Providence Health & Services et al v. Certain Underwriters at Lloyd's London et al

Filing 73

ORDER denying Defendants' 68 Motion for interlocutory review pursuant to 28 U.S.C. §1292(b), denying Defendant Federal's 69 72 Motions for Joinder. Signed by Judge Ricardo S. Martinez. (PM)

1
2
3
4
5
6
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

7
8
9
10
11
12
13
14
15
16
17
18
19
20
21

PROVIDENCE HEALTH AND SERVICES,
a Washington non-profit corporation; and
SWEDISH HEALTH SERVICES, a
Washington non-profit corporation,

Case No. C18-495RSM
ORDER DENYING DEFENDANTS’
MOTION FOR INTERLOCUTORY
APPEAL

Plaintiffs,
v.
CERTAIN UNDERWRITERS AT LLOYD'S
LONDON, SYNDICATE 2623/623
(BEAZLEY); and FEDERAL INSURANCE
COMPANY,
Defendants.
This matter comes before the Court on Defendant Certain Underwriters at Lloyd’s,
London (“Underwriters” or “Beazley”)’s Motion for interlocutory review pursuant to 28 U.S.C.

22

§ 1292(b). Dkt. #68. Beazley moves the Court “to certify for interlocutory review the Court’s

23

January 16, 2019 Order on the threshold question of whether the notice-prejudice rule applies

24
25
26

to Providence Health and Services’ and Swedish Health Services’ (collectively,
“Providence’s”) failure to provide notice of the underlying claim during the 60-day notice

27

period of the claims-made-and-reported insurance at issue.” Id. at 1. Defendant Federal

28

Insurance Company joins in the Motion and Beazley’s Reply brief, also seeking interlocutory

ORDER DENYING DEFENDANTS’ MOTION FOR INTERLOCUTORY APPEAL - 1

1

review of the Court’s related Orders dealing with Defendant Federal’s policy. Dkts. #69 and

2

#72.

3

unnecessary.

4
5
6
7

Providence opposes.

Dkt. #70.

The Court has determined that oral argument is

Under 28 U.S.C. § 1292(b), a district court may grant interlocutory appeal if an order
“involves a controlling question of law” where there is “substantial ground for difference of
opinion” and an immediate appeal will “materially advance the ultimate termination of the

8

litigation.”

9

departure from the basic policy of postponing appellate review until after the entry of a final

10
11
12

The proponent must demonstrate that “exceptional circumstances justify a

judgment.” Coopers & Lybrand v. Livesay, 437 U.S. 463, 475, 98 S. Ct. 2454, 57 L. Ed. 2d
351 (1978). “It is well settled that ‘the mere presence of a disputed issue that is a question of

13

first impression, standing alone, is insufficient to demonstrate a substantial ground for

14

difference of opinion.’” Couch v. Telescope Inc., 611 F.3d 629, 634 (9th Cir. 2010) (quoting In

15

re Flor, 79 F.3d 281, 284 (2d Cir. 1996)). Courts traditionally find a substantial ground for

16

difference of opinion where “the circuits are in dispute on the question and the court of appeals

17
18

of the circuit has not spoken on the point, if complicated questions arise under foreign law, or if

19

novel and difficult questions of first impression are presented.” Id. (quoting 3 Federal

20

Procedure, Lawyers Ed. § 3:212 (2010)); see also Reese v. BP Exploration (Alaska) Inc., 643

21

F.3d 681, 688 (9th Cir. 2011) (“[W]hen novel legal issues are presented, on which fair-minded

22
23
24

jurists might reach contradictory conclusions, a novel issue may be certified for interlocutory
appeal without first awaiting development of contradictory precedent.”).

25

The Court finds that Defendants have failed to meet their burden of demonstrating that

26

interlocutory appeal is warranted in this case. Defendants’ disagreement with the Court’s prior

27

ruling alone does not create the required “substantial difference of opinion.”

