Plaintiffs’ motion to remand declaratory judgment action back to state court denied where there were other causes of action alleged in complaint and no pending state court action.

In this declaratory judgment action in the United States District Court for the District of New Jersey, the magistrate judge considered the plaintiffs’ motion to remand the case back to state court. The matter arose from a property damage claim in relation to a homeowners' insurance policy. The case was originally filed in state court and then removed to federal court by the defendants pursuant to 28 U.S.C. § 1332. The plaintiffs then sought to have the case remanded back to state court since they were seeking declaratory relief. The defendants argued that there was also diversity jurisdiction and that only one aspect of the case was a claim for declaratory judgment. There were also claims for breach of contract, breach of the covenant of good faith and fair dealing, and violation of the New Jersey Consumer Fraud Act. Pursuant to the declaratory judgment act, a district court “may declare the rights” of a party. However, whether to entertain a declaratory judgment action is within the district court’s discretion. Due to the presence of additional causes of action, aside from the request for declaratory judgment, the court was compelled to deny the plaintiffs' motion. The court went on to state that, even if plaintiffs had only sought declaratory relief, there would still be little reason for the court to remand the case since there was no pending state court proceeding. Thus, there was no threat of duplicative litigation. The magistrate judge recommended that the plaintiffs’ motion to remand be denied—the recommendation was subsequently adopted by the court.

Case Law Alert - 1st Quarter 2013