UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF NORTH CAROLINA 

WESTERN DIVISION 

RICHARD P. NORDAN, 

Plaintiff, 

BLACKWATER SECURITY 

CONSULTING, L.L.C., and 

BLACKWATER LODGE & TRAINING 

CENTER, INC., 

Defendants. 

ORDER 

This matter is before the court upon motions to remand and for injunctive relief by 

Plaintiff Richard P. Nordan and a motion for injunctive relief by Defendants Blackwater 

Security Consulting, L.L.C. and Blackwater Lodge & Training Center, Inc. [collectively, 

"Blackwater"]. These matters are now ripe for disposition. 

I. BACKGROUND 

This action arises out of four Independent Contractor Service Agreements ["Service 

Agreements"] entered into by Blackwater and Stephen S. Helveston, Mike R. Teague, Jerko 

Gerald Zovko and Wesley J. K. Batalona [collectively, "Decedents"], which provided inter alia: 

Contractor and [Blackwater] hereby agree that any dispute regarding 

interpretation or enforcement of any of the parties' rights or obligations under 

this Agreement shall be resolved by binding arbitration according to the rules 

of the American Arbitration Association and shall be conducted in Currituck or 

Camden County in North Carolina. 

On March 31, 2004, Decedents were killed while working for Blackwater in Fallujah, Iraq. 

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BLACKWATER SECURITY CONSULTING, LLC et al v. WESTCHESTER SURPLUS LINES INSURANCE COMPANY et al Doc. 55 Att. 8

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Nordan, as Ancillary Administrator of Decedents' estates, subsequently filed an action in the 

Superior Court of North Carolina in Wake County alleging state law claims of fraud and 

wrongful death against Blackwater and two of its employees. 

On December 14, 2006, Blackwater initiated an arbitration in Currituck County, North 

Carolina against Nordan. In its Demand for Arbitration, Blackwater described its claim as: 

Breach of contract: As administrator of the estates of four Blackwater 

professionals killed by a mob of insurgents . . . [Nordan] has breached 

decedents' contractual obligations not to sue, not to seek publicity and to 

protect classified and confidential information, to release Blackwater & all 

affiliates from all claims, and to assume all risks of "being shot, . . . killed by a 

firearm . . . terrorist activity, hand to hand combat" etc. in Iraq. 

Notice of Removal [DE-11 Ex. 3, Complaint at Ex. A. On May 4, 2007, Nordan filed a 

complaint in the Superior Court Division in Wake County, North Carolina seeking a 

declaratory judgment that he "has never consented or otherwise agreed to arbitration of any 

matter with [Blackwater]" and "is not subject to any alleged claims in any arbitration forum . . 

. against him in his individual capacity." Id. Complaint at p. 8. In his complaint, Nordan 

also sought injunctive relief prohibiting Blackwater "from proceeding against [Nordan] in his 

individual capacity in arbitration.'' Id. Complaint at p. 10. 

On May 14, 2007, Blackwater removed the action to this court. The next day, a 

hearing was held in the Wake County Superior Court before the Honorable Donald W. 

Stephens. Notwithstanding the removal, Judge Stephens entered a preliminary injunction 

prohibiting Blackwater "from arbitrating any claims or participating in any arbitration 

proceeding, including the ICDR Arbitration and the preliminary hearing in that matter 

currently scheduled for May 25, 2007, against . . . Nordan in which they contend or claim, in 

any manner, that . . . Nordan is subject to any personal liability . . . ." Mot. for Temp. 

Restraining Order and Prelim. Inj. [DE-71 at Ex. D. On May 18, 2007, Blackwater filed a 

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motion [DE-71 in this court seeking to enjoin Nordan from further litigating this action in state 

court. On May 22, 2007, Nordan filed a motion [DE-91 to remand. 

The undersigned held a hearing on Blackwater's motion for injunctive relief and 

Nordan's motion to remand on May 24, 2007. That same day, the arbitration panel issued an 

order in response to a letter by Nordan contesting the panel's jurisdiction over claims against 

Nordan in his individual capacity. See Mem. in Opp. [DE-241 at Ex. 1. In the order, the panel 

explained that, having reviewed the preliminary injunction entered by Judge Stephens and 

Blackwater's Demand for Arbitration, it concluded that "such Demand makes no claim 

against Mr. Nordan for personal liability. Instead, Blackwater claims against Mr. Nordan only 

in his capacity as Ancillary Administrator . . . ." Id. The next day, May 25, 2007, the parties 

conducted a preliminary hearing before the arbitration panel. After the hearing, the panel 

issued a second order indicating that it had "confirmed that [Nordan] is before this tribunal 

solely in his capacity as Ancillary Administrator of the estates of the respective deceased 

persons." See Mem. in Opp. [DE-241 at Ex. 2. 

