Opposition Brief — Tropp v. Corporation of Lloyd's

S)

No. 10-1249

IN THE

Supreme Court of the United States

RICHARD A. TROPP,

on behalf of himself and all others similarly situated,

yr? ¥ "

; etilioner,

CORPORATION OF LLOYD'S,

also known as THE SOCIETY OF LLOYD'S

2

Respondent

On PetitTION FOR A WRIT OF CERTIORARI TO THE

Uniteo States Court or APPEALS FOR THE SECOND CIRCUIT

BRIEF IN OPPOSITION

JOHN W. BREWER

Counsel of Record

FRIED, FRANK, HARRIS,

SHRIVER & JacoBsSoN LLP

One New York Plaza

New York, NY 30004

(212)-859-8000

john. brewer@friedfrank.com

Attorneys for Respondent

236421 $

COUNSE. PRESS

BOO) 274-3321 + (800) 359-6869

CORPORATE DISCLOSURE STATEMENT

Pursuant to United States Supreme Court Rul

29.6, respondent Corporation of Lloyd’s, also known a:

The Society of Lloyd's (“Lloyd’s”) makes the following

lisclosures:

: ;

Lloyd's has no parent corporat

No publicly held corporatio1

of Lloyd's stock

zl

TABLE OF CONTENTS

Page

CORPORATE DISCLOSURE STATEMENT ...

TABLE OF CONTENTS .....0scc008 eae ii

TABLE OF CITED AUTHORITIES ...........

STATEMENT OF THE CASE .........0e0e00 i

Nature of the Lloyd’s Market and the “R&R”

BAG E,QUuitas TYAMBACUIONS ... 2.2.5 ccicceseess 2

Relevant Prior Litigation in the U.S. Courts

Between Names and Lloyd's .................... 7

Petitioner’s Underwriting and Litigation History

ETE TET TOT CELE CCC CT Re OTE ET 9

REASONS FOR DENYING THE PETITION .. 13

I. MR.TROPPHASOFFERED NO REASON

FOR THIS COURT TO REVIEW THE

UNANIMOUS CONCLUSION OF

NINE CIRCUITS THAT THE FORUM

SELECTION PROVISIONS OF THE

LLOYD'S GENERAL UNDERTAKING

ARE ENFORCEABLE..............0:: 13

I]. PETITIONER'S CONSTITUTIONAL

ATTACKS ON THE UNIFORM

FOREIGN MONEY JUDGMENTS

RECOGNITION ACT WERE NOT

PROPERLY RAISED AND PRESERVED

BELOW, AND THIS CASE WOULD

NOT BE AN APPROPRIATE VEHICLE

TO CONSIDER ANY SUCH ISSUE

OF GENERAL CONCERN ............. 16

ti?

Table of Contents

r> -

rage

A. This Case Was Not Litigated Below

as a Constitutional Case........... 17

B. The Petition’s Failed Attempt to Conjure

Up an Issue of “Growing Importance

Simply Confirms the Adequacy of

Existing Law and Legislative Responses

to Changed Circumstances .......... 18

C. Petitioner Has Shown No Basis

for a Constitutional Attack on the

“System” Analysis Followed by the

Vast Majority of U.S. Jurisdictions

and Embodied in Section 6304(a)

(1) of the NYUFMJRA ............. 19

D. The District Court Correctly Held That

Petitioner Was Not Denied Due Process

in the English Proceedings .......... 24

E. Petitioner Has Made No Showing that

the “Public Policy” Exception of the

NYUFMJRA Is Unconstitutionally

NORTON os cccsxcaceeaees ee 30

F. Petitioner's Attempt to Constitutionalize

Hostility to Foreign Court Judgments

Would Have Substantial Negative

Consequences for American Citizens

and National Interests .............. 32

CONCLUSION ...... ere es ry oe OS

TABLE OF CITED AUTHORITIES

CASES

Ackerman v_ Levine,

788 F.2d 830 (2d Cir. 1986)

Allen v. Lloyd’s,

94 F\3d 923 (4th Cir. 1996)

BMW of N. Am., Inc. v. Gore,

517 U.S. 559 (1996) .. 3 n.2k

Bonny v. Soc'y of Lloyd's,

3 F.3d 156 (7th Cir. 1993)

Brooks v. Haidt,

873 NLY.S, 2d 563 (1st Dep’t 2009)

Carnival Cruise Lines, Inc. v. Shute

499 U.S. 585 (1991)

Chevron Corp. v. Donziger,

2011 U.S. Dist. LEXIS 22729

(S.D.N.Y. March 7, 2011). .

CIBC Mellon Trust Co. v. Mora Hotel Corp. N.1

100 N.Y.2d 215 (2003) ..

Clarkson Co. v. Shaheen,

544 F.2d 624 (2d Cir. 197

Cited Authorities

Concrete Pipe & Prods. of California, Inc. 1

Constr. Laborers Pension Trust for

S. California,

508 U.S. 602 (1993) ....... 17, 17 n.20, 28, 29

DAlessio v. New York Stock Exch., Inc.,

258 F.3d 93 (2d Cir. 2001)....... | 15 n.1%

Desiderio v. Nat'l Ass'n of Sec. Dealers,

191 F.3d 198 (2d Cir. 1999)...... 25 n.30

DL Capital Group v. NASDAQ Stock Mkt. Inc.,

409 F.3d 93 (2d Cir. 2005). . | 15 n.1

Gryger v. Burke,

334 U.S. 728 (1948) .

Haynsworth v. Corp.,

121 F.3d 966 (6th Cir, 1997)

Hilton v. Guyot,

169 U.S. 113 (1895) 22, 23, 29

Lindsey v. Normet,

405 U.S. 56 (1972) ..

Lipcon v. Underwriters at Lloyd’s, London

148 F.3d 1285 (11th Cir. 1998)

Loucks v. Standard Oil Co..,

224 N.Y. 99 (1918) ..

ijt

Cited Authorities

M/S Bremen v. Zapata Off-Shore Co

407 U.S. 1 (1972) ....... | 13, 16,:

Mitsubishi Motors Corp. v.

Soler Chrysler-Plymouth, In

473 U.S. 614 (1985) ...

Osorio v. Dole Food Co.,

665 F. Supp. 2d 1307 (S.D. Fla. 2009)

Pariente v. Scott Meredith Literary Agency, In

771 F. Supp. 609 (S.D.N.Y. 1991).... 20 n

Richards v. Lloyd’s of London,

135 F.3d 1289 (9th Cir. 1998) 7, 11.12, 1

Riley v. Kingsley Underwriting Agencies, Ltd

969 F.2d 953 (10th Cir. 1992)...

Roby v. Corp. of Lloyd’s,

996 F.2d 1353 (2d Cir. 1993)

Scherk v. Alberto-Culver Co..

417 U.S. 506 (1974). .

Shell v. R.W. Sturge, Lid.,

55 F.8d 1227 (6th Cir. 1995)

Soc'y of Lloyds v. Ashenden,

233 F.3d 473 (7th Cir. 2000)

vi.

Cited Authorities

Soc'y of Lloyd’s v. Blackwell,

127 Fed. Appx. 961 (9th Cir. 2005) . .

Soc'y of Lloyd's v. Grace,

718 N.Y.S. 2d 327 (1st Dep't 2000). ...

Soc'y of Lloyd's v. Reinhart,

402 F.3d 982 (10th Cir. 2005)...

Soc’y of Lloyd’s v. Siemon-Netto,

457 F.3d 94 (D.C. Cir. 2006). .

Soc'y of Lloyd's v. Turner,

303 F.3d 325 (5th Cir. 2002). .

Sung Hwan Co. v. Rite Aid Corp.

