N.J. Judge Rejects Attempt to Apply Direct Action Exception to Superstorm Sandy Coverage Case

NEWARK, N.J. — A New Jersey judge has refused to remand a Superstorm Sandy coverage lawsuit to state court, ruling that the amount in controversy exceeds the jurisdictional threshold for keeping the matter in federal court, and that diversity of the parties cannot be negated by asserting that the case is a direct action against an insurer.

Senior U.S. District Judge William H. Walls said in a May 14 opinion that plaintiff Carevel LLC’s claim for costs associated with repairing damage caused by Sandy, combined with its bid for punitive damages against Aspen American Insurance Co., could exceed the $75,000 …