Warsaw Orthopedic, Inc. v. Sasso ( 2020 )


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  • Case: 19-1583   Document: 47     Page: 1    Filed: 10/14/2020
    United States Court of Appeals
    for the Federal Circuit
    ______________________
    WARSAW ORTHOPEDIC, INC., MEDTRONIC, INC.,
    MEDTRONIC SOFAMOR DANEK, INC.,
    Plaintiffs-Appellants
    v.
    RICK C. SASSO, M.D.,
    Defendant-Appellee
    ______________________
    2019-1583
    ______________________
    Appeal from the United States District Court for the
    Northern District of Indiana in No. 3:18-cv-00437-JD-
    MGG, Judge Jon DeGuilio.
    ______________________
    Decided: October 14, 2020
    ______________________
    MARK CHRISTOPHER FLEMING, Wilmer Cutler Pickering
    Hale and Dorr LLP, Boston, MA, argued for plaintiffs-ap-
    pellants. Also represented by MARY VIRGINIA SOOTER, Den-
    ver, CO.
    FREDERICK D. EMHARDT, Emhardt Law LLC, Carmel,
    IN, argued for defendant-appellee. Also represented by
    GEORGE T. PATTON, JR., Bose McKinney & Evans LLP,
    Washington, DC; JOHN M. BRADSHAW, Bradshaw Law
    LLC, Indianapolis, IN.
    ______________________
    Case: 19-1583     Document: 47     Page: 2    Filed: 10/14/2020
    2                          WARSAW ORTHOPEDIC, INC. v. SASSO
    Before NEWMAN, SCHALL, and WALLACH, Circuit Judges.
    NEWMAN, Circuit Judge.
    This appeal is from the decision of the United States
    District Court for the Northern District of Indiana, 1 dis-
    missing a declaratory judgment complaint filed by Warsaw
    Orthopedic, Inc.; Medtronic, Inc.; and Medtronic Sofamor
    Danek, Inc. (collectively, “Medtronic”) against Dr. Rick
    Sasso, a surgeon and inventor. The district court dismissed
    the complaint without prejudice, applying the doctrine of
    federal court “abstention” in view of the concurrent action
    in Indiana state court between the same parties concerning
    the same dispute; that decision is on appeal to the Indiana
    Court of Appeals. 2
    The state court action is described by Dr. Sasso as a
    contract case for payment for patent rights, and the federal
    action is described by Medtronic as a patent case in which
    payment requires valid patents. Medtronic argues that the
    district court’s “abstention” was an abuse of discretion, be-
    cause the federal courts have exclusive jurisdiction over pa-
    tent cases, and patent validity is fundamental to resolution
    of this dispute. Thus, Medtronic argues that abstention
    was inappropriate because the federal court had the obli-
    gation to receive and resolve this dispute.
    We conclude that the district court acted within its dis-
    cretion, abstaining without prejudice, on the facts hereof,
    for the question of contract interpretation is on appeal in
    1Warsaw Orthopedic, Inc. v. Sasso, No. 3:18-CV-437
    JD, 
    2019 WL 428574
    (N. D. Ind., Jan. 31, 2019) (“Dist. Ct.
    Op.”).
    2  Warsaw Orthopedic, Inc. v. Sasso, Appeal No. 19A-
    PL-00378 (Ind. Ct. App., docketed Feb. 19, 2019).
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    WARSAW ORTHOPEDIC, INC. v. SASSO                           3
    the Indiana state court, and federal action based on the fed-
    eral issues is not precluded.
    DISCUSSION
    Medtronic’s declaratory judgment complaint requests a
    declaration that Medtronic did not violate its royalty pay-
    ment obligation as set forth in a certain Purchase Agree-
    ment between Medtronic and Dr. Sasso (“Agreement”).
