2019 WL 1409697

United States District Court, W.D. Pennsylvania.
OZARK MOTOR LINES, INC., Plaintiff,
v.
Mark BOREN, Dev Transportation, LLC, and Gurmit Singh, Defendants.
Case No. 3:18-cv-241
|
Signed 03/28/2019
Attorneys and Law Firms
Michael J. Parrish, Jr., Toby D. McIlwain, Spence, Custer, Saylor, Wolfe & Rose, LLC, Johnstown, PA, for Plaintiff.
Jeffrey A. Ramaley, Zimmer Kunz, Pittsburgh, PA, for Defendants.
Mark Boren, Southside, AL, pro se.

MEMORANDUM OPINION
KIM R. GIBSON, UNITED STATES DISTRICT JUDGE

I. Introduction
*1 Pending before the Court is pro se Defendant Mark Boren’s Motion to Dismiss (ECF No. 11). This Motion has been fully briefed and is ripe for disposition. (See ECF Nos. 11, 17.)

For the reasons that follow, Mr. Boren’s Motion (ECF No. 11) is DENIED.

II. Jurisdiction
The Court has diversity jurisdiction over this case pursuant to 28 U.S.C. § 1332(a)(1) because Plaintiff Ozark Motor Lines, Inc. (“Ozark”) is a citizen of a different state than Defendants Mark Boren, Dev Transportation, LLC (“Dev Transportation”), and Gurmit Singh (collectively, “Defendants”) and the amount in controversy exceeds $75,000. (ECF No. 1 ¶¶ 1-7.)

III. Background1
Ozark filed its Complaint (ECF No. 1) against Defendants on November 29, 2018.

In the Complaint, Ozark alleges that Mr. Boren was employed by Ozark as a tractor-trailer driver. (Id. ¶¶ 2, 10.) On June 4, 2017, Mr. Boren was driving an Ozark tractor-trailer on Interstate 80 in Clearfield County, Pennsylvania. (Id. ¶¶ 10, 27.) Mr. Boren was traveling at a safe speed and was alert, attentive, and keeping proper lookout. (Id. ¶¶ 15-16.) A commercial vehicle owned by Dev Transportation and driven by Mr. Singh was traveling ahead of Mr. Boren. (Id. ¶ 11.) Mr. Boren was traveling at a safe distance behind the Dev Transportation vehicle. (Id. ¶ 16.)

Without warning, Mr. Singh lost control of the Dev Transportation vehicle, impacted the embankment in the median of Interstate 80, and jackknifed across both lanes of Interstate 80 westbound. (Id. ¶¶ 11, 16.) The Ozark tractor-trailer driven by Mr. Boren was forced off the road into the guardrail. (Id. ¶ 12.) The Ozark tractor-trailer bounced off the right shoulder of the guardrail and impacted the Dev Transportation vehicle, after which the Ozark tractor-trailer also jackknifed across both lanes of Interstate 80. (Id. ¶ 13.) Mr. Boren was injured in the accident and the Ozark tractor-trailer sustained major damages. (Id. ¶¶ 13-14.)

Following the accident, Ozark paid Mr. Boren $29,543.11 for medical expenses and $24,121.24 for temporary total disability benefits pursuant to the Tennessee Workers’ Compensation Act (the “Act”). (Id. ¶¶ 17-19.) Mr. Boren is also eligible to receive $36,269.55 in permanent partial disability benefits pursuant to the Act and future medical benefits related to his injuries. (Id. ¶¶ 17-18, 20.)

Ozark has been informed that Mr. Boren settled with Mr. Singh and Dev Transportation and received a net settlement in excess of the amounts paid or to be paid by Ozark to Mr. Boren. (Id. ¶ 22.) While Ozark received $32,198.61 from Mr. Singh and Dev Transportation supposedly in partial payment of the benefits paid on behalf of Ozark to Mr. Boren, Ozark has not settled with Mr. Singh and Dev Transportation and has not been reimbursed in full for the workers’ compensation benefits it has paid and will pay to Mr. Boren. (Id. ¶¶ 21-22.) Pursuant to the Act, Ozark asserts that it maintains a statutory workers’ compensation subrogation lien against Mr. Boren’s settlement. (Id. ¶¶ 22, 24.)

*2 Ozark brought one claim against Dev Transportation and Mr. Singh for negligence. Ozark also brought a claim for a workers’ compensation lien against Mr. Boren, Dev Transportation, and Mr. Singh. (Id. ¶ 39.)

On March 5, 2019, Mr. Boren filed a pro se Answer and Motion to Dismiss (ECF No. 11). Mr. Boren appears to argue for his dismissal as a defendant due to (1) failure to state a claim and (2) improper venue. In terms of dismissal for failure to state a claim, Mr. Boren argues that Ozark agreed to accept a $32,198.61 subrogation payment, which was paid to Ozark. (Id. ¶¶ 7, 12.) Moreover, according to Mr. Boren, he does not owe Ozark money for property damage because he did not cause the tractor-trailer accident. (Id. ¶¶ 9,11-12, 16.) Mr. Boren also argues that the Complaint should be dismissed for improper venue, as he is a resident of Alabama and the subrogation claim derived from a contract made in Tennessee. (Id. ¶¶ 14-15.) Alternatively, he requests that the case be transferred to the Northern District of Alabama. (Id. ¶¶ 13-14, 20.)

