ELI LILLY AND COMPANY v. ARCH INSURANCE COMPANY

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA INDIANAPOLIS DIVISION ELI LILLY AND COMPANY, and ) ELI LILLY DO BRASIL LTDA, ) ) Plaintiffs, ) ) v. ) Case No. 1:13-cv-01770-TWP-TAB ) ARCH INSURANCE COMPANY, ) ARCH SPECIALTY INSURANCE COMPANY, ) COMMERCIAL UNION INSURANCE ) COMPANY, ENDURANCE AMERICAN ) SPECIALTY INSURANCE COMPANY, ) LIBERTY INSURANCE UNDERWRITERS ) INC., RSUI INDEMNITY COMPANY, ) WESTCHESTER SURPLUS LINES ) INSURANCE CO., and XL INSURANCE ) AMERICA, INC., ) ) Defendants. ) ORDER ADOPTING THE MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION AND DENYING PLAINTIFFS' MOTION FOR RELIEF This matter is before the Court on a Motion for Relief Pursuant to Rule 56(d) and Objections to Report and Recommendation on the Rule 56(d) Motion (Filing No. 1230; Filing No. 1248) filed by Plaintiffs Eli Lilly and Company ("Lilly") and Eli Lilly do Brasil, Ltda. ("Lilly Brasil") (collectively, "Plaintiffs"). The Plaintiffs brought this action asserting claims for insurance coverage for underlying lawsuits regarding liability for environmental and other claims against Lilly Brasil. The Plaintiffs assert other related claims, and seek declaratory relief and damages against some of Lilly's insurers: Arch Insurance Company and Arch Specialty Insurance Company (collectively, "Arch"), Endurance American Specialty Insurance Company ("Endurance"), Liberty Insurance Underwriters Inc. ("LIU"), RSUI Indemnity Company ("RSUI"), Westchester Surplus Lines Insurance Co. ("Westchester"), and XL Insurance America Inc. ("XL").1 On June 13, 2019, Arch and the Upper Excess Carriers filed separate motions for summary judgment on the Plaintiffs' claims. On June 14, 2019, the Plaintiffs filed their Motion for Relief Pursuant to Rule 56(d), requesting additional discovery concerning the Defendants' summary judgment motions. The Rule 56(d) Motion was referred to the Magistrate Judge for a report and recommendation. Magistrate Judge Baker issued his Report and Recommendation, to which the Plaintiffs filed Objections. For reasons stated below, the Court finds no error of law or fact in the Report and Recommendation and therefore overrules the Plaintiffs' Objections (Filing No. 1248), adopts the Magistrate Judge's Report and Recommendation (Filing No. 1243), and denies the Plaintiffs' Motion for Relief Pursuant to Rule 56(d) (Filing No. 1230).

I. LEGAL STANDARD A district court may assign dispositive motions to a magistrate judge, in which case the magistrate judge may submit to the district judge only a report and recommended disposition, including any proposed findings of fact. Schur v. L.A. Weight Loss Ctrs., Inc., 577 F.3d 752, 760 (7th Cir. 2009); see also 28 U.S.C. § 636(b)(1)(B); Fed. R. Civ. P. 72(b). "The magistrate judge's recommendation on a dispositive matter is not a final order, and the district judge makes the ultimate decision to adopt, reject, or modify it." Schur, 577 F.3d at 760; see also 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b)(3). After a magistrate judge makes a report and recommendation, either party may object within fourteen days. 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b)(2). "A judge of the court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made." 28 U.S.C. § 636(b)(1).

1 Defendants Endurance, LIU, RSUI, Westchester, and XL will be collectively referred to as "Upper Excess Carriers." Further, a judge "may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge." Id. A district court also may assign non- dispositive matters to a magistrate judge under Rule 72(a).

II. DISCUSSION The history and facts of this matter are sufficiently set forth in the Magistrate Judge's Report and Recommendation, which the Court adopts, so only a brief synopsis of the background is stated in this Order. In addition, the legal analysis and conclusions of the Magistrate Judge are set forth in that ruling (Filing No. 1243), and need not be repeated.

On June 18, 2018, the Court issued an Order providing some relief to Arch and co- defendant Commercial Union Insurance Company (now known as Lamorak Insurance Company ("Lamorak")) after Arch and Lamorak filed summary judgment motions (Filing No. 1118). The Court's Order granted summary judgment to Arch on the Plaintiffs' reformation claims because the claims are barred by the laches doctrine, and it granted summary judgment to Lamorak on all claims asserted against it. The Court also determined that Lilly Brasil does not have standing to bring claims against Arch. Id. at 26–27.

Following the Court's June 18, 2018 summary judgment Order, the Upper Excess Carriers and Arch filed new motions for summary judgment, arguing that they are entitled to judgment on the Plaintiffs' remaining claims based on the prior summary judgment Order. They base their motions on the Court's rulings on reformation, laches, and standing. The Plaintiffs responded with their Rule 56(d) Motion, asserting that they need additional discovery in order to fully respond to the pending summary judgment motions. The Magistrate Judge's Report and Recommendation concludes that additional discovery is not necessary for the Plaintiffs to be able to respond to the summary judgment motions, and thus, it recommends denial of the Rule 56(d) Motion.

Much of the Plaintiffs' Objection to the Report and Recommendation reiterates the arguments presented in the original Rule 56(d) Motion. The Plaintiffs argue that they should be permitted to seek any and all relevant and discoverable evidence concerning the case before responding to the summary judgment motions, and they assert that the Report and Recommendation is erroneous in cutting short their discovery opportunity. However, Rule 56(d) does not open the door to any and all discovery; it provides a mechanism to seek discovery necessary for the pending summary judgment motions. See Citizens for Appropriate Rural Rds. v. Foxx, 815 F.3d 1068, 1082 (7th Cir. 2016). The Court finds no error in the Magistrate Judge's recommendation in this regard.

