Certain Underwriters at Lloyds et al v. National RailRoad Passenger Corporation et al

Filing 565

ORDER: The London Market Insurers premotion letter of March 29, 2016, is construed as a motion to dismiss Amtraks third-party complaint and amended third-party complaint. So construed, the motion is granted. Those two pleadings are dismissed without prejudice to Amtraks right to bring a separate action against the same third parties if circumstances warrant. Ordered by Judge Frederic Block on 1/26/2017. (Innelli, Michael)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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CERTAIN UNDERWRITERS at
LLOYDS, et al.,
Plaintiffs,

ORDER
Case No. 14-CV-4717 (FB) (RLM)

-againstNATIONAL RAILROAD PASSENGER
CORPORATION, et al.,
Defendants.
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BLOCK, Senior District Judge:
Rule 14(a)(1) allows a defendant to implead a nonparty “who is or may be liable to
it for all or part of the claim against it.” The rule does not apply in this case because the
plaintiffs’ complaint seeks only a declaration that they are not obligated to indemnify the
defendant. Success on that claim would not make any of the proposed third parties “liable
to [the defendant] for all or part of the claim against it.”
On occasion, courts have overlooked the plain language of the rule and allowed thirdparty practice in declaratory judgment actions. In Old Republic Insurance Co. v. Concast,
Inc., 99 F.R.D. 566 (S.D.N.Y. 1983), Judge Carter allowed an insured to implead its
insurance broker in a coverage action to “facilitate judicial economy by avoiding multiple
and circuitous suits.” Id. at 568. He cited American Fidelity & Casualty Co. v. Greyhound
Corp., 232 F.2d 89 (5th Cir. 1956), in which the Fifth Circuit stated that “the purposes of the
Rule, including the desire to avoid circuity of actions and to obtain consistent results, must

be balanced against any prejudice which the impleaded party might suffer, and these
considerations are left to the discretion of the trial court.” Id. at 92.
In a typical coverage case, the Court might agree that all interested parties should be
joined and then bound by a single declaratory judgment. But in this case, judicial economy
is best served by not allowing third-party practice. As the Court has said before, it expects
its ruling on the upcoming summary judgment motions to resolve the principal issues of law,
which will likely aid in bringing this complex matter to a final resolution between Amtrak
and all the insurers, whether or not they are parties to this action. Joining new parties now
would complicate the issues and slow down the process. Of course, if there still are any
recalcitrant insurers after the Court’s ruling, Amtrak will be free to file a separate lawsuit
against them.
For these reasons, the London Market Insurers’ premotion letter of March 29, 2016,
is construed as a motion to dismiss Amtrak’s third-party complaint and amended third-party
complaint. So construed, the motion is granted. Those two pleadings are dismissed without
prejudice to Amtrak’s right to bring a separate action against the same third parties if
circumstances warrant.
SO ORDERED.
/S/ Frederic Block_______________
FREDERIC BLOCK
Senior United States District Judge
Brooklyn, New York
January 26, 2017
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