Upper Deck Co., LLC. v. Federal Ins. Co.

ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT, DENYING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT

This case requires the Court to determine whether Federal Insurance Company (“Federal”) has a duty to defend three separate lawsuits filed against The Upper Deck Company (“Upper Deck”). Upper Deck sells packs of sports and entertain ment trading cards, some of which contain randomly inserted “chase” cards of substantial value.

I. Introduction and Factual Background

The litigation against Upper Deck

On July 30, 1996, Marty Schwartz and others sued Upper Deck, claiming that Upper Deck violated RICO and California law by marketing its cards through methods that amounted to illegal gambling (“Schwartz litigation”). Defendant’s Statements of Facts (“DSUF”) ¶ 7. Two other plaintiffs, Chaset and Dumas, sued Upper Deck on September 13, 1999 and August 21, 2000, respectively, on allegations substantially similar to those in the Schwartz litigation. Id. ¶ 15-16. The Schwartz and Chaset causes of action were filed in the Southern District of California; the Dumas litigation was filed in San Diego Superior Court. Defendant’s Motion, at 2.

The Insurance Policy

At all relevant times,…