Petition for Writ of Certiorari — Old Republic Union Insurance v. Tillis Trucking Co.

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“Te TS

971301 FEBRG 1999

occa tem

No.

IN THE

Supreme Court of the Gnited States

OCTOBER TERM, 1997

OLD REPUBLIC UNION INSURANCE COMPANY,

Petitioner,

TILLIS TRUCKING COMPANY, INC.,

TILLIS LAND & TIMBER CO., WILLIE RAY PRIDE

and MALACHI MOSES,

Respondents.

On Petition for Writ of Certiorari to the United

States Court of Appeals for the Eleventh Circuit

PETITION FOR WRIT OF CERTIORARI

HUGH C. GRIFFIN

Counsel of Record

J. ROBERT PERSONS

HUGH S. BALSAM

LORD, BISSELL & BROOK

One Atlantic Center

1201 West Peachtree Street

Suite 3700

Atlanta, Georgia 30309

(404) 870-4600

Attorneys for Petitioner

Old Republic Union

Insurance Company

Midwest Law Printing Co., Chicago 60610, (312) 321-0220

QUESTION PRESENTED

Should the Younger abstention doctrine be used to

block a non-Alabama resident’s federal court challenge to

the flagrantly and patently unconstitutional Alabama

wrongful death statute, which allows punitive damages

for even minimally negligent conduct but has been re-

peatedly upheld by the Alabama Supreme Court?

LIST OF PARTIES PARSUANT TO

SUPREME COURT RULE 29.6

The parent company of Old Republic Union Insurance

Company i@ Old Republic General Insurance Group, Inc.

“ Old Republic General Insurance Group, Inc. is itself a

wholly owned subsidiary of Old Republic International

Corp.

Old Republic Union Insurance Company has no non-

as wholly owned subsidiaries.

ill

TABLE OF CONTENTS

PAGE

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CONSTITUTIONAL PROVISION

INVOLVED IN THIS CASE ................ 2

STATUTE INVOLVED IN THIS CASE .......... 2

Ree Ee COP SEO CAGE 2... tcc cee ees 3

Basis for Federal Jurisdiction ............. 3

eee eee eee eee 4

REASONS FOR GRANTING THE WRIT ........ 11

THE YOUNGER ABSTENTION DOCTRINE

SHOULD NOT BE USED TO BLOCK A NON-

ALABAMA RESIDENT'S FEDERAL COURT

CHALLENGE TO THE FLAGRANTLY AND

PATENTLY UNCONSTITUTIONAL ALABAMA

WRONGFUL DEATH STATUTE WHERE

THERE IS NO STATE COURT FORUM WHERE

THE FEDERAL PLAINTIFF'S CONSTITUTION-

AL CLAIMS CAN BE FAIRLY AND FULLY

CONSIDERED AND RESOLVED ...........

A. The Imposition Of Punitive Damages

Under The Alabama Wrongful Death

Statute Is Patently And Flagrantly Un-

GN 0 Ss dere renee a ca 12

B. Alabama State Courts Repeatedly Refuse

To Entertain Constitutional Challenges

To The Wrongful Death Statute ........ 15

CE Se Css ev vag ec nesta eee se eee 18

PR 5 ko os bie oe a eee ee ee infra

~ tort dl all

TABLE OF AUTHORITIES

Cases PAGE

Alabama Great S. R.R. v. Burgess,

OE eb ke ce cc swede acwess 5

Alabama Power Co. v. Turner,

575 So. 2d 551 (Ala.), cert.

dented, GOD US. GOS GIGS] .. ww ccc ccc cece 15

BMW of North America, Inc. v. Gore,

pe ee rere 12-17

Brillhart v. Excess Insurance Co. of America,

ee SS ea eee 9

Central Ala. Elec. Co-op v. Tapley,

Ge es Oe Te GC bo ba ea oN Oke ees 15

District of Columbia Court of Appeals v. Feldman,

RD SE Mik 05k 54-0 ide B be Oe cee 9, 10

Green Oil Co. v. Hornsby,

539 So. 2d 218 (Ala. 1989) ............ S, 7, a7

Hammond v. City of Gadsden,

493 So. 2d 1374 (Ala. 1986) ........... 6, 7,17

Life Insurance Co. of Ga. v. Johnson,

664 Go. 3a GB6 (Ale. 1906)... icc ceccccn 16

Middlesex County Ethics Commission v. Garden

State Bar Ass’n, 457 U.S. 423 (1982) ..... 10, 17

Old Republic Union Ins. Co. v. Tillis Trucking Co.,

124 F.3d 1258 (11th Cir. 1997) ........... 1,17

Rooker v. Fidelity Trust Co.,

ay ee alae aig eae 9

Steffel v. Thompson,

SR RD gg bc wc kk sO eke ee 12, 16

Supreme Lodge of the World v. Gustin,

OD i Te i nbe o Kew eae OH 15, 16

Tatum v. Schering Corp.,

523 So. 2d 1043 (Ala. 1968) .........2cce00, 5

Wilton v. Seven Falls Co.,

CRG The 6 kas 6 oo a's ls eae eee 9

Younger v. Harris,

GES aes ee CO oa 0s eke eh 10, 11, 15, 16

Constitutional Provisions

U.S. Constitution, Amendment XIV,§1.......... 2

Statutes

36 U BA. S RO oc cucu cadres cee. 3

36 UG. BEE ic ins chisel ee 3

Se Uae «66 Bk 4 oe ee ee eee 3

Ah. FS GE 6c kek ee ke ee eee 13

Aim. GO SG kk os os 046 oS ee ee 13

Aan. Cage $6640 2 ss cea ctknes chee 2-5, 13

Treatises

Paul M. Bator, The State Courts and Federal

Constitutional Litigation, 22 WM. & MARY

i, SUD, Ge Cees sc ov vee an erences 18

mas mani nigel”

;

PETITION FOR WRIT OF CERTIORARI

Petitioner, Old Republic Union Insurance Company

(“Old Republic”), respectfully petitions this Court for a

writ of certiorari to the United States Court of Appeals

for the Eleventh Circuit. Old Republic seeks reversal of

the decision of the Court of Appeals that affirmed the

order of the United States District Court for the Middle

District of Alabama dismissing Old Republic’s complaint

for declaratory judgment.

OPINIONS BELOW

The opinion of the United States Court of Appeals for

the Eleventh Circuit affirming dismissal of Old Repub-

lic’s complaint is set forth in the Appendix, at App. 1,

and is reported as Old Republic Union Insurance Com-

pany v. Tillis Trucking Co., Inc., 124 F.3d 1258 (11th

Cir. 1997). The Court of Appeals’ order denying Old

Republic’s suggestion of rehearing en banc is set forth in

the Appendix, at App. 27.

The unpublished opinion of the United States District

Court for the Middle District of Alabama dismissing Old

Republic’s complaint is set forth in the Appendix, at App.

15.

JURISDICTION

The court of appeals affirmed dismissal of Old Repub-

lic’s complaint on October 14, 1997 (App. 1) and denied

Old Republic’s suggestion of rehearing en banc on De-

cember 8, 1997. (App. 27). The Eleventh Circuit treats a

suggestion of rehearing en banc as a petition for rehear-

ing. See Eleventh Circuit R. 35-6, 35-7.

Old Republic invokes this Court’s jurisdiction pursuant

to 28 U.S.C. § 1254(1) (1988).

CONSTITUTIONAL PROVISION

INVOLVED IN THIS CASE

United States Constitution

Amendment XIV

Section 1. All persons born or naturalized in the

United States, and subject to the jurisdiction

thereof, are citizens of the United States and of

the State wherein they reside. No State shall

make or enforce any law which shall abridge the

privileges or immunities of citizens of the United

States; nor shall any State deprive any person of

life, liberty, or property, without due process of

law; nor deny to any person within its jurisdic-

tion the equal protection of the laws.

STATUTE INVOLVED

IN THIS CASE

Alabama Code § 6-5-410—Wrongful death.

(a) A personal representative may commence an

action and recover such damage as the jury may

assess in a court of competent jurisdiction within

the State of Alabama, and not elsewhere, for the

wrongful act, omission, or negligence of any per-

son, persons, or corporation, his or their servants

or agents, whereby the death of his testator or

intestate was caused, provided the testator or

intestate could have commenced an action for

such wrongful act, omission, or negligence if it

had not caused death.

CR al Peed a eat Le ee Pots ee

(b) Such action shall not abate by the death of

the defendant, but may be revived against his

personal representative and may be maintained

though there has not been prosecution, conviction

or acquittal of the defendant for the wrongful act,

omission or negligence.

payment of the debts or liabilities of the testator

or intestate, but must be distributed according to

the statute of distributions.

(d) Such action must be commenced within two

years from and after the death of the testetor or

intestate.

STATEMENT OF THE CASE

BASIS FOR FEDERAL JURISDICTION

The district court had jurisdiction under 28 U.S.C.