7 N.Y.3d 78 (2006) ..........

Tumey v. Ohio,

Zi Us. 610 (1927) ........

INT’L CASES

Soc'y of Lloyd’s v. Fraser,

[1998] C.L.C. 1630 (A.C.) ...

Soc'y of Lloyd’s v. Jaffray,

[2002] EWCA Civ 1101 (A.C.)

Soc'y of Lloyd’s v. Leighs,

{1997} C.L.C. 759 (Q.B.)

8 n.8, 28, 30

8, 8 n.8, 30

8 n.8, 30

passim

4n.5, 6

brost

Kathleen Day, Bankruptcy Bil Benefits ( :

Few; Well-to-Do Investors Sought Speci

Provision, Wasu. Post, Mar. 10, 2001

, 4

«

Hague Convention on Choice of Court Agreement

June 30, 2005, 44 I.L.M. 1294 16

NCCUSL, Uniform For

Recognition Act (1962)

Y'UCCUSL, Uniform Foreign-Count:

Money Judgment Recognition Act (2005)

90.91 917

festatement (3d)

§ 482(1)(a)(1987)

Weinstein, Korn

2d ed. 2011)

l

The Society of Lloyd's (“Lloyd’s”) respectfully submits

this opposition to Mr. Tropp's petition for certiorari.

STATEMENT OF THE CASE

This case is the last in a series of dozens, involving

hundreds of similarly-situated litigants, that applied

well-settled law to the same underlying facts. Petitioner

was a “Name” (individual underwriter) in the insurance

market administered and regulated by Lloyd’s. Judgment

was entered against him in the courts of England for

non-payment of a mandatory reinsurance premium

(the “English Judgment”). The lower courts, agreeing

with at least two dozen prior U.S. decisions (including

seven separate circuit-level opinions) involving identical

judgments against other Names (“Equitas Premium

Judgments”), found the English Judgment entitled to

recognition and enforcement under New York law. The

case was procedurally unusual because Petitioner brought

a declaratory judgment action rather than waiting to see if

Lloyd's would sue him in the U.S., but that simply invoked

another well-settled issue: nine circuits have unanimously

agreed that the standard agreements signed by Names

designating England as the exclusive forum for litigation

between themselves and Lloyd's bar them from initiating

litigation against Lloyd’s in the U.S.

Petitioner's current attempt to claim that the state

law under which the English Judgment was entitled to

recognition is unconstitutional was not properly raised

and developed below, lacks substantive merit, and would,

in any event, not benefit Petitioner due to the facts of

his specific case. He differs from the hundreds of other

Names who have litigated and lost the same issues only

in his litigation tactics. There is no reason for this Court

to grant review.

Nature of the Lloyd’s Market and the “R&R” and

Equitas Transactions

The background facts are set forth at length in the

district court’s opinion (10a-29a)' and also described

in numerous prior opinions. See, e.g. Soc'y of Lloyd's v.

Ashenden, 233 F.3d 473 (7th Cir. 2000); Allen v. Lloyd's, 94

P.3d 923 (4th Cir. 1996). We provide only a brief summary

here.*

Lloyd’s is not itself an insurer, but administers

and regulates the London-based marketplace in which

individual Names such as Mr. Tropp are insurers. 10a.

There were over 30,000 Names as of the early 1990s, who

had unlimited personal liability for underwriting losses.

Names conducted their underwriting through various

agents, who determined which risks to insure on the

Names’ behalf, and, as an administrative convenience,

through “syndicates.” 10a-lla. A syndicate was formed to

write coverage for a particular year, and at the end of three

years would be “closed” by the purchase of reinsurance to

close (“RITC”) in which another syndicate (typically the

successor to the same syndicate for a subsequent year)

would reinsure all of the unresolved liabilities on the

insurance written through the closed syndicate in return

for payment of areinsurance premium. 11a. This finalized

1. Petitioner's Appendix is cited as “

2. Petitioner’s account contains numerous inaccuracies,

especially in its characterizations of what English courts decided

and English law provides. Moreover, references to the complaint

are irrelevant. Under Fed. KR. Civ. P. 44.1 the district court

properly evaluated the foreign decisions and lega) context for

itself and was not required to give any weight to Petitioner's self

serving allegations.

3

the profit or loss associated with the closed syndicate,

with the relevant Names (after netting with their other

underwriting results) receiving their profits or being

called upon to pay their losses. 12a.

Under English law, Names had numerous potential

remedies against their agents, including claims based on

negligence or breach of fiduciary duty, but limited remedies

against Lloyd’s itself for claims other than fraud. 12a. The

American courts have always understood this distinction.

E.g., Roby v. Corp. of Lloyd’s, 996 F.2d 1353, 1565 (2d Cir.

1993). As Petitioner acknowledges, he, like all Names,

signed a document called the General Undertaking in

which he agreed to be governed by English law and to

sue Lloyd's only in the courts of England. 13a. He fails

to note that in the same document he also “irrevocably

agree[d} that a judgment in any Proceeding brought in

the English courts shall be conclusive and binding upon

each party and may be enforced in the courts of any other

jurisdiction.” 13a-l4a, n.14.‘

Massive losses in the early 1990s thre vy the Lloyd's

market into crisis. In addition to claims arising from

natural disasters and incidents like the Exxon Valdez oil

spill, some syndicates had assumed substantial liabilities

from prior years of account via RITC in return for

3. The Petition’s contention (at 12) that there is an

inconsistency between the remedies U.S. courts understood were

available to Names and the subsequent results of English litigation

is the result of blurring the distinction between the remedies

available against agents and those available against Lloyd's itself

~ a distinction Roby and other decisions made perfectly clear

4. Names also agreed to comply with Lloyd's bye-laws,

including bye-laws that might subsequently be adopted. 13a.

4

premiums which in hindsight proved significantly too low

for the ultimate cost of the reinsured risks. 16a. Beyond

the size of the losses, traditional market mechanisms

began to break down, leaving syndicates “open” (such that

Names would need to keep paying for additional losses

as they were realized for many years into the future)

because they could not obtain RITC at any price. Allen,

94 F.3d at 927. Substantial litigation against agents and

others potentially responsible for Names’ losses arose in

the English courts, and it became apparent that the total

assets and insurance coverage of some such defendants

might be inadequate to satisfy their potential liability. /d.

Concern grew that a market collapse could lead to non-

payment of valid insurance claims. /d.

Against this background, Lloyd's formulated the

Reconstruction & Renewal (“R&R”) program to avoid

market insolvency, protect the interests of insureds,

resolve the intra-market litigation, and assist Names in

meeting their losses. 18a. R&R had two key components.

First, all Names with account liabilities from 1992

and earlier would be reinsured by a single new entity

named Equitas, which would manage and run-off those

liabilities. 18a-19a. The amount, if any, each Name would

owe as a premtum for the reinsurance would depend on

his particular mix of open syndicates and the valuation

of their assets and estimated future liability.* Second,

5. The calculation involved undertaking a comprehensive

reserving project at a syndicate-by-syndicate level with actuaria},

legal, and accounting input, lasting two and a half years with the

involvement of the U.K. government. See Soc'y of Lloyd's v. Leighs,

[1997] C.L.C. 759,775-777(Q.B.). While various technical terms

were used at the time, “Equitas Premium” as used herein means

the aggregate amount, if any, due from a Name based on his pro

rata share of those various syndicate-leve] calculations, including

5

Names would be offered individualized discounts to

their premiums out of a settlement fund totaling over

$4.8 billion if they agreed to discontinue litigation and

execute broad releases in favor of Lloyd’s and numerous

other market participants. Allen, 94 F.3d at 927. The

decision to settle in return for a discount was voluntary

(although R&R could not be effected without a sufficient

percentage of Names agreeing to settle) but all Names

were required to pay for the reinsurance into Equitas.

