United States Fidelity and Gua v. Lee Investments LLC, et al, No. 08-17753 (9th Cir. 2011)
Annotate this CaseUnited States Fidelity & Guaranty Co. ("Insurer") filed a federal action against Lee Investments, LLC ("Employer") seeking rescission of a workers' compensation policy and related relief on account of the Employer's alleged misrepresentations when Employer's employee injured herself while assembling a water slide at Employer's California waterpark. At issue was whether a federal district court had subject matter jurisdiction over an insurance company's diversity action seeking rescission of a workers' compensation policy and if so, whether it was required to dismiss the case because exclusive jurisdiction was vested by state law in a state workers' compensation agency. The court held that a federal district court had subject matter jurisdiction where the parties were diverse and the amount of controversy exceeded $75,000 and where the action did not arise under California's workers' compensation laws, Insurer filed an original claim in federal court, and Employer failed to demonstrate fraud or collusion. The court also held that the California's Workers' Compensation Appeals Board did not have exclusive jurisdiction to hear Insurer's claims. Therefore, the district court properly exercised jurisdiction, correctly addressed the law, acted well within its discretion in making innumerable litigation decisions, and did not err in granting certification.
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