§ 1332(a) because the parties are of diverse citizenship

and the amount in controversy ($7 million) exceeds the

jurisdictional amount. Plaintiff Old Republic is an IIli-

nois corporation with its principal place of business in

Chicago, Illinois. Defendants Tillis Trucking Co. (“Tillis

Trucking”) and Tillis Land & Timber, Inc. (“Tillis Land”)

are both Alabama corporations with their principal

places of business in Alabama. Defendants Willie Ray

Pride and Malachi Moses are likewise citizens and resi-

dents of Alabama.

The district court’s jurisdiction was also based on 28

U.S.C. §§ 2201 and 2202 because Old Republic sought a

declaration of its obligations under two insurance con-

tracts.

STATEMENT OF FACTS

Old Republic’s Insureds Are Sued Under

Alabama’s Wrongful Death Statute.

In December 1994, Malachi Moses’s wife was killed

when her vehicle collided with a log trailer near Ozark,

Ala. (V1, R1, p. 3.) Moses filed a wrongful death action

against: the driver of the trailer, Willie Ray Pride;

Pride’s employer Tillis Trucking (under respondeat su-

perior); and Tillis Land (alleging it was negligent in

building its logging road where it did).

The Alabama wrongful death statute provides:

§ 6-5-410 Wrongful death.

(a) A personal representative may commence an

action and recover such damage as the jury may

assess in a court of competent jurisdiction within

the State of Alabama, and not elsewhere, for the

wrongful act, omission, or negligence of any per-

son, persons, or corporation, his or their servants

or agents, whereby the death of his testator or

intestate was caused, provided the testator or in-

testate could have commenced an action for such

wrongful act, omission, or negligence if it had not

caused death.

(b) Such action shall not abate by the death of

the defendant, but may be revived against his

personal representative and may be maintained

though there has not been prosecution, conviction

or acquittal of the defendant for the wrongful act,

omission or negligence.

payment of the debts or liabilities of the testator

or intestate, but must be distributed according to

the statute of distributions.

(d) Such action must be commenced within two

years from and after the death of the testator or

intestate.

Though the statute makes no reference to punitive dam-

ages, the Alabama courts have long interpreted it as per-

mitting an award of only punitive damages. See Alabama

Great S. R.R. v. Burgess, 22 So. 913, 915 (Ala. 1897);

Tatum v. Schering Corp., 523 So. 2d 1042, 1044 (Ala.

1988). The jury is not allowed to award compensatory

damages or even to consider the issue of compensa-

tion—instead, it is specifically instructed “not to consider

the pecuniary or monetary value of the life of the de-

cedent” and that the damages are “not recoverable to

compensate the family of the deceased from a pecuniary

or monetary standpoint.” (V2, R28, Tab E, Ex. 1, p. 18.)

The Insurance Policies Involved.

At the time of the accident, the Tillis defendants owned

two insurance policies issued by Old Republic, each in

the amount of $1 million. One was an automobile liabil-

ity policy; the other a commercial general liability policy.

(V1, R1, pp. 4-5.) Old Republic provided all defendants

with a defense under the automobile liability but denied

coverage under the general liability policy on the ground

that it excluded coverage “for bodily injury arising out of

the ownership, maintenance, use of any ‘auto’ owned or

operated by any insured,” including tractor-trailer com-

binations. (V1, R1, p. 5.)

Trial Court Denies Old Republic’s

Motion To Intervene.

Shortly before the wrongful death trial was to begin,

Old Republic sought leave to intervene in order to sub-

mit special interrogatories to the jury. The proffered in-

terrogatories would have clarified the basis for any re-

ward returned, i.e., whether it was based on operation

and maintenance of the logging truck (outside the gen-

eral liability coverage) or on the placement of the logging

road and/or failure to provide a flagman (within the gen-

eral liability coverage). (V1, R13, Tab B.) The state court

initially granted Old Republic’s motion to intervene, but

then reversed its ruling shortly before trial because of

objections by both Moses’s counsel and independent

counsel for the insureds. (V1, R13, p.6.)

Jury Returns $7 Million Punitive Damages |

Verdict Against Pride and Tillis Trucking;

Trial Court Holds It Has No “Prerogative” To

Entertain A Challenge To The Constitutionality

Of Alabama’s Wrongful Death Statute.

The case came on for trial and on September 17, 1996,

a jury returned a $7 million punitive damage verdict

against Pride and Tillis Trucking. The jury found Tillis

Land not liable. In post-trial motions, the defendants

sought reversal of the punitive damages award, urging

that the Alabama wrongful death statute was unconsti-

tutional. However, the trial court refused even to con-

sider any constitutional challenge to the wrongful death

statute, reasoning that it had no “prerogative” to do so

because the Alabama Supreme Court had historically

ruled that the statute is constitutional. (V2, R24, p. 4.)

Defendants also sought a remittitur based on the fact

that Pride had virtually no assets and Tillis Trucking

had assets of only $82,000. (V2, R24, p. 2.) After a

“Hammond/Green Oil” hearing—the post-trial hearing at

which Alabama courts review the amount of a punitive

damages award (Hammond v. City of Gadsden, 493 So.

2d 1374 (Ala. 1986); Green Oil Co. v. Hornsby, 539 So.

2d 218 (Ala. 1989)) the trial court denied this relief,

accepting Moses’s argument that the judgment debtors

had one asset worth at least $7 million—a purported

“bad faith” insurance claim against Old Republic. (V2,

R24, p. 2.)

Old Republic Files This Declaratory Judgment

Action In Federal District Court.

Old Republic accordingly filed this declaratory judg-

ment action on September 20, 1996, seeking an adjudica-

tion of its rights and obligations and a declaration that

the Alabama wrongful death statute, as interpreted by

the Alabama courts to be purely punitive in nature,

violates both the United States and the Alabama Consti-

tutions for each of the following reasons:

e it lacks adequate guidance, standards and

procedures for determining the amount of

punitive damages necessary for the purpose

of deterring and punishing a defendant’s

wrongful conduct;

¢ it deprives defendants of personal property

rights without due process of law;

¢ it violates provisions against self-incrimina-

tion; and

e it allows the imposition of excessive fines.

(V1, R1, pp. 11-12.)

Alternatively, Old Republic asked the court to declare

that its financial responsibility for the $7 million judg-

ment was limited to the $1 million coverage provided by

its automobile liability policy.

Moses And Tillis Defendants Respond

With A State Court “Bad Faith” Insurance Suit

And A Motion To Dismiss This Action.

Almost a month later, in response to Old Republic’s

federal declaratory judgment action, Moses filed a civil

action in the Alabama state court before the same judge

who presided over the wrongful death trial. (V2, R28,

Tab C.) Moses asked the trial court to apply the com-

bined $2 million proceeds of Old Republic’s automobile

and general liability policies in partial satisfaction of the

$7 million punitive damages award. (Id.) Tillis Trucking

filed a cross-claim against Old Republic, asserting that

Old Republic was guilty of “bad faith” in failing to settle

the Moses claim and should therefore be held liable to

pay the entire $7 million punitive damage award, plus

additional punitive damages. (V2, R28, Tab D.)

Moses and Tillis Trucking then used this later-filed

suit as a basis for moving to dismiss the federal declara-

tory judgment action on the ground that Old Republic’s

claims could be raised in defense of the Moses collection

suit and Tillis Trucking’ ~»ad faith” action. (V1, R6,

p. 8.)

Old Republic opposed that motion on the ground that

Old Republic would not be given an opportunity to

litigate its claim in the state court action, given that—

¢ punitive damage awards under the Alabama

wrongful death statute plainly violate all

constitutional parameters set forth by this

Court, yet the Alabama courts have repeated-

ly upheld the statute against constitutional

challenges;

¢ the state court judge who would hear Moses’s

collection action and Tillis Trucking’s “bad

faith” claim against Old Republic was the

very same judge who had already refused to

entertain arguments on the constitutionality

of the wrongful death statute;

¢ this Court had recently and emphatically

indicated that Alabama courts have yet to

fashion appropriate due process constraints

on punitive damages awards in civil fraud

cases, and the Alabama wrongful death

statute suffers the same and many more in-

firmities; and

e statistical studies and anecdotal evidence

demonstrate that the Alabama court system

has routinely supported enormous punitive

verdicts against nonresident defendants, par-

ticularly nonresident insurance companies

like Old Republic, by significant multiples in

excess of amounts upheld against resident

defendants.

District Court Dismisses Complaint

Without Prejudice.

The district court nonetheless granted the defendants

motion to dismiss, relying on this Court’s holdings in

Brillhart v. Excess Insurance Co. of America, 316 U.S.

491 (1942), and Wilton v. Seven Falls Co., 515 U.S. 277

(1995), that in the exercise of its discretion, a federal

court may decline to entertain a suit under the Declara-

tory Judgment Act where the questions in issue can be

“better settled” in a state court proceeding. (V2, R27,

p. 4.) The district court ruled that dismissal was also

required under the Rooker-Feldman doctrine (Rooker v.

Fidelity Trust Co., 263 U.S. 413, 415-16 (1923), and

;

District of Columbia Court of Appeals v. Feldman, 460

U.S. 462, 482 (1983)) even though Old Republic was not

a party to the state court judgment on which the dis-

trict court relied in rendering its ruling. (V2, R27, pp.