    The Agreement, also called the Facet Screw Agreement, is
    dated December 1, 1999 and states Medtronic’s terms of
    purchase of certain Dr. Sasso inventions. The Agreement
    provides for quarterly royalty payments based on Med-
    tronic’s sales of the defined Medical Device until “the last
    to expire of the patents included in Intellectual Property
    Rights, or if no patent application(s) issue into a patent
    having valid claim coverage of the Medical Device, then
    seven (7) years from the Date of First Sale of the Medical
    Device.” Agreement ¶ 7.
    For the invention at issue, the initial patent applica-
    tion was filed on November 23, 1999, and two patents were
    issued: U.S. Patent No. 6,287,313 (“the ’313 patent”) and
    its continuation, U.S. Patent No. 6,562,046 (“the ’046 pa-
    tent”); both patents are entitled “Screw Delivery System
    and Method.” The record states that Medtronic made roy-
    alty payments from 2002 to 2018.
    Proceedings in Indiana state court
    A dispute arose, for Dr. Sasso stated that Medtronic
    was not paying royalties on sales of all relevant devices,
    but Medtronic disagreed. In June 2014, Dr. Sasso filed suit
    in Marshall Circuit Court, County of Marshall, State of In-
    diana, for breach of contract and damages. 3 Medtronic
    3  Dr. Sasso added counts concerning the Facet Screw
    Agreement to a similar suit on a different agreement—the
    Vertex Agreement. Prior to the Facet Screw Agreement
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    4                          WARSAW ORTHOPEDIC, INC. v. SASSO
    answered that the devices for which Dr. Sasso is seeking
    additional royalties are not subject to the Agreement be-
    cause they are not covered by a valid claim of the ’313 or
    ’046 patents. Dr. Sasso then filed a “Motion for Summary
    Judgment on the Term of the Screw Delivery Agreement
    and on Patent Validity as a Defense to Payment.” The
    state court granted the motion, ruling:
    The amount of money to be paid under the Agree-
    ment and the term depend on the issuance of pa-
    tents and their expiration, not their validity.
    Patent No. 6,287,313 (“’313 patent”) or 6,562,046
    (“’046 patent”) issued and have not expired.
    Summ. J. Order, Marshall Circuit Court, No. 50C01-1806-
    PL-000027 (Sept. 13, 2018). The state court excluded the
    issue of validity from the jury trial. See Order Excluding
    Witnesses and Striking the Affirmative Defense of Patent
    Invalidity, No. 50C01-1806-PL-000027 (Sept. 13, 2018)
    (“All evidence related to the defense of patent invalidity is
    excluded.”).
    At the trial, the parties disagreed over whether any
    claim covered the asserted products. Dr. Sasso testified
    that claim 26 of the ’313 patent is “really really broad.”
    Trial Tr. Nov. 9, 2018, at 51. Medtronic was not permitted
    to raise any questions concerning the validity of claims of
    the asserted scope.
    The jury found that Medtronic had breached the Agree-
    ment, and awarded damages. Judgment on the verdict was
    counts being added, Medtronic had removed the Vertex
    Agreement suit to federal court, and the federal court re-
    manded to the state court. Sasso v. Warsaw Orthopedic,
    Inc., No. 3:13-cv-1031 (N.D. Ind. Apr. 2, 2014) (remand or-
    der).
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    WARSAW ORTHOPEDIC, INC. v. SASSO                            5
    entered on November 29, 2018. Medtronic filed an appeal
    to the Indiana Court of Appeals.
    The federal declaratory judgment action
    Meanwhile, on June 8, 2018, Medtronic filed this de-
    claratory judgment action in federal district court in Indi-
    ana. The complaint contains two counts, captioned as
    follows:
    COUNT I
    Declaratory Judgment of No Breach of the Facet
    Screw Agreement Because No Valid Claim of the
    ’313 or ’046 Patent Covers the Medtronic Products
    for Which Dr. Sasso Seeks Royalties
    ***
    COUNT II
    Declaratory Judgment of No Breach of the Facet
    Screw Agreement Because No Claim of the ’313 or
    ’046 Patents, as Construed by Dr. Sasso, Is Valid
    Complaint, at 13–14. Medtronic stated in the complaint
    that the devices for which Dr. Sasso seeks additional roy-
    alties are not within the Agreement, and the claims as con-
    strued to cover such devices are not valid as required by
    the Agreement.
