Tiffin Motorhomes, Inc. v. National Interstate et al
MEMORANDUM OPINION. Signed by Judge C Lynwood Smith, Jr on 5/21/2013. (AHI )
2013 May-21 PM 04:37
U.S. DISTRICT COURT
N.D. OF ALABAMA
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
TIFFIN MOTORHOMES, INC.,
NATIONAL INTERSTATE, et al.,
Civil Action No. CV-13-S-93-NE
This action raises the question of the power of an Article III court to adjudicate
a case removed from state court. The action was commenced in the Circuit Court of
Franklin County, Alabama. The complaint sought a judgment under the Alabama
Declaratory Judgment Act1 establishing the liability (if any) of plaintiff, Tiffin
Motorhomes, Inc., to defendants, G.A. Rentals, LLC and National Interstate, for the
destruction by fire of a motorhome manufactured by plaintiff, owned by G.A. Rentals,
and insured by National Interstate.2 The case was removed to this court by National
Interstate on the basis of the parties’ diversity of citizenship. See 28 U.S.C.
§1332(a)(1).3 Plaintiff moved to remand, but argued only that National Interstate had
See Ala. Code § 6-6-220 et seq. (1975) (2005 Replacement Vol.).
Doc. no. 1-1 (Ex. A.), at ECF 2-3 (Complaint).
Doc. no. 1 (Notice of Removal). To date, plaintiff has not served G.A. Rentals.
Accordingly, the consent of that party to removal was not necessary.
not met its burden of showing that the amount in controversy exceeded $75,000,
exclusive of interest and costs.4 That motion was denied.5 The action now is before
the court on National Interstate’s motion for judgment on the pleadings.6
National Interstate first argues that the court should exercise its discretion to
refuse to entertain plaintiff’s request for entry of a declaratory relief. Alternatively,
National Interstate contends that plaintiff’s claim is not ripe for adjudication and,
therefore, that there is not a justiciable “case or controversy” within the meaning of
the federal Declaratory Judgment Act. See 28 U.S.C. § 2201(a).7 In response,
plaintiff contends that the Alabama Declaratory Judgment Act governs this case, see
Ala. Code § 6-6-220 et seq. (1975) (2005 Replacement Vol.), and cites Alabama
caselaw in support of its contention that there is a “real and present controversy.”8
The court need not resolve that dispute. Regardless of which declaratory
judgment act governs this case, this court must possess subject matter jurisdiction in
the constitutional sense. That question turns upon whether the pleadings present a
Doc. no. 5 (Motion to Remand).
Doc. no. 8 (Order Denying Motion to Remand).
Doc. no. 7 (Motion for Judgment on the Pleadings). National Interstate also has filed a
motion to extend the deadline to add causes of action, defenses, and parties “from the current
deadline of May 27, 2013, to twenty (20) days after the Court enters an Order on the pending Motion
for Judgment on the Pleadings.” Doc. no. 20 (Motion to Continue Deadline), at 1. Because the court
finds that this case is not ripe, that motion is moot.
Doc. no. 7 (Motion for Judgment on the Pleadings), at 4-11.
Doc. no. 13 (Plaintiff’s Response Brief), at ECF 2-6.
justiciable controversy that is ripe for review. Significantly, neither plaintiff nor
National Interstate directly address that question under Article III of the United States
Constitution, which limits the judicial power of federal courts to actual “cases or
controversies.”9 Accordingly, this court must address that threshold issue sua sponte.
See, e.g., Kelly v. Harris, 331 F.3d 817, 819 (11th Cir. 2003) (holding that federal
courts “always have an obligation to examine sua sponte their jurisdiction before
reaching the merits of any claim”); Johnson v. Sikes, 730 F.2d 644, 647 (11th Cir.
The relevant portion of Article III provides that:
The judicial Power shall extend to all Cases, in Law and Equity, arising under
this Constitution, the Laws of the United States, and Treaties made, or which shall
be made, under their Authority; — to all Cases affecting Ambassadors, other public
Ministers and Consuls; — to all Cases of admiralty and maritime Jurisdiction; — to
Controversies to which the United States shall be a Party; — to Controversies
between two or more States; — between a State and Citizens of another State; —
between Citizens of different States; — between Citizens of the same State claiming
Lands under Grants of different States, and between a State, or the Citizens thereof,
and foreign States, Citizens or Subjects.
