DEFENDANTS’ MOTION TO DISMISS PAGE 1 

IN THE UNITED STATES DISTRICT COURT 

WESTERN DISTRICT OF TEXAS 

PECOS DIVISION 

ARCH INSURANCE 

COMPANY, 

§ 

§ 

 

PLAINTIFF § 

V. 

§ 

§ 

§ 

 CIVIL ACTION NO. 4:20-CV-00036- 

DC-DF 

RITA CANDELARIO AND 

CRISTOBAL CANDELARIO 

§ 

§ 

§ 

DEFENDANTS § 

DEFENDANTS’ MOTION TO DISMISS 

TO THE HONORABLE JUDGE OF THIS COURT: 

 Pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12b(6), Defendants 

Rita Candelario and Cristobal Candelario move to dismiss Plaintiff Arch Insurance 

Company’s Original Complaint for Declaratory Judgment, or in the alternative, ask 

this Court to abstain from exercising its jurisdiction over this declaratory judgment 

case, because Plaintiff Arch Insurance has failed to allege an “actual controversy” 

as required by the Declaratory Judgment Act or an existing “case or controversy” as 

required by the United States Constitution, and would respectfully show this Court 

as follows: 

I. RULE 12(b)(1)

 Federal Rule of Civil Procedure 12(b)(1) authorizes this Court to dismiss any 

case for lack of jurisdiction over the subject matter. See FED. R. CIV. P. 12(b)(1). A 

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case is properly dismissed for lack of subject matter jurisdiction when the Court 

lacks the statutory or constitutional authority to adjudicate the case. See Home 

Builders Ass’n of Miss., Inc. v. City of Madison, 143 F.3d 1006, 1010 (5th Cir. 1998). 

When the Court’s subject matter jurisdiction is challenged, the party asserting 

jurisdiction bears the burden of establishing it. See King v. U.S. Dep’t of Veterans 

Affairs, 728 F.3d 410, 413 (5th Cir. 2013). The Court may dismiss a complaint for 

lack of subject matter jurisdiction on any one of these three bases: (1) the complaint 

alone; (2) the complaint supplemented by undisputed facts in the record; or (3) the 

complaint supplemented by undisputed facts plus the Court’s resolution of disputed 

facts. See Stratta v. Roe, 961 F.3d 340, 349 (5th Cir. 2020). 

II. RULE 12(b)(6) 

 To survive a motion to dismiss pursuant to Federal Rule of Civil Procedure 

12(b)(6), a complaint must contain sufficient factual matter, accepted as true, to state 

a claim for relief that is plausible on its face. See Ashcroft v. Iqbal, 556 U.S. 662, 

678 (2009). A plaintiff seeking federal declaratory relief must state sufficient facts 

to state a claim that satisfies the statutory “case or controversy” requirement. See 

Preston v. Seterus, Inc., 931 F. Supp. 2d 743, 751 (N.D. Tex. 2013). 

 When a party seeks to dismiss a declaratory judgment action under both Rule 

12(b)(1) and Rule 12(b)(6), the Court must first determine whether the Court has 

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subject matter jurisdiction and decide whether the Rule 12(b)(1) motion should be 

granted. See Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 239-41 (1937). 

A. The State Court Case. 

 Defendant Rita Candelario was an employee of Guard 1 Services, LLP, and 

provided security services at the Ramsey Natural Gas Processing Plant pursuant to 

a Master Services Contract between Guard 1 and Anadarko Petroleum Company. 

Orig. Complaint, Ex. 2. The Master Services Agreement provided that Guard 1 and 

its employees, like Defendant Rita Candelario, were independent contractors and 

should not be considered to be employees, agents, servants, or representatives of 

Anadarko. Orig. Complaint, Ex. 2, ¶ 9. 

The plant was under the operational direction, control, and supervision of 

Western Gas Partners LP, d/b/a Delaware Basin Midstream, LLC. See Plf.’s 1st Am. 

