AIG Specialty Insurance Company v. Liberty Mutual Insurance Company

Filing 48

ORDER Denying without prejudice 23 Motion to Stay. Any renewed motion shall be filed within 14 days of the issuance of this order. Signed by Magistrate Judge Nancy J. Koppe on 7/31/17. (Copies have been distributed pursuant to the NEF - MR)

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1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 DISTRICT OF NEVADA 9 AIG SPECIALTY INSURANCE COMPANY, 10 11 12 13 14 15 ) ) Plaintiff(s), ) ) v. ) ) LIBERTY MUTUAL FIRE INSURANCE ) COMPANY, ) ) ) Defendant(s). ) __________________________________________) Case No. 2:17-cv-01260-APG-NJK ORDER (Docket No. 23) 16 Pending before the Court is Defendant’s motion to stay these proceedings pending resolution of an 17 underlying state court action. Docket No. 23. Plaintiff has filed a response in opposition to the motion, 18 and Defendant has filed a reply. Docket No. 32, 36. 19 The briefing on this motion is not sufficiently clear to enable a ruling at this time. Most 20 significantly, the parties have not identified with particularity the standards that apply and crafted arguments 21 tailored to those standards. There are two primary lines of authority and standards interspersed throughout 22 the briefing: (1) that related to the Court’s inherent authority to stay proceedings generally as a matter of 23 controlling its docket, as discussed in cases such as Landis v. N. Am. Co., 299 U.S. 248, 254 (1936) and 24 Lockyer v. Mirant, 398 F.3d 1098, 1110 (9th Cir. 2005); and (2) that related to the Court’s discretion to 25 abstain from exercising jurisdiction under the Declaratory Judgment Act, as discussed in cases such as 26 Wilton v. Seven Falls Co., 515 U.S. 277, 282-90 (1995), Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 27 494-95 (1942), and Government Employees Ins. Co. v. Dizol, 133 F.3d 1220, 1225-26 (9th Cir. 1998) (en 28 banc). Although there may be some overlap in the factors considered when a court invokes its inherent 1 authority to control its docket and when a court abstains from proceeding with a case seeking declaratory 2 relief, these as separate inquiries that are generally analyzed separately. See, e.g., Atlantic Casualty Ins. 3 Co. v. Bellinger, 2017 WL 1843714, at *1-2 (E.D. Wash. May 8, 2017); United Speciality Ins. Co. v. 4 Meridian Mgmt. Grp., Inc., 2016 WL 1534885, at *1 (N.D. Cal. Apr. 15, 2016); Fidelity & Guaranty Ins. 5 Co. v. Centex Homes, 2016 WL 1257523, at *2 & 4 n.2 (S.D. Cal. Mar. 31, 2016). 6 In this case, the motion relies predominately on the Landis-line of authority regarding a stay, and 7 the standards enunciated therein. See Docket No. 23 at 6. However, the motion also relies on some cases 8 analyzing abstention under the Declaratory Judgment Act, see Docket No. 23 at 6, 9, 11 (discussing Wilton 9 and Progressive Northern Ins. Co. v. Morales-Elizalde, 2014 WL 2624996 (D. Nev. June 12, 2014)), while 10 also appearing to indicate confusingly that the abstention analysis therein is not applicable, see Docket No. 11 23 at 7.1,2 12 The response intersperses the two lines of authority and the standards established therein. See 13 Docket No. 32 at 10-12. Moreover, while the response indicates that the Brillhart factors apply, it then 14 entirely ignores the three primary Brillhart factors and instead quotes a footnote with additional factors that 15 can be considered. See id. at 11.3 The response fails to provide meaningful discussion on some of the 16 17 18 19 20 21 22 1 Defendant indicates that the abstention line of authority does not apply since Defendant is not a party to the underlying state court action. Docket No. 23 at 7. Defendant fails to provide meaningful discussion as to why it believes the standards regarding abstention under the Declaratory Judgment Act have no bearing based on that fact alone. Cf. Polido v. State Farm Mut. Auto. Ins. Co., 110 F.3d 1418, 1423 (9th Cir. 1997) (providing overview of Ninth Circuit cases analyzing discretionary jurisdiction under the Declaratory Judgment Act in cases in which the parties in the federal case were different than the parties in the underlying state case), overruled on other grounds, Dizol, 133 F.3d at 1220. Moreover, as discussed below, the reply appears to rely on the abstention case law without addressing this concern regarding the difference in parties. 