Nonparty Insurers in Federal Civil Actions: The Need For New Written Civil Procedure Laws
Parness, Jeffrey A.
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Written laws guiding civil actions in the federal district courts chiefly address the presentation, preparation and resolution of claims involving parties. However, the courts often also consider claims involving non-parties as well as non-claim matters involving parties and non-parties alike. Guidelines here mainly appear in federal precedents and, to a lesser extent, in local court rules. They often follow in-state court practices. The absence of written general laws for non-party claims and non-claim matters often leads to unnecessary confusion and unfair procedures. New, generally applicable written guidelines could help reduce uncertainty and promote fairness. To exemplify, we shall particularly explore possible reforms in settlement conference settings where the interests of non-party insurers are at stake, as well as in adjudicatory settings where non-party insurers seek recoveries from proceeds obtained by their insureds as party claimants. Before doing so, we will review briefly the major forms of adjudicatory and ancillary powers over non-party claims and non-claim matters not only to illustrate the absence of non-party insurers in written civil procedure laws, but also because any possible reforms must take account of these limited powers. We then shall examine several settlement conference and adjudicatory authority cases involving non-party insurers that have prompted confusion and unfairness. We conclude with suggestions on promoting fuller recognition and participation of non-party insurers in federal civil actions, as well as with some thoughts on other non-party claims and on non-claim matters.