U.S. Const. art. III, § 2 (emphasis supplied). The relevant portion of the federal declaratory
judgment act provides that:
In a case of actual controversy within its jurisdiction, . . . any court of the
United States, upon the filing of an appropriate pleading, 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. Any such declaration shall have the force and
effect of a final judgment or decree and shall be reviewable as such.
28 U.S.C. § 2201(a) (emphasis supplied). That Act’s requirement of a “case of actual controversy”
is generally synonymous with Article III’s “case or controversy” requirement. See MedImmune, Inc.
v. Genentech, Inc., 549 U.S. 118, 127-28 (2007); Aetna Life Insurance Co. v. Haworth, 300 U.S.
227, 339-40 (1937).
1984) (observing that the answer to the question of whether issues are ripe for
decision affects a federal court’s subject-matter jurisdiction, and that such issues may
be raised at any time).
Article III’s limitation of federal jurisdiction to actual “cases or controversies”
requires that a claim be “ripe” for judicial review. See, e.g., Konikov v. Orange
County, Florida, 410 F.3d 1317, 1322 (11th Cir. 2005). “Ripeness” — the term used
to describe the circumstance in which a particular case or controversy is deemed to
present an issue “of sufficient concreteness to evidence a ripeness for review,” Digital
Properties, Inc. v. City of Plantation, 121 F.3d 586, 589 (11th Cir. 1997) — is a
question of subject matter jurisdiction. See Bauknight v. Monroe County, Florida,
446 F.3d 1327, 1331 (11th Cir. 2006) (“Ripeness is an issue of subject matter
jurisdiction. . . .”); Greenbriar, Ltd. v. City of Alabaster, 881 F.2d 1570, 1573 n.7
(11th Cir. 1989); Paragon Management, L.L.C. v. Slaughter, 437 F. Supp. 2d 1267,
1272 (N.D. Ala. 2006). Courts must consider the “ripeness” of claims in order to
avoid hypothetical or contingent questions of law, and to prevent issuing opinions
“premised on uncertain and contingent future events that may not occur as anticipated
or may not occur at all.” Johnson v. Sikes, 730 F.2d 644, 649 (11th Cir. 1984); see
also Digital Properties, 121 F.3d at 589 (“The ripeness doctrine protects federal
courts from engaging in speculation or wasting their resources through the review of
potential or abstract disputes. The doctrine seeks to avoid entangling courts in the
hazards of premature adjudication.”).
Accordingly, the “ripeness doctrine involves consideration of both
jurisdictional and prudential concerns.” Digital Properties, 121 F.3d at 589; see also
Johnson, 730 F.2d at 648. “In deciding the ripeness of a claim, [courts] inquire into
1) whether the issues are fit for judicial decision and 2) the hardship to the parties of
withholding court consideration.” Konikov, 410 F.3d at 1322. That two-pronged
approach accounts for the “problems of prematurity and abstractness that may present
insurmountable obstacles to the exercise of the court’s jurisdiction, even though
jurisdiction is technically present.” Johnson, 730 F.2d at 648; see also Digital
Properties, 121 F.3d at 589 (“Even when the constitutional minimum has been met,
however, prudential considerations may still counsel judicial restraint.”).
Plaintiff’s complaint avers that a “real and justiciable controversy exists
between Plaintiff and Defendants as to the cause and origin of the subject fire, and
Plaintiff’s liability to Defendants for said fire loss.”10 Yet, in the parties’ opposing
briefs addressing National Interstate’s motion for judgment on the pleadings, both
plaintiff and National Interstate acknowledge that such a controversy is contingent
upon whether National Interstate, as the insurer, attempts to hold plaintiff responsible
Doc. no. 1-1 (Ex. A.), at ECF 3 (Complaint).
for the damages caused by the fire. National Interstate notes that it
still has not made a determination regarding liability, as it has not
completed its investigation [of the fire]. If National Interstate had made
such a demand to the Plaintiff [for losses caused by the fire], then a real
and justiciable controversy would likely exist.11
In response, plaintiff observes that National Interstate
has given written notice to [plaintiff] of potential liability claims arising
from the subject fire loss. The correspondence sent on behalf of
National [Interstate] explicitly states that [plaintiff] may be responsible
for the loss and that National [Interstate] is subrogated to the rights of
its insurer [i.e., G.A. Rentals].12
The correspondence that plaintiff references is an August 21, 2012 letter notifying it
of National Interstate’s ongoing investigation of the fire, and advising plaintiff that
it “may be responsible for the damages resulting from this loss.”13
To determine whether plaintiff’s claim is ripe under Article III, the court first
considers “the fitness of the issues for judicial decision.” Coalition for the Abolition
of Marijuana Prohibition v. City of Atlanta, 219 F.3d 1301, 1315 (11th Cir. 2000).
