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Law360 (September 28, 2020, 8:58 PM EDT ) Global research firm Gartner Inc. has moved to disqualify Norton Rose Fulbright LLP from representing U.S Specialty Insurance Co. in three federal disputes over up to $340 million in insurance coverage for events canceled because of COVID-19, saying that Gartner is a client of the law firm and did not consent to the conflict.
Gartner said Saturday in a New York lawsuit against U.S. Specialty that Norton Rose attempted to modify its guidelines agreement with Gartner rather than advise Gartner of the conflict and seek a waiver in an above board manner.
The firm has filed similar motions in two Texas lawsuits brought by U.S. Specialty seeking declaratory judgment on the issue of coverage.
"NRF's representation of defendants in a matter directly adverse to Gartner, its client for over a decade, violates prevailing Second Circuit law, ethical rules, and the Gartner Guidelines," Gartner wrote in the New York motion.
U.S. Specialty sued Gartner in Texas in May, asking for a declaratory judgment that it was not obligated to cover event cancellation losses in excess of the indemnity limit of two of its policies, together totaling $170 million.
In a suit in New York federal court that Gartner filed just a few weeks later in June, however, the research firm alleged that U.S. Specialty had agreed that Gartner can increase its policies' coverage limit to a potential total of $340 million in 2020.
In the suit, Gartner said that Specialty repeatedly delayed responding to its request to confirm coverage of losses from canceled events from March to May, while its policies specifically cover any loss arising from a communicable disease outbreak.
The global research firm holds over 70 industry conferences and events around the world and up to 250 smaller meetings for business executives under its "Evanta" brand. Gartner said it was forced to cancel its events starting in February because of the COVID-19 outbreak and it notified Specialty of the cancellations promptly.
In the motion to disqualify, Gartner said it was "surprised" by the Texas lawsuits because they came before U.S. Specialty had even communicated its position on coverage to Gartner, implying that Norton Rose did so in an attempt to deprive Gartner of the chance to file a "more appropriate jurisdiction of its choice."
According to Gartner, it has been a client of Norton Rose's Australia office, or one of its predecessor firms for 15 years, and the firm has advised Gartner in matters throughout the Pacific region, including in Beijing and Singapore. The firm has also done significant work for Gartner recently as the research firm was forced to lay off staff during the pandemic, the motion said.
Despite the longstanding relationship, Gartner alleged, Norton Rose did not openly disclose the conflict when it chose to represent U.S. Specialty in filing the Texas lawsuits. Rather, the firm tried after the fact to amend the agreement with the firm, which expressly forbids conflicts of interest, to make the agreement more amenable to such arrangements, Gartner said.
"Recognizing its ethical quandary, through its revisions, NRF sought to limit its representation of Gartner to its wholly-owned subsidiary in Australia — evidently hoping that would absolve NRF of its duty of loyalty to Gartner Inc.," the motion said. "The reality is that NRF's representation of Gartner has not been so narrow, and neither the law nor the guidelines allow NRF to disregard its ethical obligations."
Counsel for both parties did not respond Monday to a request for comment.
Gartner is represented by Andrew M. Zeitlin of Shipman & Goodwin LLP.
U.S. Specialty is represented by Daniel McNeel Lane, Jr., Gerard G. Pecht, Sumera Khan and Todd D. Batson of Norton Rose Fulbright US LLP.
The case is Gartner Inc. v. HCC Specialty Underwriters Inc. et al., case number 1:20-cv-04885, in the U.S. District Court for the Southern District of New York.
--Additional reporting by Daphne Zhang. Editing by Amy Rowe.
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