Ozark responded to the Motion on March 25, 2019. (ECF Nos. 16, 17.) Ozark asserts that venue is proper in the Western District of Pennsylvania because the event giving rise to the claims—namely, the tractor-trailer accident—occurred in Clearfield County, Pennsylvania. (ECF No. 17 at 3-4.) According to Ozark, the damages it suffered, including the costs for tractor-trailer repair, accident scene cleanup, and medical costs and disability benefits provided to Mr. Boren, all stem from this accident. (Id. at 4.) Ozark does not address Mr. Boren’s argument for transfer of venue.

Further, Ozark argues that it plausibly alleges that it paid Mr. Boren for medical expenses and disability benefits and that it has not been reimbursed for all of the money it paid. (Id. at 6.) Ozark therefore contends that it has a proper subrogation lien against Mr. Boren under the Act. (Id.)

IV. Discussion

A. Venue is Proper in the Western District of Pennsylvania.

1. Legal Standard
“When considering a motion to dismiss for improper venue, the court must generally accept as true the allegations in the pleadings and must view the facts in the light most favorable to the nonmoving party.” Sinclair Cattle Co. v. Ward, 80 F. Supp. 3d 553, 557–58 (M.D. Pa. 2015) (quoting Heft v. AAI Corp., 355 F. Supp. 2d 757, 762 (M.D. Pa. 2005) ); Connell v. CIMC Intermodal Equip., No. 1:16-CV-714, 2016 WL 7034407, at *2 (M.D. Pa. Dec. 2, 2016). “The party moving for dismissal or transfer based upon improper venue bears the burden of proof.” Rabner v. Titelman, No. 15-1313, 2016 WL 1613444, at *4 (W.D. Pa. Apr. 22, 2016) (citing Myers v. Am. Dental Ass’n, 695 F.2d 716, 724 (3d Cir. 1982); Cumberland Truck Equip. Co. v. Detroit Diesel Corp., 401 F. Supp. 2d 415, 418 (E.D. Pa. 2005) ); Wozniak v. Johnston, No. CIV.A. 09-238, 2009 WL 1307459, at *2 (W.D. Pa. May 8, 2009).

28 U.S.C. § 1391(b) sets out the requirements for proper venue. It provides:
A civil action may be brought in—
(1) a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located;
(2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated; or
*3 (3) if there is no district in which an action may otherwise be brought as provided in this section, any judicial district in which any defendant is subject to the court’s personal jurisdiction with respect to such action.
28 U.S.C. § 1391(b). “When venue is challenged, the court must determine whether the case falls within one of the three categories set out in § 1391(b).” Clark v. Branch Banking & Trust Co., CIVIL ACTION NO. 1:19-179, 2019 WL 1112235, at *1 (M.D. Pa. Mar. 11, 2019) (quoting Atl. Marine Constr. Co. v. U.S. Dist. Court for the W. Dist. of Tex., 571 U.S. 49, 56 (2013) ). “If it does, venue is proper; if it does not, venue is improper and the case must be dismissed or transferred under [28 U.S.C] § 1406(a).” Id. (alteration in original) (quoting Atl. Marine, 571 U.S. at 56).

In this case, it is clear that § 1391(b)(1) does not apply because Defendants are not residents of the same state. (ECF No. 1 ¶ 6.) Thus, the Court will focus on whether § 1392(b)(2) provides a basis for venue in this District.

“[I]n determining whether a substantial part of the events or omissions giving rise to a cause of action occurred in a specific jurisdiction” under § 1391(b)(2), “[t]he test … is not the defendant’s contacts with a particular district, but rather the location of those events or omissions giving rise to the claim.”2 Bockman v. First Am. Marketing Corp., 459 F. App’x 157, 161 (3d Cir. 2012) (internal quotation marks omitted) (quoting Cottman Transmission Sys., Inc. v. Martino, 36 F.3d 291, 294 (3d Cir. 1994) ). “[I]n assessing whether events or omissions giving rise to the claims are substantial, it is necessary to look at the nature of the dispute.” Prominent GmbH v. Prominent Sys., Inc., No. 2:16-CV-01609, 2017 WL 1316362, at *18 (W.D. Pa. Apr. 10, 2017) (quoting Cottman, 36 F.3d at 295); see Lorven Techs., Inc. v. Insight Techs., Inc., No. CV167397FLWDEA, 2017 WL 2670971, at *3 (D.N.J. June 21, 2017).

2. Analysis
Mr. Boren argues that venue is improper in this District because (1) he is a resident of Alabama and the other parties are residents of California and Tennessee and (2) “[t]his case is not a truck wreck case, but a subrogation case deriving from a contract based out of Tennessee which is where Ozark is based.” (ECF No. 11 ¶¶ 14-15, 18.)

Ozark counters that venue is proper here pursuant to § 1391(b)(2) because the underlying tractor-trailer accident occurred in this District. (ECF No. 17 at 4.)

