FIRM - YEAR END HIGHLIGHTS

 

 

 

ANDERSON KILL


Attorneys and Counselors at Law

1251 AVENUE OF THE AMERICAS  NEW YORK, NY 10020-1182
TELEPHONE: 212-278-1000  FAX: 212-278-1733
www.andersonkill.com

 

William G. Passannante, Esq.
wpassannante@andersonkill.com
(212) 278-1328

 

We at Anderson Kill wish you a healthy and prosperous 2021. Though some might like to forget 2020, we ring in the New Year with an overview of last year’s emerging trends in insurance recovery, along with news about our own coverage battles.

Insurance Law Trends

‘Blank Checks’ for SPACs and D&O Claims: A special purpose acquisition company (SPAC or ‘blank check company’) is a company formed to raise capital through an initial public offering (IPO). The SPAC’s management commits to completing an acquisition of a target within the period specified in its governing documents, for example two years. After the transaction, the target company becomes the predecessor to an SEC registrant, and resulting complexities and obligations sometimes give rise to D&O claims. During 2020, the amount raised through U.S. SPACs increased six (6) times over the prior year to $83.4 billion, and the number of IPOs more than quadrupled to 248. Merger objection lawsuits related to a SPAC transaction, such as a December 3, 2020 complaint in Schuman v. Hennessey Capital Acquisition, are one type of claim. Another is the Nikola Corporation Securities Litigation, in which the complaint alleges that Nikola executives made false or misleading statements and failed to disclose improper due diligence regarding its SPAC merger. Given the huge increase in SPAC transactions, expect to see more SPAC-related D&O claims in 2021.

Covid-19 Litigation Tsunami: As the first wave of Covid-19 cases shuttered businesses and reduced trade worldwide, major insurance companies published blanket denials of business interruption coverage under property policies alleging that the virus did not cause “direct physical loss or damage” to property. In response, policyholders filed more than 1,420 coverage suits, and more than 100 decisions have come down to date. While a number of early rulings favored insurance companies, policyholders have learned from experience and many recent rulings have favored policyholders. My colleagues Rhonda Orin, Dan Healy and Bob Horkovich overview this second-wave litigation here.

Insurance Companies Cash In : While insurance companies continue to stonewall Covid claims, they’re also sticking with their longstanding practice of capitalizing on catastrophe to raise rates. According to a survey by the Alera Group brokerage, the average forecast premium increase across all coverage lines for 2021 is 11.6%. That’s in the wake of substantial rate increases in 2020.

Biometric Battleground: Many states are now considering passing biometric statutes similar to Illinois’ Biometric Information Privacy Act of 2008, creating a private cause of action for misuse of personal "biometric" identifiers such as fingerprints and retina scans. The Illinois law produced a wave of biometric class action litigation in Illinois likely to be replicated elsewhere as states adopt similar laws. Meanwhile, the insurance industry has developed a variety of purported privacy and data exclusions for insurance policies that insurance companies will likely deploy when arguing against coverage for biometric liability. In good news for policyholders on this front, an Illinois court held that a business that provided a customer’s fingerprint data to a third-party vendor had “published” the material – triggering CGL coverage for “publication of material that violates a person’s right of privacy,” which was not excluded by a violations-of-statute exclusion.

New Long-tail Claims: Sex Abuse and PFAS: Many states extended or effectively eliminated statutes of limitation for sex abuse claims, triggering suits by people alleging abuse that took place many years ago. In another eruption from past decades, the health risks and liabilities surrounding per- and polyfluoroalkyl substances (PFAS) in use since the 1940’s drew focus during 2020 when the EPA updated its action plan to clean up PFAS. If the past is prologue, insurance companies might assert “expected or intended” coverage defenses in these long tail claims as they did in asbestos and environmental claims. Policyholders should know that such defenses place a significant burden of proof on the insurance company asserting the defense. For example, the duty to defend usually is not impacted.

European Antitrust Regulators Open In-Depth Investigation Into Broker Acquisition: A December 21, 2020 press release from the European Commission states, “The European Commission has opened an in-depth investigation to assess the proposed acquisition of Willis Towers Watson by Aon, under the EU Merger Regulation.” The release cites, in particular, brokerage services to large multi-national customers in the risk classes Property & Casualty, Financial and Professional services, Credit and Political risk, Cyber and Marine. Aon is domiciled in Ireland, headquartered in London and listed on the New York Stock Exchange, and Willis Towers Watson is domiciled in Ireland, headquartered in London and listed on NASDAQ Global Select Market.

