author: BARRINGTON D. PARKER, Circuit Judge

text:
    Andrew CARLIN, individually and on behalf of a class, Plaintiff-Appellant, v. DAVIDSON FINK LLP, Defendant-Appellee.
    No. 15-3105-cv
    August Term, 2015
    United States Court of Appeals, Second Circuit.
    Argued: April 5, 2016
    Decided: March 29, 2017

      Daniel A. Edelman (Tiffany N. Hardy, on the brief), Edelman, Combs, Latturner & Goodwin, LLC, Chicago, IL, for Plaintiff-Appellant.
    Andrew M. Burns, Davidson Fink LLP, Rochester, NY, Matthew' J. Bizzaro, L’Ab-bate, Balkan, Colavita & Contini, LLP, Garden City, NY, on the brief, for Defendant-Appellee.
    Before: POOLER, PARKER, and LIVINGSTON, Circuit Judges.
   BARRINGTON D. PARKER, Circuit Judge

Plaintiff-Appellant Andrew Carlin, individually and on behalf of others similarly situated, alleges that Defendant-Appellee Davidson Fink LLP violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (the “FDCPA”), when it failed to provide the “amount of the debt” within five days after an initial communication with a consumer in connection with the collection of a debt, as required by § 1692g. The complaint alleges that Davidson Fink made three attempts to collect on a debt and that each time, it failed to provide adequate notice to Carlin of the amount of the debt.

Carlin urges us to hold that Davidson Fink’s first communication, a mortgage foreclosure complaint (the “Foreclosure Complaint”), was an initial communication with a consumer in connection with the collection of a debt, and that Davidson Fink was therefore required to provide the “amount of the debt” within five days of filing the Foreclosure Complaint. But we decline to so hold because the plain language of the statute excludes from § 1692g pleadings in a civil action. Instead, we conclude that Davidson Fink’s followup letter, an unambiguous attempt to collect on a debt, triggered the disclosure requirements of § 1692g, and that Carlin has adequately alleged that this second communication by Davidson Fink did not satisfy those requirements. We therefore vacate the order and judgment of the district court and remand for further proceedings consistent with this opinion.

BACKGROUND

Because this appeal comes before us on a motion to dismiss, we accept as true all plausible allegations in the complaint.

Davidson Fink is a law firm whosé practice areas include debt collection and foreclosure. Davidson Fink provides a “wide-range of debt collection services,” and offers “immediate and inexpensive options to recover unpaid funds with a comprehensive collection process.” App. at 3. As part of its practice, Davidson Fink regularly collects consumer debts, including residential mortgage debts. There is no dispute that Davidson Fink is a debt collector within the meaning of the FDCPA.

On June 24, 2013, Davidson Fink filed the Foreclosure Complaint against Carlin, seeking to collect on a 2005 mortgage allegedly defaulted on by Carlin. The summons indicated that “[t]he relief sought in the within action is a final judgment directing the sale of the premises described above to satisfy the debt secured by the Mortgage described above.” App. at 12. The Foreclosure Complaint stated that “this action may be deemed to be an attempt to collect a debt.” App. at 17. The Foreclosure Complaint also included a paragraph requesting:

That if the proceeds of said sale of the mortgage premises aforesaid be insufficient to pay the amount found due to the plaintiff with interest and costs, the officer making the sale be required to specify the amount of such deficiency in his report of sale so that plaintiff may thereafter be able to make application to this Court, pursuant to Section 1371 of the Real Property Actions and Proceedings Law, for a judgment against the defendant(s) referred to in paragraph FOURTH of this Complaint for any deficiency which may remain after applying all of such moneys so applicable thereto, except that this shall not apply to any defendant who has been discharged in bankruptcy from the subject debt[.]

App. at 18. Section 1371 of the New York Real Property Actions and Proceedings Law provides that “[simultaneously with the making of a motion for an order confirming the sale, ... the party to whom such residue shall be owing may make a motion in the action for leave to enter a deficiency judgment....” N.Y. Real Prop. Acts. Law § 1371(2) (2016).

Davidson Fink attached to the Foreclosure Complaint a “Notice Required by the Fair Debt Collection Practices Act,” which stated that “the amount of the debt is stated in the complaint hereto attached,” and also that “the debt ... will be assumed to be valid ... unless the debtor, within thirty (30) days after receipt of this notice, disputes the validity of the debt.” App. at 21. Contrary to the assurance made in the attached notice, the Foreclosure Complaint did not state the amount of the debt.

Apparently prompted by the Foreclosure Complaint’s warnings, Carlin sent Davidson Fink a letter on July 12, 2013 (the “July Letter”), disputing the validity of the debt and requesting a verification of the dollar amount of the purported debt. Davidson Fink obliged, and on August 9, 2013, sent a letter (the “August Letter”) to Carlin containing, among other things, a Payoff Statement. The Payoff Statement was dated July 31, 2013, and indicated that it was valid through August 14, 2013. The Payoff Statement included a “Total Amount Due” of $205,261.79. Below the amount due, however, the statement added, in small print:

To provide you with the convenience of an extended “Statement Void After” date, the Total Amount Due may include estimated fees, costs, additional payments and/or escrow disbursements that will become due prior to the “Statement Void After” date, but which are not yet due as of the date this Payoff Statement is issued. You will receive a refund if you pay the Total Amount Due and those anticipated fees, expenses, or payments have not been incurred.

App. at 55. The Payoff Statement did not indicate what those estimated fees, costs, or additional payments were or how they were calculated.

Carlin brought this action alleging that Davidson Fink violated the FDCPA, which provides:

Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing—
(1) the amount of the debt....

15 U.S.C. § 1692g(a). Carlin alleges that the filing of the Foreclosure Complaint was an “initial communication ... in connection with the collection of any debt,” and because Davidson Fink failed to specify the amount of the debt within five days of filing the complaint, it is liable for damages under the FDCPA. See id. § 1692k. Alternatively, Carlin alleges that Davidson Fink was required to respond with the amount of the debt within five days of receiving the July Letter. Finally, Carlin alleges that if neither the Foreclosure Complaint nor the July Letter was an initial communication, then the August Letter was an initial communication made in connection with the collection of a debt and the Payoff Statement did not satisfy § 1692g(a) because the amount due included unaccrued and unspecified fees and costs.

Davidson Fink moved to dismiss for failure to state a claim. In September 2014, the district court (Seybert, /.) denied the motion, saying that Carlin had plausibly alleged that Davidson Fink was acting as a debt collector, that it engaged in an initial communication with Carlin, and that it failed to comply with § 1692g(a). Davidson Fink moved for reconsideration, and in September 2015, the district court granted the motion and dismissed the complaint, holding that because the Foreclosure Complaint was not an effort to collect on a debt within the meaning of § 1692g(a), the complaint failed to plausibly state a claim. Carlin appeals.

