Opinion
Civil Action No. 03-2128 Section "C" (2).
June 29, 2004
ORDER AND REASONS
This matter comes before the Court on motion to dismiss or, in the alternative, for a stay filed by the National City Bank of Indiana. Oral argument was held on May 26, 2004, and the matter was taken under advisement. Having considered the record, the memoranda and argument of counsel and the law, the Court has determined that dismissal is appropriate for the following reasons.
Declaratory action
The underlying dispute between the parties to this suit is part and parcel of probate proceedings filed in state court in Indiana, litigation in which the plaintiff has fully participated and in which substantial progress has been made. Because there is no issue concerning justiciability or the Court's authority, the focus of the Court's analysis is whether to dismiss or decide the declaratory action. Sherwin-Williams Co. v. Holmes County, 343 F.3d 383, 387 (5th Cir. 2003).
The dispute in both cases involves a trust which contains a choice of law provision that says "All matters respecting the validity, construction, interpretation, administration and enforcement of this Agreement shall be determined in accordance with the laws of the State of Indiana from time to time existing without regard to the conflicts of law rules of such state."
This analysis is governed by the Supreme Court's decision inWilton v. Seven Falls Co., 515 U.S. 277 (1995), which recognized the application of the factors in Brillhart v. Excess Insurance Co. Of America, 316 U.S. 491 (1942) in determining whether to exercise jurisdiction over a declaratory action such as this.
[I]n deciding whether to enter a stay, a district court should examine the scope of the pending state court proceeding and the nature of the defenses open there. This inquiry, in turn, entails consideration of whether the claims of all parties in interest can satisfactorily be adjudicated in that proceeding, whether necessary parties have been joined, whether such parties are amenable to process in that proceeding, etc. Other cases . . . might shed light on additional factors governing a district court's decision to stay or to dismiss a declaratory judgment action at the outset. But[,] at least where another suit involving the same parties and presenting opportunity for ventilation of the same state law issues is pending in state court, a district court might be indulging in gratuitous interference, if it permitted the federal declaratory action to proceed. Wilton, 515 U.S. at 283 (internal citations omitted), citing Brillhart, 316 U.S. at 495. See also Agora Syndicate Inc. v. Robinson Janitorial Specialists, Inc., 149 F.3d 371, 372-373 (5th Cir. 1998).
The Fifth Circuit recently restated that the criteria to be considered in determining whether to maintain a declaratory action include:
(1) whether there is a pending state action in which all of the matters in controversy may be fully litigated;
(2) whether the plaintiff filed suit in anticipation of a lawsuit filed by the defendant;
(3) whether the plaintiff engaged in forum shopping in bringing the suit;
(4) whether possible inequities in allowing the declaratory plaintiff to gain precedence in time or to change forums exist;
(5) whether the federal court is a convenient forum for the parties and witnesses;
(6) whether retaining the lawsuit in federal court would serve the purposes of judicial economy; and
(7) whether the federal court is being called on to construe a state judicial decree involving the same parties and entered by the court before whom the parallel state suit between the same parties is pending.
Vulcan Materials Co. v. City of Tehuacana, 238 F.3d 382 (5th Cir. 2001). In Sherwin-Williams, 343 F.3d at 390-391, the Fifth Circuit recognized that every circuit's formulation of factors addresses the same three aspects: (1) the proper allocation of decision-making between the state and federal courts; (2) fairness; and (3) efficiency.
The Court finds that none of these considerations weighs in favor of maintaining jurisdiction over the declaratory action in light of the pending state probate proceedings. Instead, the factors weigh in support declining to exercise jurisdiction. The pending Indiana state court suit includes bona fide claims against parties not in the declaratory action, all of whom need to be involved and whose interests may be affected by a federal decision. A number of key issues have been determined in the Indiana litigation with the plaintiff's consent, knowledge and participation. It is widely acknowledged that the Court may exercise its discretion to refuse to hear a declaratory action if an alternative remedy is more effective. See: Wright Miller, 10A Civil: Federal Practice Procedure § 2758 (West 2004).
Just prior to the hearing on this motion, the plaintiff raised the issue that the Brillhart analysis does not apply because this action is "coercive" in nature and therefore not a declaratory action. The Court disagrees. In his "Original Complaint for Declaratory Relief," the plaintiff prays for "judgment in his favor, declaring that a full accounting be given to him of that certain revocable trust . . ." (Rec. Doc. 1, ¶ XIV.). In his amended complaint, the plaintiff prays that "(1) this court render a declaratory judgment . . . declaring that the Revocable Trust . . . fails to comply with the form requirements imposed by Louisiana law and that the . . . [t]rust is therefore invalid and of no legal effect;" (2) declaring that all expenditures and distributions made by the [defendant] were improper and that such funds should be returned . . ." (Rec. Doc. 14, ¶ XIX.). The pleadings undercut the plaintiff's argument.
Coercive relief includes suits seeking injunctions as well as suits seeking damages. Woodward v. Sentry Select Insurance Co., 2004 WL 834634 (E.D.La.). See also: Southwind Aviation, Inc. v. Bergen Aviation, Inc., 23 F.3d 948 (5th Cir. 1994). In the case relied upon by the plaintiff, Kelly Investment, Inc. v. Continental Common Corp., 315 F.3d 494 (5th Cir. 2003), the plaintiffs asked for money damages and a writ of fieri facias in addition to declaratory relief, which the Court found to constitute coercive claims. That is not the case here.