The Court agrees that venue is appropriate in this District, albeit for a different reason than that suggested by Ozark. Generally, “venue must be established for each separate cause of action.” High River Ltd. P’ship v. Mylan Labs., Inc., 353 F. Supp. 2d 487, 493 (M.D. Pa. 2005). Thus, although the events underlying the negligence claim occurred in this District, that does not necessarily mean that venue is proper here for the subrogation claim.3

*4 However, the doctrine of pendent venue4 is an exception to this general rule. The pendent venue doctrine applies when multiple claims arise out of the same operative facts. Id.; McKinney v. Pinter, CIVIL ACTION No. 18-4185, 2019 WL 952247, at *4 (E.D. Pa. Feb. 26, 2019); Phila. Musical Soc., Local 77 v. Am. Fed’n of Musicians of U.S. and Can., 812 F. Supp. 509, 517 n.3 (E.D. Pa. 1992). If the doctrine applies, venue is appropriate in a district in which a substantial part of the events giving rise to one claim occurred even if venue over the pendent claim would not otherwise be proper. See High River, 353 F. Supp. 2d at 493. “[A] court examining whether to apply pendent venue should consider whether the claims derive from a common nucleus of operative fact and whether allowing for pendent venue would further the goals of judicial economy, convenience, and fairness to the litigants.” Id.

The Court finds pendent venue is appropriately applied in this case. Looking solely at the subrogation claim, the substantial events giving rise to this claim—the settlement with Dev Transportation and Mr. Singh and the receipt of workers’ compensation from Ozark—did not take place in Pennsylvania. However, the negligence claim and the subrogation claim clearly derive from a common nucleus of operative fact: the tractor-trailer accident and the injuries caused thereby. Moreover, allowing for pendent venue over the subrogation claim would promote judicial economy and convenience by permitting Ozark to litigate its related claims in one forum. Thus, the Court finds that venue is proper in the Western District of Pennsylvania.5

B. The Court Will Not Transfer this Case to Alabama.

1. Legal Standard
“In federal court, venue questions are governed either by 28 U.S.C. § 1404(a) or 28 U.S.C. § 1406.” Jumara v. State Farm Ins. Co., 55 F.3d 873, 878 (3d Cir. 1995). Section 1406 “applies where the original venue is improper and provides for either transfer or dismissal of the case.” Id. Section 1404(a) “provides for the transfer of a case where both the original and the requested venue are proper.” Id. Because venue in this District is proper, as explained supra, § 1404(a) applies to the present case.

Under § 1404(a), the Court may transfer a case in “the interest of justice … to any other district or division where it might have been brought or to any district or division to which all parties have consented.” 28 U.S.C. § 1404(a). When “ruling on a motion under § 1404(a), the court is free to consider ‘all relevant factors,’ and the Third Circuit directs district courts to a list of certain private and public interest factors.”6 Lannett Co. v. Asherman, No. CIV.A. 13-2006, 2014 WL 716699, at *6 (E.D. Pa. Feb. 24, 2014) (quoting Jumara, 55 F.3d at 879). “Unless the balance of convenience of the parties is strongly in favor of defendant, the plaintiff’s choice of forum should prevail.” Molchen v. Ford Motor Co., No. 02:08cv0954, 2008 WL 4981596, at *4 (W.D. Pa. Nov. 20, 2008) (quoting Shutte v. Armco Steel Corp., 431 F.3d 22, 25 (3d Cir. 1970) ).

*5 “The private factors include (1) the plaintiff’s forum preference; (2) the defendant’s preference; (3) whether the claim arose elsewhere; (4) the convenience as indicated by their relative physical and financial condition; (5) the convenience of the witnesses; and (6) the location of the books and records.” Crayola, LLC v. Buckley, 179 F. Supp. 3d 473, 480 (E.D. Pa. 2016) (citing Jumara, 55 F.3d at 879).

“The public factors include (1) the enforceability of the judgment; (2) practical considerations that could make trial easy, expeditious, or inexpensive; (3) the relative administrative difficulty in the two fora resulting from court congestion; (4) the local interest in deciding local controversies at home; (5) the public policies of the fora; and (6) the familiarity of the trial judge with the applicable state law in diversity cases.” Id. (citing Jumara, 55 F.3d at 879-90).

2. Analysis
Mr. Boren argues for the transfer of this case to Alabama. However, only Mr. Boren’s residency in Alabama appears to connect the present case with that state. Without more evidence regarding the locations of other events and omissions related to this case, such as where Mr. Boren was treated for his injuries, where he applied for and received workers’ compensation, and where he negotiated the settlement with Dev Transportation and Mr. Singh, the Court cannot determine whether the subrogation claim against Mr. Boren might have been brought in Alabama under 28 U.S.C. § 1391(b). See Shutte, 431 F.3d at 24 (“[A] transfer is authorized by the statute only if the plaintiff had an ‘unqualified right’ to bring the action in the transferee forum at the time of the commencement of the action; i.e., venue must have been proper in the transferee district and the transferee court must have had power to command jurisdiction over all of the defendants.”). Thus, the Court need not consider the public and private factors, as Mr. Boren has not sustained his burden of showing that Alabama would be an appropriate venue for the claim against him. See Vangura Kitchen Tops, Inc. v. C & C N. Am., Inc., No. 08cvl011, 2008 WL 4540186, at *4 (W.D. Pa. Oct. 7, 2008) (“The moving party bears the burden of proving that venue is proper in the transferee district….”).