10-12.)

Court of Appeals Affirms

Based On Younger v. Harris.

The United States Court of Appeals for the Eleventh

Circuit affirmed based on the abstention principles of

Younger v. Harris, 401 U.S. 37 (1971), and Middlesex

County Ethics Commission v. Garden State Bar Ass’n,

457 U.S. 423 (1982). The court of appeals held that:

¢ Moses’s later-filed state suit constitutes an

“ongoing state judicial proceeding” for Youn-

ger purposes (App. 7);

e the proceedings implicate important state in-

terests (App. 11); and

¢ Old Republic had an “adequate opportunity

in the state proceedings to raise constitution-

al challenges” (App. 7).

The court of appeals noted that this Court has never

held that “the practical obstacle created by adverse state

supreme court precedent deprives a person of an inade-

quate opportunity to raise the issue within the mean-

ing of Middlesex” and that Old Republic did not demon-

strate hat “state procedural law barred presentation of

[its constitutional] claims” in the Alabama state courts.

(App. 8.)

REASONS FOR GRANTING THE WRIT

THE YOUNGER ABSTENTION DOCTRINE SHOULD

NOT BE USED TO BLOCK A NON-ALABAMA RESI-

DENT’S FEDERAL COURT CHALLENGE TO THE

FLAGRANTLY AND PATENTLY UNCONSTITUTIONAL

ALABAMA WRONGFUL DEATH STATUTE WHERE

THERE IS NO STATE COURT FORUM WHERE THE

FEDERAL PLAINTIFF’S CONSTITUTIONAL CLAIMS

CAN BE FAIRLY AND FULLY CONSIDERED AND RE-

SOLVED.

This Court explained in Younger v. Harris, 401 U.S. 37

(1971), that the abstention doctrine is rooted in princi-

ples of comity—

that is, a proper respect for state functions, a

recognition of the fact that the entire country is

made up of a Union of separate state govern-

ments, and a continuance of the belief that the

National Government will fare best if the States

and their institutions are left free to perform

their separate functions in their separate ways.

Id. at 44.

Nevertheless, in Younger and in other abstention

cases, the Court has explained that the abstention rule

is subject to exceptions for “extraordinary” or “unusual”

circumstances, id. at 53, such as where a statute is

flagrantly and patently violative of express con-

stitutional prohibitions in every clause, sentence

and paragraph, and in whatever manner and

against whomever an effort might be made to

apply it.

Id. at 53-54 (citation omitted).

Further, as this Court made clear in Steffel v. Thomp-

son, 415 U.S. 452 (1974), the abstention doctrine presup-

poses that the pending state ccurt proceeding will “pro-

vide the federal plaintiff with the necessary vehicle for

vindicating his constitutional rights” and that the state

courts will carry out their “solemn responsibility, equally

with the federal courts to ‘guard, enforce, and protect

every right granted or secured by the Constitution of the

United States’.” Jd. at 460-61 (citation omitted).

As set forth below, application of these principles to

the case at bar mandates the conciusion that the district

court abused. its discretion in applying the abstention

doctrine in this case.

A. The Imposition Of Punitive Damages Under The

Alabama Wrongful Death Statute Is Patently And

Flagrantly Unconstitutional.

Even a cursory analysis demonstrates the patent un-

constitutionality of punitive damage awards under the

Alabama wrongful death statute. In BMW of North

America, Inc. v. Gore, 116 S. Ct. 1589 (1996), this Court

reversed a punitive damages award entered under an

Alabama fraud statute as unconstitutionally excessive

under three constitutional “guideposts,” each of which

manifests the patent and flagrant unconstitutionality of

the Alabama wrongful death statute—

1) Degree of reprehensibility.

In Gore, the punitive damages award was reversed

because the defendant’s conduct did “not establish the

high degree of culpability that warrants a substantial

)

punitive damages award” and “exhibit[ed] none of the

circumstances ordinarily associated with egregiously im-

proper conduct.” 116 S. Ct. at 1601 (emphasis added). In

Gore, the excessive award had at least been rendered

under a statute that expressly required a showing of

“oppression, fraud, wantonness, or malice.” (Ala. Code

§§ 6-5-20, 6-5-21.)

In contrast, punitive damage awards under the Ala-

bama wrongful death statute require no such reprehen-

sible, egregious, reckless, or other wilful and wanton

conduct. Rather, a multimillion dollar punitive damage

award may be levied against a defendant on the barest

showing of only minimally negligent conduct. (Ala. Code

§ 6-5-410(a).)

The Court in Gore noted that the reprehensibility of

the conduct is the “most important indicium of the

reasonableness of a punitive damage award.” Jd. at 1599.

If the punitive award in Gore faile* this aspect of the

constitutionality test, the award ix: inis case obviously

does so as well.

2) Ratio of the punitive damage award to the

plaintiff's actual harm and compensatory

damages.

The Alabama wrongful death statute fails this second

important constitutional requirement as well. “The prin-

ciple that exemplary damages must bear a ‘reasonable

relationship’ to compensatory damages has a long pedi-

gree.” Id. at 1601. While the Court in Gore declined to

draw a bright line between a permissible and imper-

missible ratio, it did observe that the ratio of the puni-

tive award to the compensatory award in that case was

“a breathtaking 500 to 1.” Jd. at 1603.

The Alabama wrongful death statute absolutely pro-

hibits the imposition of any compensatory damages.

Thus, under the Alabama wrongful death statute, there

is no ratio or other comparison, limitation, or guideline

to test the reasonableness of any punitive damage

award. There is only the statute itself, which permits an

unlimited punitive damage award. Thus, a punitive dam-

ages award under the Alabama wrongful death statute

cannot pass muster under this second constitutional

“guidepost.”

3) Sanctions for comparable conduct.

The Alabama wrongful death statute also fails this

third constitutional “guidepost” set forth in Gore. This

factor mandates a comparison to civil and criminal

punishment for comparable conduct in other contexts.

See id. at 1603. The Court in Gore held that the econom-

ic sanction imposed on BMW was “substantially greater

than the statutory fines available in Alabama and else-

where for similar malfeasance.” Id.

Under this constitutional prong too the Alabama

wrongful death statute is blatantly unconstitutional.

Again, the statute allows imposition of punitive damages

for even minimally negligent conduct. In this regard, the

statute has no comparison anywhere—no other state

allows a punitive damage award on proof of barely neg-

ligent conduct.

The above three “guideposts” are necessary to a valid

punitive damage award because, as the Court stated in

Gore, “[eJlementary notions of fairness enshrined in our

constitutional jurisprudence dictate that a person receive

fair notice not only of the conduct that will subject him

to punishment but also of the severity of the penalty that

a State may impose.” Jd. at 1598. As the three-factor

analysis above makes clear, no such notice is forthcom-

ing from the Alabama wrongful death statute. A defen-

dant familiar with the laws of the other states of the

Union would not have fair notice that violation of the

Alabama wrongful death statute’s provisions might sub-

ject him to a multimillion dollar penalty—there’s no

statute like it anywhere in this respect. No more “fair

notice” is to be gained by reading the statute, either. Its

text yields no clue of the potential punishment that lies

in store for anyone who should violate it. It does not

even mention punitive damages! Thus, as it has been

interpreted by the Alabama courts for more than a cen-

tury, the statute’s unconstitutionality truly is “patent”

and “flagrant.” See Younger, 401 U.S. at 53-54.

B. Alabama State Courts Repeatedly Refuse To

Entertain Constitutional Challenges To The

Wrongful Death Statute.

Despite the above constitutional infirmities, punitive

damage awards under the Alabama wrongful death

statute are an entrenched part of the fabric of Ala-

bama law. The Alabama Supreme Court has since at

least 1918 rejected challenges to the statute’s consti-

tutionality, upholding its validity as recently as 1991.

See Alabama Power Co. v. Turner, 575 So. 2d 551

(Ala.), cert. denied, 500 U.S. 953 (1991); Central Ala.

Elec. Co-op v. Tapley, 546 So. 2d 371 (Ala. 1989); Su-

preme Lodge of the World v. Gustin, 80 So. 84, 88 (Ala.

1918).’

Taking their cue from the state supreme court, Ala-

bama’s lower courts will no longer even seriously enter-

tain a constitutional challenge to the wrongful death

statute. In this very case, the Alabama state trial court

judge—who will hear this case if the district court’s

dismissal order is affirmed—has already stated on the

record that he cannot offer any relief because “[iJt is not

the prerogative of the trial court to reverse or overrule

decisions of the Alabama Supreme Court.” (V2, R24, p.4.)

