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John W. Riordan Jane Fox v. Nationwide Mutual Fire Insurance Company, 984 F.2d 69, 2d Cir. (1993)

The court is withdrawing two questions it had previously certified to the New York Court of Appeals regarding whether a private claim for punitive damages against an insurance company is preempted by state law. After the court certified the questions, the defendant insurance company paid the full amount of the judgment, rendering the case moot. The court rejects the plaintiffs' argument that the issues could evade review, finding the plaintiffs did not demonstrate that punitive damages actions against insurers are too short in duration to be fully litigated before ending. The court orders the certified questions be withdrawn.

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43 views3 pages

John W. Riordan Jane Fox v. Nationwide Mutual Fire Insurance Company, 984 F.2d 69, 2d Cir. (1993)

The court is withdrawing two questions it had previously certified to the New York Court of Appeals regarding whether a private claim for punitive damages against an insurance company is preempted by state law. After the court certified the questions, the defendant insurance company paid the full amount of the judgment, rendering the case moot. The court rejects the plaintiffs' argument that the issues could evade review, finding the plaintiffs did not demonstrate that punitive damages actions against insurers are too short in duration to be fully litigated before ending. The court orders the certified questions be withdrawn.

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984 F.

2d 69

John W. RIORDAN; Jane Fox, Plaintiffs-Appellees,


v.
NATIONWIDE MUTUAL FIRE INSURANCE COMPANY,
Defendant-Appellant.
No. 1793, Docket 92-7160.

United States Court of Appeals,


Second Circuit.
Submitted Dec. 17, 1992.
Decided Jan. 21, 1993.

Neil A. Goldberg, Buffalo, NY (Lawrence A. Schulz, Richard J. Cohen,


Saperston & Day, of counsel) for defendant-appellant.
Jonathan J. Wilkofsky, New York City (Mark L. Friedman, David B.
Karel, Wilkofsky, Friedman, Karel & Cummins, of counsel) for plaintiffsappellees.
Before WINTER, MINER and McLAUGHLIN, Circuit Judges.
PER CURIAM:

Defendant Nationwide Mutual Fire Insurance Company appealed from a


judgment entered on January 15, 1992 after a jury trial in the United States
District Court for the Southern District of New York (Brieant, Ch.J.) awarding
a total of $349,304.34 in damages, including $150,000 for punitive damages,
and $174,652.17 in attorney's fees to plaintiffs John Riordan and Jane Fox.
Nationwide argued, inter alia, that N.Y.Ins.Law 2601, providing the
Commissioner of Insurance with a range of administrative remedies, preempted
a private claim for punitive damages against an insurance company; that
N.Y.Gen.Bus.Law 349(h) did not apply to transactions between insurance
companies and their insureds; and that the district court abused its discretion by
awarding attorney's fees equal to one-half the judgement awarded. On October
2, 1992, we affirmed the judgment of the district court in all respects, except as
to the punitive damages issue. See Riordan v. Nationwide Mut. Fire Ins. Co.,
977 F.2d 47 (2d Cir.1992).

Because the issue of the applicability of N.Y.Ins.Law 2601 to punitive


damage awards against insurance companies directly implicated a strong public
policy interest of New York and because a split of authority existed between at
least two Appellate Division Departments, we certified the following two
questions to the New York Court of Appeals:

3 Does Ins.Law 2601 preempt the common law right to punitive damages in
1.
private lawsuits premised on unfair claim practices in breach of an insurance
contract?
4 If Ins.Law 2601 does not preempt the common law right to punitive damages,
2.
must the insured, in order to recover punitive damages, prove that the insurer
engaged in morally reprehensible conduct aimed at the general public such that
anyone doing business with the insurer could be exposed to the conduct?
5

Id. at 56-57. The New York Court of Appeals has not yet decided whether to
accept the certified questions.

Subsequent to our submission of these certified questions, Nationwide tendered,


and the plaintiffs accepted, the full amount of the judgment, plus interest, costs
and disbursements. A copy of the satisfaction of judgment has been filed in the
district court. Inasmuch as the judgment against Nationwide has been satisfied,
the certified questions submitted to the New York Court of Appeals are moot.
See New York City Employees' Retirement Sys. v. Dole Food Co., 969 F.2d
1430, 1433 (2d Cir.1992) ("A case becomes moot 'when the issues presented
are no longer "live" or the parties "lack a legally cognizable interest in the
outcome." ' ") (citations omitted). Plaintiffs argue that the certified questions
should not be withdrawn because the issues, although capable of repetition, will
evade review. However, plaintiffs have failed to demonstrate that actions
against insurance companies for punitive damages are too short in duration "to
be fully litigated prior to [their] cessation or expiration" and that the same
complaining party would be subjected to the same action again. See id. at 1434.

Accordingly, we hereby withdraw our certification to the New York Court of


Appeals, cf. Coastal Petroleum Co. v. Secretary of the Army, 536 F.2d 1030
(5th Cir.1976) (per curiam) (withdrawing certified questions to the Florida
Supreme Court following settlement), and order that the Clerk of the Court
transmit to the Clerk of the New York Court of Appeals a letter withdrawing
the certified questions, together with a copy of this opinion.

The motion of Nationwide Mutual Insurance Company for withdrawal of the


certified questions is granted, and the final mandate shall issue forthwith.

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