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Berlinsky v. Eli Lilly and Co.

United States District Court, S.D. Indiana, Indianapolis Division

September 19, 2016

ELI LILLY AND COMPANY, LILLY USA LLC, and JULIE MARTIN, in her individual capacity, Defendants.



         This matter is before the Court on a Motion to Dismiss filed pursuant to Federal Rule of Civil Procedure 12(b)(6) by Defendants Eli Lilly and Company, Lilly USA LLC (collectively “Lilly”), and Julie Martin (“Martin”) (collectively “the Defendants”) (Filing No. 18). Plaintiff LeeAnne Berlinsky's (“Berlinsky”) employment with Lilly ended on September 10, 2014, with a “Release Agreement” between Berlinsky and Lilly. The Release Agreement included a confidentiality provision. After Lilly responded to a subpoena from Berlinsky's ex-husband and produced the Release Agreement and other documents, Berlinsky filed this lawsuit for claims of breach of contract against Lilly and defamation against Martin, a member of Lilly's law department. The Defendants filed their Motion to Dismiss, asserting that there is an absolute privilege against liability for responding to a subpoena and there was no breach of the Release Agreement under the contract's provisions. For the following reasons, the Court GRANTS the Motion to Dismiss.

         I. BACKGROUND

         Lilly is a publically owned pharmaceutical corporation headquartered in Indianapolis, Indiana. Berlinsky was employed by Lilly for almost thirteen years. She has a PhD in healthcare administration, and she was a senior director of sales with Lilly before her employment ended on September 10, 2014. She resides in South Carolina. Defendant Martin is employed by Lilly as an assistant consultant in the legal operations department. (Filing No. 13 at 1-2.)

         Berlinsky's separation of employment from Lilly was by mutual agreement of the parties as documented in a signed “Release Agreement, ” executed on October 3, 2014 (Filing No. 19-1). In the Release Agreement, Berlinsky and Lilly agreed that Berlinsky's last day of employment at Lilly was September 10, 2014. The parties agreed that the “Agreement is motivated solely by the desire to part ways on amicable terms. By carrying out the terms of this Agreement, neither admits any wrongful action or any liability to the other.” Id. at 1.

         The Release Agreement provided for a severance payment to Berlinsky and a release of all claims or potential claims against Lilly. It also contained a confidentiality clause that stated, “[t]hese promises of confidentiality are material terms of this Agreement.” (Filing No. 19-1 at 6.) The Release Agreement noted that the parties were entering into an agreement “[i]n consideration of the mutual covenants and conditions set forth in this Agreement.” Id. at 1.

         In the Release Agreement, Berlinsky agreed to cooperate with Lilly in the future should her testimony be necessary for any legal proceedings. The Release Agreement also provided for a smooth transfer of Berlinsky's job responsibilities and the return of Lilly's property. It also stated that the “Agreement contains the entire understanding between the parties relating to the subject matter hereof and may not be amended, supplemented or otherwise modified except by an instrument in writing signed by both parties.” (Filing No. 19-1 at 8.)

         In September 2015, when she filed her Amended Complaint, Berlinsky had been divorced from her ex-husband for more than four years. Her ex-husband is an attorney in South Carolina. During the four years, Berlinsky's ex-husband repeatedly threatened Berlinsky with family court proceedings to limit her custodial rights of their minor child, increase his visitation rights, and decrease his child support obligations. (Filing No. 13 at 3). Berlinsky has spent more than $200, 000.00 in attorney fees defending herself against her ex-husband in family court. Id.

         In December 2014, Berlinsky's ex-husband learned that she was no longer working for Lilly, so he initiated another proceeding in a South Carolina family court and alleged that Berlinsky had failed to maintain adequate insurance coverage for their minor child. Id. In connection with the family court proceeding, Berlinsky's ex-husband served a subpoena on Lilly, requesting Berlinsky's personal employment information. The subpoena directed Lilly to produce Berlinsky's personnel file and answer the following questions:

[W]hether she resigned or was terminated, the reason for the resignation or termination, any prior disciplinary actions or warnings, and a copy of her severance package. . . . All notes, handwritten or electronic, intercompany e-mails, regular emails, memos and/or any and all forms of communication regarding why LeeAnne Berlinsky is no longer employed by Eli Lilly whether for misconduct, alleged misconduct, breach of company policy, breach of industry standards, criminal concerns, if there has been any drug use and/or arrests which may in any way affect cessation of LeeAnne Berlinsky's employment with Eli Lilly regardless of whether she quit or was forced to resign, resigned or was fired.

(Filing No. 13 at 3.) Berlinsky filed a motion to quash the subpoena served on Lilly, and she sent a copy of the motion to quash on January 29, 2015, to Martin in Lilly's legal department.

         In response to the subpoena, on behalf of Lilly, Martin asserted objections on the bases that the subpoena sought documents protected from disclosure by the attorney-client privilege and sought information that was not sufficiently tailored to the issues as Lilly understood them and because Lilly was not subject to the subpoena power of an out-of-state court. Along with the objections, Martin produced Berlinsky's “personal history” folder, which contained the Release Agreement. Martin provided the subpoena response and folder, on behalf of Lilly, to Berlinsky's ex-husband on February 23, 2015. Id. at 4.

         After Berlinsky's ex-husband received Lilly's subpoena response from Martin, he sent a follow-up letter to Martin on February 24, 2015, asserting that there were several documents missing from Lilly's response to the subpoena, specifically he requested any documents that led to the formation of the Release Agreement, documentation of the reason for Berlinsky's termination, and documents indicating why Berlinsky was no longer working for Lilly. Because Berlinsky's counsel determined that these additional documents were not relevant to the family court proceeding, her counsel notified Martin on February 25, 2015, that if any additional personal and confidential information about Berlinsky was released to Berlinsky's ex-husband as a result of the follow-up letter, Berlinsky would consider the confidentiality provision of the Release Agreement breached.

         On March 6, 2015, Lilly asserted that the subpoena sought “confidential personal information that is not sufficiently tailored to the issues Lilly understands to be at issue” (Filing No. 13 at 5); however, Martin produced additional employment documents regarding Berlinsky through outside counsel. Id.

         While the Release Agreement signed by Lilly on October 3, 2014, stated that it contained the entire understanding of the parties and that Berlinsky's employment ended through mutual agreement, Lilly produced a letter pre-dating the Release Agreement that indicated Berlinsky was being separated for “misconduct as a member of management.” This letter, which pre-dated the Release Agreement, contained information that contradicted the parties' agreement that Berlinsky's termination was by mutual agreement. Id. Berlinsky's ex-husband is using this earlier letter produced by Martin against Berlinsky in the ...

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