Seguros del Estado v. Scientific Games

Scientific Games, Inc. (Scientific) (defendant) contracted with Empresa Colombiana de Recursos Para la Salud, S.A. (Ecosalud), a Colombian government entity, to operate a lottery in Colombia. To ensure Scientific’s performance under the lottery contract, Scientific took out a performance bond issued by Seguros del Estado, S.A. (plaintiff). The bond agreement obligated Scientific to reimburse Seguros del Estado for any payments made under the bond. Ecosalud subsequently accused Scientific of breaching the lottery contract. Ecosalud issued an official declaration terminating the contract and assessed a $2.4 million penalty, which Seguros del Estado paid under the terms of its bond. A Colombian court denied Scientific’s petition to invalidate Ecosalud’s termination declaration. Scientific appealed that decision to a Colombian appellate court. While that appeal was still pending, Ecosalud filed suit to enforce its termination declaration in the United States. A federal district court granted Scientific’s lis alibi pendens motion to stay its proceedings pending the outcome of Scientific’s Colombian appeal. In the same federal district court, Seguros del Estado filed a separate suit for reimbursement of its penalty payment. Scientific filed a second lis alibi pendens motion to stay these proceedings as well. When the district court denied this second motion, Scientific appealed to the Eleventh Circuit, which had already affirmed the district court’s stay of the Ecosalud proceedings.