Hecla Mining: Not Applicable in Federal Court
| Publication year | 1994 |
| Pages | 1323 |
1994, June, Pg. 1323. Hecla Mining: Not Applicable In Federal Court
In May 1991, the Colorado Supreme Court announced its decision in Hecla Mining Co. v. New Hampshire Insurance Co.,(fn1) which considered insurers' duty to defend their insureds and the timing of declaratory judgment actions. The decision quickly became the subject of two articles published in The Colorado Lawyer.(fn2) The Hecla Mining case contains language which seems to indicate that an insurance company may not bring a declaratory judgment action against its insured who has been sued to determine whether the insurer has a duty to defend or indemnify until the underlying action has been adjudicated. The two articles in The Colorado Lawyer concluded that declaratory judgment actions therefore could not be brought in Colorado until the underlying cases were concluded.
Despite the impact Hecla Mining may have on state law, declaratory judgment actions in federal district court remain unaffected. The federal courts remain free to apply the federal declaratory judgment statute(fn3) and the declaratory judgment rule.(fn4)
More than forty years ago, the U.S. Supreme Court recognized the proposition that even though a declaratory judgment may not be available in state court, federal court litigants could still avail themselves of the remedy. In Skelly Oil Co. v. Phillips Petroleum Co., the Court stated: "that the declaratory judgment remedy which may be given by the federal courts may not be available in the State courts is immaterial."(fn5)
The Tenth Circuit has continually taken the position that even if a declaratory judgment action is unavailable in state court, such an action may be maintained in federal court if there is jurisdiction otherwise. For example, in Farmers Alliance Mutual Insurance Co. v. Jones,(fn6) the Tenth Circuit reviewed a case from Oklahoma, which had a statute prohibiting declaratory judgment actions by insurance companies against their insureds. The Tenth Circuit held that the Federal Declaratory Judgment Act(fn7) is procedural, not substantive, and therefore the doctrine of Erie v. Tompkins(fn8) does not apply. The court held that the trial court did not abuse its discretion in hearing the declaratory judgment action.(fn9)
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