Court Opinion

ID: 6978186
Source: CourtListenerOpinion
Date Created: 2022-07-24 02:14:44.186276+00
Date Added: 2024-06-11T16:09:04.792708
License: Public Domain

JACOBS, Circuit Judge,
concurring:
I subscribe to the opinion of the Court because it is sound as far as it goes, because it prudently avoids answering factual or discretionary questions that are stirred up in the wake of the belated jurisdictional inquiry, and because these questions are properly confided by the opinion to the fact-finding resources and sound discretion of the district judge. I write separately only to list some open questions:
Is a syndicate an entity within the meaning of Carden v. Arkoma Assocs., 494 U.S. 185, 110 S.Ct. 1015, 108 L.Ed.2d 157 (1990)? Assuming that the vertical contractual undertaking (by which each Name takes on a sliver of the policyholder’s risk) does not create a Carden entity, is a Carden entity formed by horizontal contractual undertakings among the Names and with the head underwriters? We know that Names designate an underwriter to conduct business on their behalf, that the underwriter negotiates and subscribes to risks on their behalf, and that the members divide profit and loss. Do the members also pay a share of overhead, salaries and commissions? Are they assessed (or are they debited) a share of attorneys’ fees in cases such as this one? What is the contractual or other basis for such obligations?
The premise for a ruling that a syndicate is a non-entity under Garden would be that any one Name at all can be sued (rather than a head underwriter), and a judgment against that member binds all other Names. Is that in fact how it works, notwithstanding the possibility that there may be one or more disgruntled, judgment-proof Names who might default on a large claim without notice to anyone else? Does the Society of Lloyd’s agree?
Some Names of some syndicates have alleged fraud in the inducement of Name status. See, e.g., Stamm v. Barclays Bank, 153 F.3d 30 (2d Cir.1998) (per curiam). Does that impact upon the efficacy of a Declaratory Judgment action against one Name to achieve collection of the whole insurance obligation, or the viability of class action (if opt-outs are permitted)?
If a syndicate is not an entity within the meaning of Carden, can its members constitute a class under Fed.R.Civ.P. 23.2, which affords class status to members of unincorporated associations?
If a syndicate is a non-entity under Car-den, but has members who can constitute a Rule 23.2 class, which among them (if any) must meet the amount-in-controversy minimum? Is aggregation allowed in class actions generally and in Rule 28.2 class actions specifically? Is notice and the right to opt-out pursuant to Rule 23(c)(3) also a requisite under Rule 23.2, generally or in respect of this claim? See generally 7C Charles Alan Wright, et al., Federal Practice and Procedure § 1861, at 220-22 (2d ed.1986).