Commercial Litigation and Arbitration

Declaratory Judgment — Double Contingency — Rule 12(b)(1) — Subject Matter Jurisdiction

The plaintiff in Reichhold, Inc. v. United States Metals Ref. Co., 2007 U.S. Dist. LEXIS 59274 (D.N.J. 2007), sued the defendants for CERCLA violations seeking a declaratory judgment finding defendants liable for future cleanup costs. The defendants moved to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), a provision under which ‛no presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims.“ To establish subject matter jurisdiction under the Declaratory Judgment Act, 28 U.S.C. § 2201, the plaintiff must establish the existence of an actual case or controversy. A ‛double contingency“ is often inadequate to satisfy this standard:

A double contingency is said to exist when a declaration is sought about the legal consequences of future conduct, since the conduct may not take place and if it does the other party may not challenge it.

District Judge Dickinson Debevoise dismissed the complaint on double contingency grounds because the plaintiff’s declaratory judgment depended on the contention that the New Jersey Attorney General "had plans“ to seek to recover from plaintiff. Not sufficiently ripe a dispute.

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