Granite State Insurance Company v. Tandy Corporation

PETITIONER: Granite State Insurance Company
RESPONDENT: Tandy Corporation
LOCATION: City Council of Hialeah

DOCKET NO.: 91-2086
DECIDED BY: Rehnquist Court (1991-1993)

CITATION: 507 US 1026 (1993)
GRANTED: Oct 05, 1992
ARGUED: Feb 23, 1993
DECIDED: Apr 12, 1993

Ann E. Webb - on behalf of the Petitioner
Lynne A. Liberato - on behalf of the Respondent

Facts of the case


Media for Granite State Insurance Company v. Tandy Corporation

Audio Transcription for Oral Argument - February 23, 1993 in Granite State Insurance Company v. Tandy Corporation

William H. Rehnquist:

We'll hear argument first this morning in Number 91-2086, the Granite State Insurance Company v. the Tandy Corporation.

Ms. Webb.

Ann E. Webb:

Mr. Chief Justice, and may it please the Court:

There is only one issue in this case which is truly uncontested.

Granite State and Tandy had been engaged in a significant coverage dispute for over 2 years beginning several months before Granite State filed suit.

In an effort to resolve an escalating problem, Granite State filed a declaratory judgment action in Federal court using a remedy expressly granted by Congress in the Declaratory Judgment Act.

Both jurisdiction and venue were proper in Houston.

Nonetheless, the district court stayed this action in deference to a later-filed State court action filed almost a month later by Tandy in Fort Worth, Texas.

The Fifth Circuit affirmed.

By giving the district court virtually unfettered discretion to defer to the State courts, the Fifth Circuit has judicially eviscerated an affirmative legislative remedy.

Granite State is here today asking this Court to reinstate the Declaratory Judgment Act.

There are two questions presented by this appeal.

The first is whether a district court with unquestioned jurisdiction can abstain from hearing an action validly before it simply because of the presence of a later-filed State court action.

The second issue is whether the abstention decision of the district court is reviewed de novo or for abuse of discretion.

Because of the importance of the comity and Federalism issued presented by abstention decisions, it is important that courts of appeals stringently address... stringently review the decision of the district court.

The pendency of a parallel action is always a consideration in an abstention decision.

There is no abstention decision unless there is a parallel State court action.

This cannot be an exceptional circumstance which will justify abstention from a Federal court's unflagging obligation to exercise its valid jurisdiction.

In determining whether an abstention decision is appropriate, a Federal court must begin with one of the fundamental precepts of our Federal judicial system, and this Court has stated that Federal courts have no more right to decline the exercise of valid jurisdiction than to usurp that which is not given.

The one or the other is treasonous to the Constitution.

Abstention is an extraordinary and narrow exception to a Federal court's unflagging obligation to exercise its valid jurisdiction.

William H. Rehnquist:

Well, Ms. Webb, are you assuming that an action for a declaratory judgment in that respect is the same as an action for an injunction or for damages because the declaratory judgment statute which you set forth in your brief at page 3 says that the district court may declare the rights.

It certainly suggests discretion to do so or not to do so, doesn't it?

Ann E. Webb:

Your Honor, there seems to be some discretion in the declaratory judgment statute.

We believe the discretion is not whether or not a district court may hear the case, but whether or not the district court may grant the release asked for.

There are many occasions in which declaratory relief is sought, but declaratory relief isn't appropriate for one reason or another.

For example, in the Grow case, it's... the Voting Rights Act precludes the granting of declaratory relief.

The State legislative prerogative precludes the granting of declaratory relief.

A case cited by my co-counsel, Mansour v. Green, the Eleventh Amendment barred the granting of declaratory relief.

We believe that is where the discretion lies.