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Brillhart Abstention: Will Your Declaratory Judgment Action Stay in Federal Court?
Experienced insurance coverage lawyers know that choice of forum frequently affects choice of law, and choice of law is frequently outcome determinative. Coverage disputes, therefore, often result in a rush to the courthouse by both policyholders and insurers as they select the forum. One way insurers initiate litigation is to file a declaratory judgment action, usually in federal court.
The Declaratory Judgment Act, 28 U.S.C. '2201(a) (“DJA”), gives federal courts the right to grant declaratory relief. The DJA only provides that a federal court may make a declaration, not that it shall do so. Thus, the “distinctive feature” that the Supreme Court has highlighted in this “enabling Act” is the “unique and substantial discretion,” which the DJA grants the federal courts. Wilton v. Seven Falls Co., 515 U.S. 277, 286 (1995). Because of this substantial discretion, federal courts have the option to stay or dismiss ' that is, to abstain from deciding ' a federal declaratory action when there is a pending state action involving the same dispute, even if the state action was filed after the federal declaratory judgment action. As a result, the “first filed” rule, generally applicable in federal courts, does not apply in the context of a declaratory judgment action. 12-57 Moore's Federal Practice-Civil '57.42.2.b.i.A & B. In fact, one of the special circumstances warranting exception to the first filed rule is when a party files a declaratory judgment action after receiving notice of a planned suit by another party. See e.g. Federal Ins. Co. v. May Dep't Stores Co., 808 F. Supp. 347, 350 (S.D.N.Y. 1992).
This article examines the governing U.S. Supreme Court precedent and how various federal appellate courts have addressed abstention, particularly in the insurance coverage context.
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.
The Stranger to the Deed Rule
In 1987, a unanimous Court of Appeals reaffirmed the vitality of the "stranger to the deed" rule, which holds that if a grantor executes a deed to a grantee purporting to create an easement in a third party, the easement is invalid. Daniello v. Wagner, decided by the Second Department on November 29th, makes it clear that not all grantors (or their lawyers) have received the Court of Appeals' message, suggesting that the rule needs re-examination.