When a state court for which the federal court abstains

from deciding constitutional issues has no “prerogative”

to consider those issues, then the state court proceedings

do not “provide a federal plaintiff with the necessary

vehicle for vindicating his constitutional rights,” Steffel,

supra, 415 U.S. at 460, and the reason and purpose for

the Younger abstention doctrine no longer exist. There

simply has been no “adequate opportunity in the state

proceedings to raise [Old Republic’s] constitutional chal-

' The court of appeals, in affirming dismissal of this case on

Younger grounds, took heart in the fact that Alabama courts

have, in light of Gore, ordered remittiturs in six recent puni-

tive damages cases, ushering in what the court called “a new

era for punitive damages in Alabama.” 124 F.3d at 1264. How-

ever, none of these six “new era” cases involved the wrongful

death statute at issue and indeed the Alabama Supreme Court

stated in Life Insurance Co. of Ga. v. Johnson, 684 So. 2d 685

(Ala. 1996), that the additional standards it was setting forth

in that case to give juries more guidance on punitive damages

do not apply to actions based on wrongful death. Id. at 696.

(Significantly, this Court vacated Johnson and remanded to

the Alabama Supreme Court for reconsideration in light of

Gore. See 117 S. Ct. 288 (1996)).

lenges.” Old Republic Union Ins. Co. v. Tillis Trucking

Co., 124 F.3d 1258, 1261 (11th Cir. 1997), quoting Mid-

dlesex County Ethics Comm’n v. Garden State Bar Ass’n,

457 U.S. 423, 432 (1982).”

No principle of comity should require Old Republic to

go through the meaningless ritual of presenting its

constitutional challenges to a tribunal that has already

admitted it has no “prerogative” to hear them. Nor

should any principle of comity require Old Republic to

then appeal to the Alabama Supreme Court—a tribunal

that countless times has upheld the constitutionality of

the same statute.

A prominent constitutional scholar has written:

What is the common message of Stone v. Powell

and Younger v. Harris and Allen v. McCurry? It

is that the state court will be allowed to adjudi-

cate, and do so dispositively, if—but only if—

there was or will be a “full and fair opportunity”

to litigate the constitutional question in state

court. Per contra, if it is shown that the state

forum was or will be inhospitable, if corrective

process is unavailable in the state court system,

then the federal court will step in to adjudicate

the federal claim.

2 Nor does a Hammond/Green Oil hearing—the post-trial

hearing at which Alabama courts review the amount of a puni-

tive damage award—afford meaningful review. Justice Breyer

reviewed the Hammond/Green Oil factors in detail in his con-

curring opinion in Gore and concluded that they amount to

nothing more than a “rubber stamp” of the jury award: “[A]s

the Alabama courts have authoritatively interpreted [the

Hammond/Green Oil factors], they impose little actual con-

straint.” Gore, 116 S. Ct. at 1606 (Breyer, J., concurring).

Paul M. Bator, The State Courts and Federal Consti-

tutional Litigation, 22 WM. & MARY L. REV. 605, 626

(1981). Here eighty years of Alabama jurisprudence is

“inhospitable” to Old Republic’s constitutional challenge

to the Alabama wrongful death statute. Accordingly, only

the federal court can adjudicate the constitutional issues.

it should “step in” and do so.

CONCLUSION

Wherefore, for the foregoing reasons, petitioner Old

Republic Union Insurance Company respectfully prays

that its Petition for a Writ of Certiorari to the United

States Court of Appeals for the Eleventh Circuit be

granted and that the Eleventh Circuit be ordered to

reverse the district court’s dismissal order and to order

Old Republic’s complaint for declaratory judgment rein-

stated and adjudicated on its merits.

Respectfully submitted,

HUGH C. GRIFFIN

Counsel of Record

J. ROBERT PERSONS

HUGH S. BALSAM

LORD, BISSELL & BROOK

One Atlantic Center

1201 West Peachtree Street

Suite 3700

Atlanta, Georgia 30309

(404) 870-4600

Attorneys for Petitioner

Old Republic Union

Insurance Company

APPENDIX

App. 1

United States Court of Appeals,

Eleventh Circuit.

No. 97-6179

Non-Argument Calendar.

OLD REPUBLIC UNION INSURANCE COMPANY,

Plaintiff-Appellant,

Vv.

TILLIS TRUCKING CO., INC.; TILLIS LAND &

TIMBER CO.; WILLIE RAY PRIDE; MALACHI MOSES,

Defendants-Appellees.

Oct. 14, 1997.

Appeal from the United States District Court for the

Middle District of Alabama. (No. CV-96-T-1462-S), Myron

H. Thompson, Judge.

Before TJOFLAT, COX and CARNES, Circuit wudges.

CARNES, Circuit Judge:

This case arises from the efforts of Old Republic Union

Insurance Company (“Old Republic”) to avoid payment of

a state court judgment against its insured and, alter-

natively, to have its obligations under certain insurance

policies determined by a federal court instead of state

court. Old Republic sought to do that by instituting a

declaratory judgment action in federal district court.

Relying on principles of federalism and comity, including

those embodied in Younger v. Harris, 401 U.S. 37, 91

S.Ct. 746, 27 L.Ed.2d 669 (1971), and its progeny, the

App. 2

district court dismissed the lawsuit without prejudice, in

favor of pending state court proceedings. We affirm.

I. BACKGROUND

On December 14, 1994, a tragic accident occurred be-

tween a Tillis Trucking Company tractor-trailer driven

by Willie Ray Pride and an automobile driven by Cynthia

Moses, who died as a result of the accident. Together

with the co-administrators of the estate, Mrs. Moses’

husband, Malachi Moses, brought a wrongful death

action in Dale County, Alabama, against Pride, Tillis

Trucking Company, and its related company, Tillis Land

& Timber (collectively, the “Tillis Companies”).

Old Republic insures the Tillis Companies under both

a commercial automobile liability policy and a general

liability policy. Accordingly, Old Republic provided a de-

fense to all the defendants in the wrongful death action,

while maintaining that it was potentially responsible for

a judgment only up to the $1,000,000 policy limit of the

commercial automobile policy. Moses and independent

counsel for the Tillis Companies contended that Old Re-

public would also be liable under the terms of the gen-

eral liability policy for any judgment in excess of that

policy limit.

At trial, Old Republic moved to intervene in order to

submit interrogatories to the jury for the purpose of

establishing whether liability was based on any theory

that would implicate the general liability policy in addi-

tion to the commercial automobile policy. Initially, the

state court granted Old Republic’s motion for interven-

tion, but it later reversed that ruling. Accordingly, Old

App. 3

Republic’s proposed interrogatories were not submitted

to the jury. On September 17, 1996, the jury returned a

verdict against Pride and Tillis Trucking, awarding

Moses $7,000,000 in punitive damages.’

Three days later, on September 20, 1996, Old Republic

filed a declaratory judgment action in federal district

court, seeking the following declarations: (1) the Ala-

bama Wrongful Death Statute, Ala.Code § 6-5-410, is un-

constitutional; (2) the Alabama Wrongful Death Statute,

if constitutional, cannot be constitutionally enforced

against Old Republic or any other insurer; (3) Old Re-

public’s liability to the defendants cannot exceed the

$1,000,000 policy limit of its commercial automobile

insurance policy with the insured.

On October 18, 1996, Moses and the co-administrators

filed a second state lawsuit against Old Republic, Tillis

Trucking, and Pride. That lawsuit requested the state

court to: (1) enter an order requiring Old Republic to pay

the limit of the commercial automobile policy to the

plaintiffs, and (2) conduct a jury trial to determine the

existence and application of coverage under the general

liability policy. Tillis Trucking answered and filed a

cross-claim against Old Republic, seeking compensatory

and punitive damages for Old Republic’s failure to settle

the prior wrongful death action.

On February 5, 1997, the district court dismissed Old

Republic’s declaratory judgment action without prejudice

' As authoritatively construed by the Alabama Supreme

Court, the Alabama Wrongful Death Statute provides only for

the award of punitive damages. See, e.g., Tatum v. Schering

Corp., 523 So.2d 1042 (Ala.1988).

App. 4

in favor of the pending second state action. Relying on

principles of federalism and comity, including those em-

bodied in Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746,

27 L.Ed.2d 669 (1971), and its progeny, the district held

that exercise of jurisdiction over the declaratory judg-

ment action would be “contrary to the established doc-

trines which discourage such interference with state

courts.” District Court Op. at 12-13. This appeal fol-

lowed.

II. STANDARD OF REVIEW

“Since its inception, the Declaratory Judgment Act has

been understood to confer on federal courts unique and

substantial discretion in deciding whether to declare the

rights of litigants.” Wilton v. Seven Falls Co., 515 U.S.

277, 284, 115 S.Ct. 2137, 2142, 182 L.Ed.2d 214 (1995).

“Consistent with the nonobligatory nature of the remedy,

a district court is authorized, in the sound exercise of its

discretion, to stay or to dismiss an action seeking a dec-

laratory judgment... .” Jd. at 286, 115 S.Ct. at 2143. Ac-

cordingly, the Supreme Court has directed that “district

courts’ decisions about the propriety of hearing declara-

tory judgment actions, which are necessarily bound up

with their decisions about the propriety of granting

declaratory relief, should be reviewed for abuse of dis-

cretion,” id. at 288, 115 S.Ct. at 2144, and we apply that

standard here.