    In September 2018, Dr. Sasso moved the district court
    for “abstention or stay” of the declaratory action, citing the
    scheduled November 2018 trial in state court. The district
    court did not act before that trial. After the state court
    judgment in favor of Dr. Sasso, he moved the federal court
    for dismissal of Medtronic’s declaratory action, stating that
    the federal court did not have jurisdiction because the mat-
    ter had been decided. Medtronic opposed dismissal, argu-
    ing that the state court erred in law by refusing to permit
    Medtronic’s defenses concerning invalidity of the claims as
    construed to cover the additional Medtronic devices.
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    6                          WARSAW ORTHOPEDIC, INC. v. SASSO
    The district court dismissed the declaratory judgment
    action without prejudice, stating that:
    Here, there is no purpose to be served by the de-
    claratory judgment Medtronic seeks, at least at
    this time. Medtronic is asking for a declaratory
    judgment that it did not breach the Facet Screw
    Agreement and does not owe Dr. Sasso any dam-
    ages. But the state court has already entered judg-
    ment in Dr. Sasso’s favor on that claim. No order
    or judgment of this Court can undo that judg-
    ment—only the Indiana courts of appeals and the
    United States Supreme Court have authority to re-
    view that judgment.
    Dist. Ct. Op. at *3. The district court acknowledged that
    the state court decision was being appealed, and that “it is
    possible that the state judgment will be vacated at some
    point,” but that such possibility did not affect the present
    situation.
    Id. The district court
    also cited “the discretion
    provided by the Declaratory Judgment Act, assuming but
    not deciding that jurisdiction exists.”
    Id. at *2.
    The court
    exercised this discretion and dismissed the action.
    Medtronic now appeals this dismissal, stating that the
    federal courts have exclusive jurisdiction over issues of pa-
    tent validity, valid claims are required by the Agreement,
    and the state court erred in ruling that validity is irrele-
    vant to royalty payments under the Agreement. Medtronic
    points to the requirement in ¶ 7 for “valid claim coverage”:
    7. Term of Agreement. . . . Unless sooner termi-
    nated, this Agreement shall expire upon the last to
    expire of the patents included in Intellectual Prop-
    erty Rights, or if no patent application(s) issue into
    a patent having valid claim coverage of the Medical
    Device, then seven (7) years from the Date of First
    Sale of the Medical Device. . . .
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    WARSAW ORTHOPEDIC, INC. v. SASSO                           7
    Agreement ¶ 7. Medtronic also points to the Schedules in
    the Definitions of the Facet Screw Agreement’s subject
    matter:
    1. Definitions.
    A. The Invention. The Invention shall mean any
    product, method or system relating to a facet screw
    instrumentation and a headless facet screw fixa-
    tion system as described in Schedule A, attached
    hereto.
    ***
    C. Medical Device. Medical Device shall mean any
    device, article, system, apparatus or product in-
    cluding the Invention. Such Medical Devices shall
    be listed in accordance with SDH [Sofamor Danek]
    catalog numbers and will be listed in Schedule B
    attached hereto. . . .
    Agreement ¶ 1. Medtronic states: “Schedule A describes a
    ‘Facet Screw Instrumentation and a Headless Facet Screw
    Fixation System consisting of bone screws and associated
    instruments for installation thereof.’ . . . Schedule B lists
    ‘Facet Screw Instrumentation, and A Headless Facet Screw
    Fixation System,’” with no listed catalog numbers. Med-
    tronic Br. 8 n.3.
    Medtronic states that royalties under the Agreement
    are based on the products set forth in the Agreement
    Schedules, and that those royalties were regularly and
    fully paid. Medtronic states that this dispute concerns
    “whether Medtronic owes royalties on other products not
    listed in Schedules A or B.”
    Id. (emphasis in original).
     Medtronic further states that valid claim coverage is re-
    quired by the Agreement, that patent validity is within ex-
    clusive federal jurisdiction, and that the claims as
    construed by Dr. Sasso are invalid.
