Opposition Brief — Hartford Insurance Co. of the Midwest v. Huth

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No. 02-0988 YAN oO” 2003

OURO per ne nc a

Jn The —- <—niemanelE

Supreme Court of the Gnited States

HARTFORD INSURANCE COMPANY OF

THE MIDWEST, an Indiana corporation,

Petitioner,

vs.

. CATT MICHELE HUTH, an individual,

Respondent.

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Ninth Circuit

RESPONDENT?’S BRIEF IN OPPOSITION

G. DAVID GAGE

Counsel of Record

GAGE & MATHERS, LTD.

One Renaissance Square

Suite 1125

Two North Central Avenue

Phoenix, AZ 85004-2353

Telephone (602) 258-2102

Facsimile (602) 258-8287

Attorney for Respondent

COCKLE LAW BRIEF PRINTING CO. (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED FOR REVIEW

1. Has this Court determined that a discretionary

abstention-based remand is not governed by 28 U.S.C.

§1447(c), as such a remand is not based on lack of subject

_ matter jurisdiction or defects in removal procedure, per

Quackenbush v. Allstate Insurance Company, 517 U.S. 706

(1996)?

2. Does Hartford erroneously contend that only 28

U.S.C. §1447(c) can support the remand, relying upon

Thermtron Products, Inc. v. Hermansdorfer, 423 U.S. 336

(1976), not understanding that Quackenbush qualified

Thermtron insofar as discretionary abstention-based

remands are concerned?

3. Has Hartford abandoned its claim that the Dis-

trict Court abused its discretion in denying discretionary

federal jurisdiction in this pure insurance declaratory

judgment action (involving only state law issues) under

the Federal Declaratory Judgment Act (FDJA), in accor-

dance with the discretionary jurisdiction factors declared

by this Court in Wilton v. Seven Falls Co., 515 U.S. 277

(1995) and in Brillhart v. Excess Ins. Co. of Am., 316 U.S.

491 (1942)?

4. Is there a conflict among the circuits regarding _

the pertinent issues of law?

TABLE OF CONTENTS

Page

Questions Presented for Review ...............csssceeeseeseees i

SO BE CIES iin ccccintincdinineindcaioninas ii

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Reasons for Denying the WTit..................ccccccsseeeeesees 1

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TABLE OF AUTHORITIES

Page

CASES:

Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491

ESSENSE TAC al se PRE Oe i, 1,3

Colorado River Water Conservation Dist. v. United

Ss UE AER UE ID ios ksi cctsiisinsnsniccsctsvsacevnverssseee 3

Gov’t Employees Ins. Co. v. Dizol, 133 F.3d 1220

OE TIN « ..ssncensainnngswnaniesssvsoensesvsausssovesers 3

Huth v. Hartford Ins. Co. of the Midwest, 298 F.3d

800 (9th Cir. 2002) (Reproduced App. 1-7 in Peti-

chasse anensnnlinanipsenbabinanadeenennesarse 3

Quackenbush v. Allstate Insurance Company, 517

a sik cs dlonahensuasiindbonnonaes i, 1,2,4,5

Thermtron Products, Inc. v. Hermansdorfer, 423

Aichi ca loi tashaniectinaansioesinesbonrschunnineyen i, 2,4

Wilton v. Seven Falls Co., 515 U.S. 277 (1995)........ i, 3, 4, 5

STATUTES:

aio ocean cca unuaseveeneianvmacnens 2

saa ccosancisissnctin 2

REASONS FOR DENYING THE WRIT

Inexplicably, Hartford’s petition for certiorari aban-

dons any claim that the District Court abused its discre-

tion in applying the Brillhart factors — and in deciding not

to exercise discretionary federal jurisdiction in this pure

Federal Declaratory Judgment Act (FDJA) case. This

represents a complete about-face for Hartford. See the

Opinion (App.1-7) and Order (App. 8-14).

Hartford’s Petition for Certiorari now only claims, in

essence, that a federal court has no discretion to deny

discretionary federal jurisdiction in any FDJA case in

which the plaintiff’s state court declaratory action has

been removed, claiming that the removed state court case

cannot be remanded.

To state such a position is to foreshadow its summary

rejection. No case so holds. This Court ruled to the con-

trary in Quackenbush:

“*** | We have thus held that in cases where

the relief being sought is equitable in nature or

otherwise discretionary, federal courts not only

have the power to stay the action based on ab-

stention principles, but can also, in otherwise

appropriate circumstances, decline to exercise ju-

risdiction altogether by either dismissing the suit

or remanding it to state court. * **.

Quackenbush, 517 U.S. at 721, emphasis supplied, and:

“ *** | Under our precedents, federal courts

have the power to dismiss or remand cases

based on abstention principles only where the relief

being sought is equitable or otherwise discre-

tionary. * * * .”

Quackenbush, 517 U.S. at 731, emphasis supplied.

