Led by Jeff Wall and Morgan Ratner, Sullivan & Cromwell obtained a unanimous ruling for Great Lakes Insurance in a maritime insurance case establishing that the parties’ contractual choice-of-law provision is binding.
In Great Lakes Insurance SE v. Raiders Retreat Realty, the Court held that Great Lakes Insurance could enforce a provision naming New York law as governing, overturning a contrary ruling from the U.S. Court of Appeals for the Third Circuit and resolving a split in the circuits. Reflecting the stakes of this case, the Chamber of Commerce argued in an amicus brief that allowing the Third Circuit’s decision to stand “would create unmanageable uncertainty in the insurance industry and beyond.”
After Raiders’ yacht ran aground, Great Lakes filed a declaratory judgment action in federal court in Pennsylvania to establish non-coverage. Raiders asserted a counterclaim under Pennsylvania law and argued that the law of that state should apply and not New York law, which the parties had agreed in the policy would serve as governing law. The district court sided with Great Lakes, but the Third Circuit vacated and remanded, holding that the presumption that the choice of law provision in a maritime contract is enforceable must yield to a strong public policy of the state where a suit is brought. Great Lakes turned to Sullivan & Cromwell after Raiders filed a petition for certiorari.
Jeff, a former acting U.S. Solicitor General and the Head of S&C’s Supreme Court and Appellate Practice, argued to the Court, marking his 31st Supreme Court appearance. Morgan, a former assistant to the Solicitor General and a Co-Head of the Practice, played a leading role with Jeff on the briefs.
In its ruling, the Supreme Court stressed the importance of choice of law provisions in maritime commerce, which often crosses interstate and international boundaries. The ruling is a major win for marine insurers, and insurers more generally, given its emphasis on parties’ freedom of contract.
In addition to Jeff Wall and Morgan Ratner, the S&C team representing Great Lakes Insurance included Zoe Jacoby and Madeline Jenks.