Jurisdiction Issues

SUIT AGAINST LLOYD’S DISMISSED FOR LACK OF JURISDICTION BECAUSE ONE OF THE NAMES SHARED CITIZENSHIP WITH PLAINTIFFS

November 3, 2009 by Carlton Fields

A federal district court granted the motion of certain underwriters at Lloyd’s of London to dismiss the suit for lack of subject matter jurisdiction, holding that when determining the diversity of citizenship of the parties in a case involving Lloyd’s, all the “names” must be taken into consideration. When federal jurisdiction is founded on 28 U.S.C. § 1332, the parties must be diverse in their citizenship, so that each defendant is a citizen of a state different from each plaintiff. In this case, the plaintiffs, citizens of Louisiana, claimed that an insurance policy with Lloyd’s covered property damaged in Hurricane Katrina. Lloyd’s presented the court with an unsworn declaration that one of the names on the policy also was a citizen of Louisiana. Rejecting plaintiffs’ technical arguments about the unsworn nature of the declaration, the court dismissed the case because the diversity requirement was not met. St. Charles Property Association v. Certain Underwriters at Lloyd’s London, Case No. 09-2504 (USDC E.D. La. Oct. 2, 2009).

This post written by Brian Perryman.

DISTRICT COURT FINDS NO SUBJECT MATTER JURISDICTION IN AIG SUIT

October 6, 2009 by Carlton Fields

The District Court for the District of New Jersey recently granted defendant AIG’s motion to dismiss Robert Plan Corporation’s claims arising out of a series of reinsurance agreements between the parties. The procedural history of the action is complex, and it involves underlying state court action, financial rehabilitation and bankruptcy proceedings. Robert Plan filed a Notice of Removal in January, 2009, and AIG subsequently moved to dismiss for lack of subject matter jurisdiction. The court granted the motion to dismiss, finding that that there was no case or controversy for the court to decide because the underlying state court action had been dismissed by the time plaintiffs filed their notice of removal. Additionally, because the Court found subject matter jurisdiction lacking, it denied as moot Robert Plan’s Motion to Transfer Venue. The Robert Plan Corp. v. American Int’l Group, Case No. 09-200 (D.N.J. Aug. 10, 2009).

This post written by John Black.

PARTIES STIPULATE TO DISMISSAL IN TIG V. CENTURY INDEMNITY SUIT

September 2, 2009 by Carlton Fields

We previously reported on May 20, 2009 and June 25, 2009, about TIG Insurance Company’s suit against Century Indemnity Company, which alleged that Century breached its reinsurance agreement with TIG’s predecessor-in-interest, in connection with certain reinsured losses arising from underlying Honeywell asbestos suits. As previously reported, in April, 2009 the Court allowed TIG to amend its complaint to add breach of contract claims on two additional reinsurance contracts. In June, 2009, the Court denied Century’s motion to transfer venue from New York City to Philadelphia. All parties have now stipulated to dismissal with prejudice of all claims and cross-claims. TIG Ins. Co. v. Century Indemnity Co., No. 08-7322 (USDC S.D.N.Y. July 17, 2009).

This post written by John Pitblado.

COURT DISMISSES CLAIMS AGAINST AIG FOR LACK OF STANDING

August 31, 2009 by Carlton Fields

As reported in our March 27, 2008 and April 6, 2009 posts, The National Council on Compensation Insurance (“NCCI”), as attorney-in-fact for participating companies of the National Workers Compensation Reinsurance Pool (“the Pool”), brought claims against AIG and several of its subsidiaries (“AIG”). The suit generally alleged that payments made by AIG in resolution of charges against it by the New York Attorney General’s office arising from an allegedly fraudulent workers compensation premium accounting scheme, were insufficient to compensate Pool members for their losses.

AIG moved to dismiss the claims brought by NCCI, asserting (1) NCCI lacked standing to bring claims in its capacity as “attorney-in-fact;” (2) NCCI suffered no direct injury; and (3) NCCI did not have associational standing to bring the claims on behalf of individual companies. The Court agreed with AIG, finding that there was no transfer of title or assignment of interest of any affected rights in the agreement Pool members made with NCCI to act as “attorney-in-fact.” The Court also agreed that NCCI suffered no direct injury of its own, and that NCCI could not demonstrate associational standing because of the underlying conflicts between member companies. However, while the Court dismissed the claims, it noted that the litigation continues because individual pool members’ claims were “reassigned for relatedness” to the Court, and those Pool members now seek to bring those claims as a class action. National Council on Compensation Ins., Inc. v. American Int’l Group, Inc., No. 07-C-2898 (USDC N.D. Ill. August 20, 2009).

This post written by John Pitblado.

PETITION TO VACATE ARBITRATION AWARD FILED IN WRONG COURT

July 7, 2009 by Carlton Fields

Following an unfavorable decision by an arbitrator, the Pacific Northwest Regional Council of Carpenters (“PNRCC”) filed suit in the Western District of Washington to vacate the arbitrator’s award to the Laborers’ International Union of North America (“LIUNA”). LIUNA filed a motion to transfer PNRCC’s action to D.C. federal court, arguing that PNRCC was bound to consent to D.C. jurisdiction by the collective bargaining agreement. Finding that the action could clearly have been brought in D.C., the district court focused on the “convenience of the parties” and “interests of justice” requirements for a §1404(a) transfer. The court noted that both LIUNA and PRNCC’s parent union were headquartered in Washington, D.C. and that all relevant records were in D.C. where all of the operative facts of the case occurred. For these reasons, the court held that D.C. was the more convenient forum.

The court also held that the interests of justice supported the transfer. LIUNA had filed a suit seeking enforcement of the arbitration award in D.C. and the court noted that it would be inefficient and duplicative to examine the same issues in separate cases. Ultimately, the court granted the motion to transfer, explaining that whether the agreement properly bound PNRCC was irrelevant in the §1404(a) analysis. LIUNA had met their burden by showing that D.C. was the most appropriate forum to decide all issues based on the traditional §1404(a) considerations. Pacific Northwest Reg'l Council of Carpenters v. Laborers Int'l Union of N. Am., Case No. C09-420 (W.D. Wash. June 5, 2009).

This post written by John Black.