McKool Smith, on behalf of Energy Transfer Equity LP, obtained a ruling from the Delaware Supreme Court rejecting an appeal by several insurers seeking to overturn a lower court ruling that they are subject to jurisdiction in Delaware, allowing a $2 billion coverage suit to proceed.
In the lower court decision, Superior Court Judge Eric M. Davis rejected arguments that the Delaware state court lacked jurisdiction and that the suit was premature, holding that because the insurers sold insurance contracts to Delaware entities they “must have foreseen the possibility that they could have been haled into Delaware.” Read more about that decision here.
The insurers, which include Twin City Fire Insurance Co., Navigators Insurance Co., and Allied World National Assurance Co., appealed, arguing that Judge Davis improperly applied the law and exceeded the limits imposed by the United States Supreme Court. The Delaware Supreme Court disagreed in a December 31, 2020 decision, declining to take up the appeal and finding that “the potential benefits of interlocutory review do not outweigh the inefficiency, disruption, and probable costs caused by an interlocutory appeal.”
“At bottom, the insurers’ argument failed because it misapprehended the Supreme Court’s recent case law,” said McKool Smith principal David Dehoney, counsel for Energy Transfer Equity LP. “The Supreme Court has recognized that specific jurisdiction can exist when a non-resident enters into a contractual relationship that envisioned continuing contacts in the forum State.” McKool Smith principal Lauren Varnado said that this victory “demonstrates the benefit of our approach of bringing diverse practices under one roof, including a strong energy practice combined with expertise in insurance recovery matters.”
The case is Energy Transfer Equity LP v. Twin City Fire Insurance Co. et. al., case number 343, 2020, in the Supreme Court of the State of Delaware. The Court’s full decision is here.
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