Pet. at 4 (Orig. Complaint, Ex. 1). Andarko was in contractual and actual control of 

the work site in question. Id.

In December 2015, John Doe, an employee of either Anadarko or Western 

Gas, was attempting to transfer hazardous materials from a storage unit to a truck 

for transport when he discovered that a valve was frozen. To loosen the frozen valve, 

he used a diesel burner to apply heat to it. This started a fire and led to two major 

explosions. Plf.’s 1st Am. Pet. at 4 (Orig. Complaint, Ex. 1). 

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As a result of the second explosion, Rita Candelario, who was working at the 

plant that day, was catapulted into the air and then forcefully propelled onto the 

ground. She was seriously injured by this second blast. In October 2017, she and 

her husband, Cristobal Candelario, filed a personal injury suit in state court against 

Western Gas, Anadarko, and John Doe. See Rita Candelario and Cristobal 

Candelario v. Western Gas Partners, LP d/b/a Delaware Basin Midstream, LLC, 

Andadarko Petroleum Corporation, and John Doe, No. 17-10-22180-CVR; in the 

143rd Judicial District Court of Reeves County, Texas. Western Gas, Anadarko, 

and John Doe filed answers, contending, among other things, that Rita Candelario 

was acting as their “borrowed servant” and that they were therefore entitled to assert 

the Workers’ Compensation Bar against her claims. See Defs.’ 2nd Am. Answer ¶ 

19 (Tab A); TEX. LAB. CODE 408.001. The parties have been actively litigating the 

case in state court since October 2017. 

B. The Federal Court Case. 

In May 2020, Arch Insurance Company filed this “ancillary action,” seeking 

a declaration that Anadarko was the employer of Defendant Rita Candelario at the 

time of the explosions and was thus entitled to assert the Workers’ Compensation 

Bar against Ms. Candelario’s claims in state court. (Specifically, Arch Insurance 

seeks a federal declaration that Rita Candelario was a “borrowed servant” and acting 

as an Anadarko employee under the terms of the Master Service Contract and the 

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facts of the case—even though Arch Insurance is not a party to the Master Service 

Contract.) In other words, Arch Insurance is asking this Court to step in and issue a 

federal declaration that one of Anadarko’s defenses in the ongoing state-court action 

is meritorious and should bar Rita Candelario’s state-law claims against Anadarko 

in state court. 

Arch Insurance contends that it is entitled to this declaration because it issued 

a general liability policy to Guard 1 to satisfy the insurance requirements in the 

Master Service Contract and because Anadarko has demanded that Arch Insurance 

defend and indemnify it in the state-court action. Arch Insurance maintains that it 

will be “directly affected” by the state-court determination regarding whether Rita 

Candelario is a “borrowed servant” of Anadarko under the Master Service Contract 

and the facts of the case at the time of the explosion. Orig. Petition at 2. Arch 

Insurance is also seeking its costs and fees under Section 37.009 of the Texas Civil 

Practice & Remedies Code. 

Arch Insurance is not seeking a coverage determination and does not explain 

how it will be “directly affected” by the requested determination. Although the statecourt action may require Arch Insurance to defend and indemnify Anadarko, it has 

not alleged an existing case or controversy against the Defendants, and as further 

explained below, this Court should grant this motion to dismiss in its entirety and 

dismiss the Original Complaint for Declaratory Relief. 

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III. ARGUMENT AND AUTHORITIES 

Arch Insurance seeks a declaratory judgment under state and federal law. See

Orig. Petition at 6. But under Erie, Arch Insurance cannot seek a declaration from 

a federal court under the Texas Declaratory Judgment Act, and Arch Insurance has 

wholly failed to allege an existing case or controversy sufficient to satisfy the federal 

Declaratory Judgment Act. 

To begin, the Texas Declaratory Judgment Act does not apply in federal court. 