23 2 24 25 26 27 28 Defendant also cites case law dealing with other issues, such as Colorado River abstention and stays of discovery pending resolution of a dispositive motion. See Docket Nos. 23 at 6-7 (citing American Int’l Underwriters (Phillipines), Inc. v. Cont’l Ins. Co., 843 F.2d 1253, 1259-69 (9th Cir. 1988) and Tradebay, LLC v. eBay, Inc., 278 F.R.D. 597, 602 (D. Nev. 2011)). It is not entirely clear how such case law is pertinent here. 3 “The Brillhart factors remain the philosophic touchstone for the district court. The district court should avoid needless determination of state law issues; it should discourage litigants from filing declaratory 2 1 primary issues involved in the Court’s analysis. For example, the Court considers the need to “discourage 2 litigants from filing declaratory actions as a means of forum shopping,” but Plaintiff’s entire discussion of 3 forum-shopping is a conclusory statement that Plaintiff perceives that it is Defendant that is forum-shopping 4 based on its conduct in state court. See Docket No. 32 at 13. To the extent Plaintiff is conceding that it is 5 forum-shopping, it fails to provide meaningful discussion as to why Defendant’s purported conduct should 6 negate or outweigh its own conduct in the Court’s analysis.4 7 The reply appears to abandon the Landis stay analysis, and instead argues for application of the 8 pertinent factors for abstention under Brillhart. Docket No. 36 at 3-4. The reply proceeds, however, 9 without structuring its argument to address the pertinent factors in a direct fashion. 10 In short, the Court finds the briefing to be insufficiently clear to permit a ruling. To the extent 11 Defendant seeks to invoke the Court’s discretion to abstain from exercising jurisdiction under the 12 Declaratory Judgment Act, it must clearly so state. To the extent Defendant seeks to invoke the Court’s 13 inherent authority to stay this case as a means of controlling its docket, it must clearly so state. To the 14 15 16 relief actions as a means of forum shopping; and it should avoid duplicative litigation.” Dizol, 133 F.3d at 1225. The Ninth Circuit has also made clear that these three factors are not exhaustive, however, suggesting other considerations such as: 17 whether the declaratory action will settle all aspects of the controversy; whether the declaratory action will serve a useful purpose in clarifying the legal relations at issue; whether the declaratory action is being sought merely for the purposes of procedural fencing or to obtain a ‘res judicata’ advantage; or whether the use of a declaratory action will result in entanglement between the federal and state court systems. In addition, the district court might also consider the convenience of the parties, and the availability and relative convenience of other remedies. 18 19 20 21 22 23 24 25 26 27 28 Id. at 1225 n.5 (States Ins. Co. v. Kearns, 15 F.3d 142, 145 (9th Cir. 1994) (Garth, J.,quoting American concurring)). 4 AIG also states, without elaboration, that forum-shopping is not relevant here as it is “entitled” to litigate its claims in this Court. Docket No. 32 at 13. To the extent AIG is arguing that the mere presence of federal subject matter jurisdiction negates any concerns of forum-shopping, it fails to meaningfully develop that position or supply any legal authority supporting it. Cf. Wilton, 515 U.S. at 282 (“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 jurisdictional prerequisites”). 3 1 extent Defendant wishes to invoke both doctrines, it must separately analyze the applicable issues. In any 2 of these scenarios, the parties must then provide meaningful discussion of the controlling standards and 3 meaningful discussion as to each of the applicable factors. The briefs must be organized in a coherent 4 manner and should avoid inclusion of irrelevant information. Moreover, counsel are advised that the Court 5 does not look favorably on ad hominem attacks, and they would be well-served by sticking to the facts and 6 analysis without superfluous commentary. 7 For the reasons discussed above, the pending motion to stay is hereby DENIED without prejudice. 8 Any renewed motion shall be filed within 14 days of the issuance of this order.5 The Court declines to 9 require expedited briefing on any renewed motion, and it will be decided in the ordinary course. 10 IT IS SO ORDERED. 11 DATED: July 31, 2017 12 ______________________________________ NANCY J. KOPPE United States Magistrate Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 The Court expresses no opinion herein regarding any renewed motion. 4

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