California Court of Appeals, Second District, Fifth Division
APPEAL from orders of the Superior Court of Los Angeles County, No. BC490342 John Shepard Wiley, Jr., Judge.
Covington & Burling, Donald W. Brown, Michael S. Greenberg, Jeffrey M. Davidson; Munger, Tolles & Olson and Cary B. Lerman, for Plaintiffs and Appellants.
Cozen O’Connor, Charles E. Wheeler, Matthew Walsh, Amanda M. Lorenz; Carroll, McNulty & Kull, Christopher R. Carroll and Heather E. Simpson, for Defendants and Respondents TIG Insurance Company, The North River Insurance Company and U.S. Fire Insurance Company.
Selman Breitman, Sheryl W. Leichenger and Elisabeth M. D’Agostino, for Defendant and Respondent American Guarantee & Liability Insurance Company.
Tressler, Michaela L. Sozio, Elizabeth L. Musser; White & Williams, Michael O. Kassak and Edward M. Koch, for Defendants and Respondents Federal Insurance Company, Vigilant Insurance Company and Great Northern Insurance Company.
The Aguilera Law Group, A. Eric Aguilera; Hermes, Netburn, O’Connor & Spearing, Kevin J. O’Connor, Peter C. Netburn and Matthew C. Kalin, for Defendants and Respondents Discovery Property & Casualty Insurance Company, St. Paul Protective Insurance Company, Travelers Casualty & Surety Company, Travelers Indemnity Company and Travelers Property Casualty Company of America.
Troutman Sanders, Terrence R. McInnis and William D. Burger, Jr., for Defendant and Respondent XL Insurance America, Inc.
Clyde & Co Us, David A. Gabianelli, Andrew G. Wanger, Daren S. McNally and Barbara M. Almeida, for Defendants and Respondents, Ace American Ins. Co., Century Indemnity Ins. Co., Illinois Union Ins. Co. and Westchester Fire Ins. Co.
Gordon & Rees, Peter Schwartz and Gary Collis, for Defendant and Respondent Alterra America Insurance Company.
Arnold & Porter, Brian K. Condon, Jake R. Miller; Jackson & Campbell, Warren Lutz, Timothy R. Dingilian and Paul D. Smolinsky, for Defendants and Respondents Chartis Property Casualty Company, Chartis Specialty Insurance Company, Illinois National Insurance Company and National Union Fire Insurance Company of Pitssburgh, Pa.
Wilson, Elser, Moskowitz, Edelman & Dicker, William K. Enger and James J. Pulliam, for Defendant and Respondent Guarantee Insurance Company.
The National Football League has returned to Los Angeles, but not, as many Angelenos hope, bearing the gift of a new home team. The league administration and its intellectual property marketing arm have been sued in multiple states by dozens of former players alleging lifelong brain damage from on-field injuries dating back to the 1950’s. In this case the plaintiffs, National Football League and NFL Properties LLC, seek a Los Angeles Superior Court declaratory relief judgment regarding the coverage duties of 32 insurance carriers pursuant to some 187 commercial liability policies that were issued over a 50-60 year period. All the same entities are parties to parallel coverage actions filed by some of the insurers in New York state courts at approximately the same time as the California case.
The insurer defendants sought a dismissal or stay of the California case on a theory of forum non conveniens. Following extensive briefing and a hearing, the California trial court ordered the California proceeding stayed pending the outcome of the New York actions. The plaintiffs appeal, contending the trial court misapprehended the applicable legal test, and abused its discretion in any event. We affirm and clarify the standards to be applied by a trial court which intends to stay rather than dismiss a California case on grounds of forum non conveniens. We also hold the plaintiffs, whose principal places of business are in New York City, are not California residents in the inconvenient forum context, even though three teams reside in California. Finally, we find no abuse of discretion in the trial court’s analysis and conclusion that the California action should be stayed.
A. The NFL policyholder plaintiffs
Plaintiff National Football League (“NFL”), is an unincorporated association headquartered in New York City since 1960 and comprised of 32 member “clubs” based in various states throughout the country. Only two states, California and Florida, are home to three teams. New York is home to only the Buffalo Bills; the “New York” Giants and “New York” Jets are located in northern New Jersey, a short distance from New York City. Over the past 50 years, more NFL regular season games have been played in California than in any other state. The annual Super Bowl and Pro Bowl games have been played in California 34 times, most often in Los Angeles County.
