214 F.3d 865 (7th Cir. 2000)
Mark A. Ramsden, Raelynn Ramsden,  and Milton R. Ramsden, individually  and d/b/a Ramsden Dairy,    Plaintiffs-Appellants,v.AgriBank, FCB,    Defendant-Appellee.
No. 99-3617
In the  United States Court of Appeals  For the Seventh Circuit
Argued February 23, 2000
Decided June 2, 2000
Rehearing Denied June 30, 2000

Appeal from the United States District Court  for the Western District of Wisconsin.  No. 98 C 221--Barbara B. Crabb, Judge. [Copyrighted Material Omitted]
Before Flaum, Kanne, and Diane P. Wood, Circuit  Judges.
Flaum, Circuit Judge.


1
The appellants--Mark A.  Ramsden, Raelynn Ramsden, and Milton R. Ramsden,  individually and d/b/a Ramsden Dairy  (collectively "the Ramsdens")--challenge a  decision by the district court to enjoin a state  court proceeding which the appellee, AgriBank,  alleged was threatening its prior, favorable  federal court judgment. For the reasons stated  herein, we hold that the district court abused  its discretion in enjoining the state court  proceedings, and we therefore reverse.    Background


2
The Ramsdens originally brought an action in  the Circuit Court for Portage County, Wisconsin,  against Credit Services of North Central  Wisconsin ACA, AgriBank, and Thomas E. Hass,  AgriBank's employee, alleging tortious conduct in  the sale of certain agricultural property. The  state court dismissed the action against Hass,  whereupon the Ramsdens dismissed the complaint  without prejudice against the remaining  defendants and appealed Hass's dismissal to the  state court of appeals.


3
While the appeal was pending, the Ramsdens  filed a second action against AgriBank in the  Circuit Court for St. Croix County, Wisconsin,  alleging misrepresentation and other tortious  acts in the sale of the property. AgriBank  removed the case to the United States District  Court for the Western District of Wisconsin.


4
In federal court, the Ramsdens amended their  complaint, alleging that they and their cattle  were poisoned by benzene contamination in the  water on the farm that AgriBank had sold them.  Following extensive discovery, AgriBank moved for  summary judgment, arguing that the Ramsdens  lacked evidence sufficient to show that any  benzene contamination caused the alleged health  injuries. The court, applying Daubert v. Merrell  Dow Pharmaceuticals, 509 U.S. 579 (1993), to the  Ramsdens' proposed expert testimony, concluded  that the testimony lacked scientific reliability  and validity and was therefore inadmissible.  Accordingly, the court granted defendant  AgriBank's motion for summary judgment. The  Ramsdens appealed the judgment to this Court, but  they dismissed the appeal voluntarily in exchange  for a waiver by AgriBank of recovery of its  costs.


5
While the Ramsdens' appeal was pending, however,  the Wisconsin Court of Appeals reversed the trial  court's dismissal of Hass from the state court  action and remanded the case to the trial court,  where it was pursued by the Ramsdens. According  to AgriBank, all of the Ramsden's allegations  against Hass in that state court suit concern  actions taken by Hass in the scope of his  employment with AgriBank, and all of the  allegations were the subject of the federal court  suit against AgriBank. In March 1999, Hass moved  for summary judgment in the state court, arguing  claim and issue preclusion based on the summary  judgment granted to AgriBank in federal district  court. The state court denied the motion, finding  that, although the elements were present for  claim preclusion, considerations of equity and  fairness barred application of claim preclusion  to the state court action. The court found that  under Wisconsin evidentiary law, which is less  stringent than the federal Daubert requirements,  the Ramsdens' expert would have been allowed to  testify. Because of the significant differences  in evidentiary rules, because defendant AgriBank  had removed the case to federal court, and  because the court could not find that the  Ramsdens were engaged in vexatious litigation,  the state court concluded that it would be unfair  to bar the Ramsdens' claim. The state court  reached similar conclusions with respect to issue  preclusion.


