United States District Court, D. Connecticut
RULING ON PLAINTIFFS' MOTION TO COMPEL DEFENDANT
TO RESPOND TO ORDERED DISCOVERY AND TO PRODUCE
GLAZER MARGOLIS UNITED STATES MAGISTRATE JUDGE.
factual and procedural history behind this litigation is set
forth in considerable detail in this Magistrate Judge's
Ruling on Pending Discovery Issues, filed January 27, 2017
(Dkt. #191), 2017 WL 385034 [“January Discovery
Ruling”]; Ruling on Pending Discovery Issues Regarding
Depositions, filed February 14, 2017 (Dkt. #202), 2017 WL
589192; Ruling Following In Camera Review of Wigmore
Memo, filed February 27, 2017 (Dkt. #203), 2017 WL 750693;
Ruling Following In Camera Review of Waisman and
Sennott Documents, filed March 16, 2017 (Dkt. #212), 2017 WL
1020970; Ruling on Non-Party John Hake's Motion for
Protective Order, filed March 24, 2017 (Dkt. #213), 2017 WL
1102675 [“First Hake Ruling”]; Ruling Following
In Camera Review of Hake Personnel Records from
Dodson Group, filed April 4, 2017 (Dkt. #219); Ruling
Following In Camera Review of Hake Personnel Records
from Kemper Insurance Companies, filed April 12, 2017 (Dkt.
#223); Ruling on Non-Party John Hake's Motion for
Clarification, filed May 26, 2017 (Dkt. #252); Ruling
Following In Camera Review of Non-Party
John Hake's Medical Report, filed June 6, 2017 (Dkt.
#259); and Ruling Following Second In Camera Review
of Non-Party John Hake's Medical Report, filed July 28,
2017 (Dkt. #293).
ruling addresses plaintiffs' pending Motion to Compel
Defendant to Respond to Ordered Discovery and to Produce
Documents, filed May 12, 2017 (Dkt. #241),  seeking the
production of some discovery that was the subject of the
January Discovery Ruling, and of some more recent discovery.
On June 2, 2017, defendant filed its brief in opposition
(Dkt. #256),  to which plaintiffs filed their reply
brief two weeks later. (Dkt. #278).
argue that Travelers “refuses to answer [some
discovery], as ordered” by the January
Discovery Ruling, and that other ordered discovery was
produced with “entire categories of unpermitted
redactions[.]” (Dkt. #241, Brief at 1, 5)(emphasis in
original).Plaintiffs specifically allege that
defendant “willfully violat[ed]” the January
Discovery Ruling (id. at 1) with respect to
Interrogatory No. 11 of Plaintiffs' First Set of
Interrogatories and Document Demands, served on September 14,
2015 (Exh. 5; Dkt. #241-6); Request No. 7 of Plaintiffs'
[Fourth Set of] Requests for Admission, dated August 2, 2016
(Exh. 6; Dkt. #241-7); and Requests Nos. 34, 43, 187, and 197
of Plaintiffs' [Ninth Set of] Requests for Admission,
dated October 5, 2016 (Exh. 7; Dkt. #241-8). Travelers argues
that its refusal to answer interrogatories with information
about its litigation with other policyholders, and to redact
production of other policyholders' files, permissibly
protects the confidentiality of other claimants and insureds
because the January Discovery Ruling allowed Travelers to
“redact the names of the claimants and its insureds, as
appropriate, substituting the parties' actual names or
initials.” (Dkt. #256, Brief at 7-8; January Discovery
Ruling at 8 (footnote omitted); 2017 WL 385034, at *4
(footnote omitted)). Travelers likewise argues that
plaintiffs' Requests for Admissions [“RFAs”]
about coverage positions asserted by Travelers to other
policyholders “are inapplicable because Travelers paid
indemnity [to those policyholders] pursuant to settlements,
not a coverage position.” (Dkt. #256, Brief at 8).
also seek to compel responses to six additional requests for
discovery which Travelers refuses to produce “without
substantial justification[, ]” despite “five meet
and confers between the parties[.]” (Dkt. #241, Brief
at 5-6). Plaintiffs seek to compel Travelers' response to
Request No. 1 of Plaintiffs' [Second Set of] Document
Demands, dated August 5, 2016 (Exh. 9; Dkt. #241-10); Request
No. 1 of Plaintiffs' Fourth Document Demand, dated
December 2, 2016 (Exh. 10; Dkt. #241-11); Requests Nos. 2-3
of Plaintiffs' Fifth Set of Document Demands, dated
February 3, 2017 (Exh. 11; Dkt. #241-12); and Requests Nos.
