Quinn v. Aetna Life & Cas. Co.

Citation482 F. Supp. 22
Decision Date28 June 1979
Docket NumberNo. 78 C 1628.,78 C 1628.
PartiesDorothy QUINN et al., Plaintiffs, v. AETNA LIFE & CASUALTY CO., Defendant.
CourtU.S. District Court — Eastern District of New York

COPYRIGHT MATERIAL OMITTED

Baron & Vesel, Forest Hills, N. Y. by Martin L. Baron, Forest Hills, N. Y., for plaintiffs.

Paul, Weiss, Rifkind, Wharton & Garrison by Marvin Wexler and Lewis A. Kaplan, New York City, for defendant.

MEMORANDUM DECISION AND ORDER

SIFTON, District Judge.

This case is now before the Court on defendant's motion for summary judgment or judgment on the pleadings. The three plaintiffs in this action are also plaintiffs in personal injury actions currently pending in state courts in this district. The defendant Aetna Life & Casualty Co. ("Aetna") is an insurance company. Plaintiffs' complaint arises from two advertisements which defendant caused to be published in Newsweek and New York Magazine. The thrust of both advertisements is that the current system for handling tort claims results in excessive jury awards which increase insurance rates.

The first advertisement pictures a judge reading from a document which states, "When awarding damages in liability cases, the jury is cautioned to be fair and bear in mind that money does not grow on trees. It must be paid through insurance premiums from uninvolved parties, such as yourselves." The picture has a caption which reads in large letters, "Too bad judges can't read this to a jury." The rest of this advertisement discusses two court cases which Aetna believes resulted in excessive verdicts.

The second advertisement pictures a game show announcer with the caption, "And now the big winners in today's lawsuits." The text describes the recent increase in verdicts of over $1 million. Both ads end with the line "Aetna wants insurance to be affordable."

Plaintiffs seek to enjoin defendant from running these and similar advertisements. The complaint alleges that they are part of "a program calculated to tamper with juries in their deliberative process."

I PRIOR PROCEEDINGS

Plaintiffs commenced this action on February 9, 1978 in the Supreme Court of the State of New York, Queens County, against Aetna, New York Magazine and Newsweek. The action was removed to this Court by Aetna which contended, inter alia, that the two magazines were "sham defendants" and that, therefore, complete diversity existed. By Order of this Court dated March 29, 1978, the action was remanded for lack of complete diversity.

Upon remand plaintiffs moved for a preliminary injunction, and each defendant cross-moved to dismiss the complaint. In a decision dated July 5, 1978, reported at 96 Misc.2d 545, 409 N.Y.S.2d 473, the New York Supreme Court (Graci, J.) granted the motions of New York Magazine and Newsweek to dismiss, denied Aetna's motion to dismiss, and also denied plaintiffs' motion for a preliminary injunction.

In his decision Justice Graci discussed two state law provisions, General Business Law § 350-a, dealing with misleading advertising, and Penal Law § 215.25, dealing with jury tampering. Justice Graci did not find that plaintiffs have an implied right of action based on either of these provisions, but rather found that they have an equitable cause of action for injunction as a result of the fact that they may be injured by defendant's actions and have no adequate remedy at law. 409 N.Y.S.2d at 482.

Following the state court decision plaintiffs consented to an order severing their claims against Aetna from their claims against the magazines. Because complete diversity then existed on plaintiffs' claims against Aetna, the action was, once again, removed pursuant to 28 U.S.C. §§ 1441 and 1446(b). Plaintiffs again moved to remand, and this motion was denied by this Court in an oral opinion on December 15, 1978. The action is now before this Court on defendant's motion for judgment on the pleadings, or in the alternative, summary judgment dismissing the complaint.

II ABSTENTION

As an alternative to their motion to remand, plaintiffs argued that this Court should abstain from deciding the state law issues. This Court finds that abstention is not appropriate in the present case.

In Colorado River Water Conservation District v. United States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976), Justice Brennan divided the Supreme Court's abstention cases into three categories. According to Justice Brennan, abstention is appropriate (1) when a federal constitutional issue might be mooted or presented in a different posture by a state court determination of pertinent state law, (2) where there are "difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the result in the case at bar," or (3) where federal jurisdiction has been invoked for the purpose of restraining state criminal proceedings. Id. at 814-17, 96 S.Ct. 1236, 1244.

