Source:

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF LOUISIANA

LAKE CHARLES DIVISION

RICHARD P . IEYOUB, ATTORNEY GENERAL CIVIL ACTION ex reL STATE OF LOUISIANA

vs .

SEC . : JUDGE TRIMBLE

THE AMERICAN TOBACCO COMPANY : A :tiSERICAN

. MAG . : WILSON BRANDS, INC ; R . J . REYNOLDS TOBACCO

COMPANY ; RJR NABISCO, INC . ; BATUS

CORPORATION ; BROWN & WILLIAMSON TOBACCO CORPORATION ; PHILIP MORRIS COMPANIES INC . ;

PHILIP MORRIS INCORPORATED (PHILIP MORRIS . NOTICE OF REMOVAL U.S.A .) ; THE BROOKE GROUP LIMITED ; LIGGETT

GROUP, INC . ; LIGGETT & MEYERS, INC ; LOEWS CORPORATION; LORILLARD CORPORATION ; UNITED STATES TOBACCO SALES AND

MARKETING COMPANY, INC . ; UNITED STATES TOBACCO COMPANY, INC . ; THE COUNCIL FOR TOBACCO RESEARCH -- U.S .A . INC . (SUCCESSOR TO TOBACCO INSTITUTE RESEARCH COMMITTEE) ; THE TOBACCO INSTITUTE, INC . ; HILL &

KNOWLTON, INC . ; GENERIC PRODUCTS CORPORATION ; PELICAN CIGAR CO . ;

SCHLESINGER WHOLESALERS & AUTOMOTIVE CIGARETTE SERVICE, INC . ; BATON ROUGE TOBACCO CO. ; MALONE & HYDE, INC . ; AND "A" THROUGH "Z" ENTITIES ; A .C . E . INSURANCE CO ., LTD . ; ADMIRAL INSURANCE CO. ; AETNA

CASUALTY & SURETY CO . ; AGRICULTURAL EXCESS & SURPLUS INSURANCE CO . ; ALLIANZ INSURANCE CO . ; ALLIANZ UNDERWRITERS, INC . ; ALLIANZ

VERSICHERUNGS-AKTIENGESELLSCHAFT; AMERICAN ALLIANCE INSURANCE CO . ; AMBASSADOR INSURANCE CO . ; MARSH & MCLENNAN ; C .T . BOWRING & CO . INSURANCE, LTD . (LLOYD'S) ; AMERICAN CENTENNIAL INSURANCE CO . ; AMERICAN EXCESS INSURANCE ASSOCIATION; AMERICAN EXCESS INSURANCE COMPANY; AMERICAN HOME ASSURANCE CO ., also wrongfully referred to as

AMERICAN HOME INSURANCE CO . ; AMERICAN INDEMNITY CO . ; AIU INSURANCE CO ., wrongfully referred to as AMERICAN INTERNATIONAL

UNDERWRITERS INSURANCE CO . ; AMERICAN MANUFACTURERS MUTUAL INSURANCE CO . ; AMERICAN MARINE INSURANCE GROUP ; AMERICAN MOTORISTS INSURANCE CO . ; AMERICAN NATIONAL FIRE INSURANCE CO . ;

INSURANCE CO, 4RIG-ARAB INSURANCE GROUP (B S .C .) ; ASSOCIATED INTERNATIONAL

INSURANCE CO . ; ATLANTA INTERNATIONAL INSURANCE CO . : BIRMINGHAM FIRE INSURANCE CO. : CENTAUR INSURANCE CO . . CENTENNIAL INSURANCE CO . : CENTURY INDEMNITY CO ., as successor to CCI INSURANCE CO ., as successor to INSURANCE CO . OF NORTH AMERICA, and CIGNA SPECIALTY INSURANCE CO . (f/k/a CALIFORNIA UNION INSURANCE CO .) ; CIGNA INSURANCE CO . ; CITY INSURANCE CO . : CHICAGO INSURANCE CO . ; CHUBB CUSTOM INSURANCE CO . ; COLUMBIA CASUALTY CO . ; COMMERCIAL UNION INSURANCE CO. ; CONSTITUTION STATE INSURANCE CO . OF HARTFORD CONN . ; CONTINENTAL CASUALTY CO . ; CONTINENTAL INSURANCE CO . :

