United States Court of Appeals,

Eleventh Circuit.

No. 97-6179

Non-Argument Calendar.

OLD REPUBLIC UNION INSURANCE COMPANY, Plaintiff-Appellant,

v.

TILLIS TRUCKING CO., INC.; Tillis Land & Timber Co.; Willie Ray Pride; Malachi Moses,

Defendants-Appellees.

Oct. 14, 1997.

Appeal from the United States District Court for the Middle District of Alabama. (No. CV-96-T1462-S), Myron H. Thompson, Judge.

Before TJOFLAT, COX and CARNES, Circuit Judges.

CARNES, Circuit Judge:

This case arises from the efforts of Old Republic Union Insurance Company ("Old

Republic") to avoid payment of a state court judgment against its insured and, alternatively, to have

its obligations under certain insurance policies determined by a federal court instead of state court.

Old Republic sought to do that by instituting a declaratory judgment action in federal district court.

Relying on principles of federalism and comity, including those embodied in Younger v. Harris, 401

U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971), and its progeny, the district court dismissed the

lawsuit without prejudice, in favor of pending state court proceedings. We affirm.

I. BACKGROUND

On December 14, 1994, a tragic accident occurred between a Tillis Trucking Company

tractor-trailer driven by Willie Ray Pride and an automobile driven by Cynthia Moses, who died as

a result of the accident. Together with the co-administrators of the estate, Mrs. Moses' husband,

Malachi Moses, brought a wrongful death action in Dale County, Alabama, against Pride, Tillis

Trucking Company, and its related company, Tillis Land & Timber (collectively, the "Tillis

Companies").
 1

As authoritatively construed by the Alabama Supreme Court, the Alabama Wrongful Death

Statute provides only for the award of punitive damages. See, e.g., Tatum v. Schering Corp., 523

So.2d 1042 (Ala.1988). 

2

Old Republic insures the Tillis Companies under both a commercial automobile liability

policy and a general liability policy. Accordingly, Old Republic provided a defense to all the

defendants in the wrongful death action, while maintaining that it was potentially responsible for

a judgment only up to the $1,000,000 policy limit of the commercial automobile policy. Moses and

independent counsel for the Tillis Companies contended that Old Republic would also be liable

under the terms of the general liability policy for any judgment in excess of that policy limit.

 At trial, Old Republic moved to intervene in order to submit interrogatories to the jury for

the purpose of establishing whether liability was based on any theory that would implicate the

general liability policy in addition to the commercial automobile policy. Initially, the state court

granted Old Republic's motion for intervention, but it later reversed that ruling. Accordingly, Old

Republic's proposed interrogatories were not submitted to the jury. On September 17, 1996, the jury

returned a verdict against Pride and Tillis Trucking, awarding Moses $7,000,000 in punitive

damages.1

Three days later, on September 20, 1996, Old Republic filed a declaratory judgment action

in federal district court, seeking the following declarations: (1) the Alabama Wrongful Death

Statute, Ala.Code § 6-5-410, is unconstitutional; (2) the Alabama Wrongful Death Statute, if

constitutional, cannot be constitutionally enforced against Old Republic or any other insurer; (3)

Old Republic's liability to the defendants cannot exceed the $1,000,000 policy limit of its

commercial automobile insurance policy with the insured.

On October 18, 1996, Moses and the co-administrators filed a second state lawsuit against

Old Republic, Tillis Trucking, and Pride. That lawsuit requested the state court to: (1) enter an

order requiring Old Republic to pay the limit of the commercial automobile policy to the plaintiffs,

and (2) conduct a jury trial to determine the existence and application of coverage under the general

liability policy. Tillis Trucking answered and filed a cross-claim against Old Republic, seeking
3

compensatory and punitive damages for Old Republic's failure to settle the prior wrongful death

action.

On February 5, 1997, the district court dismissed Old Republic's declaratory judgment action

without prejudice in favor of the pending second state action. Relying on principles of federalism

and comity, including those embodied in Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d

669 (1971), and its progeny, the district held that exercise of jurisdiction over the declaratory

judgment action would be "contrary to the established doctrines which discourage such interference

with state courts." District Court Op. at 12-13. This appeal followed.