6
At that point, counsel for AgriBank (the same  counsel that represented Hass in the state  action) went back to federal court to seek an  injunction against the state court permanently  enjoining it from further addressing any issues  between the Ramsdens and Hass or AgriBank arising  from the purchase of the farm property. AgriBank  also sought an injunction against the Ramsdens to  prohibit them from bringing any further actions  against AgriBank or its employees arising from  the purchase. The district court granted the  injunctions, and the Ramsdens now appeal.    Discussion


7
The Anti-Injunction Act generally prohibits  federal courts from enjoining state court  proceedings. 28 U.S.C. sec. 2283. The Act is  designed to prevent friction between state and  federal courts and to protect state court  proceedings from federal interference. See  Amalgamated Clothing Workers of America v.  Richman Bros., 348 U.S. 511, 514-16 (1955); see  also Vendo Co. v. Lektro-Vend Corp., 433 U.S.  623, 630 (1977) (plurality opinion) ("The Act's  purpose is to forestall the inevitable friction  between the state and federal courts that ensues  from the injunction of state judicial proceedings  by a federal court.").


8
By its own terms, the Anti-Injunction Act's  prohibition is sweeping and provides for only  three types of exceptions: "A court of the United  States may not grant an injunction to stay  proceedings in a State court except as expressly  authorized by Act of Congress, or where necessary  in aid of its jurisdiction, or to protect or  effectuate its judgments." 28 U.S.C. sec. 2283.  These exceptions are narrow ones. See Chick Kam  Choo v. Exxon Corp., 486 U.S. 140, 146 (1988);  Atlantic Coast Line R.R. Co. v. Brotherhood of  Locomotive Engineers, 398 U.S. 281, 287 (1970).


9
This case involves the third exception--the  "relitigation exception"--which allows a party  with a favorable federal judgment to protect that  judgment by enjoining repetitive state court  proceedings instead of relying on a claim or  issue preclusion defense. See Samuel C. Ennis &  Co. v. Woodmar Realty Co., 542 F.2d 45, 49 (7th  Cir. 1976); 17 Moore's Federal Practice,  121.08[1]. "[A]llowing an unsuccessful litigant  to harass other participants in the federal case  [through relitigation in state court] flouts and  may be said to 'seriously impair the federal  court's . . . authority to decide that case.'"  Samuel C. Ennis & Co., 542 F.2d at 50 (quoting  Atlantic Coast Line R.R. Co., 398 U.S. at 295).  Therefore, under certain circumstances a federal  court may enjoin state proceedings that attempt  to readjudicate previously-decided matters.  Rutledge v. Scott Chotin, Inc., 972 F.2d 820, 825  (7th Cir. 1992).


10
In this case, the district court concluded that  the Act permitted the issuance of an injunction  if AgriBank could prove that it had established  all the elements of claim or issue preclusion.  See Harper Plastics, Inc. v. Amoco Chemicals  Corp., 657 F.2d 939, 946-47 (7th Cir. 1981)  (holding that the relitigation exception to the  Anti-Injunction Act permits federal courts to  enjoin state court relitigation of matters  finally adjudicated in federal court). After  finding that the elements of claim preclusion  were satisfied, the court enjoined the Ramsden's  state court proceedings against Hass.


11
Because the relitigation exception bears on the  delicate relationship between state and federal  courts, strict timing requirements cabin its  invocation. In Parsons Steel, Inc. v. First  Alabama Bank, 474 U.S. 518, 524-25 (1986), the  Supreme Court held that once a litigant raises a  claim preclusion defense and the state court rules on it, that state court determination binds  the federal courts. It reached this conclusion  after noting that the Full Faith and Credit Act,  28 U.S.C. sec. 1738, under which a federal court  must give the same preclusive effect to a state  court judgment that another court of that state  would give, embodies Congress' legislative  commitment to federalism and comity in the area  of judgment recognition. 474 U.S. at 535; see  also Kremer v. Chemical Construction Corp., 456  U.S. 461, 481-82 (1982) ("It has long been  established that sec. 1738 does not allow federal  courts to employ their own rules of res judicata  in determining the effect of state judgments.  Rather, it goes beyond the common law and  commands a federal court to accept the rules  chosen by the State from which the judgment is  taken."). The Parsons Steel Court went on to hold  that "the Anti-Injunction Act and the Full Faith  and Credit Act can be construed consistently,  simply by limiting the relitigation exception of  the Anti-Injunction Act to those situations in  which the state court has not yet ruled on the  merits of the res judicata issue." 474 U.S. at  524. It further explained that "the Full Faith  and Credit Act requires that federal courts give  the state-court judgment, and particularly the  state court's resolution of the res judicata  issue, the same preclusive effect it would have  had in another court of the same State." Id. at  525. In other words, a federal court considering  enjoining a state court proceeding, where the  state court has ruled on the res judicata issue,  must first, as a threshold matter, look to that  state's law of judgments to determine whether  another court of that state would view the res  judicata ruling as final and binding. If so, then  the federal court is bound by that ruling as  well.


