Homestead Insurance v. Casden Co.
Opinion
Lead Opinion
MEMORANDUM *
The district court improperly abstained from exercising jurisdiction over Casden’s damages action against Homestead and Homestead’s declaratory judgment action against Casden. We decline to reach the merits of Homestead’s constitutional claims because there are factual questions that remain unresolved. Accordingly, we REVERSE the district court’s orders of abstention in these actions and REMAND for further proceedings.
A federal court may not dismiss a damages action or remand it to state court based on abstention. Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 711 , 116 S.Ct. 1712 , 135 L.Ed.2d 1 (1996). The district court therefore had no discretion to remand Casden’s damages action on abstention grounds.
We do not reach the question whether the district court’s remand to state court was proper on the alternative ground that the court lacked subject matter jurisdiction due to the presence of non-diverse parties. More specifically, we leave it to the district court to decide in the first instance whether the non-diverse defendants, Associated International Insurance Co. and Western Reinsurance Brokers, were fraudulently joined.