Weyerhaeuser Company v. Novae Syndicate 2007 et al
Filing
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ORDER TO SHOW CAUSE within seven days of the filing date of this order, why this action should not be dismissed as nonjusticiable. Signed by Judge James L. Robart. (SWT)
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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE
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WEYERHAEUSER COMPANY,
Plaintiff,
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v.
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NOVAE SYNDICATE 2007, et al.,
ORDER TO SHOW CAUSE WHY
THIS CASE SHOULD NOT BE
DISMISSED AS
NONJUSTICIABLE
Defendants.
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CASE NO. C18-0585JLR
Plaintiff Weyerhaeuser Company (“Weyerhaeuser”) seeks a judgment under the
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Declaratory Judgment Act, 28 U.S.C. § 2201, that Weyerhaeuser is not required to
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arbitrate any coverage dispute that may arise under the excess liability policies it
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purchased from Defendants Novae Syndicate 2007, Apollo Liability Consortium 9984,
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ANV Casualty Consortium 9148, SCOR UK Company Ltd., Starstone Syndicate 1301,
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Hiscox Dedicated Corporate Member Limited as representative member of Syndicate 33
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at Lloyd’s, and Starr Underwriting Agents Ltd. (collectively, “Defendants”). (See
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generally Compl. (Dkt. # 1).) For the reasons discussed below, the court ORDERS the
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parties to show cause, within seven days of the filing date of this order, why this action
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should not be dismissed as nonjusticiable.
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The concept of justiciability “expresses the jurisdictional limitations imposed upon
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federal courts by the ‘case or controversy’ requirement” of Article III of the United States
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Constitution. See Corrie v. Caterpillar, Inc., 503 F.3d 974, 980 (9th Cir. 2007) (citation
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omitted); U.S. Const., art. III, § 2. Justiciability is a threshold matter that courts have an
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independent obligation to evaluate, sua sponte, if necessary, before reaching the merits of
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a case. See, e.g., Am. Civil Liberties Union of Nev. v. Lomax, 471 F.3d 1010, 1015 (9th
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Cir. 2006); see also Toumajian v. Frailey, 135 F. 3d 648, 652 (9th Cir. 1998) (“In this
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action, as in all actions before a federal court, the necessary and constitutional predicate
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for any decision is a determination that the court has jurisdiction—that is[,] the power—
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to adjudicate the dispute.”).
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The Declaratory Judgment Act provides, in relevant part, that, “[i]n a case of
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actual controversy within its jurisdiction, . . . any court of the United States . . . may
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declare the rights and other legal relations of any interested party seeking such
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declaration, whether or not further relief is or could be sought.” 28 U.S.C. § 2201(a).
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The phrase “case of actual controversy” refers to the types of cases and controversies that
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are justiciable under Article III of the Constitution. See MedImmune, Inc. v. Genentech,
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Inc., 549 U.S. 118, 126-27 (2007). An actual controversy exists within the meaning of
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the Declaratory Judgment Act when the dispute is “definite and concrete, touching the
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legal relations of parties having adverse legal interests.” Id. at 127 (quoting Aetna Life
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Ins. Co. v. Haworth, 300 U.S. 227, 240-41 (1937)). Further, the dispute must be “real
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and substantial and admit of specific relief through a decree of a conclusive character, as
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distinguished from an opinion advising what the law would be upon a hypothetical set of
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facts.” Id. (internal quotation marks omitted). The basic question in each case is
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“whether the facts alleged, under all the circumstances, show that there is a substantial
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controversy, between parties having adverse legal interests, of sufficient immediacy and
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reality to warrant the issuance of a declaratory judgment.” Id. (quoting Md. Cas. Co. v.
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Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941)). Even where the Article III requirement
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of an actual controversy is satisfied, the district court’s exercise of its declaratory
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judgment authority is discretionary. See Gov’t Emps. Ins. Co. v. Dizol, 133 F.3d 1220,
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1222-23 (9th Cir. 1998).
Here, Weyerhaeuser seeks a declaratory judgment that it need not arbitrate any
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dispute over excess liability coverage that may arise between it and Defendants. (Compl.
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¶¶ 1, 35-37.) Weyerhaeuser acknowledges that “[a] justiciable controversy does not yet
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exist between the parties regarding coverage.” (Id. ¶ 1.) Rather, the parties dispute “the
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arbitrability of coverage disputes under the subject policies.” (Id.) Specifically,
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Weyerhaeuser claims that Defendants’ excess liability policies require Defendants to
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litigate any coverage dispute in a court of Weyerhaeuser’s choosing in the United States.