DISCUSSION

We review a district court’s grant of a defendant’s motion to dismiss de novo. Hart v. FCI Lender Servs., Inc., 797 F.3d 219, 223 (2d Cir. 2015). To survive a motion to dismiss, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). We must “accept as true all of the allegations contained in a complaint,” though “[t]hread-bare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. Though we are confined “to the allegations contained within the four corners of [the] complaint,” Pani v. Empire Blue Cross Blue Shield, 152 F.3d 67, 71 (2d Cir. 1998), we may also consider any “documents attached to the complaint as an exhibit or incorporated in it by reference,” Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002) (quoting Brass v. Am. Film Techs., Inc., 987 F.2d 142, 150 (2d Cir. 1993)).

In assessing Carlin’s claim, § 1692g(a) calls upon us to make three determinations: (1) whether any of the communications between the parties were “initial communications” within the meaning of § 1692g, (2) whether any of the communications between the parties were “in connection with the collection of any debt,” and (3) whether Davidson Fink provided the amount of the debt within five days of such a communication. We agree with Davidson Fink that neither the Foreclosure Complaint nor the July Letter are initial communications giving rise to the requirements of § 1692g(a). We hold, however, that the August Letter was an initial communication in connection with the collection of a debt, and that the Payoff Statement attached to the August Letter did not adequately state the amount of the debt.

A. Initial Communication

The FDCPA does not offer a definition of “initial communication.” In Goldman v. Cohen, we held that a “debt collector’s initiation of a lawsuit in state court seeking recovery of unpaid consumer debts is an ‘initial communication’ within the meaning of the FDCPA.” 445 F.3d 152, 155 (2d Cir. 2006). After Goldman, however, Congress amended the FDCPA in 2006 to clarify that “[a] communication in the form of a formal pleading in a civil action shall not be treated as an initial communication for purposes of subsection (a) of this section.” 15 U.S.C. § 1692g(d) (added by the Financial Services Regulatory Relief Act of 2006, Pub. L. No. 109-351, § 802(a), 120 Stat. 1966, 2006-07 (2006)). We have recognized that this amendment supersedes our determination in Goldman. See Ellis v. Solomon & Solomon, P.C., 591 F.3d 130, 136 (2d Cir. 2010).

Despite the plain language of the statute, Carlin insists that the Foreclosure Complaint is an initial communication. Carlin argues that our holding in Hart, 797 F.3d at 224, makes clear that a § 1692g notice is an initial communication. Here, Davidson Fink attached such a notice to the Foreclosure Complaint, although it was not required to do so, and Carlin argues that because the notice was not part of the “formal pleading,” it does not fall within the exception for formal civil pleadings provided in the statute.

Carlin’s argument finds no refuge in the text of the statute. Section 1692g(d) states that a “communication in the form of a formal pleading in a civil action” is not an initial communication. We have recognized that “courts should avoid statutory interpretations that render provisions superfluous.” State St. Bank & Tr. Co. v. Salovaara, 326 F.3d 130, 139 (2d Cir. 2003). Were we to adopt Carlin’s reading that the exclusion applies only to the formal documents that make up a standard pleading, we would be ignoring the plain language instructing that all communications in the form of a civil pleading are excluded from the definition of initial communication. Congress could have drawn the exclusion more narrowly, but it did not. Instead, it adopted a broad exclusion that, on its face, applies to any communication forming any part of a pleading. Such an exclusion naturally extends to exhibits attached to a complaint, and accordingly includes the § 1692g notice attached to the Foreclosure Complaint. Thus, we hold that even documents that are superfluously attached to a formal pleading are not initial communications within the meaning of the FDCPA.

Carlin protests that the § 1692g notice is misleading because it erroneously instructed him that he had 30 days to dispute the debt, which, according to the position now taken by Davidson Fink, was false. But Carlin has not alleged in his complaint that the notice was misleading, only that it failed to state the amount of the debt. Should Carlin wish to amend his complaint to state such a claim, that issue must be decided by the district court in the first instance, and we express no view on the merits of such a claim.

Carlin next alleges that the July Letter, sent from him to Davidson Fink in response to the Foreclosure Complaint, is an initial communication. Numerous district courts have rejected the notion that a communication initiated by a debtor to a debt collector may qualify as an initial communication. See, e.g., Derisme v. Hunt Leibert Jacobson P.C., 880 F.Supp.2d 339, 367-68 (D. Conn. 2012); Lane v. Fein, Such & Crane, LLP, 767 F.Supp.2d 382, 387 (E.D.N.Y. 2011); Gorham-Dimaggio v. Countrywide Home Loans, Inc., No. 1:05-cv-0583, 2005 WL 2098068, at *2 (N.D.N.Y. Aug. 30, 2005). Like those courts, we conclude that, read in the context of the entire statute, initial communications do not include communications initiated by the debtor.

“When construing a statute, we begin with its language and proceed under the assumption that the statutory language, unless otherwise defined, carries its plain meaning.... ” Chen v. Major League Baseball Props., Inc., 798 F.3d 72, 76 (2d Cir. 2015). The statute specifies that the communication must be “with” a consumer. We cannot discern from this alone whether the statute should be read to exclude communications initiated by the consumer. Where statutory language is ambiguous, we may consider legislative history, but in doing so, we must “construct an interpretation that comports with [the statute’s] primary purpose and does not lead to anomalous or unreasonable results.” Puello v. Bureau of Citizenship & Immigration Servs., 511 F.3d 324, 327 (2d Cir. 2007) (alteration in original) (internal quotation marks omitted) (quoting Connecticut ex rel. Blumenthal v. United States Dep’t of the Interior, 228 F.3d 82, 89 (2d Cir. 2000)); see also Romea v. Heiberger & Assocs., 163 F.3d 111, 118 (2d Cir. 1998) (noting that the court should avoid interpreting the FDCPA to “contravene[ ] the purpose of the statute”).

The FDCPA states that its purpose is to “eliminate abusive debt collection practices by debt collectors.” 15 U.S.C. § 1692(e) (emphasis added). We have similarly recognized that the “FDCPA was passed to protect consumers from deceptive or harassing actions taken by debt collectors.” Kropelnicki v. Siegel, 290 F.3d 118, 127 (2d Cir. 2002) (emphasis added). And the legislative history makes clear that the debt collector’s obligation to provide the amount of the debt arises only “[a]fter initially contacting a consumer.” S. Rep. No. 95-382, at 4 (1977), reprinted in 1977 U.S.C.C.A.N. 1695, 1699. The legislative history and stated purpose of the statute thus indicate that the statute’s primary purpose, particularly where § 1692g is implicated, is to regulate communications from the debt collector to the debtor. Thus, imposing liability under § 1692g when a debtor initiates the communication would run counter to the statute’s primary purpose and would impose liability in circumstances not contemplated by either the statute or the legislature. Accordingly, the July Letter is not an initial communication under the FDCPA.