In a diversity action like this one, federal courts apply substantive state law, but 

federal procedural rules. See Erie R. Co. v. Tompkins, 304 U.S. 67, 78 (1938). A 

declaratory judgment “is a procedural device and does not create a substantive cause 

of action.” Carter v. Bank of Am., N.A., No. 3:12-CV-4550-B, 2013 WL 482610, at 

*3 (N.D. Tex. Apr. 9, 2013). Thus, the Texas Declaratory Judgment Act only applies 

in state court, see Utica Lloyd’s of Texas v. Mitchell, 138 F.3d 208, 210 (5th Cir. 

1998), and any “request for declaratory judgment under state law is [treated by the 

federal courts] as a claim under the federal Declaratory Judgment Act.” Bonilla v. 

Wells Fargo Bank, N.A., No. H-15-3412, 2016 WL 5661706, at *4 (S.D. Tex. Sept. 

29, 2016). 

The federal Declaratory Judgment Act provides: 

In a case or controversy within its jurisdiction, . . . any court of the 

United States, upon the filing of an appropriate pleading, may declare 

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

a declaration, whether or not relief is or could be sought. . . . 

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28 U.S.C. § 2201. 

 The statute gives federal courts substantial discretion in deciding whether to 

exercise their jurisdiction to declare the rights of litigants. Wilton v. Seven Falls Co., 

515 U.S. 277, 281 (1995). In deciding whether to dismiss or exercise its discretion 

over a declaratory action, the Court must follow a three-step inquiry. 

First, the Court must determine whether it has jurisdiction over the declaratory 

action, i.e., whether a case or controversy exists between the parties. See Orix Credit 

Alliance, Inc. v. Wolfe, 212 F.3d 891, 895 (5th Cir. 2000). Second, if the Court 

determines that it has jurisdiction, the Court must resolve whether it has “authority” 

to grant the requested declaratory relief. Third, the Court has to determine whether 

it should exercise its broad discretion to decide the declaratory judgment action. Id.

Here, because Arch Insurance has failed to allege a case or controversy between the 

parties, the Court has no jurisdiction and should grant the Defendant’s motion to 

dismiss pursuant to Rule 12(b)(1). 

A. The Court Should Dismiss Plaintiff’s Claim for Declaratory Relief 

Pursuant to Rule 12(b)(1) Because Plaintiff Has Not Alleged a 

Case or Controversy as Required for a Federal Declaratory 

Judgment. 

 Federal courts are courts of limited jurisdiction and may only hear existing 

“cases” or “controversies.” See Shields v. Norton, 289 F.3d 832, 834 (5th Cir. 2002). 

The Declaratory Judgments Act recognizes and incorporates the constitutional limit 

that federal courts may only exercise jurisdiction over “cases” or “controversies.” 

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See 28 U.S.C. § 2201; see also Val-Com Acquisitions Trust v. CitiMortgage, Inc., 

421 F. App’x 398, 400 (5th Cir. 2011). 

 A case or controversy exists “when the facts alleged . . . 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.” Maryland 

Cas. Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273 (1941). The party seeking 

the declaratory judgment has the burden of establishing the existence of an actual 

controversy. See Val-Com, 421 F. App’x at 365. 

There is no “case or controversy” presented here because there is no existing 

legal dispute between Plaintiff Arch Insurance and the Defendant Candelarios. Arch 

Insurance seeks a declaration regarding the employment status of Rita Candelario; 

however, the dispute regarding her employment status is actually between Anadarko 

and the Candelarios based on the terms of the Master Service Contract between 

Guard 1 and Anadarko and the facts surrounding the explosion that injured Ms. 

Candelario. Arch Insurance is not a party to the Master Service Contract and has 

failed to describe any legal interest that it possesses that is adverse to the interests of 

Defendants Rita and Cristobal Candelario. Arch Insurance is not seeking a coverage 

determination from the Court. And to the extent that Arch Insurance argues that it 

might one day have to pay a judgment to the Candelarios under the terms of its 

general liability policy covering Guard 1 if Ms. Candelario is not deemed to be a 

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“borrowed servant” or employee of Anadarko in state court, that is not an existing 

controversy between Plaintiff Arch Insurance and the Defendant Candelarios that is 

of sufficient immediacy and reality to warrant a declaratory judgment. Maryland 

Cas. Co., 312 U.S. at 273. 