II. STANDARD OF REVIEW

"Since its inception, the Declaratory Judgment Act has been understood to confer on federal

courts unique and substantial discretion in deciding whether to declare the rights of litigants."

Wilton v. Seven Falls Co., 515 U.S. 277, 284, 115 S.Ct. 2137, 2142, 132 L.Ed.2d 214 (1995).

"Consistent with the nonobligatory nature of the remedy, a district court is authorized, in the sound

exercise of its discretion, to stay or to dismiss an action seeking a declaratory judgment...." Id. at

286, 115 S.Ct. at 2143. Accordingly, the Supreme Court has directed that "district courts' decisions

about the propriety of hearing declaratory judgment actions, which are necessarily bound up with

their decisions about the propriety of granting declaratory relief, should be reviewed for abuse of

discretion," id. at 288, 115 S.Ct. at 2144, and we apply that standard here.

III. ANALYSIS

 The district court declined to exercise jurisdiction over Old Republic's declaratory judgment

action, relying on "considerations of practicality and wise judicial administration." District Court

Op. at 9 (quoting Wilton, 515 U.S. at 286, 115 S.Ct. at 2143). Among those considerations were the

abstention principles of Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971),

particularly as illuminated by the Supreme Court's subsequent decision in Middlesex County Ethics

Committee v. Garden State Bar Association, 457 U.S. 423, 102 S.Ct. 2515, 73 L.Ed.2d 116 (1982).
 2

The district court relied upon the Rooker-Feldman doctrine as an additional ground for

dismissing Old Republic's declaratory judgment action, even though Old Republic ultimately

was denied the opportunity to intervene in the state court wrongful death action. Because we

hold that the district court did not abuse its discretion in relying on Younger abstention principles

in dismissing the declaratory judgment action, and because those principles alone warrant

affirmance of the district court's judgment, we need not decide whether the Rooker-Feldman

doctrine has any bearing on this case. 

 3

By contrast, the principles of Johnson v. American Credit Co. of Georgia, 581 F.2d 526, 530

(5th Cir.1978), relied upon by Old Republic, are plainly inapplicable to this case. In Johnson,

we reversed a district court's abstention order in a 42 U.S.C. § 1983 suit challenging the

constitutionality of Georgia's attachment scheme, because the district court had erroneously held

that the plaintiff was required to exhaust his state remedies before seeking relief in a federal

forum. Id. at 529. In Johnson, no related state action was pending, and thus the principles of

Younger raised no barrier to the plaintiff's lawsuit. Indeed, our Johnson opinion noted explicitly

that the defendants did "not assert that the abstention by the district court can be justified under

the principles of federalism and comity developed in Younger " and held that "Younger ... [does]

not apply to this case." Id. at 530 n. 8. 

4

As we shall explain, those principles alone are sufficient to prevent the district court's decision from

being an abuse of discretion.2

As the district court implicitly recognized, a declaration that the Alabama Wrongful Death

Statute is unconstitutional would have the effect of enjoining the state court from enforcing the

$7,000,000 wrongful death judgment entered against the Tillis Companies and from entertaining the

subsequent state action brought by Moses and the co-administrators against Old Republic seeking

partial satisfaction of that judgment from the policies of insurance.

Under Younger v. Harris and its progeny, federal district courts must refrain from enjoining

pending state court proceedings except under special circumstances. See Younger, 401 U.S. at 53-

54, 91 S.Ct. at 755. Under Samuels v. Mackell, 401 U.S. 66, 73, 91 S.Ct. 764, 768, 27 L.Ed.2d 688

(1971), the principles of Younger apply to declaratory judgments that would effectively enjoin state

proceedings. Accordingly, the principles of Younger have direct application to this case.3

Although Younger itself only concerned state criminal proceedings, its principles have been

extended to prohibit federal courts from enjoining state court civil proceedings where important state

interests are involved:

The policies underlying Younger are fully applicable to noncriminal judicial

proceedings when important state interests are involved. The importance of the state interest
5

may be demonstrated by the fact that the noncriminal proceedings bear a close relationship

to proceedings criminal in nature.... Proceedings necessary for the vindication of important

state policies or for the functioning of the state judicial system also evidence the state's

substantial interest in the litigation. Where vital state interests are involved, a federal court

should abstain unless state law clearly bars the interposition of the constitutional claims.....

