APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS. Hon. F. Dennis Saylor IV, U.S. District Judge.
David M. Oppenheim, with whom Brian J. Wanca, Jeffrey A. Berman, Anderson Wanca, Alan L. Cantor and Swartz & Swartz, P.C. were on brief, for the appellant.
Myles W. McDonough, with whom Christopher M. Reilly, Ryan B. MacDonald and SLOANE AND WALSH, LLP were on brief, for the appellee.
Before Howard, Stahl, and Thompson, Circuit Judges.
THOMPSON, Circuit Judge.
This is an appeal from a dismissal of an action for declaratory judgment. Because, as a threshold issue, we have an obligation to ascertain sua sponte the existence of federal subject-matter jurisdiction, we asked the parties for supplemental briefing on how (or whether) the plaintiff-appellant's claim in this action met the $75,000 amount-in-controversy requirement for diversity jurisdiction. Finding federal jurisdiction wanting, we remand this case to the district court with instructions to dismiss.
In 2008, plaintiff-appellant CE Design Ltd. (" CE" ) filed a class action suit in the Circuit Court of Cook County, Illinois, on behalf of itself and others similarly situated, against Ernida, LLC. The complaint alleged violations of the Telephone Consumer Protection Act (" TCPA" ), 47 U.S.C. § 227, the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 Ill. Comp. Stat. 505/2, and common law conversion. CE claimed that Ernida had faxed unsolicited advertisements to CE and " more than 39 other recipients," without first obtaining their permission. CE sought damages, including statutory damages of $500 for each violation of the TCPA, as well as costs, and any further relief the court deemed just and proper. The complaint specifically disclaimed any individual recovery in excess of $75,000.
After being notified of this suit, Ernida's insurer, American Economy Insurance Company (" American" ), took up Ernida's defense in Cook County, explicitly reserving its rights to withdraw from the defense and to deny coverage.
With the Cook County action still ongoing, CE then filed suit in federal court against American, seeking a declaratory judgment on American's duty to defend Ernida in the Cook County action and American's responsibility to indemnify and pay any judgment entered in that action against Ernida. Ernida is also a named defendant in the federal suit. CE asserted diversity jurisdiction under 28 U.S.C. § 1332.
American moved to dismiss CE's federal action for lack of a justiciable controversy and for failure to state a claim on which relief could be granted; alternatively, it asked the court to exercise its discretion under the Declaratory Judgment Act, 28 U.S.C. § § 2201-2202, and decline to enter declaratory relief. The district court granted American's motion, holding CE had not presented a justiciable controversy. Applying Illinois law, it found CE did not have a cognizable injury for standing purposes because " an injured claimant generally has no direct rights against the ...