1-2 of Plaintiffs' Sixth Set of Document Demands, dated
March 10, 2017 (Exh. 12; Dkt. #241-13). Travelers argues that
plaintiffs have not demonstrated a compelling and substantial
need for this discovery; the requests are irrelevant or
overbroad; the subject documents are either protected by
confidentiality agreements, or publicly available; and the
production of some subject documents is prohibited by Conn.
Gen. Stat. §§ 38a-14(j) and 38a-69(a). (Dkt. #256,
Brief at 9-10).
parties continue to dispute Travelers' responses to three
of plaintiffs' interrogatories discussed in the January
Discovery Ruling. In Plaintiffs' First Set of
Interrogatories and Document Requests to Travelers Casualty
and Surety Company, Travelers was asked to:
9. IDENTIFY each INSURED that has notified [Travelers] of
claims against it involving AGGREGATE EXPOSURES, to which
[Travelers has] asserted that coverage under an XN POLICY
only responds if the INSURED'S loss arises from a single
accident or occurrence.
10. IDENTIFY each XN POLICY which is, or has been, the
subject of LITIGATION within the last twenty-five years,
including LITIGATION with [Travelers'] reinsurers.
11. Identify, by case caption, number and jurisdiction, the
LITIGATION referenced in [Travelers'] response to
interrogatory no. 9.
(Exh. 5; Dkt. #241-6, at 8). Travelers objected to these
interrogatories based on relevance, undue burden, and privacy
claims of other policyholders, and this dispute was referred
to this Magistrate Judge by Judge Meyer. (Travelers'
Response to First Set of Interrogatories and Document
Request, dated September 25, 2014, 13-16; Dkt. #181).
Subsequently, Travelers represented that there are
twenty-seven XN policyholders with asbestos-products
liability claims for which it has made payments under XN
policies, and plaintiffs proposed a compromise wherein
Travelers respond to discovery requests related to only
twelve of those policyholders. (Dkt. #188, at 4-5). Travelers
argued that the proposed compromise would unfairly invade
other policyholders' privacy interests in their insurance
and claim information. (Dkt. #187, at 2; Dkt. #189, at 2-4).
January Discovery Ruling, this Magistrate Judge ordered
discovery with respect to eighteen of the twenty-seven files,
selected by this Magistrate Judge based upon their
chronological identification number; agreed that Conn. Gen.
Stat. § 38a-988 does not bar production of these
documents; found that these files are subject to the
Protective Order in place in this case; and, as previously
mentioned, further permitted Travelers to “redact the
names of the claimants and its insureds, as appropriate,
substituting the parties' actual names or
initials.” (Dkt. #191 at 8 (footnote omitted); 2017 WL
385034, at *4 (footnote omitted)). The January Discovery
Ruling further ordered that “defendant shall respond to
Interrogatories Nos. 8-11 to the extent they pertain only to
the eighteen asbestos product liability claims specified
above and No. 10 is further limited to fifteen years, not
twenty-five years[.]” (Id. at 13; 2017 WL
385034, at *6).
the January Discovery Ruling, Travelers' Second
Supplemental Response to Certain Interrogatories and Document
Requests in Plaintiffs' First Set [sic] of
Interrogatories and Document Requests identified, by
reference to the chronological identification number, sixteen
files that were the subject of litigation, as sought in
interrogatory No. 10; the two remaining case files had not
resulted in lawsuits. (Dkt. #241, Brief at 2; Exh. 1; Dkt.