CONTINENTAL INSURANCE COS ; DAIRYLAND INSURANCE CO . ; EMPLOYERS COMMERCIAL UNION INSURANCE CO. ; EMPLOYERS

COMMERCIAL UNION INSURANCE CO . OF AMERICA ; EMPLOYERS INDEMNITY CO . ; EMPLOYERS INSURANCE OF WAUSAU; EMPLOYERS MUTUAL CASUALTY CO . ;

EMPLOYERS MUTUAL LIABILITY INSURANCE CO . OF WISCONSIN ; EMPLOYER'S SURPLUS LINES INSURANCE COMPANY; EUROPEAN GENERAL REINSURANCE CO . ; FEDERAL INSURANCE CO . ; FIREMAN'S FUND INSURANCE CO . ; FIREMAN'S FUND INSURANCE CO . OF LOUISIANA; FIREMAN'S FUND INSURANCE COS . ; FIRST STATE INSURANCE CO . ; FIRST STATE UNDERWRITERS AGENCY OF NEW ENGLAND REINSURANCE CORP . ; AMERICAN EMPIRE SURPLUS LINES INSURANCE COMPANY f/k/a GREAT AMERICAN SURPLUS LINES

INSURANCE CO . ; GOVERNMENT EMPLOYEES INSURANCE CO . ; GRANITE STATE INSURANCE CO. ; HARBOR INSURANCE CO . ; HARTFORD ACCIDENT & INDEMNITY CO . ; HARTFORD CASUALTY INSURANCE CO . ; HARTFORD

INSURANCE CO . ; HOME INSURANCE CO . ; HOME INSURANCE CO . OF INDIANA; HIGHLANDS INSURANCE CO . ; HOUSTON GENERAL

INSURANCE CO . ; HUDSON INSURANCE CO . ; H .S . WEAVERS (UNDERWRITING) AGENCIES, LTD . ; IDEAL MUTUAL INSURANCE CO . ; INDEMNITY INSURANCE CO . OF NORTH AMERICA ;

INDUSTRIAL INDEMNITY INSURANCE CO . ; INDUSTRIAL INDEMNITY CO . OF HAWAII, LTD . ; WESTCHESTER SURPLUS LIFE INSURANCE CO . f/k/a INDUSTRIAL INSURANCE CO . OF HAWAII, LTD . ; INSURANCE CO . OF THE STATE OF PA . ; INTEGRITY INSURANCE CO . ; INTERNATIONAL

INSURANCE CO . INTERNATIONAL SURPLUS LINES INSURANCE CO ; INTERSTATE FIRE & CASUALTY CO . ; INTERSTATE FIRE & CASUALTY INSURANCE CO . ; J.H . MINET & CO ., LTD . ; LANDMARK

INSURANCE CO . ; LEXINGTON INSURANCE CO . ; LIBERTY MUTUAL INSURANCE CO . ; INSTITUTE OF CERTAIN LLOYD'S OF LONDON UNDERWRITERS ; LUMBERMAN'S MUTUAL CASUALTY CO . ;

WESTPORT INSURANCE CORPORATION f/k/a PURITAN INSURANCE CO . f/k/a MANHATTAN FIRE & MARINE INSURANCE CO . ; MARYLAND

CASUALTY CO . ; MEAD REINSURANCE CO . ; MEMBER COMPANIES OF AMERICAN

INTERNATIONAL GROUP ; MEMBER COMPANIES OF AMERICAN INTERNATIONAL GROUP

NATIONAL UNION ; MIDLAND INSURANCE CO . ; MISSION INSURANCE CO . ; MISSION NATIONAL INSURANCE CO . ; MUTUAL FIRE, MARINE & INLAND INSURANCE CO . ; NATIONAL CASUALTY CO. ; NATIONAL SURETY CORP . (FIREMAN'S FUND) INSURANCE COS . ; NATIONAL UNION FIRE INSURANCE CO . ; NATIONAL UNION FIRE

INSURANCE CO. OF PITTSBURGH, PA . ; NATIONAL SURETY CORP . ; NEW ENGLAND INSURANCE CO . ; NEW ENGLAND REINSURANCE CORP . ; NEW YORK INSURANCE EXCHANGE ; ALLSTATE INSURANCE CO., as successor-in-interest to NORTHBROOK EXCESS & SURPLUS INSURANCE f/k/a NORTHBROOK

