Credit One Bank v. Hestrin

Abstention, under Younger v. Harris, 401 U.S. 37 (1971), is appropriate for civil enforcement actions when “(1) there is an ongoing state judicial proceeding; (2) the proceeding implicates important state interests; (3) there is an adequate opportunity in the state proceedings to raise constitutional challenges; and (4) the requested relief seeks to enjoin or has the practical effect of enjoining the ongoing state judicial proceeding.”

Credit One Bank (“Plaintiff”) appealed the district court’s dismissal of its action against District Attorney Michael A. Hestrin (“the DA”), alleging that the DA violated the National Bank Act by suing Plaintiff in state court. The DA investigated a third-party vendor that made harassing phone calls to California residents regarding debts owed to Plaintiff and served Plaintiff with an investigative subpoena. Plaintiff sought an injunction against the state action, claiming that the subpoena was unenforceable as an improper exercise of visitorial powers. The district court abstained under Younger v. Harris, 401 U.S. 37 (1971).

Abstention, under Younger v. Harris, 401 U.S. 37 (1971), is appropriate for civil enforcement actions when “(1) there is an ongoing state judicial proceeding; (2) the proceeding implicates important state interests; (3) there is an adequate opportunity in the state proceedings to raise constitutional challenges; and (4) the requested relief seeks to enjoin or has the practical effect of enjoining the ongoing state judicial proceeding.” On appeal, the Court held that the district court correctly abstained after concluding that all four of the Younger requirements had been met. First, the state action qualified as an ongoing proceeding because the docket in the federal action only contained routine preliminary entries. Second, there was an important state interest present because the state court action was not an exercise of visitorial powers, and nothing in federal law would have barred the DA from bringing the state action. Third, under the National Bank Act, Plaintiff had the ability to raise a federal defense in the state court action. Finally, the injunction Plaintiff sought would interfere with the state court proceeding. AFFIRMED.