SBD/May 29, 2013/Leagues and Governing Bodies

Calif. Court Denies NFL's Attempt To Litigate Lawsuit There Pertaining To Concussion Cases

The California state Appeals Court yesterday denied an NFL effort to litigate in the Golden State a lawsuit brought by insurers against the league seeking to avoid paying for potential liability tied to the concussion cases brought by thousands of retired players. The league had wanted to try the insurance case in California, seeing the forum as more friendly and efficient, while the insurers wish to keep a lawsuit in New York state court proceeding. “The record also shows that [the NFL has its] headquarters in New York, run their operations from there, brokered the majority of their insurance policies from there, have their important documents and key executives there and have personnel involved in this coverage litigation employed there,” the court decision said. A lower California state court ruled similarly in November '12, but the NFL appealed. The New York court has let part of the insurers lawsuit to proceed, which the NFL appealed earlier this month to a higher New York court. At stake is billions of dollars, the amount the NFL could be on the hook for if the retirees were to receive favorable judgments. Litigation costs are expected to reach into the nine figures. There are 187 policies covering a period stretching back six decades that are at issue. According to the court, the policies from before '77 have not been found. “Prior to 1977, [the] NFL relied primarily on California-based insurance brokers and offices,” the decision said. “It is expected that some or all policies from that era, which are yet to be located, were issued through California brokers and/or to California-based NFL entities.” The missing policy issue is magnified now with the case getting tried in New York. California law allows an insured company like the NFL to extrapolate from a given policy year claims stretching over a much longer term. By contrast, New York law, under which the case now proceeds, requires the policyholder to pro-rate the liability over each year of the coverage period -- so if a policy is missing, that could lead to loss of coverage for that year.
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