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Legal Memorandum: Declaratory Judgment

Issue: When does a party have standing to bring a declaratory judgment action?

Area of Law: Litigation & Procedure
Keywords: Declaratory judgment; Standing; Affirmative defense
Jurisdiction: Federal
Cited Cases: None
Cited Statutes: 5 V.I.C. § 1362
Date: 11/01/2006

The defense of lack of standing is an affirmative defense.  LINC Fin. Corp. v. Onwuteaka, 129 F.3d 917, 923 (7th Cir. 1997); Native Am. Acts v. Earthdweller, Ltd., No. 01c2370 (D. Ill. May 31, 2002).  Failure to plead this affirmative defense in an answer operates as a waiver.  Id. 

A party has “standing” to bring a declaratory judgment if he or she is a person “whose rights, status or other legal relations are affected by a . . . contract.”  5 V.I.C. § 1362.  If so, such a person “may have determined any question of construction . . . arising under the . . . contract.” Id.  Where a declaratory judgment is sought by such a person, the fact that the person is not a party to the contract does not strip him or her of standing.  Thus, for example, it is common for injured claimants to bring declaratory judgments against liability insurers to construe the liability policy even though the injured claimants are not parties to the insurance contract.  See Hartford Mut. Ins. Co. v. Woodfin, 687 A.2d 652, 659 (Md. 1997).

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