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    8                           WARSAW ORTHOPEDIC, INC. v. SASSO
    Dr. Sasso states: “Right or wrong, this state court rul-
    ing is binding.” Sasso Br. 21.
    Patent reexamination
    Medtronic had, on May 1, 2018, requested Patent and
    Trademark Office reexamination of designated claims of
    the ’313 patent and on July 20, 2018, of designated claims
    of the ’046 patent. The PTO granted the reexaminations,
    and by Reexamination Certificate No. 90/014,131 issued
    January 4, 2019, the PTO cancelled claims 26–34 of the
    ’313 patent; and by Reexamination Certificate No.
    90/014,171 issued January 24, 2019, the PTO cancelled
    claims 9 and 11–32 of the ’046 patent.
    It appears undisputed that the PTO cancellations in-
    cluded all the claims that had been construed to cover the
    additional Medtronic devices for which royalties were
    sought. Medtronic Br. 15–16 & n.6. The district court
    acknowledged the reexaminations and stated that they are
    “not relevant here.” Dist. Ct. Op. at *1 n.3. Medtronic
    states that they are relevant to the requirement for cover-
    age by valid claims under Agreement ¶ 7.
    Federal jurisdiction
    Dr. Sasso challenges federal jurisdiction. Dr. Sasso
    states that the counts of the declaratory judgment com-
    plaint do not “arise under” the patent law, and thus the
    district court does not have jurisdiction under 28 U.S.C.
    § 1338. Dr. Sasso states that if the district court does have
    jurisdiction, then the court acted within its discretion in
    abstaining from the declaratory action. He also states that
    the Federal Circuit does not have jurisdiction over this ap-
    peal and that if appeal is available at all, it lies in the Sev-
    enth Circuit, not the Federal Circuit. 4
    4   28 U.S.C. § 1338(a) assigns to the federal district
    courts original jurisdiction over “any civil action arising
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    WARSAW ORTHOPEDIC, INC. v. SASSO                              9
    Medtronic states that district court and Federal Circuit
    jurisdiction are present because the declaratory judgment
    complaint includes determinations of patent validity and
    valid claim scope. Medtronic argues that this declaratory
    action meets the “arising under” standard for federal juris-
    diction, for the federal issues of patent validity and patent
    claim scope are “(1) necessarily raised, (2) actually dis-
    puted, (3) substantial, and (4) capable of resolution in fed-
    eral court without disrupting the federal-state balance
    approved by Congress.” Gunn v. Minton, 
    568 U.S. 251
    , 258
    (2013). In NeuroRepair, Inc. v. Nath Law Group, 
    781 F.3d 1340
    (Fed. Cir. 2015), this court elaborated that “[a]n issue
    of patent law is ‘necessarily raised’ if ‘a well-pleaded com-
    plaint establishes either that federal patent law creates the
    cause of action or that the plaintiff’s right to relief neces-
    sarily depends on resolution of a substantial question of
    federal patent law, in that patent law is a necessary ele-
    ment of one of the well-pleaded claims.’”
    Id. at 1344
    (quot-
    ing Christianson v. Colt Indus. Operating Corp., 
    486 U.S. 800
    , 809 (1988)).
    An appellate court has “traditional and inherent func-
    tions [such] as determining its own jurisdiction and super-
    vising the exercise of jurisdiction by the district courts
    below it.” Shaw v. Gwatney, 
    795 F.2d 1351
    , 1353 n.2 (8th
    Cir. 1986). “[I]t is the duty of this court at all times to con-
    sider its own jurisdiction.” Smith v. Gober, 
    236 F.3d 1370
    ,
    1371 (Fed. Cir. 2001); see also C.R. Bard, Inc. v. Schwartz,
    
    716 F.2d 874
    , 878 (Fed. Cir. 1983) (appellate court has ju-
    risdiction to decide whether the district court had jurisdic-
    tion).
