Berkley Assurance Company v. MacDonald-Miller Facility Solutions

Background

MacDonald-Miller Facility Solutions, Inc. moved for reconsideration of the court’s December 16, 2019 Opinion and Order. That earlier ruling determined that this action, rather than a later-filed action in the United States District Court for the Western District of Washington, would receive priority under the first-filed rule.

Choice-of-Law Argument

MacDonald-Miller argued that the court had used circular reasoning by assuming that the insurance policy’s New York choice-of-law provision was valid. It contended that the court should first conduct a new choice-of-law analysis, which would select Washington law. According to MacDonald-Miller, Washington law would make the policy’s choice-of-law provision void from the beginning.

The court rejected that argument. Because it sits in New York, the court applied New York’s choice-of-law rules. It explained that, for certain high-value contracts, New York law honors a contractual provision selecting New York law regardless of the contacts between New York and the transaction. The court also distinguished contract formation issues—such as whether a party ever agreed to the provision—from other challenges to a provision’s validity. MacDonald-Miller challenged the provision’s effect under Washington law, not whether it had agreed to the provision. The court concluded that this challenge was unsupported by New York law.

First-Filed Rule and Forum Shopping

MacDonald-Miller also argued that the court had incorrectly applied the first-filed rule because it considered the choice-of-law provision in evaluating convenience. The court rejected that argument for the same reasons stated in its choice-of-law analysis.

MacDonald-Miller further argued that alleged forum shopping created a special circumstance that justified an exception to the first-filed rule. The court disagreed because the parties had previously consented to jurisdiction in New York courts. It stated that a party does not engage in forum shopping merely by starting litigation in a forum the parties had already selected.

Interlocutory Appeal

The court declined to certify the case for interlocutory appellate review under 28 U.S.C. § 1292(b). That statute permits certification when there is a substantial disagreement about a controlling legal question. The court found that the New York Court of Appeals had directly rejected MacDonald-Miller’s interpretation of New York choice-of-law rules. It therefore denied MacDonald-Miller’s request to certify the question to the U.S. Court of Appeals for the Second Circuit.

Disposition

Judge Oetken denied MacDonald-Miller’s motion for reconsideration. He also denied its request for interlocutory appellate certification and directed the clerk to close the motion at Docket Number 50.