Opinion ID: 583906
Heading Depth: 2
Heading Rank: 1

Heading: Denial of the Motion to Dismiss the Declaratory Judgment Action

Text: 51 While ordinarily a denial of a motion to dismiss is not an appealable order, I accept for the purposes of this appeal the portion of the panel opinion which sustains our appellate jurisdiction of this action by the Trial Court under 28 U.S.C. § 1292(a)(1). I disagree completely, however, with the panel opinion that the Trial Court abused its discretion by refusing to dismiss the declaratory judgment action. 52 First of all as the Trial Court stated in footnote 2 on page 151 of its published opinion: 53 Because the Court is, by this Order, lifting the stay of the limitation case and enjoining further state court proceedings, the motion to dismiss the declaratory judgment suit on the basis of the pending state court action is moot. 54 That makes eminent good sense to me. To dismiss the declaratory action, and at the same time enjoin the prosecution of the state court proceeding in which allegedly the same issues contemplated by the declaratory judgment action could be tried, certainly would not contribute to the efficient disposition of the legal issues between the parties. More importantly, there were unique circumstances involved in this case which are not involved in the typical case where appellate courts have reviewed the circumstances under which the federal district court may entertain a declaratory judgment suit: i.e. (i) at the time the declaratory judgment action was filed in the U.S. District Court, the limitations of liability action of Magnolia Marine was already pending in that same U.S. District Court; and the consequent fact that all of the parties, other than the plaintiff underwriters in the declaratory judgment action, were already present before the same U.S. District Court; (ii) the fact that from August 3, 1988, when Magnolia Marine first filed its limitation of liability suit until August 22, 1990, the state court proceeding was stayed by reason of the automatic stay order issued by the U.S. District Court and that all discovery depositions between the parties, regarding the circumstances of the collision and the insurance coverages involved, were taken pursuant to subpoenas issued by the U.S. District Court in the limitation of liability proceedings; (iii) the fact that at the time the marine underwriters filed their declaratory judgment action in the federal court, they had not been brought into the state court proceeding by Plaintiff Frye; (iv) the fact that the state district court and the federal district court are separated by only 10 blocks in downtown New Orleans, which is the venue selected by the plaintiff Frye; and (v) the fact that whether in the federal district court or the state district court, the issues regarding policy coverage in the declaratory judgment action would be governed by the same state law, i.e., the Louisiana Direct Action Statute. 55 For all of these reasons I think it was clearly within the discretion of the Trial Court to choose to entertain the declaratory judgment action which is precisely what the Federal Declaratory Judgment Statute says he may do. 56