Lewis v. Liberty Mutual Insurance Co., No. 18-16140 (9th Cir. 2020)Annotate this Case
After plaintiffs were awarded more than $45 million in a products liability suit brought against EcoSmart, EcoSmart declared bankruptcy and plaintiffs brought a direct action against EcoSmart's insurer, LMIC, for payment on the judgment. LMIC argued that its policy with EcoSmart had a forum-selection clause designating Australian courts as the exclusive forum. The district court granted LMIC's motion to dismiss on grounds of forum non conveniens.
The Ninth Circuit held that, because plaintiffs stand in the shoes of EcoSmart, their third-party creditors' rights are derivative of the rights and limitations held by the bankrupt insured, and thus the forum-selection clause applies. The panel also held that plaintiffs have not shown that the clause violates California public policy or that Australia is an inadequate forum for suit. Accordingly, the panel affirmed the district court's judgment.