LANDYA B. McCAFFERTY, District Judge.
Plaintiffs United States Fire Insurance Company ("U.S. Fire") and The North River Insurance Company ("North River") bring suit against several insurance companies,
From 1972 to 1985, U.S. Fire and North River, both New Jersey companies, issued twelve umbrella and excess umbrella liability policies to Mine Safety Appliances Company ("MSA"), a Pennsylvania corporation that manufactured and sold products such as respiratory protection equipment and asbestos-containing personal protective products.
During that same timeframe, plaintiffs entered into reinsurance contracts that covered the twelve MSA Policies (the "Reinsurance Contracts"). In their complaint, plaintiffs allege that they entered into at least one Reinsurance Contract with each defendant, other than Equitas. They allege, however, that Equitas assumed obligations of its predecessors-in-interest under the Reinsurance Contracts "pursuant to a transaction approved by the English High Court of Justice on or about June 30, 2009." Doc. no. 5 at ¶ 8. Each of the Reinsurance Contracts was entered into in the United Kingdom. Plaintiffs allege that RiverStone Claims Management LLC ("RiverStone"), a New Hampshire-based company that is not a party to this litigation, managed the claims under the Reinsurance Contracts.
Beginning in the 1990s, MSA sought insurance coverage from plaintiffs under the MSA Policies for hundreds of bodily injury claims based on exposure to asbestos, coal, and silica dust. MSA's attempts to have plaintiffs provide coverage under the MSA Policies resulted in many litigations, none of which was in New Hampshire.
In October 2016, MSA obtained a jury verdict in Pennsylvania state court against plaintiffs for breach of three of the MSA Policies and violation of Pennsylvania's bad faith statute. Plaintiffs paid a substantial portion of the claims tendered by MSA in 2017, and then fully resolved its disputes with MSA in mid-2018 in a confidential settlement.
Beginning in March 2017 and continuing through 2018, plaintiffs, through RiverStone, billed defendants for amounts they claimed were due under the Reinsurance Contracts on account of the MSA settlement payments. Certain defendants, as well as other reinsurers not named as defendants in this case, paid some of the reinsurance billings subject to a full reservation of rights, including the right to recoup any payments. Eventually, certain defendants refused to pay additional billings. On December 21, 2018, plaintiffs brought this suit, alleging breach of several of the Reinsurance Contracts and seeking a declaratory judgment arising out of defendants' refusal to pay the additional billings.
Also on December 21, 2018, less than an hour before plaintiffs initiated the instant lawsuit, certain underwriters at Lloyd's of London ("Underwriters"), along with Tenecom, Winterthur, Sompo, and Berkshire (collectively, the "New Jersey Plaintiffs") sued North River and U.S. Fire in the Complex Business Litigation Program of the New Jersey Superior Court (the "New Jersey Action").
Unlike in this case, the Underwriters are parties in the New Jersey Action. In addition, Equitas, a defendant in this case, is not a party in the New Jersey Action.
Defendants move to dismiss or stay this case. They advance several arguments, including: (1) the court should exercise its discretion to dismiss or stay this case pursuant to the prior-pending action doctrine or the related first-filed doctrine in light of the New Jersey Action; (2) abstention is warranted under the
Plaintiffs object to defendants' motion. In addition, plaintiffs move to strike portions of defendants' memorandum in support of the motion to dismiss or stay. Plaintiffs contend that although defendants assert in their memorandum that the Underwriters would destroy the court's diversity jurisdiction if they were joined, defendants have submitted no factual support for that assertion. Therefore, plaintiffs move to strike any unsupported contentions as to the Underwriters' citizenship in defendants' memorandum. Defendants object.
While defendants' motion to dismiss or stay was pending, defendants filed a notice of an order issued in the New Jersey Action, pursuant to Local Rule 42.1. Doc. no. 56. That order, issued by the court in the New Jersey Action (the "New Jersey Order"), ruled on a number of motions filed by U.S. Fire and North River in that case. Among other things, the New Jersey Order: (1) denied U.S. Fire and North River's motion to dismiss or stay on comity grounds; (2) denied U.S. Fire and North River's motion to dismiss or stay for Forum non Conveniens; (3) denied U.S. Fire and North River's motion to join Equitas as a party; (4) denied U.S. Fire and North River's motion to dismiss the breach of contract claims for failure to state a claim; and (5) ordered the New Jersey Plaintiffs to join Banco as an indispensable party.
Under the prior-pending-action doctrine, "`the pendency of a prior action, in a court of competent jurisdiction, between the same parties, predicated upon the same cause of action and growing out of the same transaction, and in which identical relief is sought, constitutes good ground for abatement of the later suit.'"
"Generally, a court may stay or dismiss a later-filed action under the doctrine if two conditions are met: (1) there exists an identity of issues between the two actions and (2) the controlling issues in the later-filed action will be determined in the earlier-filed action."
Here, dismissal pursuant to the prior-pending action doctrine is appropriate. Although presented in a different posture, the New Jersey Action involves the same issues presented in this case: the various reinsurers' obligations to provide payments to plaintiffs under the Reinsurance Contracts. As the New Jersey Plaintiffs seek not only the return of payments they previously made to North River, but also a declaratory judgment as to the parties' respective rights and obligations under the Reinsurance Contracts, the controlling issues in this litigation will be determined in the New Jersey Action.
Consideration of the remaining factors further favors dismissal of the case in light of the New Jersey Action. As discussed
So, too, do the remainder of the factors. Judicial efficiency and the likelihood of prompt disposition in the alternative forum favors dismissal of this case in favor of the New Jersey Action. The court in the New Jersey Action, which is designed to resolve complex business and commercial cases "in an expedited manner," has already issued several substantive rulings that affect the rights of the parties, and the parties have already set certain discovery deadlines in that case. Further, U.S. Fire and North River will suffer no prejudice as a result of dismissal of this action, as they can pursue their claims in the New Jersey Action if they so choose.
Plaintiffs contend briefly that the prior-pending action doctrine applies only when two identical actions proceed concurrently in two federal courts. Although certain cases outside of the First Circuit have declined to apply the prior-pending action doctrine when a state court action is pending and instead analyze the abstention question under the
The New Jersey Action renders adjudication of this case duplicative and unnecessary. Because the New Jersey Action "will likely determine all (or nearly all) of the issues presented here," dismissal of this case is appropriate.
Because the court dismisses this case based on the prior-pending action doctrine, the court need not reach defendants' remaining arguments raised in their motion.
Plaintiffs move to strike portions of defendants' memorandum in support of their motion to dismiss or stay. Specifically, plaintiffs move to strike any reference to the argument that joining of the Underwriters as defendants in this case would destroy diversity jurisdiction because there is no factual support for that contention. Putting aside whether striking portions of defendants' memorandum would be the appropriate remedy if plaintiffs' arguments were meritorious, the court need not reach the substance of plaintiffs' motion. Because the court dismisses this case under the prior-pending action doctrine, the court need not consider defendants' arguments concerning diversity jurisdiction. Therefore, plaintiffs' motion to strike is denied as moot.
For the foregoing reasons, defendants' motion to dismiss or stay this action (doc. no. 33) is granted, to the extent it seeks dismissal of the case. Plaintiffs' motion to strike (doc. no. 50) is denied as moot. The clerk of court shall enter judgment accordingly and close the case.
SO ORDERED.