C. Ozark Has Stated a Claim for a Subrogation Lien and Credit.

1. Legal Standard
A complaint may be dismissed under Federal Rule of Civil Rule 12(b)(6) for “failure to state a claim upon which relief can be granted.” Connelly v. Lane Constr. Corp., 809 F.3d 780, 786 (3d Cir. 2016). But, detailed pleading is not generally required. Id. The Rules demand only “a short and plain statement of the claim showing that the pleader is entitled to relief” to give the defendant fair notice of what the claim is and the grounds upon which it rests. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Fed. R. Civ. P. 8(a)(2) ).

Under the pleading regime established by the Supreme Court, a court reviewing the sufficiency of a complaint must take three steps.7 First, the court must “tak[e] note of the elements [the] plaintiff must plead to state a claim.” Ashcroft v. Iqbal, 556 U.S. 662, 675 (2009). Second, the court should identify allegations that, “because they are no more than conclusions, are not entitled to the assumption of truth.” Id. at 679; see also Burtch v. Milberg Factors, Inc., 662 F.3d 212, 224 (3d Cir. 2011) (“Mere restatements of the elements of a claim are not entitled to the assumption of truth.” (citation omitted) ). Finally, “[w]hen there are well-pleaded factual allegations, [the] court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Iqbal, 556 U.S. at 679. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.; see also Connelly, 809 F.3d at 786. Ultimately, the plausibility determination is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679.

2. Analysis
*6 Tennessee workers’ compensation law provides that an injured employee who received workers’ compensation benefits may pursue an action against the third-party tortfeasor that caused his injuries. Graves v. Cocke Cty., 24 S.W.3d 285, 286 (Tenn. 2000) (citing Tenn. Code Arm. § 50-6-112(a) ); Summers v. Command Sys., Inc., 867 S.W.2d 312, 313 (Tenn. 1993). However, in order to prevent the employee from receiving a recovery from both his employer and the third-party tortfeasor for the same injuries, Tennessee law allows the employer to enforce a subrogation lien against the employee’s third-party recovery.8 Graves, 24 S.W.3d at 287; Summers, 867 S.W.2d at 313-14; Hubble v. Dyer Nursing Home, 188 S.W.3d 525, 536-37 (Tenn. 2006); Hickman v. Cont’l Baking Co., 143 S.W.3d 72, 76 (Tenn. 2004); Memphis light Gas & Water Div. v. Watson, No. W2018-00218-COA-R3-CV, 2019 WL 589838, at *1 (Tenn. Ct. App. Feb. 13, 2019).

Ozark claims entitlement to a subrogation lien pursuant to Section 50-6-112(c)(1) of the Tennessee Code and to a credit on its future liability under Section 50-6-112(c)(2)-(3). (See ECF No. ¶¶ 39-40.)

Under Section 50-6-112(c)(1), for an employer to be entitled to a subrogation lien, (1) the employee must have recovered against a third party by judgment, settlement, or otherwise; and (2) the employer’s maximum liability for workers’ compensation must have been fully or partially paid and discharged. Tenn. Code Ann. § 50-6-112(c)(1); see Hickman, 143 S.W.3d at 77 (“[T]he employer is entitled to a subrogation lien against the employee’s third-party recovery if the employer has fully or partially paid and discharged its maximum workers’ compensation liability.”).

Here, Ozark alleges that Mr. Boren received a settlement from Mr. Singh and Dev Transportation related to the underlying tractor-trailer accident. (ECF No. 1 ¶ 22.) Furthermore, Ozark alleges that it paid Mr. Boren for his medical expenses and for temporary total disability pursuant to the Act—thus partially paying its workers’ compensation liability —and that it has not been reimbursed for those payments. (Id. ¶¶ 17-19, 21.) Ozark has thus stated a claim for a subrogation lien against Mr. Boren’s settlement.

Under Section 50-6-112(c)(2), “an employer is entitled to a credit against future liability to the extent the employee’s net recovery exceeds the amount that the employer has previously paid in workers’ compensation benefits.” Hickman, 1143 S.W.3d at 77-78. Ozark alleges that Mr. Boren received more from his settlement with Mr. Singh and Dev Transportation than Ozark paid Mr. Boren. (ECF No. 1 ¶ 22.) Moreover, Ozark alleges that it will pay Mr. Boren for permanent partial disability benefits in the future, establishing that Ozark has not paid its full maximum liability for workers’ compensation. See Tenn. Code Ann. § 50-6-112(c)(2). Thus, Ozark has sufficiently alleged entitlement to a credit against its future liability for workers’ compensation in the amount of Mr. Boren’s net recovery.

*7 Mr. Boren argues that “Ozark is not due property damages from my workers’ compensation or from my pain & suffering claim against the third-party (Dev Transportation).” (ECF No. 11 ¶¶ 9, 11.) However, Ozark is not suing Mr. Boren for property damage—the negligence claim, which seeks damages to compensate Ozark for property damage caused by the tractor-trailer accident, is only brought against Dev Transportation and Mr. Singh, not against Mr. Boren.

Mr. Boren also argues that Ozark agreed to accept a $32,198.61 subrogation settlement, which was paid to Ozark. (Id. 11 7, 12.) However, at the motion-to-dismiss stage, the Court assumes that the plaintiff’s factual allegations are true. Here, Ozark alleges that it has not settled with Mr. Singh and Dev Transportation, that it has not released its subrogation lien, and that it has not been reimbursed in full for the workers’ compensation benefits it paid and will pay to Mr. Boren as a result of the tractor-trailer accident. (ECF No. 1 ¶¶ 21, 23.) Assuming these facts to be true, the Court finds that Ozark has stated a claim for a subrogation lien and credit under the Act.

