Discover Prop. & Cas. Co. v. Nat'l Football League

The following e-filed documents, listed by NYSCEF document number (Motion 023) 542, 543, 544, 545, 546, 547, 548, 549, 550, 551, 552, 553, 554, 555, 556, 557, 558, 559, 560, 561, 562, 563, 564, 565, 566, 567, 568, 569, 570, 571, 572 were read on this motion to/for            PREL INJUNCTION/TEMP REST ORDR DECISION + ORDER ON MOTION   Upon the foregoing documents, it is GRANTED. Thirty-two non-party NFL football teams (the “Non-Party Teams”)¹ move pursuant to CPLR 3103(a) by OSC for relief from subpoenas served by the Insurers² in this action: (1) directing the Insurers to withdraw or stay all other proceedings they have commenced in any 25 other jurisdictions³ against any of the Non-Party Teams seeking to compel compliance with the nearly identical subpoenas issued to each of the Non-Party Teams (the “Subpoenas”); (2) directing the Insurers not to commence any other proceedings in any other jurisdiction to compel compliance with the Subpoenas; and (3) consolidating all proceedings relating to the Subpoenas to a single proceeding before this Court. (NYSCEF Doc. No. [NYSCEF] 542, OSC). The issue here is whether the National Football League and NFL Properties LLC (collectively the NFL) are entitled to insurance coverage for their defense costs and settlement payments in connection with the underlying litigation (the MDL Action).⁴ The background of this case is set forth in prior court decisions, with which familiarity is presumed, and which will not be repeated here except as relevant to this decision. According to the Non-Party Teams, to date, the Insurers have commenced 18 separate proceedings against 21 Non-Party Teams in 14 different States, and confirmed that they intend to commence separate actions against all of the remaining Non-Party Teams in each of their respective local jurisdictions. (NYSCEF 546, MOL, 2). At the argument on the TRO on April 29, 2019, the parties agreed to stay proceedings to enforce commissions in other states while the nonparty teams performed discovery consistent with the February 26, 2019 Order of Referee Dollinger.^{5 6}(NYSCEF 547, OSC; NYSCEF 571, Transcript of April 29, 2019). The Non-Party Teams agreed to jurisdiction of this court for resolution of discovery matters in this action. (NYSCEF 571, Transcript of April 29, 2019).⁷ A Protective Order, pursuant to CPLR 3103(a), may be issued to regulate the use of disclosure devices and “prevent unreasonable annoyance, expense, embarrassment, disadvantage, or other prejudice to any person or the courts.” (Westchester Rockland Newspapers, Inc. v. Marbach, 66 AD2d 335 (2d Dept 1979). New York courts have routinely enjoined parties from proceedings in other states or countries where doing so would prevent duplicative litigation, waste judicial resources and cause the parties to incur unnecessary expenses, and potentially result in inconsistent rulings. (See, e.g., IRB-Brasil Resseguros S.A. v. Protobello Int’l Ltd., 59 AD3d 366, 366-67 [1st Dept 2009] (affirming trial court’s enjoinder of party from prosecuting its action in foreign country where such would have led to a “waste of judicial resources, unnecessary legal expenses and duplicative litigation that might lead to conflicting results.”); Certain Underwriters at Lloyds, London v. Millennium Holdings LLC, 52 AD3d 295, 295-96 (1st Dept 2008) (enjoining party from pursuing parallel proceedings in Texas); Jay Franco & Sons Inc. v. G. Studios, LLC, 34 AD3d 297, 298 (1st Dept 2006) (holding that trial court did not abuse its discretion by enjoining party from pursuing California action). The court finds that the Non-Party Teams satisfy the standards for a protective order. The Insurers issued 32 nearly identical subpoenas in connection with this action. While two of those subpoenas will be litigated in this court,⁸ there is significant risk of inconsistent rulings. Litigating the subpoena motions before this court is the most efficient and orderly process to resolve discovery issues, particularly with the appointment of the Referee. While it is true that “NFL teams have common interests such as promoting the NFL brand, they are still separate, profit-maximizing entities, and their interests…are not necessarily aligned…. Common interests in the NFL brand partially unit[e] the economic interests of the parent firms, but the teams still have distinct, potentially competing interests, “here the NFL joins the non-party teams in this motion. (Am. Needle, Inc. v. NFL, 560 US 183, 198 [2010]). Finally, the Insurers selected this court to litigate their coverage dispute. Accordingly, the motion for a protective order is granted. Dated: October 4, 2019 CHECK ONE:      CASE DISPOSED X               NON-FINAL DISPOSITION X                GRANTED              DENIED  GRANTED IN PART       OTHER APPLICATION:   SETTLE ORDER    SUBMIT ORDER CHECK IF APPROPRIATE:            INCLUDES TRANSFER/REASSIGN         FIDUCIARY APPOINTMENT            REFERENCE