In Re Lien Asserted By Rider Insurance Company As To Accident Of May 11, 2011 v. Rider Insurance Company

Filing 4

MEMORANDUM and ORDER DISMISSING the complaint; Clerk of Court is directed to CLOSE this case.Signed by Honorable James M. Munley on 8/13/13. (sm)

In Re Lien Asserted By Rider Insurance Company As To Accident Of May 11, 2...Rider Insurance Company

Doc. 4

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
IN RE LIEN ASSERTED BY RIDER
INSURANCE COMPANY AS TO
ACCIDENT OF MAY 11, 2011,
Plaintiff

:
No. 3:13cv2087
:
:
(Judge Munley)
:
:
v.
:
:
RIDER INSURANCE COMPANY,
:
Defendant
:
:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
MEMORANDUM
Defendant filed the instant notice of removal (Doc. 1) on August 5,
2013 to remove to federal court plaintiff’s state court complaint seeking
declaratory relief. We will decline to exercise jurisdiction and will dismiss
the case sua sponte.
Background
This case arises from Defendant Rider Insurance Company
(hereinafter “Rider”) asserting a $125,000 lien against plaintiff’s personal
injury recovery. (Id. ¶¶ 1, 12). Plaintiff seeks a declaration that Rider’s
$125,000 demand should be reduced to account for fees, costs and
Rider’s decision to forego a $25,000 settlement from the tortfeasor’s
bodily injury liability limits. (Id. ¶¶ 6-9, 14).
Plaintiff filed the instant action for declaratory judgment pursuant to
Pennsylvania’s Declaratory Judgment Act, 42 PA. CONS. STAT. ANN. §
7531 et seq, on July 3, 2013. (Doc. 1, Ex. A, Compl. (hereinafter
“Compl.”)). Rider filed a timely notice of removal (Doc. 1) on August 5,

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2013. On August 6, 2013, plaintiff responded to Rider’s notice of removal
by filing a motion for remand (Doc. 2), bringing the case to its present
posture.
Discussion
Rider removed this case from state court pursuant to 28 U.S.C. §
1441(a), which gives a defendant the right to remove “any civil action
brought in a State court of which the district courts of the United States
have original jurisdiction.” 28 U.S.C. § 1441(a). As noted above, plaintiff
seeks declaratory relief pursuant to state law. “An action for declaratory
judgment is procedural in nature and purpose.” Munich Welding, Inc. v.
Great Am. Ins., 415 F. Supp. 2d 571, 574 (W.D. Pa. 2006). Because a
federal court sitting in diversity must apply federal law with respect to
procedural rules, proceeding under the Pennsylvania Declaratory
Judgment Act is improper. Fed. Kemper Ins. Co. v. Rauscher, 807 F.2d
345, 352 (3d Cir. 1986) Therefore, the court will assess jurisdiction
pursuant to the federal Declaratory Judgment Act, 28 U.S.C. §§ 2201. Id.
The Declaratory Judgment Act provides that “[i]n 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.” 28 U.S.C. § 2201(a) (emphasis
added). The United States Supreme Court has explained that “[d]istrict

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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.” Wilton v. Seven Falls
Co., 515 U.S. 277, 282 (1995). The Supreme Court has emphasized that
district courts are under no compulsion to exercise this discretionary
jurisdiction. Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491, 494-95
(1942).
The Third Circuit has held that a court’s decision whether to exercise
its discretion to hear a declaratory judgment action “requires some inquiry
into the scope of the state court proceeding, the nature of the defenses
available there, and whether the claims of all parties in interest can
satisfactorily be adjudicated in that proceeding.” See id. at 133 (citing
Brillhart, 316 U.S. at 491). Furthermore, “[a] federal court should also
decline to exercise its discretionary jurisdiction when doing so would
promote judicial economy by avoiding duplicative and piecemeal litigation.”
Id. at 135 (citing Mitcheson v. Harris, 995 F.2d 235, 240 (4th Cir. 1992)).
These considerations are especially important because “district courts
should give serious consideration to the fact that they do not establish
state law, but are limited to predicting it.” Id. A court may sua sponte
exercise its discretion not to hear a declaratory judgment action. See id. at
136.

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The trend of Federal District Courts sitting in Pennsylvania is “to
decline to exercise jurisdiction over declaratory judgment actions involving
an insurance company that are solely brought on diversity and have no
federal question or interest.” Reifer v. Westport Ins. Corp., — F. Supp. 2d
—, 2013 WL 1833800, at *2 (M.D. Pa. 2013); see also Allstate Ins. Co. v.
Seelye, 198 F. Supp. 2d 629, 631-32 (W.D. Pa. 2002) (stating that when
the sole issue of insurance coverage presents no federal question, nor
promotes any federal interest, district courts are reluctant to exercise
jurisdiction over declaratory judgment actions).
Therefore, the question here is whether we should exercise our
discretion to decline to hear this declaratory judgment action when the
sole issue does not present a federal question or promote any federal
interest. Plaintiff seeks a declaration, pursuant to state law, that Rider’s
$125,000 demand should be reduced to account for fees, costs and
Rider’s decision to forego a $25,000 settlement from the tortfeasor’s
bodily injury liability limits. Any judgment the court issues in this case
would depend largely on applying well-settled principles of Pennsylvania
law to the factual occurrences that gave rise to the state-court suit.
Plaintiff does not ask us to resolve questions of federal statutory or
constitutional law which we might be peculiarly qualified to answer.
A state court can as easily answer these questions as we can, and
there is no need to resort to a federal forum to do so. See Summy, 234

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F.3d at 136 (finding that “the desire of insurance companies and their
insureds to receive declarations in federal court on matters of purely state
law has no special call on the federal forum”). As the Third Circuit Court
of Appeals has explained “[t]he state’s interest in resolving its own law
must not be given short shrift simply because one party or, indeed, both
parties, perceive some advantage in the federal forum. When state law is
firmly established, there would seem to be even less reason for the parties
to resort to the federal courts. Unusual circumstances may occasionally
justify such action, but declaratory judgments in such cases should be
rare.” Id. Adding our opinion to those of the state court in this case would
make the matter unnecessarily more complex.
Accordingly, our interest in comity and respect for judgments of state
courts compels us to use our discretion to decline to exercise jurisdiction
in this case. Because the court chooses not to exercise jurisdiction over
this action, the court will not address plaintiff’s motion for remand. (Doc.
2). An appropriate order follows.

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IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
IN RE LIEN ASSERTED BY RIDER
INSURANCE COMPANY AS TO
ACCIDENT OF MAY 11, 2011,
Plaintiff

:
No. 3:13cv2087
:
:
(Judge Munley)
:
:
v.
:
:
RIDER INSURANCE COMPANY,
:
Defendant
:
:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
ORDER
AND NOW, to wit, this 13th day of August 2013, the court declines
to exercise jurisdiction over the plaintiff’s complaint (Doc. 1, Ex. A,
Compl.) pursuant to the Declaratory Judgment Act, 28 U.S.C. §§ 2201,
and the complaint is hereby DISMISSED sua sponte. The Clerk of Court
is directed to close this case.

BY THE COURT:

s/ James M. Munley
JUDGE JAMES M. MUNLEY
United States District Court

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