Approximately 95% of the over 30,000 Names settled and

R&R became effective. 20a. Bye-laws enacted by Lloyd’s

enabled the appointment of a substitute agent for all of

the Names (including those who objected) and authorized

that agent to bind the Names to the reinsurance contract

with Equitas. 20a. Since 1996, Equitas has dealt with all

claims on the insurance policies previously written by the

reinsured Names, including those like Petitioner who have

never paid their Equitas Premium.

Litigation then ensued against those remaining

Names who owed money on their Equitas Premiums. 22a.

Equitas assigned its litigation claims for non-payment of

the Equitas Premium to Lloyd’s, which then became the

plaintiff.

The English courts resolved numerous threshold

challenges to the mandatory nature of the Equitas

reinsurance transaction, including: claims that the bye-

laws requiring non-accepting Names to purchase the

reinsurance were ultra vires and outside the scope of

payment of losses already incurred but not funded. (Such losses

were accounts receivable at the syndicate level, but obviously

such reccivables would be of uncertain value when transferred to

Equitas unless paid.)

6

Lloyd’s authority under English law; claims that the

substitute agent appointed by Lloyd’s could not have

bound the non-accepting Names; 2nd various attacks on

the validity of the assignment of claims from Equitas to

Lloyd’s. See, e.g., Leighs, [1997] C.L.C. 759, affd [1997]

C.LC. 1398 (C.A.); Soc’y of Lloyd’s v. Wilkinson, [1997]

C.L.C. 1012 (Q.B.); Soc’y of Lloyd’s v. Fraser, [1998] C.L.C.

1630 (C.A.), aff'g 11998) C.L.C. 127 (Q.B.). la upholding the

bye-laws, the courts did not take a hands-off approach, but

examined and accepted the substantive reasonableness

of Lloyd’s response to the crisis with which it was faced.

Leighs, (1997] C.L.C. at 781.

One key issue was the “conclusive evidence” provision,

which was upheld by the English courts. 23a. This provision

simply means (Ashenden, 233 F.3d at 478) that the specific

amount of the Equitas Premium calculated for a particular

Name and executed by the substitute agent on the Name’s

behalf cannot be challenged except for “manifest error,”

such as internal arithmetic mistakes or, e.g., seeking to

charge the Name reinsurance for syndicates or years on

which he had not participated. Thus, the calculation of the

incremental premium required for each of the hundreds of

different open syndicates being reinsured could not be tied

up for years in litigation, with Names avoiding payment by

second-guessing the numbers because different actuaries

or underwriters could have reached different conclusions

on the same data.®

6. No such issue would even have arisen if Lioyd’s had taken

a simpler approach such as simply charging each Name the same

amount, or charging a premium proportionate to the amount of

business each Name had conducted without attempting to value

specific assets and likely future liabilities on a syndicate-by-

syndicate basis, the fairer and more individualized approach

Lloyd's took was not only more complex but inherently judgmental.

ry

f

Once these threshold issues had been resolved, Lloyd's

began to obtain Equitas Premium Judgments in England

against Names. 23a. Approximately 300 such judgments

were against U.S. residents. At the same time, many

non-settling Names were pursuing claims of their own

against Lloyd's. Several hundred of them joined together

to pursue fraud claims against Lioyd’s in England, which

resulted in an extremely lengthy trial, with the finder of

fact ultimately concluding that the Names had not proven

their case. Soc’y of Lloyd’s v. Jaffray, [2000] EWHC

51(Comm.), aff'd (2602] EWCA Civ 1101. Petitioner could

have joined in this suit, but did not.

Relevant Prior Litigation in the U.S. Courts Between

Names and Lloyd’s

As noted above, the decision here was in complete

conformity with two extensive and well-settled bodies of

precedent.

First, over the course of the 1990s, various Names

tried to sue Lloyd’s (and/or other participants in the

Lloyd's market) for damages and other relief in U.S. courts

in violation of the General Undertaking. These efforts

were uniformly rejected. Riley v. Kingsley Underwriting

Agencies, Ltd., 969 F.2d 953 (10th Cir. 1992), cert. dented,

506 U.S. 1021 (1992); Roby, 996 F.2d 1353, cert. denied,

510 U.S. 945 (1993); Bonny v. Soc’y of Lloyd’s, 3 F.3d 156

(7th Cir. 1993), cert. denied, 510 U.S. 1113 (1994); Shell v.

R.W. Sturge, Ltd., 55 F.3d 1227 (6th Cir. 1995); Allen, 94

F.3d 923 (4th Cir. 1996) mandamus denied, 521 U.S. 1102

(1997); Richards v. Lloyd's of London, 135 F.3d 1289 (9th

Cir. 1998), cert. dented, 625 U.S. 943 (1998); Haynsworth

v. Corp., 121 F.3d 956 (5th Cir. 1997), cert. denied, 523

U.S. 1072 (1988); and Lipcon v. Underwriters at Lloyd's,

8

London, 148 F.3d 1285 (11th Cir. 1998), cert. denied,

525 U.S. 1093 (1999).? Those eight circuits were joined

more recently by a ninth, which held that the General

Undertaking likewise barred counterclaims brought by

defendant Names in U.S. litigation commenced to enforce

Equitas Premium Judgments. Soc’y of Lloyd's v. Siemon-

Netto, 457 F.3d 94 (D.C. Cir. 2006). This present case

appears to have been the only commenced by a Name

against Lloyd's in a U.S. court in the last decade.

Second, Lloyd's filed lawsuits in the U.S. seeking the

recognition and enforcement of English Equitas Premium

Judgments under state law against Names who had not

paid the amounts for which the English courts had found

them to be liable. The first decisions holding in Lloyd’s favor

(Soc’y of Lloyd's v. Grace,718 N.Y.S. 2d 327 (1st Dep’t 2000)

and Ashenden, 233 F.3d at 473)) were ultimately joined

by over twenty other decisions throughout the country,

unanimously finding Equitas Premium Judgments to

be entitled to recognition.’ Those litigations collectively

involved approximately 250 different defendant Names;

others paid or reached consensual settlements with

Lloyd’s without litigation being instituted in the U.S.

Lloyd's has not filed any such actions against Names

since 2006; all of the actions it has filed have now been

concluded, and there is no particular reason to believe

7. Allen specifically involved an attempt to obtain injunctive

relief against the mandatory reinsurance by Equitas.

8. Other published appellate decisions include: Siemon-

Netto, 457 F.3d 94; Soc'y of Lloyd’s v. Reinhart, 402 F.3d 982 (10th

Cir. 2005), cert denied, 546 U.S. 826 (2005); Soc'y of Lloyd’s v.

Turner, 303 F.3d 325 (Sth Cir. 2002). A fairly comprehensive list

of additiona) unpubjished decisions is given at 8a n.3.

9

that any similar actions will be filed in the future.’ There

have been no additional] Equitas Premium Judgments

obtained by Lloyd’s in England against U.S.-resident

Names since 2004. Notably, the amicus brief filed by the

American Names Association (“ANA”) does not contend

that any other U.S. Names of which it is aware or which

it claims to represent are currently involved in litigation

over the recognition and enforcement of Equitas Premium

Judgments or are faced with the prospect of such Litigation

in the future.”