III. ANALYSIS

The district court declined to exercise jurisdiction over

Old Republic’s declaratory judgment action, relying on

App. 5

“considerations of practicality and wise judicial adminis-

tration.” District Court Op. at 9 (quoting Wilton, 515

U.S. at 286, 115 S.Ct. at 2143). Among those consider-

ations were the abstention principles of Younger uv.

Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971),

particularly as illuminated by the Supreme Court’s sub-

sequent decision in Middlesex County Ethics Committee

v. Garden State Bar Association, 457 U.S. 423, 102 S.Ct.

2515, 73 L.Ed.2d 116 (1982). As we shall explain, those

principles alone are sufficient to prevent the district

court’s decision from being an abuse of discretion.”

As the district court implicitly recognized, a declaration

that the Alabama Wrongful Death Statute is unconstitu-

tional would have the effect of enjoining the state court

from enforcing the $7,000,000 wrongful death judgment

entered against the Tillis Companies and from entertain-

ing the subsequent state action brought by Moses and

the co-administrators against Old Republic seeking par-

tial satisfaction of that judgment from the policies of in-

surance.

Under Younger v. Harris and its progeny, federal dis-

trict courts must refrain from enjoining pending state

* The district court relied upon the Rooker-Feldman doctrine

as an additional ground for dismissing Old Republic’s declara-

tory judgment action, even though Old Republic ultimately

was denied the opportunity to intervene in the state court

wrongful death action. Because we hold that the district court

did not abuse its discretion in relying on Younger abstention

principles in dismissing the declaratory judgment action, and

because those principles alone warrant affirmance of the dis-

trict court’s judgment, we need not decide whether the Rooker-

Feldman doctrine has any bearing on this case.

App. 6

court proceedings except under special circumstances.

See Younger, 401 U.S. at 53-54, 91 S.Ct. at 755. Under

Samuels v. Mackell, 401 U.S. 66, 73, 91 S.Ct. 764, 768,

27 L.Ed.2d 688 (1971), the principles of Younger apply to

declaratory judgments that would effectively enjoin state

proceedings. Accordingly, the principles of Younger have

direct application to this case.°

Although Younger itself only concerned state criminal

proceedings, its principles have been extended to prohibit

federal courts from enjoining state court civil proceedings

where important state interests are involved:

The policies underlying Younger are fully appli-

cable to noncriminal judicial proceedings when

important state interests are involved. The im-

portance of the state interest may be demon-

strated by the fact that the noncriminal proceed-

ings bear a close relationship to proceedings

criminal in nature. ... Proceedings necessary for

the vindication of important state policies or for

° By contrast, the principles of Johnson v. American Credit

Co. of Georgia, 581 F.2d 526, 530 (5th Cir.1978), relied upon

by Old Republic, are plainly inapplicable to this case. In

Johnson, we reversed a district court’s abstention order in a 42

U.S.C. § 1983 suit challenging the constitutionality of Geor-

gia’s attachment scheme, because the district court had er-

roneously held that the plaintiff was required to exhaust his

state remedies before seeking relief in a federal forum. Jd. at

529. In Johnson, no related state action was pending, and thus

the principles of Younger raised no barrier to the plaintiff's

lawsuit. Indeed, our Johnson opinion noted explicitly that the

defendants did “not assert that the abstention by the district

court can be justified under the principles of federalism and

comity developed in Younger “ and held that “Younger .. .

[does] not apply to this case.” Jd. at 530 n. 8.

eee NE ee

App. 7

the functioning of the state judicial system also

evidence the state’s substantial interest in the

litigation. Where vital state interests are in-

volved, a federal court should abstain unless

state law clearly bars the interposition of the

constitutional claims. .. .

The question in this case is threefold: first, do

[the proceedings] constitute an ongoing state

judicial proceeding; second, do the proceedings

implicate important state interests; and third, is

there an adequate opportunity in the state pro-

ceedings to raise constitutional challenges.

Middlesex County Ethics Comm. v. Garden State Bar

Ass’n, 457 U.S. 423, 432, 102 S.Ct. 2515, 2521, 73 L.Ed.

2d 116 (1982) (citations and internal quotation marks

omitted).

Applying the Middlesex factors to this case, it is read-

ily apparent that the first factor is met. Clearly, there is

an ongoing state judicial proceeding in this case that

effectively would be enjoined if the federal court declared

the Alabama Wrongful Death Statute to be unconsti-

tutional: the state court enforcement action brought by

Moses and the co-administrators. It is of no moment that

the state court action was filed after Old Republic filed

its federal declaratory judgment action. The Supreme

Court has made it plain that the principles of Younger

apply with equal force in the context of subsequently

filed state court proceedings, so long as those “state court

proceedings are initiated “before any proceedings of sub-

stance on the merits have taken place in federal court.’”

Hawaii Hous. Auth. v. Midkiff, 467 US. 229, 238, 104

S.Ct. 2321, 2328, 81 L.Ed.2d 186 (1984) (quoting Hicks

v. Miranda, 422 U.S. 332, 349, 95 S.Ct. 2281, 2292, 45

L.Ed.2d 223 (1975)).

App. 8

Skipping the second factor for the moment, it is also

clear that Old Republic has an adequate opportunity to

raise in state court any constitutional objections it has to

the Alabama Wrongful Death Statute. Certainly, Ala-

bama state procedural law does not “clearly bar the

interposition of the constitutional claims.” Indeed, the

Alabama Supreme Court has already entertained several

constitutional challenges to the Wrongful Death Statute.

See, e.g., Alabama Power Co. v. Turner, 575 So.2d 551

(Ala.1991); Central Alabama Elec. v. Tapley, 546 So.2d

371 (Ala.1989). Those particular challenges were reject-

ed, but Alabama law did not bar their interposition.

Old Republic contends that the Alabama Supreme

Court’s decisions in Turner and Tapley deprive it of an

adequate opportunity to raise its constitutional challeng-

es, because the Alabama Supreme Court has already

upheld the statute as constitutional. We disagree. The

Supreme Court has never held that the practical obstacle

created by adverse state supreme court precedent de-

prives a party of an adequate opportunity to raise the

issue within the meaning of Middlesex. To the contrary,

the Court has held that “the burden on this point rests

on the federal plaintiff to show ‘that state procedural

law barred presentation of [its] claims.’” Pennzoil Co. v.

Texaco, Inc., 481 U.S. 1, 14, 107 S.Ct. 1519, 1528, 95

L.Ed.2d 1 (1987) (quoting Moore v. Sims, 442 U.S. 415,

432, 99 S.Ct. 2371, 2382, 60 L.Ed.2d 994 (1979)) (empha-

sis added). Old Republic can point to no feature of

Alabama procedural law that prohibits it from attempt-

ing to persuade the Alabama Supreme Court to reexam-

ine its decisions in Turner and Tapley, or from pressing

constitutional arguments that those cases did not ad-

dress. Accordingly, we cannot say that the pending state

App. 9

court enforcement action will not afford Old Republic an

adequate opportunity to press its federal constitutional

claims.

Our conclusion that Alabama precedent against Old

Republic on the merits on one or more of its contentions

should not excuse it from pursuing those contentions in

state court is supported by analogy to Supreme Court

decisions dealing with futility as it relates to procedural

default doctrine in habeas corpus cases. Federal habeas

law, like abstention law, is infused with notions of fed-

eralism and comity. With exceptions and qualifications

not relevant here, procedural default doctrine generally

bars a state prisoner from raising in a federal habeas

proceeding issues which he failed to timely raise in state

court, absent a showing of cause and prejudice. In Smith

v. Murray, 477 U.S. 527, 106 S.Ct. 2661, 91 L.Ed.2d 434

(1986), the Supreme Court reiterated the holding of an

earlier decision, Engle v. Isaac, 456 U.S. 107, 130 & n.

36, 102 S.Ct. 1558, 1573 & n. 36, 71 L.Ed.2d 783 (1982),

that the likelihood a particular federal constitutional

claim will be rejected on the merits in the state courts

does not excuse a habeas petitioner’s failure to raise it

there. In Smith, the Court applied that holding to the

perceived futility of pressing a claim to the state su-

preme court, explaining that “it is the very prospect that

a state court may decide, upon reflection, that the con-

tention is valid that undergirds the established rule that

perceived futility alone cannot constitute cause.” Jd. at

534-35, 106 S.Ct. at 2666 (citations and internal quota-

tion marks omitted). Likewise, the possibility that the

Alabama Supreme Court may decide, upon reflection,

that Old Republic’s contentions are valid, undergirds our

conclusion that perceived futility does not mean that Old

App. 10

Republic lacks an adequate opportunity to raise its con-

tentions in the Alabama Supreme Court.‘

Returning to the second Middlesex factor, the question

is this: Does the pending enforcement action against Old

Republic—to which the state is not a party—involve a

sufficiently “important” state interest to justify invoca-

tion of the Younger doctrine? The Supreme Court has it-

self supplied the answer by applying Younger abstention

in the context of a civil punitive damage award between

private parties. In Pennzoil Co. v. Texaco, Inc., 481 U.S.