#241-2, at 6-7). In response to interrogatory No. 11, which
sought case captions, numbers and jurisdictions of that
litigation, Travelers answered, “In order to protect
the confidentiality of policyholders [identified by
chronological identification numbers], Travelers has not
identified caption, number or jurisdiction for the litigation
involving their XN policies, which has been resolved by
confidential settlements and/or settlements in bankruptcy
proceedings.” (Exh. 1; Dkt. #241-2, at 7; Dkt #241,
Brief at 8-9).
argue that Travelers' “refusal to respond” is
“a willful violation” of the January Discovery
Ruling “which unconditionally directs Travelers to
respond to Interrogatory No. 11 with respect to the sixteen
policyholders” who had been involved in litigation
with defendant (Dkt. #241, Brief at 9) and that
Travelers' confidentiality arguments already had been
rejected by the Court in the January Discovery Ruling
(id. at 12). Travelers argues that providing case
captions, numbers, and jurisdictions would unmask the
insureds' identity to plaintiffs, and effectively moot
its permissible efforts to redact the insureds' names
elsewhere. (Dkt. #256, Brief at 8, 11). However, as
plaintiffs point out in their supplemental responses,
Travelers already has identified seven of these sixteen
policyholders (3M Corp., Kentile Floors, Viking Pump, Warren
Pumps, Armstrong Contracting and Supply Corp.
[“ACANDS”], Armstrong Cork, and The Flintoke
Co.), and moreover, has admitted to specific identifying
litigation data relating to three of them (Viking Pump,
Warren Pumps, and 3M Corp.) (Exhs. 18-20; Dkts. ##241-19 to
241-21; Dkt. #241, Brief at 12-13; Dkt. #278, at 3). Thus,
the motion is moot with respect to the three policyholders
for which defendant already provided litigation information
(Viking Pump, Warren Pumps, and 3M Corp.). With respect to
the other four policyholders identified (Kentile Floors,
ACANDS, Armstrong Cork and The Flintoke Co.), given the
immediate availability that anyone with internet access has
to court filings throughout the country, plaintiffs have the
ability to locate this information on their own initiative.
Although plaintiffs argue that Travelers' confidentiality
concerns are only pretext to conceal damaging evidence in
other cases (Dkt. #278, at 3), this judicial officer agrees
that at least with respect to some of the insureds,
plaintiffs have already “demonstrated that they can
locate litigation involving XN policies in the public
record[, ]” rendering unnecessary such disclosures by
Travelers. (Dkt. #256, at 19). Thus, the balance of this
portion of the ruling will focus on the remaining nine
policyholders (sixteen minus seven) whose identities have not
further argues that unmasking the identities of other
policyholders would “turn over to a potential business
competitor proprietary information regarding the extent of
that policyholder's asbestos problem as well as its
litigation strategies in resolving those claims.”
(Id. at 12). Travelers' concern on behalf of its
other policyholders is not purely speculative: one such
policyholder provided a declaration in opposition to the
Motion to Compel,  urging that disclosure to plaintiffs
“of ACME Corporation's strategies and thought
processes-conveyed in large part through confidential
settlement negotiations with Travelers-would harm ACME
Corporation in connection with its current efforts to prove
its entitlement to coverage under policies issued by many
different insurers.” (Id. at 11 & Exh. S,
at 3; Dkt. #256-16). Travelers is thus reasonably concerned
that by effectively identifying any additional policyholders
to plaintiffs, it would share information policyholders
provide to insurers only with the expectation that it not be
disclosed, “especially to other companies that may be
in direct competition with its business goals.” (Dkt.
#256, at 12). Because ACME Corporation has expressed
legitimate concerns about maintaining the confidentiality of
its identity, Travelers need not provide any further
identifying information about ACME Corporation.
persuasively argues that an order to answer Interrogatory No.
