The City of Thibodaux, Louisiana (plaintiff) filed a petition in a Louisiana state court claiming a taking of land, buildings, and equipment owned by Louisiana Power & Light Company (defendant). The Attorney General of Louisiana had previously concluded in a similar case that a Louisiana city did not have the power asserted by Thibodaux. However, the Louisiana statute asserted by Thibodaux as the authority for the taking had never been interpreted in the relevant context by Louisiana courts. The company, a Florida corporation, removed the action to federal court based on diversity of citizenship. The district court stayed the action until the Louisiana Supreme Court had the chance to interpret the state statute. The appellate court reversed, holding that the district court’s stay of the proceedings was unjustified and inappropriate. The United States Supreme Court granted certiorari.