# Opposition Brief — Younis Bros. & Co. v. CIGNA Worldwide Insurance

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386018_1718%3A2

## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1997
- **Citation:** 519 U.S. 1077

## Text

f) —_
supreme Court, U.S
No. 96-691 pokag Saat
I
'

In The DEC 4 1996
Supreme Court of the United States.
- a
October Term, 1996
YOUNIS BROS. AND CO., INC.,
Petitioner,

VS.

CIGNA WORLDWIDE INSURANCE COMPANY,

Respondent,
-and-
THE ABI JAOUDI and AZAR TRADING CORPORATION,
Petitioner,

VS.
CIGNA WORLDWIDE INSURANCE COMPANY,
Respondent.

On Petition for Writ of Certiorari to the United States
Court of Appeals for the Third Circuit

RESPONDENT?’S BRIEF IN OPPOSITION

STEPHEN A. COZEN
Counsel of Record
DAVID R. STRAWBRIDGE
DOUGLAS R. WIDIN
ELIZABETH J. CHAMBERS
COZEN AND O’CONNOR
Attorneys for Respondent
1900 Market Street
Philadelphia, Pennsylvania 19103
(215) 665-2000

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COUNTER STATEMENT OF QUESTION PRESENTED

Whether the Court should grant certiorari on a petition
containing only unreviewable state law claims, routine hearsay
evidentiary issues, and moot jury questions.

ii

DISCLOSURE OF CORPORATE AFFILIATIONS

CIGNA Worldwide Insurance Company is a subsidiary of
CIGNA Corporation, which indirectly owns 100 percent of the
shares in CIGNA Worldwide Insurance Company. A Philippine
corporation, P.C.I.B. CIGNA Life Insurance Company, is a
nonwholly owned subsidiary of CIGNA Worldwide Insurance

Company.

iii

TABLE OF CONTENTS

Page
Courter Statement of Question Presented ........... i
Disclosure of Corporate Affiliations ................ ii
EAE TOTES RO ee oa a iii
PI crate hc bob ii et iv
Statement of Jurisdiction ......................... 1
Counter Statement of the Case ..................... ]
Reasons for Denying the Writ ..................... 6

I. The Court lacks jurisdiction over the petitioners’
I a i 6

Il. Certiorari should not be granted to review trial

hearsay rulings raising no important federal
ng RN RRR SES FETA UPN Sly ee ee 8

Iil. Certiorari should not be granted to render what

would amount to advisory opinions on claims that
SACRED CA GRA GTS OURO Rew Kbc we oc ck 10

ME SCG Gun Cacao ck . oeu ee 12

iv

Contents
Page
TABLE OF CITATIONS
Cases Cited:

Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986)
POP eee Te Oo Pee PT Loree ee ray 10

Brady v. Southern Railroad Co., 320 U.S. 476 (1943)
je CA VEGAAD RGN SODA GSN Weed Eh MLO RTE EL ES 10
Ellis v. Dixon, 349 U.S. 458 (1955) ...............- 7
Fay u. Nola, 372 U.S. SPL GIGS) 6 vec ketenes 6, 10, 11
Goodman v. Lukens Steel Co., 482 U.S. 656 (1987) .. 11
Graver Mfg. Co. v. Linde Co., 336 U.S. 271 (1949) .. 11

Mano Insurance Company v. Picasso Cafeteria, March
Term, A.D. 1995 (Liberia July 28, 1995) ......... &,3, 7

Mano Insurance Company v. Picasso Cafeteria, March
Term, A.D. 1996 (Liberia September 27, 1996) ....... 6, 7
McKay v. Foster, 332 U.S. 783 (1947) .............. 7

Montana v. Imlay, 506 U.S. __, 113 S. Ct. 444, 121 L.
hs Ae BE ANUP) irk ioe CdS oes bare wee UR ekas 10

Rice v. Sioux City Memorial Park Cemetery, 349 U.S. 70
CS UeD ic ob bs Bae ene baa seal rere ees 8,9

Contents

Somportex Limited v. Philadelphia Chewing Gum Corp.,
453 F.2d 435 (3d Cir. 1971), cert. denied, 405 U.S.
BT RE OFEE Se ERC RK RN Sr aa OA CURRE DC Oe eee st

Stembridge v. Georgia, 343 U.S. 541 (1952) ........

Tannenbaum v. Connecticut Fire Insurance Co., 127 Pa.
BORNE. £ras Ue ae DOP CEO SED Fo bev detec teenes

United States v. Richardson, 418 U.S. 166 (1974) ....
Statutes Cited:

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ce ee Rg 2 eee a re ene ees arp ae
Rules Cited:

ON CINE RUN SU CV bbebusseccduasteatnesinn

Federal Rule of Evidence 803(3) ...................

