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Eli Lilly and Co. v. Arch Insurance Co.

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

September 27, 2016

ELI LILLY AND COMPANY, et al. Plaintiffs,
v.
ARCH INSURANCE COMPANY, et al. Defendants.

          ORDER ON CERTAIN DEFENDANTS' MOTION TO COMPEL

          LARRY J. McKINNEY, JUDGE

         Defendants Arch Insurance Company and Arch Specialty Insurance Company (collectively, “Arch”) have moved for an Order that compels Plaintiffs Eli Lilly and Company (“Lilly”) and Eli Lilly do Brasil LTDA (“Lilly do Brasil”) (collectively, “Plaintiffs”) to produce all documents responsive to Arch's third set of document requests; to produce all communications with and between Plaintiffs' insurance brokers, including documents in JLT London's and JLT Brazil's possession; and to produce complete copies of all insurance policies requested by Arch. Dkt. No. 468. Plaintiffs contend that Arch's request for hundreds of policies not at issue in this case is overly burdensome and that the benefit of production is far outweighed by the burden of locating all of them. Dkt. No. 511. Further, Plaintiffs asserts that Arch should seek Jardine Lloyd Thompson Group (“JLT”) documents from that entity because Plaintiffs have no legal control over JLT, its employees or its documents. Id. Plaintiffs also argue that it has already produced more than 55, 000 pages of documents from JLT and the 59 documents that Plaintiffs withheld are either irrelevant or subject to the attorney-client and work-product privileges via a common interest privilege. Id. at 2.[1] Finally, Plaintiffs assert that Arch is not entitled to further discovery related to payment of insurance premiums and premium tax information (“premium information”) because Lilly has provided information and witness testimony that Lilly Brasil did not pay any portion of the Arch premium, which is all the information that is required. Further information regarding this topic would be too expensive, disruptive and intrusive to produce. Id. at 3.

         I. BACKGROUND

         On December 9, 2015, Arch filed a Motion to Stay Discovery. Dkt. No. 318.

         On December 21, 2015, Arch served on their third request for production of documents, which consisted of an additional 57 requests for production, bringing the total to 572. Dkt. No 470-1. The relevant requests include: (1) those directed to Plaintiffs' accounting practices related to allocation of insurance premiums amongst various corporate entities and information regarding the payment of premium taxes in the United States, Brazil and other countries, Dkt. No. 470-1, RFP Nos. 260-64 & Nos. 255-58; (2) documents reflecting communications between Plaintiffs and their insurance brokers, including JLT London and JLT Brazil, Dkt. No. 470-1, RFP No. 277[2]; (3) a complete set of insurance policies, as requested in September 2015, RFP Nos. 233, 235, 247 and 288, and as shown in Docket No. 469 at 8-10, including policies for any Lilly subsidiary from 1977 through 2014.

         On January 28, 2016, the Court granted in part and denied in part Arch's motion to stay discovery (“Jan. 28 Order”). Dkt. No. 342. Specifically, the Court stated, “[T]he discovery between Lilly and Arch shall be limited to the foreign law defense and arguments raised by Arch in its Motion for Judgment on the Pleadings.” Dkt. No. 342 at 4. Arch continued to fight the scope of the Jan. 28 Order; and the Court heard arguments and tried to clarify the issues on February 2, 2016 (“Feb. 2 Order”). Dkt. Nos. 346; 348.

         On February 8, 2016, Plaintiffs served responses and objections to Arch's Second Set of Requests for Production, which included the requests related to insurance policies for each Lilly entity from 1977 through 2014. Dkt. No. 511-3. Lilly objected to the requests on the grounds that policies not at issue in this lawsuit are irrelevant and that the burden and expense of production outweighs its likely benefit, but promised to produce some responsive documents. Id. at 13 & 15. Lilly objected to RFP No. 247 because it was duplicative of RFP No. 233. Id. at 25.

         According to Arch, Lilly has produced the following policies, but many of them are incomplete. Dkt. No. 469 at 8-10.