Because

28

ORDER DENYING DEFENDANTS’ MOTION FOR INTERLOCUTORY APPEAL - 2

1

Washington law controls the issue for which Defendants seek interlocutory review, the Court

2

agrees with Providence that Defendants’ citations to contradictory authorities not interpreting

3

Washington law are inapposite. See Dkt. #70 at 6. The Court has already ruled that the cases

4

cited by Defendants where Washington law was interpreted as not applying the notice-

5
6
7

prejudice rule to a claims-made-and-reported policy, see Dkt. #71 at 3–4, were factually
distinct. See Dkt. #61 at 7. Such cases therefore lend little support to Defendants’ position that

8

there is the possibility for a substantial difference of opinion. The Court further finds that its

9

ruling as to this issue is entirely consistent with the existing legal landscape for assessing the

10
11
12
13

application of the notice-prejudice rule under Washington law. As such, Defendants have
failed to present adequate evidence or argument that this is a case where fair-minded jurists
might reach contradictory conclusions.

14

Defendants have also failed to demonstrate that an immediate appeal will “materially

15

advance the ultimate termination of the litigation.” Defendants cannot argue that the potential

16

reversal of the Court’s ruling alone satisfies this element. Such an argument could be made in

17
18
19
20
21
22
23
24

every case by a dissatisfied party. Further, the Court agrees with Providence’s analysis:
…[A]ppellate review in the normal course—after final judgment—
does not pose a foreseeable risk of remand and costly retrial. The
remaining proceedings in this case, whether via summary
judgment or trial, will determine whether Beazley was prejudiced
by the delay in notice. To the extent Beazley carries its burden of
proving prejudice, it will escape its coverage obligation despite the
summary judgment ruling against it. If Beazley were to fail to
prove prejudice but in turn prevailed on appeal after a final
judgment in favor of Providence, the case would be over.

25

Id. at 10–11. Although Defendants point to Providence’s threat of staying this case because

26

certain discovery requests are potentially prejudicial to its underlying insurance case, the Court

27

agrees with Providence that this potential stay does not constitute exceptional circumstances

28

ORDER DENYING DEFENDANTS’ MOTION FOR INTERLOCUTORY APPEAL - 3

1

justifying a departure from the basic policy of postponing appellate review until after the entry

2

of a final judgment. In any event, the Court can evaluate the merits of such a stay when (or if)

3

a motion to stay is filed by Providence.

4
5
6
7

The Court acknowledges Plaintiff’s suggestion that the Court certify this question to the
Washington State Supreme Court. However, as correctly pointed out by Defendants, “[t]here is
a presumption against certifying a question to a state supreme court after the federal district

8

court has issued a decision.” Dkt. #71 at 6 (citing Thompson v. Paul, 547 F.3d 1055, 1065 (9th

9

Cir. 2008)). “The Washington State Supreme Court does not operate as a court of appeals for

10
11
12

decisions of this Court.” Robertson v. GMAC Mortg. LLC, 2013 U.S. Dist. LEXIS 77680, *3
(W.D. Wash. May 30, 2013).

The Court finds that Plaintiff has failed to overcome the

13

presumption against certification after this Court has already issued its decision on this legal

14

issue, and the Court declines to certify this question now.

15
16

Having reviewed the relevant briefing and the remainder of the record, the Court hereby
finds and ORDERS that Defendants’ Motion for interlocutory review pursuant to 28 U.S.C. §

17
18
19

1292(b), Dkt. #68, is DENIED. Defendant Federal’s Motions for joinder, Dkts. #69 and #72,
are DENIED consistent with the above.

20
21

DATED this 1 day of April 2019.

22
23
24
25

A

RICARDO S. MARTINEZ
CHIEF UNITED STATES DISTRICT JUDGE

26
27
28

ORDER DENYING DEFENDANTS’ MOTION FOR INTERLOCUTORY APPEAL - 4