United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 06-3454

___________ 

Royal Indemnity Company, *

individually and as successor by *

merger with Royal Insurance *

Company of America, *

formerly known as Royal Globe *

Insurance Company, *

*

Appellant, *

*

v. * Appeals from the United States

* District Court for the 

Apex Oil Company, Inc. * Eastern District of Missouri.

individually and as successor in *

interest to Clark Oil and Refining *

Corporation; Ace Insurance *

Company, of Illinois, as *

successor in interest to INA *

Insurance Company of Illinois; *

Central National Insurance *

Company of Omaha; Maryland *

Casualty Company, as successor *

in interest to American General *

Insurance Company; National Union *

Fire Insurance Company of Pittsburgh; *

TIG Insurance Company, successor in *

interest to International Insurance *

Company, successor in interest to *

International Insurance Company, *

*

Appellees. *
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___________

No. 06-3461

___________ 

Royal Indemnity Company, *

individually and as successor by *

merger with Royal Insurance *

Company of America, *

formerly known as Royal Globe *

Insurance Company, *

*

Plaintiff, *

*

v. *

*

Apex Oil Company, Inc. *

individually and as successor in *

interest to Clark Oil and Refining *

Corporation; Ace Insurance *

Company, of Illinois, as *

successor in interest to INA *

Insurance Company of Illinois; *

Central National Insurance *

Company of Omaha; Maryland *

Casualty Company, as successor *

in interest to American General *

Insurance Company; National Union *

Fire Insurance Company of Pittsburgh; *

TIG Insurance Company, successor in *

interest to International Insurance *

Company, *

*

Defendants, *

*

v. *

*
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National Union Fire Insurance Company *

of Pittsburgh, *

*

Third Party Plaintiff - *

Appellant, *

*

Corroon & Black of Missouri, Inc.; *

Frank B. Hall & Co. of Missouri, Inc., *

*

Third Party Defendants - *

Appellees. *

*

___________

No. 06-3469

___________ 

Royal Indemnity Company, *

individually and as successor by *

merger with Royal Insurance *

Company of America, *

formerly known as Royal Globe *

Insurance Company, *

*

Plaintiff, *

*

v. *

*

Apex Oil Company, Inc. *

individually and as successor in *

interest to Clark Oil and Refining *

Corporation; Ace Insurance *

Company, of Illinois, as *

successor in interest to INA *

Insurance Company of Illinois; *

Central National Insurance *

Company of Omaha; Maryland *
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Casualty Company, as successor *

in interest to American General *

Insurance Company; National Union *

Fire Insurance Company of Pittsburgh; *

TIG Insurance Company, successor in *

interest to International Insurance *

Company, *

*

Defendants, *

*

------------------------------ *

*

TIG Insurance Company, successor *

in interest to, *

*

Cross-Claimant - Appellant, *

*

v. *

*

Apex Oil Company, Inc., *

*

Cross-Defendant - Appellee. *

________________

Submitted: October 19, 2007

 Filed: January 2, 2008 

________________

Before LOKEN, Chief Judge, GRUENDER and BENTON, Circuit Judges.

________________

GRUENDER, Circuit Judge.

Royal Indemnity Company brought this action pursuant to 28 U.S.C. §§ 2201

and 2202, to seek a declaration of the rights and obligations of Royal Indemnity

Company, various other insurance companies and Apex Oil Company, Inc. (“Apex”),
1

The Honorable Carol E. Jackson, Chief Judge, United States District Court for

the Eastern District of Missouri. 

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under certain insurance policies Royal Indemnity Company and the other insurance

companies issued to Apex. For the reasons discussed below, we affirm the district

court’s1

 decision to abstain, but we vacate the dismissal order and remand so that the

court can instead enter an order staying the proceedings. 

I. BACKGROUND

Between May 2003 and April 2005, the State of Illinois, the United States, and

a group of individuals filed five separate lawsuits (“the underlying suits”) against

Apex in state and federal courts in Illinois based on the actions of Apex and its

predecessor companies in releasing contaminants into the soil surrounding its oil

refinery in Hartford, Illinois. Royal Indemnity Company defended Apex on the

majority of the underlying suits. On August 5, 2005, Apex brought suit against

multiple insurers in the Circuit Court of Madison County, Illinois (“the Illinois

lawsuit”), seeking a declaration of the parties’ rights and responsibilities with respect

to the Hartford soil contamination under policies the insurance companies had issued

to Apex. 

