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Baxter International, Inc. v. AXA Versicherung

United States District Court, N.D. Illinois, Eastern Division

March 30, 2017

BAXTER INTERNATIONAL, INC., Plaintiff,
v.
AXA VERSICHERUNG, Defendant.

          MEMORANDUM OPINION AND ORDER

          Jeffrey T. Gilbert United States Magistrate Judge.

         Plaintiff Baxter International, Inc. ("Baxter") has filed a motion to compel Defendant AXA Versichemng ("AXA") to produce certain communications between AXA and its co-insurers and reinsurers. Plaintiffs Motion to Compel Certain of AXA's Communications with Its Co-Insurers and Reinsurers under the 1990 AXA Policy ("Baxter's Motion to Compel"), [ECF Nos. 410, 414], For the reasons stated below, Baxter's Motion [ECF Nos. 410, 414] is granted in part and denied without prejudice in part.

         I. BACKGROUND

         This lawsuit stems from the settlement of a multi-district litigation ("MDL") involving product liability lawsuits brought against Baxter and other drug companies seeking damages for allegedly contaminated blood products. See Beater Int'l, Inc. v. AXA Versichemng, 2014 WL 3583929 (N.D. Ill. July 18, 2014) for a thorough discussion of the facts underlying both the MDL and this case. Consistent with the parties' terminology, the Court will refer to the MDL as "the Second Generation Litigation." In this lawsuit, Baxter seeks indemnification from AXA for the costs of defending and settling HCV claims raised in the Second Generation Litigation. Id. at *1. Baxter alleges AXA incurred its duty to indemnify through an insurance policy issued in 1990 by a predecessor of AXA to a company that Baxter later acquired. Id. The Court will call that insurance policy "the 1990 Policy." Id. AXA is what Baxter calls "the 'lead insurer' on the 1990 Policy." Baxter's Motion to Compel, [ECF No. 414], at 1. But the insured risk is shared by others. There are four co-insurers under the 1990 Policy. Id. And there are one or more reinsurers of AXA's risk under the 1990 Policy. Id.[1]

         During discovery in this case, Baxter served requests for production on AXA that sought communications between AXA and its co-insurers and reinsurers. Request for Production No. 27 seeks: "All documents reflecting communications between AXA and reinsurers of the AXA Policy relating to claims made under that policy, " Baxter International Inc.'s First Set of Requests for Production of Documents Propounded to Defendant AXA Versicherung AG, [ECF No. 414-2], at 8 (capitalization altered). Request for Production No. 31 seeks: "All documents reflecting communications between AXA and one or more of its co-insurers relating to the AXA Policy." Baxter International Inc.'s Second Set of Requests for Production of Documents Propounded to Defendant AXA Versicherung AG, [ECF No. 414-3], at 5 (capitalization altered).

         AXA objected to producing any of the documents covered by these two requests. Baxter's Motion to Compel, [ECF No. 414], at 2-3. In late 2015, Baxter filed a motion to compel documents sought by Request Nos. 27 and 31. [ECF Nos. 290, 291], Baxter limited its motion, though, to documents created before Baxter filed the present lawsuit. Id. After AXA told Baxter it did not have responsive pre-litigation documents, Baxter suggested tabling the motion. [ECF No. 321], But the Court denied the motion without prejudice on the ground that "the better approach is to deny [the motion] outright based on the present record since the issues will be presented somewhat differently in the future if any of them need to be addressed at all." Id.

         Baxter's present motion to compel again asks that AX A be required to produce documents covered by Request for Production Nos. 27 and 31. But Baxter now has limited these requests both temporally and substantively. Baxter only seeks post-litigation communications. Baxter's Motion to Compel, [ECF No. 414], at 3. Also, Baxter only seeks two types of post-litigation communications. The first is: "AXA's notice(s) of the Second Generation Litigation to its co-insurers and reinsurers under the 1990 Policy, and the co-insurers'/reinsurers' response(s)." Id. at 4; see also Id. at 11. The second is: "Correspondence from AXA to its co-insurers and reinsurers under the 1990 Policy in which AXA describes (a) the coverage available to Baxter under the 1990 Policy for its losses in the Second Generation [L]itigation or (b) any agreement or understanding between Baxter/Immuno and AXA/Colonia concerning coverage available under the 1990 Policy for HCV claims." Id. at 4; see also Id. at 11. Baxter argues the relevance of the documents it is now requesting AXA be ordered to produce only became clear late in discovery. Id. at 1, 4. AXA objects to producing any of these communications with its co-insurers and reinsurers.

