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Supreme Court Re-Shifts Burdens of American Home Products, Then Refuses to Defer to First-Filed Action in a State Whose Insurance Law is Less Favorable In Awarding Coverage to Polluters

The Supreme Court delivered a one-two punch in last week’s decision in Sensient Colors, Inc. v. Allstate Ins. Co., et al., __ N.J. __ (2008), Docket No. A-99/100/101-06 (Jan. 29, 2008). First, it revamped the rules for determining the comity stay. Then, applying those rules, it held that a second-filed action should proceed in New Jersey, in part because the polluting policyholder might be less able to obtain insurance reimbursement for the cost of cleanup of its contaminated property in South Jersey if the action were adjudicated in New York under New York law.

Revising The American Home Products Test

In the battle of the forums (or fora if you remember your Latin), the long-standing general rule has been that courts defer to the first-filed action, unless a party can overcome the first-filed presumption and demonstrate the action should be adjudicated in the second-filed forum based on the particular circumstances of the case. For more than 10 years, American Home Products Corp. v. Adriatic Ins. Co., 286 N.J. Super. 24 (App. Div. 1995), has provided the guiding framework on the first-filed doctrine. In its first opportunity to review the American Home Products analysis, the New Jersey Supreme Court modified the Appellate Division’s paradigm.

American Home Products established a three-prong test to determine whether a court should defer to a first-filed action or retain jurisdiction over a subsequently filed suit. Under this test, a party moving for a comity stay or dismissal of a second-filed action in New Jersey has to establish that: (1) there is a first-filed action in other state; (2) both cases involve substantially the same parties, claims and legal issues; and (3) the plaintiff in the second-filed action will have the opportunity for adequate relief in the first-filed jurisdiction. American Home Products, 286 N.J. Super. at 37. Once these are established, the burden shifts to the other party who must demonstrate special equities for allowing the second-filed action to proceed. Id.

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One of the developers from Tumblr has come up with a new service: Instapaper.

The site basically acts as “to-read” list. As you surf the net, you click on a bookmark (which you conveniently place in your links bar) and that page gets added to your “to-read” list; something that’s interesting but you don’t have time to spend on it right now.

One of the great things about the Net is its breadth of information; and one of the worst things about the Net is its breadth of things. While reading one article, you stumble upon another link to something that is applicable not to the subject at hand, but something else you’re doing… but now’s not the time to go down that road. So you click on your Instapaper bookmarklet and know that you can go back to it easily.

There’s no registration necessary. You don’t even have to set up a password (tho you probably should).

The service is free, but as they point out in their FAQ: “Instapaper isn’t meant for permanent, long-term archival of everything you’ve ever wanted to read. And while best efforts are made, your data’s integrity is not 100% guaranteed here. This is for temporary storage of links you’d like to read.”

I’ve found the site to be incredibly handy and thought I’d do my part to spread the word.