Petitioner’s Underwriting and Litigation History

Mr. Tropp was a Name for the 1988 through 1991

years of account, underwriting policies generating

approximately £1.4 million in premiums. On a net basis

(with profits on some syndicates and losses on others)

his underwriting proved unprofitable, as was the case

for most Names during those years. He claims that his

agents violated his express instructions not to place him

9. Lloyds is still pursuing full collection in a handful of cases

where the merits issues are final.

10. Ltoyd’s has not been in contact with the ANA for years,

and had no reason to believe that it was not entirely defunct. Its

anti-Lioyd’s website (www.truthaboutlloyds.com) appears as of

June 1, 2011 not to have been updated since 2006. Its current

brief was filed by a lawyer who unsuccessfully represented the

Names in Soc'y of Lloyd's v. Blackwell, 127 Fed. Appx. 96] (9th Cir.

2005). ANA Br. at 2. Mr. Ryan's clients in that case did not seek

certiorari from this Court and, so far as the decision indicates,

did not raise any of the federal constitutional claims Mr. Tropp

now asks this Court to consider The English decisions the ANA

complains about were all issued in or prior to 2000, so Names

were free to raise these issues in Blackwell and the various other

decisions unanimously recognizing Equitas Premium Judgments.

10

on syndicates underwriting particular sorts of risks and

also that he would not have continued to underwrite for the

1990 and 1991 years of account but for misrepresentations

by his agents concerning the availability of stop-loss

reinsurance and the proper resignation procedure.

14a-15a. He began to refuse to pay his losses in 1994

(16a-17a), requiring over £50,000 to be advanced by the

Lloyd's Centra] Fund to avoid non-payment of valid claims

of his insureds. He refused to accept his R&R settlement

offer, which would have given him a £281,077 (over 75%

of the total owed) discount. He subsequently reached

tentative agreement with Lloyd’s on the price term of a

very generous settlement that would have required him to

pay only $5,000, but refused to reach agreement on other

material terms, causing talks to collapse. 21a, 136a-144a.

Then, six years after payment had been due, Lloyd’s

sued Petitioner in England, and Petitioner counterclaimed.

24a, 27a. Lloyd’s was found entitled to summary judgment

against him for non-payment of Equitas Premium (which

had grown to £463,881.28 with eight years of prejudgment

interest) both in the trial court and on appeal (111a,

150a), and his counterclaims were separately dismissed

for failure to state a claim, both in the trial court and

on appeal. (74a, 94a). Those decisions were accurately

summarized by the district court (23a-29a), and in any

event speak for themselves. We deal here only with a few

of Petitioner’s mischaracterizations."|

11. Complaints about the “pay now, sue later” issue

(Ashenden, 233 F.3d at 478-79) are a red herring. All this meant

was that Petitioner could not delay entry of summary judgment

in favor of Lloyd's on its claim for non-payment based on having

asserted counterclaims that had not yet been resolved. But those

counterclaims ultimately were resolved favorably to Lloyd's,

1]

As to what Petitioner calls his “wrongful liability”

defenses, the English court found that they amounted to

claims that but for the misconduct of his agents, certain

risks would not have been underwritten. 132a. But that

was no defense to payment, because Names were required

to purchase reinsurance for the liabilities they actually

had, not those they would have had but for the alleged

misconduct of their own agents. This is straightforward

agency law: if A’s agent B wrongfully (but within the scope

of apparent authority) binds A to an insurance contract

with C, Ais liable to C and must pursue an indemnification

claim against B, with A rather than C bearing the risk

that B may be judgment-proof. Because Equitas would

have to pay A's obligation to C, the alleged misconduct of

B was irrelevant to the amount that should be charged

for that reinsurance. With the exception of a late and

procedurally-improper attempt which was not followed

up on (92a), Petitioner never pursued claims against his

agents.

without Lloyd’s having been able to collect its judgment in the

interim. Indeed, “pay now” js a misnomer, since the English court

adjudicated the merits of Petitioner’s counterclaims despite his

failure to pay the judgment,

12. Petitioner criticizes the district court’s ruling on the

adequacy of his remedies against his agents (39a-40a), which

analyzed the English case law on the issue, without explaining

how it was erroneous under Rule 44.1. And not only does he fail to

explain why the “burden” of pursuing separate claims against his

agents could possibly violate his Fourteenth Amendment rights,

he faila to explain why he did not seek to pursue his remedies

against his agents years earlier—even before Lloyd's sued him—

as many other Names did. See Richards, 135 F.3d at 196 (noting

other Names’ substantial litigation recoveries against agents In

English courts).

12

As to the English court's treatment of the so-called

“missing assets” defenses, it made clear that Petitioner

would be entitled to credit for his reinsurance (“PSL”) if

he executed required paperwork (135a) and that if other

sums had not been properly credited to his account it

would have been because of his agents’ misconduct. 134a.

The more fanciful claims he subsequently raised about

huge sums said to have gone missing were noted to have

been raised for the first time on appeal and outside the

scope of his pleadings. 75a-76a. Moreover, the English

court indicated it would consider the merits of at least

three other defenses to the monetary amount sought by

Lloyd’s: (1) a “wrong years” defense (i.e. any claim that

he was erroneously being charged for reinsurance with

respect to syndicates or years in which he had not, in fact,

underwritten)(132a); (2) an alleged prior settlement (which

would have presumably limited his financial liability to the

alleged settlement amount) (137a-144a); and (3) arguments

that Lloyd’s should not be able to obtain very substantial

pre-judgment interest (149a).

Despite the fact that Lloyd’s had taken no steps to

sue him in the U.S., Petitioner then brought this action,

which was dismissed by the district court for the reasons

set forth in its lengthy and thoughtful opinion (6a-54a)

and then affirmed by the Second Circuit.

13

REASONS FOR DENYING THE PETITION

I. MR. TROPP HAS OFFERED NO REASON FOR

THIS COURT TO REVIEW THE UNANIMOUS

CONCLUSION OF NINE CIRCUITS THAT THE

FORUM SELECTION PROVISIONS OF THE

LLOYD’S GENERAL UNDERTAKING ARE

ENFORCEABLE"

In the almost four decades since this Court decided

M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972),

perhaps no single proposition has been as clearly

established in the lower courts as the validity of the

Lloyd's General Undertaking; it has been held enforceable

by nine separate circuits. This Court has denied review

in all seven of the cases in which it was sought. Supra 7.

The various circuits’ decisions set forth at length their

application of this Court’s teaching in Bremen, as well

as subsequent cases such as Scherk v. Alberto-Culver

Co., 417 U.S. 506 (1974), Mitsubishi Motors Corp. v.

Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985), and

Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991).

Petitioner has failed to explain how al] of these circuits

could have unanimously misapprehended this Court’s

rulings, or to point to anything that has changed since

the last time this Court was asked to review the issue.

Moreover, as noted above, the wave of litigation

between Names and Lloyd's in the U.S. courts has now

ended, and Mr. Tropp is the only Name to commence U.S.

13. Because this threshold venue issue is logically prior to the

lower courts’ alternative merits ruling on the English Judgment,

we are addressing it first, as the lower courts did, although the

Petition takes the points in reverse order.

14

litigation in violation of the General Undertaking in the

last decade. All of his meritless attacks on the General

Undertaking involve fact-intensive assertions about

alleged deficiencies of English-law remedies supposedly

unique to litigation involving Lloyd’s.

Furthermore, Mr. Tropp claims error (Pet. at 35)

only insofar as the General Undertaking prevented him

from pursuing a vaguely-pleaded cause of action for an

“accounting,” not based on any federal or state statute

or regulation.’ But none of his groundless complaints

about the scope of English remedies actually relate to this

accounting cause of action, nor has he made any effort,

either here or below, to show that his accounting claim

would be in the least bit viable in New York if the Genera]

Undertaking had not been enforced."