11 for the unidentified policyholders will moot the
Court's efforts in the January Discovery Ruling to
protect those policyholders' identities. In light of
Travelers' responses to date, and the competing
confidentiality concerns, the Court requires supplemental
filings from both sides on or before September
15, 2017. Plaintiffs shall indicate why they
require disclosure of litigation information for the eight
unidentified policyholders (besides ACME Corporation), when
seven policyholders already have been identified by
Travelers. Defendant shall file a supplemental brief or
affidavit explaining how many of these eight remaining
unidentified policyholders (besides ACME Corporation) are in
direct competition with plaintiffs and the nature of the
“proprietary information” (Dkt. #256, at 12) that
would be revealed by answers to Interrogatory No. 11.
addition, plaintiffs allege that Travelers produced a host of
documents pursuant to the January Discovery Ruling with
unpermitted redactions of “policy numbers, claims
related data, aggregate amounts paid under the XN policies
for asbestos product liability claims, and reinsurer
names.” (Dkt. #241, Brief at 15-16, referring
to Exhs. 8 & 22, Dkts. ##241-9 & 241-23).
Plaintiffs argue that these redactions evidence
Travelers' “bad faith conduct” and attempt to
“thwart [p]laintiffs' investigation and to make
those documents essentially unusable for depositions, motion
practice, and trial[, . . . and to] deliberately obscure data
that exposes its fraud.” (Id. at 16).
Travelers argues that the redactions in Exhibits 8 and 22
“show that the unredacted text strikes the same balance
[as previously permitted redactions in Dkts. ##191 and 203]
and affords [p]laintiffs substantive information regarding
the policyholders' asbestos claims without divulging
their dollar amounts, percentages and other settlement
information regarding their defense and settlement
strategies.” (Dkt. #256, Brief at 12).
January Discovery Ruling did not invite Travelers to
determine what redactions would “strike the same
balance” as in this Court's previous rulings, but
instead specifically permitted Travelers to redact the
claimants' and insureds' “names, . . . as
appropriate.” (Dkt. #191, at 8; 2017 WL 385034, at *4).
While Travelers may still redact the names of claimants and
insureds for the purpose of protecting the identity of these
policyholders, Travelers may not redact other claims-related
data. If any additional redaction is absolutely necessary to
protect the identity of policyholders, Travelers may submit
the unredacted documents to Chambers for in camera
review, with a short explanation as to why the proposed
redactions are necessary to maintain confidentiality of the
policyholder's identity, on or before
September 15, 2017.
TRAVELERS' COVERAGE POSITION ASSERTIONS TO OTHER
seek to compel Travelers' response to five RFAs admitting
Travelers “did not take the position that XN
POLICY/POLICIES insuring [a particular policyholder] were
only triggered if the per occurrence limits of the insurance
policies underlying the XN POLICY/POLICIES insuring [that
policyholder] had been exceeded.” (Dkt. #241, Brief at
13-15; Exhs. 6 & 7; Dkt. #241-7, at 3; Dkt. #241-8, at 8,
9, 34, 36). Plaintiffs requested this admission with respect
to five policyholders: A.H. Robins Company Incorporated (RFA
No. 7 of August 2, 2016, Exh. 6, Dkt. #241-7, at 3); ACANDS
(RFA No. 34 of October 5, 2016, Exh. 7, Dkt. #241-8, at 8);
Armstrong Cork Company (RFA No. 43 of October 5, 2016, Exh.
7, Dkt. #241-8, at 9); the 3M Company, formerly known as
Minnesota Mining & Manufacturing Company (RFA No. 187 of
October 5, 2016, Exh. 7, Dkt. #241-8, at 34); and the
Flinkote Company (RFA No. 196, Exh. 7, Dkt. #241-8, at 36).
answered these RFAs admitting that it “registered an
indemnity payment under . . . the XN policies insuring [these
policyholders] . . . pursuant to a confidential settlement
agreement[, ]” and “[e]xcept as admitted, this
Request is inapplicable as Travelers paid the indemnity under
the XN policies” pursuant to a confidential settlement
agreement.(Dkt. #241, Brief at 13-14; Exhs. 20-21;
Dkt. #241-22, at 4-5; Dkt. #241-21, at 6-7, 9-10, 13-14,
their Motion to Compel, plaintiffs argue that Travelers has
not responded to the RFAs which inquire whether Travelers
ever asserted a particular coverage position to these
policyholders; instead, Travelers' responses relate to
the circumstances under which Travelers paid these
policyholders. (Dkt. #241, Brief at 14). In its opposition to
the motion, Travelers reasserts that the RFAs are
inapplicable because payments to these policyholders were
made pursuant to settlement, not to a coverage position.
