3rd Circ. Lets Insurers Off Hook In Juvie Kickback Scandal

Law360, New York (June 21, 2012, 3:30 PM EDT) -- Colony Insurance Co. and General Star Indemnity Co. have no duty to defend a juvenile detention facility operator that faced class action and criminal claims for allegedly paying judges to send teens to its care centers, the Third Circuit ruled Thursday.

A three-judge panel affirmed a Pennsylvania federal court’s decision to nix coverage for Mid-Atlantic Youth Services Corp., which managed several juvenile detention facilities in Pennsylvania. MAYS and its owner, Robert Powell, allegedly paid approximately $2.6 million to two judges of the Luzerne County Court of...
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