Observers of filing trends in personal injury mesothelioma matters alleging exposure to talc contaminated with asbestos have noted that the bankruptcy filing of a predominant defendant in those matters did little to slow the pace of such filings. Instead, as the filing of new matters continued, the number of defendants named in such filings substantially increased. In an … [Read more...] about Talc-Related Matter Filings Predictably Increase, As New Bankruptcies Are Filed
Legal
I Shall (Not) Be Released: With Purdue Pharma Decision, US Supreme Court Remakes Chapter 11 Landscape
They say every man needs protection, they say that every man must fall.1 For over 40 years, “the bankruptcy community has recognized the resolution of mass tort claims as a widely accepted core function of bankruptcy courts,” and a “key feature in every mass tort bankruptcy” has been the non-debtor release.2 These releases are granted in favor of parties that have not … [Read more...] about I Shall (Not) Be Released: With Purdue Pharma Decision, US Supreme Court Remakes Chapter 11 Landscape
Supreme Court Resolves FAA Circuit Split, Limiting Appealability of Orders Compelling Arbitration
The Supreme Court recently resolved a Circuit split addressing how district courts should proceed when they have found that all claims in a dispute should be compelled to arbitration. Smith v. Spizzirri, No. 22-1218, --- S.Ct. ----, 2024 WL 2193872 (U.S. May 16, 2024). The Federal Arbitration Act (“FAA”) provides that, once a court has referred a matter to arbitration, “the … [Read more...] about Supreme Court Resolves FAA Circuit Split, Limiting Appealability of Orders Compelling Arbitration
Cedent Wins Late Notice Dispute
It’s been a while since there has been a court opinion on the defense of late notice in a reinsurance dispute. Recently, a Texas federal court had the pleasure of addressing the issue. In United States Fire Insurance Co. v. Unified Life Insurance Co., No. 3:22-cv-00868-BT (N.D. Tex., Mar. 29, 2024, the cedent sought a reinsurance recovery after a class-action settlement. The … [Read more...] about Cedent Wins Late Notice Dispute
Arbitration Award Confirmed In the Face of Recapture and Request to Seal Is Denied
Parties to reinsurance arbitrations often file in court to confirm (or vacate) arbitral awards. Some file even though the adverse party has complied with the arbitration award. When doing so, they invariably invoke the confidentiality agreement in the proceeding to seal the award and other related documents used in the petition to confirm. Must the court confirm and must the … [Read more...] about Arbitration Award Confirmed In the Face of Recapture and Request to Seal Is Denied
Chaffetz Lindsey Launches New York Appellate Insurance Reports (NYAIR)
February 2024 ─ Chaffetz Lindsey is excited to launch of a new firm publication, the New York Appellate Insurance Reports (NYAIR). NYAIR will provide timely summaries of New York appellate court and Second Circuit decisions concerning complex commercial insurance and reinsurance disputes. Coverage includes decisions back to January 1, 2023 and we will add new reports as future … [Read more...] about Chaffetz Lindsey Launches New York Appellate Insurance Reports (NYAIR)
Nuclear Verdicts & Social Inflation: Juror Biases & Trends
How do you get the attention of 100 people attending the last session on the final day of an AIRROC conference? Well, this presentation started out with the group watching two brief videos of juries deliberating in advance of rendering their verdict. In both scenarios, audience members were able to hear the jurors discussing their opinions on the deep pockets of corporate … [Read more...] about Nuclear Verdicts & Social Inflation: Juror Biases & Trends
New York Court Of Appeals Rules That Presence Of COVID-19 Virus At Insured Property And Resulting Business Closures Do Not Constitute “Direct Physical Loss Or Damage” Under Property Policy
For more information, please visit the Insurance Law Alert Resource Center. Holding The New York Court of Appeals ruled that allegations of the COVID-19 virus at insured property locations and the resulting business closures and accommodations resulting from the virus do not state a claim for “direct physical loss or damage” under a property policy. Consolidated Rest. … [Read more...] about New York Court Of Appeals Rules That Presence Of COVID-19 Virus At Insured Property And Resulting Business Closures Do Not Constitute “Direct Physical Loss Or Damage” Under Property Policy
What is the Practical Effect of an Honorable Engagement Clause?
Introduction Since time out of mind, the arbitration clauses of reinsurance contracts have included language to the effect that arbitrators shall consider the contract as an honorable engagement, rather than merely a legal obligation, are relieved of all judicial formalities and may abstain from following the strict rules of law. One commentator described honorable engagement … [Read more...] about What is the Practical Effect of an Honorable Engagement Clause?