1, 107 S.Ct. 1519, 95 L.Ed.2d 1 (1987), Pennzoil obtained

a judgment in a Texas state court against Texaco for

nearly $11 Billion, including punitive damages of $3

Billion. Under Texas law, it appeared that Texaco could

prevent enforcement of the judgment only if it posted a

bond for more than $13 Billion, which it could not do.

Facing that dilemma, Texaco brought a civil action in

federal district court claiming that the Texas bond and

lien provisions denied it due process. Texaco requested

that the district court enjoin enforcement of the judg-

ment pending the appeal of the judgment in the Texas

* Old Republic has not cited, nor has our research revealed,

any reported federal appellate decisions holding that the ab-

sence-of-adequate-opportunity prong of Middlesex is satisfied

by unfavorable state supreme court precedeiit addressing the

constitutional issue in question. In W.C.M. Window Co. v.

Bernardi, 730 F.2d 486, 490-92 (7th Cir.1984), the Seventh

Circuit did speculate that unfavorable state court precedent

might suffice in some circumstances, but avoided resolution of

the question by deciding the case on alternative grounds. We

are unpersuaded by that speculative dicta. At the time of

W.C.M. Window, the Seventh Circuit did not have the benefit

of the Supreme Court’s Pennzoil or Smith opinions.

App. 11

courts. The district court entered an injunction, and the

court of appeals affirmed. See id. at 6-8, 107 S.Ct. at

1524.

The Supreme Court reversed, holding that the federal

district court should have abstained on Younger grounds.

See Pennzoil, 481 U.S. at 17, 107 S.Ct. at 1529. The

Supreme Court reasoned that “the States have important

interests in administering certain aspects of their ju-

dicial systems” that can suffice to support invocation of

Younger abstention, even in the context of civil proceed-

ings involving purely private parties. Jd. at 14, 107 S.Ct.

at 1527. The Court elaborated on the importance of the

state’s interest as follows:

Not only would federal injunctions in such cases

interfere with the execution of state judgments,

but they would do so on grounds that challenge

the very process by which those judgments were

obtained. So long as those challenges relate to

pending state proceedings, proper respect for the

ability of state courts to resolve federal questions

presented in state-court litigation mandates that

the federal court stay its hand.

Id.

Under Pennzoil, it is readily apparent that pending

enforcement action against Old Republic is sufficient to

satisfy the second Middlesex factor. A federal declaratory

judgment that the Alabama Wrongful Death Statute is

unconstitutional would not only interfere with partial

satisfaction of the wrongful death judgment against the

Tillis Companies by means of an enforcement action

against Old Republic, it “would do so on grounds that

challenge the very process by which [that] judgment |

[was] obtained.”

App. 12

As the district court correctly observed, Younger ab-

stention is rooted in notions of comity. See, e.g., Penn-

zoil, 481 U.S. at 10-11, 107 S.Ct. at 1525-26. In order to

award Old Republic the declaratory relief it seeks, a

federal court would have to determine that Alabama's

procedures for awarding damages under its wrongful

death statute are so woefully inadequate that its own

state courts are incapable of preventing unconstitutional

damage awards in wrongful death cases. The federal

court would have to find that Alabama state courts are

incapable of enforcing the federal constitution in this

context. Merely stating that proposition is sufficient to

illuminate why the Younger doctrine stands in the way

of the relief sought by Old Republic.

Principles of comity notwithstanding, Old Republic con-

tends that exceptional circumstances in Alabama re-

quired the district court to entertain its declaratory

judgment action. Specifically, Old Republic contends that

it cannot obtain a fair resolution of its constitutional

claims in state court due to “the inherent bias of an

entire court system which routinely enters and affirms

enormous punitive awards against out-of-state defen-

dants and, in particular, out-of-state insurance compa-

nies.” In constructing that argument, Old Republic

makes much of newspaper and magazine articles, which

“tell a bleak story of jury excesses,” as well the fact that

the United States Supreme Court has recently held some

Alabama punitive damage judgments to be unconstitu-

tionally excessive. According to Old Republic, the Su-

preme Court’s opinion in BMW of North America, Inc. v.

Gore, __ U.S. __, 116 S.Ct. 1589, 134 L.Ed.2d 809

(1996), illustrates the constitutional deficiencies of Ala-

bama’s system.

‘

ae nl a at We OH lal

App. 13

We are aware of the Supreme Court’s decision in

BMW, but it did not hold that Alabama’s punitive dam-

ages laws are unconstitutional; instead, it held that they

had been unconstitutionally applied. See __._- U.S. at___-

___, 116 S.Ct. at 1598-99. There is a world of difference

between holding that Alabama courts have erred by fail-

ing to reduce or overturn unconstitutionally excessive

damage awards in one or more cases and in holding that

the entire state punitive damages scheme is incapable of

constitutional application. Accordingly, BMW does not

change the Younger abstention analysis applicable to

this case.

Although on some occasions Alabama’s punitive dam-

ages laws have been applied unconstitutionally, Old Re-

public has not shown that the Alabama Wrongful Death

Statute is “flagrantly and patently violative of express

constitutional prohibitions,” or that the Alabama courts

are applying the statute in bad faith, or that other

“extraordinary circumstances” are present, as would be

necessary to make an exception to the Younger rule. See

Younger, 401 U.S. at 53-54, 91 S.Ct. at 755 (citation and

internal quotation marks omitted). Since BMW, the Ala-

bama Supreme Court has shown itself able and willing

to follow the Supreme Court’s guidelines for ensuring

that Alabama punitive damage awards satisfy constitu-

tional constraints. See, e.g., American Pioneer Life Ins.

Co. v. Williamson, No. 1921796, ___ So.2d___,_ (Alla.

Sept. 5, 1997) (on remand from the Supreme Court) (con-

ditioning affirmance on remittitur of $2,000,000 punitive

damage award to $750,000); Ford Motor Co. v. Sperau,

No. 1931591, ___ So.2d ___, ___ (Ala. Sept. 5, 1997) (on

remand from the Supreme Court) (conditioning affir-

mance on remittitur of $6,000,000 punitive damage

App. 14

award to $1,792,000); Life Ins. Co. of Georgia v. Johnson,

No. 1940357, __ So.2d__, __ (Ala. Aug. 15, 1997) (on

remand from the Supreme Court) (conditioning affir-

mance on remittitur of $15,000,000 punitive damage

award to $3,000,000); Union Sec. Life Ins. Co. v. Crocker,

No. 1931672, So.2d___, __ (Ala. Aug. 15, 1997) (on

remand from the Supreme Court) (conditioning affir-

mance on remittitur of $2,000,000 punitive damage

award to $1,000,000); Hillcrest Ctr., Inc. v. Rone, No.

1940535, ___ So.2d___,_ (Ala. Aug. 1, 1997) (affirming

trial court’s remittitur of punitive damage award from

$200,000 to $130,000); BMW of North America, Inc. v.

Gore, No. 1920324, ___ So.2d___,__— (Ala. May 9, 1997)

(on remand from the Supreme Court) (conditioning af-

firmance on remittitur of $2,000,000 punitive damage

award to $50,000); Foremost Ins. Co. v. Parham, 693

So.2d 409, 413, 435 (Ala.1997) (conditioning affirmance

on remittitur of two separate $7,500,000 punitive dam-

age awards to $175,000 and $173,000). Indications are

that the BMW decision has ushered in a new era for

punitive damages in Alabama.

IV. CONCLUSION

For the foregoing reasons, we conclude that the district

court did not abuse its discretion in dismissing Old Re-

public’s declaratory judgment action. The district court’s

judgment of dismissal without prejudice is AFFIRMED.

App. 15

[Filed February 5, 1997]

IN THE DISTRICT COURT OF THE

UNITED STATES FOR THE MIDDLE DISTRICT

OF ALABAMA, SOUTHERN DIVISION

OLD REPUBLIC UNION

INSURANCE COMPANY,

Plaintiff,

CIVIL ACTION

No. 96-T-1462-S

TILLIS LAND & TIMBER CoO.,

TILLIS TRUCKING CO., INC.,

WILLIS RAY PRIDE, and

)

MALACHI MOSES, )

)

Defendants.

MEMORANDUM OPINION

Relying on the Declaratory Judgment Act of 1984, 28

U.S.C.A. § 2201(a), plaintiff Old Republic Union Insur-

ance Company seeks a declaration that its obligation for

a $7 million jury verdict against its insureds, defendants

Tillis Trucking Co., Inc., and Willie Ray Pride, cannot

exceed the $1 million limit of their commercial automo-

bile liability policy, or in the alternative, that the Ala-

bama wrongful death statute violates the United States

and the Alabama Constitutions and cannot be enforced.

