United States Court of Appeals

FOR THE EIGHTH CIRCUIT

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No. 07-3850

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Cincinnati Indemnity Company, *

*

Appellant, *

* Appeal from the United States

v. * District Court for the

* Western District of Missouri.

A & K Construction Company, *

doing business as Kirchner & *

Company; Kevin Kirchner *

* 

Appellees. *

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Submitted: June 13, 2008

Filed: September 15, 2008

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Before MELLOY, ARNOLD, and BENTON, Circuit Judges.

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BENTON, Circuit Judge.

Cincinnati Indemnity Company issued a workers’ compensation policy to A&K

Construction Company d/b/a Kirchner and Company (A&K). Cincinnati sued for a

declaratory judgment that Kevin Kirchner was not an A&K employee when he was

injured on May 17, 2006. Both Kirchner and A&K moved to dismiss for lack of

subject matter jurisdiction. The district court granted the motions to dismiss under

Federal Rule of Civil Procedure 12(b)(1). Having jurisdiction under 28 U.S.C. §

1291, this court vacates and remands.
1

Cincinnati objects that the state case is not “pending” as there is an

interlocutory order dismissing it without prejudice, pursuant to the doctrine of primary

jurisdiction. This objection is meritless. In Missouri: “An interlocutory order is

always under the control of the court making it. At any time before final judgment a

court may open, amend, reverse or vacate an interlocutory order.” Woods v. Juvenile

Shoe Corp. of Am., 361 S.W.2d 694, 695 (Mo. 1962) (citations omitted).

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I.

Kirchner was working on a border fence of a farm he owned in Russellville,

Missouri. A&K’s business address is at a separate location in Russellville. While

driving his own all-terrain vehicle between his property and A&K’s business address,

Kirchner was involved in an accident, sustaining serious and permanent injuries. He

asserts he was working, as an employee, on the fence at the instruction of A&K.

Cincinnati counters that he was driving the ATV to retrieve tools to repair or build his

own fence. 

Kirchner filed for workers’ compensation benefits with the Missouri

Department of Labor and Industrial Relations (LIR). Cincinnati opposed his claim,

asserting that at the time of the accident, he was not an employee as defined in the

policy. His claim is still pending before the LIR.

Cincinnati also filed for declaratory judgment in Missouri state court,

requesting interpretation of the same policy at issue here. The state trial court entered

an interlocutory dismissal without prejudice, due to the doctrine of primary

jurisdiction. The state court of appeals rejected an appeal, finding no appealable

“judgment.” The case is still pending in state court.1

II.

The district court dismissed for lack of subject matter jurisdiction. To the

contrary, a district court has subject matter jurisdiction to try an original action
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concerning a state workers’ compensation claim, if the requisites of diversity

jurisdiction are met. Horton v. Liberty Mut. Ins. Co., 367 U.S. 348, 352 (1961);

Home Indem. Co. v. Moore, 499 F.2d 1202, 1204 (8th Cir. 1974). See Beach v.

Owens-Corning Fiberglass Corp., 728 F.2d 407, 409-10 (7th Cir. 1984) (ruling that

district court had jurisdiction to entertain workers’ compensation suit but should have

dismissed it for failure to state a claim upon which relief could be granted); Begay v.

Kerr-McGee Corp., 682 F.2d 1311, 1315-19 (9th Cir. 1982) (district court dismissed

workers’ compensation claims for lack of subject matter jurisdiction but appellate

court upheld dismissal for failure to state a claim upon which relief could be granted,

due to Arizona Industrial Commission’s exclusive jurisdiction). But see Connolly v.

Md. Cas. Co., 849 F.2d 525 (11th Cir. 1988) (affirming district court’s dismissal of

case based on lack of subject matter jurisdiction because Florida’s Workers’

Compensation Act provided exclusive remedy); Stuart v. Colo. Interstate Gas Co.,

271 F.3d 1221, 1224-25 (10th Cir. 2001); Armistead v. C & M Transp., Inc., 49 F.3d

43, 47 (1st Cir. 1995), overruled on other grounds by City of Chicago v. Int’l Coll.

of Surgeons, 522 U.S. 156, 162, 178 (1997); Evans v. B.F. Perkins Co., 166 F.3d

642, 650 (4th Cir. 1999).

III.

The complaint seeks only a declaratory judgment. Presented with the motion

to dismiss, the district court should have considered abstaining from exercising

jurisdiction in this declaratory case where a parallel state lawsuit is pending. See

Martin Ins. Agency, Inc. v. Prudential Reinsurance Co., 910 F.2d 249, 254-55 (5th

Cir. 1990) (although parties did not discuss abstention in district court, dismissal for

lack of subject matter jurisdiction may be affirmed on abstention grounds); cf. Less

v. Lurie, 789 F.2d 624, 625 n.1 (8th Cir. 1986) (a motion to dismiss under Rule 12

(b)(1) may be treated as a motion to dismiss for failure to state a claim under Rule 12

(b)(6)). This court may raise the issue of the appropriateness of abstention sua sponte.

Robinson v. City of Omaha, 866 F.2d 1042, 1043 (8th Cir. 1989).
2

This court need not address the effect of the pending administrative claim

before the LIR. See Calico Trailer Mfg. Co. v. Ins. Co. of N. Am., 155 F.3d 976, 978

(8th Cir. 1998); Dial v. Hartford Accident & Indem. Co., 863 F.2d 15, 16-17 (5th Cir.

1989) (affirming dismissal of case alleging breach of workers’ compensation policy,

due to failure to exhaust available administrative remedies); Jarrard v. CDI

Telcomms., Inc., 408 F.3d 905, 909 n.3 (7th Cir. 2005) (affirming dismissal of state

workers’ compensation claim, for failure to state a claim upon which relief may be

granted). 

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Because Cincinnati requested a declaratory judgment pursuant to 28 U.S.C. §

2201, the district court had the discretion to determine “whether and when to entertain

an action under the Declaratory Judgment Act, even when the suit otherwise satisfies

subject matter jurisdictional prerequisites.” Wilton v. Seven Falls Co., 515 U.S. 277,

282 (1995), citing Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491 (1942). A

district court may exercise its discretion and determine that a declaratory judgment

serves no useful purpose. Wilton, 515 U.S. at 288. It may stay or dismiss the action.

Id.; Royal Indem. Co. v. Apex Oil Co., 511 F.3d 788, 793 (8th Cir. 2008).

Deciding whether to entertain a declaratory judgment action, a district court

should determine if the question in controversy would be better settled in the

proceedings in the state court. See Brillhart, 316 U.S. at 495. This analysis includes

whether the state case involves the same issues and parties as the federal declaratory

case, whether all claims can be decided in the state court, and whether all parties are

joined and amenable to process there. Royal, 511 F.3d at 793, quoting Brillhart, 316

U.S. at 495. The issues cannot be governed by federal law. Id. 

In this case, the parties and the issues are identical in federal and state courts.2

Missouri law governs the issues. See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78

(1938). All necessary parties are already joined in the Missouri case. Finally, as the

district court referenced, the state proceedings are adequate to resolve the issue of
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Kirchner’s status at the time of the accident, which will result in uniform decisions

within the state’s statutory scheme. In sum, the question in controversy will be better

settled in the pending Missouri case. 

IV.

Because the district court erred by not abstaining on these facts, the judgment

of the district court is vacated, and the case remanded for consideration whether it

should be dismissed without prejudice or stayed.

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