Eaton Corporation v. Westport Insurance Corporation
Filing
75
DECISION AND ORDER denying the four insurers' motion to dismiss this action under either Wilton/Brillhart abstention or forum non conveniens 48 ; denying Eaton's motion to file a sur-reply brief 71 . Signed by Judge Lynn Adelman on 10/27/2017. (cc: all counsel) (gc)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
EATON CORPORATION,
Plaintiff,
v.
Case No. 15-C-1157
WESTPORT INSURANCE COMPANY,
AIU INSURANCE COMPANY,
GRANITE STATE INSURANCE COMPANY,
NEW HAMPSHIRE INSURANCE COMPANY, and
NORTH RIVER INSURANCE COMPANY
Defendants.
______________________________________________________________________
DECISION AND ORDER
When the plaintiff, Eaton Corporation, initiated this suit, it named Westport
Insurance Company as the sole defendant. Eaton alleged that Westport breached its
duty to provide excess insurance coverage to Eaton for asbestos-related claims under a
policy that Westport’s predecessor had issued to Eaton’s predecessor, Cutler-Hammer,
Inc., in 1978. Westport moved to dismiss the suit under the doctrine of forum non
conveniens or to transfer the case to the United States District Court for the Northern
District of Ohio. I denied that motion. Several months later, Eaton filed an amended
complaint. The amended complaint adds four insurance companies as defendants: AIU
Insurance Company, Granite State Insurance Company, New Hampshire Insurance
Company, and North River Insurance Company. Eaton alleges that these four insurers,
like Westport, issued excess insurance policies that cover the asbestos claims arising
out of Cutler-Hammer’s business.
These four insurance companies now move to
dismiss the amended complaint, arguing that I should either abstain from exercising
jurisdiction over the case or dismiss it under forum non conveniens.
I. BACKGROUND
As I explained in my opinion on Westport’s motion to dismiss, Cutler-Hammer,
Inc., was a manufacturer of electrical equipment and headquartered in Milwaukee,
Wisconsin. On March 30, 1979, Cutler-Hammer merged into Eaton, with Eaton as the
surviving entity. Eaton is an Ohio corporation having its principal place of business in
Cleveland, Ohio.
By the 1980s, various lawsuits had been filed against Eaton alleging personal
injuries caused by exposure to asbestos. Some of these suits alleged exposure to
asbestos contained in products manufactured by Cutler-Hammer before it merged into
Eaton, and by Eaton in the continuation of the Cutler-Hammer’s business. But other
suits were not connected to Cutler-Hammer.
These suits alleged personal injuries
caused by exposure to asbestos at Eaton’s premises or in products manufactured by
Eaton’s other divisions.
In March 2013, Eaton filed a lawsuit in state court in Cleveland, Ohio, against a
number of insurance companies that had issued liability policies to Eaton. That suit is
pending.
In the Ohio suit, Eaton seeks a declaration of its rights to coverage for
asbestos-related claims that are not connected to Cutler-Hammer products. The Ohio
lawsuit primarily involves asbestos claims arising out of Eaton’s axle-brake business.
Three of the insurance companies that Eaton has recently added to this
Wisconsin case are also defendants in the Ohio case—Granite State, New Hampshire,
and North River. These three insurance companies issued excess insurance policies
directly to Eaton at various times in the 1970s and 1980s. Eaton alleges in the Ohio suit
that those policies cover the asbestos claims arising out of Eaton’s axle-brake business.
2
In the Wisconsin suit, Eaton alleges that Granite State and New Hampshire issued
different excess insurance policies directly to Cutler-Hammer, which were in force prior
to the date on which Cutler-Hammer merged into Eaton, and which cover the asbestos
claims arising out of Cutler-Hammer’s business.
In the Wisconsin suit, Eaton also
alleges that AIU Insurance Company and Westport issued policies to Cutler-Hammer
that were in force before the merger and that cover Cutler-Hammer asbestos claims.
Neither AIU nor Westport is currently a party to the Ohio Suit—however, as I discuss
below, motions have been filed in the Ohio case that, if granted, would make them
parties.