(Dkt. #256, at 8, 13).
plaintiffs observe, “[t]hat Travelers settled with [a
policyholder] does not answer the critical question, which is
whether, before it made a payment under [a
policyholder's] XN policies, Travelers told [that
policyholder] that its XN policies did not respond to product
losses exceeding the underlying aggregate limit.” (Dkt.
#241, Brief at 14). Whether Travelers paid policyholders
pursuant to a settlement is irrelevant because
plaintiffs' RFAs inquire “about a coverage position
Travelers was obligated to disclose to its insured well
before litigation and any settlement.” (Id.).
Because “[e]ither Travelers asserted that [coverage]
position before it settled with those insureds, or it did
not[, ]” (Dkt. #278, at 4-5) Travelers is ordered to
respond to these RFAs.
DISCOVERY RELATED TO ASBESTOS LOSS-RELATED RESERVES DATA
No. 2 of Plaintiffs' Fifth Set of Document Demands to
Travelers Casualty and Surety Company Regarding Reserves,
dated February 3, 2017, seeks “ALL DOCUMENTS provided
to Milliman, Inc. in connection with its actuarial analysis
of [Travelers'] reserving for asbestos related loss in
connection with the Connecticut Insurance Department
[“CID”] Examination Report as of December 31,
2009.” (Dkt. #241, Brief at 22; Exh. 11; Dkt. #241-12,
at 4). Travelers objected on the grounds that the
documents sought are protected by attorney-client privilege
and attorney work product doctrine; they include confidential
information and documents protected by the privacy rights of
Travelers' other policyholders; the information is not
relevant; the request is overly broad and unduly burdensome;
and the documents are protected by Conn. Gen. Stat.
§§ 38a-14(j) and 38a-69(a). (Dkt. #241, Brief at
22; Exh. 29; Dkt #241-30, at 3-4).
RELEVANCE AND PRIVILEGE
Connecticut, the discovery of insurance reserve information
is based on relevance and privilege. U.S. Bank Nat'l
Ass'n v. Lawyers Title Ins. Corp., No. CV095013702,
2010 WL 1629942, at *4 (Conn. Super. Ct. Mar. 22, 2010).
Although discovery of loss reserves is often denied because
it is not relevant to the underlying cause of action,
“[m]ost courts . . . are willing to permit discovery if
the underlying action involves allegations of bad faith
because the mind set of the insurer then becomes relevant to
the underlying cause of action.” Id. (citation
omitted); see also Esposito v. Cutler, Nos.
LLICV146010013S, LLICV146010019S, 2015 WL 4571197, at *3
(Conn. Super. Ct. June 30, 2015)(insurance reserves were not
discoverable because plaintiffs did not assert that
defendants acted in bad faith). Reserve-related discovery can
be important in such cases because “[b]ad faith is a
state of mind which must be established by circumstantial
evidence[, . . . making the] actions of the defendant in
respect to the reserve . . . relevant.” Groben v.
Travelers Indemnity Co., 266 N.Y.S.2d 616, 619 (N.Y.
Sup. Ct. 1965), aff'd, 282 N.Y.S.2d 214
to plaintiffs, Travelers misrepresented, in bad faith, the
coverage position of its XN policies; as such, the reserve
information is relevant to “the issue of Travelers'
financial motive for taking the bad faith position it did as
of 2009.” (Dkt. #241, Brief at 23-24). In response to
plaintiffs' request for reserve information, Travelers
asserts a blanket privilege objection (Travelers Casualty and
Surety Company's Response to Plaintiffs' Fifth Set of
Document Demands Served on February 3, 2017, Exh. 29, Dkt.