It would appear from a reading of the plaintiff's pleadings that no claim for injunctive relief is made.
Declaratory and injunctive relief have may attributes in common. . . . Although the result may be similar in both types of actions because each involves a court determination regarding the propriety of a particular course of action, declaratory relief involves a lesser showing than injunctive relief, and does not contain the coercive element of an injunction.
James Moore, 12 Moore's Federal Practice § 57.07 (2000).
Injunctions and declaratory judgments are different remedies. An injunction is a coercive order by a court directing a party to do or refrain from doing something, and applies to future actions. A declaratory judgment states the existing rights in a controversy, but does not, in itself, coerce any party or enjoin any future action.Ulstein Maritime, Ltd. v. United States, 833 F.2d 1052, 1055 (1st Cir. 1987), cited with approval in Southwind Aviation, 23 F.3d at 951, fn 16. "There is no question but that the passive remedy of a declaratory judgment is far less intrusive into state functions than injunctive relief that affirmatively commands specific future behavior under the threat of the court's contempt powers." Morrow v. Harwell, 768 F.2d 619, 627 (5th Cir. 1985). A request for injunctive relief can be ignored when it is either frivolous or made solely to avoid application of the Brillhart standard. Black Sea Investment, Ltd. v. United Heritage Corp., 204 F.3d 647 (5th Cir. 2000).
In addition, an injunction may issue against a state court proceeding under the provisions of the Anti-Injunction Act, 28 U.S.C. § 2283, only if expressly authorized by statute, necessary in aid of jurisdiction or to protect or effectuate a judgment.Texas Employers' Insurance Assn. v. Jackson, 862 F.2d 419 (5th Cir. 1988) (en banc). "The statute cannot be avoided by framing an injunction as a restraint on a party rather than directly on the state court." Charles Wright, Arthur Miller Edward Cooper, 17 Federal Practice Procedure § 4222 (West). "Any doubts as to the propriety of a federal injunction against state proceedings should be resolved in favor of permitting state courts to proceed in an orderly fashion to finally determine the controversy."Atlantic Coast Line Railroad Co. v. Brotherhood of Locomotive Engineers, 398 U.S. 281, 297 (1970). If an injunction would be barred by the Anti-Injunction Act, the issuance of a declaratory judgment what would have the same effect should also be barred.American Airlines, Inc. v. Dept. of Transportation, 202 F.3d 788, 802 (5th Cir. 2000).
Finally,
It is well established that a federal court may not exercise its diversity jurisdiction to probate a will, administer an estate, or entertain an action that would interfere with pending probate proceedings in a state court or with state court's control of property in its custody. The probate exception to federal diversity jurisdiction thus stands as a common-law limitation that holds simply that a federal court has no jurisdiction to probate a will or administer an estate.
James Moore, 15 Moore's Federal Practice § 102.92[1]. As a general matter, courts apply the probate exception to all suits deemed `ancillary' to the probate of a will." Id. The federal court may not interfere with probate proceedings or assume general jurisdiction of the probate or control of property in the state court's custody. In such a case, "the federal court is limited to declaring the validity of the asserted claims, leaving to the claimants to assert their federal judgments as res judicata in the probate court." Turton v. Turton, 644 F.2d 344, 347 (5th Cir. 1981); Charles Wright, Arthur Miller Edward Cooper, 13B Federal Practice Procedure § 3610 (West).
It would appear that a coercive claim for injunctive relief may not be available to the plaintiff.
Even if the Court were to apply the more restrictive abstention doctrine under Colorado River Water Conservation District v. United States, 424 U.S. 800 (1976), it would decline jurisdiction. Under Colorado River, a federal court may abstain from a case that is part of parallel, duplicative litigation only under "exceptional" circumstances. This determination turns on the consideration of six relevant factors: (1) assumption by either court of jurisdiction over a res, (2) relative inconvenience of the forums, (3) avoidance of piecemeal litigation, (4) the order in which jurisdiction was obtained by the concurrent forums, (5) to what extent federal law provides the rules of decision on the merits, and (6) the adequacy of the state proceedings in protecting the rights of the party invoking federal jurisdiction. The decision "does not rest on a mechanical checklist" of these factors, but rather "on a careful balancing of [them] as they apply in a given case, with the balance heavily weighted in favor of the exercise of jurisdiction." Moses H. Cone Memorial Hospital. v. Mercury Construction Corp., 460 U.S. 1, 16 (1983).
None of the factors weigh in favor of maintaining this case. There is a pending probate proceeding. There is no showing that either forum is inconvenient. The Court gives little weight to the fact that the plaintiff technically filed this lawsuit first, given the fact that it was dismissed for lack of prosecution and its filing was not otherwise disclosed prior to the filing of the Indiana state court proceeding. This litigation does not present a federal issue and is based on state law. The plaintiff has fully participated in the Indiana proceedings, which is fully capable of protecting the plaintiff's rights. Piecemeal litigation can only be avoided by deference to the Indiana state court, which has made substantial progress.
Accordingly,
IT IS ORDERED that the motion to dismiss filed by National City Bank of Indiana is GRANTED.