District of Nevada Holds Entire Lawsuit is a Single Claim subject to Antitrust Sublimit
In a win for Wiley’s client, the U.S. District Court for the District of Nevada, applying Texas law, has held that a complaint constitutes a single “Claim” under a directors and officers liability policy as a “civil . . . proceeding” “commenced by service of a complaint,” and could not be construed as a collection of written demands. EB Holdings II, Inc. v. Illinois Nat’l Ins. Co., 2026 WL 559764 (D. Nev. Feb. 27, 2026). The court further held that coverage for the lawsuit at issue was subject to a $5 million antitrust sublimit because at least two causes of action in the underlying complaint arose out of alleged antitrust violations and, in any event, each cause of action was linked to the violations.
The insureds, a head of a lead empire and a holding company, were sued by investors alleging that they engaged in an illegal price-fixing scheme to keep the price of scrap metal used to make lead low, thereby inflating the companies’ earnings and their securities’ value in the secondary market. The insureds sought coverage under its D&O policies for a settlement of the lawsuit. The primary policy contained an “antitrust sublimit,” which limited coverage under the primary policy to $5 million for any “Antitrust Claim,” defined to mean “any Claim alleging, arising out of, based upon or attributable to, or in any way involving, either directly or indirectly, antitrust violations.” The primary insurer asserted that, if coverage for the claim was not barred by other exclusions, the antitrust sublimit applied. And the excess insurers asserted that a sublimit provision contained in the first excess policy, which excluded coverage “[i]f any loss under any Underlying Insurance is subject to a sub-limit,” barred coverage entirely under the excess policies.
To determine whether the underlying lawsuit was an “Antitrust Claim,” the court first addressed whether the underlying complaint constituted a single Claim. The primary policy defined a Claim to include both a “written demand for monetary or non-monetary relief” and “a civil . . . proceeding” “commenced by service of a complaint.” The insureds argued that the court had to parse the complaint and evaluate each cause of action individually as a “written demand” for relief. The court disagreed, holding that to construe each cause of action as a written demand would ignore the policy’s language and structure. The court held that a “civil proceeding commenced by a complaint” refers to an entire lawsuit, and interpreting each cause of action as a Claim would render the “civil proceeding” definition mere surplusage and unnecessary.
Next, the court assessed whether the underlying action fell within the definition of an “Antitrust Claim.” The court noted that, given the broad prefatory language to the definition, the “threshold to trigger this sublimit is low.” At the very least, the court found that the causes of action in the underlying complaint for fraud-in-the-inducement and racketeering arose out of antitrust violations because they were based on representations that were false because of the alleged price-fixing scheme. The court also held that the remaining causes of action could be linked to antitrust violations for similar reasons but concluded that reaching that issue was ultimately unnecessary.
The court declined to find that two other exclusions under the primary policy barred coverage, resulting in dismissal of only the excess carriers on summary judgment under the sublimit provision.
