NFL Attempts to Keep Insurance Coverage Dispute in California
The National Football League recently filed a motion to dismiss a lawsuit filed by Alterra America Insurance Co. in New York State Supreme Court, arguing that the excess insurer did not have the requisite standing to add additional insurers as parties to its New York action, since the NFL is already pursing an action against them inCalifornia.
The current dispute arose out of the massive insurance coverage obligations dispute between the NFL, NFL Properties LLC, and a host of primary and additional insurers, which began after the league was hit with a class action lawsuit by over 3,000 former players. In the class action suit, the former players accuse the NFL of downplaying the risks of player concussions, causing many now-retired NFL alumni to experience degenerative mental diseases and later-life cognitive decline.
The jurisdictional dispute between the NFL and Alterra is basically a result of timing. Alterra filed a suit against the league to determine its coverage obligations inNew York court just two days before the NFL filed suit against 32 insurers in California state court. Alterra then amended its complaint in an attempt to drag those other insurers into the New York case.
The NFL’s motion states that most of the insurance contracts at issue “are between the NFL policyholders and other insurers, making Alterra a complete stranger and not entitled to the relief it requests.” It went on to note that the lead defendant in the California (Fireman’s Fund Insurance Co.) was a California corporation, headquartered in California, and further, that multiple other claims representatives for different primary insurers are headquartered in California as well. Lastly, the league noted that Alterra’s lawsuit was premature, as its excess policy did not “kick in” until the league’s primary insurers paid out $51 million in damages. Added together, the NFL believes that these factors dictate that the matter should be decided inCalifornia, not New York.