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New reinsurance-related and arbitration developments from Carlton Fields

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MOTION TO COMPEL ARBITRATION ROUNDUP

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Class-Waiver Arbitration Clauses:

Vernon v. Qwest Communications International, Inc., Case No. 1:09-cv-01840 (USDC D.D.C. Mar. 8, 2012) (compelling arbitration; class-waiver arbitration provision in electronic agreement that was not “user friendly” was enforceable under Concepcion, as it was not unconscionable under state law)

Smith v. Americredit Financial Services, Inc., Case No. 3:09-cv-01076 (USDC S.D. Cal. March 12, 2012) (denying motion to compel arbitration; class waiver arbitration provision in retail installment contract was procedurally and substantively unconscionable under state law and was thus unenforceable, notwithstanding Concepcion)

Division of Labor Between Courts and Arbitrators:

Grigsby & Associates, Inc. v. M Securities Investment, Case No. 09-11817 (11th Cir. Dec. 20, 2011) (vacating order denying motion to enjoin arbitration; district court incorrectly held that arbitrators should decide whether defendants waived right to arbitrate by pursuing several lawsuits)

Schatz v. Cellco Partnership, Case No. 1:10-cv-05414 (USDC S.D.N.Y. Feb. 3, 2012) (compelling arbitration; validity of arbitration clause limiting relief available to plaintiff was question for arbitration, where it was ambiguous whether a “clear conflict” existed between the arbitration clause and purported rights to relief under state law)

Unite Here Local 25 v. Madison Ownership, LLC, Case No. 1:11-cv-0062 (USDC D.D.C. March 23, 2012) (denying dismissal of injunction action to compel labor arbitration, but ordering discovery as to coverage of arbitration agreement; purported failure of legal basis for injunctive relief was not a jurisdictional issue for the court, but was a question of available remedy for arbitrators to decide)

Waller v. Foulke Management Corp., Case No. 1:10-cv-06342 (USDC D.N.J. Mar. 19, 2012) (denying reconsideration of order compelling arbitration; whether multiple arbitration agreements were consistent and thus valid was question for court)

Seventeenth Street Associates, LLC v. Cole, Case No. 3:11-cv-00478 (USDC S.D. W. Va. Feb. 29, 2012) (compelling arbitration; court determines res judicata precluded relitigation of prior order compelling arbitration)

Right to Enforce Arbitration Agreement:

Allianz Global Risk U.S. Insurance Co. v. General Electric Co., Case No. 10-55451 (9th Cir. Mar. 5, 2012) (affirming order compelling arbitration; Allianz had subrogation rights under state law and thus GE was estopped from refusing to arbitrate with Allianz under the arbitration agreement between GE and Allianz’s insured)

Butto v. Collecto Inc., Case No. 2:10-cv-02906 (USDC E.D.N.Y. Feb. 23, 2012) (denying reconsideration of order denying motion to compel arbitration; non-signatory was not “sufficiently close” to contracting party to enforce arbitration agreement)

Thomas v. Westlake, Case No. D058531 (Cal. Ct. App. Mar. 23, 2012) (reversing denial of petition to compel arbitration; alleged agency relationship amongst defendants permitted non-signatory defendants to enforce arbitration agreement)

This post written by Michael Wolgin.

See our disclaimer.

“RIGHT TO KNOW” LAW INAPPLICABLE TO RECORDS SOUGHT IN INSURER’S LIQUIDATION PROCEEDINGS

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A court vacated an order of the Pennsylvania Office of Open Records that denied a request for documents in the possession of the department of insurance related to the drafting of the reinsurance offset guidelines of a liquidating insurer. The OOR had found that the documents were exempt from disclosure as “internal predecisional deliberations” in the possession of the department, which was serving as the insurer’s statutory liquidator. On appeal, while the court tended to agree with the OOR’s reasoning, it found that the state disclosure law was “inapplicable to rehabilitation or liquidation proceedings because [the records] are solely within the control of the court under the Insurance Act.” As a result, the court held that it, and not the OOR, had jurisdiction over the documents relating to the drafting of the guidelines. Greenberger v. Pennsylvania Insurance Department, Case No. 931 C.D. 2011 (Pa. Commw. Ct. March 7, 2012).

This post written by Michael Wolgin.

See our disclaimer.

APPALACHIAN AND INA SETTLE ASBESTOS REINSURANCE DISPUTE

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Appalachian Insurance Company recently settled and voluntarily dismissed its action against Insurance Company of North America pending in US District Court for the Eastern District of Pennsylvania. Appalachian’s claims arose out of INA’s alleged breach of a facultative reinsurance agreement between the parties. Appalachian had settled with Union Carbide after UC was sued for claims related to asbestos. Subsequently, Appalachian filed this action seeking to apply the reinsurance agreement’s “follow the settlements” clause. Appalachian asserted claims for breach of contract and declaratory relief. Appalachian Ins. Co. v. Insurance Co. of North Am., Case No. 10-7614 (E.D. Pa. Jan. 5, 2012).

This post written by John Black.

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SECOND CIRCUIT ORDERS DISMISSAL OF SUIT TO CONFIRM A PERUVIAN ARBITRATION AWARD IN NEW YORK ON FORUM NON CONVENIENS GROUNDS

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The Peruvian arbitration awarded over $21 million in connection with a consulting agreement for engineering studies on water and sewage services in Peru. A Peruvian statute, however, significantly limited the amount the consultant could recover from the Peruvian government. Consequently, the consultant filed a petition to confirm the award in U.S. district court in New York, where the consultant hoped to collect the full amount of the award from Peruvian assets located there. The lower court denied dismissal of the petition, in part, due to the policy supporting international arbitration under the Panama Convention. Over a vigorous dissenting opinion, the Second Circuit panel majority reversed, holding that “the cap statute is a highly significant public factor warranting [forum non conveniens] dismissal.” The court acknowledged: “Although enforcement of [international] awards is normally a favored policy of the United States and is specifically contemplated by the Panama Convention, that general policy must give way to the significant public factor of Peru’s cap statute.” Figueiredo Ferraz v. Republic of Peru, No. 09-3925 (2d Cir. Dec. 14, 2011).

This post written by Michael Wolgin.

See our disclaimer.