12
In this case, we agree with the district court  that under Wisconsin law the state court's denial  of summary judgment on the res judicata issue  would not be regarded as sufficiently "final" to  warrant preclusive effect in another Wisconsin  court, and it would therefore not warrant the  full preclusive effect in federal court demanded  by the Full Faith and Credit Act. See Wis. Stat.  sec. 808.03(1) ("A final judgment or final order  is a judgment, order or disposition that disposes  the entire matter in litigation as to one or more  of the parties . . . ."); Heaton v. Larsen, 294  N.W.2d 15, 24 (Wis. 1980). Accordingly, the  district court was not statutorily barred by the  Full Faith and Credit Act--as it intersects with  the Anti-Injunction Act--from calling into  question the state court's resolution of the res  judicata issue.


13
But just because a federal court has the  statutory power to enjoin a state court  proceeding does not mean that it should exercise  that authority. In other words, that the state  court has not reached final judgment on a  previously litigated claim is an essential but  not necessarily sufficient condition of federal  court intervention pursuant to the relitigation  exception of the Anti-Injunction Act.


14
When a federal court is asked to enjoin state  court proceedings, the mere fact that the case  falls within one of sec. 2283's exceptions does  not "qualify in any way the principles of equity,  comity, and federalism that must restrain a  federal court when asked to enjoin a state court  proceeding." Mitchum v. Foster, 407 U.S. 225, 243  (1972). A litigant must still show equitable  entitlement to an injunction. See Kerr-McGee  Chemical Corp. v. Hartigan, 816 F.2d 1177, 1182  (7th Cir. 1987). Moreover, the Supreme Court has  instructed that "[a]ny doubts as to the propriety  of a federal injunction against state court  proceedings should be resolved in favor of  permitting the state courts to proceed in an  orderly fashion to finally determine the  controversy. The explicit wording of sec. 2283  itself implies as much, and the fundamental  principle of a dual system of courts leads  inevitably to that conclusion." Atlantic Coast  Line R.R. Co., 398 U.S. at 297. Assuming that the  threshold test of finality mandated by Parsons  Steel is satisfied, how far do these principles  extend in limiting federal courts' power to  intervene once a state court has already  adjudicated the merits of the preclusion issue?


15
Different jurisdictions have adopted competing  approaches for cases in which the state court has  not yet reached final judgment, but in which the  state court has ruled on the res judicata  defense. On remand from the Supreme Court and  flowing back up from the district court, the  Eleventh Circuit considered in the Parsons Steel  case whether the Alabama state court's denial of  a motion for summary judgment on res judicata  grounds bound the federal court considering an  injunction. First Alabama Bank of Montgomery v.  Parsons Steel, Inc., 825 F.2d 1475 (11th Cir.  1987). The Eleventh Circuit held that, under  Alabama law, the denial of summary judgment was  not a final adjudication of the preclusion issue,  and it went on to hold, therefore, that the  district court was not precluded from enjoining  the state court proceedings. Id. at 1480-86; see  also Battle v. Liberty Nat'l Life Ins. Co., 877  F.2d 877, 882 (11th Cir. 1989) ("Because [a  denial of a motion for summary judgment] is not  a final order, it would not be given preclusive  effect in state court and need not be accorded  that deference in federal court.").


