Jurisdiction Issues

NINTH CIRCUIT: NO IMMEDIATE APPEAL OF INTERIM STAY AND ORDER COMPELLING SUBMISSION OF DISPUTE TO REFEREE

May 24, 2012 by Carlton Fields

The Ninth Circuit recently issued an opinion on an issue of first impression — whether an order compelling enforcement of a contractual agreement to submit a dispute to a referee, and staying proceedings in the interim, is immediately appealable. The dispute at issue arose between Bagdasarian Productions and Twentieth Century Fox over the film “Alvin and the Chipmunks, The Squeakquel.” The Ninth Circuit dismissed the appeal on the basis that it lacked jurisdiction at this stage of the proceedings. Specifically, the court held that the stay was not a “final decision” or “judgment” because it did not put the plaintiffs “out of court.” No decision by the referee could possibly moot the action or be res judicata (as with a parallel proceeding). Indeed, after the referee’s decision, the losing party would have the option of moving for a new trial or any other post-judgment motions. Similarly, the court found that the order staying the proceedings was not immediately appealable under the collateral order doctrine because plaintiffs could ultimately seek relief on appeal to this court after the action before the referee and district court concludes. The Court noted that its ruling was consistent with treatment of orders denying or compelling arbitration under the Federal Arbitration Act. Bagdasarian Productions, LLC v. Twentieth Century Fox Film Corp., No. 10-56430 (9th Cir. Mar. 26, 2012).

This post written by John Black.

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FEDERAL COURT JURISDICTION FOUND FOR STATE LAW CLAIMS BASED ON DISPUTED WITHDRAWALS UNDER FEDERAL REINSURANCE PROGRAM

May 9, 2012 by Carlton Fields

School districts brought a case in state court against their insurers, alleging that the insurers’ withdrawal of funds from the federal Early Retiree Reinsurance Program (ERRP) on the school district’s behalf was improper under the ERRP’s scheme. Despite the plaintiffs’ assertion of only state common law claims for conversion, civil theft, unjust enrichment, and breach of fiduciary duty, the defendants removed the case to federal court as implicating a federal question. On plaintiffs’ motion to remand back to state court, the court analyzed plaintiffs’ allegations and determined that, notwithstanding that the legal claims were alleged under state law, meeting the elements of those claims required the court to interpret the ERRP and related federal regulations to determine whether the defendants’ withdrawals were proper. The court then determined that, because the case would entail a “substantial and disputed federal issue,” and because federal jurisdiction over the case would not create “a potentially enormous shift of traditionally state cases into federal court,” federal jurisdiction was proper. In reaching this conclusion, the court found that the lack of a right to a private right of action under the ERRP was a relevant factor, but did not require remand. Hartland Lakeside Joint No. 3 School District v. WEA Insurance Corp., Case No. 2:12-cv-00154 (USDC E.D. Wisc. Apr. 24, 2012).

This post written by Michael Wolgin.

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COURT OVERTURNS DENIAL OF REQUEST FOR REINSURANCE-RELATED RECORDS FOR JURISDICTIONAL REASONS

May 7, 2012 by Carlton Fields

The Commonwealth Court of Pennsylvania issued an opinion vacating Pennsylvania’s Office of Open Records’ denial of a request for documents under the state’s Right-to-Know Law. Plaintiff sought records related to Reinsurance Offset Guidelines from the Pennsylvania Department of Insurance and Reliance Insurance Company, which has been in liquidation since 2001. The OOR denied the request on the basis that the documents were “internal, pre-decisional deliberations.” The court vacated the denial because the OOR did not have jurisdiction to hear this matter as Reliance’s Statutory Liquidator. The court further explained that the Pennsylvania Insurance Department, when aiding the Statutory Liquidator, and Reliance are acting pursuant to a judicial order and under the supervision of the Commonwealth Court. Because the court had appointed the state Insurance Commissioner as Statutory Liquidator, it retained general supervision over the Statutory Liquidator and the insolvent estate. Thus, all complaints regarding how the insolvency is being administered must be directed to the court, and any records can only be obtained through court order. Greenberger v. Pennsylvania Ins. Dept., No. 931 C.D. 2011 (Pa. Commw. Ct. Mar. 7, 2012).

This post written by John Black.

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

April 10, 2012 by Carlton Fields

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.

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ARBITRATION ROUND-UP

March 29, 2012 by Carlton Fields

Manifest disregard

Bangor Gas Co., LLC v. H.Q. Energy Services (U.S.), Inc., No. 1:11-cv-457-NT (USDC D. Me. Mar. 1, 2012) (granting motion to confirm, no manifest disregard).

Total Landscaping Care, LLC v. Tower Cleaning Systems, Inc., No. 10-6542 (USDC E.D. Pa. Mar. 1, 2012) (denying vacatur, no manifest disregard).

Duferco S.A. v. Tube City IMS, LLC, No. 11-886 (2d Cir. Mar. 8, 2012) (affirming denial of vacatur, no manifest disregard).

Exceeding Scope

W & J Harlan Farms, Inc. v. Cargill, Inc., No. 1:09-CV-113-WTL-TAB (USDC S.D. Ind. Mar. 6, 2012) (granting motion to confirm, arbitrators did not exceed scope, no manifest disregard).

Primed, Inc. v. Dallas General Life Insurance Co., No. 8:11-cv-2002-T-33AEP (USDC M.D. Fla. Feb. 28, 2012) (denying vacatur, arbitrators did not exceed powers).

JPMorgan Chase Bank, N.A., No. 10-17562 (9th Cir. Feb. 29, 2012) (affirming denial of vacatur, arbitrators did not exceed scope)

Failure to hear pertinent and material evidence

LJL 33rd Street Associates, LLC v. Pitcairn Properties, Inc., No. 11-Civ-6399 (USDC S.D.N.Y. Feb. 15 2012) (denying vacatur, no failure to hear pertinent and material evidence)

Jurisdiction / Venue / Procedure

JDS Uniphase Corp. v. Finisar Corp., No. 11-1213 (USDC W.D. Pa. Mar. 5, 2012) (granting motion to dismiss, no independent subject matter jurisdiction conferred by FAA) (appeal docketed March 9, 2012).

Marlowe v. IDS Property Casualty Insurance Co., No. 2011AP2067 (Wis. Ct. App. Mar. 13, 2012) (reversing trial court, remanding to arbitrators for ruling on discovery issues).

Rain CII Carbon, LLC v. ConocoPhillips Co., No. 11-30669 (5th Cir. Mar. 9, 2012) (affirming ruling denying vacatur for lack of “reasoned award” attack on award issued without findings of fact and law).

Grynberg Production Corp. v. Susman Godfrey, LLP, No. 10-1248 (10th Cir. Feb. 16, 2012) (affirming denial of motion to compel re-arbitration of matters encompassed by original award).

Bridgepoint Ventures, LLC v. PanAm Management Group, Inc., No. 11-10021 (11th Cir. Mar. 2, 2012) (affirming proper subject matter jurisdiction of trial court that granted motion to confirm where complete diversity existed at time of filing).

Local 36 Sheet Metal Workers’ International Association AFL-CIO v. Whitney, No. 11-1781 (8th Cir. Mar. 6, 2012) (reversing denial of vacatur where non-appearing party in arbitration challenged jurisdiction for lack of contract between parties for first time in proceeding to enforce the award).

This post written by John Pitblado.

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