Policyholder Is Entitled To Documents Sought In Contamination Dispute


A New York federal magistrate judge on Nov. 23 granted an insured’s motion to compel the production of documents in an environmental contamination coverage dispute after determining that the insured has shown a need for the requested documents and that the request was not overly burdensome (Certain Underwriters at Lloyd’s, et al., v. National Railroad Passenger Corp., et al., No. 16-2778, E.D. N.Y.; 2016 U.S. Dist. LEXIS 162783).

(Opinion available. Document #03-161201-006Z.)

Certain Underwriters at Lloyd’s (Underwriters) and London Market Insurers (LMI) filed suit in the U.S. District Court for the Eastern District of New York against National Railroad Passenger Corp. (Amtrak), seeking a determination as to whether a series of liability insurance policies issued to Amtrak more than 30 years ago obligate LMI to reimburse Amtrak for costs incurred in connection with environmental waste allegedly found on Amtrak’s property.

Environmental Contamination

According to the plaintiff insurers’ amended complaint, Amtrak sought coverage for environmental contamination at one of its properties and asbestos injury claims filed against it. Following the demand for coverage, LMI and Amtrak entered into a standstill agreement and, for many years, attempted to settle the coverage dispute. In 2014, Amtrak notified LMI that it was terminating the standstill agreement. LMI then filed suit.

Amtrak served nonparty Resolute Management Inc. (RMI) with a subpoena duces tecum on July 19, 2016. RMI is responsible for directing litigation, managing discovery and conducting the handling of Amtrak’s claims for coverage on behalf of LMI and the Underwriters.

LMI, acting on behalf of RMI, filed a motion for a protective order, seeking to prohibit Amtrak from enforcing the subpoena served on RMI. LMI argued that the documents sought by Amtrak were duplicative of others already produced to Amtrak by various insurers.

The motion for a protective order was denied on the basis that Amtrak had proven a need for the documents and that LMI failed to establish that RMI’s compliance with the subpoena would be unduly burdensome.

Revised Request

Following the denial of the motion for a protection order, Amtrak proposed a revised subpoena for RMI’s review. RMI served its response but refused to produce documents related to 19 of the 22 categories of documents subpoenaed by Amtrak.

Amtrak then filed a motion to enforce the subpoena.

Chief Magistrate Judge Roanne L. Mann granted the motion to enforce the subpoena, rejecting RMI’s argument that it should be excused from responding to the subpoena because Amtrak already has the documents that it seeks in the subpoena.

“In this Court’s view, RMI’s representations as to the completeness of the prior productions are too ambiguous and convoluted to warrant an order quashing the subpoena,” the magistrate judge said.

The magistrate judge said that Amtrak has shown a need for the documents and RMI failed to show that responding to the subpoena would be unduly burdensome.

“As discussed during the August 9th oral argument, the Insurers challenging the subpoena made no showing that the documents to be searched by RMI are so voluminous that the burden on RMI outweighs Amtrak’s interest in confirming the accuracy of RMI’s representation that all responsive documents have been produced,” the magistrate judge said.

Burden Not Met

Further, the magistrate judge said that if RMI has already conducted a search for all the same documents, as it contends, all that would be required is for RMI “to re-produce the documents it previously produced on behalf of its clients.”

“Simply put, it seems that RMI doth protest too much,” the magistrate judge noted.

The magistrate judge also said that RMI has not carried its burden of demonstrating that the subpoena at issue is overbroad or unduly burdensome.

In granting the motion to compel, the magistrate judge said RMI must produce the requested documents and its privilege log by Dec. 7.

LMI and Underwriters are represented by Ronald Abramson of Lewis Baach in New York. Amtrak is represented by Rhonda D. Orin of Anderson Kill & Olick in Washington, D.C.

To view the article: Policyholder Is Entitled To Documents Sought In Contamination Dispute

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Insurance Recovery Attorney | Anderson Kill LLP
Rhonda D. Orin
Managing Shareholder (Branch)
Washington, DC

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