B. The Court Should Dismiss Plaintiff’s Claim for Declaratory Relief 

Pursuant to Rule 12(b)(6) Because the Court Lacks the Authority 

to Consider the Merits of the Declaratory Judgment Action. 

Assuming for purposes of this argument that the Court has subject-matter 

jurisdiction over this request for declaratory relief, the second inquiry in deciding 

whether the Court should dismiss or exercise its discretionary jurisdiction over this 

declaratory judgment action is whether the Court has the “authority” to grant the 

requested declaratory relief. The Court lacks the authority to consider the merits of 

this declaratory judgment action if: (1) the Candelarios have filed a lawsuit in state 

court; (2) the state court case involves the same issues as those in the federal court 

declaratory judgment action; and (3) the Court is prohibited from enjoining the state 

court proceeding under the Anti-Injunction Act, 28 U.S.C. § 2283. See SherwinWilliams Co. v. Holmes County, 343 F.3d 383, 388 n.1 (5th Cir. 2003); Travelers 

Ins. Co. v. Louisiana Farm Bureau Fed’n Inc., 996 F.2d 774, 776 (5th Cir. 1993). 

The Court should grant the Canderlarios’ motion to dismiss pursuant to Rule 

12(b)(6) because it does not have the authority to grant the declaratory relief sought 

in this case. The Candelarios filed suit in Texas state court in October 2017. In that 

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case, Anadarko claims that Rita Candelario was acting as its “borrowed servant” and 

that Anadarko is entitled to assert the Workers’ Compensation Bar against her 

claims. See Defs.’ 2nd Am. Answer ¶ 19 (Tab A). Thus, the state-court case involves 

the same issues as those presented in this federal declaratory judgment action. And 

finally, as explained below, the Court is prohibited from enjoining the pending statecourt proceedings under the Anti-Injunction Act. 

The Anti-Injunction Act provides that a “court of the United States may not 

grant an injunction to stay proceedings in a State court except as expressly authorized 

by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or 

effectuate its judgments.” 28 U.S.C. 2283. In this case, no act of Congress expressly 

authorizes an injunction of the state-court proceedings, and a federal injunction is 

not necessary to aid this Court in exercising its jurisdiction or to protect or effectuate 

its judgments. Because the Court is prohibited from enjoining the state-court action 

under the Anti-Injunction Act, the Court should dismiss Arch Insurance’s federal 

declaratory judgment action under Rule 12(b)(6). See Wolfe, 212 F.3d at 895. 

C. The Court Should Not Exercise Its Discretionary Jurisdiction to 

Entertain Plaintiff’s Claim for Declaratory Relief. 

Again, assuming for purposes of argument that the Court has subject-matter 

jurisdiction over this request for declaratory relief, the third inquiry the Court must 

make is deciding whether it should exercise its discretionary jurisdiction over Arch 

Insurance’s request for declaratory relief. See Wolfe, 212 F.3d at 895. In deciding 

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whether the Court should exercise its discretion to entertain or dismiss a request for 

declaratory relief, it must consider seven factors: (1) whether there is an existing 

state action in which all matters in controversy may be fully litigated; (2) whether 

the plaintiff filed suit in anticipation of a lawsuit filed by the defendants; (3) whether 

the plaintiff engaged in forum shopping in bringing the suit; (4) whether possible 

inequities in allowing the declaratory judgment 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 will serve 

the purpose 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. See 

Sherwin-Williams, 343 F.3d at 388; St. Paul Ins. Co. v. Trejo, 39 F.3d 585, 590-91 

(5th Cir. 1994). 