We have little difficulty concluding, however, that the August Letter was an initial communication. Davidson Fink argues that the protections of the FDCPA are not implicated where the debtor is protected by the procedures of the court system. Davidson Fink’s argument fails because the August Letter was not sent in the context of a litigation, nor was it even sent to Carlin’s attorney. The cases cited by Davidson Fink are inapposite — those cases, which concern only misrepresentations under § 1692e, all involve representations made to an attorney representing the debtor, usually in the context of a formal proceeding. See, e.g., Gabriele v. Am. Home Mortg. Servicing, Inc., 503 Fed.Appx. 89, 92 (2d Cir. 2012) (alleged misstatements made in state foreclosure action); Simmons v. Roundup Funding, LLC, 622 F.3d 93, 95 (2d Cir. 2010) (alleged misstatements made in bankruptcy filing); Kropelnicki, 290 F.3d at 123 (alleged misstatement made over the phone to attorney during settlement discussions). Here, by contrast, the August Letter was not sent in connection with the foreclosure proceeding, and in fact makes no mention of the proceeding. Furthermore, the letter was not sent to Carlin’s attorney, who had already appeared on behalf of Carlin in the foreclosure proceeding, but to Carlin himself. Davidson Fink is thus incorrect that Carlin was amply protected by the procedures of the court system.

Nor can we say that the August Letter was merely a response to an unsolicited request for information. The August Letter was sent in response to the July Letter, which was only sent in the first place because Carlin was under the mistaken impression that he was required to dispute the debt within thirty days. In light of such circumstances, there is little dispute that the August Letter was an initial communication within the meaning of the FDCPA.

B. In Connection With the Collection of Any Debt

Having determined that only the August Letter is an initial communication, we must assess whether the letter was sent “in connection with the collection of any debt.” 15 U.S.C. § 1692g(a). In addressing this question at the motion to dismiss stage, our role is to determine merely whether, when viewed objectively, the plaintiff “has plausibly alleged that a consumer receiving the communication could reasonably interpret it as being sent ‘in connection with the collection of [a] debt,’ rather than inquiring into the sender’s subjective purpose.” Hart, 797 F.3d at 225 (alteration in original). In Hart, we determined that the letter in question was unambiguously sent in connection with the collection of a debt because: (1) the letter directed the recipient to mail payments to a specified address, (2) the letter referred to the FDCPA by name, (3) the letter informed the recipient that he had to dispute the debt’s validity within thirty days, and (4) most importantly, the letter “emphatically announcefd] itself as an attempt at debt collection: ‘THIS IS AN ATTEMPT TO COLLECT UPON A DEBT, AND ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE.’ ” Id. at 226. We had “no difficulty in concluding” that the communication in question was an attempt to collect on a debt within the meaning of the FDCPA. Id.

Here, too, the August Letter is unambiguous. The Payoff Statement provides addresses to which Carlin was instructed to mail or wire his payments, the cover letter mentions the FDCPA by name, and, most notably, the letter states: “PLEASE BE ADVISED THAT DAVIDSON FINK LLP IS A LAW FIRM ACTING AS A DEBT COLLECTOR. THIS IS AN ATTEMPT TO COLLECT A DEBT. ANY INFORMATION OBTAINED FROM YOU WILL BE USED FOR THAT PURPOSE.” App. at 54. These factors, disposi-tive in Hart, are similarly instructive here and demonstrate that Carlin has adequately pleaded that the August Letter was sent in connection with the collection of a debt.

C. Amount of the Debt

The remaining inquiry is whether Davidson Fink adequately stated the amount of the debt in the August Letter, as required by § 1692g. We conclude that it did not.

The Payoff Statement included a “Total Amount Due,” but that amount may have included unspecified “fees, costs, additional payments, and/or escrow disbursements” that were not yet due at the time the statement was issued. The Payoff Statement indicated that any such fees would accrue by August 14, 2013 (the date on which the Payoff Statement became void), and that if payment of the “Total Amount Due” was made prior to August 14, Carlin would receive a refund in the amount of the unaccrued fees.

When determining whether a debt collector has violated § 1692g’s notice requirements, we consider how the “least sophisticated consumer” would interpret the notice. See Russell v. Equifax A.R.S., 74 F.3d 30, 34 (2d Cir. 1996) (citing Clomon v. Jackson, 988 F.2d 1314, 1318 (2d Cir. 1993)). We ask whether “the notice fails to convey the required information ‘clearly and effectively and thereby makes the least sophisticated consumer uncertain’ as to the meaning of the message.” DeSantis v. Computer Credit, Inc., 269 F.3d 159, 161 (2d Cir. 2001) (quoting Savino v. Computer Credit, Inc., 164 F.3d 81, 85 (2d Cir. 1998)). Thus, even if a debt collector accurately conveys the required information, a consumer may state a claim if she successfully alleges that the least sophisticated consumer would inaccurately interpret the message.

It is unclear whether Davidson Fink’s notice accurately conveys the required information. The FDCPA defines “debt” as “any obligation or alleged obligation of a consumer to pay money arising out of a transaction ..., whether or not such obligation has been reduced to judgment.” 15 U.S.C. § 1692a(5). The Seventh Circuit has expressed doubt that “debt” includes unac-crued court costs or attorney fees. See Veach v. Sheeks, 316 F.3d 690, 693 (7th Cir. 2003). But the Payoff Statement does not specify what the “estimated fees, costs, [and] additional payments” are, and thus we cannot say whether those amounts are properly part of the amount of the debt. If Davidson Fink improperly included fees and costs that it was not entitled to under the note (absent a judgment), the Payoff Statement would plainly be insufficient under § 1692g.

The least sophisticated consumer standard we use to interpret the legal effect of FDCPA notices supports this conclusion. Absent fuller disclosure, an unsophisticated consumer may not understand how these fees are calculated, whether they may be disputed, or what provision of the note gives rise to them. Because the statement gives no indication as to what the unaccrued fees are or how they are calculated, she cannot deduce that information from the statement.

We do not hold that a debt collector may never satisfy its obligations under § 1692g by providing a payoff statement that provides an amount due, including expected fees and costs. But a statement is incomplete where, as here, it omits information allowing the least sophisticated consumer to determine the minimum amount she owes at the time of the notice, what she will need to pay to resolve the debt at any given moment in the future, and an explanation of any fees and interest that will cause the balance to increase.

We are not ignorant of the safe-harbor statement we formulated in Avila v. Riexinger & Assocs., LLC, 817 F.3d 72 (2d Cir. 2016). There, we held:

[A] debt collector will not be subject to liability under Section 1692e for failing to disclose that the consumer’s balance may increase due to interest and fees if the collection notice either accurately informs the consumer that the amount of the debt stated in the letter will increase over time, or clearly states that the holder of the debt will accept payment of the amount set forth in full satisfaction of the debt if payment is made by a specified date.

817 F.3d at 77. However, the Payoff Statement only expresses that the Total Amount Due may include estimated fees and costs. There is no clarity as to whether new fees and costs are accruing or as to the basis for those fees and costs.

