Opinion ID: 2830649
Heading Depth: 3
Heading Rank: 1

Heading: Pending State Court Action

Text: The district court found that this factor weighed against exercising jurisdiction because there was “a pending state court case which may resolve the issues raised in this case.” This was apparently a reference to the fact that if the Texas appeals court finds that TSCLP is entitled to the exclusive-remedy defense, “McGowan would take nothing.” Citing Agora Syndicate, Inc. v. Robinson Janitorial Specialists, Inc., 149 F.3d 371 (5th Cir. 1998), Ironshore 7 See infra Part II(B)(7). 11 Case: 14-51164 Document: 00513168367 Page: 12 Date Filed: 08/25/2015 No. 14-51164 contends that the district court misapplied this factor because “[w]hether Safety National’s policy is responsible for the McGowan judgment has not been raised by any party to the state lawsuit.” “The first Trejo factor, whether there is a pending state action in which all the matters in the controversy may be litigated, requires the court to examine comity and efficiency.” Sherwin–Williams, 343 F.3d at 391. It is clear that “[a] district court may decline to decide ‘a declaratory judgment suit where another suit is pending in state court presenting the same issues, not governed by federal law, between the same parties.’” Id. at 392 (emphasis added) (quoting Brillhart, 316 U.S. at 495). Although “the lack of a pending parallel state court proceeding” does not per se require a district court to decide a declaratory judgment action, “the presence or absence of a parallel state proceeding is an important factor.” Id. at 394. In Agora, this Court recognized that in the context of a district court’s DJA discretion, a “parallel state proceeding[ ]” refers to a state court proceeding with “identity of parties or issues.” 149 F.3d at 373; see also AXA, 162 F. App’x at 320 (“First, because AXA is not a party to the Louisiana action, the court correctly concluded no pending state action exists where all the matters in controversy could be fully litigated.”). Here, the pending state court action does not involve the same parties— Safety National and Ironshore are not parties in that case. Moreover, the state suit does not involve the same legal issues—the scope of Safety National and Ironshore’s insurance policies. Safety National argues that, “[c]ontrary to Ironshore’s contention, the issue of whether McGowan was an employee of Tractor Supply was . . . presented to and ruled upon by the [s]tate [t]rial [c]ourt.” This misses the point. Whether McGowan was an employee as defined by the TWCA is an issue before the state court. At issue in the DJA action is the distinct question of whether McGowan was an employee under the Safety 12 Case: 14-51164 Document: 00513168367 Page: 13 Date Filed: 08/25/2015 No. 14-51164 National policy. Moreover, the Texas trial court did not explain whether it granted summary judgment for McGowan on the TWCA-employee issue or on one of the other issues raised in McGowan’s summary judgment motion. The district court’s conclusion that because the Texas appeal might moot the issue, there existed a “pending state action in which all the matters in the controversy may be litigated,” Sherwin–Williams, 343 F.3d at 391, was mistaken. Here, the state court action did not involve the same parties or the same legal issues; thus, this factor weighs “strongly against dismissal,” see id. at 394.