V. Conclusion
For the reasons stated above, the Court DENIES Mark Boren’s Motion to Dismiss. A corresponding order follows.

ORDER
NOW, this 28th day of March, 2019, upon consideration of Defendant Mark Boren’s Motion to Dismiss (ECF No. 11) and Plaintiff Ozark Motor Lines, Inc.’s response thereto (ECF Nos. 16, 17), and for the reasons set forth in the Memorandum Opinion accompanying this Order, it is HEREBY ORDERED that Mr. Boren’s Motion to Dismiss is DENIED.

All Citations
Slip Copy, 2019 WL 1409697

Footnotes

1
The factual allegations in this Background are taken from Ozark’s Complaint and are assumed to be true for purposes of deciding the present Motion. In this section, the Court has included only the facts and procedural history that are relevant to the pending Motion.

2
The Third Circuit has explained that “the venue provision ‘favors the defendant … by requiring that the events or omissions supporting a claim be substantial’ ” because “[s]ubstantiality is intended to preserve the element of fairness so that a defendant is not haled into a remote district having no real relationship to the dispute.’ ” Bockman v. First Am. Marketing Corp., 459 F. App’x 157, 161 (3d Cir. 2012) (quoting Cottman Transmission Sys., Inc. v. Martino, 36 F.3d 291, 295 (3d Cir. 1994) ).

3
Mr. Boren characterizes Ozark’s claim against him as a subrogation claim deriving from a contract entered into in Tennessee, as opposed to a tractor-trailer accident claim. (ECF No. 11 ¶ 14.) Construing this argument liberally, the Court understands Mr. Boren as raising the issue of different claims necessitating different venue analyses.

4
The doctrine of pendent venue is derived from the concept of pendent jurisdiction. See Hsin Ten Enter. USA, Inc. v. Clark Enters., 138 F. Supp. 2d 449, 462 (S.D.N.Y. 2000) (citing Beattie v. United States, 756 F.2d 91, 101 (D.C. Cir. 1984), overruled on other grounds by Smith v. United States, 507 U.S. 197 (1993) ). While the doctrine of pendent jurisdiction is now codified and referred to as supplemental jurisdiction, the doctrine of pendent venue has not been similarly codified or renamed.

5
While Mr. Boren argues that his residency and lack of contacts with Pennsylvania necessitate a finding of improper venue, “[t]he test for determining venue [under § 1391(b)(2) ] is not the defendant’s ‘contacts’ with a particular district, but rather the location of those ‘events or omissions giving rise to the claim’ ….” Cottman, 36 F.3d at 294; McKinney, 2019 WL 952247, at *3 (“Venue is determined by the location of events, omissions, or property rather than the defendant’s contacts with a particular district.” (citing Cottman, 36 F.3d at 294) ).

6
“The above list of factors is merely a guide, and not all the factors may be relevant or determinative in each case.” Carnegie Mellon Univ. v. Marvell Tech. Grp., Ltd., No. CIV. A. 09-290, 2009 WL 3055300, at *2 (W.D. Pa. Sept. 21, 2009) (quoting LG Elec., Inc. v. First Int’l Computer, Inc., 138 F. Supp. 2d 574, 587 (D.N.J. 2001) ).

7
Although the Supreme Court described the process as a “two-pronged approach,” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009), the Court noted the elements of the pertinent claim before proceeding with that approach, id. at 675–79. Thus, the Third Circuit has described the process as a three-step approach. See Connelly, 809 F.3d at 787; Burtch v. Milberg Factors, Inc., 662 F.3d 212, 221 n.4 (3d Cir. 2011) (citing Santiago v. Warminster Twp., 629 F.3d 121, 130 (3d Cir. 2010) ).

8
Specifically, Section 50-6-112 of the Tennessee Code provides, in relevant part:
(c)(1) In the event of a recovery against the third person by the worker … by judgment, settlement or otherwise, and the employer’s maximum liability for workers’ compensation under this chapter has been fully or partially paid and discharged, the employer shall have a subrogation lien against the recovery, and the employer may intervene in any action to protect and enforce the lien.
(2) In the event the net recovery by the worker … exceeds the amount paid by the employer, and the employer has not, at the time, paid and discharged the employer’s full maximum liability for workers’ compensation under this chapter, the employer shall be entitled to a credit on the employer’s future liability, as it accrues, to the extent the net recovery collected exceeds the amount paid by the employer.
(3) In the event the worker … effects a recovery, and collection of that recovery, from the other person, by judgment, settlement or otherwise, without intervention by the employer, the employer shall nevertheless be entitled to a credit on the employer’s future liability for workers’ compensation, as it accrues under this chapter, to the extent of the net recovery.
Tenn. Code Ann. § 50-6-112(c).

2019 WL 1379884

NOT FOR PUBLICATION
United States District Court, D. New Jersey.
CONTINENTAL INDEMNITY COMPANY, Plaintiff,
v.
H&M INTERNATIONAL TRANSPORTATION, INC., Defendant.
Civ. No. 18-14701-WHW-CLW
|
Signed 03/26/2019
Attorneys and Law Firms
Steven Michael Rosato, DLA Piper LLP, New York, NY, for Plaintiff.
Kenneth J. Cesta, Hoagland Moran Dunst & Doukas LLP, New Brunswick, NJ, for Defendant.

