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NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports.  Readers are requested to
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SUPREME COURT OF THE UNITED STATES
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No. 94-562
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LESLIE WILTON, etc., et al., PETITIONERS v.
SEVEN FALLS COMPANY et al.
on writ of certiorari to the united states court
of appeals for the fifth circuit
[June 12, 1995]

  Justice O'Connor delivered the opinion of the Court.
  This case asks whether the discretionary standard set
forth in Brillhart v. Excess Ins. Co. of America, 316
U. S. 491 (1942), or the -exceptional circumstances- test
developed in Colorado River Water Conservation Dist. v.
United States, 424 U. S. 800 (1976), and Moses H. Cone
Memorial Hospital v. Mercury Constr. Corp., 460 U. S.
1 (1983), governs a district court's decision to stay a
declaratory judgment action during the pendency of
parallel state court proceedings, and under what stan-
dard of review a court of appeals should evaluate the
district court's decision to do so.

                            I
  In early 1992, a dispute between respondents (the Hill
Group) and other parties over the ownership and
operation of oil and gas properties in Winkler County,
Texas, appeared likely to culminate in litigation.  The
Hill Group asked petitioners (London Underwriters) to
provide them with coverage under several commercial
liability insurance policies.  London Underwriters refused
to defend or indemnify the Hill Group in a letter dated
July 31, 1992.  In September 1992, after a 3-week trial,
a Winkler County jury entered a verdict in excess of
$100 million against the Hill Group on various state law
claims.
  The Hill Group gave London Underwriters notice of
the verdict in late November 1992.  On December 9,
1992, London Underwriters filed suit in the United
States District Court for the Southern District of Texas,
basing jurisdiction upon diversity of citizenship under 28
U. S. C. 1332.  London Underwriters sought a declara-
tion under the Declaratory Judgment Act, 28 U. S. C.
2201(a) (1988 ed., Supp. V), that their policies did not
cover the Hill Group's liability for the Winkler County
judgment.  After negotiations with the Hill Group's
counsel, London Underwriters voluntarily dismissed the
action on January 22, 1993.  London Underwriters did
so, however, upon the express condition that the Hill
Group give London Underwriters two weeks' notice if
they decided to bring suit on the policy.
  On February 23, 1993, the Hill Group notified London
Underwriters of their intention to file such a suit in
Travis County, Texas.  London Underwriters refiled their
declaratory judgment action in the Southern District of
Texas on February 24, 1993.  As promised, the Hill
Group initiated an action against London Underwriters
on March 26, 1993 in state court in Travis County.  The
Hill Group's codefendants in the Winkler County
litigation joined in this suit and asserted claims against
certain Texas insurers, thus rendering the parties
nondiverse and the suit nonremovable.
  On the same day that the Hill Group filed their
Travis County action, they moved to dismiss or, in the
alternative, to stay London Underwriters' federal
declaratory judgment action.  After receiving submissions
from the parties on the issue, the District Court entered
a stay on June 30, 1993.  The District Court observed
that the state lawsuit pending in Travis County encom-
passed the same coverage issues raised in the declara-
tory judgment action and determined that a stay was
warranted in order to avoid piecemeal litigation and to
bar London Underwriters' attempts at forum shopping.
London Underwriters filed a timely appeal.  See Moses
H. Cone Memorial Hospital, supra, at 10 (a district
court's order staying federal proceedings in favor of
pending state litigation is a -final decisio[n]- appealable
under 28 U. S. C. 1291).
  The United States Court of Appeals for the Fifth
Circuit affirmed in an unpublished opinion filed on July
29, 1994.  Noting that under Circuit precedent, -[a]
district court has broad discretion to grant (or decline to
grant) declaratory judgment,- Wilton v. Seven Falls Co.,
Civ. Action No. 93-2068 (CA5 1994), pp. 2-3, citing
Torch, Inc. v. LeBlanc, 947 F. 2d 193, 194 (CA5 1991),
the Court of Appeals did not require application of the
test articulated in Colorado River, supra, and Moses H.
Cone, supra, under which district courts must point to
-exceptional circumstances- to justify staying or dismiss-
ing federal proceedings.  Citing the interests in avoiding
duplicative proceedings and forum shopping, the Court
of Appeals reviewed the District Court's decision for
abuse of discretion, and found none.  Wilton, Civ. Action
No. 93-2068, p. 3.
