Dianoias Eatery LLC v. Motorists Mutual Insurance Co, No. 20-2954 (3d Cir. 2021)Annotate this Case
The three restaurants in these consolidated appeals each brought its own action in state court seeking a declaration that its respective Insurer was obligated to provide coverage for COVID-19-related losses under an insurance policy. Each Insurer removed its case to federal court invoking diversity jurisdiction; each district court exercised its discretion under the Declaratory Judgment Act (DJA), 28 U.S.C. 2201–02, to abstain from hearing the case and ordered the matter be remanded to state court. The Third Circuit vacated the orders, concluding that the District Courts erred in weighing factors relevant to the exercise of discretion under the DJA: the likelihood that a federal court declaration will resolve the uncertainty of obligation which gave rise to the controversy, the general policy of restraint when the same issues are pending in a state court, and the public interest in settlement of the uncertainty of obligation. In this case, a declaratory judgment would be sufficient to afford relief and settle their respective controversies.