Notices such as the Payoff Statement here may very well be commonplace in the debt collection industry. But the FDCPA does not insulate a debt collector from liability merely because others in the industry engage in the same practice. It is no great chore for Davidson Fink and other debt collectors to revise their standard payoff statements to clarify the actual amount due, the basis of the fees, or simply some information that would allow the least sophisticated consumer to deduce the amount she actually owes.

CONCLUSION

Because Carlin has adequately alleged that the August Letter is an initial communication sent by a debt collector in connection with the collection of a debt and that it does not clearly state the amount of the debt, we vacate the order and judgment of the district court and remand for proceedings consistent with this opinion.

      . Because we conclude that the erroneously attached notice was not an initial communication, we need not confront the parties' extensive arguments regarding whether the initiation of a foreclosure action is done "in connection with the collection of any debt.” Nor do we need to consider the district court’s interpretation of the Eleventh Circuit’s ruling in Reese v. Ellis, Painter, Ratterree & Adams, LLP, 678 F.3d 1211 (11th Cir. 2012), as that case offers little guidance on the issues we confront here.

      . The only additional fee beyond principal and interest referenced in the underlying note is a 2% "Late Charge for Overdue Payments.” [JA155] The Payoff Statement does not indicate whether the late charge is part of the "fees, costs, [and] additional payments” included in the Total Amount Due.

      . As we explained in Avila, though not required by the text of the statute, a notice would also satisfy § 1692g if it used language such as : “As of today, [date], you owe $_ This amount consists of a principal of $_, accrued interest of $_, and fees of $.__ This balance will continue to accrue interest after [date] at a rate of $_per [date/week/ month/year].” 817 F.3d at 77 n. 2 (citing Jones v. Midland Funding, LLC., 755 F.Supp.2d 393, 397 n. 7).


source: Caselaw Access Project

author: JOHN M. WALKER, JR., Circuit Judge:

license: Public Domain

text:
    TRU-ART SIGN CO., INC., Plaintiff-Appellant, v. LOCAL 137 SHEET METAL WORKERS INTERNATIONAL ASSOCIATION, Defendant-Appellee.
    No. 15-3415-cv
    August Term, 2016
    United States Court of Appeals, Second Circuit.
    Argued: September 27, 2016
    Decided: March 29, 2017

      Joseph M. Labuda (Netanel Newberger, on the briei), Milman Labuda Law Group PLLC, Lake Success, NY, for Plaintiff-Appellant.
    Nathaniel K. Chakny, Charny & Associates, Rhinebeck, NY, for Defendant-Appel-lee.
    Before: WALKER and CABRANES, Circuit Judges, and BERMAN, District Judge.

       Judge Richard M. Berman, of the United States District Court for the Southern District of New York, sitting by designation.

   JOHN M. WALKER, JR., Circuit Judge:

Plaintiff-appellant Tru-Art Sign Co., Inc. (“Tru-Art”) appeals from an order of the United States District Court for the Eastern District of New York (Leonard D. Wexler, J.) denying its motion for interest and costs. Following a jury trial, the district court entered judgment in favor of Tru-Art. On appeal, we affirmed the finding. of liability, vacated the damages award, and remanded for a new trial on damages or, in the alternative, for the district court to offer Tru-Art a remittitur. Tru-Art elected a remittitur and thereafter filed a motion for costs as well as prejudgment and postjudgment interest, which the district court denied. Tru-Art now appeals this decision. Because we find Tru-Art’s motion for prejudgment interest was untimely under Federal Rule of Civil Procedure 59(e) and that Tru-Art waived its claim for costs pursuant to Local Civil Rule 54.1 of the Eastern District of New York, we AFFIRM the district court’s denial of such interest and costs. We VACATE the district court’s order to the extent it denied postjudgment interest and REMAND for the district court to calculate and award such interest.

BACKGROUND

Tru-Art prevailed at a jury trial on its claims against defendant-appellee Local 137 Sheet Metal Workers International Association (“Local 137”) for violations of § 8(b)(4) of the National Labor Relations Act and the jury awarded Tru-Art $650,000 in damages. On August 27, 2013, the district court entered judgment in favor of Tru-Art with “no costs or fees awarded to either party.” Tru-Art did not request interest or costs and it did not move to alter or amend the judgment under Federal Rule of Civil Procedure 59(e).

Local 137 thereafter appealed, arguing that it was entitled to judgment as a matter of law on certain claims, that the jury instructions were flawed, and that the district court should have ordered a new trial on damages due to an excessive damages award. We affirmed the district court’s judgment as to liability, but vacated the damages on the basis that the award was “clearly excessive” because the evidence at trial only supported damages amounting to $440,000. Tru-Art Sign Co. v. Local 1S7 Sheet Metal Workers Int’l Ass’n, 573 Fed.Appx. 66, 69 (2d Cir. 2014) (summary order). We remanded for a new trial on damages and noted that, in the alternative, the district court could offer Tru-Art the option of accepting a remittitur as to the damages found to be excessive. Id.

On October 8, 2014, Tru-Art accepted a remittitur and, for the first time in the proceedings, requested and received permission to file a motion for costs and prejudgment interest. On October 29, 2014, the district court entered a second judgment against Local 137 for $440,000 — the amount that we had identified on appeal as appropriate. On the same day, Tru-Art filed its motion for costs, prejudgment interest, and postjudgment interest. Local 137 opposed Tru-Art’s requests for prejudgment interest and costs.

On September 29, 2015, the district court denied Tru-Art’s requests for prejudgment interest and costs. The district court found that an award of prejudgment interest was not appropriate, reasoning that there were no special circumstances warranting additional compensation and that such an award likely would overcompensate Tru-Art. The district court also noted that Tru-Art requested prejudgment interest for the first time at a conference following our-remand and the issuance of our mandate. Finally, the district court found that Tru-Art’s enumerated costs were excessive and noted that Tru-Art never sought to amend or challenge the first judgment in this case, which did not award costs. The district court did not address Tru-Art’s request for post-judgment interest. Tru-Art timely appealed.

DISCUSSION

We review a district court’s decision to deny prejudgment interest and costs for abuse of discretion. Dattner v. Conagra Foods, Inc., 458 F.3d 98, 100 (2d Cir. 2006) (per curiam); Merck Eprova AG v. Gnosis S.p.A., 760 F.3d 247, 263-64 (2d Cir. 2014). Determinations of timeliness are generally matters of statutory interpretation, which we review de novo. Boykin v. KeyCorp, 521 F.3d 202, 207 (2d Cir. 2008). We may affirm on any basis supported by the record. Coulter v. Morgan Stanley & Co., 753 F.3d 361, 366 (2d Cir. 2014) (per curiam).

