Riceland Foods Inc v. Liberty Mutual Insurance Company
ORDER granting in part and denying in part deft's 49 Motion to Compel as provided in this Order; pltf is directed to provide discovery responses within 20 days from the entry of this Order. Signed by Judge Susan Webber Wright on 8/1/11. (vjt)
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
RICELAND FOODS, INC.
LIBERTY MUTUAL INSURANCE
NO: 4:10CV00091 SWW
Riceland Foods, Inc. (“Riceland”) brings this diversity action against Liberty Mutual
Insurance Company (“Liberty”), seeking a declaratory judgment regarding Liberty’s duties
under commercial general liability policies. Before the Court is Liberty’s motion to compel
(docket entry #49), Riceland’s response in opposition (docket entry #56), and Liberty’s reply
(docket entry #59). After careful consideration, and for reasons that follow, Liberty’s motion to
compel is granted in part and denied in part.
Riceland is an agricultural cooperative that processes and markets rice and other
agricultural commodities for its farmer members, and Liberty is an insurance company that
issued commercial general liability policies (“the Policies”) to Riceland for the periods covering
August 1, 2005 through August 1, 2008. Riceland and various affiliates of Bayer Crop Science
(“Bayer”) have been named as defendants in more than 170 civil lawsuits by rice growers and
distributors, who claim that they suffered damages from the contamination of the commercial
rice supply by genetically modified (“GM”) rice.1
Plaintiffs in the underlying lawsuits allege that from 1996 to 2006, Bayer grew and tested
varieties of GM rice and failed to take precautions to prevent GM rice from contaminating or
infiltrating the nation’s commercial rice supply. The plaintiffs further allege that beginning in
the early 2000's, Riceland assumed an active role in Bayer’s GM rice endeavor by entering
contracts with farmers to grow GM rice and by milling and processing GM rice. According to
the farmers and distributors prosecuting the underlying suits, Bayer and Riceland knew that the
conventional rice supply could be contaminated by GM rice, and they failed to take precautions
to prevent such contamination.
Riceland notified Liberty of the underlying lawsuits and sought a defense under the
Policies. Under a reservation of rights, Liberty agreed to provide a defense in all of the
underlying lawsuits, with the exception of three, but then filed a claim for arbitration, taking a
no-coverage position as to all of the underlying lawsuits. On February 10, 2010, Riceland
commenced this action seeking a declaration regarding Liberty’s duties under the polices.
The case is before the Court on Liberty’s motion to compel. Liberty categorizes the
discovery requests at issue as follows: (1) document requests and interrogatories concerning GM
rice; (2) document requests concerning Riceland’s communications with Bayer; (3) document
requests and interrogatories concerning the reasonableness of attorney fees incurred in the
underlying lawsuits; (4) document requests and interrogatories concerning coverage analysis for
the underlying lawsuits; and (5) document requests concerning other policies.
In August 2006, the United States Department of Agriculture announced that genetically
modified rice had been discovered in the United States rice supply.
Discovery Requests Concerning GM Rice
In its Requests for Documents Nos. 12, 13, 14, 15, 16, and 17, Liberty seeks the
production of documents that may supply information regarding “the extent of Riceland’s
knowledge and involvement concerning GM rice.” Docket entry #50, at 8. Such information,
Liberty asserts, is relevant because the Policies exclude coverage for property damage expected
or intended from the standpoint of the insured.
The documents sought include documents concerning the following: (1) Riceland’s
activities related to the use, growth, storage, sale, research and development of GM rice (Request
No. 12); (2) Riceland’s contracts, work orders, service orders, joint ventures, and collaboration
with any entity concerning GM rice (Request No. 13); (3) sources, causes, means, or
mechanisms (whether actual, alleged, or potential) for contamination the commercial rice supply
by GM rice (Request No. 14); (4) risks and benefits of GM rice (whether actual or potential)
(Request No. 15); (5) communications concerning GM rice with the United States Food and
Drug Administration, United States Department of Agriculture, and any other federal or state
government agency that regulates food and agriculture (Request No. 16); and (6) suits, claims,
complaints, correspondence, and communications alleging that Riceland, Bayer, or other persons
are responsible for GM contamination (Request No. 17).2
Riceland acknowledges that the documents sought could be relevant to indemnification
issues but contends that it has not asked the Court to determine Liberty’s indemnification
obligations. The Court disagrees. In the ad damnum clause of the complaint, Riceland seeks a
declaration that the Polices apply to Riceland’s claims arising out of the underlying lawsuits and
In response to Request No. 17, Riceland produced all complaints in its possession,
which allege that Riceland is responsible for GM contamination.
a declaration that Liberty shall honor all of the obligations and responsibilities set forth in the
Policies for the underlying lawsuits. See Compl., at 22.
Riceland further contends that the “various disputed, factual issues involved in the GM
Rice lawsuits” should be “tried by the parties in the GM Rice lawsuits, with indemnity coverage
issues determined when ripe.” Docket entry #5, at 3. Riceland’s presumption that indemnity
coverage issues are not ripe for consideration is contrary to Eighth Circuit precedent. “In the
insurance policy context, a declaratory judgment action is ripe [for adjudication] irrespective of
whether the underlying action is ongoing or resolved.” Scottsdale Insurance Co. v. Universal
Crop Protection Alliance, LLC, 620 F.3d 926, 934 (8th Cir. 2010)(citing Capitol Indem. Corp.,
978 F.2d 437, 438 (8th Cir. 1992)).
Finally, Riceland objects that Liberty’s document requests are without reasonable
temporal limits and seek confidential and protected material produced in the underlying lawsuits.