         II. LEGAL STANDARD

         Under Federal Rule of Civil Procedure 37(a), when a party does not respond properly to a discovery request, the party that issued the request may file a motion to compel a proper response. FED. R. Civ. P. 37(a); Vukadinovich v. Hanover Cmty. Sch Corp., 2014 WL 667830, at *4 (N.D. Ind. Feb. 20, 2014). The court then must independently determine the proper course of discovery. John Wiley & Sons, Ltd. v. McDonnell Boehnen Hulbert & Berghoff LLP, 2013 WL 505252, at *2 (N.D. Ill. Feb. 12, 2013). When doing so, the court has significant discretion. Gile v. United Airlines, Inc., 95 F.3d 492, 496 (7th Cir. 1996). Ultimately, the party objecting to discovery bears the burden to show the requested discovery is improper. Deere v. Am. Water Works Co., 306 F.R.D. 208, 215 (S.D. Ind. 2015); Dauska v. Green Bay Packaging Inc., 291 F.R.D. 251, 258 (E.D. Wis. 2013); JAB Distributors, LLC v. London Luxury, LLC, 2010 WL 4008193, at *1 (N.D. Ill. Oct. 13, 2010).

         III. DISCUSSION

         As noted, AXA objects to producing the documents Baxter is seeking. AXA argues the notices to its reinsurers of the Second Generation Litigation are irrelevant to this case. AXA also contends the work product doctrine protects all correspondence between it and its co-insurers and reinsurers describing either the coverage available, or agreements or understandings regarding the coverage available. As a fallback position, AXA asserts that, if the Court orders it to produce any documents, AXA should be permitted to redact the amount of its reserves and related information from which the amount can be calculated because the reserve amounts are irrelevant and are work product, and the production of that information now, at the close of discovery and on the eve of a scheduled mediation, would give Baxter a tactical advantage to which it is not entitled after waiting years to request the reinsurance documents. Finally, AXA briefly mentions, but does not develop, arguments related to the undue burden created by Baxter's request, Baxter's delay in filing its Motion to Compel, and Baxter's failure to meet and confer before filing its current Motion.

         A. AXA's notices to its co-insurers and reinsurers may contain relevant and discoverable information.

         Federal Rule of Civil Procedure 26(b) defines the general scope of discovery. Hurt v. Vantlin, 2016 WL 3144992, at *1 (S.D. Ind. June 6, 2016), objections overruled, 2016 WL 3917138 (S.D. Ind. July 20, 2016) ("Federal Rule of Civil Procedure 26(b)(1) sets the standard for the scope of general discovery . . . ."). Under that provision, a party "may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case." Fed.R.Civ.P. 26(b)(1).

         According to Baxter, AXA's notices to its co-insurers and reinsurers are relevant to the present litigation for two reasons.[2] First, Baxter says the notices may contain admissions by AXA about the scope of coverage under the 1990 Policy and its obligations to Baxter. Baxter's Reply in Support of Its Motion to Compel Certain of AXA's Communications with Its Co-Insurers and Reinsurers under the 1990 AXA Policy ("Baxter's Reply"), [ECF No. 430], at 8. Second, Baxter argues the notices could be relevant to AXA's motive for denying coverage. Baxter's Motion to Compel, [ECF No. 414], at 6. More specifically, Baxter says AXA may be concerned about its reinsurers asserting a late notice defense. Id. In other words, Baxter's theory is that AXA may be fighting Baxter's claim because it fears that it may have no ...


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