First and foremost, even if the accounting claim were

not precluded by the res judicata effect of the English

court’s dismissal of Mr. Tropp's counterclaims, it would

have been time-barred on its face. Mr. Tropp did not sue

until 2007, but the transactions as to which he seeks an

accounting would have occurred no later than 1996. In

14. Because the lower courts elected in the alternative to

reach the merits of the NYUFMJRA claims, the applicability

of the Genera) Undertaking to bar the preemptive declaratory

judgment claim (without prejudice to his right to defend himself

if and when Lloyd's had ever opted to bring a collection action) is

now effectively moot.

15. His other claims about the inadequacy of remedies are

difficult to follow as well as irrelevant to the claims he sought to

litigate inthe U.S. For example, he complains (Pet. at 16) thet the

English court held he had no contractua! remedies against L'oyd's

without disclosing that his English pleadings failed to invoke

any “express reliance upon express terms of contract, or indeed

implied terms of contract, between [himse]f] and [Lloyd's].” 61a.

15

New York, accounting claims are subject to a six-year

limitations period, which would have run out in 2002."°

Even if the time bar could be evaded, Mr. Tropp has not

shown any material difference between New York law

and English law applicable to accounting claims, nor has

he shown that New York's choice-of-law principles would

not mandate the applicability of English law.” This is

thus the polar opposite of cases like Richards, where the

plaintiff Names alleged causes of action under the federal

securities laws which the English courts concededly would

not entertain (under English choice-of-law rules), and the

question was whether the different remedies available in

England were sufficiently adequate to make the General}

Undertaking enforceable.'® Here Mr. Tropp has not

plausibly demonstrated that there would be any difference

in substantive law if he were allowed to disregard the

General Undertaking and litigate in New York instead

of England.

16. 1 Weinstein, Korn & Miller, N.Y. Civ. Prac 7 213.01 (2d

ed. 2011); Brooks v. Haidt, 873 N.Y.S. 2d 663, 564 (Ist Dep't 2009).

17. All of the relevant contacts here other than plaintiff's

domicile would point to English law even without the choice-of-law

agreement. Moreover, Lioyd’s is akin to private American self-

regulatory organizations such as the New York Stock Exchange.

Roby, 996 F.2d at 1357 (drawing that comparison). Courts have

repeatedly recognized common-law immunity from liability for the

NYSE and similar entities that is even more protective than that

available to Lloyd's under Enghsh law. See DL Capita! Group v.

NASDAQ Stock Mkt. Inc., 409 F.3d 93, 97 (2d Cir. 2005); D'Alessio

v. New York Stock Exch, Inc., 258 F.3d 93, 106 (2d Cir. 2001).

There is thus no claim that New York's choice of law rules would,

much less would be constitutionally required to, disregard Lloyd's

statutory immunity.

18. Petitioner has made no argument based on the Securities

laws, making the discussion in the ANA brief a complete non

sequitur.

ve

10

Finally, this would be a particularly inopportune time

for this Court to devote its limited resources to revisiting

its well-settled case law on international forum selection

clauses because the legal landscape may be imminently

changing. The United States has signed the Hague

Convention on Choice of Court Agreements, June 30,

2005, 44 1.L.M. 1294 (““HCCCA”). While the Senate has

not yet ratified HCCCA, the State Department recently

announced (76 Fed. Reg. 26333 (May 6, 2011)) an open

meeting for June 15, 2011 to solicit input into legislation

for implementing the treaty. If and when the HCCCA is

ratified, the lower courts will no doubt begin to encounter

questions about how prior decisiona! law is or is not

consistent with the new backdrop, and this Court will have

the opportunity to provide appropriate guidance.

Il, PETITIONER'S CONSTITUTIONAL ATTACKS ON

THE UNIFORM FOREIGN MONEY JUDGMENTS

RECOGNITION ACT WERE NOT PROPERLY

RAISED AND PRESERVED BELOW, AND THIS

CASE WOULD NOT BE AN APPROPRIATE

VEHICLE TO CONSIDER ANY SUCH ISSUE OF

GENERAL CONCERN"

Almost four decades ago, this Court said “We cannot

have trade and commerce in world markets ... exclusively

on our terms, governed by our laws, and resolved in

our courts.” Bremen, 407 U.S. at 9. Over a half-century

before that, the future Justice Cardozo said: “We are not

so provincial as to say that every solution of a problem

is wrong because we deal with it otherwise at home.”

19. Petitioner's certificate of service does not indicate that

the Attorney General of New York was served as required by

Rute 29(4)(c).

17

Loucks v. Standard Oil Co., 224 N.Y. 99, 110-11(1918).

Rejecting such a provincial attitude, the various states

have generally chosen to adopt balanced approaches to

the recognition of foreign judgments.

A. This Case Was Not Litigated Below as a

Constitutional Case

Petitioner has not asked this Court to review the lower

courts’ interpretations of New York statutory law in this

case. However, to the extent they were raised at all, the

constitutional arguments he now seeks to focus on were

treated as throwaways in his briefing below. Indeed, of

the total of 154 pages over five briefs submitted by Mr.

Tropp in the district court and court of appeals, the point

headings labeled as constitutional attacks on the statute

(“NYUFMJRA”) took up less than ten pages. Mr. Tropp

now blithely asserts (Pet. at 4) that the law the English

courts applied would be unconstitutional under Concrete

Pipe & Prods. of California, Inc. v. Constr. Laborers

Pension Trust for S. Calyornia, 508 U.S. 602 (1993) if

adopted in an American jurisdiction, but Concrete Pipe

was not cited even once by Mr. Tropp below. Likewise,

Tumey v. Ohio, 273 U.S. 510 (1927) was never cited in the

district court. Instead, the district court’s discussion on

20. While the Second Circuit’s correct application of

Tumey did not turn on any disputed facts, Petitioner's meritless

Tumey-based arguments are based on false factual assertions on

questions where Lloyd's did not make a full factual record in the

district court because the issue had not been raised. Similarly, the

Concrete Pipe argument, raised for the first time in the Petition, is

based on a false analogy between two different sets of complicated

factual circumstances, but the record below in this case was not

made with an eye toward rebutting a false analogy that Mr. Tropp

had not yet asserted.

(o 4)

}

constitutional issues focused on, and rejected (53a-54a),

Mr. Tropp’s strained analogies to foreign libel judgments

raising First Amendment concerns. Mr. Tropp essentially

abandoned that argument in the Second Circuit but

apparently seeks to revive it here.

B. The Petition’s Failed Attempt to Conjure Up

an Issue of “Growing Importance” Simply

Confirms the Adequacy of Existing Law

and Legislative Responses to Changed

Circumstances

The wave of litigation involving the enforcement of

Equitas Premium Judgments is now over except for this

case. It is unlikely that the extraordinarily fact-bound

nature of Petitioner's criticisms of English law would

provide a good opportunity to address issues of broader

interest to American courts and other litigants. But there

is no pressing need for this Court to address any such

broader issue. Petitioner refers (at 26-27) to cases raising

First Amendment concerns, but does not mention that

Congress has addressed these concerns by enacting a

statute just last year that explicitly limits the recognition

(in state and federal! court) of foreign judgments in

defamation cases that do not comport with substantive

American First Amendment doctrine.*! New York already

provided similar protection.™

Petitioner also points to recent controversies about

huge verdicts issued against American defendants in Latin

American jurisdictions. But Osorio v. Dole Food Co., 665

21. Pub. L. 111-223, codified at 28 U.S.C. §§ 4101-4105

22. CPLR 5304(b)(8)(adopted 2008).

19

F. Supp. 2d 1307 (S.D. Fla. 2009), apptied Florida's similar

statute to the facts of the case and denied recognition,

hardly showing that the statute was unconstitutionally

underprotective of American judgment debtors’ interests.