For further discussion of many of these issues, please see New Developments in Emerging Coverage Disputes by my colleagues Robert Chesler, Nicholas Insua, and John Lacey Jr.

Anderson Kill Wins

In addition to many claims resolved outside of litigation, as always, Anderson Kill was on the insurance coverage front lines for policyholders, on multiple fronts:

  • In response to the greatest social and economic challenge of our times, the Covid-19 pandemic, Anderson Kill has been retained by more than 160 national and local businesses, including national and global hospitality companies and major health care systems, seeking coverage for loss of income triggered by potential Coronavirus contamination and the resulting closures by civil authorities. 
  • In a case in which Anderson Kill serves as special insurance counsel in a major bankruptcy, a bankruptcy court confirmed a ‘lift stay’ order suit against the available insurance coverage.
  • In a marine cargo claim for coverage of a theft of merchandise, we defeated the insurance company’s motion for summary judgment. The SDNY’s decision clarifies what types of commercial disputes come within the rarefied world of admiralty law. The case also has implications in cases where insurance companies seek retroactively to void and rescind insurance policies under both New York law and admiralty law.
  • We helped major builders of energy facilities resolve claims in excess of $100 million stemming from damage subsequent project delays inflicted by Hurricane Harvey to a facility under construction when the hurricane struck.

Firm Kudos

For the fourteenth consecutive year, Chambers USA ranked Anderson Kill among the nation’s top insurance recovery practice groups. The firm’s New York office was also recognized for insurance dispute resolution, and its New Jersey office for insurance litigation. Chambers recognized individual AK attorneys Bob Horkovich, Finley Harckham, Josh Gold, Rhonda Orin, Robert Chesler, Steven Pudell, and yours truly. For the eighth year straight, Best Lawyers named us a National Tier 1 Best Law Firm in Insurance Law, also recognizing Bob, myself, Marshall Gilinsky, Rhonda Orin, Daniel Healy, Stephen Palley, Michele Gallagher, Pamela Hans, Robert Chesler, and Steven Pudell as Best Lawyers. Benchmark Litigation ranked Anderson Kill a National Tier 1 firm in Insurance Litigation for the seventh year running and named Bob Horkovich the Benchmark Litigation 2020 Insurance Lawyer of the Year , Finley Harckham and myself national litigation stars and Josh Gold a future star, while placing Carrie Maylor DiCanio on the 40 & Under Hotlist for the third year running. In a highly competitive process, Law360 named Raymond Mascia, Jr. a Rising Star in insurance law. In New Jersey, the Pro Bono Partnership recognized Robert Chesler and John Lacey, Jr. in our Newark office for providing help in an insurance coverage matter to an agency providing services to the homeless in New Jersey.

Welcomes

This year we welcomed two leading lights from the blockchain universe into the firm’s cutting-edge Technology, Media and Distributed Systems Group as shareholders:   Preston Byrne, based in New York, who served as COO of an early enterprise blockchain startup and who now advises a broad range of companies on complex cross-border legal questions arising from the use of cutting-edge technologies, and Hailey Lennon, based in California, former regulatory counsel at leading cryptocurrency platforms Coinbase and bitFlyer. Our Litigation Group was bolstered in 2020 by the additions in New York of shareholders Sheldon Eisenberger, a 30-year veteran of complex commercial disputes, and   T. Bryce Jones, who brought his successful solo practice to Anderson Kill. Ringing in the New Year with us is Paul M. Kaplan, a litigation heavyweight, joining the New York office as a shareholder. The firm was also pleased to welcome as new associates in New York James Goodridge, our former Gene Anderson Fellow; former summer associates Fiona Hogan, Regan Samson, and Thomas Dupont; and new associates Safkat Rakib, Michael Yusko, and Difie Osborne .   

Looking Forward to 2021

We wish you, our clients and everyone in our community health, safety, and prosperity in the coming year. We hope to have the opportunity to help you protect your interests and fulfill your goals in 2021.

Very truly yours,

Passannante Signature

William G. Passannante
(212) 278-1328
wpassannante@andersonkill.com

Anderson Kill

1251 Avenue of the Americas
New York, NY 10020