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U.S. v. Com. of Pa.

January 22, 1991

UNITED STATES OF AMERICA, APPELLANT
v.
COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF ENVIRONMENTAL RESOURCES



Appeal from the United States District Court for the Middle District of Pennsylvania; D.C. Civil No. 89-01526.

Mansmann, Cowen and Alito, Circuit Judges.

Author: Mansmann

Opinion OF THE COURT

MANSMANN, Circuit Judge

The underlying issue in this case is whether the United States must comply with an administrative order issued by the Pennsylvania Department of Environmental Resources ("DER") to clean up a site located on the United States' property at the Navy Ships Parts Control Center ("Navy Control Center") in Mechanicsburg, Pennsylvania. By a lawsuit against the United States Department of the Navy, the Navy Control Center, and others, in the Commonwealth Court of Pennsylvania, the DER sought the United States' compliance with the Pennsylvania Clean Streams Law, 35 Pa. Cons. Stat. Ann. § 691.1, et seq. (Purdon's Supp. 1990), and the Pennsylvania Solid Waste Management Act, 35 Pa. Cons. Stat. Ann. §§ 6018.101 - .1003 (Purdon's Supp. 1990). Although the United States raised a sovereign immunity defense, it took the affirmative step of filing a civil action pursuant to the Declaratory Judgment Act, 22 U.S.C. §§ 2201, 2202, in the United States District Court for the Middle District of Pennsylvania where the Navy Control Center is located. The district court declined to exercise discretion and dismissed the suit. Because we find that the United States has a compelling interest in adjudicating its sovereign immunity under federal statutes in a federal forum, we will vacate the dismissal and remand the matter for further proceedings.

I.

The Navy Ship Parts Control Center covers approximately 825 acres, and the site at issue consists of an approximately 12 mile long drainageway. Stormwater flows from the Navy Control Center into this drainageway; at a one-mile long stretch the drainageway resembles a "low-lying area of land" which adjoins public athletic fields where children play. At this point the drainageway is admittedly contaminated by polychlorinated biphenyls (PCBs).

The Pennsylvania DER issued an administrative order on August 24, 1988, directing the United States to remove and dispose of all contamination at the site.*fn1 On March 23, 1989, the DER filed a petition to enforce this order in the Commonwealth Court of Pennsylvania. The United States then attempted to remove the case to the United States District Court for the Middle District of Pennsylvania. Upon motion by the DER, the district court remanded the case to the Commonwealth Court, finding that removal to the federal court was unavailable because the United States' defenses did not arise under federal law for the purpose of 28 U.S.C. § 1331.

Shortly thereafter, the United States filed this lawsuit in the United States District Court for the Middle District of Pennsylvania, seeking relief under the Declaratory Judgment Act that the DER's "actions to enforce its administrative order are barred by sovereign immunity and CERCLA" and "that the [DER's] cleanup standard and remedial action ordered by the [DER] are arbitrary, capricious and unreasonable" and should therefore be set aside. The United States also sought injunctive relief to prevent further DER enforcement activity. Both parties agree that the affirmative claims raised in the federal lawsuit are identical to the defenses asserted in the state court action. The United States moved for summary judgment; the DER countered with a motion for partial summary judgment and a motion to dismiss under the Declaratory Judgment Act, 22 U.S.C. § 2201 et seq.

Granting the DER's motion, the district court dismissed the suit on February 22, 1990,*fn2 articulating its refusal to exercise discretion under the Declaratory Judgment Act for two reasons. First, the issues raised in the federal suit were identical to those raised in the pending state court action. Second, the district court was persuaded that the United States' suit for declaratory and injunctive relief in federal court constituted an inappropriate "procedural fencing" tactic and another attempt at "forum shopping", especially given its failed attempt at removal.*fn3 In the view of the district court:

where there is a pending action in a state court which can adequately adjudicate federal law defenses, and where that case is not otherwise removable to federal court, it would be inappropriate for this court to entertain a separate declaratory judgment action to rule on the validity of anticipated defenses based on federal laws.

