A federal judge from Southern District of New York has denied a professional football team’s bid to stave off arbitration in a worker’s compensation dispute with an insurance company.
The Las Vegas Professional Football Limited Partnership (LVG), a professional football team in the Arena Football League (AFL), was a participant in a worker’s compensation insurance program with National, an insurance company. Last year, LVG sued National and its parent, American International Group (AIG), in a dispute over payment.
After a federal judge compelled arbitration, LVG asked the judge to reconsider his ruling. Among its arguments, LVG claimed that it “neglected to bring to the court’s attention that the Payment Agreement is unconscionable because it was the product of undue influence and duress; the court should have declined to decide National’s petition because the Florida Action was filed first; that I should have dismissed the petition to compel arbitration because there is a substantial identity with the parties in the Florida Action; (and) that National mischaracterized the status of settlement negotiations in its prior filings with the Court.”
Addressing each element in turn, the court first turned to the “under duress” argument. It noted that AIG “demanded that LVG provide it with collateral, or AIG would terminate the policy. This would leave LVG in violation of Nevada workers compensation laws and the AFL’s rules.” The court declined to side with the plaintiff on this claim, noting “the issue of the contract’s validity is an issue for the arbitrators to decide.”
Next, it focused on the applicability of the “first filed rule.” In denying the argument, the court found that the plaintiff was essentially forum shopping, seeking to “disregard its contractual obligation to arbitrate by filing the Florida Action, and subsequently adding National as a defendant, is a form of forum shopping. See Welborn Clinic v. MedQuist, Inc., 301 F.3d 634, 637 (7th Cir. 2002).
Finally, it dispatched with LVG’s remaining arguments.
“LVG argues that National mischaracterized certain facts in an earlier submission to the Court, creating a false impression that the ‘parties were actively engaged in settlement negotiations’ during the time between when LVG commenced the Florida Action and National brought its petition to compel arbitration,” wrote the court. “Although a party’s failure to be candid with the court is a serious issue, it is irrelevant to LVG’s motion to reconsider. I did not consider the status of the negotiations during this intervening period when I granted National’s petition.”
LVG’s last argument — that AIG and National are substantially the same party — similarly failed. “To the extent this is a repetition of LVG’s ‘first filed’ argument, I have addressed it above. In addition, to the extent that LVG or National read the Memo & Order as ordering LVG to arbitrate its claims against AIG, it does not. The Memo & Order grants National’s petition to compel arbitration of the claims LVG has made against National. The claim against AIG is only pending in the district court in the Southern District of Florida. WorldCrisa, 129 F.3d at 76.”
National Union Fire Insurance Company of Pittsburgh, PA, v. Las Vegas Professional Football Limited Partnership d/b/a Las Vegas Gladiators; S.D.N.Y.; 09 Civ. 7490 (PKC), 2010 U.S. Dist. LEXIS 5829; 1/15/10
Attorneys of Record: (for petitioner) Anthony Ignatius Giacobbe, Jr, Greg Michael Bernhard, Michael Steven Davis, Zeichner Ellman & Krause LLP, New York, NY. (for respondent) James L. Ferraro, Ferraro Law Firm, Coral Gables, FL.