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(Id. ¶¶ 26-31, 37.) Weyerhaeuser further represents that it “has incurred, or expects to
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incur, covered defense costs and liabilities in connection with [an allegedly defective
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Weyerhaeuser product] that exceed the applicable coverage limits of all of [Defendants’]
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[p]olicies.” (Id. ¶ 22.) According to Weyerhaeuser, “Defendants have neither confirmed
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that resolution of future disputes, should they arise, will occur in a Washington State
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forum nor disclaimed any intention to initiate a competing coverage arbitration and/or
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litigation outside of Washington.” (Id. ¶ 24.) Weyerhaeuser thus contends that “[t]here
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is an actual and justiciable controversy between Plaintiff and Defendants as to the
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arbitrability of the parties’ disputes regarding or arising under [Defendants’] [p]olicies
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and the proper venue for any such litigation.” (Id. ¶ 37.)
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Upon its own review of the pleadings and applicable law, the court is not
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convinced that this action presents an “actual controversy” within the meaning of the
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Declaratory Judgment Act. See 28 U.S.C. § 2201(a). Defendants have not initiated or
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sought to compel arbitration, and Weyerhaeuser expressly concedes that no coverage
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dispute has arisen between the parties.1 (Compl. ¶¶ 1, 38.) Weyerhaeuser alleges only
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that the parties disagree about the meaning of policy terms that have yet to be implicated
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in a live dispute. In short, Weyerhaeuser appears to seek an advisory opinion on a
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contract interpretation issue that, at this time, is untethered to a “definite and concrete”
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controversy between the parties. See MedImmune, 549 U.S. at 127.
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Indeed, several courts have concluded that a declaratory judgment action
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concerning the arbitrability of a future, hypothetical conflict is nonjusticiable. See, e.g.,
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Jones v. Sears Roebuck & Co., 301 F. App’x 276, 281-84 (4th Cir. 2008) (upholding the
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dismissal of claims as nonjusticiable where the plaintiffs alleged that the arbitration
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Likewise, Weyerhaeuser states in the complaint that it “does not currently allege causes
of action for breach of contract, bad faith, violation of the Washington Insurance Fair Conduct
Act, [or] violation of the Washington Consumer Protection Act . . . .” (Compl. ¶ 38.)
Weyerhaeuser reserved the right to amend its complaint “to add such causes of action” should a
coverage dispute arise. (Id.; see also id. ¶ 1.) To date, Weyerhaeuser has not sought to amend its
complaint. (See generally Dkt.)
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provision of a credit card agreement was unconscionable, because “none of the
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[d]efendants has threatened to invoke the arbitration provision”); Lee v. Am. Express
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Travel Related Servs., No. C 07-04765, 2007 WL 4287557, at *5 (N.D. Cal. Dec. 6,
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2007) (dismissing as nonjusticiable the plaintiffs’ claim that the arbitration clause in a
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credit card contract was unlawful, where the arbitration clause had “not been implicated
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in any actual dispute between the parties”); Posern v. Prudential Secs., Inc., No. C-03-
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0507SC, 2004 WL 771399, at *8 (N.D. Cal. Feb. 18, 2004) (dismissing a claim for a
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declaratory judgment invalidating an arbitration provision, where, because the defendant
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“has not filed a motion to compel arbitration, the declaratory relief that [the plaintiffs]
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seek[] appears speculative”); Rivera v. Salomon Smith Barney Inc., No. 01 Civ.
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9282(RWS), 2002 WL 31106418, at *2-4 (S.D.N.Y. Sept. 20, 2002) (dismissing an
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action as nonjusticiable where the plaintiff sought a declaratory judgment to determine
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whether potential, future claims against her former employer were subject to mandatory
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arbitration); Tamplenizza v. Josephthal & Co., 32 F. Supp. 2d 702, 704 (S.D.N.Y. 1999)
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(finding that the plaintiff’s request for a declaratory judgment that an arbitration
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agreement was null and void “strains the concept of ‘case or controversy’ to its outer
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limit,” absent an actual dispute between the parties).
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For the foregoing reasons, the court ORDERS the parties to show cause, within
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seven days of the filing date of this order, why this action should not be dismissed as
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nonjusticiable. The parties’ responses to this order may not exceed 10 pages. Defendants
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must jointly file one submission.
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Dated this 22nd day of July, 2019.
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A
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The Honorable James L. Robart
U.S. District Court Judge
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