Magistrate Judge Says Accounting Malpractice Reinsurance Case Belongs in State Court

CAMDEN, N.J. — A New Jersey federal magistrate judge has recommended that a lawsuit demanding reinsurance proceeds for the settlement of an underlying malpractice action brought against an accounting firm and its insurer be remanded to state court.

In a Feb. 20 report and recommendation, Magistrate Judge Cathy L. Waldor of the U.S. District Court for the District of New Jersey rejected the defendant reinsurers’ argument that removal is proper under the Federal Arbitration Act because the arbitration provision in the reinsurance agreements is governed by the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

The …