The question in this case is threefold: first, do [the proceedings] constitute an

ongoing state judicial proceeding; second, do the proceedings implicate important state

interests; and third, is there an adequate opportunity in the state proceedings to raise

constitutional challenges.

Middlesex County Ethics Comm. v. Garden State Bar Ass'n, 457 U.S. 423, 432, 102 S.Ct. 2515,

2521, 73 L.Ed.2d 116 (1982) (citations and internal quotation marks omitted).

Applying the Middlesex factors to this case, it is readily apparent that the first factor is met.

Clearly, there is an ongoing state judicial proceeding in this case that effectively would be enjoined

if the federal court declared the Alabama Wrongful Death Statute to be unconstitutional: the state

court enforcement action brought by Moses and the co-administrators. It is of no moment that the

state court action was filed after Old Republic filed its federal declaratory judgment action. The

Supreme Court has made it plain that the principles of Younger apply with equal force in the context

of subsequently filed state court proceedings, so long as those "state court proceedings are initiated

"before any proceedings of substance on the merits have taken place in federal court.' " Hawaii

Hous. Auth. v. Midkiff, 467 U.S. 229, 238, 104 S.Ct. 2321, 2328, 81 L.Ed.2d 186 (1984) (quoting

Hicks v. Miranda, 422 U.S. 332, 349, 95 S.Ct. 2281, 2292, 45 L.Ed.2d 223 (1975)).

 Skipping the second factor for the moment, it is also clear that Old Republic has an adequate

opportunity to raise in state court any constitutional objections it has to the Alabama Wrongful

Death Statute. Certainly, Alabama state procedural law does not "clearly bar the interposition of the

constitutional claims." Indeed, the Alabama Supreme Court has already entertained several

constitutional challenges to the Wrongful Death Statute. See, e.g., Alabama Power Co. v. Turner,

575 So.2d 551 (Ala.1991); Central Alabama Elec. v. Tapley, 546 So.2d 371 (Ala.1989). Those

particular challenges were rejected, but Alabama law did not bar their interposition.

Old Republic contends that the Alabama Supreme Court's decisions in Turner and Tapley

deprive it of an adequate opportunity to raise its constitutional challenges, because the Alabama
6

Supreme Court has already upheld the statute as constitutional. We disagree. The Supreme Court

has never held that the practical obstacle created by adverse state supreme court precedent deprives

a party of an adequate opportunity to raise the issue within the meaning of Middlesex. To the

contrary, the Court has held that "the burden on this point rests on the federal plaintiff to show "that

state procedural law barred presentation of [its] claims.' " Pennzoil Co. v. Texaco, Inc., 481 U.S.

1, 14, 107 S.Ct. 1519, 1528, 95 L.Ed.2d 1 (1987) (quoting Moore v. Sims, 442 U.S. 415, 432, 99

S.Ct. 2371, 2382, 60 L.Ed.2d 994 (1979)) (emphasis added). Old Republic can point to no feature

of Alabama procedural law that prohibits it from attempting to persuade the Alabama Supreme Court

to reexamine its decisions in Turner and Tapley, or from pressing constitutional arguments that those

cases did not address. Accordingly, we cannot say that the pending state court enforcement action

will not afford Old Republic an adequate opportunity to press its federal constitutional claims.

Our conclusion that Alabama precedent against Old Republic on the merits on one or more

of its contentions should not excuse it from pursuing those contentions in state court is supported

by analogy to Supreme Court decisions dealing with futility as it relates to procedural default

doctrine in habeas corpus cases. Federal habeas law, like abstention law, is infused with notions of

federalism and comity. With exceptions and qualifications not relevant here, procedural default

doctrine generally bars a state prisoner from raising in a federal habeas proceeding issues which he

failed to timely raise in state court, absent a showing of cause and prejudice. In Smith v. Murray,

477 U.S. 527, 106 S.Ct. 2661, 91 L.Ed.2d 434 (1986), the Supreme Court reiterated the holding of

an earlier decision, Engle v. Isaac, 456 U.S. 107, 130 & n. 36, 102 S.Ct. 1558, 1573 & n. 36, 71

