Insurance carriers must pursue constitutionality case in state court

The abstention doctrine provides that federal courts should generally refrain from enjoining or otherwise interfering in ongoing state proceedings and allow the proceedings to go forward in state court.

Case name: Liberty Mutual Insurance Co., et al. v. Hurlbut, et al., No. 08 Civ.7192 (DC) (S.D.N.Y. 03/09/09).

Ruling: The U.S. District Court, Southern District of New York dismissed the carrier companies' complaint and motions to enjoin the enforcement of new amendments to New York's Workers' Compensation Law and for summary judgment based on the court's lack of jurisdiction under the abstention doctrine.

Agency penalized for excluding contractors from coverage (03/22/12)
Company's failure to pay premium results in liability for worker's injury (12/19/11)
Chiropractor can testify as to psychological overlay (06/27/11)
Medicaid's payment, write-off erase employer's liability to worker (03/12/12)
WC court can decide premium payment dispute (12/06/12)

What it means: The abstention doctrine applies to a case in federal court that addresses the constitutionality of certain amendments to the New York Workers' Compensation Law. This doctrine provides that federal courts should generally refrain from enjoining or otherwise interfering in ongoing state proceedings and allow the proceedings to go forward in state court.

Summary: The New York State Insurance Fund, a workers' compensation insurer of the state, and the New York State Workers' Compensation Board were involved in an ongoing proceeding to amend the state's workers' compensation laws. The carrier companies argued that the proceeding implicated an important state interest in the functioning of the workers' compensation system with respect to certain proposed amendments that affected their insured clients. The carriers sought to enjoin enforcement of the new laws and moved for summary judgment. The defendants argued the abstention doctrine kept the case from being heard in the District Court.

The District Court dismissed the carriers' complaint under the abstention doctrine as set forth in Younger v. Harris. Under Younger, abstention is mandatory when there is a pending state proceeding that implicates an important state interest, and the state proceeding affords the federal plaintiff an adequate opportunity for judicial review of its federal constitutional claims.

The court also found that because judicial review of the New York Workers' Compensation Board's orders is available under the Workers' Compensation Law, the carrier companies are afforded an adequate opportunity for review of their federal constitutional claims in the state proceedings. Accordingly, the court found abstention appropriate and granted the defendants' motion to dismiss.

June 8, 2009

Newsletter Sign-up