    Applying the standards of precedent, the issues of va-
    lidity and claim scope are well-pleaded in this declaratory
    under any Act of Congress relating to patents,” and 28
    U.S.C. § 1295(a)(1) assigns exclusive appellate jurisdiction
    to the Federal Circuit for those district court decisions.
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    10                          WARSAW ORTHOPEDIC, INC. v. SASSO
    complaint, are actually disputed, are substantial to the fed-
    eral system as a whole, and the federal-state judicial bal-
    ance would not be disrupted by the district court’s exercise
    of declaratory jurisdiction. Thus, this declaratory action is
    within the district court’s jurisdictional authority, and we
    have jurisdiction to receive this appeal and to determine
    whether the district court abused its discretion in abstain-
    ing from exercise of declaratory jurisdiction.
    The district court’s abstention
    The Declaratory Judgment Act states that courts may
    grant declaratory relief, 28 U.S.C. § 2201(a), and the Su-
    preme Court has explained that the Act confers “unique
    and substantial discretion in deciding whether to declare
    the rights of litigants,” Wilton v. Seven Falls Co., 
    515 U.S. 277
    , 286 (1995). Also, the Court had stated in Brillhart v.
    Excess Insurance Co. of America, 
    316 U.S. 491
    (1942), that
    federal courts may and reasonably should abstain from ex-
    ercising declaratory jurisdiction when the issues “can bet-
    ter be settled in [a] proceeding pending in . . . state court.”
    Id. at 495.
         As summarized in Envision Healthcare, Inc. v. Pre-
    ferredOne Insurance Co., 
    604 F.3d 983
    (7th Cir. 2010): “Un-
    der what is known as the Wilton/Brillhart abstention
    doctrine, district courts possess significant discretion to
    dismiss or stay claims seeking declaratory relief, even
    though they have subject matter jurisdiction over such
    claims.”
    Id. at 986.
    The propriety of a district court’s Wil-
    ton/Brillhart abstention is reviewed on the standard of
    abuse of discretion, that is, whether the action “is based on
    clearly erroneous findings of fact, is based on erroneous in-
    terpretations of the law, or is clearly unreasonable, arbi-
    trary or fanciful.” iLOR, LLC v. Google, Inc., 
    631 F.3d 1372
    , 1376 (Fed. Cir. 2011).
    Medtronic and Dr. Sasso discuss, but do not resolve,
    whether the criterion for measuring abstention discretion
    is the potentially more flexible measure of Wilton/Brillhart
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    WARSAW ORTHOPEDIC, INC. v. SASSO                           11
    or the standard of Colorado River Water Conservation Dis-
    trict v. United States, 
    424 U.S. 800
    (1976). In Colorado
    River, the Court stated that abstention “is an extraordi-
    nary and narrow exception to the duty of a District Court
    to adjudicate a controversy properly before it,” stating that
    abstention is appropriate “only in the exceptional circum-
    stances where the order to the parties to repair to the state
    court would clearly serve an important countervailing in-
    terest.”
    Id. at 813.
          The thrust of precedent applying Colorado River is that
    a federal proceeding should not be stayed in favor of a state
    proceeding when the federal proceeding includes a claim
    over which federal courts have exclusive jurisdiction. See,
    e.g., Cottrell v. Duke, 
    737 F.3d 1238
    , 1248 (8th Cir. 2013)
    (“[W]e join the Second, Seventh, and Ninth Circuits and
    hold that the Colorado River doctrine may not be used to
    stay or dismiss a federal proceeding in favor of a concurrent
    state proceeding when the federal proceeding contains a
    claim over which Federal courts have exclusive jurisdic-
    tion.”).
    The district court here selected the standard of Wil-
    ton/Brillhart as attuned to the situation at hand. Dist. Ct.
    Op. at *2. We agree that this was reasonable on the facts
    here, for there had already been a trial in the state court
    and it is now on appeal at the Indiana Court of Appeals.
    The district court also referred to the Northern District’s
    2014 rebuff of Medtronic’s attempted removal to federal
    court, 
    see supra
    n.3, although the district court remarked
    that this prior action is not res judicata.
