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- NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
- being done in connection with this case, at the time the opinion is issued.
- The syllabus constitutes no part of the opinion of the Court but has been
- prepared by the Reporter of Decisions for the convenience of the reader.
- See United States v. Detroit Lumber Co., 200 U. S. 321, 337.
-
- SUPREME COURT OF THE UNITED STATES
-
- Syllabus
-
- WILTON et al. v. SEVEN FALLS CO. et al.
- certiorari to the united states court of appeals for
- the fifth circuit
- No. 94-562. Argued March 27, 1995-Decided June 12, 1995
-
- Petitioner underwriters refused to defend or indemnify respondents
- under several commercial liability insurance policies in litigation
- between respondents and other parties over the ownership and
- operation of certain Texas oil and gas properties. After a verdict
- was entered against respondents and they notified petitioners that
- they intended to file a state court suit on the policies, petitioners
- sought a declaratory judgment in federal court that their policies did
- not cover respondents' liability. Respondents filed their state court
- suit and moved to dismiss or, in the alternative, to stay petitioners'
- action. The District Court entered a stay on the ground that the
- state suit encompassed the same coverage issues raised in the
- federal action, and the Court of Appeals affirmed. Noting that a
- district court has broad discretion to grant or decline to grant
- declaratory judgment, the court did not require application of the
- test articulated in Colorado River Water Conservation Dist. v.
- United States, 424 U. S. 800, and Moses H. Cone Memorial Hospital
- v. Mercury Constr. Corp., 460 U. S. 1, under which district courts
- must point to ``exceptional circumstances'' to justify staying or
- dismissing federal proceedings. The court reviewed the District
- Court's decision for abuse of discretion, and found none.
- Held:
- 1. The discretionary standard of Brillhart v. Excess Ins. Co., 316
- U. S. 491, governs a district court's decision to stay a declaratory
- judgment action during the pendency of parallel state court proceed-
- ings. Pp. 4-11.
- (a) In addressing circumstances virtually identical to those
- present here, the Court in Brillhart made clear that district courts
- possess discretion in determining whether and when to entertain an
- action under the Declaratory Judgment Act (Act), even when the
- suit otherwise satisfies subject matter jurisdiction. While Brillhart
- did not set out an exclusive list of factors governing the exercise of
- this discretion, it did provide some guidance, indicating 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 gratuitous
- interference if it permitted the federal declaratory action to proceed.
- Pp. 4-6.
- (b) The Act's distinct features justify a standard vesting district
- courts with greater discretion in declaratory judgment actions than
- that permitted under the ``exceptional circumstances'' test set forth
- in Colorado River and Moses H. Cone, neither of which dealt with
- declaratory judgments. On its face, the Act makes a textual com-
- mitment to discretion by specifying that a court ``may'' declare
- litigants' rights, 28 U. S. C. 2201(a) (emphasis added), and it has
- repeatedly been characterized as an enabling Act, which confers a
- discretion on the courts rather than an absolute right upon the
- litigant. Pp. 6-10.
- (c) Petitioners' argument that, despite the unique breadth of
- this discretion, district courts lack discretion to decline to hear a
- declaratory judgment suit at the outset depends on the untenable
- proposition that a court, knowing at the litigation's commencement
- that it will exercise its discretion to decline declaratory relief, must
- nonetheless go through the futile exercise of hearing a case on the
- merits first. Nothing in the Act recommends this reading, and the
- Court is unwilling to impute to Congress an intention to require
- such a wasteful expenditure of judicial resources. Pp. 10-11.
- 2. District courts' decisions about the propriety of hearing declar-
- atory judgment actions should be reviewed for abuse of discretion,
- not de novo. It is more consistent with the Act to vest district
- courts with discretion in the first instance, because facts bearing on
- the declaratory judgment remedy's usefulness, and the case's fitness
- for resolution, are particularly within their grasp. Proper applica-
- tion of the abuse of discretion standard on appeal can provide
- appropriate guidance to district courts. Pp. 11-12.
- 3. The District Court acted within its bounds in staying the
- declaratory relief action in this case, since parallel proceedings,
- presenting opportunity for ventilation of the same state law issues,
- were underway in state court. Pp. 12-13.
- 29 F. 3d 623, affirmed.
- O'Connor, J., delivered the opinion of the Court, in which all other
- Members joined, except Breyer, J., who took no part in the consider-
- ation or decision of the case.
-