Upper Deck Co. has sued its general liability insurer, Liberty Mutual Fire Insurance Co., in California federal court last week, alleging that Liberty Mutual failed to satisfy its defense obligations in an antitrust lawsuit brought against Upper Deck by rival trading card maker Leaf Trading Cards LLC. According to the complaint, Liberty Mutual agreed that the allegations in Leaf’s suit triggered coverage under Upper Deck’s policy and acknowledged its duty to defend and Upper Deck’s right to independent counsel. However, Liberty Mutual stopped paying the defense fees of one of the firms Upper Deck hired, and also failed to pay the fees of a different firm.

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The Ninth Circuit in Teleflex Medical Incorporated v. National Union Fire Insurance Company of Pittsburgh PA, No. 14-56366 (9th Cir. Mar. 21, 2017) affirmed a jury verdict finding that AIG must pay $3.75 million in damages plus attorneys’ fees to cover LMA North America, Inc.’s (“LMA’s”) settlement with its competitor over allegedly disparaging advertisements that characterized a competitor’s products as unsafe.

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The recovery of attorneys’ fees is an important issue in almost every lawsuit, and especially for policyholders in litigation against their insurer.  In almost every case, the policyholder and its insurer will dispute whether the policyholder’s attorneys’ fees are reasonable and necessary, with insurer arguing that they are not.  On Tuesday, February 7, 2016, the Texas Supreme Court heard oral argument in In re National Lloyds Insurance Company, Wardlaw Claims Service, Inc., and Ideal Adjusting, Inc., Case No. 15-0591, regarding whether a policyholder seeking recovery of its attorneys’ fees should be permitted to discover its insurance company’s attorneys’ fee information—such as hourly rates and time spent on the matter.

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