  We granted certiorari, 513 U. S. ___ (1994), to resolve
circuit conflicts concerning the standard governing a
district court's decision to stay a declaratory judgment
action in favor of parallel state litigation, compare, e. g.,
Employers Ins. of Wausau v. Missouri Elec. Works, 23 F.
3d 1372, 1374, n. 3 (CA8 1994) (pursuant to Colorado
River and Moses H. Cone, a district court may not stay
or dismiss a declaratory judgment action absent -excep-
tional circumstances-); Lumbermens Mut. Casualty Co.
v. Connecticut Bank & Trust, 806 F. 2d 411, 413 (CA2
1986) (same), with Travelers Ins. Co. v. Louisiana Farm
Bureau Federation, Inc., 996 F. 2d 774, 778, n. 12 (CA5
1993) (the -exceptional circumstances- test of Colorado
River and Moses H. Cone is inapplicable in declaratory
judgment actions); Mitcheson v. Harris, 955 F. 2d 235,
237-238 (CA4 1992) (same), and the applicable standard
for an appellate court's review of a district court's
decision to stay a declaratory judgment action, compare,
e. g., United States Fidelity & Guaranty Co. v. Murphy
Oil USA, Inc., 21 F. 3d 259, 263, n. 5 (CA8 1994)
(reviewing for abuse of discretion); Christopher P. v.
Marcus, 915 F. 2d 794, 802 (CA2 1990) (same), with
Genentech, Inc. v. Eli Lilly & Co., 998 F. 2d 931, 936
(CA Fed 1993) (reviewing de novo); Cincinnati Ins. Co.
v. Holbrook, 867 F. 2d 1330, 1333 (CA11 1989) (same).
We now affirm.

                           II
  Over 50 years ago, in Brillhart v. Excess Ins. Co., 316
U. S. 491 (1942), this Court addressed circumstances
virtually identical to those present in the case before us
today.  An insurer, anticipating a coercive suit, sought
a declaration in federal court of nonliability on an
insurance policy.  The District Court dismissed the
action in favor of pending state garnishment proceed-
ings, to which the insurer had been added as a defen-
dant.  The Court of Appeals reversed, finding an abuse
of discretion, and ordered the District Court to proceed
to the merits.  Reversing the Court of Appeals and
remanding to the District Court, this Court held that,
-[a]lthough the District Court had jurisdiction of the suit
under the Federal Declaratory Judgments Act, it was
under no compulsion to exercise that jurisdiction.-  Id.,
at 494.  The Court explained that -[o]rdinarily it would
be uneconomical as well as vexatious for a federal court
to proceed in a declaratory judgment suit where another
suit is pending in a state court presenting the same
issues, not governed by federal law, between the same
parties.-  Id., at 495.  The question for a district court
presented with a suit under the Declaratory Judgment
Act, the Court found, is -whether the questions in
controversy between the parties to the federal suit, and
which are not foreclosed under the applicable substan-
tive law, can better be settled in the proceeding pending
in the state court.-  Ibid.
  Brillhart makes clear that 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 jurisdic-
tional prerequisites.  Although Brillhart did not set out
an exclusive list of factors governing the district court's
exercise of this discretion, it did provide some useful
guidance in that regard.  The Court indicated, for
example, that in deciding whether to enter a stay, a
district court should examine -the scope of the pending
state court proceeding and the nature of defenses open
there.-  Ibid.  This inquiry, in turn, entails consideration
of -whether the claims of all parties in interest can
satisfactorily be adjudicated in that proceeding, whether
necessary parties have been joined, whether such parties
are amenable to process in that proceeding, etc.-  Ibid.
Other cases, the Court noted, might shed light on
additional factors governing a district court's decision to
stay or to dismiss a declaratory judgment action at the
outset.  See ibid.  But Brillhart indicated that, at least
where another suit involving the same parties and
presenting opportunity for ventilation of the same state
law issues is pending in state court, a district court
might be indulging in -[g]ratuitous interference,- ibid.,
if it permitted the federal declaratory action to proceed.