Eaton’s claims against North River Insurance Company are different than its
claims against the other insurers. With respect to North River, Eaton alleges that it
issued four policies directly to Eaton that cover both Cutler-Hammer asbestos claims
and Eaton axle-brake asbestos claims. Eaton has alleged claims against North River
under these four policies in both the Ohio suit and the Wisconsin suit. However, in its
complaint in the Ohio suit, Eaton alleges that it is not, in that suit, seeking a
determination of coverage under the North River policies for Cutler-Hammer asbestos
claims. Rather, its claims in that case under the North River policies are limited to
coverage for asbestos claims relating to Eaton’s axle-brake business. In the Wisconsin
case, Eaton seeks a determination of coverage under the North River policies for
Cutler-Hammer asbestos claims.
After Eaton filed its amended complaint adding AIU, Granite State, New
Hampshire, and North River to this case, those insurers filed motions in the Ohio case
seeking to have AIU and Westport added as parties. On March 21, 2017, AIU filed a
3
motion to intervene in the Ohio case as a defendant, counterclaimant, and third-party
plaintiff. On the same day, Granite State, New Hampshire, and North River filed a
motion for leave to file a third-party compliant against Westport. The point of filing these
motions is to graft the Cutler-Hammer claims that Eaton has asserted in the Wisconsin
case onto the Ohio case, with the result that the Ohio case would become “parallel” to
the Wisconsin case, in the sense that both cases would encompass the same CutlerHammer insurance claims. (The Ohio case would also continue to encompass the
Eaton axle-brake insurance claims.) However, as far as the record in this case reveals,
the Ohio court has not yet decided either AIU’s motion to intervene or the other insurers’
motion to add Westport as a defendant.
After the four insurers filed their Ohio motions, they filed in this case the present
motion, in which they argue that I should either abstain from exercising jurisdiction over
this case or dismiss it under forum non conveniens. They argue that either abstention
or a forum non conveniens dismissal is appropriate because it would be more efficient
to litigate all of Eaton’s claims relating to excess insurance coverage for asbestos
claims in a single forum than to have separate suits for the Cutler-Hammer claims and
the axle-brake claims. The four insurers note that, although I previously declined to
dismiss this case in favor of the Ohio case when Westport asked me to do so, things
are different now that Eaton has asserted in this case claims against North River under
policies that are also at issue in the Ohio case. I consider these arguments below.
II. DISCUSSION
4
The four newly added insurers assert two grounds for dismissing this action in
favor of the Ohio state-court action: (1) abstention under what is known as
Wilton/Brillhart abstention, and (2) forum non conveniens.
A.
Wilton/Brillhart Abstention
The doctrine known as Wilton/Brillhart abstention is an application of the
Declaratory Judgment Act, 28 U.S.C. § 2201.1 That doctrine recognizes that the text of
the Act states that a federal court “may declare the rights and other legal relations” of
the parties, which implies that the court has discretion to decline to entertain a suit
seeking declaratory relief. 28 U.S.C. § 2201(a)(emphasis added); see also Med.
Assurance Co., Inc. v. Hellman, 610 F.3d 371, 377–79 (7th Cir. 2010).
One well-
recognized reason for abstaining under Wilton/Brillhart is that “parallel state
proceedings are ongoing.” Envision Healthcare, Inc. v. PreferredOne Ins. Co., 604 F.3d
983, 986 (7th Cir. 2010). Here, the four insurers argue that the Ohio state-court action
encompassing Eaton’s axle-brake insurance claims is a parallel proceeding and that
therefore abstention under Wilton/Brillhart is appropriate. One can debate whether the
Ohio action is truly a parallel proceeding to this one, given that the Ohio court has not
yet granted the insurers’ motions to expand the Ohio case to encompass the CutlerHammer claims. But I need not wade into that debate, since another problem clearly
prevents me from abstaining from hearing this action under Wilton/Brillhart, which is that
it is not limited to claims for declaratory relief.
1
The name for this abstention doctrine derives from Wilton v. Seven Falls Co., 515 U.S.
277, 286–90 (1995) and Brillhart v. Excess Insurance Co. of America, 316 U.S. 491,
494–95 (1942).