    Id. at *1
    n.2.
    Applying the standard of abuse of discretion, “it is ap-
    propriate to vest district courts with that discretion ‘in the
    first instance, because facts bearing on the usefulness of
    the declaratory judgment remedy, and the fitness of the
    case for resolution, are peculiarly within their grasp.’”
    Sony Elecs., Inc. v. Guardian Media Techs., Ltd., 
    497 F.3d 1271
    , 1288 (Fed. Cir. 2007) (quoting Wilton, 515 U.S. at
    Case: 19-1583    Document: 47      Page: 12     Filed: 10/14/2020
    12                          WARSAW ORTHOPEDIC, INC. v. SASSO
    289). Medtronic challenges this exercise of discretion, ar-
    guing that patent validity is essential to Dr. Sasso’s claim
    and was wrongly excluded from the state court trial, pro-
    ducing a fatal flaw in the state court proceeding.
    In Wilton, the Supreme Court guided that the federal
    court must apply, to the facts before it, “a circumspect
    sense of its fitness informed by the teachings and experi-
    ence concerning the functions and extent of federal judicial
    
    power.” 515 U.S. at 287
    (quoting Pub. Serv. Comm’n of
    Utah v. Wycoff Co., 
    344 U.S. 237
    , 243 (1952)). The Court
    explained that the Declaratory Judgment Act was designed
    to create “an opportunity, rather than a duty, to grant a
    new form of relief to qualifying litigants.”
    Id. at 288.
    The
    Court stated that the federal court should consider the ef-
    fect of the concurrent state court proceeding and “whether
    the claims of all parties in interest can satisfactorily be ad-
    judicated in [the state court] proceeding.”
    Id. at 283
    (quot-
    ing 
    Brillhart, 316 U.S. at 495
    ).
    Precedent illustrates that the discretion to decline de-
    claratory judgment jurisdiction is not unlimited. For ex-
    ample, in Capo, Inc. v. Dioptics Medical Products, Inc., 
    387 F.3d 1352
    (Fed. Cir. 2004), this court held that it was an
    abuse of discretion to dismiss a declaratory action challeng-
    ing patent validity, when the dismissal left the accused in-
    fringer “unable to resolve its accused liability for patent
    infringement.”
    Id. at 1357;
    see also Meyers v. Oneida Tribe
    of Indians of Wis., 
    836 F.3d 818
    , 823 (7th Cir. 2016)
    (“[T]here are numerous circumstances in which a court ap-
    propriately accords priority to a non-merits threshold in-
    quiry other than subject matter jurisdiction, such as
    pendent jurisdiction, forum non conveniens, abstention,
    and others.”). Medtronic also cites Jang v. Boston Scien-
    tific Corp., 
    767 F.3d 1334
    (Fed. Cir. 2014), where the court
    held that discretionary dismissal was improper when “res-
    olution of the contract claim [] requires resolution of under-
    lying issues of infringement,”
    id. at 1337,
    including the
    scope and validity of the relevant patents, and there exists
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    WARSAW ORTHOPEDIC, INC. v. SASSO                          13
    the possibility that those issues could arise in subsequent
    infringement litigation and could create divergent judg-
    ments unless the court maintains appellate jurisdiction
    , id. at 1338.
    Medtronic reminds us that federal courts are not
    bound by a state court decision on a matter of federal law
    and argues that this too supports proceeding with federal
    action.
    Dr. Sasso responds that “[c]ommercial agreements tra-
    ditionally are the domain of state law” and “[s]tate law is
    not displaced merely because the contract relates to intel-
    lectual property which may or may not be patentable.”
    Sasso Br. 23 (quoting Aronson v. Quick Point Pencil Co.,
    
    440 U.S. 257
    , 262 (1979)). In Gunn, the Court affirmed
    that malpractice claims against a patent attorney are the
    province of the states’ “special responsibility for maintain-
    ing standards among members of the licensed professions,”
    and that it did not trigger the federal court’s exclusive pa-
    tent 
    jurisdiction. 568 U.S. at 264
    ; see also 
    Christianson, 486 U.S. at 813
    –17 (discussing scope of “arising under” ju-
    risdiction).