INSURANCE CO. pursuant to merger effective 1/1/85 and NORTHBROOK INDEMNITY CO . ; NORTH RIVER INSURANCE CO . ; NORTHWESTERN NATIONAL

INSURANCE CO. ; OLD REPUBLIC INSURANCE CO . ; PACIFIC EMPLOYERS INSURANCE CO . ; PACIFIC INSURANCE CO . ; RELIANCE NATIONAL

INDEMNITY CO ., sued as PLANET INSURANCE CO . ; PROGRESSIVE CASUALTY INSURANCE CO . ;

EVEREST REINSURANCE CO . f/k/a PRUDENTIAL REINSURANCE CO . ; RAMSEY INSURANCE CO . ; RELIANCE INSURANCE CO . ; RELIANCE NATIONAL INSURANCE CO . OF NEW YORK, sued as RELIANCE INSURANCE CO . OF NEW YORK; REPUBLIC

INSURANCE CO . ; RESOLUTE REINSURANCE CO . ; Rid INSURANCE CO . ; ROYAL INDEMNITY CO., improperly named as ROYAL INSURANCE CO . ; ROYAL INSURANCE COMPANY OF AMERICA; SCOTTSDALE INSURANCE CO . ; ST . PAUL FIRE & MARINE INSURANCE CO . ; ST . PAUL SURPLUS LINES INSURANCE CO. ; STONEWALL INSURANCE CO . ; SUN INDEMNITY CO . OF NEW YORK ; THE FIDELITY AND CASUALTY COMPANY OF NEW YORK : THE HOME INDEMNITY CO . ; THE SEVEN PROVINCES INSURANCE CO ., LTD . ; TIG

!

INSURANCE CO . . TRANSAMERICA INSU2ANCE CO . ; TRAtiSAMERICA I .NSL'RANCE GROUP ; TRANSAMERICA INSURANCE SERVICES :

TRANSCONTINENTAL INSURANCE CO . ; TRANSIT CASUALTY CO . ; TRAVELERS INSURANCE COS ., TWIN CITY FIRE INSURANCE CO . ; UNITED STATES FIRE INSURANCE CO . : UTICA MUTUAL

INSURANCE CO . ; VALLEY FORGE INSURANCE CO. ; WAUSAU INSURANCE COS . ; WESTCHESTER FIRE INSURANCE CO . ; WESTERN EMPLOYERS

INSURANCE CO . ; X .L . INSURANCE CO ., LTD . ; ZURICH INTERNATIONAL LTD . ; ZURICH INSURANCE CO . :

NOTICE OF REMOVAL

0

To: THE HONORABLE JUDGES OF'TIiE UNITED STATES

DISTRICT COURT FOR THE WESTERN DISTRICT OF

LOUISIANA, LAKE CHARLES DIVISION

Petitioner, A .C .E . Insurance Company, Ltd_ ("A .C .E ."), through "

undersigned counsel, with full reservation of any and all defenses, including lack of personal

jurisdiction, respectfully files this Notice of Removal and states :

1 . On March 13, 1996, the above-entitled action was commenced by plaintiff,

Louisiana Attorney General Richard P . Ieyoub, against The American Tobacco Company and

other manufacturers and distributors of tobacco products and certain of their public relations

firms and trade organizations (the "Tobacco Defendants") in the Fourteenth Judicial District

Court, Parish of Calcasieu, State of Louisiana, bearing docket no . 96-1209 . Plaintiff

subsequently filed First, Second and Third Supplemental and Amending Petitions .

2 . On March 14, 1997, plaintiff filed its Fourth Supplemental and Amending

Petition, naming as party defendants numerous insurance companies that allegedly issued

policies of liability insurance to various of the Tobacco Defendants . By its Fifth

Supplemental and Amending Petition, filed on or about April 3, 1997, plaintiff asserted

claims against additional insurers that allegedly issued policies of liability insurance to R .J .

Reynolds Tobacco Company ("R .J . Reynolds") . A.C .E . has been named as a defendant in

the Fourth and Fifth Supplemental and Amending Petitions in its capacities as an alleged

insurer of Brown & Williamson Tobacco Corp . ("Brown & Williamson"), Philip Morris

Incorporated ("Philip Morris") and R .J . Reynolds . Service of the Summons and Petition, as

amended and supplemented, was received by A .C .E . in Hamilton, Bermuda on May 9, 1997 .