 There already exists a state-court action in which the matters at issue here will 

be fully litigated. Next, unsatisfied with the state court’s jurisdiction over these 

issues, Arch Insurance clearly engaged in a form of forum-shopping by filing this 

lawsuit in federal court. And the federal lawsuit results in a multiplicity of lawsuits 

between additional parties, not in judicial economy. Although the Court is not an 

inconvenient forum for the parties and witnesses, the balance of these factors either 

weigh in favor of dismissing the case or simply do not apply. For these reasons, the 

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Court should grant this motion and dismiss Plaintiff Arch Insurance’s claims for 

declaratory relief against the Defendant Candelarios. 

D. In Any Event, The Court Should Dismiss Arch Insurance’s 

Claims for Attorney’s Fees under Rule 12(b)(6).

 The Court should dismiss Plaintiff Arch Insurance’s claim for attorney’s fees 

and costs. The Declaratory Judgment Act “does not by itself provide statutory 

authority to award attorney’s fees that would not otherwise be available under state 

law in a diversity action.” Mercantile Nat’l Bank v. Bradford Trust Co., 850 F.2d 

215, 218 (5th Cir. 1988). Therefore, this Court must look to substantive state law 

for a basis to award attorney’s fees. 

 Arch Insurance attempts to rely on Section 37.009 of the Texas Declaratory 

Judgments Act as a basis for awarding attorney’s fees, see Orig. Complaint at 7-8, 

but Section 37.009 is purely a procedural statute and does not support a claim for 

attorney’s fees in a federal Declaratory Judgment Act case as a matter of law. See 

Utica Lloyd’s of Texas, 138 F.3d at 210. For this reason, the Court should dismiss 

Arch Insurance’s claims for attorney’s fees for failure to state a claim. See FED. R.

CIV. P. 12(b)(6). 

IV. RELIEF REQUESTED 

 Wherefore, premises considered, Defendants Rita and Cristobal Candelario 

pray this Court grant this motion and: 

 A. refuse to exercise its jurisdiction over this declaratory judgment action; 

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DEFENDANTS’ MOTION TO DISMISS PAGE 14 

 B. dismiss Plaintiff’s requests for declaratory relief; 

 C. dismiss Plaintiff’s claims for costs and attorney’s fees; 

 D. grant all such other relief as Defendants may be entitled to receive in 

law or in equity. 

Respectfully submitted, 

By: /s/ Russell A. Murray____________ 

RUSSELL A. MURRAY 

State Bar No. 24062519 

rmurray@lovettlawfirm.com 

LOVETT LAW FIRM

619 Arizona Ave. 

El Paso, Texas 79902 

(915) 757-9999 

(915) 595-4166 (facsimile) 

JAVIER L. HERRERA 

State Bar No. 24075498 

Javier@herreralawfirm.com

HERRERA LAW FIRM, INC. 

1800 W. Commerce St. 

San Antonio, Texas 78207 

(210) 224-1054 

(210) 228-0887 

KIRK L. PITTARD 

State Bar No. 24010313 

kpittard@dpslawgroup.com 

DURHAM, PITTARD & SPALDING, LLP 

P.O. Box 224626 

Dallas, Texas 75222 

(214) 946-8000 

(214) 946-8433 (fax) 

ATTORNEYS FOR DEFENDANTS 

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DEFENDANTS’ MOTION TO DISMISS PAGE 15 

CERTIFICATE OF SERVICE 

I hereby certify that on July 7, 2020, I electronically filed the foregoing 

document with the clerk of the court for the U.S. District Court, Western District of 

Texas, using the electronic case filing system of the court. The electronic case filing 

system sent a “Notice of Electronic Filing” to the following attorneys of record who 

have consented in writing to accept this notice as service of this document by 

electronic means: 

Mary J. Ibarra-Myers 

Fee Smith Sharp & Vitullo, LLP 

5301 Southwest Parkway, Ste. 460 

Austin, TX 78735 

(512) 479-8400 

mmyers@feesmith.com 

COUNSEL FOR PLAINTIFF 

/s/Russell A. Murray_________ 

RUSSELL A. MURRAY 

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