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1 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 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 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. ; AMERICAN RE-INSURANCE CO. ; AMERICAN ZURICH INSURANCE CO. ; APPALACHIAN. MAG. : WILSON. NOTICE OF REMOVAL

2 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 2

3 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 3

4 ! 0 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 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 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 4

5 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, 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. 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. Consistent with the provisions of 9 U.S.C. 202, the arbitration agreements contained in CO 01\ rr.~ t"j ~ U3 _gt~. 5

6 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 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 : 9 U. S. C 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. 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 m CN required by 28 U.S.C. 1446(d). r-.,, 1r A.C.E. does not make any representation as to the legal sufficiency of service of process on any other C7o defendant to this action. {.1"t 6 CD t~t

7 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 (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 P.O. Box New Orleans, LA Tel. No. (504) OF COUNSEL : ATTORNEYS FOR A.C.E. INSURANCE COMPANY, LTD. 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 (212) 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, Jam s M. Garner (#19589)