  Brillhart, without more, clearly supports the District
Court's decision in this case.  (That the court here
stayed, rather than dismissed, the action is of little
moment in this regard, because the state court's decision
will bind the parties under principles of res judicata.)
Nonetheless, London Underwriters argue, and several
Courts of Appeals have agreed, that intervening case law
has supplanted Brillhart's notions of broad discretion
with a test under which district courts may stay or
dismiss actions properly within their jurisdiction only in
-exceptional circumstances.-  In London Underwriters'
view, recent cases have established that a district court
must point to a compelling reason-which, they say, is
lacking here-in order to stay a declaratory judgment
action in favor of pending state proceedings.  To evalu-
ate this argument, it is necessary to examine three cases
handed down several decades after Brillhart.
  In Colorado River Water Conservation Dist. v. United
States, 424 U. S. 800 (1976), the Government brought an
action in Federal District Court under 28 U. S. C. 1345
seeking a declaration of its water rights, the appoint-
ment of a water master, and an order enjoining all uses
and diversions of water by other parties.  See Pet. for
Cert. in Colorado River Water Conservation Dist. v.
United States, O. T. 1974, No. 74-940, pp. 39a-40a.  The
District Court dismissed the action in deference to
ongoing state proceedings.  The Court of Appeals re-
versed, 504 F. 2d 115 (1974), on the ground that the
District Court had jurisdiction over the Government's
suit and that abstention was inappropriate.  This Court
reversed again.  Without discussing Brillhart, the Court
began with the premise that federal courts have a
-virtually unflagging obligation- to exercise the jurisdic-
tion conferred on them by Congress.  Colorado River,
supra, at 813, 817-818, citing Cohens v. Virginia, 6 Wheat.
264, 404 (1821).  The Court determined, however, that
a district court could nonetheless abstain from the
assumption of jurisdiction over a suit in -exceptional-
circumstances, and it found such exceptional circum-
stances on the facts of the case.  424 U. S., at 818-820.
Specifically, the Court deemed dispositive a clear federal
policy against piecemeal adjudication of water rights; the
existence of an elaborate state scheme for resolution of
such claims; the absence of any proceedings in the
District Court, other than the filing of the complaint,
prior to the motion to dismiss; the extensive nature of
the suit; the 300-mile distance between the District
Court and the situs of the water district at issue; and
the prior participation of the Federal Government in
related state proceedings.
  Two years after Colorado River we decided Will v.
Calvert Fire Ins. Co., 437 U. S. 655 (1978), in which a
plurality of the Court stated that, while -`the pendency
of an action in the state court is no bar to proceedings
concerning the same matter in the Federal court having
jurisdiction,'- id., at 662, quoting McClellan v. Carland,
217 U. S. 268, 282 (1910), a district court is -`under no
compulsion to exercise that jurisdiction,'- 437 U. S., at
662, quoting Brillhart, 316 U. S., at 494.  Will concerned
an action seeking damages for an alleged violation of
federal securities laws brought in federal court during
the pendency of related state proceedings.  Although the
case arose outside the declaratory judgment context, the
plurality invoked Brillhart as the appropriate authority.
Colorado River, according to the plurality, -in no way
undermine[d] the conclusion of Brillhart that the
decision whether to defer to the concurrent jurisdiction
of a state court is, in the last analysis, a matter
committed to the district court's discretion.-  Will, supra,
at 664.  Justice Blackmun, concurring in the judgment,
criticized the plurality for not recognizing that Colorado
River had undercut the -sweeping language- of Brillhart.
437 U. S., at 667.  Four Justices in dissent urged that
the Colorado River -exceptional circumstances- test
supplied the governing standard.
  The plurality's suggestion in Will that Brillhart might
have application beyond the context of declaratory
judgments was rejected by the Court in Moses H. Cone
Memorial Hospital v. Mercury Constr. Corp., 460 U. S.
1 (1983).  In Moses H. Cone, the Court established that
the Colorado River -exceptional circumstances- test,
rather than the more permissive Brillhart analysis,
governs a district court's decision to stay a suit to
compel arbitration under 4 of the Arbitration Act in
favor of pending state litigation.  Noting that the
combination of Justice Blackmun and the four dissenting
Justices in Will had made five to require application of
Colorado River, the Court rejected the argument that
Will had worked any substantive changes in the law.
