Lloyd's v. Consultants
Certain Underwriters at Lloyd's, London Subscribing to Policy No. PSH00698637 v. Enercon Consultants, Inc.
- Denise Cote
- 1:20-cv-10659
- U.S. District Court · Southern District of New York
- 3
In Certain Underwriters v. Enercon, Judge Broderick ordered briefing on whether the court has diversity jurisdiction over the insurance-policy dispute.
The parties to the insurance-policy declaratory-judgment action, including the Lloyd’s syndicate plaintiffs and the defendant entities, must address whether federal diversity jurisdiction exists.
What happened
Certain Underwriters at Lloyd’s, London Subscribing to Policy No. PSH00698637 v. Enercon Consultants, Inc. concerns a request for a declaration of the parties’ rights and obligations under an insurance policy. The parties rely on federal diversity jurisdiction, which generally requires opposing parties to have different citizenships.
The court could not determine the relevant citizenships of the plaintiffs, described as syndicates operating through the Lloyd’s of London marketplace and possibly made up of members with different levels of potential liability. The court explained that insurance-syndicate cases may require examining each syndicate member’s citizenship, although some cases examine only a lead underwriter.
Judge Vernon S. Broderick ordered the parties to brief whether subject-matter jurisdiction exists. If they agree that jurisdiction exists, they must file a joint brief within 21 days; if they disagree, supporting parties must file within 21 days, opposing parties have 14 additional days, and supporters may reply seven days after that.
The detailed version
- Lloyd's v. Consultants · No. 1:20-cv-10659
- Denise Cote
- Aug. 24, 2021
Background
The plaintiffs brought an action seeking a declaratory judgment about the rights and obligations under an insurance policy. The parties asserted that the court had subject-matter jurisdiction under the diversity-of-citizenship statute, 28 U.S.C. § 1332. The opinion describes the plaintiffs as various syndicates operating through the Lloyd’s of London marketplace in London, England. The defendants are described as entities that appear to be citizens of New York and Florida for diversity-jurisdiction purposes.
Jurisdictional Issue
Federal diversity jurisdiction generally requires complete diversity, meaning that all opposing parties must have different citizenships. Jurisdiction is assessed based on the parties’ citizenships when the complaint was filed. The court stated that the materials submitted did not establish the relevant citizenships of the plaintiffs, who appeared to be an unincorporated association made up of members with differing potential liability under the disputed policy.
The court also explained that determining citizenship in insurance-syndicate cases can be fact-intensive. Depending on the circumstances, courts may need to examine the citizenship and amount in controversy for each syndicate member, while in other circumstances they may evaluate only a lead insurance underwriter.
Order
Judge Vernon S. Broderick ordered the parties to brief the issue of subject-matter jurisdiction in light of controlling precedent. If all parties agree that jurisdiction exists, they must file one joint brief within 21 days of the order’s entry, with enough analysis for the court to determine that jurisdiction exists. If the parties disagree, those supporting jurisdiction must file a brief within 21 days; opponents may file a response no later than 14 days after that; and supporters may file a reply seven days after the response deadline.
The order did not decide whether the court has subject-matter jurisdiction and did not reach the underlying insurance-policy dispute.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.