Csr Ltd. v. Federal Ins. Co.
| Decision Date | 25 May 2001 |
| Docket Number | No. CIV.A. 95-2947(HAA).,CIV.A. 95-2947(HAA). |
| Citation | 146 F.Supp.2d 556 |
| Parties | CSR LIMITED and CSR America, Inc., Plaintiffs v. FEDERAL INSURANCE COMPANY, et al., Defendants |
| Court | U.S. District Court — District of New Jersey |
McElroy, Deutsch & Mulvaney (KC 8550), Morristown, NJ, for Defendants Listed on Schedule A.
Gita Rothschild, McCarter & English, Newark, NJ, for Plaintiff.
John Dixon, Sullivan & Cromwell, New York City, for Plaintiff.
Joseph R. McDonough, (JRM7129), Graham, Curtin & Sheridan, Morristown, Paul R. Koepff, (PRK8452), Rosemary B. Boller, (RBB6876), O'Melveny & Myers LLP New York City, for Defendants CIGNA Insurance Company of Europe S.A.-N.V. CIGNA Insurance Asia Pacific Limited Insurance Company of North America (U.K.) Limited.
This matter comes before the court on a motion by certain defendants1 ("defendants") for dismissal pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of in personum jurisdiction and on a motion by defendants for dismissal on the grounds of forum non conveniens. The plaintiffs, CSR Limited and CSR America, Inc., ("plaintiffs") have opposed the motions. For reasons stated below, the motion to dismiss for lack of in personum jurisdiction and the motion to dismiss on the grounds of forum non conveniens are DENIED.
CSR Limited is a publically traded company, established in 1887 under the laws of New South Wales, Australia, with its principal place of business in Sydney, Australia. From 1943 to 1966 CSR acted as a sales agent for one of its subsidiaries, Midalco Pty. Limited, in connection with the sale of raw blue asbestos fiber mined at Midalco's operation in Wittenoom, Western Australia. CSR America, Inc. is a corporation organized and existing under the laws of the State of Georgia, with its principal place of business in West Palm Springs, Florida. It is a wholly owned subsidiary of CSR Investments Overseas Limited which, in turn, is a wholly owned subsidiary of CSR, Limited. The moving defendants are insurance companies, primarily located in Australia and Europe, that allegedly issued primary, umbrella and excess policies of insurance to CSR Limited from 1978 to 1995. CIGNA Insurance Australia Limited ("CIGNA Australia") was the lead primary layer insurer and also a lead insurer on many of the umbrella and excess insurance layers. Many of the insurer policies issued to CSR contain a "lead insurer" clause in the following or similar terms:
It is declared and agreed that with effect from inception all Extension, Reductions or Cancellations of Risk or of Conditions, all Fixings of Premium, all Settlements of Claims or Contestations whatsoever and in general all Dispositions of whatsoever nature, taken by the Lead Insurer will definitely be binding upon all insurers and carry with them the unanimous consent of all Insurers under this Contract.
See Defendant's Brief in Support of Motion to Dismiss on the Grounds of Forum Non Conveniens at 5.
Thousands of asbestos claims have been filed against CSR and CSR America as a result of CSR's export activities. As of August 1994, CSR had settled 447 Australian personal injury claims, and as of 1995, CSR and CSR America had settled 40,000 U.S. personal injury claims. Cases settled by CSR include Smith, et. al. v. Johns-Manville, et. al. and Consolidated Cases, Civ. Nos., 77-2047, 79-9, 79-1992, 79-2680, 79-2218, 79-3056, 80-179, 80-264 (D.N.J.) (Ackerman, J.). To date, CSR and CSR America have settled approximately 109,000 U.S. asbestos bodily injury claims, most of which related to finished products manufactured in the John Manville plant in New Jersey.
On November 29, 1991, CSR wrote to its insurers formally requesting coverage for U.S. asbestos-related claims asserted to that date. The insurers rejected the claim, and required that, before re-insuring CSR for the 1992-93 year, CSR sign a letter agreeing to withdraw its asbestos coverage claims. CSR signed the letter and subsequently obtained coverage.