I. Prejudgment Interest

A plaintiffs “postjudgment motion for discretionary prejudgment interest constitutes a motion to alter or amend the judgment under [Federal Rule of Civil Procedure] 59(e).” Osterneck v. Ernst & Whinney, 489 U.S. 169, 175, 109 S.Ct. 987, 103 L.Ed.2d 146 (1989). A motion pursuant to Rule 59(e) “must be filed no later than 28 days after the entry of the judgment,” Fed. R. Civ. P. 59(e), and a court may not grant an extension to file such a motion, Fed. R. Civ. P. 6(b)(2).

At issue in this case is whether the initial judgment — entered on August 27, 2013 — or the second judgment — entered on October 29, 2014 after Tru-Art accepted the remittitur — determines when the 28-day period began to run for Tru-Art’s Rule 59(e) motion for prejudgment interest. We find that, in the instant case, the timeliness of Tru-Art’s motion is based on the first judgment entered on August 27, 2013.

We have held that, in certain circumstances, a plaintiff may timely move for prejudgment interest for the first time on remand. See, e.g., Adams v. Lindblad Travel Inc., 730 F.2d 89, 93-94 (2d Cir. 1984); see also Paddington Partners v. Bouchard, 34 F.3d 1132, 1144 (2d Cir. 1994); In re Frigitemp Corp., 781 F.2d 324, 328 (2d Cir. 1986). Tru-Art argues that such holdings are analogous to the instant case. We disagree. In Adams v. Lindblad Travel Inc., for example, the plaintiff requested prejudgment interest on appeal, was entitled to recover prejudgment interest as a matter of right under the applicable statutes, and the district court was instructed to engage in a recalculation or reconsideration of damages on remand. 730 F.2d at 93-94. As a result, we noted that the parties did not have any “legitimate expectation that the issues relating to the ultimate award [were] finally decided” and that the district court would have “ample opportunity” on remand to make any findings necessary to calculate prejudgment interest, such as the accrual date of the cause of action. Id.

Here, prejudgment interest was not mandatory pursuant to the applicable statute — Section 303(b) of the Labor Management Relations Act, 29 U.S.C. § 187(b). See Wickham Contracting Co. v. Local Union No. 3, Int’l Bhd. of Elec. Workers, 955 F.2d 831, 836 (2d Cir. 1992). Tru-Art also did not file its motion for prejudgment interest until after it had accepted the remittitur. At the time of Tru-Art’s motion, therefore, the damages award had been finally decided.

McNabola v. Chicago Transit Authority, 10 F.3d 501, 521 (7th Cir. 1993) is instructive. There, the Seventh Circuit held that, when both an initial judgment and a judgment that is entered after a remittitur exist, the timeliness of a motion for prejudgment interest should be determined based on the second judgment only if the Rule 59(e) motion “bear[s] some relationship” to the basis for altering the original judgment — e.g., the determination that damages were excessive. Id. The Seventh Circuit concluded that the plaintiff— who moved for prejudgment interest for the first time approximately four months after the initial judgment had been entered and only after the defendant had moved for a new trial on the ground that the jury had awarded excessive damages— had not timely filed a motion for such interest. Id. at 520-21. The court noted that, “[ajlthough [plaintiff] could have filed a Rule 59(e) motion challenging the remit-titur after entry of a ‘second final judgment’, he could not for the first time file a motion for prejudgment interest because such a motion was addressed to the initial and not the [second] judgment.” Id. at 521 (citation omitted).

Several district courts in this circuit have adopted this rule in similar contexts. See Kazazian v. Bartlett & Bartlett LLP, No. 03 Civ. 7699 (LAP), 2007 WL 4563909, at *3 (S.D.N.Y. Dec. 19, 2007) (“Plaintiffs new Rule 59(e) motion to amend the Amended (Corrected) Judgment will only be considered timely ... to the extent it seeks to amend something altered by the previous amendment.”); see also Padilla v. Maersk Line, Ltd., No. 07 Civ. 3638 (RMB/THK), 2012 WL 4009555, at *1 (S.D.N.Y. Sept. 12, 2012) (“Where both an original and an amended judgment exist, a party may not [base] its own untimely request for alteration of the [original] judgment on a wholly independent ground from the one that gave rise to the amended judgment.” (citation omitted)).

We now adopt the timeliness rule stated by the Seventh Circuit in McNabola as the law of our circuit. When both an initial judgment and an amended judgment exist, the timeliness of a Rule 59(e) motion is determined from the date of the amended judgment only if the motion bears some relationship to the district court’s alteration of the first judgment. McNabola, 10 F.3d at 521. Phrased differently, when a district court alters its judgment, a party aggrieved by the alteration must ask for correction of that alteration to have the timeliness of their correction determined from the date of the altered judgment. Id. If the Rule 59(e) motion bears no relationship to the district court’s alteration of the initial judgment, the motion’s timeliness is determined from the date of the earlier judgment.

As noted by the Seventh Circuit in McNabola, the time limit stated in Rule 59(e) would be ineffective if parties could continually file motions unrelated to the basis for the new judgment, thereby preventing the judgment from becoming final. See id. Here, although the district court entered a second judgment after we vacated the damages award — and did not merely amend its own judgment — the same logic applies because the district court offered a remittitur of the damages awarded in the first judgment, which Tru-Art accepted. Tru-Art, therefore, in effect seeks to amend the first judgment, which did not include discretionary prejudgment interest. Tru-Art’s motion, which was filed more than a year after the first judgment was entered, was untimely in relation to that judgment and does not “bear some relationship” to Local 137’s appeal, which gave rise to the second judgment. See id.

Further, even assuming arguendo that Tru-Art’s motion for prejudgment interest had been timely filed, we find the district court appropriately considered the relevant factors stated in Wickham Contracting Co. v. Local Union No. 3, Int’l Bhd. of Elec. Workers, 955 F.2d at 834, and did not abuse its discretion in determining that based on these factors prejudgment interest would overcompensate Tru-Art.

Accordingly, we affirm the district court’s denial of Tru-Art’s motion for prejudgment interest.

II. Costs

Pursuant to Federal Rule of Civil Procedure 54(d)(1), costs ordinarily “should be allowed to the prevailing party.” A motion for costs, unlike one for prejudgment interest, is not a motion to alter or amend a judgment under Rule 59(e) and is not subject to the same timeliness standard. See Osterneck, 489 U.S. at 174-75, 109 S.Ct. 987; Buchanan v. Stanships, Inc., 485 U.S. 265, 268, 108 S.Ct. 1130, 99 L.Ed.2d 289 (1988) (finding a motion for costs is not brought pursuant to Rule 59(e) because it “does not involve reconsideration of any aspect of the decision on the merits”).

A party seeking to recover costs in the United States District Court for the Eastern District of New York, however, must file with the Clerk of Court a notice of taxation of costs “[wjithin thirty (30) days after the entry of final judgment, or, in the case of an appeal by any party, within thirty (30) days after the final disposition of the appeal, unless this period is extended by the Court for good cause shown.” E.D.N.Y. Local Civ. R. 54.1(a). “Any party failing to file a notice of taxation of costs within the applicable thirty (30) day period will be deemed to have waived costs.” Id.