Page

10

1

Respondent respectfully requests that the Court deny the
Petition for Writ of Certiorari to the United States Court of
Appeals for the Third Circuit. The Third Circuit’s opinion is
reported at 91 F.3d 13 (3d Cir. 1996). The district court opinion
affirmed by the Third Circuit is reported at 899 F. Supp. 1385
(E.D. Pa. 1995).

STATEMENT OF JURISDICTION

Petitioners seek to invoke this Court’s jurisdiction pursuant
to 28 U.S.C. § 1254(1). Jurisdiction over the petitioners’ state
law claims is disputed; the remaining claims are not appropriate
for granting certiorari.

COUNTER STATEMENT OF THE CASE

This petition involves a suit by two Liberian businesses
against their insurer, respondent CIGNA Worldwide Insurance
Company (“CWW”). The petitioners filed insurance claims for
looting and/or fire damage they claimed occurred at seven
different locations in Harbel and Monrovia, Liberia, over a span
of six months from June through November, 1990, during the
height of a civil war. According to the petitioners, these losses
resulted from purely local rioting, and, for that reason, were
covered by their CWW policies.

CWW denied the claims. It proved at trial that petitioners’
losses were caused, not by local rioting, but by an insurrection
that started in December, 1989, and developed into a full scale
Civil War that raged throughout 1990, and beyond. Fierce battles
were fought in Harbel in June, 1990, and in Monrovia, from
July through November, of 1990, the time period covering the
petitioners’ losses. CWW argued that the petitioners’ losses were

2

excluded from coverage under the War Risk Exclusion Clauses
contained in each of the petitioners’ policies.’

The petitioners filed suit in the United States District Court
for the Eastern District of Pennsylvania. In addition to coverage
claims, petitioners contended that CWW acted in bad faith by
denying their insurance claims, and that it unreasonably delayed
investigating their claims. CWW answered that it was not bad
faith to deny uncovered claims, and that it sent investigators to
Liberia as early as war conditions would permit safe passage.

The parties disagreed initially on what law governed the
case. CWW argued Liberian law applied; the petitioners argued
for Pennsylvania law, including Pennsylvania’s bad faith statute,
42 Pa. C.S.A. § 8371. The district court ruled that Pennsylvania
law applied. Neither side contested the district court’s choice
of law decision on appeal.

At trial, CWW presented extensive evidence to document
the inception and progress of the Liberian Civil War. The
uncontroverted evidence showed that identifiable rebel groups,
headed by Charles Taylor, invaded Liberia’s interior border on

1. The War Risk Exclusion Clauses in the petitioner’s Fire Policies
excluded losses caused “directly or indirectly” by “(c) insurrection; (d)
rebellion; (e) revolution; (f) civil war; (g) usurped power.” The Extended
Coverage Endorsements to the petitioners’ Fire Policies covered looting losses
caused “directly” by riot, but excluded looting loss “caused directly or
indirectly” by “insurrection, rebellion, revolution, civil war, usurped power,
or action taken by governmental authority in hindering, combating or
defending against such an occurrence.” A Burglary Policy and a Money and
Securities Policy CWW issued to petitioner Abi Jaoudi and Azar Trading
Corporation (“AJA”) excluded coverage for “loss due to war, whether or not
declared, civil war, insurrection, rebellion, revolution or to any act or condition
incident to any of the foregoing.” Additionally, AJA’s Accounts Receivable
Policy excluded coverage for losses “caused by or resulting from” the same
types of occurrences.

3

December 24, 1989, and that Taylor’s group, with a later splinter
group, headed by Prince Ormie Johnson, fought their way
through Liberia to the country’s capital city of Monrovia, on
the coast. Uncontradicted evidence established that the rebel
leaders’ expressed goal was to overthrow the Liberian
government, headed by President Samuel Doe, and to assume
control of the government.”

Through the testimony of uncommonly reliable and
disinterested witnesses, CWW documented the chaotic living
conditions that attended the rebel fighting in Harbel and
Monrovia, including looting, lawlessness, fires, and a complece
breakdown of law enforcement and civil authority in Harbel and
Monrovia. These witnesses included international journalists
from the Associated Press, British Broadcasting Corporation,
the London Manchester Guardian, some of whom had direct
interviews and conversations with the rebel leaders, a Defense
Department and Army Attache to the American Embassy, a
Cabinet Minister and other officials from the Liberian
government, such as the Liberian Court Administrator, the
Deputy Coordinator for Operations at the Freeport of Monrovia,
and officials from the tax and insurance departments. CWW
also presented the testimony of residents who lived through the
crisis, including a conscripted rebel soldier and Government
soldiers who participated in looting.

