Hunton Insurance Recovery Blog

The United States Supreme Court recently held in Great Lakes Ins. SE v. Raiders Retreat Realty Co., LLC, that choice-of-law provisions in maritime contracts, including maritime insurance policies, are presumptively enforceable under federal maritime law. In Great Lakes, a policyholder asserted counterclaims against its insurer under the state law of Pennsylvania, where the insurer had filed a federal-court action seeking a declaration of no coverage, even though the choice-of-law provision in the applicable maritime insurance policy designated New York law. The policyholder argued that Pennsylvania had the greatest interest in the dispute, and that enforcing the New York choice-of-law provision in the policy would contravene Pennsylvania’s fundamental public policy. The district court dismissed the policyholder’s counterclaims, but the Third Circuit reversed. The Supreme Court agreed to hear the case, and we explained here that the Court’s decision could have significant ramifications for insurance-coverage disputes both under maritime insurance policies and more generally if the Court adopted broad rules regarding the enforcement of choice-of-law provisions.  

On Monday, March 6, the US Supreme Court agreed to hear an insurance coverage dispute, Great Lakes Insurance SE v. Raiders Retreat Realty Co., LLC.  Insurance cases are few and far between in the high court, so both policyholders and their insurers will be watching the Great Lakes case with great interest.  Notably, while the case involves the specialized area of maritime law, how the Supreme Court chooses to address the choice-of-law issue it presents could have much broader implications.