OPINION
William H. Walls, Senior United States District Court Judge
*1 In this declaratory judgment action, Defendant H&M International Transportation, Inc. (“H&M”) moves to dismiss the Complaint without prejudice under the Brillhart abstention doctrine, or in the alternative for a stay of this action. ECF No. 8. Plaintiff Continental Indemnity Company (“Continental”) opposes. ECF No. 20. Decided without oral argument under Federal Rule of Civil Procedure 78, the motion to dismiss is denied, and the motion to stay is granted.

FACTUAL BACKGROUND1
H&M is a New Jersey-based trucking company whose services include rail terminal operations, warehousing and distribution, container freight stations, and customs examination sites. Compl. ¶¶ 7-9. Continental insured H&M from May 15, 2014 through May 15, 2015 under Workers’ Compensation & Employer’s Liability Insurance Policy No. 73-889895-01-01 (the “Policy”). Id. ¶ 19; see also ECF No. 8-2 Ex. 1 (Policy). The Policy contains several exclusions, including for claims relating to “[b]odily injury to any person in work subject to the Federal Employers’ Liability Act (45 USC Sections 51-60), any other federal laws obligating an employer to pay damages to an employee due to bodily injury arising out of or in the course of employment, or any amendments to those laws[.]” Compl. ¶ 20 (quoting Policy Part II.C.9.).

During the term of the Policy, Barry Hoots was injured in the course and scope of his employment with H&M. Compl. ¶ 21. Hoots, who was injured in Arkansas, sued H&M under the Federal Employers’ Liability Act (“FELA”) in the Circuit Court of Crittenden County, Arkansas, Case No. 18CV-2016-499 (the “Arkansas Action”). Id. ¶ 22. H&M denied any FELA liability to Hoots because it “is not a common carrier or railroad” and Hoots “was not engaging in work that was in the furtherance of interstate commerce at the time of the incident at issue.” ECF No. 8-2 Ex. 3 (H&M Answer in Arkansas Action) ¶¶ 22, 23.

Continental disclaimed any responsibility to defend or indemnify H&M for the Arkansas Action on the grounds that the Policy excludes FELA claims, including Hoots’s. Id. ¶ 24. Continental is, however, defending H&M in the Arkansas Action under a reservation of rights. Id.

Continental sued H&M in this Court for a declaratory judgment that (1) the Policy is enforceable, and (2) the Arkansas Action “is a FELA claim and [Continental] has no duty to indemnify or defend H&M[.]” Compl. at 7. H&M moves to dismiss the Complaint under the Brillhart abstention doctrine, or in the alternative to stay this case pending the outcome of the Arkansas Action. ECF No. 8-1.

*2 While H&M’s motion was sub judice, the judge in the Arkansas Action ruled that H&M “is a common carrier by railroad and is subject to [FELA].” ECF No. 23-1 (Jan. 29, 2019 Order in Arkansas Action). Continental argues that this ruling moots H&M’s motion, which contended that the question of whether H&M is subject to FELA should be decided in the Arkansas Action. ECF No. 23. H&M disagrees, countering that H&M intends to appeal the Arkansas court’s order. ECF No. 24 at 1. H&M also informed the Court for the first time of a separate action—pre-dating the Arkansas Action—by Hoots against H&M and Continental, before the Arkansas Workers’ Compensation Commission. Id. at 2 (citing Arkansas W.C.C. File No. G408197 (the “Workers’ Compensation Claim”) ). According to H&M, whether Hoots states a FELA claim is also at issue in the Workers’ Compensation Claim. Id.

STANDARD OF REVIEW
Federal courts generally have a “virtually unflagging obligation … to exercise the jurisdiction given them.” Colo. River Water Conservation Dist. v. United States, 424 U.S. 800, 817 (1976). It is, however, well settled that a district court’s discretion to defer to a state court is significantly broader when the federal action is one for declaratory judgment. See e.g., Brillhart v. Excess Ins. Co., 316 U.S. 491, 495 (1942); Wilton v. Seven Falls Co., 515 U.S. 277, 286 (1995) (“Distinct features of the Declaratory Judgment Act, we believe, justify a standard vesting district courts with greater discretion in declaratory judgment actions than that permitted” in other contexts.). According to the Supreme Court, the Declaratory Judgment Act confers “discretionary, rather than compulsory, jurisdiction upon federal courts.” Reifer v. Westport Ins. Corp., 751 F.3d 129, 134 (3d Cir. 2014) (citing Brillhart, 316 U.S. at 494). H&M urges this Court to exercise this discretion and either (1) abstain from deciding Continental’s declaratory judgment claim, ECF No. 8-1 at 8-14, or (2) stay this case pending resolution of the Arkansas Action, id. at 14-15.