Here, it is clear that the claim is not yet “sufficiently mature, and the issues
sufficiently defined and concrete, to permit effective decisionmaking by the court.”
Konikov, 410 F.3d at 1322. Specifically, the fact that National Interstate may, at some
Doc. no. 14 (National Interstate’s Reply Brief), at 5 (alteration and emphasis supplied).
Doc. no. 13 (Plaintiff’s Response Brief), at ECF 2-3 (alterations and emphasis supplied).
Id. at ECF 8 (Ex. A, Letter of Aug. 21, 2012 from National Interstate to Tiffin
Motorhomes) (emphasis supplied).
future time, attempt to hold plaintiff responsible for the loss does not create more than
an abstract, hypothetical disagreement “premised on uncertain and contingent future
events that may not occur as anticipated or may not occur at all.” Johnson, 730 F.2d
at 649; see also Konikov, 410 F.3d at 1322 (noting that the ripeness doctrine exists
to courts avoid becoming entangled in abstract disagreements).
It is possible that National Interstate will not attempt to hold plaintiff
responsible for the loss at all. Thus, adjudicating the issues raised by plaintiff’s suit
at this juncture would be speculative, because there is no “substantial continuing
controversy between parties having adverse legal interests.” Emory v. Peeler, 756
F.2d 1547, 1552 (11th Cir. 1985) (finding no case or controversy under both Article
III and the federal Declaratory Judgment Act).
The court also must evaluate “the hardship to the parties of withholding court
consideration.” City of Atlanta, 219 F.3d at 1315. It is not apparent how plaintiff
would be burdened by waiting until this putative dispute is ripe for litigation, and the
possible outcomes of “withholding court consideration” suggest that no burden exists.
If National Interstate does not attempt to hold plaintiff responsible for the loss, then
no controversy will arise. Alternatively, if National Interstate eventually does attempt
to hold plaintiff responsible and demands payment, plaintiff may then seek
declaratory relief, or National Interstate could initiate a suit as plaintiff. It is not clear
how waiting for either result would prejudice plaintiff and, given that National
Interstate is still investigating the fire,14 it would benefit, rather than burden, National
Interstate to allow that process to run its course.
Plaintiff misapprehends the nature of the ripeness inquiry under consideration
when arguing that:
If litigation must be commenced [by National Interstate] before a bona
fide controversy can be said to exist, then no declaratory judgment could
ever be properly filed by a party which was potentially liable for a loss.
By definition, all such declaratory judgment actions would be subject to
dismissal as either premature or moot.15
That argument is not sound. The relevant inquiry is not “which party commenced the
litigation,”16 but “whether there is an actual dispute between the parties.” If the
answer to that latter question is “yes,” then the case is constitutionally ripe for
adjudication, and either party can initiate a lawsuit. Here, however, there is only a
possible or hypothetical dispute, not an actual one.
I. DISMISSAL OR REMAND?
See doc. no. 7 (Motion for Judgment on the Pleadings), at 10-11; see also doc. no. 13
(Plaintiff’s Response Brief), at ECF 8 (Ex. A, Letter of Aug. 21, 2012 from National Interstate to
Doc. no. 13 (Plaintiff’s Response Brief), at ECF 3 (alterations supplied, underlined
emphasis in original).
“It is immaterial [for the purpose of determining whether a ‘controversy’ exists] that
frequently, in the declaratory judgment suit, the positions of the parties in the conventional suit are
reversed.” Maryland Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273 (1941) (alteration
Remand — not dismissal — is the proper remedy because, lacking subject
matter jurisdiction, this court has no constitutional authority to dismiss or otherwise
adjudicate the case. See, e.g., Kelly v. Harris, 331 F.3d 817, 819 (11th Cir. 2003).
Moreover, the removal statute commands that if, “at any time before final
judgment it appears that the district court lacks subject matter jurisdiction, the case
shall be remanded.” 28 U.S.C. § 1447(c) (emphasis supplied). The language of §
1447(c) is mandatory, not discretionary. See, e.g., International Primate Protection
League v. Administrators of Tulane Educational Fund, 500 U.S. 72, 87-89 (1991)
(finding that § 1447(c) requires remand when subject matter jurisdiction is lacking);
University of South Alabama v. American Tobacco Co., 168 F.3d 405, 410 (11th Cir.
