The background of this case is that Boomerang Recoveries LLC, a reinsurance program review company, investigated Farmers Insurance Company’s reinsurance contracts to identify any premiums Farmers had been overcharged in exchange for a percentage of any recoveries. Boomerang allegedly found that Farmers had been overcharged $2,246,014.65 in reinsurance premiums from 2003 to 2013. Guy Carpenter & Company LLC, the reinsurance broker, conducted its own review in response to Boomerang’s, and found that Farmers owed reinsurers over two million dollars in premium that had not been paid, thus reducing the amount owed to Farmers to $273,989.97. According to Boomerang, Guy Carpenter had no justification for performing the audit and disputing Boomerang’s findings, that Guy Carpenter disparaged Boomerang, and induced Farmers not to pursue a substantial portion of the recoveries.
On December 9, 2014, Boomerang brought a litigation against Guy Carpenter and two of its officers for various torts, including intentional interference with contract, unfair competition, commercial disparagement and other claims in Pennsylvania state court. The case was removed and then later remanded back to the state court. Boomerang then added Marsh & McLennan Cos. Inc. (MMC) as a defendant in a fifth amended complaint, and MMC again removed the case. Boomerang then moved to remand on the basis that removal was improper given the forum defendant rule, 28 U.S.C. § 1441(b)(2), and that one of the defendants is a citizen of Pennsylvania. The defendants argued that the one officer who is a Pennsylvania citizen was fraudulently joined to defeat removal. The Pennsylvania federal court, however, concluded that the officer was not fraudulently joined, and that the case was improperly removed from state court. Thus, the court remanded the action back to Pennsylvania state court for lack of federal subject matter jurisdiction. Boomerang Recoveries, LLC v. Guy Carpenter & Co., LLC, Case No. 16-0222 (USDC E.D. Pa. Apr. 21, 2016).
This post written by Jeanne Kohler.
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