Residents endured lack of food or water. Hordes of starving
refugees fled to Monrovia from battles elsewhere in the country,
and, with other starving residents, took to looting for food and
other necessities of life amidst a climate where there were no
police to control the turmoil, firefighters to put out fires, or even
protection from Government troops, which either participated
in the looting or were preoccupied with fighting the rebels. The
petitioners’ own employees, on cross-examination by CWW,

2. The evidence showed that, after reaching Monrovia, Prince Johnson
and his followers abducted and killed President Doe.

4

described fighting in the streets of Harbel and Monrovia, and
the severe deprivation, lawlessness and absence of civil authority
caused by that fighting.

The jury, surprisingly, returned a verdict for the petitioners
on the coverage and bad faith claims. Since the petitioners had
demanded a jury trial, and since Pennsylvania’s bad faith statute
provides that, upon a finding of bad faith, “the court may” award
punitive damages, interest, attorneys’ fees or costs, the district
court bifurcated trial of the bad faith damages. Under this
bifurcation plan, the jury decided the issue of punitive damages
and the district court decided whether any other bad faith
damages would be awarded. The jury assessed no punitive
damages against CWW, finding that CWW’s conduct was not
outrageous. The district court then ruled that the evidence did
not support the award of interest, attorneys fees or costs.

Thereafter, the district court granted judgment
notwithstanding the verdict on two grounds: (a) that the trial
evidence proved CWW’s War Risk Defense as a matter of law,
and (b) that “no evidence” supported the bad faith verdict.’

While post-verdict motions were pending, the Liberian
Supreme Court decided a separate case involving an insurance
claim for looting damages in Monrovia in June, 1990, Mano
Insurance Company v. Picasso Cafeteria. The Liberian high
court held in Mano that the Civil War was the efficient, proximate
cause of the looting losses, and under the provisions of the policy
there at issue, that the insurance claim was not covered by the
plaintiff’s insurance policy.

While not challenging the district court’s previous choice

3. The district cour’ slso granted alternative relief in the form of a new
trial on the grounds that: (a) the jury’s verdict was against the weight of the
evidence, and (b) the district court had committed reversible error by giving
the ambiguity jury instruction the petitioners had requested.

5

of law decision, CWW suggested that the district court review
the Mano case under comity principles, both for the Liberian
high court’s acknowledgement that a Civil War, and not local
rioting, had occurred in Monrovia, and for the use in the Liberian
decision of the same test for causation that was applicable under
Pennsylvania law.

The petitioners heatedly protested this idea, calling the
comity doctrine “inapplicable” and the Mano decision “without
legal effect.” Neither the district court nor the Third Circuit based
their decisions on Liberian law.‘

Using applicable United States law, the Third Circuit
affirmed the district court. In particular, the Third Circuit
reviewed and affirmed the district court’s ruling that the Liberian
Civil War was the efficient, proximate cause of the petitioners’
losses. The proximate cause test used by the Third Circuit was
the same test of causation approved by the Pennsylvania courts
for insurance matters. Tannenbaum v. Connecticut Fire Insurance
Co., 127 Pa. Super. 278, 284, 193 A. 305 (1937) (approving use
of proximate cause test in insurance cases).

After the Third Circuit’s opinion was filed, the Liberian
Supreme Court reversed its decision in Mano.’ In so ruling, the
Liberian high court ruled that only war risk damages caused by
the direct effect of offensive or defensive military operations
were excluded from coverage under War Risk Exclusion Clauses.

4. The district court, however, stated that it would have reached the
same decision had it decided the case on Liberian law. The court of appeals
did not even consider the Liberian Mano decision.

5. The strange way in which a reconstituted, restructured court found a
basis for a third review is troublesome and ought give one pause as to the
validity of the opinion.

6

Abandoning their prior positions and arguments, and
rejecting the lower courts’ apparent reliance on their arguments,
the petitioners now opportunistically, and overexpansively,
contend that this particular decision by the Liberian Supreme
Court “fixes the standard” for the test of causation in insurance
cases, that “courts in [the United States] should apply that
standard as well,” and that the Third Circuit should be reversed
for not following the second Mano decision, decided after the
Third Circuit ruled, under principles of comity. Petition for Writ
Certiorari, at 17.

