Fire-Dex, LLC v. Admiral Insurance Company

The Declaratory Judgment Act grants “unique and substantial discretion” to district courts to abstain from deciding requests for declaratory judgment. Wilton v. Seven Falls Co., 515 U.S. 277, 286 (1995). Consequently, federal courts in diversity cases have broad discretion to decline jurisdiction over declaratory claims presenting unsettled questions of state law. By contrast, federal courts generally have a “virtually unflagging obligation” to exercise jurisdiction over claims seeking coercive relief like injunctions or damages. Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 817 (1976). As multiple circuits, a leading federal courts treatise, and the panel below have all recognized, the circuits are split regarding the standard for abstention in so-called “mixed” cases containing both declaratory and coercive claims. Pet. App. 5a. The question presented is: When a complaint joins claims for declaratory relief on a novel state-law issue with claims for damages, does a district court retain its discretion to decline jurisdiction over the declaratory claims and to stay the coercive claims in deference to state courts? (i)