The Plaintiffs complain that the Report and Recommendation states "Lilly" asked the Court to stay discovery, and they argue this is erroneous because the parties agreed to the stay. However, the Report and Recommendation is not in error as it correctly explains Lilly asked the Court to stay discovery and the Defendants did not object to the stay, which is recorded in the Court's conference notes at Filing No. 1157.

The Plaintiffs also argue the Report and Recommendation is erroneous in concluding the summary judgment motions are limited to "purely legal" issues because the motions involve questions of fact. The Court disagrees with the Plaintiffs' position and agrees with the Magistrate Judge that the pending summary judgment motions concern legal questions about the impact of the prior summary judgment Order on the remaining claims.

The Court's review of the Magistrate Judge's consideration, analysis, and conclusions regarding the need for additional discovery to respond to the pending summary judgment motions leads the Court to conclude that the Magistrate Judge's determination was correct and without error. il. CONCLUSION For the reasons stated above, the Court OVERRULES the Plaintiffs’ Objections (Filing No. 1248), ADOPTS the Magistrate Judge's Report and Recommendation (Filing No. 1243), and DENIES the Plaintiffs’ Motion for Relief Pursuant to Rule 56(d) (Filing No. 1230). The Plaintiffs are ordered to file their response, if any, to the pending summary judgment motions (Filing No. 1228 and Filing No. 1229) within thirty (30) days of the date of this Order. The Defendants may file a reply within fourteen (14) days after the Plaintiffs’ response is served.

SO ORDERED.

Date: 5/28/2020 Cin Latin re TANYA WALTON PRATT, JUDGE United States District Court DISTRIBUTION: Southern District of Indiana Thomas B. Bays NORRIS CHOPLIN & SCHROEDER LLP Kyle Andrew Lansberry tbays @ncs-law.com LEWIS WAGNER LLP klansberry @lewiswagner.com Eileen K. Bower CLYDE & CO US LLP Cynthia Elaine Lasher [email protected] NORRIS CHOPLIN & SCHROEDER LLP clasher @ncs-law.com Jeffrey D. Claflin PLEWS SHADLEY RACHER & BRAUN Ryan Taylor Leagre jclaflin @ psrb.com PLEWS SHADLEY RACHER & BRAUN rleagre@ psrb.com Jared K. Clapper NICOLAIDES FINK THORPE Michael P. McNamee MICHAELIDES SULLIVAN LLP MEAGHER & GEER PLLP jclapper@ nicolaidesllp.com mmcnamee@ meagher.com Colin Edington Connor Erik S. Mroz PLEWS SHADLEY RACHER & BRAUN DREWRY SIMMONS VORNEHM, LLP cconnor@ psrb.com [email protected] Andrew J. Detherage Katherine Werner O'Malley BARNES & THORNBURG LLP COZEN O'CONNOR andy.detherage @ btlaw.com komalley @cozen.com Kyle M. Dickinson George M. Plews TRAUB LIEBERMAN STRAUS & PLEWS SHADLEY RACHER & BRAUN SHREWBERRY LLP [email protected] [email protected] Meghan Eileen Ruesch LEWIS WAGNER LLP Danielle C. Dobry [email protected] MEAGHER & GEER PLLP [email protected] Gina M. Saelinger ULMER & BERNE LLP Wendy N. Enerson [email protected] COZEN O'CONNOR [email protected] Frederic Xavier Shadley ULMER & BERNE LLP John Paul Fischer, Jr. [email protected] BARNES & THORNBURG LLP [email protected] Charles E. Spevacek MEAGHER & GEER PLLP Ana M. Francisco [email protected] FOLEY & LARDNER LLP [email protected] Samuel R. Stalker COZEN O'CONNOR Michael Robert Giordano [email protected] LEWIS WAGNER LLP [email protected] Monica T. Sullivan NICOLAIDES FINK THORPE Emily A. Golding MICHAELIDES SULLIVAN LLP CLYDE & CO US LLP [email protected] [email protected] Meaghan A. Sweeney Gregory M. Gotwald NICOLAIDES FINK THORPE PLEWS SHADLEY RACHER & BRAUN MICHAELIDES SULLIVAN LLP [email protected] [email protected] Megan B. Gramke Jason M. Taylor ULMER & BERNE LLP TRAUB LIEBERMAN STRAUS & [email protected] SHREWSBERRY [email protected] Scott A. Harkness NORRIS CHOPLIN & SCHROEDER LLP David A. Temple [email protected] DREWRY SIMMONS VORNEHM, LLP [email protected] Georgia Hatzis ULMER & BERNE LLP Joseph P. Thomas [email protected] ULMER & BERNE LLP [email protected] Jennifer Snyder Heis John Carl Trimble ULMER & BERNE LLP LEWIS WAGNER LLP [email protected] [email protected] Bryan Vezey Christian P. Jones COZEN O'CONNOR BARNES & THORNBURG, LLP [email protected] [email protected] Mark F. Wolfe Bruce L. Kamplain TRAUB LIEBERMAN STRAUS & NORRIS CHOPLIN & SCHROEDER LLP SHREWSBERRY LLP [email protected] [email protected] Joshua A. Klarfeld Bradley J. Wombles ULMER & BERNE LLP NORRIS CHOPLIN & SCHROEDER [email protected] [email protected] Michael S. Knippen Joseph Ziemianski TRAUB LIEBERMAN STRAUS & COZEN O'CONNOR SHREWSBERRY LLP [email protected] [email protected]