In deciding whether to abstain from or stay an action under Brillhart, “[c]ourts should first determine whether there is a ‘parallel state proceeding.’ ” Kelly v. Maxum Specialty Ins. Grp., 868 F.3d 274, 282 (3d Cir. 2017) (quoting Reifer, 751 F.3d at 143, 146). The existence of a parallel state proceeding is “but one factor for courts to consider”—but it is “a significant factor that is treated with ‘increased emphasis.’ ” Id. (quoting Reifer, 751 F.3d at 144); see also Colony Ins. Co. v. Troensa Constr., Inc., No. CV1703577RBKKMW, 2018 WL 4676038, at *8 (D.N.J. Sept. 28, 2018) (court “presumed it had jurisdiction” after finding no parallel proceeding). Put another way, “the existence of a parallel state proceeding ‘militates significantly in favor of declining jurisdiction.’ ” Kelly, 868 F.3d at 282 (quoting Reifer, 751 F.3d at 144-45).

In the Third Circuit, cases are parallel only when there is “a substantial similarity in issues and parties[.]” Kelly, 868 F.3d at 284. “[T]he mere potential or possibility that two proceedings will resolve related claims between the same parties” is not enough. Id. at 283-84.

DISCUSSION
*3 H&M effectively concedes that the Arkansas Action is not parallel to this case. See ECF No. 8-1 at 9 (“The fact that Continental is not a named party in the Arkansas Action does not preclude application of Brillhart.” (emphasis in original) ). And it is right to do so: “[Kelly] creates a per se presumption that an insurer’s declaratory judgment action is distinct from underlying tort actions in state court where the insurer is a non-party.” Colony Ins. Co., 2018 WL 4676038, at *7 (citing Kelly, 868 F.3d at 287). Continental is not a party in the Arkansas Action, see ECF No. 8-2 Ex. 3 (Complaint in Arkansas Action), and H&M has done nothing to overcome Kelly’s presumption. This case and the Arkansas Action are not parallel.

This does not end the analysis, though. The Third Circuit instructs courts to also give “meaningful consideration” to these factors (and others, as appropriate) before abstaining from or staying a case:
(1) the likelihood that a federal court declaration will resolve the uncertainty of obligation which gave rise to the controversy;
(2) the convenience of the parties;
(3) the public interest in settlement of the uncertainty of obligation;
(4) the availability and relative convenience of other remedies;
(5) a general policy of restraint when the same issues are pending in a state court;
(6) avoidance of duplicative litigation;
(7) prevention of the use of the declaratory action as a method of procedural fencing or as a means to provide another forum in a race for res judicata; and
(8) (in the insurance context), an inherent conflict of interest between an insurer’s duty to defend in a state court and its attempt to characterize that suit in federal court as falling within the scope of a policy exclusion.
Kelly, 868 F.3d at 282-83 (quoting Reifer, 751 F.3d at 146). The Court takes these factors in turn.

First, the requested declaration would resolve the question of H&M’s liability by determining whether Hoots’s injury is subject to FELA. See Compl. at 7 (Prayer for Relief 2). H&M does not disagree. See ECF No. 8-1 at 11-12. This factor weighs against abstention. Second, neither New Jersey nor Arkansas is a more convenient forum for the parties. H&M is headquartered in New Jersey, see Policy at 1, and New Jersey law may apply to this dispute.2 On the other hand, Hoots was injured while employed by H&M in Arkansas, so witnesses—will likely be in Arkansas too. See Watts v. H & M Int’l Transp., Inc., No. CIV.A. 12-6703 CCC, 2014 WL 2854772, at *3 (D.N.J. June 20, 2014) (“Although the question of whether FELA applies to H & M is a question of law, it can only be determined by examining the facts surrounding Defendant’s business activities.”) (citation omitted). These considerations balance out, making this second factor neutral. Third, as in Kelly, “the parties do not aver that any public interest is at stake other than the usual interest in the fair adjudication of legal disputes, an interest which the District Court is well-equipped to address.” 868 F.3d at 288. see also IDT Corp. v. Krill, No. CIV.A. 13-1540 SDW, 2013 WL 5937421, at *5 (D.N.J. Nov. 4, 2013) (finding public interest not implicated where no public policy concerns at issue and no “novel or complex issues of state law necessitation state court adjudication”). This factor militates against abstention.

Fourth, there is no more convenient remedy available. This Court and Arkansas state tribunals are equally capable of declaring the validity of the Policy and whether FELA applies to the Arkansas Action. Fifth, the main substantive issue in this case—whether Hoots’s underlying suit is subject to FELA—is also pending in the Arkansas action. Continental admitted as much when it submitted the Arkansas court’s January 29, 2019 order—finding that H&M “is a common carrier by railroad and is subject to [FELA]”—to this Court. See ECF No. 23-1. This factor favors abstention. Sixth, there is some risk of duplicative litigation. On the one hand, the issue of whether Hoots’s injury is covered by FELA is central to this case and to the Arkansas Action, making some duplication inevitable. On the other hand, this court is not bound by the Arkansas court’s interpretation of FELA. See United States v. Bedford, 519 F.2d 650, 653 n.3 (3d Cir. 1975) (“It is a recognized principle that a federal court is not bound by a state court’s interpretation of federal laws[.]”).3 Because the Arkansas court has already issued a ruling on whether FELA applies and because that decision will likely be appealed, ECF Nos. 23, 24, this factor favors abstention.

