Hartford Fire Insurance Co. v. California

509 U.S. 764 (1993)

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Nature of the Case

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Facts

The Sherman Act makes every contract, combination, or conspiracy in unreasonable restraint of interstate or foreign commerce illegal. Ps allege that both domestic and foreign Ds violated the Sherman Act by engaging in various conspiracies to affect the American insurance market. The foreign Ds argue that the principle of international comity requires the District Court to refrain [from exercising jurisdiction over certain claims against it. Ps allege that the object of the conspiracies was to force certain primary insurers (insurers who sell insurance directly to consumers) to change the terms of their standard CGL insurance policies to conform with the policies the defendant insurers wanted to sell. Ds wanted a 'claims-made' trigger, obligating the insurer to pay or defend only those claims made during the policy period. If the policy period ends without a claim having been made, the insurer can be certain that the policy will not expose it to any further liability. Ds also wanted the 'claims-made' policy to have a 'retroactive date' provision, which would further restrict coverage to claims based on incidents that occurred after a certain date. Ds also wanted legal defense costs to be counted against the stated limits. Hartford (D), itself, was a London, England insurer. Its conduct occurred only in the U.K. It along with the other foreign Ds argued that it was unreasonable for U.S. antitrust laws to regulate their conduct. The District Court granted Ds' motions to dismiss the Sherman Act claims for failure to state a cause of action. The Court of Appeals for the Ninth Circuit, reversed, expressed the view that the principle of international comity did not bar the exercise of federal jurisdiction against the foreign defendants. The Court of Appeals believed that 'application of [American] antitrust laws to the London reinsurance market 'would lead to significant conflict with English law and policy,'' and that 'such a conflict unless out-weighed by other factors, would by itself be a reason to decline the exercise of jurisdiction.' But other factors, in the court's view, including the London reinsurers' express purpose to affect United States commerce and the substantial nature of the effect produced, out-weighed the supposed conflict and required the exercise of jurisdiction in this litigation. The Supreme Court granted certiorari.