United States District Court, S.D. Indiana, Indianapolis Division
MCKINNEY, UNITED STATES DISTRICT JUDGE.
matter comes before the Court on Defendants', Arch
Insurance Company and Arch Specialty Insurance Company's
(collectively, “Arch's”), Motion to Compel
the Depositions of Ian S. Pettman and Mike Brown or, in the
Alternative, to Strike the Affidavits of Ian S. Pettman and
Mike Brown, and Motion for Sanctions (the
“Motion”). Dkt. No. 631. In the Motion, Arch
seeks to compel the depositions of two British citizens that
submitted affidavits on behalf of Plaintiffs, Eli Lilly and
Company and Eli Lilly do Brasil, Ltda. (collectively,
“Lilly”), or alternatively, to strike their
affidavits in connection with Lilly's Second Amended
Complaint and Cross Motion for Summary Judgment. Dkt. No. 632
at 35. Arch also requests that the Court order Lilly
“to pay Arch's costs incurred in conjunction with
this motion and [Arch's] prior attempts to obtain”
the desired depositions. Id. For the reasons stated
herein, the Court GRANTS in part and DENIES in part
this case involves an insurance dispute that arises from
claims against Eli Lilly do Brasil (“Lilly
Brasil”) for alleged environmental contamination and
products liability injuries related to a plant in Brazil.
Dkt. No. 289, ¶¶ 10-55. In its Second Amended
Complaint, Lilly asserts that the liabilities of Lilly
Brasil, a wholly-owned subsidiary of Eli Lilly and Company
(“Lilly U.S.”), are covered by certain primary
and excess insurance policies purchased by Lilly U.S.
Id. at ¶¶ 56-98. Lilly also asserts that
if Lilly Brasil is not expressly covered, certain excess
insurance policies should be reformed to allow for such
coverage based on the doctrine of mutual mistake.
Id. at ¶¶ 99-175. In support of its
allegation regarding mutual mistake, Lilly attached
affidavits (the “Affidavits”) of British
citizens, Ian S. Pettman and Mike Brown (collectively, the
“JLT Witnesses”), to its First Amended Complaint,
Dkt. No. 211, Exs. I (“Pettman Aff.”) & J
(“Brown Aff.”), and relied on the Affidavits in
its Cross Motion for Partial Summary Judgment. Dkt. No. 460
at 9-10. While both of the JLT Witnesses are employees of the
British company, JLT Specialty Limited (“JLT”),
the Affidavits were executed by the JLT Witnesses in their
individual capacities, rather than their official capacities
for JLT. See generally, Pettman Aff; Brown Aff.
Affidavits, the JLT Witnesses explained that they have worked
closely with Lilly U.S. to provide and manage worldwide
excess commercial general liability, employee liability, and
auto insurance coverage to Lilly U.S. and its subsidiaries.
Pettman Aff., ¶¶ 4-6; Brown Aff., ¶ 5. Because
JLT is not licensed in the United States, JLT had to work
directly with insurance brokers in the United States (the
“U.S. Brokers”), who had direct contact with the
insurers that provided such coverage to Lilly U.S. Pettman
Aff., ¶ 7. Although JLT could not directly obtain this
worldwide coverage for Lilly U.S., it remained heavily
involved with the procurement of coverage by reviewing quotes
from insurers and communicating with the U.S. Brokers
regarding the desired coverage. Id. at ¶ 9. In
light of their experiences working with Lilly U.S., the JLT
Witnesses stated that they believe that the insurers
providing coverage to Lilly U.S., including Arch, “were
aware, and intended, that those policies [at issue] should
cover Lilly [U.S.]'s world-wide operations, including
those at, or arising from the activities of Lilly
[U.S.]'s wholly-owned subsidiary, [Lilly Brasil].”
Pettman Aff., ¶ 10; Brown Aff., ¶ 9. The JLT
Witnesses further “affirm[ed] under the penalties of
perjury that [their] affidavit[s are] true and accurate, to
the best of [their] knowledge and belief[s].” Pettman
Aff. at 4; Brown Aff. at 3.
