Introduction And Selection Process
Welcome to the 17th annual look back at the year’s ten most significant insurance coverage decisions. Holy Cow! It’s been that long?
As I always do at the outset of the annual Top 10 Coverage Cases of the Year, here is my description of the selection process. It is highly subjective, not in the least bit scientific and in no way democratic. But just because the selection process has no accountability or checks and balances whatsoever does not mean that it wants for deliberativeness. To the contrary, the process is very deliberate and involves a lot of analysis, balancing, hand-wringing and tossing and turning at night. It’s just that only one person is doing any of this.
[If you think I missed a case, tell me. I’ll be the first to admit that I goofed (and I have). It is impossible to be aware of every coverage case decided nationally.]
The selection process operates throughout the year to identify coverage decisions (usually, but not always, from state high courts) that (i) involve a frequently occurring claim scenario that has not been the subject of many, or clear-cut, decisions; (ii) alter a previously held view on an issue; (iii) are part of a new trend; (iv) involve a burgeoning or novel issue; or (v) provide a novel policy interpretation. Some of these criteria overlap. Admittedly, there is also an element of “I know one when I see one” in the process. In addition, cases that meet the selection criteria are usually not included when the decision is appealed. In such situation, the ultimate significance of the case is up in the air.
In general, the most important consideration for selecting a case as one of the year’s ten most significant is its potential ability to influence other courts nationally. Many courts in coverage cases have no qualms about seeking guidance from case law outside their borders. In fact, it is routine--especially so when in-state guidance is lacking. The selection criteria operates to identify the ten cases most likely to be looked at by courts on a national scale and influence their decisions.
That being said, the most common reason why many unquestionably important decisions are not selected is because other states do not need guidance on the particular issue, or the decision is tied to something unique about the particular state. Therefore, a decision that may be hugely important for its own state – indeed, it may even be the most important decision of the year for that state – nonetheless will be passed over as one of the year’s ten most significant if it has little chance of being called upon by other states at a later time.
For example, this year the Pennsylvania Supreme Court, in Rancosky v. Washington National Insurance Co., set forth the elements for establishing a bad faith claim. The significance of Rancosky, for lawyers practicing in Pennsylvania, cannot be overstated. However, the decision was not considered for inclusion in the annual Top 10 Best in Show. There is simply no shortage of case law nationally addressing bad faith standards. Thus, the chances of a court, outside of Pennsylvania, turning to Rancosky for guidance, when confronted with a bad faith case, are slim.
Likewise for the Missouri Supreme Court’s decision in Doe Run Res. Corp. v. Am. Guar. & Liab. Ins., addressing -- first impression -- whether the pollution exclusion bars coverage for a toxic tort claim arising from alleged industrial pollution. This is a very important decision for those practicing in Missouri. But courts in other states, when confronting the pollution exclusion, are not likely to look to Doe Run and say -- Show Me.
I gave a lot of thought to including the Washington Supreme Court’s decision in Xia v. ProBuilders Specialty as a top ten case. The court – the first ever, anywhere – used an “efficient proximate cause” analysis, when interpreting the pollution exclusion, resulting in a significant narrowing of its potential applicability (as well as expansion of what’s bad faith). But with a volume of case law nationally, interpreting the pollution exclusion, that could fill a library -- and the decision involving such a seismic change in its interpretation -- I do not see Xia having impact outside of Washington.
Best wishes for a healthy and prosperous 2017 and may any resolutions that you make last at least until February.
The year’s ten most significant insurance coverage decisions are listed in the order that they were decided.
|