Hartford cites Thermtron (Petition, p. 5) as the pri-

mary authority for its Quackenbush-rejected position,

apparently unaware that Quackenbush (517 U.S. at 711-

712) cites Thermtron in declaring that an “abstention-

based remand order does not fall into either category of

remand order described in §1447(c), as it is not based on

lack of subject matter jurisdiction or defects in removal

procedure” (emphasis supplied).

Such discretionary abstention is extended to FDJA

cases, Quackenbush, 517 U.S. at 718-719, citing Wilton.

There is absolutely nothing in the text of the FDJA, 28

U.S.C. §2201(a) which restricts the discretionary exercise of

discretionary FDJA jurisdiction in the manner advocated

by Hartford:

“(a) In a case of actual controversy within its ju-

risdiction * ** 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 supplied.

“May” is the operative word which provides the basis

for the unbroken line of cases which leave to the discretion

of the district judge the discretionary decision to exercise

or not exercise discretionary FDJA jurisdiction, subject to

review for abuse of discretion.

See also the underlying Huth v. Hartford Ins. Co. of

the Midwest, 298 F.3d 800 (9th Cir. 2002) Opinion (repro-

duced in Petition for Certiorari, App. 1-7), which provides

the following analysis (App. 3 and 6-7):

“Section 2201 Jurisdiction

“The exercise of jurisdiction under the Federal

Declaratory Judgment Act, 28 U.S.C. § 2201(a),

is committed to the sound discretion of the fed-

eral district courts. See, e.g., Wilton v. Seven

Falls Co., 515 U.S. 277, 282-83 (1995); Brillhart

v. Excess Ins. Co. of Am., 316 U.S. 491, 494-95

(1942); Gov’t Employees Ins. Co. v. Dizol, 133

F.3d 1220, 1223 (9th Cir. 1998) (en banc). Even if

the district court has subject matter jurisdiction,

it is not required to exercise its authority to hear

the case. See Dizol, 133 F.3d at 1223.

* * *

“*** | Hartford argues the district court erred

because no ‘exceptional circumstances’ justify ab-

stention. ‘Exceptional circumstances,’ however, is

not the standard for discretionary jurisdiction

under 28 U.S.C. § 2001. Wilton, 515 U.S. at 286-

88 (distinguishing Colorado River Water Conser-

vation Dist. v. United States, 424 U.S. 800, 810-

20 (1976)). * * * .”

Huth v. Hartford (reproduced in Petition for Certiorari,

App. 3 and 6-7).

See also the District Court’s underlying discretionary

analysis of the Brillhart factors in its Order (reproduced in

Petition for Certiorari, App. 8-14), including these obser-

vations (App. 12-13):

“3 Hartford asks the court to place great weight

on the fact that Huth filed her state court action

after notice of Hartford’s federal suit. The court

notes that timing is legally insignificant given

Wilton, in which the court upheld staying a fed-

eral action in favor of the state action which was

filed one month later. 515 U.S. at 280.

[and]

“4 Hartford argues there is no state court action

as it has been removed to federal court. The

Court does not find this argument persuasive.

Clearly CIV-00-2345 began in state court. Once

this court decides to remand the action the case

will proceed in state court rather than federal

court. Hartford can not avoid the Court’s juris-

dictional discretion under the FDJA by removing

a state court action and then arguing no state

court action exists.”

ORDER, U.S. District Court (in Petition for Certiorari,

App. 12-13).

Given the foregoing, some overall comments are now

directed to the Hartford’s Petition’s stated contentions and

authority:

1. Regarding pages 5-7 of the Petition, it affirma-

tively appears that Hartford’s basic premise (erroneously

based upon Thermtron) is that there can be no discretion-

ary abstention remand. This Court held to the contrary in

Quackenbush, which is dispositive. The remand in this

pure declaratory judgment action was well within the

discretion of the District Judge.

2. Regarding the claimed conflict among the circuits

(pages 8-13 of the Petition), there is no conflict. Not one of

the cited cases shares the factual and legal-discretionary

attributes of this action.

3. Hartford is under the mistaken impression that a

discretionary abstention remand is not possible; however,

Quackenbush holds to the contrary (unknown to Hartford).

4. Then, thinking that the removed state court case

somehow disappears forever, once removed, Hartford goes

down the irrelevant semantic path regarding whether

removal means that there is no concurrent or pending or

parallel state court proceeding.

5. The simple answer is that Quackenbush held that

the district court may order a discretionary abstention

remand relative to, among other types of abstention,

Wilton FDJA abstention. The District Court so ordered, in

this case.

CONCLUSION

It was well within the discretion of the District Judge

to decline discretionary FDJA jurisdiction, to stay Hart-

ford’s FDJA case and to remand Huth’s Arizona declara-

tory action. Hartford has now conceded that there was no

abuse of discretion by failing to urge abuse of discretion as

an issue in its Petition for Certiorari. The Petition for

Certiorari should be summarily denied.

Respectfully submitted,