In re Chinese Manufactured Drywall Products Liab. Litig..This Document Relates To: Pate v. Am. Int'l Specialty Lines Ins. Co.
| Decision Date | 09 February 2011 |
| Docket Number | MDL No. 2047. |
| Citation | 767 F.Supp.2d 649 |
| Parties | In re CHINESE MANUFACTURED DRYWALL PRODUCTS LIABILITY LITIGATION.This Document Relates to: Pate v. American International Specialty Lines Insurance Co., No. 09–7791; Centerline Homes Construction, Inc. v. Mid–Continent Casualty Co., No. 10–178; and Northstar Holdings, Inc. v. General Fidelity Insurance Co., No. 10–384. |
| Court | U.S. District Court — Eastern District of Louisiana |
OPINION TEXT STARTS HERE
Judy Y. Barrasso, Barrasso, Usdin, Kupperman, Freeman & Sarver, LLC, Phillip A. Wittmann, Stone, Pigman, Walther, Wittmann, LLC, New Orleans, LA, for Defendants.
ORDER & REASONS
Before the Court are the following motions to dismiss: Mid–Continent Casualty Company's (“MCC”) Motion to Dismiss in Pate v. American International Specialty Lines Insurance Co., No. 09–7791, 2009 WL 5251506 (E.D.La. filed Dec. 23, 2009), consolidated with, No. 09–md–2047 (E.D.La. filed June 15, 2009)(R. Doc. 2156); MCC's Motion to Dismiss in Centerline Homes Construction, Inc. v. Mid–Continent Casualty Co., No. 10–178 (E.D.La. filed Jan. 26, 2010), consolidated with, No. 09–md–2047 (R. Doc. 2282); MCC's Motion to Dismiss in Northstar Holdings, Inc. v. General Fidelity Insurance Co., No. 10–384 (E.D.La. filed Feb. 12, 2010), consolidated with, No. 09–md–2047 (R. Doc. 2843); FCCI Commercial Insurance Co. and FCCI Insurance Co.'s (collectively referred to as “FCCI”) Motion to Dismiss in Pate, No. 09–7791 (R. Doc. 2147); Owners Insurance Company's (“Owners”) Motion to Dismiss in Pate, No. 09–7791 (R. Doc. 3302); and NGM Insurance Co.'s (“NGM”) Motion to Dismiss in Pate, No. 09–7791 (R. Doc. 3174). Each of these motions raises a personal jurisdiction challenge, among others, to support the relief sought. A briefing and hearing schedule on the personal jurisdiction challenges was established by the Court, which culminated in a hearing on November 3, 2010. The Court ruled from the bench after reviewing the briefs, applicable law, and hearing from the parties on oral argument. The Court denied MCC's personal jurisdiction challenges in all three of its motions, denied FCCI's personal jurisdiction challenge, but granted both Owners' and NGM's personal jurisdiction challenges. See (R. Doc. 6330). Nonetheless, the Court finds it appropriate to issue the present Order & Reasons to provide written reasons for its rulings from the bench. See id.
The present litigation arises from the manufacture, distribution, sale, and installation of Chinese drywall which is contained in homes where it allegedly emits foul odors and damages metal and electronic elements and devices, as well as causes various personal injuries to occupants of the homes. On June 15, 2009, the Judicial Panel on Multi–District Litigation transferred all federal actions alleging damages from Chinese-manufactured drywall to this Court, the U.S. District Court for the Eastern District of Louisiana, for coordinated or consolidated pretrial proceedings pursuant to 28 U.S.C. § 1407. See In re Chinese–Manufactured Drywall Prods. Liab. Litig., 626 F.Supp.2d 1346 (J.P.M.L.2009)(R. Doc. 1). Since the inception of the MDL, a number of parties have entered the litigation, including comprehensive general liability (“CGL”) insurers, sought after for indemnity and/or defense by their insureds. Many of these cases involving the CGL insurers, among numerous others, have been consolidated with the MDL proceedings.
On August 5, 2010, the Court, determining it was an appropriate time in the MDL litigation, issued an Order establishing a briefing and hearing schedule for personal jurisdiction, venue, and indispensable party motions filed by the CGL insurers.1 (R. Doc. 4873). This Order also provides for conducting discovery and depositions prior to the hearing on the motions. Id. However, also pursuant to this Order, if the CGL insurers stipulated to personal jurisdiction, they were relieved of the obligation to respond to discovery and participate in depositions. Id. Fifteen CGL insurers stipulated to personal jurisdiction in this Court, while the four CGL insurers who filed the present motions challenging personal jurisdiction did not.
As mentioned above, three cases are implicated in the present motions, (1) Pate v. American International Specialty Lines, et al., No. 09–7791; (2) Centerline Homes Construction, Inc., et al. v. Mid–Continent Casualty Co., et al., No. 10–178; and (3) Northstar Holdings, Inc., et al. v. General Fidelity Insurance Co., No. 10–384, the facts of which are summarized as follows.