Clearly, the third category has no application in the present case. The first category originated with Railroad Commission of Texas v. Pullman Co., 312 U.S. 496, 61 S.Ct. 643, 85 L.Ed. 971 (1941), a case in which the plaintiff came to federal court seeking equitable relief and the decision was grounded in the discretionary nature of equitable jurisdiction. See Id. at 500-01, 61 S.Ct. 643. In the present case, unlike Pullman, it is the defendant which seeks a federal forum and does so pursuant to a right given by the federal statute providing for diversity jurisdiction. 28 U.S.C. §§ 1441(a), 1446(b). To abstain in the present case would effectively destroy defendant's statutory right to remove.1 Further, Pullman abstention is appropriate only where the state law is uncertain, Lindsey v. Normet, 405 U.S. 56, 62 n.5, 92 S.Ct. 862, 31 L.Ed.2d 36 (1972), and this Court does not believe New York law is uncertain in the present case. But by far the most persuasive reason why this is not an appropriate case for a Pullman -type abstention is that plaintiffs request abstention not to seek a state court ruling to avoid the necessity of reaching the constitutional issue, but rather to pursue a state court remedy which requires that the constitutional issue be decided.

Plaintiffs' argument in favor of abstention relies primarily on Naylor v. Case & McGrath, Inc., 585 F.2d 557 (2d Cir. 1978). Naylor was an action against Aetna's advertising agency and involved advertisements either identical with or similar to those involved in the present case. The Naylor court placed Naylor in the second Colorado River classification because Naylor was brought pursuant to a relatively new and recently amended Connecticut statute, Conn.Gen.Statutes § 42-110b(9), allowing for suits by individuals damaged by unfair or deceptive trade practices. 585 F.2d at 563. The Attorney General of Connecticut had filed an amicus brief asking that the court abstain in order to permit issues of first impression under the Connecticut statute to be decided first by a Connecticut state court. 585 F.2d at 559. Thus, unlike the present case, the state law was uncertain and its resolution was a matter of concern to the state. 585 F.2d at 565. It was because the Naylor case turned upon complex issues of first impression involving interpretation of a recently enacted and newly amended Connecticut statute, which the State of Connecticut expressed concern in having interpreted by state courts, that the Second Circuit held that abstention was appropriate in that case. See 585 F.2d at 565-66. These considerations are entirely absent in the present case which does not involve difficult issues of state law or recently enacted statutes. Additionally, at the stage at which Second Circuit decided abstention would have been appropriate in Naylor, the district court had no independent basis for federal jurisdiction, but rather had pendent jurisdiction only. 585 F.2d at 564. This further distinguishes the present case from Naylor. For all the above reasons this Court finds abstention to be inappropriate in the present case.

III LAW OF THE CASE

Plaintiffs argue that Justice Graci's decision denying plaintiffs' motion to dismiss is the law of the case. Defendant concedes that insofar as they now seek judgment on the pleadings their motion is, in substance, identical to the motion to dismiss which was previously denied in state court. They argue, however, that this Court is not bound by Justice Graci's opinion and this Court agrees. The doctrine is discretionary. First Nat'l Bank of Hollywood v. American Foam Rubber Corp., 530 F.2d 450, 543 n.3 (2d Cir. 1976); GAF Corp. v. Circle Floor Co., 329 F.Supp. 823, 826 (S.D.N.Y.1971), aff'd, 463 F.2d 752 (2d Cir. 1972), cert. denied, 413 U.S. 901, 93 S.Ct. 3058, 37 L.Ed.2d 1045 (1973). In a recent opinion by Judge Friendly, the Second Circuit adopted the following reasoning from Moore, IB Federal Practice ¶ 0.4041 at 407:

"Since a lower federal court cannot by its law of the case bind a higher court having appellate jurisdiction over it, the only sensible thing for a lower court, . . . to do is to set itself right instead of inviting reversal above, when convinced that its law of the case is substantially erroneous."

Brunswick Corp. v. Sheridan, 582 F.2d 175, 177 (2d Cir. 1978). The power to reexamine the law of the case is not lost by the transfer from state to federal court. Hill v. U. S. Fidelity & Guaranty Co., 428 F.2d 112, 115 (5th Cir. 1970), cert. denied, 400 U.S. 1008, 91 S.Ct. 564, 27 L.Ed.2d 621 (1971). This Court is therefore free to reexamine the decision of the state court denying defendant's motion to dismiss. The reexamination of the state court judge's decision is particularly appropriate in the present case because the primary errors which defendant alleges that the state court committed involve questions of federal constitutional, rather than state law.

IV POSSIBLE BASES OF RELIEF

The conflict between the right to an unbiased jury and the First Amendment is "almost as old as the Republic." Nebraska...

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