On March 22, 2006, Royal Indemnity Company initiated this lawsuit by filing

a complaint in federal court pursuant to the Declaratory Judgment Act, 28 U.S.C. §§

2201 and 2202, “seeking adjudication of the parties’ rights and obligations under

certain insurance policies.” In its complaint, Royal Indemnity Company also sought

a declaration of the rights and responsibilities of the parties based on claims of

equitable contribution, subrogation, unjust enrichment and/or equitable estoppel for

the costs Royal Indemnity Company incurred in defending Apex as well as attorneys’

fees, costs and interest. In this lawsuit, Royal Indemnity Company named Ace

Insurance Company of Illinois; Central National Insurance Company of Omaha;
2

For the sake of simplicity, we refer to all three appellants as Royal throughout

this opinion. Although the three appellants entered the lawsuit at different times, the

district court used the same rationale in dismissing the appellants’ claims and crossclaims against Apex, and the three use the same arguments in their efforts to prove

that abstention is inappropriate in this lawsuit. 

-6-

Maryland Casualty Company, as successor in interest to American General Insurance

Company; National Union Fire Insurance Company of Pittsburgh, PA; and TIG

Insurance Company as defendants. In the course of this lawsuit, National Union and

TIG Insurance Company filed separate cross-complaints against Apex, and National

Union interpleaded Corroon & Black of Missouri, Inc., and Frank B. Hall & Co. of

Missouri, Inc., as third-party defendants.

On May 19, 2006, Apex amended its complaint in the Illinois lawsuit to name

as defendants the same entities who are parties to this lawsuit. Apex then filed a

motion to dismiss this lawsuit as duplicative of the Illinois lawsuit. The Illinois

lawsuit remains active, although two of the defendants, National Union and Corroon

& Black, have filed motions to dismiss, which were still pending before the Illinois

state court at the time this appeal was submitted. The district court granted Apex’s

motions to dismiss Royal Indemnity Company’s initial complaint and National

Union’s and TIG’s cross-claims, dismissing all claims without prejudice under the

abstention doctrine of Wilton v. Seven Falls Co., 515 U.S. 277 (1995). The district

court found that the Illinois lawsuit and this lawsuit were parallel, that the claim was

essentially one for declaratory judgment, and that it had the discretion to abstain from

this lawsuit under Wilton and Brillhart v. Excess Insurance Co. of America, 316 U.S.

491 (1942).

Royal Indemnity Company, National Union and TIG (collectively “Royal”)2

appeal the dismissal, claiming the district court erred in finding that it could abstain

under Wilton and Brillhart. Royal requests that we either find that the abstention test

articulated in Wilton and Brillhart does not apply or, in the alternative, that we remand
-7-

so the district court can enter an order staying these proceedings instead of dismissing

this lawsuit. We affirm the district court’s decision to abstain, but we vacate the

dismissal and remand for the district court to enter an order staying the proceedings

in this lawsuit. 

II. DISCUSSION

Although rare, federal courts may sometimes refrain from exercising

jurisdiction over a case properly filed in federal court. “The doctrine of abstention,

under which a District Court may decline to exercise or postpone the exercise of its

jurisdiction, is an extraordinary and narrow exception to the duty of a District Court

to adjudicate a controversy properly before it.” County of Allegheny v. Frank

Mashuda Co., 360 U.S. 185, 188 (1959). In Colorado River Water Conservation

District v. United States, 424 U.S. 800, 817 (1976), the Supreme Court noted that

federal courts have a “virtually unflagging obligation . . . to exercise the jurisdiction

given them.” Under the standard articulated in Colorado River, a federal court should

only abstain from a case in which there are parallel state proceedings for “exceptional

circumstances.” Id. at 813 (quoting County of Allegheny, 360 U.S. at 188-89). 