Tru-Art first requested to file a motion for costs on October 8, 2014 — forty-nine days after we had issued our mandate. Although the district court allowed Tru-Art to file its motion, it did not extend the deadline for Tru-Art to file a notice of costs with the Clerk. Absent such an extension and because Tru-Art has not provided any reason for its failure to file this notice, much less shown good cause, Tru-Art' has waived its claim for costs.

III. Postjudgment Interest

The district court did not address Tru-Art’s claim for postjudgment interest, stating only that “Plaintiffs motion for prejudgment interest and costs is denied.” J.A. 163. On appeal, Tru-Art argues that the district court abused its discretion in failing to state any reason why it denied postjudgment interest. Local 137 did not object to Tru-Art’s request for post-judgment interest before the district court and does not now dispute Tru-Art’s entitlement to postjudgment interest on appeal.

Pursuant to 28 U.S.C. § 1961, “[t]he award of post-judgment interest is mandatory on awards in civil cases as of the date judgment is entered.” Lewis v. Whelan, 99 F.3d 542, 545 (2d Cir. 1996). “[Section 1961’s] terms do not permit of the exercise of judicial discretion in its application.” Carte Blanche (Singapore) Pte., Ltd. v. Carte Blanche Int’l, Ltd., 888 F.2d 260, 269 (2d Cir. 1989) (citation omitted). Accordingly, we remand this case to the district court to calculate and award postjudgment interest.

CONCLUSION

For the reasons stated above, we AFFIRM the district court’s denial of Tru-Art’s motion for prejudgment interest and costs. We VACATE the district court’s order to the extent that it denied post-judgment interest and REMAND the action for the district court to calculate and award such interest.

      . We also have held that a district court may award prejudgment interest sua sponte if the initial judgment is vacated on appeal and the case is remanded for a recalculation of damages, and that we may award such interest sua sponte if the question of damages is open on appeal and an award is "mandated by the interests of justice.” See Newburger, Loeb & Co. v. Gross, 611 F.2d 423, 433-34 (2d Cir. 1979). Our holding in the instant case does not implicate-these determinations.

      . Tru-Art did state that it was entitled to prejudgment interest in a letter to the court, dated September 4, 2013, in which it opposed the amount of a supersedeas bond that Local 137 had proposed. Tru-Art, however, did not formally move to alter or amend the judgment.

      . Tru-Art argues in the alternative — for the first time in its reply brief — that its motion for prejudgment interest was timely filed pursuant to Federal Rule of Civil Procedure 60(b). We ordinarily do not consider issues raised for the first time in a reply brief. McBride v. BIC Consumer Prods. Mfg. Co., 583 F.3d 92, 96 (2d Cir. 2009). In any event, the argument does not merit our attention because Tru-Art does not state the basis for which it should be granted relief under Rule 60(b).

      . Tru-Art’s argument that its motion for costs is timely pursuant to Rule 60(b) fails for the same reasons stated above with respect to Tru-Art’s motion for prejudgment interest.


author: HARDIMAN, Circuit Judge.

text:
    Bryan RARICK, Individually and on behalf of a class of similarly situated persons v. FEDERATED SERVICE INSURANCE COMPANY, Appellant Terry Easterday; Linda Easterday, h/w individually and on behalf of a class of similarly situated persons v. The Federated Mutual Insurance Company, Appellant
    No. 15-3606, No. 16-1328
    United States Court of Appeals, Third Circuit.
    Argued November 2, 2016
    (Filed: March 28, 2017)

      Charles E. Spevacek [Argued], William M. Hart, Tiffany M. Brown, Julia J. Nier-engarten, Meagher & Geer, 33 South Sixth Street, Suite 4400, Minneapolis, MN 55402, Attorneys for Defendants-Appellants
    James C. Haggerty [Argued], Suzanne T. Tighe, Esq., Haggerty Goldberg Schleifer & Kupersmith, 1835 Market Street, Suite 2700, Philadelphia, PA 19103, Attorneys for Plaintiffs-Appellees
    Before: CHAGARES, HARDIMAN, and SCIRICA, Circuit Judges.
   OPINION OF THE COURT

HARDIMAN, Circuit Judge.

In Brillhart v. Excess Insurance Company of America, 316 U.S. 491, 62 S.Ct. 1173, 86 L.Ed. 1620 (1942), the Supreme Court held that federal courts have broad discretion to decline to hear actions arising under the Declaratory Judgment Act. Decades later the Court reminded federal courts that they have a “virtually unflagging obligation” to exercise jurisdiction over actions seeking legal relief. Colo. River Water Conservation Dist. v. United States, 424 U.S. 800, 817, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976). But this “unflagging obligation” does not undermine the discretion inherent in the Declaratory Judgment Act as interpreted in Brillhart. See Wilton v. Seven Falls Co., 515 U.S. 277, 286-88, 115 S.Ct. 2137, 132 L.Ed.2d 214 (1995).

What about complaints that seek both declaratory and legal relief? Our sister courts of appeals and district courts within the Third Circuit have disagreed over the legal standard applicable in such cases. The United States District Court for the Eastern District of Pennsylvania in the two appeals' we consider here adopted a “heart of the matter” test and, after finding that the essence of each action was declaratory, declined to exercise jurisdiction. In our view, the heart of the matter test is problematic because it enables plaintiffs to avoid federal subject matter jurisdiction through artful pleading. Accordingly, we will vacate the orders of the District Court and remand the cases for further proceedings.

I

A

A resident of Pennsylvania, Brian Rar-ick worked for a company that insured its vehicles under a business automobile policy provided by Federated Service Insurance Company, a Minnesota corporation. Under that policy, Rariek’s employer waived uninsured motorist coverage for most of its employees, including Rarick.

In his complaint, Rarick alleged that he suffered injuries after he crashed a company car insured by Federated Service when an unidentified vehicle forced him off the road. Rarick reported the accident and submitted a claim to Federated Service for uninsured motorist benefits, in accordance with the Pennsylvania Motor Vehicle Financial Responsibility Law, 75 Pa. Cons. Stat. §§ 1701, et seq. Federated Service denied the claim, citing its waiver of uninsured motorist coverage for employees like Rarick.

After his claim was denied, Rarick filed a class action lawsuit in the Court of Common Pleas of Philadelphia County, Pennsylvania. Rarick sought, inter alia, a judgment declaring that Pennsylvania’s Motor Vehicle Financial Responsibility Law required Federated Service to provide Rar-ick with uninsured motorist coverage. Rar-ick also requested damages for breach of contract alleging — in nearly identical language to his prayer for declaratory relief — that Federated Service breached its contract by failing to provide him with uninsured motorist coverage.

