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Grange Mutual Casualty Co. v. Indian Summer Carpet Mills Inc.

United States District Court, N.D. Alabama, Middle Division

November 17, 2017




         I. Introduction

         Plaintiff Grange Mutual Casualty Company (“Grange”) initiated this insurance coverage dispute on July 27, 2017, pursuant to the Declaratory Judgment Act (the “Act”), 28 U.S.C. § 2201(a). (Doc. 1). Grange seeks “[a] declaration that [it] has no legal obligation to defend or indemnify Indian Summer for the claims asserted [in the Underlying Gadsden and Centre Lawsuits].” (Id. at 19 ¶ 39(a)). The Act provides that “[i]n any case of actual controversy within its jurisdiction . . . any court of the United States . . . may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.” 28 U.S.C. § 2201(a) (emphasis added). However, “[e]ven if there is a case or controversy, ‘district courts possess discretion in determining whether and when to entertain an action under the Declaratory Judgment Act, even when the suit otherwise satisfies subject matter jurisdictional prerequisites.'” 3M Co. v. Avery Dennison Corp., 673 F.3d 1372, 1376 (Fed. Cir. 2012) (quoting Wilton v. Seven Falls Co., 515 U.S. 277, 282, 115 S.Ct. 2137, 2140, 132 L.Ed.2d 214 (1995)).

         Pending before the Court is a Consent Motion To Enter Declaratory Relief in Favor of Plaintiff (doc. 25) (the “Consent Motion”) filed by Grange and Defendant Indian Summer Carpet Mills, Inc. (“Indian Summer”) on November 10, 2017. These moving parties ask this Court to enter a consent order (id. at 3-4 ¶¶ 6-7) establishing that Grange has no duty to defend or indemnify Indian Summer in two separate underlying (and still pending) water pollution lawsuits-4:16-CV-1755-KOB (the “Underlying Gadsden Lawsuit”) and 4:17-CV-1026-KOB (the “Underlying Centre Lawsuit”). The proposed consent order (doc. 25-1) is attached to the Consent Motion.

         Defendants Water Works and Sewer Board of the City of Gadsden and Water Works and Sewer Board of the City of Centre are not parties to the Consent Motion and are in default. (Doc. 23). Grange and Indian Summer indicate that “the proposed order does not affect the rights of Gadsden or Centre (the plaintiffs in the Underlying Lawsuits), against whom Grange will be seeking default judgments.” (Doc. 25 at 4 ¶ 7).

         For those reasons explained below, any ruling on the Consent Motion is RESERVED pending Grange's right to replead and otherwise address the Court's jurisdictional/discretionary concerns as set out below.

         II. Standards

         A. General Principles Governing Subject Matter Jurisdiction

         Unlike state courts, federal tribunals are bodies of limited jurisdiction, meaning that the grounds for the Court's jurisdiction over the claims asserted by the plaintiff must be present at the time the complaint is filed and must be obvious on the face of the complaint. Fed.R.Civ.P. 8(a). The law is clear that Grange, the party seeking to invoke federal jurisdiction in this case, has the burden to demonstrate that the Court has subject matter jurisdiction. See McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 785, 80 L.Ed. 1135 (1936) (“They are conditions which must be met by the party who seeks the exercise of jurisdiction in his favor …. [and a]s he is seeking relief subject to this supervision, it follows that he must carry throughout the litigation the burden of showing that he is properly in court.”).

         Further, “a federal court has an independent obligation to review its authority to hear a case before it proceeds to the merits.” Mirage Resorts, Inc. v. Quiet Nacelle Corp., 206 F.3d 1398, 1400-01 (11th Cir. 2000). Consequently, the Court cannot ignore jurisdictional concerns even if the parties have none.

         Relatedly, the parties can neither manufacture the existence nor waive a want of subject matter jurisdiction. See, e.g., Am. Fire & Cas. Co. v. Finn, 341 U.S. 6, 17-18, 71 S.Ct. 534, 542, 95 L.Ed. 702 (1951) (“The jurisdiction of the federal courts is carefully guarded against expansion by judicial interpretation or by prior action or consent of the parties.”); Sosna v. Iowa, 419 U.S. 393, 398, 95 S.Ct. 553, 556-57, 42 L.Ed.2d 532 (1975) (“While the parties may be permitted to waive nonjurisdictional defects, they may not by stipulation invoke the judicial power of the United States in litigation which does not present an actual ‘case or controversy, ' and . . . we feel obliged to address the question of mootness [or ripeness] before reaching the merits of appellant's claim.”) (citation omitted); Jackson v. Seaboard Coast Line R.R. Co., 678 F.2d 992, 1000 (11th Cir. 1982) (“The jurisdiction of a court over the subject matter of a claim involves the court's competency to consider a given type of case[, ] and cannot be waived or otherwise conferred upon the court by the parties.”) (footnote omitted).

         B. Ripeness

         The Eleventh Circuit has explained that the doctrine of ripeness-one subset of Article III's framework for confirming the presence of a constitutionally-sound case or controversy-involves both constitutional and prudential considerations:

When determining if a claim is ripe for judicial review, we consider both constitutional and prudential concerns. In some circumstances, although a claim may satisfy constitutional requirements, prudential concerns “counsel judicial restraint.” See Digital, 121 F.3d at 589 (quoting Action Alliance of Senior Citizens v. Heckler, 789 F.2d 931, 940 n.12 (D.C. Cir. 1986)). Our inquiry focuses on whether the claim presented is “of sufficient concreteness to evidence a ripeness for review.” Id. Strict application of the ripeness doctrine ...

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