Thus, because ripeness is an issue of subject matter jurisdiction, see Reahard
v. Lee County, Florida, 30 F.3d 1412, 1415 (11th Cir. 1994), remand is proper when,
as here, a removed case is not ripe for adjudication. See, e.g., Smith v. Wisconsin
Department of Agriculture, 23 F.3d 1134, 1142 (7th Cir. 1994) (Because plaintiff’s
“claim is not yet ripe, the district court lacked subject-matter jurisdiction and was
required under § 1447(c) to remand the claim to the state court from which it was
removed.”); Oakland 40, LLC v. City of South Lyon, No. 10-14456, 2011 WL
1884188, at *1-2 (E.D. Mich. May 18, 2011) (“Under 28 U.S.C. § 1447(c), this court
‘shall’ remand the case if the court lacks subject matter jurisdiction; and ripeness is
a jurisdictional requirement.”); cf. Coyne v. American Tobacco Co., 183 F.3d 488,
496 (6th Cir. 1999) (finding that remand is required under § 1447(c) when the
plaintiff lacks Article III standing).
Finally, an “order remanding [a removed] case may require payment of just
costs and any actual expenses, including attorney fees, incurred as a result of the
removal.” 28 U.S.C. § 1447 (alteration and emphasis supplied). The decision to
award costs is vested within the district court’s discretion. Bauknight v. Monroe
County, Florida, 446 F.3d 1327, 1329 (11th Cir. 2006).
Recently, the Supreme Court enunciated a standard to guide the district
courts in deciding whether to award fees when remanding a case to state
court because of improper removal. The Court held that “[a]bsent
unusual circumstances, courts may award attorney’s fees under §
1447(c) only where the removing party lacked an objectively reasonable
basis for seeking removal. Conversely, when an objectively reasonable
basis exists, fees should be denied.” Explicitly rejecting the notion that
the statute created a presumption in favor of awarding fees, the Court
explained that § 1447(c) only authorized an award of costs and fees
when such an award was just.
Id. (internal citations omitted) (quoting and citing Martin v. Franklin Capital Corp.,
546 U.S. 132, 136-40 (2005)). The Eleventh Circuit’s decision in Bauknight suggests
that costs should not be awarded in this case. The Bauknight opinion affirmed the
district court’s refusal to impose costs after remanding a case that was not ripe for
adjudication. Id. at 1327-29. In support of that result, the Court noted that several
district courts previously had disagreed about whether a defendant’s right to removal
is distinct from the issue of ripeness. Id. at 1331. It also added that the removing
defendant “had to act quickly after receipt of the complaint” because of the time
constrains imposed by 28 U.S.C. § 1446(b). Id. Both of those rationales apply here,
so costs will not be taxed to National Interstate.
III. CONCLUSION AND ORDER
Because this case is not ripe for adjudication in the Article III sense, the court
lacks subject matter jurisdiction. Ordinarily, such a finding would warrant dismissal
of the action. See Fed. R. Civ. P. 12(h)(3) (“If the court determines at any time that
it lacks subject-matter jurisdiction, the court must dismiss the action.”). Here,
however, remand is the proper remedy, because this case was removed from state
court. See 28 U.S.C. § 1447(c) (“If at any time before final judgment [in a case
removed from state court] it appears that the district court lacks subject matter
jurisdiction, the case shall be remanded.”) (alteration and emphasis supplied).
Accordingly, an order remanding this case to the Circuit Court of Franklin
County, Alabama, will be entered contemporaneously herewith. This court expresses
no opinion about the underlying merits of this action, or whether it presents a
justiciable controversy as a matter of Alabama law. Those matters are for the state
court to decide on remand. Alabama courts may, of course, have more liberal
ripeness standards than the federal judiciary. But the ability of this court to
adjudicate a case remains constitutionally constrained by Article III, even when a
statutory basis for jurisdiction — here, the parties’ diversity of citizenship — exists.
National Interstate’s motion for judgment on the pleadings, as well as its
motion for an extension of the deadline to add parties, causes of action, and defenses,
also is due to be denied as moot.
DONE this 21st day of May, 2013.
United States District Judge
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?