-`Abdication of the obligation to decide cases,'- the Court
reasoned, -`can be justified . . . only in the exceptional
circumstance where the order to the parties to repair to
the State court would clearly serve an important
countervailing interest.'-  460 U. S., at 14, quoting
Colorado River, supra, at 813.  As it had in Colorado
River, the Court articulated non-exclusive factors
relevant to the existence of such exceptional circum-
stances, including the assumption by either court of
jurisdiction over a res, the relative convenience of the
fora, avoidance of piecemeal litigation, the order in
which jurisdiction was obtained by the concurrent fora,
whether and to what extent federal law provides the
rules of decision on the merits, and the adequacy of
state proceedings.  Evaluating each of these factors, the
Court concluded that the District Court's stay of federal
proceedings was, under the circumstances, inappropriate.
  Relying on these post-Brillhart developments, London
Underwriters contend that the Brillhart regime, under
which district courts have substantial latitude in
deciding whether to stay or to dismiss a declaratory
judgment suit in light of pending state proceedings (and
need not point to -exceptional circumstances- to justify
their actions), is an outmoded relic of another era.  We
disagree.  Neither Colorado River, which upheld the
dismissal of federal proceedings, nor Moses H. Cone,
which did not, dealt with actions brought under the
Declaratory Judgment Act, 28 U. S. C. 2201(a) (1988
ed., Supp V).  Distinct features of the Declaratory
Judgment Act, we believe, justify a standard vesting
district courts with greater discretion in declaratory
judgment actions than that permitted under the -excep-
tional circumstances- test of Colorado River and Moses
H. Cone.  No subsequent case, in our view, has called
into question the application of the Brillhart standard to
the Brillhart facts.
  Since its inception, the Declaratory Judgment Act has
been understood to confer on federal courts unique and
substantial discretion in deciding whether to declare the
rights of litigants.  On its face, the statute provides that
a court -may declare the rights and other legal relations
of any interested party seeking such declaration,- 28
U. S. C. 2201(a) (1988 ed., Supp. V) (emphasis added).
See generally E. Borchard, Declaratory Judgments
312-314 (2d ed. 1941); Borchard, Discretion to Refuse
Jurisdiction of Actions for Declaratory Judgments, 26
Minn. L. Rev. 677 (1942).  The statute's textual commit-
ment to discretion, and the breadth of leeway we have
always understood it to suggest, distinguish the declara-
tory judgment context from other areas of the law in
which concepts of discretion surface.  See generally D.
Shapiro, Jurisdiction and Discretion, 60 N.Y.U. L. Rev.
543 (1985); cf. O. Fiss & D. Rendleman, Injunctions
106-108 (2d ed. 1984) (describing courts' nonstatutory
discretion, through application of open-ended substantive
standards like -irreparable injury,- in the injunction
context).  We have repeatedly characterized the Declara-
tory Judgment Act as -an enabling Act, which confers a
discretion on the courts rather than an absolute right
upon the litigant.-  Public Serv. Comm'n v. Wycoff Co.,
344 U. S. 237, 241 (1952); see also Green v. Mansour,
474 U. S. 64, 72 (1985); Cardinal Chemical Co. v.
Morton International, Inc., 508 U. S. ___, ___, n. 17
(1993) (slip op., at 11, n. 17).  When all is said and
done, we have concluded, -the propriety of declaratory
relief in a particular case will depend upon a circum-
spect sense of its fitness informed by the teachings and
experience concerning the functions and extent of federal
judicial power.-  Wycoff, supra, at 243.
  Acknowledging, as they must, the unique breadth of
this discretion to decline to enter a declaratory judg-
ment, London Underwriters nonetheless contend that,
after Colorado River and Moses H. Cone, district courts
lack discretion to decline to hear a declaratory judgment
suit at the outset.  See Brief for Petitioners 22 (-District
courts must hear declaratory judgment cases absent
exceptional circumstances; district courts may decline to
enter the requested relief following a full trial on the
merits, if no beneficial purpose is thereby served or if
equity otherwise counsels-).  We are not persuaded by
this distinction.  London Underwriters' argument
depends on the untenable proposition that a district
court, knowing at the commencement of litigation that
it will exercise its broad statutory discretion to decline
declaratory relief, must nonetheless go through the futile
exercise of hearing a case on the merits first.  Nothing
in the language of the Declaratory Judgment Act
recommends London Underwriters' reading, and we are
unwilling to impute to Congress an intention to require
such a wasteful expenditure of judicial resources.  If a
district court, in the sound exercise of its judgment,
determines after a complaint is filed that a declaratory
judgment will serve no useful purpose, it cannot be
incumbent upon that court to proceed to the merits
before staying or dismissing the action.