However, the test articulated in Colorado River for a federal court to abstain

when there are parallel state proceedings does not apply to actions under the

Declaratory Judgment Act. See Wilton, 515 U.S. at 286. Federal courts have more

discretion to abstain in an action when a party seeks relief under the Declaratory

Judgment Act. See Wilton, 515 U.S. at 286-87; Brillhart, 316 U.S. at 494-95. This

broader discretion arises out of the Declaratory Judgment Act’s language that a court

“may declare the rights and other legal relations of any interested party seeking such

declaration.” 28 U.S.C. § 2201(a) (emphasis added). The Supreme Court has noted

that it has “repeatedly characterized the Declaratory Judgment Act as ‘an enabling

Act, which confers a discretion on the courts rather than an absolute right upon the

litigant.’” Wilton, 515 U.S. at 287 (quoting Public Serv. Comm’n of Utah v. Wycoff
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Co., 344 U.S. 237, 241 (1952)). In emphasizing the uniqueness of the Declaratory

Judgment Act, the Court commented that its “textual commitment to discretion, and

the breadth of leeway we have always understood it to suggest, distinguish the

declaratory judgment context from other areas of the law in which concepts of

discretion surface.” Id. at 286-87. Therefore, in a declaratory judgment action, a

federal court has broad discretion to abstain from exercising jurisdiction even if there

are no exceptional circumstances as articulated in Colorado River. See Scottsdale Ins.

Co. v. Detco Indus., Inc., 426 F.3d 994, 997 (8th Cir. 2005).

According to Brillhart, for a district court to have discretion to abstain in a

proceeding under the Declaratory Judgment Act, the parallel state court proceeding

must present “the same issues, not governed by federal law, between the same

parties,” and the court must evaluate “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.”

Brillhart, 316 U.S. at 495. After considering these factors, a federal court may abstain

from the proceeding because “[o]rdinarily it would be uneconomical as well as

vexatious for a federal court to proceed in a declaratory judgment suit where” a

parallel state court proceeding is pending. Id. 

We review a district court’s decision to abstain for abuse of discretion, giving

underlying legal decisions plenary review. Cedar Rapids Cellular Tel., L.P. v. Miller,

280 F.3d 874, 878 (8th Cir. 2002).

Royal argues that the district court erred in applying the Wilton and Brillhart

abstention doctrine and instead should have applied the “exceptional circumstances”

test articulated in Colorado River. However, unlike Colorado River, this lawsuit

involves a declaratory judgment action. Apex, therefore, claims that the district court

correctly relied upon Wilton and Brillhart to govern its abstention analysis. Royal

responds by arguing that Royal Indemnity Company’s claims for contribution,
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subrogation, unjust enrichment and equitable estoppel are independent from its claims

for declaratory judgment, and the existence of these claims causes Wilton and

Brillhart to be inapplicable and requires instead that we analyze the decision to abstain

under the test articulated in Colorado River. Royal thus concludes that the

circumstances here are not so exceptional as to allow a federal court to abstain and

that we should therefore reverse the district court and remand for this lawsuit to

proceed on the merits. 

However, the fact that Royal Indemnity Company seeks monetary damages in

addition to declaratory relief does not require a federal court automatically to apply

the exceptional circumstances test articulated in Colorado River. The Declaratory

Judgment Act allows a court to grant any “further necessary or proper relief based on”

its declaratory judgment decree. 28 U.S.C. § 2202. A court has discretion to grant

further necessary or proper relief in declaratory judgment actions; consequently, a

court may still abstain in a case in which a party seeks damages as well as a

declaratory judgment so long as the further necessary or proper relief would be based

on the court’s decree so that the essence of the suit remains a declaratory judgment

action. See, e.g., Horne v. Firemen’s Ret. Sys. of St. Louis, 69 F.3d 233, 236 (8th Cir.