REASONS FOR DENYING THE WRIT

The petition presents the Court with an array of
unreviewable state law claims, routine trial evidentiary rulings,
and moot Seventh Amendment questions. The petition is not
deserving of review and should be denied. This Court does not
grant certiorari to hear state law claims, for jurisdictional
reasons. Moreover, the claims that do contain federal questions
do not remotely approach the level of importance or public
interest justifying certiorari, nor are they supported by any other
of the “special” reasons discussed in Supreme Court Rule 10
that might warrant this Court’s review.

I.

THE COURT LACKS JURISDICTION OVER THE
PETITIONERS’ STATE LAW CLAIMS.

This Court has repeatedly declined to review judgments
resting on independent state grounds, for jurisdictional reasons.
As the Court stated in Fay v. Noia, 372 U.S. 391, 428 (1963), it
does not have the “power” to reverse decisions that are based
on adequate and independent state grounds and that do not
present questions of the validity or construction of the “federal

7

constitution, treaties, statutes, commissions or authorities in
dispute.” Accord Ellis v. Dixon, 349 U.S. 458 (1955); Stembridge
v. Georgia, 343 U.S. 541 (1952); McKay v. Foster, 332 U.S. 783
(1947) (all denying certiorari because the decision below rested
on nonfederal grounds). No such federal questions are raised in
Sections III and VI of the petition.

Section III of the petition claims: (a) that the Third Circuit
“used the wrong standard of causation,” and (b) that the Third
Circuit should be reversed for not according comity to the
second, though not the first, Mano decision. The definition, scope
and application of the test of causation, however, is purely a
matter of state law, unless some federal right were offended by
the test applied. Petitioners identify no constitutional provision
or other federal right allegedly violated by the lower courts’
analysis of causation, and this is fatal to their petition. The claim
raised in the petition does not rise above a state law claim.

Petitioners’ comity claim also raises no federal question.
Since this case does not involve a suit by or against foreign
governments, it does not implicate treaties with foreign
countries, federal jurisdiction over foreign governments or other,
similar federal issues. The question raised in the petition is
simply whether the Third Circuit should have accorded comity
to a judicial opinion of a foreign country. Such a claim is
manifestly a state law question. Somportex Limited v.
Philadelphia Chewing Gum Corp., 453 F.2d 435 (3d Cir. 1971),
cert. denied, 405 U.S. 1017 (1972) (a federal court in diversity
applies the comity principles of the state where the federal court
is sitting, in this case, Pennsylvania). The petitioners allege no
constitutional or federal right otherwise implicated in the comity
claim. Accordingly, review of this claim should not be granted.

Section VI of the petition also raises only a state law claim.
This section of the petition alleges the substantively incorrect

8

claim, which is contrary to numerous state and federal cases
interpreting the state statute, that the district court’s
interpretation of the term “may” in Pennsylvania’s bad faith
statute was contrary to the state legislature’s intent in enacting
the statute. While the heading to Section VI alleges that the lower
courts’ interpretation of Pennsylvania’s bad faith statute was
“unconstitutional,” the body of the argument makes it clear that,
if there is a claim of unconstitutionality being discussed, it is at
most a violation of the state constitution (which this Court does
not review) and not a violation of the federal constitution (which
this Court might choose to review). As with the causation and
comity claims, Section VI identifies no federal constitutional
provision, federal statute, or other federal standard, purportedly
at issue.

Accordingly, review of these claims should be denied
because they raise no federal question.

Il.

CERTIORARI SHOULD NOT BE GRANTED TO
REVIEW TRIAL HEARSAY RULINGS RAISING NO
IMPORTANT FEDERAL QUESTION.

Even where federal questions are raised in a petition,
Supreme Court Rule 10 makes it clear that the Court will not
grant certiorari unless there are “special and important reasons”
for review. As the Court stated in Rice v. Sioux City Memorial
Park Cemetery, 349 U.S. 70 (1955):

A federal question raised by a petitioner may
be “of substance” in the sense that, abstractly
considered, it may present an intellectually
interesting and solid problem. But this Court
does not sit to satisfy a scholarly interest in

9

such issues. Nor does it sit for the benefit of
the particular litigants. “Special and
important reasons” imply a reach to a
problem beyond the academic or episodic.

349 U.S. at 74. In dismissing the writ, the Court wrote further:

. .. itis very important that we be consistent
in not granting the writ of certiorari except
in cases involving principles the settlement
of which is of importance to the public, as
distinguished from that of the parties . . .

