To Declare or Not to Declare: The Tension Between the Declaratory Judgment Act and Federal Abstention Doctrine

This article previews the issues and arguments in Granite State Insurance Co. v. Tandy Corp., on the Supreme Court’s appellate docket for 1992-93. The Court this Term has the opportunity to revisit the important intersection of two federal court procedures: the Federal Declaratory Judgment Act and the federal abstention doctrine. Granite State presents two issues. The chief issue is whether a federal court that has jurisdiction over a federal declaratory judgment action may in its discretion decline to exercise that jurisdiction in favor of a subsequently filed, duplicative state lawsuit. More narrowly, Granite State asks whether the Colorado River "exceptional circumstances" test, a prudential abstention doctrine, applies to favor federal court abstention in declaratory judgment actions. A subsidiary issue is whether appellate courts should review a trial court's decision to abstain in these circumstances by reviewing the facts freshly, or by determining whether the trial court abused its discretion.A tension exists between these two doctrines because while the Declaratory Judgment Act allows litigants access to federal courts to have their respective legal rights and duties ascertained, abstention doctrine permits the federal courts to decline to hear the litigant's petition at all. The question thus arises whether what the Federal Declaratory Judgment Act giveth, federal abstention doctrine can taketh away.The determination of this seemingly knotty, abstract procedural question has great practical significance in an age of increasing litigation simultaneously pursued in both federal and state courts. When litigants file duplicative lawsuits in both state and federal courts, federal courts have shown an increasing tendency to apply abstention doctrines to decline to hear the merits of cases, deferring to state courts with jurisdiction over the parallel proceeding. The most extreme form of abstention doctrine, so-called Colorado River abstention, permits a federal court to decline to exercise its rightful jurisdiction in the interests of "sound judicial administration."Granite State is important because the case sharply presents the competing tugs of the Federal Declaratory Judgment Act and Colorado River prudential abstention. To declare or not to declare, that is the question. Granite State asks whether Colorado River abstention is consistent with the purposes of the Federal Declaratory Judgment Act. Simply put, the chief purpose of the Declaratory Judgment Act is to help litigants understand the nature of their legal obligations and consequently avert further litigation. When a federal court declines to exercise its jurisdiction to make this determination, state court litigation will probably proceed to adjudicate the merits of the claims.Thus, a federal court's failure to exercise its jurisdiction under the Federal Declaratory Judgment Act may result in state litigation that might have been avoided had the federal court done its duty and declared the parties' rights. On the other hand, if a possible early federal declaration of rights spurs a race to the courthouse in order to preclude state court adjudication, then prudential as well as comity concerns tug in the opposite direction. In this view, a federal court might properly refrain from exercising its jurisdiction to avoid frustrating the efforts of at least one side of the dispute from having its day in state court.