1995) (finding that “the essence of [Horne’s] suit [was] one for declaratory judgment”

when he sought a declaratory judgment, an injunction to prevent his employers from

removing him from his job, emotional distress damages and attorneys’ fees). While

Royal Indemnity Company seeks monetary damages in addition to a declaratory

judgment, those damages can all be characterized as “further necessary or proper

relief” that Royal Indemnity Company seeks based on the requested declaratory

judgment. The damages Royal Indemnity Company seeks are not independent of the

requested declaratory judgment, but are closely linked with it. The prayer for relief

in Royal Indemnity Company’s complaint seeks:

A. Under Count I [a claim for declaratory relief regarding Apex],

declaring that Royal [Indemnity Company] is not required to defend

and/or indemnify Apex Oil in the Illinois Action;
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B. Under Count II [the claim for equitable contribution, subrogation,

and/or unjust enrichment], declaring that Royal [Indemnity Company]

is entitled to contribution from the Defendant Insurers for their portion

of Apex Oil’s defense costs in the [underlying suits] to be determined by

the Court;

C. Under Count III [the claim for equitable estoppel], declaring that

ACE, Central National and National Union are equitably estopped from

denying Apex Oil a defense and/or indemnity in the [underlying suits];

D. Under Count IV [a claim for declaratory relief regarding the other

insurers], declaring the rights and responsibilities of the Parties in

connection with the [underlying suits], including a declaration that Royal

[Indemnity Company] has no obligation to continually defend and/or

indemnify Apex Oil in the [underlying suits], or in the alternative,

declaring that any defense and/or indemnity obligations owed to Apex

Oil in connection with the [underlying suits] must be apportioned

between and among the insurance policies issued by Royal [Indemnity

Company] and all Defendant Insurers and/or Apex Oil itself;

E. Awarding attorneys’ fees, costs and interest and such other and

further relief as this Court may be [sic] necessary and proper.

If the district court were to reject Royal Indemnity Company’s claims under the

Declaratory Judgment Act, it could not recover on the claims for contribution,

subrogation, unjust enrichment and equitable estoppel. According to the prayer for

relief in its complaint, Royal Indemnity Company generally seeks declarations of the

rights and responsibilities of the various parties involved in the lawsuit. However, it

also seeks contribution from the other insurance companies for the portion of Apex’s

defense costs “to be determined by the Court.” Such contribution, however, would

clearly arise out of the district court’s determination of the rights and responsibilities

of the various insurers and, therefore, would clearly constitute “further necessary or

proper relief” based on the declaratory judgment. The only other monetary damages

Royal Indemnity Company explicitly requests in the complaint are attorneys’ fees,

costs and interest, all of which are also “further necessary or proper relief” based on

the requested declaratory judgment. Therefore, as in Horne, we believe the essence

of this lawsuit is one for declaratory judgment.
3

In explicitly requiring that an injunction be in good faith for Brillhart not to

apply, Cedar Rapids was clearly referring to an exception noted in Black Sea

Investment, Ltd. v. United Heritage Corp., 204 F.3d 647, 652 (5th Cir. 2000). In

Black Sea, the Fifth Circuit explained that generally when a party seeks both

declaratory and injunctive relief, the test articulated in Colorado River controls and

“the only potential exception to this general rule applies when a party’s request for

injunctive relief is either frivolous or is made solely to avoid application of the

Brillhart standard.” Id. Based on Cedar Rapids’s reliance on Black Sea, we conclude

that a “good faith” injunction is one that is not frivolous or made solely to avoid

application of Wilton and Brillhart. Therefore, Wilton and Brillhart may not apply

when a party seeks a good faith injunction as well as declaratory relief, but a party

cannot avoid application of the Wilton and Brillhart abstention standard merely by

artfully pleading manufactured claims for injunctive relief.

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In Horne, this court concluded that Horne’s “suit [was] most aptly characterized

as one for declaratory judgment; that is, for a declaration of his rights with respect to

his continued employment with any additional relief based on the court’s decree”

when he sought a declaratory judgment, an injunction to prevent his employers from

removing him from his job, unspecified emotional distress damages and attorneys’

fees in a duplicative federal action. 69 F.3d at 236. Because “the essence of his suit

[was] one for declaratory judgment,” and Brillhart governs a district court’s decision

to abstain from a declaratory judgment action, we affirmed the district court’s decision

to abstain. Id. In Cedar Rapids, conversely, we reversed the district court’s decision

to abstain because, in addition to a declaratory judgment, the appellants sought

injunctive relief to prevent the Iowa Attorney General from enforcing an Iowa law

against them which they claimed was preempted by the Federal Communications Act.