December 2, 2016, Arch filed a Motion to Strike the
Affidavits, pursuant to Federal Rules of Civil Procedure
37(c)(1)(C) and 12(f). Dkt. No. 554. On February 8, 2017, the
Court denied Arch's Motion to Strike. Dkt. No. 603. The
Court found that, even though certain aspects of Lilly
U.S.'s relationship with JLT were “troubling,
” Arch undoubtedly knew about the JLT Witnesses since
the filing of Lilly's First Amended Complaint and could
have approached the JLT Witnesses directly for discovery even
though they are British citizens. Id. at 4. The
latter was suggested, in part, by Lilly in response to
Arch's Motion to Strike. Dkt. No. 568 at 3, 7.
the Court's ruling on Arch's Motion to Strike, Arch
proceeded to seek depositions of the JLT Witnesses through
the United Kingdom's court system (the “UK
Court”), in accordance with the Hague Convention. Dkt.
No. 632 at 8. On February 28, 2017, Master McCloud of the UK
Court initially ordered that Arch may take the oral evidence
of the JLT Witnesses for up to seven hours each, including
time for cross-examination and re-direct examination of the
JLT Witnesses. Dkt. No. 632, Ex. 5.
objected and sought to set aside Master McCloud's order.
Dkt. No. 652 at 10. Prior to the hearing that was to take
place on JLT's motion to set aside, Arch and JLT
negotiated several terms regarding the process by which the
JLT Witnesses would be deposed, including limiting the scope
of questioning, providing the JLT Witnesses with a summary of
the lines of questioning seven days in advance, and treating
the depositions as trial depositions, as opposed to discovery
depositions. Id. However, on the morning of the
hearing, Arch indicated that it did not wish to proceed with
the depositions without the ability to cross-examine the JLT
Witnesses and admitted that such cross-examination is not
permitted under English law. Id. at 11. On March 16,
2017, Senior Master Fontaine set aside Master McCloud's
order in its entirety, finding that Arch is not entitled to
cross-examine the JLT Witnesses under English law. Dkt. No.
652, Ex. A-1 at 11. Senior Master Fountaine further ordered
Arch to pay fees to JLT. Id. at 12.
light of the orders issued in the UK Court, Arch now seeks to
either compel the JLT Witnesses' depositions in the
United States, or alternatively, to strike the Affidavits
altogether. See generally, Dkt. No. 632. Arch
asserts that Lilly has sufficient control over the JLT
Witnesses to compel them to appear for depositions under the
Federal Rules of Civil Procedure (the “Rules”).
Id. at 9-13. Arch further argues that, if the Court
were to find that the JLT Witnesses could not be compelled to
testify in depositions, the Affidavits should be stricken
because the JLT Witnesses do not have personal knowledge of
the information contained within the affidavits and because,
without the ability to subject the JLT Witnesses to
cross-examination or to otherwise test the Affidavits'
veracity, the Affidavits amount to inadmissible hearsay.
Id. at 15-22. Arch also requests that the Court
require Lilly to pay Arch's costs associated with this
Motion and Arch's prior attempts to obtain the
depositions of the JLT Witnesses. Id. at 23-30.
opposes the Motion because it lacks control over the JLT
Witnesses. Dkt. No. 652 at 11-14. Lilly further argues that,
while the Court cannot compel cross-examination of the JLT
Witnesses, Arch can still obtain its desired testimony
through direct examination under English law, and that the
Affidavits should not be rendered inadmissible simply because
the JLT Witnesses cannot be cross-examined. Id. at
CONTROL AND PERSONAL JURISDICTION OVER THE JLT
there is a clear relationship between Lilly and JLT, there is
no evidence that Lilly has sufficient control over JLT for
this Court to compel Lilly to produce the JLT Witnesses for
depositions. Arch correctly points out that Lilly U.S. had
several agreements with JLT, through which JLT agreed to
provide insurance brokering services to Lilly U.S. and agreed
to encourage the JLT Witnesses to assist Lilly U.S.
