Steadfast Insurance Company v. Portsmouth JV
- Ronnie Abrams
- 1:20-cv-08615
- U.S. District Court · Southern District of New York
- 2
In Steadfast Insurance Company v. Portsmouth JV, Judge Abrams allowed discovery to continue and accepted diversity jurisdiction for now.
Steadfast Insurance Company and Portsmouth JV. Discovery continues, and the court will proceed for now on the understanding that it has diversity jurisdiction; Portsmouth JV may file a jurisdictional motion if it continues to question Steadfast’s citizenship.
What happened
In Steadfast Insurance Company v. Portsmouth JV, the court considered whether to pause information-sharing while it reviewed Steadfast’s motion concerning Portsmouth JV’s counterclaims and whether Steadfast was an Illinois or Delaware citizen.
The court decided that Steadfast had not shown a sufficient reason to pause discovery. Because the motion concerned only certain claims and requests for attorneys’ fees and would not resolve the entire case, the court allowed discovery to proceed and adopted the parties’ proposed case-management plan.
Judge Ronnie Abrams also found that the information Steadfast provided was enough, for now, to support treating Steadfast as an Illinois citizen and exercising diversity jurisdiction. Portsmouth JV may file an appropriate motion challenging subject-matter jurisdiction if it still has doubts.
The detailed version
- Steadfast Insurance Company v. Portsmouth JV · No. 1:20-cv-08615
- Ronnie Abrams
- Feb. 16, 2021
Background
The court had directed the parties to address two issues: whether discovery should be stayed while the court considered Steadfast’s motion concerning Portsmouth JV’s counterclaims, and how to resolve Portsmouth JV’s question about whether Steadfast was a citizen of Illinois or Delaware. That citizenship question affected whether the court had subject-matter jurisdiction based on diversity of citizenship.
Discovery Stay
The court concluded that Steadfast had not established good cause—a legally sufficient reason—for staying discovery. The court noted that the pending motion would not resolve the entire action. It concerned Portsmouth JV’s request for attorneys’ fees and costs in its answer and its claims for bad faith and extra-contractual damages in the form of attorneys’ fees in its counterclaim. The court also found that the parties had not shown that the discovery would be especially broad or burdensome.
The court therefore permitted discovery to proceed and entered the case-management plan proposed by the parties. It scheduled a post-discovery conference for September 3, 2021, at 11:30 a.m.
Citizenship and Jurisdiction
The court found that Steadfast had provided enough information to support treating it as an Illinois citizen and exercising diversity jurisdiction. The materials included a certificate of authority from an insurance department, articles of reorganization stating that the company’s principal office would be in Cook County, Illinois, and a certificate of conversion filed with the Delaware Secretary of State.
The court acknowledged Portsmouth JV’s concerns about inconsistencies in Steadfast’s representations to various courts. Based on the information then provided, however, the court was prepared to proceed on the understanding that it had jurisdiction. The court stated that Portsmouth JV could file an appropriate motion to dismiss for lack of subject-matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1) if it continued to have doubts.
Disposition
The order allowed discovery to continue, adopted the proposed case-management plan, and accepted the basis for diversity jurisdiction for purposes of proceeding with the case. It did not decide Steadfast’s pending motion concerning Portsmouth JV’s counterclaims.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.