    The Court’s guidance recognizes the variety of circum-
    stances in which both state and federal questions are pre-
    sent, and states in Grable & Sons Metal Products, Inc. v.
    Darue Engineering & Manufacturing, 
    545 U.S. 308
    (2005),
    that “questions of [federal] jurisdiction over state-law
    claims require careful judgments about the nature of the
    federal interest at stake,” distinguishing a “sufficient con-
    dition for federal-question jurisdiction [from] a necessary
    one.”
    Id. at 317
    (internal quotation marks and citations
    omitted).
    Precedent illustrates the variety of circumstances that
    may arise, whereby discretion is exercised on various facts,
    including whether preclusion should be afforded to a state
    court’s ruling on an aspect otherwise properly before the
    federal court. For example, in General Motors Corp. v. Ro-
    mein, 
    503 U.S. 181
    (1992), the Court held that in applying
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    14                          WARSAW ORTHOPEDIC, INC. v. SASSO
    the Contract Clause, federal courts are “bound to decide for
    ourselves whether a contract was made,” affording “re-
    spectful consideration and great weight,” but not conclu-
    sive deference, “to the views of the State’s highest court.”
    Id. at 187
    (quoting Indiana ex rel. Anderson v. Brand, 
    303 U.S. 95
    , 100 (1938)). In Titus v. Wallick, 
    306 U.S. 282
     (1939), the Court distinguished the deference due to a state
    court’s application of the “law of its own state or matters
    peculiarly within its cognizance.”
    Id. at 288.
    Medtronic
    reminds us that for this Agreement the Indiana court was
    required to apply Tennessee law, suggesting that this di-
    minished any entitlement to deference on contract issues.
    Medtronic also cites Bouie v. City of Columbia, 
    378 U.S. 347
    (1964), where the Court disagreed with the state
    court’s interpretation of state trespass law to avoid federal
    due process.
    Id. at 361–62.
    Medtronic states that prece-
    dent shows that preclusion “may in some contexts” be sub-
    ject to “[d]octrines of federal pre-emption.” Durfee v. Duke,
    
    375 U.S. 106
    , 114 (1963) (citing Kalb v. Feuerstein, 
    308 U.S. 433
    , 439 (1940)). As summarized in concurrence in Grable,
    there is room for discretion:
    The Court faithfully applies our precedents inter-
    preting 28 U.S.C. § 1331 to authorize federal-court
    jurisdiction over some cases in which state law cre-
    ates the cause of action but requires determination
    of an issue of federal law, e.g., Smith v. Kansas City
    Title & Trust Co., 
    255 U.S. 180
    , 
    41 S. Ct. 243
    , 
    65 L. Ed. 577
    (1921); Merrell Dow Pharmaceuticals
    Inc. v. Thompson, 
    478 U.S. 804
    , 
    106 S. Ct. 3229
    , 
    92 L. Ed. 2d 650
    (1986). . . . Whatever the virtues of
    the Smith standard, it is anything but clear. Ante,
    at 2367 (the standard “calls for a ‘common-sense
    accommodation of judgment to [the] kaleidoscopic
    situations’ that present a federal issue, in ‘a selec-
    tive process which picks the substantial causes out
    of the web and lays the other ones aside.’” (quoting
    Case: 19-1583    Document: 47     Page: 15     Filed: 10/14/2020
    WARSAW ORTHOPEDIC, INC. v. SASSO                          15
    Gully v. First Nat. Bank in Meridian, 
    299 U.S. 109
    ,
    117-118 (1936))) . . . 
    . 545 U.S. at 320
    –21 (Thomas, J., concurring).
    On the entirety of the circumstances, we conclude that
    the district court exercised “common-sense accommodation
    of judgment,”
    id., and did not
    abuse its discretion in ab-
    staining and dismissing without prejudice.
    CONCLUSION
    The decision of the district court is affirmed.
    AFFIRMED