349 US. at 79.

It is difficult to conceive of a question more lacking in broad
public import, or one more limited in pertinence to “the benefit
of the particular litigants,” than the district court’s hearsay
rulings challenged in Sections I and II of the petition. The
petitioners’ hearsay claims refer to evidence from journalists
that the rebels’ goal was to overthrow the established Liberian
government and assume control of the government. Such
testimony was based upon direct conversations between the
journalists and the rebel leaders, as well as statements from the
rebel leaders the journalists heard at press conferences.

This testimony regarding the rebel leaders’ intent, which
clearly was not hearsay, raises nothing more than routine claims
of trial error. See, e.g., Fed. R. Evid. 803(3) (statements of a
declarant’s intent, plan, motive or design are not excluded by
the hearsay rule). There is nothing “special” or “important”
about these claims, nor does the petition itself argue that any
broader import is involved.

Moreover, the petition misrepresents the record in claiming

10

that the district court “weighed” the evidence the petitioners
erroneously characterize as hearsay. In upholding the War Risk
Defense as a matter of law, the district court did not consider
the weight of the testimony the petitioners claim is hearsay, as
the petition contends. Rather, the district court rested its decision
on the fact that the testimony was uncontradicted, which the
district court was required to consider. Brady v. Southern
Railroad Co., 320 U.S. 476, 479-80 (1943) (when, without
weighing credibility, there can be but one reasonable conclusion
as to the verdict, the court should determine the proceeding by
non-suit, directed verdict ... or by judgment notwithstanding
the verdict); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250
(1986) (quoting Brady, and stating that “the trial judge must
direct a verdict if, under the governing law, there can be but one
reasonable conclusion as to the verdict”). The hearsay claims
are thus not deserving of the Court’s review.

Il.

CERTIORARI SHOULD NOT BE GRANTED TO
RENDER WHAT WOULD AMOUNT TO ADVISORY
OPINIONS ON CLAIMS THAT ARE MOOT.

The Court does not review questions that are moot and
would result only in the issuance of advisory opinions. Montana
v. Imlay, 506 U.S. __, 113 S. Ct. 444, 121 L. Ed. 2d 310 (1992)
(certiorari petition dismissed as improvidently granted because
“no matter which party might prevail in this Court,” the judgment
would be the same); United States v. Richardson, 418 U.S. 166,
171 (1974) (the Court’s power may not be exercised over
questions that are “moot or calling for an advisory opinion”);
Fay v. Noia, 372 U.S. 391, 430 (1963) (the Court is obliged to
“refrain from rendering advisory opinions or passing upon moot
questions”).

11

Sections IV and V raise issues connected with the bifurcated
trial of the bad faith damages. Unquestionably, however, the
dispositive ruling concerning the petitioners’ bad faith claims
was the district court’s “no evidence” finding. By that ruling,
the district court determined, and the Third Circuit agreed, that
the petitioners had not made out the elements of their bad faith
claims as a matter of law. The petitioners of course may not
challenge that ruling here. Goodman v. Lukens Steel Co., 482
U.S. 656, 665 (1987) (“a court of law, such as this Court is,
rather than a court for correction of errors in factfinding, cannot
undertake to review concurrent findings of fact by two courts
below in the absence of a very obvious and exceptional showing
of error”), citing Graver Mfg. Co. v. Linde Co., 336 U.S. 271,
275 (1949).

Nevertheless, Sections IV and V of the petition allege that
the district court’s bifurcated trial of bad faith damages violated
Seventh Amendment jury guarantees. Such a claim is irrelevant,
given the present posture of the case. Since the petitioners did
not prove their bad faith claims at all, and are not entitled to
recover any damages, they would not be entitled to recover such
damages no matter how the Covrt ruled on the petition’s
purported Seventh Amendment claim. The petition’s challenge
to the way the bad faith damages were tried is, clearly, moot.
Thus, even if a potential Seventh Amendment issue were lurking
somewhere in these sections, which respondent cannot find,
since a decision on such a question would not have the slightest
impact on the judgment in this case, any decision by this Court
would be advisory, and, therefore, impermissible. Fay v. Noia,
372 U.S. at 430, n. 40 (“if the same judgment” would be rendered
after the lower court’s ruling were “corrected,” the Supreme
Court’s opinion “could amount to nothing more than an advisory
opinion”). Certiorari, thus, should not be granted for these
claims.

12
CONCLUSION

The petition for writ of certiorari should be denied.
Respectfully submitted,

STEPHEN A. COZEN

Counsel of Record

DAVID R. STRAWBRIDGE
DOUGLAS R. WIDIN
ELIZABETH J. CHAMBERS
COZEN AND O’CONNOR
Attorneys for Respondent

1900 Market Street

Philadelphia, Pennsylvania 19103
(215) 665-2000

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386018_1718%3A2. Public record. Not legal advice.