“One leading commentator has described the Anti-Aggregation Rule when applied to multiple claims as ‘in an unsatisfactory state,’ evolving ‘haphazardly and with little reasoning,’ serving ‘no apparent policy,’ and turning ‘on a mystifying conceptual test,’” writes Jonathan L. Schwartz, a partner in Goldberg Segalla’s Global Insurance Services Practice Group, for Law360’s Expert Analysis series.

“In contrast to these criticisms, the First, Sixth and Seventh Circuits have recently brought clarity to that rule. From these rulings, it is apparent that insurers seeking a declaratory judgment of noncoverage for the settlement of a class action may find difficulty in meeting the amount in controversy requirement for diversity jurisdiction under 28 U.S.C. § 1332.

“While insurers faced with these circumstances may be relegated to litigating coverage in an unfavorable state court, this scenario may be avoided altogether if the insurer initiates a declaratory judgment in federal court early on in the claim process, and especially prior to settlement. Of course, this option may not always be available or desirable. Yet, knowing which venues are an option for litigating an insurer’s duty to indemnify for a judgment or settlement is information every insurer needs in deciding its coverage position.”

In this article, Jonathan examines several key cases addressing the Anti-Aggregation Rule and consumer protection statutes such as the Fair and Accurate Credit Transactions Act (FACTA) and the Telephone Consumer Protection Act (TCPA), and provides practical tips to help insurers avoid the harsh effect of the Anti-Aggregation Rule.

Read the article here:

• Jonathan L. Schwartz, “Blocking Coverage From the Anti-Aggregation Rule,” Law360, July 14, 2014 (subscription required)