Declaratory relief refers to a court’s declaratory judgment stating the rights of parties without ordering any specific action or listing awards for damages. Declaratory relief allows a party who is not certain of his rights to prevent the accrual of avoidable damages and to obtain an adjudication before the parties bring a coercive lawsuit. Declaratory relief can be contrasted with coercive relief where the court orders a party to pay monetary damages or take certain action under injunctive relief. When a party is requesting a declaratory judgment, the party is seeking an official declaration regarding the status of the controversy in issue. Moreover, the point is that the resolution of the declared rights of all parties involved will hopefully prevent further escalation of the conflict or even further litigation. A plaintiff seeking declaratory relief must show that there is an actual controversy even though declaratory relief will not order enforceable action against the defendant. An actual controversy means there is a connection between the challenged conduct and injury, and redressability that the court could order. An example of this in a case involving contracts would be a party seeking an interpretation of the contract to determine their rights. Another example would be an insured individual seeking a specific determination of their rights and surrounding circumstances regarding insurance coverage under a specific policy.
The Declaratory Judgment Act is a federal statute that authorizes declaratory relief. The Declaratory Judgment Act provides that a court, upon the filing of an appropriate pleading, "may" issue a declaratory judgment in "a case of actual controversy within its jurisdiction" (28 U.S.C. § 2201(a)). Therefore, a federal court has discretion whether to exercise jurisdiction over a declaratory judgment action. In analyzing whether to exercise jurisdiction the court must determine at the outset whether the court has jurisdiction under Article III, section 2 by evaluating whether the complaint alleges an actual controversy.
[Last updated in September of 2022 by the Wex Definitions Team]