                                                                           FILED
                            NOT FOR PUBLICATION                             JAN 02 2013

                                                                        MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS




                            FOR THE NINTH CIRCUIT



UNITED STATES OF AMERICA and                     No. 11-35184
BONNEVILLE POWER
ADMINISTRATION,                                  D.C. No. 3:10-cv-00528-HA

              Plaintiffs - Appellants,
                                                 MEMORANDUM *
  v.

STATE OF OREGON and CLACKAMAS
COUNTY,

              Defendants - Appellees.



UNITED STATES OF AMERICA,                        No. 11-35776

              Plaintiff - Appellant,             D.C. No. 3:11-cv-00452-HZ

  v.

STATE OF OREGON and COUNTY OF
CLACKAMAS,

              Defendants - Appellees.



                    Appeal from the United States District Court
                             for the District of Oregon

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
                   Ancer L. Haggerty, Senior District Judge, Presiding
                    Marco A. Hernandez, District Judge, Presiding

                        Argued and Submitted October 12, 2012
                                  Portland, Oregon

Before: SILVERMAN, CLIFTON, and N.R. SMITH, Circuit Judges.

      We have jurisdiction over Case Nos. 11-35184 (“Oregon I”) and 11-35776

(“Oregon II”), which are consolidated for appeal, pursuant to 28 U.S.C. § 1291.

For the reasons set forth below, we affirm the district court in both cases.

                                       Oregon I

      Federal courts have a “virtually unflagging” obligation to adjudicate claims

within their jurisdiction. Colo. River Water Conservation Dist. v. United States,

424 U.S. 800, 817 (1976); United States v. Morros, 268 F.3d 695, 703 (9th Cir.

2001). As such, “abstention is permissible only in a few carefully defined

situations with set requirements.” Morros, 268 F.3d at 703 (internal quotation

marks omitted); see also Colo. River, 424 U.S. at 813 (noting that abstention is

proper only in “exceptional circumstances” (quoting Cnty. of Allegheny v. Frank

Mashuda Co., 360 U.S. 185, 188-89 (1959)). “We review de novo whether the

facts of the instant case conform to these requirements.” Morros, 268 F.3d at 703.

“If they do, we review the district court’s decision to abstain for an abuse of

discretion.” Id.


                                           2
      We conclude that the facts of this case meet the “requirements” for

abstention under Levin v. Commerce Energy, Inc., 130 S. Ct. 2323 (2010). Like

the plaintiffs in Levin, the plaintiffs in these consolidated cases (the “United

States”) bring a federal constitutional challenge to a state tax exemption. See 130

S. Ct. at 2328-29, 2336. In Levin, the Supreme Court held that abstention was

appropriate based on general “[c]omity considerations” including deference to state

regulation of its own tax policy. See id. at 2330 & n.2, 2336-37. While the

plaintiffs in Levin were private businesses and a private citizen, see id. at 2328, not

the United States, this distinction is not material given the Levin court’s comity

rationale. Accordingly, we reject the United States’ argument that this distinction

renders Levin inapplicable as a matter of law.

      The district court did not abuse its discretion in abstaining under Levin.

Here, like the state in Levin, the State of Oregon enjoys “wide regulatory latitude”

over its tax policy. See id. at 2336. Similarly, the Oregon state courts are “better

positioned than their federal counterparts to correct any violation because they are

more familiar with state legislative preferences . . . .” Id. Indeed, the Supreme

Court has shown a strong preference for allowing states to fashion their own




                                           3
remedy once a tax is deemed discriminatory and unconstitutional. See Davis v.

Mich. Dep’t of Treasury, 489 U.S. 803, 817-18 (1989).1

                                      Oregon II

      Because the sole relief sought in Oregon II is a declaration that the state tax

exemption is unconstitutional, Oregon II implicates the Wilton/Brillhart abstention

doctrine. The Wilton/Brillhart doctrine allows “district courts broad discretion [to

abstain] as long as it furthers the Declaratory Judgment Act’s purpose of enhancing

judicial economy and cooperative federalism.” See R.R. Street & Co. Inc. v.

Transport Ins. Co., 656 F.3d 966, 975 (9th Cir. 2011) (internal quotation marks

omitted); see also Wilton v. Seven Falls Co., 515 U.S. 277, 286-90 (1995);

Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 494-95 (1942). We reject the

United States’ argument that the Wilton/Brillhart discretionary standard does not

apply and that the district court erred under the Colorado River “exceptional

circumstances” test. See Chamberlain v. Allstate Ins. Co., 931 F.2d 1361, 1366

(9th Cir. 1991) (“The Colorado River test . . . does not apply where the Declaratory

Judgments Act, 28 U.S.C. § 2201, is involved.”). Accordingly, we review the

district court’s decision to abstain for abuse of discretion. Gov’t Emps. Ins. Co. v.



      1
       Because we affirm the district court under Levin, we do not reach the other
abstention doctrines, or the justiciability arguments, raised by the State of Oregon.

                                           4
Dizol, 133 F.3d 1220, 1223 (9th Cir. 1998) (“[O]ur review of a district court’s

decision to entertain an action under the Declaratory Judgment Act is deferential,

under the abuse of discretion standard.”).

      The district court did not abuse its discretion in abstaining under the factors

identified by the Supreme Court in Wilton and Brillhart, and by this court in Dizol.

See Dizol, 133 F.3d at 1225 & n.5. The district court properly found that a number

of factors weighed in favor of abstention, including the risk of duplicative

litigation, forum shopping, and needless entanglement between federal and state

courts. See Smith v. Lenches, 263 F.3d 972, 977-78 (9th Cir. 2001); Dizol, 133

F.3d at 1225 & n.5. This finding was supported by the fact that the United States

initially had its choice of federal or state forums. The United States chose to

initiate proceedings with the Oregon Department of Revenue, proceedings which

are presently pending in state court on appeal. The United States only filed suit in

federal district court after receiving an unfavorable declaratory ruling from the

Oregon Department of Revenue.

      While the predominately federal nature of the United States’ claim, and its

status as the plaintiff in this case, arguably weigh in favor of retaining jurisdiction,

they are insufficient to demonstrate that the district court abused its discretion.

This is especially true given the Supreme Court’s preference for allowing state


                                             5
courts to fashion their own remedy for discriminatory taxation. See Levin, 130 S.

Ct. at 2333-35 & n.11; Davis, 489 U.S. at 817-18.

      AFFIRMED




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