Insurer

Policy Number (if known)

Bates Reference

State of Pennsylvania

99-0263237

ARCH00000943

ARCH00001487

ARCH00001557

ARCH00003120

ACE American/ACE Group

ARCH00003496

ACE American/ACE Group

CSZ G27174346-001

ARCH00007347

Winterthur

#901/LK0105810

LILLY_00110705

Swiss Re

LILLY_00160224

North American Specialty

LILLY_00160224

Gerling

LILLY_00160224

GE Frankona

LILLY_00160224

XL

LILLY_00160224

Allied World Assurance

LILLY_00160224

Zurich

LILLY_00160224

Scor

LILLY_00160224

American Re

LILLY_00160224

XL

LILLY_00160226

Illinois Union

LILLY_00160226

XL

US00007658LI05A

LILLY_00160228

Illinois Union

LILLY_00160228

Illinois Union

LILLY_00160228

ELCO/ELGO

LILLY_00160228

Illinois Union

LILLY_00160228

Zurich

LILLY_00160228

ELCO/ELGO

LILLY_00160230

Illinois Union

LILLY_00160230

Illinois Union

LILLY_00160230

ELCO/ELGO

LILLY_00160230

ACE InternationalOther Auto

LILLY_00160381-

LILLY_00160383

AISL- Contractor's Pollution

LILLY_00160381-

LILLY_00160383

Allied World (AWAC)

LILLY_00160381-

LILLY_00160383

CNA

LILLY_00160381-

LILLY_00160383

Chubb

LILLY_00160381-

LILLY_00160383

FM Global

LILLY_00160381-

LILLY_00160383

Glacier Reinsurance

LILLY_00160381-

LILLY_00160383

HDI Global-

LILLY_00160381-

LILLY_00160383

Llyods

LILLY_00160381-

LILLY_00160383

Montpeilier Re

LILLY_00160381-

LILLY_00160383

Munich Re

LILLY_00160381-

LILLY_00160383

National Union Fire Co.

LILLY_00160381-

LILLY_00160383

QBE International-

LILLY_00160381-

LILLY_00160383

RLI

LILLY_00160381-

LILLY_00160383

SCOR

LILLY_00160381-

LILLY_00160383

Star Tech

LILLY_00160381-

LILLY_00160383

Gemini

CEX09600116-00

LILLY_00217321

Lexington

#23543096

LILLY_00217321

American Specialty

ELD10003843800

LILLY_00217321

Dkt. No. 469 at 8-10. Arch seeks the complete policies referenced above. In addition, Arch contends that Plaintiffs should be compelled to produce all claims-made foreign general liability policies that they have asserted were requested from their brokers. Id. at 10 (citing Dkt. No. 470-13). None of the “other” policies referenced by Plaintiffs in meet and confer emails were disclosed. Moreover, Arch seeks all policies issued to Lilly Brasil by an admitted insurer in Brazil, which is relevant to the issues of coverage in this case.

         On February 22, 2016, Plaintiffs asked Arch to identify which of the requests in its Third Set of Request for Production Arch believed related to its MJOP. Dkt. No. 470-2 at 5. Arch declined; instead it proposed that the parties stay Arch's discovery until after Plaintiffs filed their response to Arch's Motion for Judgment on the Pleadings, or, if Plaintiffs raised factual issues in their response to the Motion for Judgment on the Pleadings, Plaintiffs' RFP responses would be due no less than 14 days prior to Arch's deadline to file a reply. Id. at 4. Plaintiffs declined. Id. at 2. Instead, Plaintiffs served their responses on April 1, 2016. Dkt. No. 470-3. With respect to the relevant requests, Plaintiffs stated that, notwithstanding the overbreadth of the requests (as pertaining to jurisdictions not at issue in the case) and the expense, it would “produce non-privileged responsive documents for the policies at issue in this case to the extent they have not already been produced, including but not limited to invoices, receipts, and check stubs evidencing payment of insurance premiums.” See, e.g., id. at 8.

         On April 15, 2016, Arch inquired about the promised premium information. Dkt. No. 470-5 at 1. Plaintiffs responded that it was working to identify responsive documents. Id.

         On June 2, 2016, the other issues that are the subject of this Motion to Compel, Arch took issue with Plaintiffs' production of communications with insurance brokers, JLT in particular. Dkt. No. 470-7 at 3. Arch stated that Plaintiffs made the information relevant by attaching JLT affidavits to their Complaint. Id.

         On June 20, 2016, Plaintiffs responded by reminding Arch of the partial stay of discovery as well as their well-founded objections to the discovery requested. Dkt. No. 471-1 at 1. Further, Plaintiffs informed Arch of the documents that it intended to produce with respect to each of the disputed topics. As to the premium payments, Plaintiffs claimed that they would provide “documentation evincing that (1) Lilly do Brasil did not pay any of the premiums for the policies at issue; (2) no premiums were ever allocated to Lilly do Brasil; and (3) Lilly do Brasil did not pay any premium taxes.” Id. at 3. Further, the response explained the difficulty in producing the relevant documents, but explained how the premiums are paid and how they are allocated. Id. Plaintiffs further asserted that the burden to gather all of the requested information was high and the benefit to Arch minimal; therefore, under the new proportionality in the Rule 26, the information was more properly sought through an interrogatory. Id. at ...


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