Plaintiff NFL Properties LLC is a Delaware corporation headquartered, since 1970, in New York City. At the time the actions at issue here were filed, NFL Properties was not licensed to do intrastate business in California. NFL Properties develops, licenses and markets the intellectual property of the NFL and its member clubs. NFL Properties is the successor to National Football League Properties, Inc. (“NFLP”), which was incorporated in California in 1963. NFLP was a California corporation throughout its existence, which ended in 2001. Its principal place of business until approximately1970 was in Los Angeles County, where it and then NFL Properties maintained an office unti1 2005. 
NFL’s largest offices are in New York, where the various NFL entities conduct the majority of their business. Anastasia Danias, Vice-President of Legal Affairs for NFL, works in New York, as do other NFL executives. NFL entities regularly file suit in New York state and federal courts, including insurance coverage actions against insurers located in eastern states other than New York.
B. The insurance and insurer defendants
Thirty-two insurers are named as defendants in the instant coverage case. NFL alleges those companies issued commercial general liability (“CGL”) policies providing primary and excess coverage over a roughly 45-year period from the late 1960’s to 2012. Decades of policies are implicated in the underlying tort litigation because CGL policies generally cover only occurrences within the policy period and the tort plaintiffs allege injuries dating back to the 1950’s. Plaintiffs NFL and NFL Properties separately purchased and maintained their own insurance programs over the years involved here up until 2000, when they fully integrated their programs.
Thus far, the NFL plaintiffs have identified at least 187 policies issued to one or both of them by the 32 defendants covering time periods between March 1968 and August 2012. The vast majority were brokered and delivered to NFL in New York City. The policies provide coverage in layers: a first-recourse “primary” layer and “umbrella” or “excess” layers of coverage. Fifty-two of the policies, issued by 12 of the insurer defendants, are primary policies, which include a duty to defend against lawsuits potentially covered by the policy. Prior to 1977, NFL relied primarily on California based insurance brokers and offices. It is expected that some or all policies from that era, which are yet to be located, were issued through California brokers and/or to California based NFL entities.
All the defendants are licensed and/or doing business in both California and New York. With one exception, the insurers currently have their principal places of business east of the Mississippi River, primarily in the northeast and mid-Atlantic states. The majority are located within 250 miles of New York City. Only Fireman’s Fund has a principal business location in California, in the city of Novato. Three insurers have their principal place of business in New York. Fourteen defendants have their principal place of business in either Connecticut or New Jersey, which along with New York are collectively referred to as the “Tri-State Area.” Four insurers have their principal place of business in Pennsylvania. Four more are located in Illinois, and one each are in Florida, New Hampshire, North Carolina, Virginia, and Minnesota. Thirty of the 32 insurer defendants are incorporated in east coast states, Illinois or Indiana.
Chartis is the only primary carrier with a principal place of business in New York. NFL alleges that Chartis issued 12 policies under which NFL is entitled to coverage. Eleven policies were negotiated primarily between underwriters located in New York and NFL’s New York broker, and the policies were delivered to NFL in New York. One Chartis policy was negotiated primarily between underwriters located in both Illinois and New York and an NFL broker in Indiana. NFL tendered its claims for coverage under the Chartis policies from its New York offices, and Chartis is handling those claims in New York, where documents concerning the claims are located.
TIG issued more duty-to-defend policies than any other insurer. Although TIG is incorporated in California and maintained its principal business location here at the time most of its NFL policies were written, the TIG policies were issued to NFL in New York through a New York-based broker. All relevant TIG documents and personnel are located in Manchester, New Hampshire. TIG’s two affiliates have their principal places of business in New Jersey, where all their relevant documents and witnesses are located.
The Travelers policies were negotiated, issued, or issued for delivery to NFL in New York, often through New York brokers. Travelers is handling NFL’s claims in New York City.
ACE is headquartered in Philadelphia. All 28 of its primary and secondary policies allegedly issued to NFL since 1968 were brokered, issued, and delivered to NFL in New York. Although ACE is handling NFL’s claims partly in California, representatives from New Jersey, Delaware and Pennsylvania are also involved.
The Chubb policies were delivered to NFL in New York, and most of the brokers for those policies are located in New York. One Chubb person responsible for NFL claims handling is located in California; several others are located in Texas and New Jersey.
Hartford Accident & Indemnity Company and New England Reinsurance Corporation issued seven policies to NFL. Six policies for which information is available, were issued in New York, five through a New York-based broker. NFL’s claims under these policies have been handled by representatives in Connecticut working with NFL personnel in New York.
XL Insurance America issued six policies, and XL Select Insurance Company issued one. All seven were brokered, underwritten, and delivered in New York. All claims by NFL under these policies are being handled in Pennsylvania.