L.Ed.2d 783 (1982), that the likelihood a particular federal constitutional claim will be rejected on

the merits in the state courts does not excuse a habeas petitioner's failure to raise it there. In Smith,

the Court applied that holding to the perceived futility of pressing a claim to the state supreme court,

explaining that "it is the very prospect that a state court may decide, upon reflection, that the

contention is valid that undergirds the established rule that perceived futility alone cannot constitute

cause." Id. at 534-35, 106 S.Ct. at 2666 (citations and internal quotation marks omitted). Likewise,
 4

Old Republic has not cited, nor has our research revealed, any reported federal appellate

decisions holding that the absence-of-adequate-opportunity prong of Middlesex is satisfied by

unfavorable state supreme court precedent addressing the constitutional issue in question. In

W.C.M. Window Co. v. Bernardi, 730 F.2d 486, 490-92 (7th Cir.1984), the Seventh Circuit did

speculate that unfavorable state court precedent might suffice in some circumstances, but

avoided resolution of the question by deciding the case on alternative grounds. We are

unpersuaded by that speculative dicta. At the time of W.C.M. Window, the Seventh Circuit did

not have the benefit of the Supreme Court's Pennzoil or Smith opinions. 

7

the possibility that the Alabama Supreme Court may decide, upon reflection, that Old Republic's

contentions are valid, undergirds our conclusion that perceived futility does not mean that Old

Republic lacks an adequate opportunity to raise its contentions in the Alabama Supreme Court.4

Returning to the second Middlesex factor, the question is this: Does the pending enforcement

action against Old Republic—to which the state is not a party—involve a sufficiently "important"

state interest to justify invocation of the Younger doctrine? The Supreme Court has itself supplied

the answer by applying Younger abstention in the context of a civil punitive damage award between

private parties. In Pennzoil Co. v. Texaco, Inc., 481 U.S. 1, 107 S.Ct. 1519, 95 L.Ed.2d 1 (1987),

Pennzoil obtained a judgment in a Texas state court against Texaco for nearly $11 Billion, including

punitive damages of $3 Billion. Under Texas law, it appeared that Texaco could prevent

enforcement of the judgment only if it posted a bond for more than $13 Billion, which it could not

do. Facing that dilemma, Texaco brought a civil action in federal district court claiming that the

Texas bond and lien provisions denied it due process. Texaco requested that the district court enjoin

enforcement of the judgment pending the appeal of the judgment in the Texas courts. The district

court entered an injunction, and the court of appeals affirmed. See id. at 6-8, 107 S.Ct. at 1524.

The Supreme Court reversed, holding that the federal district court should have abstained

on Younger grounds. See Pennzoil, 481 U.S. at 17, 107 S.Ct. at 1529. The Supreme Court reasoned

that "the States have important interests in administering certain aspects of their judicial systems"

that can suffice to support invocation of Younger abstention, even in the context of civil proceedings

involving purely private parties. Id. at 14, 107 S.Ct. at 1527. The Court elaborated on the

importance of the state's interest as follows:
8

Not only would federal injunctions in such cases interfere with the execution of state

judgments, but they would do so on grounds that challenge the very process by which those

judgments were obtained. So long as those challenges relate to pending state proceedings,

proper respect for the ability of state courts to resolve federal questions presented in

state-court litigation mandates that the federal court stay its hand.

Id.

Under Pennzoil, it is readily apparent that pending enforcement action against Old Republic

is sufficient to satisfy the second Middlesex factor. A federal declaratory judgment that the Alabama

Wrongful Death Statute is unconstitutional would not only interfere with partial satisfaction of the

wrongful death judgment against the Tillis Companies by means of an enforcement action against

Old Republic, it "would do so on grounds that challenge the very process by which [that] judgment[

][was] obtained."

 As the district court correctly observed, Younger abstention is rooted in notions of comity.

See, e.g., Pennzoil, 481 U.S. at 10-11, 107 S.Ct. at 1525-26. In order to award Old Republic the

declaratory relief it seeks, a federal court would have to determine that Alabama's procedures for

awarding damages under its wrongful death statute are so woefully inadequate that its own state

courts are incapable of preventing unconstitutional damage awards in wrongful death cases. The

federal court would have to find that Alabama state courts are incapable of enforcing the federal

constitution in this context. Merely stating that proposition is sufficient to illuminate why the

Younger doctrine stands in the way of the relief sought by Old Republic.