The Pate case was filed directly in the Eastern District of Louisiana on December 23, 2009, by Robert C. Pate, as Trustee for the WCI Chinese Drywall Trust (the “Trust”), seeking a declaratory judgment that WCI's CGL insurers, as well as its subcontractors' CGL insurers, are obligated to indemnify the Trust for losses arising from claims against WCI Communities, Inc. and certain of its subsidiaries (collectively referred to as “WCI”) for the development and sale of homes allegedly containing defective Chinese drywall. See No. 09–7791(R. Doc. 1). Thereafter, on March 15, 2010, the Trustee filed a First Amended Complaint. See No. 09–md–2047(R. Doc. 1732).
WCI is a contractor for single-family homes, villas, condominiums, and luxury high rise towers. See id. In 2006, WCI began to receive complaints of property damage and/or personal injuries as a result of Chinese drywall installed in the residences WCI sold in Florida from 2005 to 2008, particularly in the Fort Lauderdale, Fort Meyers, and Bradenton areas. Id. On August 4, 2008, and July 1, 2009, WCI filed for bankruptcy. Id. Thereafter, on July 16, 2009, WCI filed a Second Amended Joint Chapter 11 Plan of Reorganization. Id. This Plan created the Chinese Drywall Trust to assume WCI's liability or losses for Chinese drywall-related claims asserted against WCI. Id. The Trust was transferred the right, title, and interest in pursuing and receiving any and all insurance recoveries arising from these claims. Id. The United States Bankruptcy Court for the District of Delaware confirmed the Plan on August 26, 2009. Id.
The Pate complaints allege that the Trustee is a citizen of the state of Texas and lives in Texas. Id. As to the four movant CGL Insurers, the complaints allege that FCCI is a Florida corporation with its principal place of business in Florida, MCC is an Ohio corporation with its principal place of business in Oklahoma, NGM is a New Hampshire corporation with its principal place of business in Florida, and Owners is an Ohio corporation with its principal place of business in Michigan. See (R. Doc. 1732). The complaints further allege personal jurisdiction in Louisiana over MCC by virtue of its authorization to sell insurance in Louisiana, over FCCI for its sale of insurance in Louisiana and maintenance of a regional office in the gulf-coast to service Louisiana, and over NGM for offering a complete line of commercial products and services throughout the southeast and southwest. See id. FCCI issued policies to subcontractors SD & Associates and Residential Drywall, Inc.; MCC issued policies to subcontractors Finest Drywall, Inc., Residential Drywall, Inc., and Florida Drywall; NGM issued policies to subcontractor HDS Drywall Services; and Owners issued a policy to Hinkle Drywall, LLC. Id.
The Centerline case was filed in the Eastern District of Louisiana on January 26, 2010, by Centerline Homes Construction, Inc., Completed Communities II, LLC, Centerline Homes at Georgetown, LLC, and Centerlines Homes, Inc. (collectively referred to as “Centerline”), seeking a declaratory judgment that their insurers, as well as the insurers of their subcontractors, are obligated to defend and indemnify Centerline for claims against it relating to its development of residences allegedly containing Chinese drywall. See No. 10–178(R. Doc. 1). Centerline builds single-family and multi-family homes, such as townhouses and condominiums, in Florida. Id. A number of homeowners who purchased Centerline residences between 2005 and 2007 in Broward, Palm Beach, and Saint Lucie counties have complained of property damage and/or personal injuries as a result of the Chinese drywall in their homes. Id. MCC issued Centerline both commercial umbrella and excess liability insurance policies, and it issued United Framers, Inc., a subcontractor of Centerline, a CGL policy. Id. Centerline alleges that MCC is authorized to conduct business in Louisiana and has issued policies there. Id.
The Northstar case was filed in the Eastern District of Louisiana on February 12, 2010, by Northstar Holdings, Inc., Northstar Homes, Inc., and Northstar Holdings at B & A., LLC (collectively referred to as “Northstar”), seeking a declaratory judgment that their insurers are obligated to defend and indemnify them for losses arising from claims against Northstar for its development of homes allegedly containing Chinese drywall. See No. 10–384(R. Doc. 1). Northstar builds homes and residential communities in Florida. Id. A number of homeowners who purchased Northstar homes between 2005 and 2007 have alleged that these homes contain Chinese drywall which causes property damage and/or personal injuries. Id. MCC issued insurance policies to Northstar's subcontractor, Precision Drywall, Inc., under which Northstar seeks coverage as a named or additional insured. Id. According to Northstar, MCC is authorized to conduct business in Louisiana and has issued policies in this state. Id.
As mentioned above, defendant CGL insurers in these cases, MCC, FCCI, Owners, and NGM, filed the present motions to dismiss for lack of personal jurisdiction, among other grounds.
The Court will now review the law on personal jurisdiction, followed by a discussion and analysis of the parties' arguments.
“The plaintiff bears the burden of establishing a district court's...
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