throughout this litigation. See Dkt. No. 632 at
10-13, Ex. 8. However, none of these agreements forfeit
JLT's status as an independent, British company,
completely distinct from Lilly U.S. Because JLT remains an
independent entity and because none of its agreements with
Lilly U.S. allow Lilly to demand that the JLT Witnesses
appear for depositions, Lilly lacks control over JLT and the
JLT Witnesses and the Court cannot compel Lilly to produce
the JLT Witnesses for depositions in either the United States
or the United Kingdom.
the Court may only compel the JLT Witnesses' depositions
if it has personal jurisdiction over them. A district court
must have personal jurisdiction over a non-party in order to
compel its compliance with a discovery request. See
Leibovitch v. Islamic Republic of Iran, 188 F.Supp.3d
734, 745 (N.D. Ill. 2016) (citing Reinsurance Co. of Am.
v. Administratia Asigurarilor de Stat, 902 F.2d 1275,
1281 (7th Cir. 1990); Gucci Am., Inc. v. Weixing Li,
768 F.3d 122, 141 (2nd Cir. 2014); In re Uranium
Antitrust Litig., 480 F.Supp. 1138, 1145 (N.D. Ill.
1979); 16 MOORE'S FEDERAL PRACTICE § 108.125 (3d ed.
2003)). A determination of personal jurisdiction involves two
steps. The Court must first determine whether the state's
“long-arm jurisdiction” statute allows
jurisdiction and, second, decide whether the exercise of
jurisdiction comports with due process. See NUCOR Corp.
v. Aceros Y Maquilas de Occidente, S.A., 28 F.3d 572,
580 (7th Cir. 1994). Indiana's jurisdiction statute is
Indiana Trial Rule 4.4(A), which states that “a court
of this state may exercise jurisdiction on any basis not
inconsistent with the Constitutions of this state or the
United States.” Accordingly, this Court has personal
jurisdiction to the extent allowed by the Due Process Clause
of the Fourteenth Amendment.
forum to have personal jurisdiction, the Due Process Clause
requires that a non-resident entity have “certain
minimum contacts with [the forum state] such that the
maintenance of the suit does not offend ‘traditional
notions of fair play and substantial justice.'”
Int'l Shoe Co. v. Washington, 326 U.S. 310, 316
(1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463
(1940)). Personal jurisdiction under Indiana Trial Rule
4.4(A) may be either general or specific. See Alpha Tau
Omega v. Pure Country, Inc., 185 F.Supp.2d 951, 956
(S.D. Ind. 2002). General jurisdiction makes a non-resident
entity amenable to suit within a particular forum regardless
of the subject matter of the suit, based on an entity's
continuous and systematic contacts with the forum. See
Helicopteros Nacionales de Colombia, S.A. v. Hall, 466
U.S. 408, 414-16 (1984). Specific jurisdiction makes a
non-resident entity amenable only to suits arising out of or
related to its contacts with the particular forum.
Id. at 414. Specific jurisdiction may be based on
relatively modest contacts with the forum if such contacts
have a substantial connection to the litigation at issue.
See Burger King Corp. v. Rudzewicz, 471 U.S. 462,
474-76 (1985). For specific jurisdiction, due process
requires that a non-resident entity have established contacts
with the forum state by purposefully availing itself of the
privilege of conducting business there. See Asahi Metal
Indus. Co. v. Superior Ct. of Cal., 480 U.S. 102, 112
(1987). To “purposefully avail” itself in a forum
state, a non-resident entity's conduct and connection
with the forum state should be such that it should reasonably
anticipate being hauled into court in that state. Burger
King, 471 U.S. at 474. When determining whether personal
jurisdiction may be exercised, the Court engages in a ...