SAN FRANCISCO -- A federal judge has sent an insurance dispute back to the California court where it was originally filed.
PHL Variable Insurance company sued Continental Casualty Company and Lloyd’s of London in San Francisco Superior Court over costs it incurred from a class-action lawsuit filed by holders of PHL life insurance.
PHL carries liability insurance from Continental and Lloyd's, and argued that they should cover the costs of the class-action litigation.
Continental removed the case to federal court, and PHL asked to have it moved back to Superior Court. Continental opposed remand and asked the judge to either dismiss the suit or transfer it to federal court in Connecticut, where a similar suit is pending.
On March 18, U.S. District Court Judge Charles Breyer agreed with PHL and remanded the case back to California court. He also refused a request from Lloyd’s of London to dismiss it from the case, saying that would be a “waste of judicial resources.”
The judge wrote at length about the complex nature of the case, which spans three separate courts.
“CNA filed the first suit concerning this controversy in the U.S. District Court for the District of Connecticut, where that suit continues,” Breyer wrote. “Soon after, PHL filed its own action in the San Francisco Superior Court. Defendants then removed that case to this Court.”
PHL “intimates” that if Lloyd’s was severed from the lawsuit, “it could simply refile or resume the action against Lloyd’s in state court,” Breyer wrote.
The result would then be three different lawsuits in three different courts, all about the same controversy, wrote Breyer.
“This outcome imposes needless burden on all involved and creates a risk of inconsistent rulings that would confound the due administration of justice,” Breyer concluded.
PHL Variable Insurance Company v. Continental Casualty Company et al. U.S. District Court, Northern District of California, 19-cv-06799-CRB