Court Opinion

ID: 8976740
Source: CourtListenerOpinion
Date Created: 2022-11-27 11:06:00.286684+00
Date Added: 2024-06-11T17:10:35.305211
License: Public Domain

TJOFLAT, Chief Judge,
concurring:
I concur in the result reached by the majority but write separately because I am concerned with its discussion of “standing to sue.”
As a suit on a contract of marine insurance, this case falls within the federal courts’ admiralty jurisdiction. See Insurance Co. v. Dunham, 78 U.S. (11 Wall.) 1, 35-36, 20 L.Ed. 90 (1870). The district court improperly characterizes the role in this suit of a British bankruptcy statute that provides a third party with a direct action against an insurer when the insured has become insolvent. The district court correctly concludes that the plaintiff’s cause of action here depends upon that statute: without it, the plaintiff could bring no direct action against the insurer. The district court, however, incorrectly concludes that the cause of action depends solely upon the statute. The action also depends upon the underlying contract of marine insurance: the British statute alone would give the plaintiff no cause of action. Because the suit is based in part on this insurance contract, it falls within the federal courts’ admiralty jurisdiction.
The majority is confused about whether this statute provides a basis for the plaintiff’s cause of action. The majority states that the statute “concerns standing to sue,” but that such statutes “do not create any liabilities or causes of action.” Ante at 499. A few sentences later, however, the majority concludes that “the English statute gives direct action litigation rights to the plaintiff.” Id. The term “litigation rights” must surely mean a right, or cause, of action.
The majority’s confusion seems to result from its attempt to analogize this British statute to a Louisiana direct action statute, La.Rev.Stat.Ann. § 22:655 (West 1988 & Supp.1989). The Louisiana statute mandates that every liability insurance contract issued in Louisiana contain a direct action *501provision for third parties against an insurer if an insured becomes insolvent. See id. If the British statute involved here operated in this manner, then the majority would be correct in asserting that the British statute creates no “liabilities or causes of action,” ante at 499. The British statute, however, operates differently. Rather than mandating a direct action provision in every insurance contract, the statute itself provides the right of action: the insured’s “rights against the insurer under the contract in respect of the liability shall ... be transferred to and vest in the third party to whom the liability was so incurred.” The Third Parties (Rights Against Insurers) Act, 1930, 20 & 21 Geo. 5, ch. 25, § 1(1). This statute thus “vests” a substantive right in the third party — a right that is, of course, equivalent to the insured’s rights under the contract.
In short, the plaintiff’s right of action in this case depends on both the insurance contract and the statute. This action (because it depends in part on the insurance contract) falls under federal admiralty jurisdiction; I therefore concur in the result reached by the majority.