11. ANALYSIS 

Before examining the pending motions, the court must first consider the threshold 

question of whether the court has subject matter jurisdiction over Nordan's claim. See Ins. 

Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702 (1982) 

(explaining that a court has an independent obligation to assess its subject matter jurisdiction 

and may raise it on its own motion). For a district court to have jurisdiction to issue a 

declaratory judgment, the Article 111 case-or-controversy requirements must be satisfied. 28 

U.S.C. § 2201(a); White v. Nat'l Union Fire Ins. Co. of Pittsburgh, Pennsylvania, 913 F.2d 165, 

167 (4th Cir. 1990). 

"Although declaratory judgments are frequently sought in advance of the full harm 

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expected, they must still present a justiciable controversy rather than abstract, hypothetical or 

contingent questions." St. Thomas-St. John Hotel & Tourism Ass'n, Inc. v. Gov't of the United 

States Virgin Islands, 218 F.3d 232, 240 (3d Cir. 2000) (internal quotations omitted). "It must 

be a real and substantial controversy admitting of specific relief through a decree of a 

conclusive character, as distinguished from an opinion advising what the law would be upon 

a hypothetical state of facts." Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 241 (1937). 

Whether the subject of a declaratory judgment action is a sufficiently live controversy 

rather than an abstract question "is necessarily one of degree, and it would be difficult, if it 

would be possible, to fashion a precise test for determining in every case whether there is 

such a controversy." Maryland Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941). 

"Basically, the question in each case is whether the facts alleged, under all the circumstances, 

show that there is a substantial controversy, between parties having adverse legal interests, of 

sufficient immediacy and reality to warrant the issuance of a declaratory judgment." Id. 

In the instant action, the court concludes that Nordan does not have standing to 

pursue a declaratory judgment as to his amenability to arbitration claims against him in his 

individual capacity. As described above, Nordan instituted this action to obtain a 

declaratory judgment that he "has never consented or otherwise agreed to arbitration of any 

matter with [Blackwater]" and "is not subject to any alleged claims in any arbitration forum . . 

, against him in his individual capacity." Notice of Removal [DE-11 Ex. 3, Complaint at p. 8. 

Nordan also seeks injunctive relief prohibiting Blackwater "from proceeding against [Nordan] 

in his individual capacity in arbitration." Id. at p. 10. 

As explained in the arbitration panel's orders, Blackwater has presented no claim 

against Nordan in his individual capacity. Moreover, Blackwater has disclaimed its intent to 

pursue a claim against Nordan in his individual capacity before the arbitration panel. See 

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Mem. in Opp. [DE-241 at ll 1. ("Blackwater hereby stipulates that Blackwater is not 

'proceeding against Plaintiff in his individual capacity' in the arbitration Blackwater initiated 

in December 2006. . . ."). 

Nor is there any suggestion that Blackwater intends in the future to pursue any claim 

under the arbitration clause in the Service Agreements against Nordan in his individual 

capacity. Accordingly, a ruling as to whether Nordan may be subjected to arbitration in his 

individual capacity would not resolve a real, concrete question based on existing facts. The 

court therefore finds that there is not a substantial controversy between the parties of 

sufficient immediacy and reality to warrant the issuance of a declaratory judgment. Cf., Volvo 

Constr. Equip. North America, Inc. v. CWMEquip. Co., Inc., 386 F.3d 581, 592 n.12 (4th Cir. 

2004) (finding a sufficiently live controversy where the parties had initiated litigation, and 

distinguishing another case, North Jefferson Square Associates, L.P. v. Virginia Housing 

Authority, 94 F. Supp. 2d 709 (E.D. Va. 2000), where a "district court determined that a 

controversy was not present under the Declaratory Judgment Act because the defendant had 

not taken any action, even of a preliminary nature, against the plaintiff, and the defendant 

had not indicated that it intended to take any future legal action against the plaintiff"); see 

also Jones v. Sears Roebuck & Co., 2007 WL 964401 (S.D. W. Va. March 28,2007)(holding that 

there was no case or controversy in a declaratory judgment action as to validity of arbitration 

clause where there was no dispute between the parties). Because this action does not meet 

the Article I11 case-or-controversy requirement, this court lacks subject matter jurisdiction to 

issue a declaratory judgment. 

Based on the foregoing, this action is DISMISSED and all pending motions are 

DENIED as moot. The Clerk of Court is DIRECTED to close this case. 

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SO ORDERED. 

d 

This the 1 day of June, 2007. 

Pnior United States District Judge 

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