  We agree, for all practical purposes, with Professor
Borchard, who observed half a century ago that -[t]here
is . . . nothing automatic or obligatory about the as-
sumption of `jurisdiction' by a federal court- to hear a
declaratory judgment action.  Borchard, Declaratory
Judgments, at 313.  By the Declaratory Judgment Act,
Congress sought to place a remedial arrow in the
district court's quiver; it created an opportunity, rather
than a duty, to grant a new form of relief to qualifying
litigants.  Consistent with the nonobligatory nature of
the remedy, a district court is authorized, in the sound
exercise of its discretion, to stay or to dismiss an action
seeking a declaratory judgment before trial or after all
arguments have drawn to a close.  In the declaratory
judgment context, the normal principle that federal
courts should adjudicate claims within their jurisdiction
yields to considerations of practicality and wise judicial
administration.

                           III
  As Judge Friendly observed, the Declaratory Judgment
Act -does not speak,- on its face, to the question
whether discretion to entertain declaratory judgment
actions is vested in district courts alone or in the entire
judicial system.  Friendly, Indiscretion about Discretion,
31 Emory L. J. 747, 778 (1982).  The Court of Appeals
reviewed the District Court's decision to stay London
Underwriters' action for abuse of discretion, and found
none.  London Underwriters urge us to follow those
other Courts of Appeals that review decisions to grant
(or to refrain from granting) declaratory relief de novo.
See, e. g., Genentech, Inc. v. Eli Lilly & Co., 998 F. 2d,
at 936; Cincinnati Ins. Co. v. Holbrook, 867 F. 2d, at
1333.  We decline this invitation.  We believe it more
consistent with the statute to vest district courts with
discretion in the first instance, because facts bearing on
the usefulness of the declaratory judgment remedy, and
the fitness of the case for resolution, are peculiarly
within their grasp.  Cf. First Options of Chicago, Inc. v.
Kaplan, 514 U. S. ___, ___ (1995) (slip op., at 10) (-[T]he
reviewing attitude that a court of appeals takes toward
a district court decision should depend upon `the respective
institutional advantages of trial and appellate courts'-)
(citation omitted); Miller v. Fenton, 474 U. S. 104, 114
(1985) (-[T]he fact/law distinction at times has turned on
a determination that, as a matter of the sound adminis-
tration of justice, one judicial actor is better positioned
than another to decide the issue in question-).  While
it may be true that sound administration of the Declara-
tory Judgment Act calls for the exercise of -judicial
discretion, hardened by experience into rule,- Borchard,
Declaratory Judgments, at 293, proper application of the
abuse of discretion standard on appellate review can, we
think, provide appropriate guidance to district courts.
In this regard, we reject London Underwriters' sugges-
tion, Brief for Petitioners 14, that review for abuse of
discretion -is tantamount to no review- at all.

                           IV
  In sum, we conclude that Brillhart v. Excess Ins. Co.,
316 U. S. 491 (1942), governs this declaratory judgment
action and that district courts' decisions about the
propriety of hearing declaratory judgment actions, which
are necessarily bound up with their decisions about the
propriety of granting declaratory relief, should be
reviewed for abuse of discretion.  We do not attempt at
this time to delineate the outer boundaries of that
discretion in other cases, for example, cases raising
issues of federal law or cases in which there are no
parallel state proceedings.  Like the Court of Appeals,
we conclude only that the District Court acted within its
bounds in staying this action for declaratory relief where
parallel proceedings, presenting opportunity for ventila-
tion of the same state law issues, were underway in
state court.  The judgment of the Court of Appeals for
the Fifth Circuit is
                                              Affirmed.


  Justice Breyer took no part in the consideration or
decision of this case.