Justices rule in favor of choice of law in maritime insurance case
In a rare unanimous decision, the U.S. Supreme Court has ruled in favor of choice of law/forum selection clauses found in marine insurance contracts in a case prepared by Jonathan Goldman, JD '21 and his brother, Michael. The case was argued before the Court last fall.
"Our reaction—unbelievable!" said Goldman shortly after learning of the decision. "The oral argument went well, two SCOTUS blog posts said it went well for us, and then a judge reached out to me and said he heard we were favored, so the expectation was there. We expected to win, mostly, even hoping that at best it would be 8-1, but the decision is 9-0, which means Justice [Elena] Kagan, our biggest opposition at argument, must have come around."
In the first maritime law case heard by the Court in nearly 70 years, the case involved choice-of-law clauses in maritime insurance contracts. The dispute concerns a yacht insurance case and whether state or federal law should be applied when deciding insurance coverage. On behalf of their client, Great Lakes Insurance SE, the Goldman’s argued in favor of uniform federal law.
"State insurers and those parties have tried to get around such clauses in marine insurance contracts for decades by arguing that state law should govern these disputes instead of the choice of law/forum selection clauses found in marine insurance contracts. This decision will make these clauses enforceable," Goldman explained. "What it means going forward is that instead of state law getting involved and leading to different—and unpredictable—outcomes due to various state laws, the decision states plainly that the uniform body of admiralty law is best for these marine insurance contract disputes because it's better for the courts and the law and won't lead to forum shopping. That's civil procedure 101."
The Goldman's were notified of the decision by the firm who assisted them with the oral argument. Stating that a 9-0 decision "is very, very rare," Goldman said, "It's not unheard of, but very rare especially given the political climate and the Court over the last 20 years.
"The oral argument went exactly as planned, so our preparation for that was spot on. The 9-0 decision makes that much clearer. The Court must have found our arguments favorable."
"Jonathan and his colleagues' victory at the U.S. Supreme Court is noteworthy on many levels, including demonstrating how critical thorough preparation, compelling legal writing, and excellent advocacy are to prevailing in high-stakes legal matters" said UMass Law Dean Sam Panarella. "The development of these legal skills in our students is a significant focus at UMass Law and it is gratifying to see Jonathan put them to such impressive use at the highest court in the land. We are proud to call Jonathan an alum of UMass Law and look forward to watching his legal career thrive."
Justice Brett Kavanaugh wrote the decision with a concurrence by Justice Clarence Thomas.
"Long term , this means that these clauses are now air-tight in the circuits and 9-0 means no funny business trying to get around them," Goldman added. "Uniformity is the word."