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Law360 (August 11, 2020, 7:00 PM EDT ) U.S. Specialty Insurance Co. has told a Texas federal judge to reject research firm Gartner Inc.'s bid to transfer to New York a suit about whether Gartner is entitled to additional coverage over its $150 million limit for canceled events, calling the request "procedural gamesmanship."
In a brief filed Monday, USSIC told U.S. District Judge Lynn N. Hughes that it filed its lawsuit seeking a declaration about whether Gartner was entitled to the additional coverage on May 27, almost a full month before Gartner filed its nearly identical suit in New York federal court on June 25. USSIC told the court Gartner simply wants to litigate this dispute closer to its Stamford, Connecticut, headquarters and has no legitimate reasons to oppose the Texas litigation.
"As is often the case, neither the Southern District of New York nor the Southern District of Texas will perfectly balance the burdens of litigation between the parties," USSIC told the court. "But in an era of electronic filing, electronic document production, and remote depositions, any imbalance is insufficient to justify the extraordinary relief that Gartner seeks. After all, Gartner, who provides technology research and consulting services, regularly stages events around the world and is represented here by an international law firm with offices on three different continents."
Gartner has argued it doesn't have sufficient contacts with Texas for it to be fair or reasonable for it to face suit there. The policy at-issue, Gartner alleges, was obtained by its New York broker from HCC Specialty Underwriters Inc. in Massachusetts and its premiums were paid to HCC, not to USSIC in Texas.
USSIC sued Gartner seeking a declaration that it is not obligated to pay beyond Gartner's $150 million yearly coverage limit. Gartner, which organizes more than 300 conferences globally, had to cancel or postpone its events because of COVID-19.
Gartner has stressed that the only connection between its policy and Texas was that the insurance was issued under USSIC's name and the insurer is based in Houston. Gartner maintained that it had no control over HCC's decision to issue its policy with USSIC, and it was HCC, not USSIC, that issued the policy in Massachusetts and delivered it to Gartner in New York.
USSIC has argued the suit belongs in Texas because Gartner has three offices in Texas that employ about 1,260 people. Gartner called that argument conclusory and misleading because only 4% of its revenue came from Texas last year and Texas employees make up less than 8% of its workforce.
Gartner separately sued USSIC and HCC claiming coverage in New York federal court in late June, saying that the issuer agreed that Gartner can increase its policies' coverage limit by $170 million for a potential of $340 million, including $20 million for a subsidiary's policy, in 2020.
The parties did not return messages seeking comment Tuesday.
USSIC is represented by Gerard G. Pecht, Sumera Khan, Todd D. Batson and Daniel McNeel Lane Jr. of Norton Rose Fulbright US LLP.
Gartner is represented by Julie A. Hardin of Reed Smith LLP and Steven L. Schreckinger, Scott P. Lewis and Tamara S. Wolfson of Anderson Kreiger LLP and Nicole S. Soussan.
The case is U.S. Specialty Insurance Co. v. Gartner Group Inc., case number 4:20-cv-01850, in the U.S. District Court for the Southern District of Texas.
--Additional reporting by Daphne Zhang. Editing by Jay Jackson Jr.
For a reprint of this article, please contact reprints@law360.com.