Old Republic has invoked the court’s diversity-of-citizen-

ship jurisdiction. 28 U.S.C.A. § 1332. Old Republic is a

citizen of Illinois, and defendants are citizens of Ala-

bama. Now before the court are motions filed by Malachi

Moses, plaintiff in the underlying action which resulted

App. 16

in the verdict against Tillis Trucking and Pride, and by

Tillis Trucking and Tillis Land & Timber Company to

dismiss the declaratory action as to all parties, or to stay

it pending the outcome of a second state lawsuit filed by

Moses and others. For reasons that follow, the court will

grant the motions and dismiss this lawsuit, albeit with-

out prejudice.

The events leading up to this litigation and the pend-

ing motions may be summarized as follows:

¢ There are two state lawsuits which relate to the

present matter. The first is the underlying litigation, a

wrongful death claim in Dale County, Alabama, which

arose from an accident on December 14, 1994 between a

Tillis Trucking tractor and trailer, driven by Pride, and

an automobile driven by Moses’s wife, who died as a

result of the accident. Named as defendants in that ac-

tion were Pride, Tillis Trucking, and its related company,

Tillis Land and Timber.

¢ Old Republic Insurance insures the Tillis compa-

nies under both a commercial automobile liability policy

and a general liability policy. Old Republic provided a

defense to all defendants in the wrongful death action,

but with the stated position that it considered itself

potentially responsible for a judgment only under the

commercial automobile liability policy. Moses and the

independent counsel for the Tillis companies contended

that Old Republic would be also liable under the terms

of the general liability policy for any judgment against

App. 17

them in excess of $1 million, which is the limit of the

commercial automobile policy.’ |

e At trial, Old Republic moved to intervene in order

to submit interrogatories to the jury establishing wheth-

er liability was based on any theory which would impli-

cate the general liability policy in addition to the com-

mercial automobile policy. The state court first granted

Old Republic’s motion on August 11, 1996, but reversed

that ruling on August 26, 1996. On September 17, 1996,

the jury returned a verdict against Pride and Tillis

Trucking—but not against Tillis Land & Timber—for $7

million.

¢ Old Republic filed this declaratory judgment action

on September 20, 1996, seeking a declaration that the

Alabama wrongful death statute is unconstitutional, or

that its obligation for the judgment against Tillis Truck-

ing is limited to $1 million under the commercial auto-

mobile liability policy.

¢ On October 18, 1996, Moses and others filed a

second state lawsuit against Old Republic, Tillis Truck-

ing, and Pride. Tillis Trucking responded and filed a

cross-claim complaint against Old Republic, alleging that

Old Republic acted negligently, in breach of contract, and

with bad faith in refusing to settle the claims in the

underlying wrongful death action.

* The general liability policy contains an exclusion for motor

vehicle accidents, which Moses claimed did not prevent a

finding of liability for other activity—failure to warn passing

motorists at the plant entrance where the accident occurred,

allegedly negligent maintenance of vehicle, and the like—

which would implicate the general policy.

App. 18

More than 50 years ago, in Brillhart v. Excess Ins. Co.,

316 U.S. 491, 62 S.Ct. 1173 (1942), the Supreme Court

addressed circumstances similar to those presented to

this court. An insurer, anticipating a coercive suit,

sought a declaration in federal court of nonliability on an

insurance policy. The district court dismissed the lawsuit

in favor of a pending state proceeding, to which the

insurer had been added as a defendant. The appellate

court reversed, holding that the trial court had abused

its discretion, and ordered the trial court to proceed to

the merits. The Supreme Court reversed the appellate

court and held that, “Although the District Court had

jurisdiction of the suit under the Federal Declaratory

Judgment Act, it was under no compulsion to exercise

that jurisdiction.” Brillhart, 316 U.S. at 494, 62 S.Ct. at

1175. The Court explained that “Ordinarily it would be

uneconomical as well as vexatious for a federal court to

proceed in a declaratory judgment suit where another

suit is pending in a state court presenting the same

issues, not governed by federal law between the same

parties.” Id. at 495, 62 S.Ct. at 1175-76. The Supreme

Court explained that the question for a federal court

presented with a suit under the Declaratory Judgment

Act is “whether the questions in controversy between the

parties to the federal suit, and which are not foreclosed

under the applicable substantive law, can better be set-

tled in the proceeding pending in the state court.” Jd.

In Wilton v. Seven Falls, Co., ____ U.S. __, 115 S.Ct.

2137 (1995), the Supreme Court reaffirmed Brillhart’s

holding. The Court rejected the suggestion that interven-

App. 19

ing decisions, see Colorado River Water Conservation

Dist. v. United States, 424 U.S. 800, 96 S.Ct. 1236

(1976), Will v. Calvert Fire Ins. Co., 437 U.S. 655, 98

S.Ct. 2552 (1978), and Moses H. Cone Memorial Hospital

v. Mercury Constr. Corp., 460 U.S. 1, 103 S.Ct. 927

(1983), had in any way undermined Brillhart’s holdings.

The Wilton Court stated that district courts still “have

substantial latitude in deciding whether to stay or to

dismiss a declaratory suit in light of pending state pro-

ceedings.” ___ U.S. at __, 115 S.Ct. at 2142. See also

United States Fidelity and Guarantee Company v.

Algernon-Blair, Inc., 705 F. Supp. 1507 (M.D. Ala. 1988)

(holding that Brillhart was still controlling after Colora-

do River, Calvert Fire Ins. and Moses H. Cone).

In applying Brillhart, the Eleventh Circuit has held

that, of the many factors that may legitimately enter

into a district court’s decision whether to hear a prayer

for declaratory relief, the existence of an ongoing state

proceeding involving the same issues as the declaratory

judgment action is the most potent. Angora Enterprises,

Inc. v. Condominium Ass’n of Lakeside Village, Inc., 796

F.2d 384, 387-88 (11th Cir. 1986) (per curium); Michigan

Tech Fund v. Century Nat’l Bank of Broward, 680 F.2d

736, 742 (11th Cir. 1982) Ven-Fuel Inc. v. Department of

the Treasury, 673 F.2d 1194, 1195 (11th Cir. 1982); see

also 6A J. Moore, Moore’s Federal Practice 7 57.08[3] at

57-44 (1984). “Exercise of federal jurisdiction in such a

situation risks unnecessary commitment of scarce judi-

cial resources, multiplicative expenditures of legal ser-

vices, inconsistent ruling at numerous litigation junc-

tures, and the appearance of disregard for the state trial

court’s authority and expertise in violation of basic

App. 20

norms of federal and state comity.” Algernon-Blair, 705

F. Supp. at 1514.

Of course, Moses’s state court litigation does not serve

as a per se bar to Old Republic’s declaratory judgment

action. See Fed.R.Civ.P. 57 (“The existence of another

adequate remedy does not preclude a judgment for dec-

laratory relief in cases where it is appropriate.”); 6A J.

Moore, Moore’s Federal Practice | 57.08(6.-1] at 57-54

(1984). In exercising its discretion in this situation under

Brillhart, the district court must direct its attention to

the adequacy of the state proceeding in resolving the

disputes presented in the federal complaint. The Elev-

enth Circuit has stated that, “In its discretion, a district

court may decline to entertain a declaratory judgment

action on the merits when a pending proceeding in

another court will fully resolve the controversy between

the parties.” Ven-Fuel, 673 F.2d at 1195. And “[t]he dis-

trict court has discretion to decline to entertain a diver-

sity action seeking a declaratory judgment and raising

issues of state law when those same issues are being

presented contemporaneously to state courts and thus

will necessarily be resolved by the state courts.” Michi-

gan Tech Fund 680 F.2d at 742 (citations omitted).

The most recent Eleventh Circuit statement on the

subject suggests that the relevant determinant is not

whether the state court litigation involves the identical

issues in form as the federal action, but rather whether

the substance of the federally pleaded issues will be

resolved in state court.

“Although Fed.R.Civ.P. 57 specifically provides

that the existence of ‘another adequate remedy

does not preclude a judgment for declaratory

App. 21

relief in cases where it is appropriate,’ a court, ‘in

the exercise of the discretion that it always has

in determining whether to give a declaratory

judgment, may properly refuse declaratory relief

if the alternative remedy is better or more effec-

tive.’ 10A C. Wright, A. Miller & M. Kane, Feder-

al Practice and Procedure: Civil 2d, § 2758 at

621-23 (footnotes omitted). This is also true if

there is a pending action in which some of the

questions posed by the declaratory action have or

may be raised. As Professors Wright, Miller and

Kane have summarized:

‘Unnecessary interference with state

court litigation should be avoided. The

Declaratory Judgment Act was not in-

tended to enable a party to obtain a

change of tribunal from a state to federal

court, and it is not the function of the

federal declaratory action merely to antic-

ipate a defense that otherwise would be

presented in a state action.’”

Angora Enterprises, 796 F.2d at 387-88 (citations omit-

ted) (emphasis added).

The proper inquiry, then, is whether there is adequate

opportunity for the issues raised to be fully litigated in

the state forum. Middlesex Count Ethics Comm’n v.

Garden State Bar Assoc., 457 U.S. 423, 432, 102 S. Ct.