Arbitration in the Courts
Southern District of New York twice finds that, under the McCarran Ferguson Act, Louisiana statute barring arbitration of insurance disputes reverse-preempts the New York Convention: Arbitration agreements were not “forum selection clauses” exempted from Louisiana statute’s proscription on arbitrating insurance disputes. Certain Underwriters at Lloyds, London et al v. Mpire … [Read more...] about Arbitration in the Courts
Participation In Early Stages of Arbitration Dooms Petition to Stay Arbitration
When a party receives and arbitration demand and there is a dispute about whether there is an agreement to arbitrate between the parties, participating in the early stages of the arbitration may be problematic for a subsequent effort to dispute arbitrability. This issue can arise when there has been an assignment or transfer of a reinsurance agreement or the right to the … [Read more...] about Participation In Early Stages of Arbitration Dooms Petition to Stay Arbitration
New York Preserves Subrogation Rights
The insurer’s right of subrogation is equitable in nature, even if not based in contract. However, since the insurer steps into the shoes of its insured and is limited to the rights of its insured, an integral part of the investigation process is determining what rights the insured has. Whether or not the insured can settle with the tortfeasor and that whether the settlement … [Read more...] about New York Preserves Subrogation Rights
Pesky Facts Result in a Denial of Summary Judgment in a Post-Settlement Allocation Case
Since the 1970s cedents and reinsurers have been battling over long-term environmental pollution damage. Disputes have arisen over the number of retentions that the cedent should take, the manner in which settlement with the insured should be allocated and other issues. In a recent case, a reinsurer sought summary judgment on a cedent’s breach of contract claim over a specific … [Read more...] about Pesky Facts Result in a Denial of Summary Judgment in a Post-Settlement Allocation Case
Excess and Surplus Lines Law Manual 2023 Update
We are happy to provide the 2023 edition of our Excess and Surplus Lines Law Manual. This edition reflects all of the pertinent changes in the surplus lines laws and regulations of the 50 states and U.S. territories during the past year. The website provides you with the ability to click on the states and territories of interest to view the updates, and a PDF of the entire … [Read more...] about Excess and Surplus Lines Law Manual 2023 Update
Back-to-Back and Belly-to-Belly: Coextensive Reinsurance Coverage
When a ceding insurer purchases reinsurance, it generally expects that its reinsurer will respond to the ceding insurer's claims to the same extent that the ceding insurer covers the underlying claim unless otherwise stated in the reinsurance contract. In other words, ceding insurers often expect back-to-back reinsurance coverage. While this is not true in every reinsurance … [Read more...] about Back-to-Back and Belly-to-Belly: Coextensive Reinsurance Coverage
Arbitration in the Courts
DC district court reaches conflicting decisions whether EU high court’s landmark decision deprives US courts of jurisdiction to enforce investors’ arbitral awards against Spain. 9REN Holding SARL v. Kingdom of Spain, No. 1:19-cv-1871-TSC (D.D.C. Feb. 15, 2023); Blasket Renewable Investments LLC v. Kingdom of Spain, No. 21-3249 (RJL) (D.D.C. March 31, 2023). The Slovak … [Read more...] about Arbitration in the Courts
Cedent Prevails on Back-to-Back Reinsurance Recovery
Settlement allocations of long-tail losses like pollution claims have long been a source of disputes between cedents and reinsurers. Often the allocation of the underlying settlement depends on the allocation methodology used based on the law of the relevant jurisdiction. The issue becomes more complicated where the reinsurance contract is governed by the law of a different … [Read more...] about Cedent Prevails on Back-to-Back Reinsurance Recovery
Eleventh Circuit Joins Its Sister Circuits in Holding that the FAA’s Grounds for Vacating Domestic Awards Are Available to Challenge International Arbitration Awards Rendered in the United States or Decided under U.S. Law
We recently wrote about the Eleventh Circuit’s May 2022 decision in Corporacion AIC, S.A. v. Hidroelectrica Santa Rita S.A. (AICSA v. HSR), holding that FAA grounds for vacating domestic arbitration awards are not available to challenge international arbitration awards. The Eleventh Circuit reheard the case en banc, as urged by the three judge panel in its May 2022 opinion, … [Read more...] about Eleventh Circuit Joins Its Sister Circuits in Holding that the FAA’s Grounds for Vacating Domestic Awards Are Available to Challenge International Arbitration Awards Rendered in the United States or Decided under U.S. Law
More On ChatGPT And Insurance Coverage
At the end of February, I did an article, for a Coverage Opinions email blast, that shared the results of my ChatGPT insurance coverage test. I had asked the much talked-about artificial intelligence platform – that offers answers to questions in human-like conversation – what it knew about insurance coverage. Very simple. I asked five very specific questions with answers … [Read more...] about More On ChatGPT And Insurance Coverage
Third Circuit Reverses; Dismisses LTL’s “Texas Two-Step” Bankruptcy Case
In the AIRROC Annual 2022, the authors published “Dancing to the Beat of Divisive Mergers; The ‘Texas Two-Step’ Bankruptcy Strategy,” summarizing the strategy and discussing several recent cases.1 Most notably, the LTL Management, LLC (Johnson & Johnson) case was discussed in detail. In that case, the talc claimants and others filed a motion to dismiss, arguing that the … [Read more...] about Third Circuit Reverses; Dismisses LTL’s “Texas Two-Step” Bankruptcy Case
