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Diamond "D" Construction Corp. v. McGowan

Where district court's preliminary injunction halted DOL's administrative proceedings against plaintiff and ordered that DOL rescind notices of withholding, preliminary injunction vacated; because DOL's conduct and its effects on plaintiff were not encompassed by either bad faith or extraordinary circumstances exceptions to the Younger v. Harris abstention doctrine, district court was required to abstain from taking jurisdiction.

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Argued: October 30, 2001

Appeal from a preliminary injunction entered by the United States District Court for the Western District of New York (Curtin, J.) that halted the New York State Department of Labor’s (“DOL”) ongoing administrative proceedings against the Plaintiff and ordered that the DOL rescind notices of withholding entered against the Plaintiff. VACATED and REMANDED.

In this case we must apply bedrock principles of federalism, embodied in the Younger abstention doctrine. Younger v. Harris, 401 U.S. 37 (1971). We are asked to determine whether a federal court was empowered to enjoin ongoing state administrative proceedings brought by the New York State Department of Labor (“DOL”) against a contractor, Diamond “D” Construction Corporation (“Diamond D”). More precisely, we must inquire whether the manner in which the DOL’s investigation and administrative proceedings were conducted, coupled with the precarious financial position inflicted upon Diamond D, created sufficient circumstances to trigger either or both of the established exceptions to the Younger abstention doctrine. Because we hold that the DOL’s conduct and its effects on Diamond D are not encompassed by either exception, we conclude that the district court was required by Younger to abstain from taking jurisdiction over this case. *fn2 Therefore, we vacate the preliminary injunction and remand this case to the district court with directions that it be dismissed.

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