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EAGLE-PICHER INDUS. v. AMERICAN EMPLRS. INS. CO.

January 28, 1983

EAGLE-PICHER INDUSTRIES, INC., Plaintiff,
v.
AMERICAN EMPLOYERS INSURANCE COMPANY, ET AL., Defendants



The opinion of the court was delivered by: GESELL

 The question before the Court is whether or not this civil declaratory judgment action should be transferred to the United States District Court for the District of Massachusetts pursuant to 28 U.S.C. § 1404(a). Defendants support transfer and plaintiff opposes. The matter of transfer was originally raised by the Court sua sponte and at the Court's request has now been fully briefed. Starnes v. McGuire, 168 U.S. App. D.C. 4, 512 F.2d 918, 934 (D.C. Cir. 1974). The Court acted before answers after gaining considerable background knowledge of the facts and issues in the case by reason of heavily documented preclusion motions still awaiting disposition after briefing and argument. *fn1"

 While the foregoing litigation was in progress, the United States Court of Appeals for the District of Columbia Circuit decided an analogous insurance coverage case, not involving Eagle-Picher, creating a different standard for interpreting insurance coverage of this general type. That standard provides coverage far broader than either of the traditional standards of exposure or manifestation. Keene Corp. v. Insurance Co. of North America, 215 U.S. App. D.C. 156, 667 F.2d 1034 (D.C. Cir. 1981), cert. denied, 455 U.S. 1007, 102 S. Ct. 1644, 71 L. Ed. 2d 875, 102 S. Ct. 1645 (1982). Eagle-Picher immediately sought to have the District of Massachusetts and the Court of Appeals for the First Circuit adopt the Keene standard. Both Courts refused.

 The present action, relating to immediate and secondary umbrella policies not adjudicated in Massachusetts, followed immediately. The same day the First Circuit rejected the Keene rule plaintiff filed here. The obvious and sole purpose of this tag-along action is to take advantage of the unique ruling of the District of Columbia Circuit and, in effect, collaterally to attack the result Eagle-Picher received in Massachusetts.

 All the defendants in this new District of Columbia action have agreed to be bound by the policy interpretation adopted by the First Circuit, if it is not reversed by the Supreme Court, as to all of the policies whose interpretation is sought before this Court. Some defendants in this action are also seeking summary judgment on the ground that because the language of the policies before the First Circuit is functionally identical to the language at issue here, Eagle-Picher is precluded under the law of the First Circuit from seeking an interpretation different than that already established by final judgment in that Circuit. Those preclusion motions place this Court in the position of deciding what exactly the First Circuit decided, and whether that decision would be res judicata under the preclusion law of that Circuit as to the policies here at issue.

 The facts which control the Court's exercise of its discretion in this instance are set forth below:

 1. Eagle-Picher insured its primary risk against asbestos claims with Liberty Mutual. A series of first-tier umbrella policies, which would become applicable only when the Liberty Mutual coverage was exhausted, were written by American Employers, American Motorists, and the London Market. Beginning about the middle of 1973 it became clear that Eagle-Picher's asbestosis liability would be greater than anticipated and additional umbrella or excess coverage policies were written on top of the first two tiers by the London Market. Later further excess protection was written by Prudential, still later a further policy by the London Market, and finally yet another policy written by A.I.U. was pyramided on top, all within the period of mid-1973 and 1978. These policies track each others' language, are interrelated, often incorporate identical coverage language, and the entire insurance protection plan must be viewed as a whole.

 2. Key language in some of the policies here at issue expressly incorporates language from subordinate policies that has already been interpreted by the District of Massachusetts and confirmed with a slight modification by the First Circuit. The language of the other policies at issue, although not identical, closely tracks that interpreted by the First Circuit as adopting the manifestation theory.

 3. Further proceedings arising out of the District of Massachusetts case involving counterclaims and cross-claims relating to the exhaustion of primary coverage are still pending in the District of Massachusetts.

 4. Some of the defendants in the Massachusetts action are also defendants in the case before this Court.

 5. The District of Massachusetts is the only District where all of Eagle-Picher's insurers can be reached to achieve identical interpretation of the coverage provisions. First State and Lexington, which were originally dismissed by Eagle-Picher in this case because it was unable to serve them in the District of Columbia and which it now seeks to bring in again, are available for suit in Massachusetts. Other insurers who are citizens of Massachusetts are not named in either case at the present time.

 6. In deciding whether to grant defendants' preclusion motions, this Court must apply the preclusion law of the forum of the precluding decision.

 7. The issues presented in the Massachusetts action are in many respects identical to the issues tendered in the District of Columbia. The Massachusetts District Court is thoroughly familiar with the facts and legal issues in this case. It also is best situated to evaluate the scope and meaning of the decisions already reached in the First Circuit, the very issue tendered to this Court by the preclusion motions. For example, the Massachusetts Court can ...


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