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Altman v. Liberty Helicopters


January 13, 2010


The opinion of the court was delivered by: Ludwig, J.


This action is based on an aircraft collision over the Hudson River on August 8, 2009.*fn1 On that date, plaintiff's decedent was piloting a single-engine fixed-wing aircraft from Teterboro to Ocean City, New Jersey when a helicopter owned by defendant Meridian Consulting I Corporation, and operated by defendant Liberty Helicopters, Inc. for sightseeing tours, also entered the Hudson River air traffic. The resulting accident caused the death of plaintiff's decedent. On September 30, 2009, plaintiff commenced this action and, on October 29, 2009, filed an amended complaint. Defendants are Meridian, Liberty, American Eurocopter, LLC (seller of the helicopter), and four insurance companies - United States Aviation Underwriters, United States Aircraft Insurance Group, Allianz Global Risks US Insurance Company, and Arch Insurance Company.*fn2 Because neither complete diversity or a federal question is present, this action must be dismissed. 28 U.S.C. §§ 1332, 1332.

Plaintiff is a citizen of Pennsylvania. Amended complaint, ¶ 1. Defendant USAIG, "a joint underwriting association consisting of member insurance companies... has a principal place of business in Pennsylvania and does business in Pennsylvania through many brokers and is licensed here." Id., ¶ 7. ACE American Insurance Company, a company organized and existing under the laws of of the Commonwealth of Pennsylvania, is a member company of defendant USAIG. Defendants' motion, ¶ 11 and Declaration of William F. Ranieri,*fn3 Exhibit 1, defendants' motion. In determining diversity, an unincorporated association is considered a citizen of each state where any one of its members is a citizen, and all member companies must be diverse from the opposing party. RLI Ins. Co. v. United States Aviation Underwriters, Inc., 739 F. Supp. 1219, 1221 (N.D. Ill. 1990), citing Carden v. Arkoma Associates, 494 U.S. 185 (1990) ("The Supreme Court [has] held that the citizenship of every member of an unincorporated entity must be considered for diversity purposes."). Moreover, "[a]ll members of an incorporated association must be diverse from the opposing party; it is irrelevant whether the unincorporated association is plaintiff or defendant." Rockwell Int'l Credit Co. v. United States Aircraft Ins. Group, 823 F.2d 302, 304 (9th Cir. 1987), overruled on other grounds by Partington v. Gedan, 923 F.2d 686 (9th Cir. 1991). Under this rule, diversity does not exist.

Plaintiff concedes that diversity jurisdiction did not exist at the time of filing, and does not at present, but to cure the jurisdictional defect, moves for dismissal of USAIG. USAU and USAIG oppose this request, arguing that USAIG is an indispensable party. Fed R. Civ. P. 19(b).

The claims against the insurer defendants, including USAIG, are as follows:

fraudulent claim and false swearing in violation of the Pennsylvania Unfair Insurance Practices and Unfair Trade Practices and Consumer Protection law (Count VI); negligence (Count VII); breach of contract (Count VIII); and conspiracy and concerted action to commit fraud, false claim and intimidation to deter exercise of constitutional rights (Count IX). The facts forming the basis for the claims are asserted against the insurers collectively. Amended complaint, ¶¶ 34-52. Moreover, with respect to USAIG's participation in the insurance of Liberty and Meridian, "a contracting party is the paradigm of an indispensable party." Travelers Indem. Co. v. Household Intern., Inc., 775 F. Supp. 518, 527 (D. Conn. 1991), citing Cloverleaf Standardbred Owners Ass'n, Inc. v. National Bank of Washington, 699 F.2d 1274, 1279-80 (D.C. Cir. 1983). Because USAIG is a contracting party, and, as such, indispensable, this action cannot proceed without it, and plaintiff's motion must be denied. Because plaintiff cannot cure this jurisdictional defect, her motion to amend must be denied as futile.

The other basis for jurisdiction, federal question, is also challenged by the insurer defendants. They assert that plaintiff's claim under the Federal Tort Claims Act does not confer jurisdiction and note that the amended complaint does not allege plaintiff's exhaustion of administrative remedies. Plaintiff filed a claim against the United States on September 30, 2009. The claim has not been formally denied, and the six-month waiting period will not expire until March 30, 2010. Moreover, the United States is not a party to this action, having not yet substituted itself for the individual air traffic controllers named in the amended complaint.*fn4

Because no basis for the exercise of subject matter jurisdiction exists, this action must be dismissed.

Edmund V. Ludwig, J.

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