Federated Service removed Rarick’s civil action to the District Court under 28 U.S.C. §§ 1441 (removal) and 1332 (diversity jurisdiction). After the removal, no related case remained pending in state court. Later, the District Court issued an order to show cause why it should not remand the case to the Court of Common Pleas consistent with its discretion under the Declaratory Judgment Act.

The District Court adopted a “heart of the matter” test to determine whether it had discretion to decline jurisdiction. The Court determined that the crux of the litigation was declaratory because Rarick sought a declaration that he is entitled to uninsured motorist benefits. The Court then considered whether it should decline jurisdiction over the entire case under our decision in Reifer v. Westport Insurance Corp., 751 F.3d 129 (3d Cir. 2014). Under Reifer, the absence of a pending state case created a rebuttable presumption in favor of jurisdiction. In light of “the nature and novelty of the state law issues,” the Court found the presumption was rebutted, so it declined jurisdiction and remanded the case to the Court of Common Pleas. Rarick v. Federated Serv. Ins. Co., 2015 WL 5677295, at *5 (E.D. Pa. Sept. 28, 2015). Federated Service appealed.

B

Terry Easterday, a resident of Pennsylvania, worked for an affiliate of Federated Service called Federated Mutual Insurance Company, which is a Minnesota company. Federated Mutual had a business automobile policy that waived underin-sured motorist coverage.

In his complaint, Easterday alleged that he sustained injuries in two rear-end collisions while driving a car owned and insured by Federated Mutual. Easterday submitted insurance claims seeking tort damages and he later sought recovery of underinsured motorist benefits from Federated Mutual. The company denied East-erday’s claim citing the waiver of underin-sured motorist benefits.

Easterday, along with his wife Linda, sued in the Court of Common Pleas of Philadelphia County, Pennsylvania. The Easter days sought, inter alia, a declaration that Pennsylvania law required Federated Mutual to provide underinsured motorist coverage. The Easterdays also requested damages for breach of contract, alleging — in nearly identical language to their prayer for declaratory relief — that Federated Mutual breached its contract by failing to provide Easterday with underin-sured motorist coverage.

Federated Mutual removed the case to the District Court under 28 U.S.C. §§ 1441 (removal) and 1332 (diversity jurisdiction). After the removal, no related case remained pending in state court. At a Rule 16 conference in the District Court, East-erday raised the issue of subject matter jurisdiction.

In light of the factual similarities between the two cases, the District Court followed Rarick, 2015 WL 5677295. The Court found that the heart of the matter was declaratory because “[t]he crux of th[e] litigation is whether the insurance policy in question provides coverage to the plaintiffs.” Easterday v. Federated Mut. Ins. Co., 2016 WL 492481, *4 (E.D. Pa. Feb. 9, 2016). The Court then turned to Reifer to determine whether it should decline jurisdiction. As in Rarick, the Court found that although there was no pending parallel state court proceeding, it should nonetheless decline jurisdiction because of the novel nature of the state law claim and the absence of a federal interest. Id. Federated Mutual appealed.

II

The District Court had jurisdiction in both cases under 28 U.S.C. §§ 1441 and 1332. We have appellate jurisdiction under 28 U.S.C. § 1291. See Reifer, 751 F.3d at 133 (holding that “a remand order entered pursuant to the [Declaratory Judgment Act] is an appealable final decision”). We typically review a district court’s decision to decline jurisdiction under the Declaratory Judgment Act for abuse of discretion. Id. at 138-39. However, when a district court declines jurisdiction of non-declaratory matters, we “review[] the underlying legal questions de novo but the court’s decision to abstain for abuse of discretion.” Nat’l City Mortg. Co. v. Stephen, 647 F.3d 78, 82 (3d Cir. 2011) (citations omitted). Here, we must first decide whether the District Court applied the appropriate legal standard to ascertain its discretion to decline jurisdiction. We review that question of law de novo.

III

A

A federal district court’s discretion to decline jurisdiction depends on whether the complaint seeks legal or declaratory relief. When an action seeks legal relief, federal courts have a “virtually unflagging obligation” to exercise jurisdiction. Colo. River, 424 U.S. at 817, 96 S.Ct. 1236. There are but a few “extraordinary and narrow exeeption[s]” to this rule. Id. at 813, 96 S.Ct. 1236.

When an action seeks declaratory relief, however, federal courts may decline jurisdiction under the Declaratory Judgment Act. 28 U.S.C. § 2201(a) (“In a case of actual controversy within its jurisdiction, ... any court of the United States ... may declare the rights and other legal relations of any interested party seeking such declaration....” (emphasis added)). Courts have greater discretion to decline jurisdiction over actions for declaratory judgments because they seek an adjudication of rights and obligations prior to the enforcement of a remedy. See Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671-72, 70 S.Ct. 876, 94 L.Ed. 1194 (1950); see also Step-Saver Data Sys., Inc. v. Wyse Tech., 912 F.2d 643, 649 (3d Cir. 1990) (“The idea behind the [Declaratory Judgment Act] was to clarify legal relationships so that plaintiffs (and possibly defendants) could make responsible decisions about the future.”); 10B Charles A. Wright & Arthur R. Miller, Fed. Prac. & Proc. Civ. § 2751 (4th ed.) (“[The Act] gives a means by which rights and obligations may be adjudicated in cases involving an actual controversy that has not reached the stage at which either party may seek a coercive remedy and in cases in which a party who could sue for coercive relief has not yet done so.”). The Supreme Court first confirmed federal courts’ discretion to decline jurisdiction over declaratory judgment actions in Brillhart, 316 U.S. at 495-96, 62 S.Ct. 1173, and reaffirmed this discretion in Wilton, 515 U.S. at 288, 115 S.Ct. 2137.

B

Before today “[w]e have never ruled on the legal standard a district court must apply when addressing whether it may decline jurisdiction when both declaratory and legal relief are claimed.” Reifer, 751 F.3d at 135 n.5. Federal courts opining on the matter have developed three main approaches.

The United States Courts of Appeals for the Second, Fourth, and Fifth Circuits have adopted a bright line rule that prioritizes a federal court’s duty to hear claims for legal relief over its discretion to decline jurisdiction to hear declaratory judgment actions. Under that rule, “[t]he Colorado River standard applies to all mixed claims — even when the ‘claims for coercive relief are merely “ancillary” to [a party’s] request for declaratory relief.’ ” VonRosenberg v. Lawrence, 781 F.3d 731, 735 (4th Cir. 2015), as amended (Apr. 17, 2015) (alterations in original) (quoting Black Sea Inv., Ltd. v. United Heritage Corp., 204 F.3d 647, 652 (5th Cir. 2000)); see also New Eng. Ins. Co. v. Barnett, 561 F.3d 392, 397 (5th Cir. 2009) (per curiam) (“[W]hen an action contains any claim for coercive relief, the Colorado River abstention doctrine is ordinarily applicable.” (citation omitted)); Vill. of Westfield v. Welch’s, 170 F.3d 116, 124 n.5 (2d Cir. 1999). These courts generally have found that Colorado RivePs “unflagging obligation” to entertain legal claims supersedes any discretion to decline jurisdiction over a declaratory claim in the same suit. See VonRosenberg, 781 F.3d at 735 (depriving access to a federal forum simply because there is a request for declaratory relief “seems especially unwarranted given that nearly all claims, including those for damages or in-junctive relief, effectively ask a court to declare the rights of the parties to the suit”).