Fireman’s Fund or an affiliate issued four policies to NFL in New York. Three policies were issued through a New York-based broker and one primary policy was issued through a California-based broker that is now located in Illinois. This insurer is handling NFL’s claims through employees in California and South Carolina, who have communicated with NFL’s New York personnel.
Through Harbor Insurance Company and Niagara Fire Insurance Company, Continental Insurance Company issued four policies to NFL. Three were negotiated between New York underwriters and brokers; one involved a New York underwriter and a broker in California. That California broker has since been acquired by a Chicago-based brokerage. NFL’s claims under these policies are being handled in New Jersey.
Allstate Insurance Company is the successor in interest to Northbrook Excess & Surplus Insurance Company, formerly Northbrook Insurance Company. All the policies under which Allstate may be liable were issued to NFL in New York through a New York broker. All claims handling with respect to these policies is taking place in Illinois.
Alterra issued one policy to NFL through a New York broker; it is handling NFL’s claims in New York and Virginia.
American Re issued one policy to NFL through a California broker that has since been acquired by a Chicago-based brokerage. All claims handling is taking place in New Jersey.
American Guarantee & Liability Insurance Company, Arrowood, Guarantee Insurance Company and OneBeacon Insurance Company each issued one policy to NFL in New York and through a New York broker in most cases. These carriers are handling NFL’s claims in states other than California, including Minnesota, Georgia and Florida.
C. The underlying tort litigation
As set forth in appellants’ appendix, in July 2011, 73 former players sued the NFL and NFL Properties, along with helmet maker Riddell in Los Angeles Superior Court (the “Maxwell” case). The players alleged concussions and other injuries sustained during their NFL careers had resulted in brain and other neurological damage, and that, at its highest management levels, NFL negligently failed to protect players against such long-term injuries. Maxwell was the first such lawsuit filed against NFL. In August 2011, two similar actions were filed in Los Angeles Superior Court on behalf of 63 players (“Pear” and “Barnes”). Also in August 2011, seven former players filed a putative class action against NFL in the United States District Court for the Eastern District of Pennsylvania (“Easterling”). Maxwell, Pear, Barnes and Easterling were the vanguard of what has become a large number of lawsuits filed on behalf of former players in California and at least eight other states throughout the country (“underlying tort litigation”). Some cases allege fraud and conspiracy in addition to negligence.
NFL removed Maxwell, Pear, and Barnes to the United States District Court for the Central District of California on the basis of a federal question of jurisdiction, contending that plaintiffs’ claims were preempted under the Labor Management Relations Act and provisions of the players’ Collective Bargaining Agreement. NFL subsequently moved to transfer those and other federal actions for coordinated or consolidated Multidistrict Litigation (“MDL”) of pretrial proceedings in a single court. NFL and most of the tort plaintiffs urged that the consolidated proceedings be assigned to the Eastern District of Pennsylvania, where Judge Anita B. Brody was presiding over Easterling, the first case filed in federal court. In its transfer motion, NFL argued the Eastern District of Pennsylvania was the “most suitable” forum because, among other things, it “is a convenient forum for many defendants and potential witnesses in the Actions, with the NFL headquartered in nearby New York City, and the plaintiffs in the... [removed California actions], more than half of whom reside in the Eastern part of the United States....”
In January 2012, the Judicial Panelon Multidistrict Litigation ordered the Maxwell, Pear, and Barnes actionstransferred to the Eastern District of Pennsylvania for MDL pretrial proceedings. All the players allege in the concussion MDL that “all NFL policies and decisions relevant to the conduct alleged herein occurred primarily in the NFL corporate offices in New York.” An amended MDL complaint focuses on the claim that NFL’s senior management knew the risk of brain injury to players, but failed to disclose it. Those cases will be returned to their original venues if not settled before trial.
As of November 2012, players had filed more than 174 lawsuits against the NFL itself, many of which also named NFL Properties as a defendant. Most (154) were filed in states other than California. More than 3, 700 former players and more than 2, 000 spouses are plaintiffs in those cases. Approximately 12 percent of the former players allege California residence; approximately 1.5 percent alleges New York residence. Most of these cases have been, or will be, consolidated in the MDL in Pennsylvania.
At the time the trial court stayed NFL’s California action, the MDL proceedings were in the initial pleading stage, with discovery stayed and motions to dismiss pending and awaiting oral argument. If the underlying tort litigation is not dismissed on pretrial motions, the individual lawsuits will be returned for ...