Likewise, in the high-profile case of Chevron Corp. v.

Donziger, 2011 U.S. Dist. LEXIS 22729 (S.D.N.Y. March

7, 2011) (alluded to but not cited, Pet. at 27), the court

relied on the NYUFMJRA in preliminarily enjoining a

judgment against a U.S. defendant in Ecuador, similarly

undercutting any claim that the current statute is

unconstitutionally underprotective.

C. Petitioner Has Shown No Basis for a

Constitutional Attack on the “System”

Analysis Foliowed by the Vast Majority of

U.S. Jurisdictions and Embodied in Section

56304(a)(1) of the NYUFMJRA

The NY UFMJRA compulsorily denies recognition to

foreign judgments rendered under a “system which does

not provide impartial tribunals or procedures compatible

with the requirements of due process of law.” This is

not a quirk of New York law, but a key provision of the

model Uniform Foreign Money Judgments Recognition

Act (““UFMJRA”), originally promulgated in 1962 and

eventually enacted in 32 states. Courts have consistently

held the statute means what it says, i.e. that the American

court is not to delve into idiosyncratic or case-specific

complaints if the judgment was rendered by a judicial

system which is fair as a whole.® As the Seventh Circuit

23. NYUFMJRA does specify various other case-specific

grounds for denying recognition, such as lack of timely notice and

fraud on the foreign court, which are not present here.

20

said in Ashenden, “the statute, with its reference to

‘system,’ does not support such a retail approach.” 233

F.3d at 477. Moreover, as a practical matter, the “retail”

approach could be so fact-specific that it would “in effect

give the judgment debtor a further appeal on the merits,”

which, among other things, would be “inconsistent

with providing a streamlined, expeditious method for

collecting money judgments rendered by courts in other

jurisdictions.” /d.** New York’s Court of Appeals has held

that the “relevant inquiry under. ..5304(a)(1) is the overall

fairness of England’s legal ‘system,’ which is beyond

dispute.” 4a (citing C/BC Mellon Trust Co. v. Mora Hotel

Corp. N.V., 100 N.Y.2d 215, 221 (2003)).

The question is not whether this “system” approach

is obligatory, but whether it is within the range of

constitutionally permissible options. In 2005, the National

Conference of Commissioners on Uniform State Laws

(“NCCUSL”) proposed a revised version of the UFMJRA,

the Uniform Foreign-Country Money Judgments

24. As the Seventh Circuit correctly observed, a judgment

debtor's complaints about having been denied “due process” can

rapidly shade into an attempt to obtain de facto appellate review

in the American court of the foreign court’s decisions on close

questions of its own law of procedure or evidence. But it is clear

that the foreign court's alleged error of law, whether substantive or

procedural, is not a basis for denying recognition to the resulting

judgment, anymore than a New York court can deny full faith

and credit to a California judgment because it believes that the

Cahfornia court made errors of California law. Clarkson Co.

v. Shaheen, 544 F.2d 624, 631 (2d Cir. 1976) (no basis to refuse

recognition on “mere assertion ... that the judgment was erroneous

in law or in fact”), Partente v. Scott Meredith Literary Agency,

Inc ,771 F.Supp 609, 616-617 (S.D N.Y. 1991) (refusing to conduct

de facto appellate review of French tribunal's French law rulings).

21

Recognition Act (“UFCMJRA”). It retains the “system”

test (§ 4(b)(1)), with commentary indicating that the

Ashenden decision represented a good interpretation of

that test, but also added a discretionary ground for non-

recognition (§ 4(c)(8)) that “the specific proceeding in the

foreign court leading to the foreign country judgment was

not compatibie with the requirements of due process of

law.” The new proposed statute did not require “retail”

inquiry in any given case, but would merely give courts

discretion to consider it. The American Law Institute

Proposed Foreign Judgment Recognition Act (the “ALI

Proposed Statute”), also promulgated in 2005 although

not thus far enacted, expressly considered but rejected

a provision similar to the NCCUSL's proposed section

4(c)(8) because the ALI had reached a differing view on

the policy question presented.”* Instead, section 5(a)(i) of

the ALI Proposed Statute is virtually in haec verba with

the traditional “system” provision of the UFMJRA, and

25. Petitioner seems to be arguing that the UFCMJRA's

proposed section 4(c)(8) be mandatory, which 1s, so far as the

Petition shows, not currently the law in any American jurisdiction.

26. Atthe time the ALI Proposed Statute was promulgated,

the ALI’s president was amicus Michael Traynor, whose brief (at

8) mentions the existence of this proposal without acknowledging

that it contradicts Petitioner’s current position. Presumably,

the ALI does not encourage Congress to enact unconstitutional

statutes, and it seems improbable that Mr. Traynor would have

presided over such a high-profile proposal while harboring

personal reservations that it was unconstitutional. The other

amicus who signed the same brief is Geoffrey Hazard, who served

as the ALI’s director in 1987 when it issued the Restatement (3d)

of Foreign Relations Law, Section 482(1)(a) of which endorses the

“system” approach of the UFMJRA and does not suggest it has

any constitutional infirmities.

22

comment c expressly provides that a “showing that the

judgment debtor was not dealt with fairly in the particular

case will not defeat recognition or enforcement” under

that subsection, because “{sJuch a detailed inquiry into the

foreign judgment is inconsistent with the pro-enforcement

philosophy of the [proposed] Act.”

States are free to adopt the UFCMJRA with its

proposed section 4(c)(8) as an alternative to the UFMJRA;

some have, but others, including New York, have not.?? The

NCCUSL did not suggest that the proposed discretionary

ground for non-recognition is constitutionally required

or the previous model statute it had recommended was

constitutionally infirm; indeed, that would make it difficult

to understand why proposed section 4(c)(8) is discretionary

rather than mandatory.

Hilton v. Guyot, 159 U.S. 113 (1895), cannot help

Petitioner. Hilton did not claim to be constitutionally-

driven; rather it enunciated comity-based rules for

recognition of foreign judgments in the absence of an

applicable statute. The suggestion that Hilton’s reference

to a “full and fair trial” requires the “retail” approach is

27. The HCCCA also has provisions related to the

enforcement of judgments in cases where an exclusive forum

selection agreement existed. Those provisions include permissive

carve-outs for non-recognition that would permit a signatory

jurisdiction to utilize a provision like section 4(c)(8), thus

accommodating the current minority practice within the United

States. That obviously provides no support for an argument that

the Constitution requires the minority adoption of a discretionary

ground for non-recognition to be transformed into universal

adoption of a mandatory ground.

23

no more plausible than a claim that the same Janguage

requires denial) of the recognition of judgments obtained

without “full ...trial” through, e.g., the equivalent of

American summary judgment practice. The very same

sentence from Hilton, when expanded from the snippet

selectively quoted by Petitioner, includes the phrase “a

system of jurisprudence likely to secure an impartial

administration of justice,” 159 U.S. at 202, and has been

relied on by both the ALI and NCCUSL as the basis for

their “system” approaches. See §5, cmt. c, ALI Proposed

Statute; § 4, cmt. 5, UMFJRA. Indeed, the Tenth

Circuit held that Hilton required the court “to examine

the entirety of the foreign judicial system, and not the

particularity of individual judgments.” Reinhart, 402 F.3d

at 1000 (emphasis In original).