280 F.3d at 877-79. We noted that “Brillhart applies to declaratory judgment actions

generally, but not to actions that, like this one, involve good faith claims for injunctive

relief.”3

 Id. at 879. Royal argues that Cedar Rapids limits Horne and that Cedar

Rapids applies here because Royal Indemnity Company seeks not only declaratory

relief but also claims for contribution, subrogation, unjust enrichment and equitable

estoppel. However, we do not agree that Cedar Rapids controls in this lawsuit.

Because Royal Indemnity Company does not seek an injunction, Cedar Rapids does

not prevent a federal court from abstaining from this lawsuit.
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Royal also argues that the Ninth Circuit’s decisions in Government Employees

Insurance Co. v. Dizol, 133 F.3d 1220 (9th Cir. 1998) (en banc), and United National

Insurance Co. v. R & D Latex Corp., 242 F.3d 1102 (9th Cir. 2001), support its claims

that Wilton and Brillhart do not apply here. However, not only are these cases not

binding precedent for us, they are easily distinguishable. In Dizol, the Ninth Circuit

stated that abstention was inappropriate when a complaint included other claims such

as bad faith, breach of contract, breach of fiduciary duty and recission. 133 F.3d at

1225. Those claims were entirely separate and distinct from the claim for declaratory

judgment and thus could not be deemed “further necessary or proper relief” based on

the sought-after declaratory judgment claim. Thus, Wilton and Brillhart would clearly

be an inappropriate basis for abstention in those circumstances. In R & D Latex, the

Ninth Circuit noted that one of the claims, a request for monetary relief, was

essentially a claim for breach of contract. 242 F.3d at 1112. The Ninth Circuit found

that the claim for monetary relief was “independent of the request for declaratory

relief.” Id. at 1114. Here, Royal Indemnity Company’s claims for monetary relief are

not independent of the request for declaratory judgment, but qualify as further

necessary or proper relief under the Declaratory Judgment Act. Thus, Dizol and R &

D Latex simply do not apply to our analysis.

Therefore, because the essence of this lawsuit is one for declaratory judgment

and because the Wilton and Brillhart abstention analysis applies to claims for

declaratory judgment, we hold that the district court correctly determined that the

Wilton and Brillhart abstention standard applied. We now must address whether the

district court abused its discretion in applying the factors presented in Wilton and

Brillhart when it reached its conclusion that it could abstain. As discussed above, for

a district court to have discretion to abstain in a proceeding under the Declaratory

Judgment Act, the state court proceeding must present “the same issues, not governed

by federal law, between the same parties,” and the federal court must evaluate

“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.” Brillhart, 316 U.S. at 495.

 
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Here, analyzing the factors presented in Brillhart and Wilton, we conclude that

the district court did not abuse its discretion in finding that it had discretion to abstain

from hearing this lawsuit. The Illinois lawsuit and this lawsuit both seek a declaration

of the rights and responsibilities of the parties under the insurance policies regarding

the underlying lawsuits against Apex. Royal argues that this lawsuit presents a

separate issue because it seeks monetary damages as well as relief under the

Declaratory Judgment Act. As discussed above, however, that is incorrect because we

find this lawsuit to be, in essence, an action for a declaratory judgment. Therefore,

the issues in both proceedings are the same. 

The issues to be resolved in both the Illinois lawsuit and this lawsuit involve the

application of state insurance law. Federal law does not govern the underlying issues

of the Illinois lawsuit or this lawsuit. Therefore, this factor does not disqualify the

federal court from abstaining under Wilton and Brillhart. See Brillhart, 316 U.S. at

495. See also Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 26

(1983) (finding that if federal law governs the federal action, that “must always be a

major consideration weighing against surrender”). 