5
A district court has no discretion under Wilton/Brillhart to dismiss non-declaratory
claims, such as claims for damages, when those claims are “independent” of the
declaratory claims. R.R. Street & Co., Inc. v. Vulcan Materials Co., 569 F.3d 711, 716–
17 (7th Cir. 2009). A claim for non-declaratory relief is independent of the declaratory
claim if: (1) it has its own federal subject-matter-jurisdictional basis, and (2) its viability is
not wholly dependent upon the success of the declaratory claim. Id. In other words, the
non-declaratory claims are independent if they would continue to exist if the request for
a declaration simply dropped from the case. Id.
In the present case, Eaton has asserted two non-declaratory claims against
Westport. First, Eaton alleges that Westport has breached one of its insurance policies
by failing to pay Eaton’s claims for insurance coverage for Cutler-Hammer asbestos
lawsuits.
In connection with that claim, Eaton requests compensatory damages.
Second, Eaton alleges an insurance bad-faith claim against Westport. In connection
with that claim, Eaton requests compensatory and punitive damages. Although Eaton
also requests declaratory relief against Westport to establish Westport’s continuing
obligation to provide coverage for Cutler-Hammer claims, Eaton’s damages claims
against Westport are not dependent on the declaratory claim. The damages claims
would continue to exist if the declaratory claim were simply dropped from the case, and
the diversity jurisdiction would provide a basis for those claims. Thus, I cannot abstain
from hearing Eaton’s damages claims against Westport under Wilton/Brillhart.
In its brief in opposition to the four insurers’ motion, Eaton pointed out that I lack
power to abstain from hearing this entire action under Wilton/Brillhart because the
action includes claims for damages against Westport. See Br. in Opp. at 18 n.25, ECF
6
No. 60. In response to this argument, the other four insurers argued that abstention
under Wilton/Brillhart is allowed because Eaton has asserted only declaratory claims
against them. See Reply Br. at 9 n.3, ECF No. 66. But even if Eaton had asserted only
declaratory claims against the four insurers,2 I could not abstain from hearing the entire
action under Wilton/Brillhart, as the action includes the damages claims against
Westport. At most, I could abstain from hearing Eaton’s claims against the other four
insurers under Wilton/Brillhart. Yet the four insurers have not asked me to abstain from
hearing only the claims against them. They have moved to dismiss the entire action,
see Mot. at 1, ECF No. 48, and they request in their briefs that I dismiss this entire
action “in favor of a complete resolution of Eaton’s asbestos-related insurance coverage
claims in the Ohio Action,” Br. in Supp. at 15, ECF No. 49.
That relief is simply
unavailable under Wilton/Brillhart, given the presence in this action of the independent
claims for damages against Westport.
Another abstention doctrine, known as Colorado River abstention, allows a
district court to abstain from exercising jurisdiction where parallel state proceedings are
pending, even if the claims involved in the suit include requests for non-declaratory
relief. See Colorado River Water Conservation Dist. v. United States, 424 U.S. 800
(1976).
However, Colorado River abstention is allowed only in “extraordinary
circumstances,” and the four insurers have not argued that this case presents such
circumstances. Instead, after Eaton raised the possibility of Colorado River ’s applying
to this case, the four insurers responded by insisting that Wilton/Brillhart applies and
2
In fact, in addition to its request for declaratory relief against the four insurers, Eaton
has requested an injunction. See Am. Compl. at p. 11, ECF No. 35.
7
disclaiming any reliance on Colorado River. See Reply Br. at 9 n.3, ECF No. 66. Thus,
I do not consider whether abstention under Colorado River would be appropriate. And
because abstention under Wilton/Brillhart is foreclosed by the claims for damages
against Westport, the four insurers’ request that I abstain from hearing this action will be
denied.
B.
Forum Non Conveniens
The common law doctrine of forum non conveniens allows a court to dismiss a
suit over which it would normally have jurisdiction in order to best serve the
convenience of the parties and the ends of justice.
Stroitelstvo Bulgaria Ltd. v.