The United States Courts of Appeals for the Seventh Circuit and Ninth Circuit have taken a slightly different approach, applying an independent claim test, which balances the court’s duty to hear legal claims with its discretion to decline jurisdiction over claims for declaratory relief. Under this test, the district court first determines whether claims seeking legal relief are independent of claims for declaratory relief. R.R. St. & Co., Inc. v. Vulcan Materials Co., 569 F.3d 711, 716-17 (7th Cir. 2009). “Non-declaratory claims are ‘independent’ of a declaratory claim when they are alone sufficient to invoke the court’s subject matter jurisdiction and can be adjudicated without the requested declaratory relief.” Id. at 715 (citing United Nat’l Ins. Co. v. R&D Latex Corp., 242 F.3d 1102, 1113 (9th Cir. 2001)). If the legal claims are dependent on the declaratory claims, the court may decline jurisdiction over the entire action. Id. at 716-17. But if they are independent, the court must adjudicate the legal claims unless there are exceptional circumstances as described in Colorado River. Id. When the legal claims are independent, courts generally will not decline the declaratory judgment action in order to avoid piecemeal litigation. R.R. St. & Co., 569 F.3d at 715-16. “Where the [legal] claims are not independent, the district court has discretion under Wilton/Brillhart to abstain from hearing the entire action.” Id. at 716.

Finally, district courts in the Third Circuit, following the approach taken by the United States Court of Appeals for the Eighth Circuit in Royal Indem. Co. v. Apex Oil Co., 511 F.3d 788 (8th Cir. 2008), primarily have applied the “heart of the matter” or “essence of the lawsuit” test. Under that test, the court “examines the relationship between the claims, and determines what the ‘essence of the dispute’ concerns.” Elec. Claims Processing, Inc. v. M.R. Sethi M.D., S.C., 2013 WL 243594, at *3 (W.D. Pa. Jan. 22, 2013) (quoting ITT Indus., Inc. v. Pac. Emp’rs. Ins., 427 F.Supp.2d 552, 566-67 (E.D. Pa. 2006)). This approach seeks to “balance between the various interests at stake” by examining the crux of the litigation. Id. (quoting Columbia Gas of Pa. v. Am. Int’l Grp., 2011 WL 294520, at *2 (W.D. Pa. Jan. 27, 2011)). Courts applying this test have found that the “administrative, jurisprudential, and other concerns” of mixed action litigation make it “fundamentally reasonable to pull a dependent coercive claim ■within the ambit of the discretion afforded its declaratory counterpart.” Columbia Gas, 2011 WL 294520, at *2. On this view, to allow an ancillary or dependent legal claim to eliminate the court’s discretion under the Declaratory Judgment Act, “would be the tail wagging the dog.” Id. (quoting Franklin Commons E. P’ship v. Abex Corp., 997 F.Supp. 585, 592 (D.N.J. 1998)).

C

The District Court in both cases under review here adopted the “heart of the matter” test. In Rarick, the Court was persuaded that the “Supreme Court’s specific recognition that declaratory judgment actions necessitate a different treatment than other types of cases” required the court to analyze the facts of a mixed claim before deciding whether it should decline jurisdiction. 2015 WL 5677295, at *4 (quoting ITT Indus., Inc., 427 F.Supp.2d at 557). Using similar reasoning, the District Court in Easterday adopted the heart of the matter test because it found “that the outcome of the plaintiffs’ claims for breach of contract and bad faith are dependent on how the insurance policies are interpreted for the declaratory judgment claim.” 2016 WL 492481, at *3 n.2.

After careful consideration of the various tests applied in the decisions mentioned, we hold that the independent claim test is the most appropriate one. When a complaint contains claims for both legal and declaratory relief, a district court must determine whether the legal claims are independent of the declaratory claims. If the legal claims are independent, the court has a “virtually unflagging obligation” to hear those claims, subject of course to Colorado RiveP s exceptional circumstances. Colo. River, 424 U.S. at 817-19, 96 S.Ct. 1236. If the legal claims are dependent on the declaratory claims, however, the court retains discretion to decline jurisdiction of the entire action, consistent with our decision in Reifer, 751 F.3d at 144-46.

The independent claim test is superior to the others principally because it prevents plaintiffs from evading federal jurisdiction through artful pleading. Although Rarick and Easterday included declaratory claims in their complaints, they requested a legal remedy — damages—for breach of contract. Because both cases satisfied the requirements for diversity jurisdiction, Rarick and Easterday could have obtained their desired relief in federal courts without requesting a declaratory judgment. By including a declaratory claim in their pleadings, however, Rarick and Easterday invited the District Court to avoid Colorado River’s “virtually unflagging obligation” in favor of the more expansive discretion afforded under Reifer.

This outcome is inconsistent with the purpose of the Declaratory Judgment Act, which is to “clarify legal relationships” in order to help putative litigants “make responsible decisions about the future.” Step-Saver Data Sys., 912 F.2d at 649. The Declaratory Judgment Act was intended to “enlarge[ ] the range of remedies available in the federal courts” by authorizing them to adjudicate rights and obligations even though no immediate remedy is requested. Skelly Oil Co., 339 U.S. at 671, 70 S.Ct. 876 (emphasis added). The heart of the matter test enables plaintiffs to subvert this goal by using the Declaratory Judgment Act to avoid federal subject matter jurisdiction over claims that are ripe for adjudication and in which the plaintiffs seek immediate relief.

Another virtue of the independent claim test is that it gives district courts the flexibility that the bright line test precludes. We agree with the Seventh Circuit when it opined: “we do not think the mere fact that a litigant seeks some non-frivolous, non-declaratory relief in addition to declaratory relief means that a district court’s Wilton/Brillhart discretion to decline to hear the declaratory claim should be supplanted by the narrow Colorado River doctrine.” R.R. Street & Co, Inc., 569 F.3d at 716. We also agree that while the bright line test is more easily applied by courts, “it unduly curtails a district court’s ‘unique and substantial discretion’ to abstain from hearing claims for declaratory relief.” Id. (quoting Wilton, 515 U.S. at 286, 115 S.Ct. 2137).

rv

We hold that the independent claim test is the applicable legal standard for review of a complaint that seeks both legal and declaratory relief. In these cases, both Plaintiffs’ legal claims were independent of their declaratory claims. Accordingly, we will vacate the judgments of the District Court and remand the cases for a determination whether exceptional circumstances exist under Colorado River.