The parties to both the Illinois lawsuit and this lawsuit were the same at the time

this appeal was submitted. All the necessary parties have been joined in the Illinois

lawsuit, and their claims can be adjudicated in the Illinois state court. Royal notes that

National Union and Corroon & Black have filed motions to dismiss in the Illinois

lawsuit and argues that if those motions are granted, the parties to the two lawsuits

will not be identical and the court should not be able to invoke the Wilton and

Brillhart abstention doctrine. However, at the time this appeal was submitted, the

Illinois state court had not granted those motions. Thus, for the purposes of this

lawsuit and the abstention analysis, the parties are the same. If the Illinois state court

eventually grants those motions to dismiss, the parties to the lawsuits will not be

identical and the abstention analysis may be different. However, we decline to

speculate on how the Illinois state court might rule with respect to the motions to

dismiss. Therefore, on the record as presented to us, the parties to the two lawsuits

are identical.
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Finally, Royal argues that the district court erred in failing to analyze the choice

of law and forum non conveniens considerations in deciding to abstain. However, the

Supreme Court has never used choice of state law or forum non conveniens as factors

in analyzing an abstention under Wilton and Brillhart, and Royal cites only one

unpublished decision from the Southern District of New York in which those factors

have been considered. See Reliance Ins. Co. of Illinois v. Multi-Fin. Secs. Corp., 1996

WL 61763, at *4-5 (S.D.N.Y. 1996) (unpublished) (finding, among other factors, that

choice of law and forum non conveniens supported the court’s decision to abstain).

This unpublished, nonbinding case does not persuade us that we are required to

consider choice of law and forum non conveniens, particularly because Reliance

merely stated that “choice of law and forum non conveniens factors also support

abstention” and did not hold that a court must consider those factors in determining

whether abstention was appropriate. Id. 

Were we to consider choice of law and forum non conveniens in determining

whether to abstain under Wilton and Brillhart, these considerations would not compel

us to refrain from abstaining in this lawsuit. Even if the choice of law analysis led to

choosing Missouri law, the Illinois state court is perfectly capable of applying

Missouri state law in its case. See Morris B. Chapman & Assocs. v. Kitzman, 739

N.E.2d 1263, 1268 (Ill. 2000) (upholding the application of Missouri law in an action

for attorneys’ fees filed in Madison County). Even if we were to consider the issue

of forun non conveniens, we would not find the Illinois state court inconvenient

because Madison County is located very close to the district court for the Eastern

District of Missouri, because the underlying lawsuits were filed in Illinois and because

the insured property is located in Illinois. Thus, we reject Royal’s argument that

choice of law and forum non conveniens compel us to refrain from abstaining in this

lawsuit.

Thus, we affirm the district court’s decision to apply the Wilton and Brillhart

abstention standard, and after considering the appropriate Wilton and Brillhart factors,

we hold that the district court did not abuse its discretion in abstaining from this

lawsuit to allow the parallel state court action to proceed.
4

Because we remand so that the district court can enter a stay in this lawsuit, we

need not address Royal’s argument that in dismissing this lawsuit the district court

abused its discretion under Quackenbush v. Allstate Insurance Co., 517 U.S. 706

(1996).

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However, we vacate the dismissal order and remand so that the district court

can enter instead a stay of proceedings. As courts have noted, “where the basis for

declining to proceed is the pendency of a state proceeding, a stay will often be the

preferable course, because it assures that the federal action can proceed without risk

of a time bar if the state case . . . fails to resolve the matter in controversy.” Wilton,

515 U.S. at 288 n.2. See also Int’l Ass’n of Entrepreneurs of Am. v. Angoff, 58 F.3d

1266, 1271 (8th Cir. 1995); Hart and Wechsler’s The Federal Courts and the Federal

System 1193 (5th ed. 2003) (discussing the distinction between a stay and a

dismissal). As the Supreme Court has concluded, an order staying an action “does not

constitute abnegation of judicial duty. On the contrary, it is a wise and productive

discharge of it. There is only postponement of decision for its best fruition.”

Louisiana Power & Light Co. v. City of Thibodaux, 360 U.S. 25, 29 (1959). Here, the

Illinois state court could potentially grant the motions to dismiss of Corroon & Black

and National Union, leading to different parties in each lawsuit and perhaps creating

non-parallel proceedings. Therefore, because of the potential for non-parallel

proceedings, because of potential statutes of limitations issues and because of the

preference for stays, we remand so that the district court can enter a stay rather than

a dismissal in this lawsuit.4

III. CONCLUSION

Accordingly, we affirm the district court’s decision to abstain, but we vacate its

dismissal order and remand for entry of a stay. 

______________________________