94 F.3d 923 (4th Cir. 1996), 96-2158, Allen v. Lloyd's of London
|Citation:||94 F.3d 923|
|Party Name:||Louis F. ALLEN; Carl K. Baker; Joyce P. Baker; Peter D. Berrington; Oliver Birckhead; Florence Blaustein, Mary L. Bray; T.K. Brooker; Donald J. Brooks; Joseph Callaghan; James Cassel; Terry G. Chapman; J.A. Clawson; John K. Colvin; Fred B. Cox; John Rawlyn; Charles Crabtree; Christopher P. Clup; Gordon C. Davidson; Rutherford Day; Donald D. Doty; M|
|Case Date:||September 03, 1996|
|Court:||United States Courts of Appeals, Court of Appeals for the Fourth Circuit|
Argued Aug. 27, 1996.
[Copyrighted Material Omitted]
ARGUED: Harvey L. Pitt, Fried, Frank, Harris, Shriver & Jacobson, New York City, for Appellants. Alexander Stephens Clay, IV, Kilpatrick & Cody, Atlanta, Georgia, for Appellees. ON PLEADINGS: Michael H. Rauch, Bonnie Steingart, Fried, Frank, Harris, Shriver & Jacobson, New York City; Cynthia T. Andreason, LeBoeuf, Lamb, Greene & MacRae, L.L.P., Washington, DC; Henry H. McVey, Warren E. Zirkle, Darryl S. Lew, McGuire, Woods, Battle & Boothe, L.L.P., Richmond, Virginia, for Appellants. Richard R. Cheatham, Susan A. Cahoon, Stephen E. Hudson, Christopher B. Lyman, Kilpatrick & Cody, Atlanta, Georgia; Conrad M. Shumadine, Walter D. Kelley, Jr., Willcox & Savage, Norfolk, Virginia, for Appellees. Timothy M. Kaine, Rhonda M. Harmon, Mezzullo & McCandlish, Richmond, Virginia, for Amicus Curiae Association of Lloyd's Members. Mark R. Joelson, Joseph P. Griffin, Thomas J. O'Brien, Morgan, Lewis & Bockius, L.L.P., Washington, DC, for Amicus Curiae United Kingdom. Ronald A. Jacks, David M. Spector, Mayer, Brown & Platt, Chicago, Illinois, for Amicus Curiae NAIB; Martin Shulman, Paul H. Falon, Manatt, Phelps & Phillips, L.L.P., Washington, DC; Richard A. Brown, Leonard D. Venger, Donald R. Brown, Manatt, Phelps & Phillips, L.L.P., Los Angeles, California; William W.
Palmer, General Counsel, California Department of Insurance, San Francisco, California, for Amicus Curiae Insurance Commissioners.
Before NIEMEYER, MICHAEL, and MOTZ, Circuit Judges.
Reversed and remanded by published opinion. Judge NIEMEYER wrote the opinion, in which Judge MICHAEL and Judge MOTZ joined.
NIEMEYER, Circuit Judge:
In 1995, Lloyd's of London announced a $22 billion "Plan for Reconstruction and Renewal" to restructure the Lloyd's market's reinsurance needs and to revitalize the market. The Plan included an offer by Lloyd's managers to settle, for $4.8 billion, all intra-market disputes, including existing and potential lawsuits by "Names," members of the Lloyd's market who underwrite insurance there. Ninety-three American Names filed this action in the Eastern District of Virginia under United States securities laws to compel Lloyd's to disclose more financial information about its proposed plan. The Names also sought a preliminary injunction prohibiting Lloyd's from forcing American Names to make "an irrevocable election respecting their investment" by an August 28, 1996 deadline established by Lloyd's.
Applying United States securities laws, the district court granted the Names' motion for a preliminary injunction on August 23, 1996. The court directed Lloyd's to make disclosures as required by § 14(a) of the Securities Exchange Act of 1934 by September 23, 1996, and prohibited Lloyd's from taking steps to collect any amounts from American Names pending completion of the disclosure and review process. The court also scheduled a trial on the merits for November 4, 1996.
Lloyd's appealed the district court's preliminary injunction and sought expedited review because Names wishing to accept the settlement proposal that Lloyd's offered as part of its Plan were required to advise Lloyd's of their decision by noon on August 28, 1996. We scheduled oral argument for August 27, 1996, and, following argument, entered the following order from the bench, reversing the district court:
On the motion of appellants to stay the district court's injunction entered August 23, 1996, and upon consideration of the briefs, papers, and extensive arguments of counsel, the court grants the motion. Because the court's decision rests on its determination, to be articulated in a later opinion, that the contractual provisions among the parties selecting the law of and a forum in the United Kingdom should be enforced, we reverse and remand this case with instructions that the district court dismiss it.
This opinion provides the reasoning for our order.
Lloyd's of London manages an insurance market that was created over 300 years ago in a London coffee shop to insure shipping risks. The market today is a large, complex arrangement under which "Names," who as members of the Society of Lloyd's become members in the market, join individual underwriting syndicates formed to insure a broad range of risks. Managing agents assemble the syndicates, collect premiums from the insureds, assess the Names, manage the risks, and provide annual accountings to the Names. The underwriting capital for each syndicate is supplied by cash advanced by the Names, and excess losses--those that exceed the premiums paid--are insured by the Names' commitment to pay losses from their personal assets "down to their last cufflinks." The integrity of the market is also assured by a Central Fund, created from assessments of Names, which the market's managing body, the Council of Lloyd's, controls and maintains to disburse to insureds when Names default.
The Lloyd's market is governed by a series of acts of Parliament, enacted over the last 100 years, authorizing the Council of Lloyd's to adopt rules and bylaws to regulate the market. As a...
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