United States District Court, D. New Jersey
B. KUGLER UNITED STATES DISTRICT JUDGE
matter comes before the Court on Defendants' Motion to
Dismiss Plaintiff's Complaint (Doc. No. 9),
Plaintiff's Response (Doc. No. 15), Defendants' Reply
(Doc. No. 16) and the Parties' sur-replies (Doc. Nos. 17,
case concerns the application of Brillhart
abstention, which places in this Court's discretion the
authority to abstain from the exercise of its jurisdiction
when, as alleged here, there is a pending, parallel
proceeding in state court. See Brillhart v. Excess Ins.
Co. of Am., 316 U.S. 491, 494-95 (1942). Because the
state court proceedings are not parallel, however, this Court
declines to abstain from exercising its jurisdiction.
Defendants' motion is DENIED.
April 8, 2014, a crane carrying a 5, 000-lb load of steel
plates collapsed and caused “severe, permanent and
catastrophic lower torso and pelvic crush injuries” to
Ronald Torres, who soon after filed suit against EC Cranes,
Inc., and others on March 29, 2016, in the Superior Court of
New Jersey, Law Division, Camden County. The Torres
action deals with a question of potentially huge importance
to Mr. Torres but of comparatively less importance for
purposes of this decision: Is Jamie Collazos, doing business
as EC Cranes, responsible for failing to inspect, service, or
maintain the crane that injured Mr. Torres?
Indemnity Company is, as befits its name, an insurance
company. Scottsdale was insuring EC Cranes at the time of Mr.
Torres's accident, and was sued in the Torres
action. Shortly after the injury, Scottsdale sent Mr.
Collazos a letter stating its intent to defend against Mr.
Torres's allegations. There was one caveat: Scottsdale
reserved the right to deny defense if in the course of its
investigation it learned Mr. Collazos had “materially
misrepresented the business of EC Cranes” in his
application for insurance. On November 11, 2016, Scottsdale
made good on that caveat, and filed a complaint in this Court
under its diversity jurisdiction seeking rescission of the
contract and a declaratory judgment to that effect. This case
thus presents a different merits question than that of the
Torres action: Is the Scottsdale insurance policy
void because of misrepresentations by Mr. Collazos, or
then, is the status of proceedings between the parties-or
was, as Scottsdale has since been dismissed without prejudice
from the Torres suit and is no longer a party to the
state proceedings. (See Doc. No. 17.) So the
question we face today is of a different nature than the
merits issues in the two proceedings: Should this Court
abstain from exercising its jurisdiction over the declaratory
judgment action when there is a related proceeding in New
Jersey state court?
begin with the text of the Declaratory Judgment Act
(“DJA”), 28 U.S.C. § 2201, which provides
that a court “may declare the rights and other
legal relations of any interested party seeking such
declaration.” The DJA's “may” has been
read as granting broad discretion to federal courts. The
statute has a “textual commitment to discretion”
that inheres to a district court, and does not convey an
“absolute right upon the litigant” to bring a
declaratory judgment action in federal court. Wilton v.
Sevan Falls Co., 115 S.Ct. 2137, 2142-43 (1995).
“If a district court, in the sound exercise of its
judgment, determines after a complaint is filed that a
declaratory judgment will serve no useful purpose, it cannot
be incumbent upon that court to proceed to the merits before
staying or dismissing the action.” Id.
the declaratory judgment context, the normal principle that
federal courts should adjudicate claims within their
jurisdiction yields to considerations of practicality and
wise judicial administration.” Wilton, 515
U.S. at 288. The Third Circuit has held that district courts
must consider several factors, “to the extent they are
relevant, ” when deciding whether to abstain:
(1) the likelihood that a federal court declaration will
resolve the uncertainty of obligation which gave rise to the
(2) the convenience of the parties;
(3) the public interest in settlement of the uncertainty of