DJA Claim: Short v. Allstate, M.D. Ala., 5/23/05

Can you pursue private rights to declaratory judgments and relief under the FCRA?
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David A. Szwak
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DJA Claim: Short v. Allstate, M.D. Ala., 5/23/05

Post by David A. Szwak »

Declaratory Judgment Act Claims
[4] In the Complaint, Plaintiffs allege that "there exists a bona fide and justiciable, legal controversy between [them] and the Defendants, which should be settled and relief afforded as to any uncertainty and insecurity" pursuant to the Declaratory Judgment Act. (Compl. ¶¶ 22 & 23). The Declaratory Judgment Act, 28 U.S.C. § 2201, provides, in relevant part:
(a) In a case of actual controversy within its jurisdiction ... any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such.
"[T]he operation of the Declaratory Judgment Act is procedural only." Household Bank v. JFS Group, 320 F.3d 1249, 1253 (11th Cir.2003) (quoting *1182 Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 57 S.Ct. 461, 81 L.Ed. 617 (1937)). If there is an underlying ground for federal court jurisdiction, the Declaratory Judgment Act "allow[s] parties to precipitate suits that otherwise might need to wait for the declaratory relief defendant to bring a coercive action." Gulf States Paper Corp. v. Ingram, 811 F.2d 1464, 1467 (11th Cir.1987).
Consistent with the "cases" and "controversies" requirement of Article III, the Declaratory Judgment Act specifically provides that a declaratory judgment may be issued only in the case of an "actual controversy." See Emory v. Peeler, 756 F.2d 1547, 1551-52 (11th Cir.1985). Based on the facts alleged, there must be a substantial continuing controversy between two adverse parties. Id. at 1552. "The plaintiff must allege facts from which the continuation of the dispute may be reasonably inferred. Additionally, the continuing controversy may not be conjectural, hypothetical, or contingent; it must be real and immediate, and create a definite, rather than speculative threat of future injury" Id. (internal quotations omitted).
[5] [6] As the Supreme Court has explained:
The difference between an abstract question and a 'controversy' contemplated by the Declaratory Judgment Act is necessarily one of degree, and it would be difficult, if it would be possible, to fashion a precise test for determining in every case whether there is such a controversy. Basically, the question in each case is whether the facts alleged, under all circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.
Maryland Cas. Co. v. Pacific Oil Co., 312 U.S. 270, 273, 61 S.Ct. 510, 85 L.Ed. 826 (1941). Therefore, a threshold question in an action for declaratory relief is whether a justiciable controversy exists. Wendy's Int'l v. City of Birmingham, 868 F.2d 433, 435 (11th Cir.1989). At an irreducible minimum, the party who invokes the court's authority under Article III must show: (1) that he or she personally has suffered some actual or threatened injury as a result of the alleged conduct of the defendant; (2) that the injury fairly can be traced to the challenged action; and (3) that it is likely to be redressed by a favorable decision. Valley Forge Christian Coll. v. Ams. United for Separation of Church and State, Inc., 454 U.S. 464, 472, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982).
[7] [8] Taking the allegations asserted in the Complaint as true, the Court finds that Plaintiffs have not sufficiently alleged a claim upon which it may grant declaratory relief. The essence of Plaintiffs' "controversy" with Allstate arises from the inclusion of Mrs. Short's credit history on the credit report submitted to Savage. Although Mrs. Short asserts that she specifically directed Savage not to consider her credit history in assessing Mr. Short's FSA loan application, she does not assert--nor is it alleged in the Complaint--that she gave such direction to Allstate. Indeed, there are no allegations in the Complaint that Allstate was aware of Mrs. Short's request to omit her credit history nor that she notified Allstate of Savage's lack of authority to receive her credit history. Plaintiffs' allegations thus are insufficient to state a claim because there is no actual controversy between the present parties. Although the parties have differing opinions regarding whether Savage should have been able to receive Mrs. Short's credit history, a mere difference of opinion about the state of the law does not create an actual legal controversy that the Court can adjudicate. See Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 241, 57 S.Ct. 461, 81 L.Ed. 617(1937) (a controversy that can be adjudicated by the Declaratory Judgment Act "must be a real and substantial controversy admitting of specific *1183 relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts.").
Moreover, Plaintiffs allege in the Complaint, that Savage "against the expressed instructions of the Plaintiffs and without informing Plaintiffs of his actions, obtained a credit report" from Allstate. (Compl. at ¶ 11). There are no allegations that Allstate inappropriately conveyed the report to Savage. Hence, based upon the allegations of the Complaint--which the court accepts as true--and viewing them in the light most favorable to Plaintiffs, if Allstate inappropriately furnished Mrs. Short's credit history to Savage, Plaintiffs may have a conflict, perhaps with Savage, but not with Allstate. As such, retaining Allstate in this case would necessarily entail engaging it in a controversy of which it has no adverse legal interests. Such a position is contrary to the principles of the Declaratory Judgment Law. See Brown & Root, Inc. v. Big Rock Corp., 383 F.2d 662, 665 (5th Cir.1967) [FN10] (citing Aetna Life Ins. Co., 300 U.S. at 240-41, 57 S.Ct. 461) ("The controversy must be definite and concrete, touching the legal relations of parties having adverse legal interests."). Accordingly, because there is no live controversy between Plaintiffs and Allstate, Plaintiffs have failed to state a claim for which relief may be granted. Allstate's motion to dismiss is due to be granted on this claim.

FN10. In Bonner v. City of Prichard, Ala., 661 F.2d 1206, 1209
(11th Cir.1981) (en banc), the Eleventh Circuit adopted as binding precedent all decisions of the former Fifth Circuit issued prior to October 1, 1981.

Short v. Allstate Credit Bureau
370 F.Supp.2d 1173
May 23, 2005
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