16
In Amalgamated Sugar Co. v. NL Industries,  Inc., 825 F.2d 634 (2d Cir. 1987), the Second  Circuit held that a district court properly  enjoined state court relitigation of a claim by  shareholders where a federal court previously  entered a judgment in favor of a corporation. In  that case, the state court had not yet ruled on  the merits of the res judicata defense raised by  the corporation, but indicated that it would  consider those merits only in the context of a  full trial on the underlying claim. The Second  Circuit held that the district court could  properly enjoin the state court proceedings  because the state court had not entered a prior  final judgment on the merits, but had merely  denied the corporation's summary judgment motion  without prejudice. Id. at 642. Under those  circumstances, the Second Circuit did not need to  confront the scenario before us, where the state  court had not reached final judgment but had  clearly adjudicated and expressly rejected the  merits of the res judicata defense. The Second  Circuit did, however, go on to note in dicta that  "[the corporation] acted properly in moving for  summary judgment on res judicata grounds in the  New Jersey court prior to seeking injunctive  relief in the district court, thereby attempting  to avoid invoking the more intrusive remedy of  injunctive relief." Id.


17
In Kaempfer v. Brown, 684 F.Supp. 319 (D.D.C.  1988), the District of Columbia District Court  enjoined the defendants from pursuing a claim in  District of Columbia courts where a federal  district court's earlier judgment involved  identical tort claims. At that time, the District  of Columbia Superior Court had summarily denied  the injunctive plaintiff's motion to dismiss on  res judicata and other grounds, but the district  court "[could not] say with the slightest degree  of confidence that the Superior Court [had]  decided the issue of res judicata." Id. at 323.  The district court interpreted Parsons Steel as  holding that the Full Faith and Credit Act bars  a federal court from enjoining a state action in  order to protect a prior federal judgment once a  state court has expressly rejected a preclusion  defense. Id.


18
We believe that a rule that restricts a federal  court's discretion to enjoin state court  proceedings once the state court expressly and  unambiguously decides a res judicata defense,  whether or not there has been a final judgment on  the entire claim in state court, best reconciles  the conflicting concerns identified in Parsons  Steel. Any federal injunction to bar purported  relitigation balances efficiency advantages of  finality against respect for state courts and  their decisions. Once a state court considers a  res judicata defense and rules that a prior  federal judgment does not actually bar a claim,  the affront of federal court intervention  stripping the state court of power to continue is  greatly magnified. After such a ruling, the  interests in preventing possible relitigation are  therefore generally outweighed by the heightened  comity concerns except in the most extraordinary  circumstances.1


19
The standards governing abstention under the  Younger doctrine are instructive in this regard,  as those standards have evolved in light of  heightened comity concerns surrounding federal  injunctions of state criminal proceedings and  other state proceedings involving important state  interests. In Younger v. Harris, 401 U.S. 37  (1971), a plaintiff sought a federal injunction  against a state criminal prosecution on the  grounds that the prosecution violated federal  constitutional rights. The district court ordered  injunctive relief and the Supreme Court reversed,  concluding that the injunction was "a violation  of the national policy forbidding federal courts  to stay or enjoin pending state court proceedings  except under special circumstances." Id. at 41.  "[The] underlying reason," the Court explained,  "for restraining courts of equity from  interfering with criminal prosecutions is  reinforced by an even more vital consideration,  the notion of 'comity,' that is, a proper respect  for state functions . . . ." Id. at 44; see also  Trust & Investment Advisers, Inc. v. Hogsett, 43  F.3d 290, 294-95 (7th Cir. 1994) (explaining that  the Younger doctrine "has since been expanded  beyond criminal prosecutions to various civil  proceedings in state court implicating important  state interests"). To accommodate this interest,  the Court held that a litigant in the Younger  context must make a "showing of bad faith,  harassment, or . . . other unusual circumstance  that would call for equitable relief." Id. at  54.2


