of Brooklyn and Queens, Inc. is a New York not-for-profit corporation which owns and operates hospitals in Brooklyn and Queens, New York.
Plaintiffs commenced this action in April 1991 to enforce their right to do business in the State of New York, as provided in the LRRA. Plaintiffs' original complaint alleges, inter alia: (1) that New York's Excess Insurance Law, Section 18 of Chapter 226 of the Laws of 1986 of New York, as amended and extended (the "Excess Insurance Law") violates the LRRA and the Commerce Clause, Article I, Section 8 of the United States Constitution ("the Commerce Clause"), and enforcement of the Excess Insurance Law should be enjoined; (2) that attorney's fees should be awarded, pursuant to 42 U.S.C. § 1983, for deprivation of constitutional rights secured by the Commerce Clause; (3) that certain violations of Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1 (1990), should be enjoined; and (4) that damages should be awarded for violations of the Sherman Act, New York's Donnelly Act (New York General Business Law § 340), and for interference with contracts with insureds.
On January 12, 1994, plaintiffs moved this Court for an order, pursuant to Rules 15(a) and 15(b) of the Federal Rules of Civil Procedure, granting to plaintiffs leave to file an amended and supplemental complaint. Plaintiffs seek to amend their claims in two respects. First, they seek to broaden their allegations within the existing causes of action and to widen their request for relief by seeking to enjoin conduct by the State defendants which allegedly interferes with plaintiffs' businesses. Second, plaintiffs seek to add claims against MLMIC and Curiale under section 1 of the Sherman Antitrust Act ("§ 1 of Sherman Act").
On May 4, 1994, in response to plaintiffs' motion to amend, State defendants moved for summary judgment on plaintiffs' first, second, third and fourth claims for relief, and moved for dismissal of plaintiffs' fifth claim for relief and its new ninth claim for relief. On that same day, Defendant MLMIC made a motion to dismiss the ninth and tenth causes of action asserted in the Amended Complaint that plaintiffs proposed to submit upon a favorable ruling in their motion to amend. Finally, completing the tangled web of overlapping motions, plaintiff PP made a motion for partial summary judgment on May 4, 1994, requesting the Court to grant the relief it requested in its first, second, third and fourth causes of action.
The plethora of motions in this case makes it difficult to choose the most efficacious point to begin analysis. The best way to proceed appears to be to address, in order, plaintiffs' causes of action with accompanying motions.
I. Causes of Action 1-4
Plaintiffs' first four causes of action allege, in essence, that the Excess Insurance Law violates the LRRA and the Commerce Clause, that plaintiffs have no adequate remedy at law, and that the Excess Insurance Law should be enjoined. State defendants move for summary judgment with respect to these four causes of action, and plaintiff PP counters with its own motion for partial summary judgment asking the Court to decide these four causes of action in its favor.
A. Standard for Summary Judgment
Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986); Lang v. Retirement Living Pub. Co., 949 F.2d 576, 580 (2d Cir. 1991). "In deciding whether to grant summary judgment all inferences drawn from the materials submitted to the trial court are viewed in a light most favorable to the party opposing the motion. The nonmovant's allegations are taken as true and it receives the benefit of the doubt when its assertions conflict with those of the movant." Cruden v. Bank of New York, 957 F.2d 961, 975 (2d Cir. 1992). "Only when no reasonable trier of fact could find in favor of the nonmoving party should summary judgment be granted." Id.; accord Taggart v. Time, Inc., 924 F.2d 43, 46 (2d Cir. 1991).
"Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted." Anderson, 477 U.S. at 248. "The judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Id., 477 U.S. at 249.
In the instant motions, there is no disputed element of fact. Rather, the matter turns on whether, as a matter of law, the LRRA preempts New York's Excess Insurance Law. Plaintiffs argue that it does and defendants contend that it does not. Before a determination can be reached, the history and language of the statutes in question must be carefully analyzed.
B. The LRRA
In 1981, in response to a perceived crisis in the availability and affordability of commercial product liability insurance, Congress enacted the Product Liability Risk Retention Act of 1981, 15 U.S.C. §§ 3901-3904 (1984) ("PLRRA"). State Defendants' Memorandum of Law in Support of their Motion ("State Defendants Mem.") at 2. The Risk Retention Amendments of 1986 (Pub. L. No. 99-563, 100 Stat. 3170-3172, 3177), effective October 27, 1986, created the law currently in place, the Liability Risk Retention Act. Id. at 2-3. "The LRRA was designed to eliminate state law barriers to the formation and operation of RRGs, yet reserve adequate state governmental oversight and regulation over these entities." Amicus Mem. at 7. In essence, the LRRA requires that RRGs be licensed in a single state but then permits them to operate in all other states without obtaining a separate insurance license in each state in which they do business. This is accomplished through the use of specific exemptions from state insurance regulation contained in the LRRA. State Defendants Mem. at 3. Consequently, states in which a RRG operates ("non-domiciliary" states), other than the state in which it is licensed ("domiciliary" state), are permitted to regulate the RRG only to the extent allowed under the LRRA.
The LRRA provides, in pertinent part, as follows:
(a) Except as provided in this section, a risk retention group is exempt from any State law, rule, regulation, or order to the extent that such law, rule, regulation or order would --