593 (1st Cir. 1996); W.M. Schlosser Co. v.
School Bd. of Fairfax County, 980 F.2d 253, 258-59 (4th Cir.
1993). It goes even further: it requires both federal and state
courts to apply a federal common law of arbitrability to the
arbitration of disputes arising under contracts in commerce,
a common law applicable equally in federal and state courts,
Allied-Bruce Terminix Companies, Inc. v. Dobson, 513 U.S.
265, 272 (1995); Southland Corp. v. Keating, 465 U.S. 1, 14-15
(1984); Circuit City Stores, Inc. v. Adams, supra, 279 F.3d at
892—as the Illinois courts, which have, incidentally, said
they favor arbitration as a method of dispute resolution,
e.g., Board of Managers of Courtyards at Woodlands Condomin-
ium Ass’n v. IKO Chicago, Inc., 697 N.E.2d 727, 730 (Ill. 1998);
United Cable Television Corp. v. Northwest Illinois Cable
Corp., 538 N.E.2d 547, 549 (Ill. 1989), acknowledge. Caligiuri
v. First Colony Life Ins. Co., 742 N.E.2d 750, 755 (Ill. App.
2000); Caudle v. Sears, Roebuck & Co., 614 N.E.2d 1312, 1316-
17 (Ill. App. 1993); Konewko v. Kidder, Peabody & Co., 528
N.E.2d 1, 3 (Ill. App. 1988).
  CIGNA has one good point: the state judge’s refusal to
stay discovery on the merits of the providers’ breach of
10                                                No. 02-1278

contract claims until the issue of arbitrability is resolved
puts the cart before the horse. If a dispute is arbitrable, re-
sponsibility for the conduct of discovery lies with the ar-
bitrators—indeed, for the sake of economy and in contrast
to the practice in adjudication, parties to an arbitration do
not conduct discovery; the arbitrators do. 9 U.S.C. § 7;
Amgen, Inc. v. Kidney Center of Delaware County, Ltd., 95 F.3d
562, 563 (7th Cir. 1996); National Broadcasting Co. v. Bear
Stearns & Co., 165 F.3d 184, 190-91 (2d Cir. 1999); Burton v.
Bush, 614 F.2d 389, 390 (4th Cir. 1980); cf. Olympia & York
Florida Equity Corp. v. Gould, 776 F.2d 42, 43 (2d Cir. 1985)
(per curiam); Yeargin Construction Co. v. Parsons & Whitte-
more Alabama Machinery & Services Corp., 609 F.2d 829,
831 (5th Cir. 1980) (per curiam). That is water over the dam,
however. As far as we can tell, discovery relating to the
state court judge’s resolution of the issue of arbitrability is
complete, so that the only question for us today is whether
he will conscientiously and sensibly apply the proper legal
standard to the issue of arbitrability. We are not certain that
he will; his actions in certifying a class even though many of
its members including one of the named plaintiffs were
basing their claims on contracts containing arbitration
clauses, in allowing discovery on the merits to proceed be-
fore ruling on arbitrability, and in delaying as long he has
ruling on that question (CIGNA moved the state judge for
an order to arbitrate in July 2001, almost a year ago), do
make us wonder whether federal arbitration rights may not
be a second-order concern for him. But our doubts don’t rise
to the level at which we could deem the district judge’s ac-
tion in abstaining an abuse of discretion. Although CIGNA
is not an Illinois company, neither are most of the members
of the class, which is nationwide, so bias in favor of state
residents should not be operative. We rather doubt that the
state judge is eager to adjudicate disputes among almost
No. 02-1278                                                   11

300,000 parties if the laborious task of dispute resolution
can be shifted to the backs of arbitrators.
   This is all speculation; it is enough that we emphasize—
and we do emphasize—that if down the road the state
court judge proves unwilling or unable to enforce CIGNA’s
valid rights if any to arbitration and CIGNA cannot get
prompt relief from the state appellate courts, it can ask
the district judge to lift the stay; and under the posited
conditions, which were not the conditions when he ruled,
CIGNA would receive a sympathetic hearing. But for now
we think it best (more precisely, we think the district judge
did not abuse his discretion in thinking it best) to allow the
federal suit to be stayed at least until the state judge rules on
CIGNA’s motion to compel arbitration—provided that rul-
ing is not too long delayed. Nor would that ruling necessar-
ily preclude further proceedings in the district court, for
in the “event that the state court action proves inadequate
to protect the parties’ federal rights, ordinary principles of
res judicata and collateral estoppel would not prevent them
from bringing their claims back before a federal court. ‘Re-
determination of issues is warranted if there is reason to
doubt the quality, extensiveness, or fairness of procedures
followed in prior litigation.’ ” Lumen Construction, Inc. v.
Brant Construction Co., supra, 780 F.2d at 697 (citation omit-
ted), quoting Montana v. United States, 440 U.S. 147, 164 n. 11
(1979). It is true that the preclusive effect of a state court
judgment in a federal case is a matter of state rather than
of federal law, Marrese v. American Academy of Orthopaedic
Surgeons, 470 U.S. 373, 380-81 (1985), as may not have been
clear when Lumen was decided; but, consistent with Lumen
and with Montana v. United States, Illinois law denies col-
lateral estoppel effect to a finding not made on the basis
of a fair and adequate hearing. E.g., Fried v. Polk Bros., Inc.,
546 N.E.2d 1160, 1164 (Ill. App. 1989); Coronet Ins. Co. v.
Booker, 511 N.E.2d 793, 796-97 (Ill. App. 1987).
12                                              No. 02-1278

  The judgment is modified to convert dismissal of the suit
into a stay of the suit and so modified is
                                                 AFFIRMED.

A true Copy:
       Teste:

                          _____________________________
                          Clerk of the United States Court of
                            Appeals for the Seventh Circuit




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