Bulgarian-American Enterprise Fund, 589 F.3d 417, 421 (7th Cir. 2009). When a court
dismisses a case for this reason, it concludes that the dispute should be heard in some
other forum, and the expectation is that, following a forum non conveniens dismissal,
the plaintiff will re-file the suit in the more appropriate forum (assuming that the statute
of limitations would not bar the re-filing).
In recent years, federal courts have emphasized that forum non conveniens
should be used only when the alternative forum is located in a foreign country.
See,
e.g., Deb v. SIRVA, Inc., 832 F.3d 800, 805 (7th Cir. 2016). However, the Supreme
Court has stated that “perhaps” forum non conveniens could “in rare instances” be used
“where a state or territorial court serves litigational convenience best.” Sinochem Int’l
Co. Ltd. v. Malaysia Int’l Shipping Corp., 549 U.S. 422, 430 (2007). In the present case,
the alternative forum is an Ohio state court, not a court in a foreign country, and thus it
is questionable whether I even have the power to dismiss this case under forum non
8
conveniens. However, for the reasons given below, I would not dismiss this case under
that doctrine even if I had the power to do so.
The doctrine of forum non conveniens is an exceptional one that a court must
use sparingly. Deb, 832 F.3d at 805. While a court may consider a variety of factors
when deciding whether to dismiss a suit based on forum non conveniens, the focus is
on “the convenience to the parties and the practical difficulties that can attend the
adjudication of a dispute in a certain locality.” Fischer v. Magyar Államvasutak Zrt., 777
F.3d 847, 866 (7th Cir. 2015) (quoting Sinochem, 549 U.S. at 429). “Thus, when an
alternative forum has jurisdiction to hear a dispute, a case can be dismissed if trial in the
plaintiff’s chosen forum would be more oppressive to the defendant than it would be
convenient to the plaintiff or if the forum otherwise creates administrative and legal
problems that render it inappropriate.” Id.
When deciding whether to dismiss a case based on forum non conveniens, a
court first examines whether there is an adequate alternative forum available to hear the
case. See id. at 867. If so, the court then evaluates the various “private and public
interest factors” to see whether the balance counsels in favor of dismissal. See id.
In my decision on Westport’s motion to dismiss this case for forum non
conveniens, I found that the Ohio state court was an adequate alternative forum, and
that finding applies to the four insurers’ current motion.
Moreover, I analyzed the
various private and public interest factors and found that none of them weighed heavily
in favor of the Ohio forum, such that this would be one of the “rare instances” in which
forum non conveniens should be used to dismiss a federal case in favor of a state
forum. The four insurers concede that my analysis of those factors applies to their
9
motion. Br. in Supp. at 14, ECF No. 49. However, they contend that Eaton’s decision
to add claims to this case under the North River policies that are already at issue in the
Ohio litigation causes the balance of factors to tip in favor of Ohio. They also note that if
the Ohio court grants their motions to add Westport and AIU to the case, thereby
bringing Eaton’s Cutler-Hammer claims into that case, then the Ohio case will be
entirely duplicative of this case.
One problem with the insurers’ argument is that the Ohio court has not granted
their motions to add the Cutler-Hammer claims to the Ohio suit. So, right now, this
action is not duplicative of the Ohio action, and it may never be. The insurers’ argument
that this case is duplicative is therefore premature. It is true that the North River policies
are at issue in both cases, but that results in this case and the Ohio case overlapping
only slightly. That small area of overlap is not alone enough to make this case one of
the rare ones in which a forum non conveniens dismissal in favor of a state court is
appropriate. Accordingly, the insurers’ request to dismiss this case under forum non
conveniens will be denied.
III. CONCLUSION
For the reasons stated, IT IS ORDERED that the four insurers’ motion to dismiss
this action under either Wilton/Brillhart abstention or forum non conveniens (ECF No.
48) is DENIED.
IT IS FURTHER ORDERED that Eaton’s motion to file a sur-reply brief (ECF No.
71) is DENIED.
10
Dated at Milwaukee, Wisconsin, this 27th day of October, 2017.
/s Lynn Adelman
LYNN ADELMAN
United States District Judge
11
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?