Principles of comity notwithstanding, Old Republic contends that exceptional circumstances

in Alabama required the district court to entertain its declaratory judgment action. Specifically, Old

Republic contends that it cannot obtain a fair resolution of its constitutional claims in state court due

to "the inherent bias of an entire court system which routinely enters and affirms enormous punitive

awards against out-of-state defendants and, in particular, out-of-state insurance companies." In

constructing that argument, Old Republic makes much of newspaper and magazine articles, which

"tell a bleak story of jury excesses," as well the fact that the United States Supreme Court has

recently held some Alabama punitive damage judgments to be unconstitutionally excessive.
9

According to Old Republic, the Supreme Court's opinion in BMW of North America, Inc. v. Gore, ---

U.S. ----, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996), illustrates the constitutional deficiencies of

Alabama's system.

We are aware of the Supreme Court's decision in BMW, but it did not hold that Alabama's

punitive damages laws are unconstitutional; instead, it held that they had been unconstitutionally

applied. See --- U.S. at ---- - ----, 116 S.Ct. at 1598-99. There is a world of difference between

holding that Alabama courts have erred by failing to reduce or overturn unconstitutionally excessive

damage awards in one or more cases and in holding that the entire state punitive damages scheme

is incapable of constitutional application. Accordingly, BMW does not change the Younger

abstention analysis applicable to this case.

Although on some occasions Alabama's punitive damages laws have been applied

unconstitutionally, Old Republic has not shown that the Alabama Wrongful Death Statute is

"flagrantly and patently violative of express constitutional prohibitions," or that the Alabama courts

are applying the statute in bad faith, or that other "extraordinary circumstances" are present, as

would be necessary to make an exception to the Younger rule. See Younger, 401 U.S. at 53-54, 91

S.Ct. at 755 (citation and internal quotation marks omitted). Since BMW, the Alabama Supreme

Court has shown itself able and willing to follow the Supreme Court's guidelines for ensuring that

Alabama punitive damage awards satisfy constitutional constraints. See, e.g., American Pioneer Life

Ins. Co. v. Williamson, No. 1921796, --- So.2d ----, ---- (Ala. Sept. 5, 1997) (on remand from the

Supreme Court) (conditioning affirmance on remittitur of $2,000,000 punitive damage award to

$750,000); Ford Motor Co. v. Sperau, No. 1931591, --- So.2d ----, ---- (Ala. Sept. 5, 1997) (on

remand from the Supreme Court) (conditioning affirmance on remittitur of $6,000,000 punitive

damage award to $1,792,000); Life Ins. Co. of Georgia v. Johnson, No. 1940357, --- So.2d ----, ----

(Ala. Aug. 15, 1997) (on remand from the Supreme Court) (conditioning affirmance on remittitur

of $15,000,000 punitive damage award to $3,000,000); Union Sec. Life Ins. Co. v. Crocker, No.

1931672, --- So.2d ----, ---- (Ala. Aug. 15, 1997) (on remand from the Supreme Court) (conditioning
10

affirmance on remittitur of $2,000,000 punitive damage award to $1,000,000); Hillcrest Ctr., Inc.

v. Rone, No. 1940535, --- So.2d ----, ---- (Ala. Aug. 1, 1997) (affirming trial court's remittitur of

punitive damage award from $200,000 to $130,000); BMW of North America, Inc. v. Gore, No.

1920324, --- So.2d ----, ---- (Ala. May 9, 1997) (on remand from the Supreme Court) (conditioning

affirmance on remittitur of $2,000,000 punitive damage award to $50,000); Foremost Ins. Co. v.

Parham, 693 So.2d 409, 413, 435 (Ala.1997) (conditioning affirmance on remittitur of two separate

$7,500,000 punitive damage awards to $175,000 and $173,000). Indications are that the BMW

decision has ushered in a new era for punitive damages in Alabama.

IV. CONCLUSION

For the foregoing reasons, we conclude that the district court did not abuse its discretion in

dismissing Old Republic's declaratory judgment action. The district court's judgment of dismissal

without prejudice is AFFIRMED.