The marine insurance agreement at issue included a choice of law provision, stating the policy was governed by federal maritime law.
The insurer had denied coverage, and brought a declaratory judgment action seeking to adjudicate that denial. The insured counterclaimed, and included a Pennsylvania statutory bad faith claim. The carrier moved for judgment on the pleadings as to the bad faith claim.
The court agreed that there was clear and enforceable choice of law language providing that federal maritime law controlled. Under that law, state law bad faith claims are preempted. Thus, the court granted judgment on the pleadings on this issue. Judge Kane carried out a lengthy and detailed analysis supporting her conclusion, citing both legal precedent on the preemption principle, and separately rejecting a public policy argument.
Date of Decision: March 24, 2022
CLEAR SPRING PROPERTY AND CASUALTY COMPANY v. MATADOR SPORTFISHING, LLC, U.S. District Court Middle District of Pennsylvania No. 1:21-CV-01581, 2022 WL 884267 (M.D. Pa. Mar. 24, 2022) (Kane, J.)
Maritime law provides that cases are tried to a judge, not a jury. In a separate decision on the same date, the court observed that even had the bad faith claim survived, the insured would not be entitled to a jury trial because maritime law principles still would govern since the facts and claims underlying all the actions were the same.
Date of Decision: March 24, 2022
CLEAR SPRING PROPERTY AND CASUALTY COMPANY v. MATADOR SPORTFISHING, LLC, No. 1:21-CV-01581, 2022 WL 888099 (M.D. Pa. Mar. 24, 2022) (Kane, J.)