*4 Seventh, it is unclear whether there has been procedural fencing here. H&M argues that Continental “should have pursued its coverage claims in an appropriate forum in Arkansas if it truly believed the claims had merit, rather than bring them in a forum with no real connection to the incident.” ECF No. 8-1 at 14. But Continental hardly sued in an illogical forum, bringing this action in New Jersey, where H&M is headquartered. See Westfield Ins. Co. v. Icon Legacy Custom Modular Homes & Icon Legacy, No. 4:15-CV-00539, 2015 WL 4602262, at *5 (M.D. Pa. July 30, 2015) (no procedural fencing when plaintiff-insurer sued in defendant-insured’s home district for declaration that underlying suits in New York and Massachusetts state court against defendant-insured were not covered by indemnification policy). Indeed, one court in this District has stated that where the declaratory judgment plaintiff “is not a party in the state proceeding, this concern [about procedural fencing] does not apply.” Colony Ins. Co., 2018 WL 4676038, at *9. That Continental could have sued (or intervened) in Arkansas does not mean it was required to do so. This Court disagrees with that blanket statement, though—particularly where, as here, the declaratory judgment plaintiff (Continental) could have moved to intervene in the state court action. Cf. Associated Indus. Ins. Co. v. Four Four, LLC, No. 2:17-CV-103-WKW, 2018 WL 2946397, at *6 (M.D. Ala. June 12, 2018) (no “procedural fencing” because insurer “unsuccessfully sought to intervene in the state-court litigation”). This factor is neutral.

Eighth and finally, there is no conflict between Continental’s ongoing defense (subject to a reservation of rights) of H&M in the Arkansas Action and its characterization of the Arkansas Action here. Continental is positioned to make the same argument in both cases: that Hoots’s suit does not fall under FELA. Cf. Nationwide Prop. & Cas. Ins. Co. v. Zatyko, No. CV 16-1010, 2016 WL 6804436, at *4 (E.D. Pa. Nov. 16, 2016) (no conflict because plaintiff-insurer’s argument in federal declaratory judgment action does not depend on any legal arguments made by defendant-insured in state court action). This final factor is neutral.

As discussed, there is no parallel state court action here, which militates strongly in favor of exercising jurisdiction. See Kelly, 868 F.3d at 282; Reifer, 751 F.3d at 144-45. And the Kelly factors are a wash: factors one and three support this Court exercising jurisdiction; factors two, four, seven, and eight are neutral; and factors five and six favor abstention.

A footnote in Kelly, however, counsels against this Court wading into this dispute at this time. As quoted by H&M: “It is possible that, in certain circumstances, determining the issue of coverage will rely on questions central to the underlying liability proceeding. [ ] Even if the proceedings are not parallel as we have defined it, such may be the type of situation which nevertheless warrants a court’s abstention.” Kelly, 868 F.3d at 287 n.12 (emphasis added) (citing Nationwide Mut. Ins. Co. v. Lowe, 95 F.Supp.2d 274, 276-77 (E.D. Pa. 2000) ) (quoted in ECF No. 8-1 at 10). Though this statement is dicta, its logic is persuasive: when the same central issue is being litigated in an underlying personal injury action and a federal declaratory judgment action, a federal court has grounds to abstain. This is even true where, as here, the state and federal proceedings are not parallel. Indeed, the court in Nationwide, relied on by Kelly, abstained in a similar situation where both state and federal tribunals were being called on to decide whether the personal injury plaintiffs were employees or independent contractors of the insured. 95 F.Supp.2d at 276. Because “[i]nconsistent determinations … may result,” the court abstained. Id.

This Court will not abstain, but will instead stay this matter. The Arkansas Action court has already held that H&M “is subject to [FELA],” ECF No. 23-1, and an appeal is forthcoming, ECF Nos. 24, 25. To avoid the possibility of inconsistent determinations in New Jersey and Arkansas—which, as stated, has a substantial nexus to the underlying dispute and to the factual questions that would inform a FELA decision—this Court will stay this case pending final resolution of the Arkansas Action. See Brillhart, 316 U.S. at 495 (explaining that district court should refrain where “questions in controversy … can better be settled in the proceeding pending in the state court”).

CONCLUSION
*5 H&M’s motion to dismiss this action pursuant to Brillhart abstention (ECF No. 8) is denied. H&M’s motion to stay this case pending final resolution of the Arkansas Action (ECF No. 8) is granted. An appropriate order follows.

All Citations
Slip Copy, 2019 WL 1379884

Footnotes

1
Unless stated otherwise, all facts are drawn from Continental’s Complaint (“Compl.”), ECF No. 1. These facts are taken as true for the purpose of the H&M’s motion. See Cuevas v. Wells Fargo Bank, N.A., 643 F. App’x 124, 125-26 (3d Cir. 2016) (quoting McTernan v. City of York, 577 F.3d 521, 526 (3d Cir. 2009) ) (“[I]n deciding a motion to dismiss, all well-pleaded allegations … must be taken as true and interpreted in the light most favorable to the plaintiffs, and all inferences must be drawn in favor of them.”).

2
The parties have not briefed the choice of law issues in this action, and the Court will not decide it here. But, as Continental points out, ECF No. 20 at 12-13, New Jersey law may ultimately govern this dispute because H&M is headquartered in New Jersey and performed its contractual obligations there.

3
Continental also dismisses any risk of duplicative litigation because, as a non-party to the Arkansas Action, it is not bound by the Arkansas court’s FELA determination. ECF No. 20 at 14. True enough. But that is due to Continental’s own choice to sue in this forum rather than to intervene in the Arkansas Action. See Ark. R. Civ. P. 24 (Intervention).