The general rule of law stipulates that a litigant cannot simultaneously file suit in both federal and state court when the cases are based on essentially the same facts and issues.

This rule, known as the Colorado River Doctrine, was established by a Supreme Court ruling in Colorado River Water Conservation Dist. V. United States, 424 U.S. 800 (1976).


https://constructionsuperconference.com/news/latest-news/a-litigant-can-file-simultaneous-suits-in-state-and-federal-court/


The Federal Court ruled against Ashland, stating that the Colorado River Doctrine did not apply because “the Lien Action and the Contract Action similarly involved different issues, different requisites of proof, and different remedies.”



How does this apply to Baudins?


The Baudins owed a duty of due care to Dulberg in 2 different ways:

1)  Dulberg was their client and they had a signed agreement with Dulberg

2)  Baudins signed an agreement with the bankruptcy trustee to represent the Dulberg bankruptcy estate.  Dulberg was the single largest stakeholder in the bankruptcy estate.


The breach of duty of Baudins toward Dulberg as his attorneys and the breach of duty of Baudins toward the bankruptcy estate "involve different issues, different requisites of proof, and different remedies.” 




https://allmandlaw.com/bankruptcy-trustee-auctions-debtors-lawsuit/


The bankruptcy trustee determined that the lawsuit was the debtors’ only valuable asset; but the debtors did not claim the interest as exempt property. The bankruptcy court gave the trustee the power to auction the property despite the debtors’ objection and offers to repurchase the property back from the estate.
The court stated: “The responsibility of Trustee is to maximize assets and the best way to do so is to auction the asset to the highest bidder.”