In the parallel state court action, by order of the Commonwealth Court dated March 15, 1990, the United States was directed to comply with the DER's administrative order as specified in the enforcement order.*fn4

Thirty-six days after the Commonwealth Court order, the United States filed this timely appeal from the district court's order dismissing its complaint. We review a dismissal under the Declaratory Judgment Act for abuse of discretion. Terra Nova Ins. Co., Ltd. v. 900 Bar, Inc., 887 F.2d 1213, 1224 (3d Cir. 1989). This standard is applied with a caveat, however; because the Declaratory Judgment Act should "have a liberal interpretation," "the ambit of the district court's discretion is somewhat circumscribed and the range of our review is correspondingly enlarged" when the district court has denied declaratory relief. Exxon Corp. v. Federal Trade Commission, 588 F.2d 895, 900 (3d Cir. 1978).

II.

Neither party disputes that the district court had original jurisdiction over this lawsuit pursuant to 28 U.S.C. § 1345 (district courts shall have original jurisdiction of all civil actions commenced by the United States). Rather, it is the discretion to exercise jurisdiction which is at issue, and specifically, whether the United States is entitled to a declaratory judgment in federal court, its forum of choice, even though identical issues have been raised in a parallel state court action.

In its order of dismissal, the district court clearly articulated that its dismissal was grounded on its discretion under the Declaratory Judgment Act, and it did not reach the question of abstention under the Colorado River doctrine. See Colorado River Water Conservation District v. United States, 424 U.S. 800, 96 S. Ct. 1236, 47 L. Ed. 2d 483 (1976). This approach is appropriate because although Colorado River abstention and discretion under the Declaratory Judgment Act often appear confusingly similar,*fn5 they differ in scope. The district court's discretion under the Declaratory Judgment Act is significantly greater than under Colorado River. While the factors to be evaluated are similar, the test for abstention under Colorado River requires exceptional circumstances. Colorado River, 424 U.S. at 818. See New Orleans Public Service, Inc. v. Council of City of New Orleans, 491 U.S. 350, 109 S. Ct. 2506, 2512, 2513, 105 L. Ed. 2d 298 (1989) (abstention discretion is a limited exception to the court's otherwise "virtually unflagging" obligation to exercise jurisdiction); Moses H. Cone Memorial Hosp. v. Mercury Constr. Co., 460 U.S. 1, 16, 103 S. Ct. 927, 74 L. Ed. 2d 765 (1983) (referring to Colorado River exceptional-circumstances test). Moreover, although the Supreme Court in Moses H. Cone considered the exercise of federal jurisdiction in a diversity case where a related state action was pending and applied the extraordinary circumstances test, Moses H. Cone did not involve a claim for declaratory relief and therefore did not implicate the exercise of broader discretion under the Declaratory Judgment Act. Moses H. Cone, 460 U.S. at 4 (case arises as petition to compel arbitration). See Mission Ins. Co. v. Puritan Fashions Corp., 706 F.2d 599 (5th Cir. 1983) (distinguishing exceptional circumstances test reiterated in Moses H. Cone from declaratory judgment action) see also United States Fidelity & Guaranty Co. v. Algernon-Blair, Inc., 705 F. Supp. 1507, 1521 (M.D. Ala. 1988) (exceptional circumstances test does not apply to declaratory judgment actions).

We have previously made clear that a dismissal appropriate under the broader standard of the Declaratory Judgment Act should be effected without resort to the more limited doctrine of abstention. Terra Nova Ins. Co., Ltd. v. 900 Bar, Inc., 887 F.2d at 1224 n.12 (declining to "decide if Colorado River analysis is ever proper in the declaratory judgment context or if it is subsumed in the inquiry under the Act" but suggesting the exercise of discretion first under the Declaratory Judgment Act before reaching Colorado River abstention). Therefore, the traditional discretion of the federal courts to decide whether to hear declaratory judgment cases is not ...


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