20
In this case, the district court gave  inadequate weight to these heightened comity  concerns. Unhappy with the state court's handling  of the res judicata defense, AgriBank went to  federal court for another look at the issue.  Having determined that res judicata should have  barred the state court suit, the district court  found no comity considerations that weighed  against AgriBank's costs and inconvenience of  continued state court proceedings. Instead, the  district court concluded that the balance of  harms and the public's interest in finality  weighed in AgriBank's favor after noting only  that "[t]he obvious prospect of relitigation  suffices to show that defendant will suffer  irreparable harm if an injunction does not issue  to stop the state court proceeding." The court  therefore enjoined further proceedings in state  court on the matter, and we regard this as an  abuse of discretion. Just as the Younger Court  rejected the plaintiff's plea for injunctive  relief because the injury he faced was "solely  'that incidental to every criminal proceeding  brought lawfully and in good faith,'"  401 U.S.  at 49 (citations omitted), here AgriBank sought  injunctive relief in the face of further  litigation expenses which, though costly, are  incidental to defense of every lawsuit. While the  expenses and uncertainty of litigation may  sometimes be sufficient to warrant an injunction  pursuant to sec. 2283 prior to a clear and  express state court ruling on the preclusion  defense, see, e.g., Harper Plastics, Inc. v.  Amoco Chemicals Corp., 657 F.2d 939 (7th Cir.  1981), they are insufficient when weighed against  the added, countervailing comity interests that  arise after that point.


21
Under this approach, AgriBank was not stripped  of a remedy if it believed that the state court  wrongly decided the res judicata issue. If  AgriBank had demonstrated extraordinary  circumstances it might have been entitled to a  federal injunction. As it stands, though,  AgriBank would still have an opportunity to  appeal the state trial court's decision up  through the state appeals process.3 As the  Supreme Court went on to explain in Parsons  Steel:    Even if the state court mistakenly rejected  respondents' claim of res judicata, this does not  justify the highly intrusive remedy of a federal  court injunction against the enforcement of the  state-court judgment. . . . Challenges to the  correctness of a state court's determination as  to the conclusive effect of a federal judgment  must be pursued by way of appeal through the  state-court system and certiorari from this  Court.    474 U.S. at 525; see also Amalgamated Clothing  Workers v. Richman Bros., 348 U.S. 511, 518  (1955) ("The prohibition of sec. 2283 is but  continuing evidence of confidence in the state  courts, reinforced by a desire to avoid direct  conflicts between state and federal courts.").  While a federal injunction of state court  proceedings might, in some cases, be cost-  effective, "inefficient simultaneous litigation  in state and federal courts on the same issue" is  "one of the costs of our dual court system." Id.  at 524-25.

Conclusion

22
For the reasons stated herein, we VACATE the  decision of the district court granting the  injunction and REMAND the case for further  proceedings consistent with this opinion.



Notes:


1
 An express and unambiguous rejection of a res  judicata defense would arguably increase the  likelihood that further state court proceedings  would undermine a prior federal court judgment,  and therefore counsel in favor of a federal  injunction. However, this concern will almost  always be outweighed by the heightened comity  interests that arise once the state court has  adjudicated this issue and, as explained later in  this opinion, is best addressed through state  appellate channels.    Drawing a line at the point at which  a state court decides the res  judicata issue might also arguably create  incentives for litigants with a prior, favorable  federal court judgment to rush back to federal  court for an injunction rather than relying on  the res judicata defense in state court at all.  Aside from the fact that Parsons Steel already  creates incentives to obtain a federal injunction  before the state court reaches final judgment, we  believe that it is necessary to restrict district  court discretion in this way to prevent the  relitigation exception of the Anti-Injunction Act  from simply being turned into a vehicle for  seeking appellate review of a state court  decision in federal court. See Atlantic Coast  Line R.R. Co., 398 U.S. at 293.


2
 In considering the types of "unusual  circumstances" that satisfy this standard, the  Court also noted that "even irreparable injury is  insufficient unless it is 'both great and immediate.'"  Id. at 46 (citing Fenner v. Boykin, 271 U.S. 240,  243 (1926)).


3
 Although a denial of a motion for summary  judgment is not appealable as a final decision,  under Wisconsin law a litigant may petition for  leave to appeal a non-final order under certain  circumstances. See Wis. Stat. sec. 808.03(2).