2512, 2521 (1982). The Supreme Court has stated that,

where vital state interests are involved, an adequate

opportunity is present unless state law bars a plaintiff

from raising the federal challenge in the state proceed-

ing. Id. Moreover, “[mJjinimal respect for the state proc-

esses, of course, precludes any presumption that the

state courts will not safeguard federal constitutional

rights,” Jd. at 431, 2521.

App. 22

Here, notably, Old Republic has two state proceedings

in which it has opportunity to present its federal chal-

lenges. First, in the underlying wrongful death action,

Old Republic was not barred from presenting these

claims to the court. On the contrary, it appears that Old

Republic raised the constitutionality of the Alabama

Wrongful Death Statue in its answers to the complaints,

in the pre-trial order, in its motion for directed verdict at

the end of the plaintiff’s case, in its post-trial motion for

a new trial, judgment not withstanding the verdict, or

request for remittitur, and in its motion to stay execution

of judgment. Presumably, it may proceed in state courts

on appeal of these motions as well as with its denied

motion to intervene.

Next, in Moses’s second, still pending, state action, Old

Republic is charged with fraud and bad faith in its

conduct in the underlying wrongful death litigation. The

state lawsuit directly implicates Old Republic’s contrac-

tual obligations to the Tillis companies, obligations which

Old Republic disputes in its complaint to this court, and

which are central to the resolution of Moses’s claims. Old

Republic’s claims of alleged unconstitutionality of the

Alabama wrongful death statute may freely be asserted

in that state action. Most significantly, the ultimate

question of Old Republic’s liability for the verdict against

its insureds, now the plaintiffs in the pending state

action, will be fully and finally determined by the out-

come of that lawsuit, so long as it is allowed to proceed.

In other words, Old Republic has not demonstrated,

and, indeed, does not argue, that it was barred from

raising the precise issues it alleges in either the underly-

ing wrongful death litigation or in the pending state

App. 23

action brought by Moses. And, in the language of Ven-

Fuel, the requirement that the “pending proceeding in

another court will fully resolve the controversy between

the parties” is met. See Ven-Fuel, 673 F.2d at 1195.

Therefore, by urging that “this court should not use

Wilton as a shield to avoid hearing this case,” Old Re-

public asks the court to ignore, if not defy, both the

Supreme Court’s and the Eleventh Circuit’s guidelines

for application of discretion and restraint in favor of Old

Republic’s admitted forum shopping. See Wilton,__ US.

at__, 115 S.Ct. at 2143, Angora Enterprises, 796 F.2d

at 387-88; see also United Insurance Co. v. Harris, 939

F. Supp. 1527 (M.D. Ala 1996). This the court will not

do. Instead, it applies “considerations of practicality and

wise judicial administration” in declining to exercise jur-

isdiction over this declaratory action. See Wilton, 115

S.Ct. at 2143.

This case presents another compelling reason to grant

dismissal in addition to its discretionary Declaratory Act

jurisdiction, in that Old Republic asks this court, in

essence, to review a completed proceeding and jury ver-

dict from a state court while post-trial motions on the

issues presented are still pending—a highly irregular

request. Moreover, Old Republic argues that the Ala-

bama wrongful death statute applied in the completed

judgment cannot be enforced against it or against any of

* Supplemental brief of plaintiff in opposition to motion to

dismiss, filed November 21, 1996, at 3.

App. 24

its insureds, and asks this court to intervene to prevent

its enforcement. In effect, Old Republic’s complaint

places this court in a position of an appeals court for a

state trial court’s decisions, and demands its review of

the final judgment of a state court pursuant to a jury

verdict.

Under the Rooker-Feldman doctrine, a lower federal

court lacks subject-matter jurisdiction to act as a court

of appeals for a state court judgment.’ As is the related

Younger abstention doctrine,‘ this principle is firmly

rooted in the most fundamental elements of our federal-

ist system of justice, those which reflect “the notion of

‘comity,’ that is a proper respect for state functions,” and

a belief that “the National Government will fare best if

the states and their institutions are left free to perform

their separate functions in their separate ways.” Younger

v. Harris, 401 U.S. 37, 91 S. Ct. 976 (1971) (holding that

federal courts should voluntarily abstain from enjoining

matters where pending state cases will resolve the un-

derlying disputes).

° The doctrine derives its name from two Supreme Court

cases, District of Columbia Court of Appeals v. Feldman, 460

U.S. 462, 482, 103 S. Ct. 1303, 1315 (1983), and Rooker v.

Fidelity Trust Co., 263 U.S. 413, 415-416, 44 S. Ct. 149, 150

(1923). The lack of jurisdiction under this doctrine may be

raised by either party or sua sponte by the court.

* Recently, when confronted with a declaratory judgment ac-

tion framed as a challenge to the constitutionality of the Ala-

bama’s punitive damages statute, another court in this district

dismissed the action based on the Younger abstention doc-

trine. See Alfa Financial Corp. v. Key, 927 F. Supp. 423, 431-

432 (M.D. Ala. 1996).

App. 25

Rooker-Feldman has two statutory bases, 28 U.S.C.A.

§ 1257, which limits federal review of state court pro-

ceedings to the United States Supreme Court, and 28

U.S.C.A. § 1331, which provides that federal district

courts are courts of original jurisdiction. The broad

premises of the doctrine apply not only to claims that

were actually raised and adjudicated in the state court,

but to any claims which are “inextricably intertwined”

with the state court judgment. The Eleventh Circuit

Court of Appeals affirmed its support of the scope of the

doctrine in recent case of Powell v. Powell, 80 F. 3d 464,

466-467 (11th Cir. 1996), finding that the court had no

jurisdiction over a challenge to the constitutionality of

the Uniform Services Former Spouses Protection Act

which was “inextricably intertwined” with a final judg-

ment in a state court divorce action. The court notes one

circumstance where a limitation is placed on the Rooker-

Feldman doctrine: where there is “no reasonable opportu-

nity to raise [the] federal claim in the state proceedings.”

Powell, 80 F.3d at 467 (citing Wood v. Orange County,

715 F.2d 1543, 1547 (11th Cir. 1983), cert. denied, 467

U.S. 1210, 104 S. Ct. 2398 (1984).

The claims Old Republic asserts are also “inextricably

intertwined” with a state court judgment. Furthermore,

Old Republic’s insured raised its arguments in the un-

derlying state court lawsuit, and it was obviously not

barred from pursuing those federal claims in the state

arena. If, after pursuit of state remedies, Old Republic is

dissatisfied with the judgments of the Alabama state

courts, the proper route is appeal to the United States

Supreme Court, not an attempted collateral attack or

circumvention of the process. As well-documented by Old

Republic, the review by the United States Supreme

App. 26

Court of a large number of Alabama cases related to

punitive damages, is evidence of the availability of that

remedy.° There is no reason to believe, nor does Old Re-

public suggest, that this review would elude them or be

deficient in any respect.

III.

In sum, Old Republic does not present a persuasive

argument that this court should choose to hear this

declaratory judgment action—if, indeed, it legitimately

has jurisdiction—in a manner contrary to the established

doctrines which discourage such interference with state

courts. Even with the assumption that the proposed

issues are proper subject matter, it declines, in its dis-

cretion, to exercise jurisdiction. An appropriate judgment

will be entered.

DONE, this the 5th day of February, 1997.

UNITED STATES DISTRICT JUDGE

* Old Republic refers the court to Life Insurance Co. of Geor-

gia v. Johnson, ____ U.S. __, 117 S. Ct. 288 (1996), BMW v.

Gore, __ U.S. ___, 116 S. Ct. 1589 (1996), TXO Products Corp.

v. Alliance Resources Corp., 509 U.S. 443, 113 S. Ct. 2711

(1993), and Pacific Mutual Life Insurance Co. v. Haslip, 499

U.S. 1, 111 S.Ct. 1032 (1991). In addition, Old Republic’s brief

in Opposition to motion to dismiss cites Yale law professor

George L. Priest, The Punitive Damage Phenomenon in Ala-

bama (October 24, 1996), with permission, as completing a

recent study which indicates that the United States Supreme

Court reviews more punitive awards coming out of Alabama

than any other state.

te eh eens stains Rite ott

App. 27

[Filed December 8, 1997]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

No. 97-6179

OLD REPUBLIC UNION INSURANCE COMPANY,

Plaintiff-Appellant,

versus .

TILLIS TRUCKING CO., INC.; TILLIS LAND &

TIMBER CO.; WILLIE RAY PRIDE; MALACHI MOSES,

Defendants-Appellees.

On Appeal from the United States District Court

for the Middle District of Alabama

ON PETITION(S) FOR REHEARING AND

SUGGESTION(S) OF REHEARING EN BANC

Before: TJOFLAT, COX, and CARNES, Circuit Judges.

PER CURIAM:

The Petition(s) for Rehearing are DENIED and no mem-

ber of this panel nor other Judge in regular active

service on the Court having requested that the Court be

polled on rehearing en banc (Rule 35, Federal Rules of

Appellate Procedure; Eleventh Circuit Rule 35-5), the

Suggestion(s) of Rehearing En Banc are DENIED.

ENTERED FOR THE COURT:

UNITED STATES CIRCUIT JUDGE

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