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United States District Court for Maryland Dismisses Declaratory Judgment Action where Moving Party Failed to Make Compulsory Counterclaim in Related Action

Alban Waste, LLC v. CSX Transp., Inc.
__F. Supp.2d _, No. 13-3192 (D. Md. April 1, 2014)

by Wayne C. Heavener, Associate
Semmes, Bowen & Semmes (

In Alban Waste, LLC v. CSX Transportation, Inc., the United States District Court for the District of Maryland dismissed a party’s declaratory judgment action where that party was already a named defendant in a related negligence action pending before the Court. Writing for the Court, Judge James K. Bredar held that the party could not circumvent its failure to file a timely compulsory counterclaim by moving for declaratory judgment under the pretense of adjudicating a related interpleader action. The Court, therefore, dismissed the party’s action, noting that the party should have filed a counterclaim instead of resorting to a declaratory judgment action.

On May 28, 2013, a collision occurred between a truck owned by Alban Waste, LLC, and a train owned by CSX Transportation, Inc. (“CSX”), resulting in an explosion that caused various personal injuries to many people. CSX filed suit against Alban Waste, LLC and the operator of the truck, John Jacob Alban, Jr. (collectively, the “Albans”), alleging negligence. Thereafter, Harford Mutual Insurance Company, which issued a commercial automobile policy to the Albans, filed an interpleader action naming 42 interested parties, including CSX, the Albans, and prospective personal injury claimants, so as to have the interested parties litigate among themselves their respective claims to the policy’s proceeds. Later, on January 13, 2014, the Albans filed an action in Maryland state court for declaratory relief against CSX and other interested parties to the interpleader action. CSX removed the Albans’ state court action to federal court, and filed a motion to dismiss for failure to state a claim.

The Court granted CSX’s Motion to Dismiss. The Court found that the Albans failed to allege any facts sufficient under Ashcroft v. Iqbal, 556 U.S. 662 (2009) or Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) to demonstrate that CSX committed any tortious or wrongful act. Furthermore, the Court found that the Albans’ declaratory judgment action was an inappropriate vehicle for resolving the matters currently pending between the litigants. The Court observed that the Declaratory Judgment Act conferred upon the Court broad discretion in permitting a party to proceed in a declaratory judgment action. In this case, the circumstances militated against permitting a declaratory judgment action to proceed. Quoting precedent, the Court noted that the Court’s discretionary jurisdiction over the declaratory judgment action “should not be exercised for the purpose of trying issues involved in cases already pending.” Aetna Cas. & Sur. Co. v. Quarles, 92 F.2d 321, 324 (4th Cir. 1937). The Court found that a declaratory judgment was not needed against CSX because CSX’s federal action naming the Albans as defendants was still pending. The Court observed that the Albans seemingly waived their ability to counterclaim against CSX in that action, because such a claim was compulsory under FED. R. CIV. P. 13(a)(1)(A), and the time limit for filing such a counterclaim had expired. The Court held that it would not allow the Albans to now assert such a claim under the guise of a declaratory judgment.