Petitioner has failed to show any reason why the

policy choices made by the various states should not be

respected, or how hitherto unknown principles limiting

those policy choices could be found concealed within the

Fourteenth Amendment. There is no reason here for

skepticism as to the results of the legislative process.** To

put it mildly, American judgment debtors who have failed

to pay foreign judgments in favor of foreign judgment

28. This is the polar opposite of cases such as BM W of North

America, Inc. v. Gore, 517 U.S. 559 (1996) (Pet. at 28), where the

concern is that parochialism will benefit in-state litigants at the

expense of out-of-state adversaries. Here, Petitioner is perversely

arguing that parochialism is mandatory and a more cosmopolitan

attitude forbidden.

24

creditors are not a classic “discrete and insular minority”

in need of special judicial solicitude.*

D. The District Court Correctly Held That

Petitioner Was Not Denied Due Process in the

English Proceedings

Although the Second Circuit found it unnecessary to

reach the issue, the district court found in the alternative

that “{njot only does the English system as a whole provide

due process, there is no evidence that it denied due process

in Tropp’s particular case.” 46a. As the court went on to

note,

at six separate stages in the proceedings ... the

English system afforded Tropp an opportunity

to be heard, and he submitted extensive

briefings which were meticulously considered

by judges. In turn, the judges issued 59 single-

29. Names refusing to pay their Lloyd’s-related obligations

have not generally been hapless underdogs with no access to the

political process. Indeed, in 2001 members of amicus ANA were

able to have special provisions inserted by Congressional allies

into draft bankruptcy reform legislation which would have de

facto overturned existing pro-Lloyd’s precedents in the federal

courts and placed Lloyd's at a unique disadvantage as compared to

other foreign entities in litigation with U.S citizens. See Kathleen

Day, Bankruptcy Bill Benefits Chosen Few; Well-to-Do Investors

Sought Special Provision, WASH. Post, Mar. 10, 2001, at Al. The

proposed legislation (which had severe constitutional flaws because

of, among other things, how it singled L]oyd’s out,) was criticized

by the State Department (Steven Brostoff, Powell Blasts Lloyd's

Provision in Bankruptcy Bill, Nat’. UNDERWRITER, Prop. &

CasuacTy/Risk & Benerits Mcmt. Epvition, Mar. 19, 2001, at 1)

and ultimately did not pass.

26

spaced pages of opinions (comprising some

178 separately numbered paragraphs). The

fact that Tropp did not prevail in any of these

hearings does not mean that the English system

lacks due process.

47a.

Petitioner provides no cogent argument as to why

the district court’s fact-intensive and record-bound

determination was erroneous. He argued at great length

below that the English courts misconstrued English law,

and indeed the McBride amicus brief devotes almost

half its substance to claiming that the English courts

misconstrued the intent of Parliament. But this Court

has made it clear in the domestic context that a disputed

judicial interpretation of state law cannot be bootstrapped

into a federal civil rights claim. Gryger v. Burke, 334 U.S.

728, 731 (1948) (“we are not at liberty to conjecture that

the trial court acted under an interpretation of the state

law different from that which we might adopt and then

30. Like the ANA brief, the McBride brief is essentia)ly that

of a “sore loser.” Mr. McBride admits that he is no disinterested

academic; rather (brief at 1 n.1), he is a barrister who apparently

represented Petitioner in a failed attempt to get the European

Court of Human Rights to intervene and overrule English law.

None of his mischaracterizations of English law (which were not

presented to the lower courts) are relevant tou the NYUFMJRA’s

constitutionality. His contention that Lloyd’s is viewed as a private

entity in some legal contexts and a public or quasi-public entity

in others is hardly scandalous. American SRO’s are entitled to

broad immunity because of their quasi-public functions, supra

at n.15, while simultaneously not being treated as state actors in

other contexts. Desiderro v. Nat'l Ass'n of Sec. Dealers, 191 F.3d

198, 206 (2d Cir. 1999).

26

set up our own interpretation as a basis for declaring that

due process has been denied”). The English courts were

extremely patient with Mr. Tropp, gave him the benefit

of the doubt in view of his pro se status, and carefully

evaluated all the legal and factual contentions he made

(many of which were foreclosed by binding English

appellate precedent) before finding them insufficient. That

is all that due process requires.

As for Petitioner's claim that he was denied a “due

process” right to put on evidence disputing the amount of

Lloyd’s claim against him, what evidence may be presented

in any case necessarily depends on its relevance, which

in turn necessarily depends on the applicable substantive

law. Lindsey v. Normet, 406 U.S. 56, 68 (1972) (state

procedure did not violate Constitution by barring evidence

which would not support valid defense under substantive

law). In fact, the English courts permitted Mr. Tropp to

dispute the amount of Lloyd's claim against him in at least

four different ways described above. Supra 12. That none

of these arguments ultimately prevailed does not raise

any due process concerns.

Indeed, Petitioner has not cited any U.S. authority

that a defendant in a civil case has a free-floating due

process right to challenge the calculation of plaintiff's

damages on any basis that can be imagined. When a

contract contains a clear price term (as was the case

here) and the goods or services have been fully delivered

or performed but not paid for (as was the case here, since

Equitas has provided Petitioner with full reinsurance

protection despite his lack of payment), damages may

be constitutionally awarded based on no more evidence

than the contract price.*' His claim that he never agreed

to that price is simply a variation of his claim that he

never agreed to purchase the reinsurance at all, but was

involuntarily bound to the contract. But whether Lloyd's

had the regulatory authority to bind him and other Names

to the contract (including its price term) was a question

of substantive English law that has nothing to do with

procedural due process. As the district court noted (48a),

separate complaints about the substantive English law

under which particular evidence was irrelevant cannot be

squeezed into this due process analysis. Ashenden, 233

F.3d at 480 (“the cases that deal with international due

process talk only of procedural) rights”).

The Second Circuit rejected Petitioner’s Tumey

based claim because (5a), although “the UK courts gave

conclusive effect to Lloyd’s calculation of Tropp’s liability,

the UK courts themselves had no financial interest in the

outcome of Tropp’s case.”™ Petitioner makes no claim to

the contrary, nor could he. The claim that Tumey goes

beyond a guarantee of unbiased judges and somehow

makes it unconstitutional for a neutral and financially-

disinterested judge to apply principles of substantive law

that permit one party toa voluntary private arrangement

whose governing documents so provide (whether via

81. In any event, Petitioner made no showing in the record

below that he had evidence the English courts refused to consider

which would have led any reasonable factfinder to conclude that

the amount of his Equitas Premium fell outside the range of

reasonableness.

32. In Tumey, the magistrate personally retained

he levied. 273 U.S. at 620

28

contract or via the bylaws of a private organization) to

calculate financial obligations due from the other despite

an alleged financial stake in the determination is fanciful.

No such principle can be determined from the cases cited,

many of which were in any event not cited below.* In any

event, such an improbable extension of Tumey would

not help Petitioner because the underlying premise that

Lioyd’s had a financial) interest in overcharging Petitioner

for reinsurance coverage at the time his Equitas Premium

was determined is simply false.**

Nor would the Concrete Pipe analogy never raised

below have done any good if timely raised. In Concrete

Pipe, Congress had intervened after the fact to change the

rules applicable to pre-existing private arrangements—

conferring on certain pension plan trustees a new

statutory right to pursue “withdrawal” liability claims

against employers who had formerly contributed to the

plans but had never agreed (either by contract or the

equivalent of a process for enactment of future bye-laws)

to pay such liability. This was a key reason that the Court

33. Except for Tumey, Hilton and C/BC, none of the cases

cited in the Hazard/Traynor amicus brief (which focuses on the

Tumey argument) were cited below.