Copies of all pleadings served on A .C .E . are attached as Exhibit A .

3 . By its Supplemental and Amending Petitions, plaintiff seeks to recover health

care expenses allegedly attributable to the treatment of illnesses caused by the use of tobacco

products . Plaintiff also seeks an injunction prohibiting the tobacco defendants from

promoting the sale of their tobacco products to minors . Punitive damages, attorney's feea

and legal interest are also sought by the plaintiff .

4 . A .C .E . is a Bermuda corporation with its principal and sole place of business

in Hamilton, Bermuda . See the Declaration of Peter N . Mear submitted in support of this

removal, Exhibit B .

5 . Plaintiff asserts claims under the contracts of excess liability insurance A .C .E .

issued to Philip Morris, Brown & Williamson and R .J . Reynolds under the Louisiana Direct

Action Statute . La .R .S . 22 :655 . Each of these insurance contracts contains a written

arbitration clause, which mandates that "[a)ny dispute, controversy or claim arising out of or

relating to this Policy" be settled by arbitration. Certified copies of the subject policies are

attached as Exhibits C, D, E .

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6 . These are commercial contracts which are not entirely between citizens of the

United States as one of the contracting parties, A .C .E ., is a Bermuda corporation .

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Consistent with the provisions of 9 U .S .C . § 202, the arbitration agreements contained in

each of the A .C .E . policies fall under the Convention on the Recognition and Enforcement

of Foreign Arbitral Awards, 21 U .S .T . 2517, T .I .A .S . No . 6997 . 330 U .N .T .S . 3 (entered

into force for the United States on December 29, 1970) . Pursuant to 9 U .S .C . § 203, this

federal district court has original jurisdiction over this action, which falls under the

Convention on the Recognition and Enforcement of Foreign Arbitral Awards .

7 . As a result of the foregoing, this action may be removed to the United States

District Court for the Western District of Louisiana pursuant to 9 U .S .C . § 205, which

provides :

Where the subject matter of the action or proceeding pending in

a State court relates to an arbitration agreement or award falling

under the Convention, the defendant or the defendants may, at

any time before the trial thereof, remove such action or

proceeding to the district court of the United States for the

district and division embracing the place where the action or

proceeding is pending .

9 U . S . C . § 205 .

8 . Although A.C .E . contends that consent to removal by co-defendants is not

required under 9 U .S .C . § 205, A.C .E. represents that all defendants which were properly

served with the Fourth and Fifth Supplemental Petitions consent to this removal . All such

defendants acknowledge their consent to this removal in the "Consent to Removal" pleadings

attached as Exhibit F to this Petition .

9 . A .C .E . will provide the Court with anything it requires under 28 U .S .C . §

1446(a) and/or 28 U .S .C . § 1447(b) .

10 . A .C .E . will give written notice of the filing of this Notice of Removal as

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required by 28 U .S .C . § 1446(d) . r-.,,

11 . A .C .E . will give written notice of this removal and file a copy thereof with the

Clerk of the Fourteenth Judicial District Court, Parish of Calcasieu . State of Louisiana . as

required by 28 U .S .C . § 14-46(d) .

12 . A .C .E . reserves the right to amend or supplement this Notice of Removal .

WHEREFORE, A .C.E. Insurance Company, Ltd . respectfully requests that

this action proceed in this Court as an action properly removed to it .

Dated : June 12th, 1997

JaFnM . Garnei T .A . (#19589)

M M . Young (#20446)

McGLINCHEYSTAFFORD

643 Magazine Street 70130

P .O . Box 60643

New Orleans, LA 70160-0643

Tel . No . (504) 586-1200

ATTORNEYS FOR

A .C .E . INSURANCE COMPANY, LTD .

OF COUNSEL:

Mitchell L . Lathrop, Esq .

Kimball Ann Lane, Esq .

Christine M . Megna, Esq .

LUCE, FORWARD, HAMILTON & SCRIPPS LLP

Citicorp Center

153 East 53rd Street

New York, New York 10022

(212) 754-1414

CERTIFICATE OF SERVICE

I hereby certify that a copy of the above and foregoing Notice of Removal has been

hand delivered to plaintiff s counsel, Drew Ranier, Esq., and forwarded to all other counsel

of record by depositing same in the U .S . Mail, properly addressed and postage prepaid .

New Orleans, Louisiana, this 12th day of June, 1997 .