Ky. Federal Judge Bifurcates Bad Faith Claims, Stays Discovery in Pollution Coverage Action

PADUCAH, Ky. — A Kentucky federal magistrate judge has bifurcated bad faith claims asserted by CC Metals & Alloys LLC (CCMA) against Fortitude Reinsurance Company Ltd. and American International Specialty Lines Insurance Co. in a pollution coverage action, and stayed discovery on the bad faith claims until the coverage claims are resolved.

On April 14, Magistrate Judge Lanny King of the U.S. District Court for the Western District of Kentucky agreed with Fortitude Re and AISLIC that courts should bifurcate and stay discovery on bad faith claims in insurance disputes to promote judicial economy, prevent prejudice to insurers, and avoid …