34. As noted above, no factual record was made on this Issue.

Such a record would have established that Lloyd's incentive, if

anything, was to make the premiums as low as possible (in order to

encourage participation and voluntary payment by a high enough

percentage of Names to make the R&R transactions feasible) while

also making them sufficiently high for Equitas to be adequately

capitalized to run off the risks it was assuming (and satisfy

relevant regulators of that fact). Nor could Lioyd’s have identified

ex ante which Names would be in the tiny minority who would not

pay their Equitas Premiums and need to be pursued in court.

etermined that the trustee’s determination of the amoun

due could not be unreviewable. Moreover, the Court

determined that the trustee had a systematic incentive to

overcharge withdrawing employers; by contrast, there is

simply no basis to claim that Lloyd’s had any structural

incentive to overcharge Names in general, much less thi

etitioner individually.**

In any event, the Seventh Circuit noted, Ashenden

233 F.3d at 478, probably no foreign legal system has

adopted “every jot and tittle of American due process” as

set forth in our case law, and there can be no claim that

those exact procedures must be followed for a foreign

judgment to be recognized. Concrete Pipe is a perfect

example of the sort of the “jot and tittle” presented by

the evolution of Fourteenth Amendment doctrine that

we should not expect any other country’s judicial system

to have adopted in precisely the same fashion. Indeed, in

Hilton, this Court was not troubled by features of French

procedure that would be unacceptable in our country,

such as the use of unsworn testimony not subject to cross

examination. 159 U.S. at 204-205.

This point is particularly compelling here, since

Petitioner expressly agreed to litigate his Lloyd's-related

disputes under English law in English courts (as well as

expressly agreeing to be bound by future Lloyd's bye

laws). Even if a defendant involuntarily haled into a

foreign court might have some right to resist enforcement

35. See supra n.34. Again, because of Petitioner’s failure t

te Concrete Pipe below, no record was made on the numerous

material factual differences between the Equitas/R&R

transactions and the U.S. statutory scheme regulating mult

Nploy er pen non 1) an :

in the U.S. of the resulting judgment due to procedural!

variatic .s from U.S. standards, Petitioner has made no

showing whatsoever that such a right could not, as a matter

of constitutional law, be waived. The Seventh Amendment

right to jury trial can uncontroversially be waived by

contract. Any number of constitutionally-mandated

procedural protections available in an American court

proceeding can uncontroversially be waived by agreeing

to a binding arbitration agreement. Petitioner provides

no argument whatsoever as to how the Constitution could

prevent New York from deciding to enforce his voluntary

agreement to be bound by English law as interpreted by

English courts.

E. Petitioner Has Made No Showing that the

“Public Policy” Exception of the NYUFMJRA

Is Unconstitutionally Narrow

Section 5304(b)(4) of the NYUFMJRA gives a cour

the discretionary authority to decline to recognize a

foreign judgment if “the cause of action on which the

judgment was based is repugnant to the public policy of

this state.” Petitioner failed to convince the lower courts

that the English Judgment should be denied recognition

on this basis. Similar claims have been consistently

rejected in other decisions recognizing Equitas Premium

Judgments, both in New York and across the country.

Grace, 718 N.Y.S.2d at 328; Turner, 303 F.3d at 333;

Ashenden, 233 F.3d at 478-80; Sitemon-Netto, 457 F.3d

at 99-100; Reinhart, 402 F.3d at 998.

The claim that the “cause of action”

is the wrong

level of generality, because some contracts might violate

,

mihi

iblic policy even though contract-based claims in general

would not, is a non sequitur, nota constitutional argument

Petitioner conjures up a speculative parade of horribles

involving foreign court judgments enforcing contracts

that were racially discriminatory or involved drug sales

or prostitution, but points to no actual] cases where U.S.

courts have felt obligated to recognize and enforce such

judgments on the theory that “breach of contract” was the

only level of generality that could be considered.

In any event, the district court fully recognized

(52a) that “Tropp is correct that the cause of action in

Lloyd’s case against him was not a run of the mill, or

‘plain vanilla’ contract claim.” However, it proceeded (2d.)

to say “[rlegardless of whether such a scheme would be

acceptable under New York contract law, we cannot say

that the English courts’ decision to bind the Names under

these circumstances is repugnant to the public policy of

New York.’%® It is well-established that New York will

not find a foreign judgment repugnant to its own public

policy simply because of differences in substantive law.

See, e.g. Sung Hwan Co. v. Rite Aid Corp., 7 N.Y.3d 78,

79 (2006) (granting recognition to judgment where South

Korean tort law permitted recovery on facts insufficient

to support liability under New York law); Ackerman

v. Levine, 788 F.2d 830, 841 (2d Cir. 1986) (reversing

36. Thus, the district court's analysis merely assumed

arguendo that the details of the English substantive law applied

here might differ from those potentially applicable in New

York. Petitioner has never shown that a similar result would be

impermissible under New York law, much Jess contrary to public

policy, under analogous circumstances involving a private se)f-

regulatory organization’s ability to enact bye-laws binding its

members to certain financial obligations considered appropriate

to meet the challenge of a market-threatening crisis.

32

refusal to recognize German judgment). Petitioner

offers no conceivable rationale as to why the Fourteenth

Amendment could possibly obligate New York to adopt a

more parochial public policy than it has freely chosen for

itself, or, again, why any such right to avoid unfavorable

foreign substantive law would be unwaivable.

F. Petitioner’s Attempt to Constitutionalize

Hostility to Foreign Court Judgments Would

Have Substantial Negative Consequences for

American Citizens and National Interests

As this Court said in Bremen, 407 U.S. at 9, “The

expansion of American business and industry will hardly

be encouraged if, not-withstanding solemn contracts, we

insist on a parochial concept that all disputes must be

resolved under our laws and in our courts.” Permitting

Americans such as Petitioner who have voluntarily entered

into profit-seeking business ventures in foreign countries

with indisputably fair legal systems to flee the obligations

those legal systems have imposed on them would

obviously have dire consequences for other Americans

willing to live up to their freely-assumed obligations.

Foreign entities would need to reassess the litigation

risk associated with doing business with Americans, or

demand that any prospective American business partner

maintain sufficient assets within the foreign jurisdiction to

satisfy any potential liability that might arise. Enforcing

voluntary agreements to litigate in a specified foreign

forum, as this Court’s case law mandates, is of limited

practical use if there is no assurance that that forum’s

subsequent judgments will be recognized.

Even more significantly, constitutionalizing hostility

to the recognition and enforcement of foreign judgments

would predictably make foreign judicial systems more

hostile to the recognition and enforcement of American

judgments entered against their own nationals. That

would undermine the interests of American judgment

creditors with claims against foreign defendants, possibly

representing a much wider cross-section of American

society than individuals who choose to engage in business

ventures abroad. A traditional rationale for generous

enforcement of foreign judgments in the U.S. is precisely

to encourage similar treatment of U.S. judgments by

foreign courts. C/BC, 100 N.Y.2d at 221. Reasonable minds

can disagree as to whether that is the best policy, but the

Constitution leaves state legislatures (and Congress) free

to make that decision for themselves.

CONCLUSION

TS

-

b

>

For the foregoing reasons, the

-ertiorari should be denied.

JOHN W. BREWER

Counsel of Record

FRIED, FRANK, HARRIS,

SHRIVER & JACOBSON LLI

One New York Plaza

New York, NY 10004

(212)-859-8000

_ P , foe Coss cagt ft: > .

john.brewer@friedfrank.