Starr Indemnity and Liability Insurance Company v. Camenzind Dredging, Inc.
5:19-cv-00694
N.D. Cal.Oct 11, 2019Background:
- Paul Williams sued Camenzind and MB Marine in California state court for a knee injury allegedly suffered aboard the vessel Surveyor.
- Camenzind tendered the defense to its insurer, Starr, which insured Camenzind under P&I, Commercial Marine Liability, and excess (Bumbershoot) policies.
- Starr denied coverage (no duty to defend or indemnify), concluding the policies did not cover Williams’s claim or MB Marine’s cross-complaint.
- Starr filed a federal declaratory judgment action seeking a declaration of no duty to defend/indemnify (Feb. 7, 2019); Camenzind moved to dismiss or stay under Brillhart abstention principles.
- The district court took judicial notice of state-court filings and analyzed whether the Brillhart factors and related Dizol considerations warranted abstention.
- The court denied Camenzind’s motion, concluding the Brillhart factors weighed against abstention and the federal court should exercise jurisdiction.
Issues:
| Issue | Plaintiff's Argument (Starr) | Defendant's Argument (Camenzind) | Held |
|---|---|---|---|
| Whether federal court should abstain because resolution would involve needless state-law issues | Federal admiralty law likely governs (P&I interpretation), so federal court need not avoid deciding the dispute | Case concerns only California insurance law and state issues, so federal court should abstain | Court: Federal admiralty rule likely applies; factor weighs against abstention |
| Whether Starr engaged in forum shopping by filing federal declaratory action | Starr was not a party in the state action and properly invoked federal diversity and admiralty jurisdiction | Filing in federal court is forum shopping; Starr could have litigated in state court | Court: No evidence of forum shopping; factor weighs against abstention |
| Whether declaratory action would duplicate ongoing state litigation | Starr’s coverage suit clarifies insurer–insured relations and does not mirror the state tort action (different parties/issues) | Underlying state case is parallel and could lead to duplicative litigation | Court: Little meaningful overlap; avoidance-of-duplication factor weighs against abstention |
| Whether additional Dizol factors (entanglement, utility, convenience) counsel abstention | Declaratory action will clarify relations and avoid federal–state entanglement | Not explicitly developed in briefing | Court: No compelling Dizol concerns; Brillhart factors dispositive against abstention |
Key Cases Cited
- Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491 (establishes framework for federal abstention in declaratory judgment suits)
- Wilton v. Seven Falls Co., 515 U.S. 277 (confirms district courts' broad discretion to hear or dismiss declaratory actions)
- Gov’t Emps. Ins. Co. v. Dizol, 133 F.3d 1220 (9th Cir.) (en banc) (clarifies Brillhart factors and additional considerations in insurance coverage cases)
- R.R. St. & Co. Inc. v. Transp. Ins. Co., 656 F.3d 966 (9th Cir.) (applies Brillhart factors in declaratory judgment context)
- City & County of San Francisco v. Underwriters at Lloyds, London, 141 F.3d 1371 (9th Cir.) (recognizes federal maritime rules governing P&I coverage issues)
- Golden Eagle Ins. Co. v. Travelers Companies, 103 F.3d 750 (9th Cir.) (discusses weight of parallel state proceedings in abstention analysis)
- Am. Cas. Co. of Reading, Penn. v. Krieger, 181 F.3d 1113 (9th Cir.) (forum-shopping concern under Brillhart)
- Bohemia, Inc. v. Home Ins. Co., 725 F.2d 506 (9th Cir.) (noting difficulties in deciding whether federal or state law governs maritime insurance contracts)