CSR has since litigated the enforceability of the letter and sought reimbursement for the claims filed against it. It pursued litigation in Australia against pre-1978 insurers, and in the midst of that litigation, it filed suit against certain pre-1978 insurers in New Jersey to relieve itself of transcontinental discovery burdens related to the U.S. claims; however, the Australian court stayed the New Jersey action.
On June 23, 1995, after settlement of the pre-1978 claims, CSR and CSR America instituted this suit in the United States against its post-1978 insurers for payment of claims brought in the United States against CSR and CSR America. The plaintiffs' complaint alleged, inter alia, breach of contract, bad faith denial of coverage, tortious interference with contractual relations, tortious interference with prospective economic advantage, violation of section 1 of the Sherman Antitrust Act, and violation of title 56, section 9-3 of the New Jersey Statutes Annotated. Plaintiffs' antitrust claim is based on their allegation that defendant insurers engaged in a group boycott when the insurers collectively refused to write plaintiffs a new insurance policy unless plaintiffs withdrew a request for coverage of 95,000 asbestos-related claims which plaintiffs contend were covered under a previous policy written by the defendants.
This court will first address the defendants' motion for dismissal for lack of in personum jurisdiction and then address defendants' motion for dismissal on the grounds of forum non conveniens.
A court may only exercise personal jurisdiction over a defendant in a state with which the defendant has "Certain minimum contacts ... such that maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984), (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)).
If the cause of action related directly to the defendant's contacts with the forum state, it is one of "specific jurisdiction." Such jurisdiction depends on whether a defendant "purposely created contacts" with the forum state making it reasonable for him to anticipate being haled into court there. See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980); These contacts must have a basis in "some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws." Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958); Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476-76, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985).
Where the cause of action does not arise within the forum, the plaintiff bears the burden of proving that the non-resident defendant had "continuous and systematic" contacts with the forum so as to establish general jurisdiction. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984); Provident Nat'l Bank v. California Federal Sav. & Loan Ass'n, 819 F.2d 434, 438 (3d Cir.1987).
Federal statutes which contain a nationwide service of process procedure enable a federal court to exercise personal jurisdiction over a properly served defendant "provided the defendant has minimum contacts with the United States." IUE AFL-CIO Pension Fund v. Locke Mach. Co., 726 F.Supp. 561, 565 (D.N.J. 1989). If such contacts with the United States can be established, "specific contacts with the district in which enforcement is sought ... are unnecessary." Application to Enforce Admin. Subpoenas Duces Tecum of S.E.C. v. Knowles, 87 F.3d 413, 417 (10th Cir.1996). Section 22 of the Clayton Act, 15 U.S.C. § 22 provides for nationwide service of process in all actions under the antitrust laws. Therefore, jurisdiction in this case is determined by defendants' contacts with the United States as a whole.
In evaluating a motion to dismiss for lack of in personam jurisdiction, the court "must accept all of the plaintiffs' allegations as true and construe disputed facts in favor of the plaintiff." Carteret Sav. Bank, F.A. v. Shushan, 954 F.2d 141, 142 n. 1 (3d Cir.1992). Once personal jurisdiction has been challenged, plaintiff must come forward with actual proofs which establish "with reasonable particularity" the nature and extent of the defendant's contacts with the forum state. See Patterson v. FBI, 893 F.2d 595, 603-4 (3d Cir.1990).
Defendants contend that they have not created meaningful contacts with New Jersey, on the grounds that they are foreign companies with principal places of business in Australia or Europe, who have not maintained an office or bank account, owned property, paid taxes, solicited business, or employed workers in New Jersey. Allegedly, the policies they issued to CSR do not provide coverage to CSR for liabilities arising from CSR's involvement with asbestos. Therefore, according to the defendants, they have not purposefully created contacts with New Jersey such that they should reasonably anticipate being haled into court here. Defendants further contend that the exercise of jurisdiction over the foreign defendants by a New Jersey court would not comport with traditional notions of fair play and substantial justice.
Plaintiffs respond that because the insurance contracts issued by the defendants contain world-wide coverage clauses, the defendants availed themselves of the benefits of doing business in the forum, and therefore have the required minimum contacts with this forum. Moreover, plaintiffs contend that the vast numbers of New Jersey claims render long arm jurisdiction over defendants fair and just.
This court first notes that forty-two defendants have stipulated that they have continuous and systematic contacts with New Jersey for purposes...
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