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Leagues and Governing Bodies

League notes settlement talks in effort to delay discovery

The NFL is engaged in settlement negotiations with dozens of insurers it is suing, and has reached a deal with one, over liability for the league’s pending class-action concussion settlement with more than 5,000 retirees, an agreement that could cost more than $1 billion.

The NFL’s outside counsel, John Hall of Covington & Burling, disclosed the talks last week in a letter to the New York state judge overseeing the lawsuit.

“Confidential discussions have taken place with the majority of the carriers, including all of the primary insurers,” Hall wrote. “The NFL parties have concluded a settlement agreement with one carrier group, and confidential settlement discussions with other carriers remain ongoing.”

The mediation is led by mediation and arbitration service JAMS, Hall wrote.

Neither the NFL nor Hall replied for comment. The letter did not disclose which carrier group settled.

The insurers filed suit against the NFL in August 2012 seeking a court order stating they were not liable for damages emanating from the then-ongoing concussion litigation. The league days later counter-sued.

Once the NFL and retirees reached a preliminary settlement in 2013 on the concussion matter, the insurance case was largely stayed. However, the insurance carriers in the past months began pushing aggressively for discovery to commence, and the league has fought back.

Hall’s letter largely concerned convincing the judge that discovery should not start until the settlement process is complete. The NFL is concerned that discovery in the insurance case might affect the outcome of the appeals of the settlement, as well as individual cases filed by retirees who opted out of the settlement.

An insurance expert agreed the NFL is right to hold off on discovery.

“The insurers are arguably breaching their fiduciary duty of good faith and fair dealing to the NFL by pressing for the coverage case to leapfrog over the underlying action [the concussion cases],” said Lynda Bennett, chair of the insurance recovery practice at Lowenstein Sandler. “It puts the NFL in the untenable position of having to take positions with the insurers that may be used against the NFL in the underlying actions.”

The state court judge, Jeffrey Oing, last week extended the stay until Jan. 11, though the settlement appeals are likely to still be live then. Oral arguments in the 3rd Circuit U.S. Court of Appeals occurred just last week, and an appeal to the U.S. Supreme Court is possible.

In addition, more than 150 of the individual opt-out cases are pending.

The discovery the insurers want to conduct would, in part, probe what the NFL knew years ago about the risk of head injuries in football. Arguably, the insurers could then argue that if the NFL knew about the risks, the insurers would not have to cover the settlement.

In the concussion settlement, one point of contention among critics of the deal is that the NFL does not admit to any wrongdoing or allow any discovery.

The movie “Concussion,” due out on Christmas and which follows one doctor’s battle with the NFL over head injuries, ends with lines on the screen noting the concussion settlement does not require the NFL to admit wrongdoing or produce any documents about what it knew.

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