Discovery

A reinsurer that was engaged in a London arbitration against a captive insurer of a defense contractor for the U.S. Navy had obtained documents from the Navy subject to a an agreed confidentiality protective order limiting use of the documents to the arbitration. While counsel was negotiating the terms of the protective order, counsel brought his own $2.5 billion qui tam action based on the confidential documents, against the defense contractor in a separate proceeding in Mississippi. Ultimately, the Mississippi court excoriated counsel and dismissed the qui tam case because counsel utilized the confidential documents in violation of the protective order. While counsel’s appeal of the Mississippi case was pending, counsel attempted to reopen the protective order proceedings and modify the order, contending that his violation of the order was due to “inadvertent noncompliance.” The court denied counsel’s request, ruling that the counsel was not a party to the protective order proceedings (his client was), and therefore had no standing to reopen the case to modify the order without first moving to intervene in the case. The court further held that counsel did not satisfy “good cause” to modify the protective order because (i) counsel previously advocated in favor of entry of the protective order, (ii) counsel obtained the documents from the Navy with ulterior selfish motives, and (iii) counsel disingenuously argued to the court that his violation of the order was an inadvertent mistake. Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft In München, v. Northrop Grumman Risk Management, Inc., Case No. 1:10-cv-00551 (USDC D.D.C. Dec. 9, 2015).

This post written by Barry Weissman.

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The court considered the various privilege assertions of both the insurers (plaintiffs) and the insureds (defendants) in a multi-insurer insurance litigation. In analyzing varying categories of documents, including subsets of documents produced to the court in camera, the court ordered the production of certain documents but not others. Included in the court’s reasoning were the following principles based on New York law: (1) regarding attorney client privilege, discussions between the insurer and its attorney in advance of the denial of coverage are not privileged unless they are “primarily or predominantly a communication of a legal character,” as distinct from routine insurance business activities such as claim investigation; (2) regarding work product, the party seeking to withhold a document “must demonstrate that the document it seeks to withhold was created because of the anticipation of litigation” and in the context of insurers, that presumptively occurs when the insurance claim is denied; (3) documents related to reserves and reinsurance is discoverable unless they are “covered by another relevant privilege”; and (4) documents generated by the insureds that “speak more to the requirements for making a case to the insurers, not a case against the insurers in the courts,” namely, documents generated before the submission of proof of loss, is presumptively not privileged and is discoverable. Great American Insurance Co. of N.Y. v. Castleton Commodities International LLC, Case No. 1:15-cv-03976 (USDC S.D.N.Y. Oct. 15, 2015).

This post written by Michael Wolgin.

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The Eleventh Circuit Court of Appeals has addressed what it deemed an issue of first impression for any circuit court: Whether documents obtained under 28 U.S.C. § 1782 can be used in a subsequent domestic litigation. The case pitted the former wife of Gaston Glock, founder of the Glock handgun company, against the Glock corporation. The former wife desired to use documents obtained through § 1782 for her Austrian divorce in a RICO action against Glock, Inc. Glock argued that § 1782 did not envision documents being used for such a purpose. The Eleventh Circuit agreed, but in so doing applied the rationale that allowing parties to use, “for purposes of litigation, documents they have lawfully obtained, regardless of whether they could have obtained them through discovery in the case in which they use them,” furthers the goals of the Federal Rules of Civil Procedure. Distinguishing between the former wife using the documents as part of the proceeding and whether the documents would be ultimately admissible, the court reasoned that a blanket rule precluding such use could create a procedural nightmare for lower courts. Such determinations should be committed to the discretion of the district courts to determine if the documents were solely obtained to abuse § 1782. Glock v. Glock, Inc., No. 14-15701 (11th Cir. Aug. 17, 2015).

This post written by Zach Ludens.
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A district court in Kansas denied as moot defendant Liberty Mutual Fire Insurance Company’s motion to review a magistrate’s order granting plaintiff Great Plains Ventures, Inc.’s motion to compel reinsurance, reserves, and claims-related materials. The magistrate judge ruled in January that Liberty Mutual failed to establish why documents Great Plains had requested in a coverage dispute were irrelevant or privileged. Thus, the magistrate judge granted Great Plains’ motion to compel. Soon thereafter, Liberty Mutual requested that the magistrate judge stay his order in anticipation of its objection to the discovery order and its motion to review the order to compel. While the motion to review was pending, the magistrate judge denied the motion to stay and ordered Liberty Mutual to produce the documents. Liberty Mutual complied, and because it did so, the court ruled that its request for review was moot. Great Plains Ventures, Inc. v. Liberty Mutual Fire Insurance Co., No. 6:14-cv-01136 (USDC D. Kan. May 1, 2015).

This post written by Whitney Fore, a law clerk at Carlton Fields in Washington, DC.

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