Because the Policies exclude coverage for property damage expected or intended from the
standpoint of the insured, the Court agrees that information regarding Riceland’s knowledge of
and involvement with GM rice is relevant. However, the Court finds that documents and
information that came to Riceland after contamination of the rice supply, which would include
material produced in the underlying lawsuits, is not relevant to whether Riceland expected or
intended the contamination and property damage to occur.
The Court is without sufficient information necessary to impose specific temporal limits
on Liberty’s discovery requests concerning GM rice. Accordingly, the Court urges the parties to
reach an agreement on this issue. If efforts to reach an agreement fail, the parties may seek
Court intervention with motions that provide detailed information as to the timing of the
occurrences that caused the property damage at issue in the underlying lawsuits.
Document Requests Concerning Communications with Bayer
In its Document Request No. 18, Liberty seeks all documents concerning
communications between Riceland and Bayer related to the underlying lawsuits. Riceland
objects to the request on grounds that the information sought is neither relevant nor likely to lead
to the discovery of admissible evidence and the request is overbroad and unduly burdensome, as
it requires Riceland to produce documents relating to “all” communications, even those that have
no connection to the parties’ coverage dispute.
Liberty contends that the information sought is subject to discovery because (1) it may
uncover evidence regarding Riceland’s involvement with Bayer’s GM rice activities and
Riceland’s knowledge about GM rice, (2) it may show that Bayer and Riceland had an
agreement that one of them would assume the defense or liability of the other, and (3) it could be
relevant to any subrogation or contribution rights that Liberty might have.
The Court finds that Liberty’s document request is too broad and seeks information that
is not relevant to the coverage issues before the Court, such as information obtained by Riceland
after contamination of the rice supply. Additionally, the Court finds that Liberty’s quest for
documents regarding the extent of Riceland’s knowledge and involvement concerning GM rice
is adequately covered under Document Requests Nos. 12 through 17. The Court agrees,
however, that an agreement between Bayer and Riceland, whereby one agreed to assume defense
or liability costs arising from GM rice litigation, would be relevant to the coverage issues in this
case. Accordingly, Riceland is directed to provide any communications between Riceland and
Bayer concerning such an agreement or concerning negotiations toward such an agreement.
Discovery Requests Concerning Attorney Fees
Riceland seeks to recoup attorney fees and defense costs it has incurred in the underlying
lawsuits, and Liberty seeks information relevant to the reasonableness of the fees and costs that
Riceland has incurred. Liberty issued a request for documents concerning “any matters that
Thompson Coburn LLP or Barrett & Deacon has handled for Riceland since January 1, 2000,
including matters other than the Underlying Suits.” Docket entry #50, at 11. Liberty also
propounded the following interrogatory:
Interrogatory No. 20. For any attorneys or law firms that have represented You in civil
litigation since January 1, 2000:
(a) Identify the attorney or law firm:
(b) Identify the case caption, docket number, and court for
which each attorney or law firm entered an appearance on Your behalf;
(c) describe the subject matter of the litigation;
(d) state the rate(s) charged to You by each such attorney or
Riceland objects that Liberty’s requests are too broad because they seek more than
information about attorney fee rates and ask for all documents pertaining to all matters
(including non-litigation matters) in which the aforementioned law firms represented Riceland.
Riceland maintains that the requests present an undue burden and encompass an unreasonably
lengthy time frame--2000 to the present. Riceland reports that Liberty has suggested that
Riceland redact documents that contain privileged or protected information, and Riceland asserts
that redacting documents dating back to 2000 presents an unduly burdensome task.
Riceland makes the following offer:
If narrower in its scope (since 2006 when the GM Rice lawsuits started and limited
to defense of civil litigation for Riceland), Riceland would prove willing to answer
interrogatory 20, subject to redaction for any privilege and protection. Upon doing
so, Liberty would have the information that it seeks without the need for the
burdensome production . . . of all billings and payments, as well as all documents
concerning nature of all matters in which Barrett & Deacon, P.A. and Thompson
Coburn LLP have worked in the last ten years.
Docket entry #56, at 7. In response to Riceland’s offer, Liberty states that it is willing to limit the
requests to litigation matters, so long as Riceland produces responsive information as to all matters
since 2000 in which the aforementioned law firms have represented Riceland.
The Court may limit discovery if it determines that the burden or expense of the proposed
discovery outweighs its likely benefits. See WWP, Inc. v. Wounded Warriors Family Support,
Inc. 628 F.3d 1032, 1039 (8th Cir. 2011). Here, the Court finds that the probative value of
documents regarding attorney fees incurred for matters unrelated to litigation and attorney fees
dating back to 2000 is outweighed by the time and expense involved in gathering and redacting
such documents. While information regarding attorney fees incurred by Riceland in other
matters may be helpful, it is not crucial to a determination regarding the reasonableness of
attorney fees incurred in the underlying lawsuits. The deciding factors include the ability of the
attorneys, the time and labor required to perform services properly, the novelty and difficulty of
the issues involved, and the fee customarily charged for similar services in the local area are
determinative. See Chrisco v. Sun Indus., Inc., 304 Ark. 227, 229, 800 S.W.2d 717, 718-19
In sum, the Court finds that the information Riceland has offered to supply regarding
attorney fees is sufficient, and the Court directs Riceland to provide Liberty the information set
forth in its proposal.
Discovery Requests Concerning Coverage Analysis
Liberty seeks information regarding “analysis of coverage for the underlying suits,” and
it propounded a request for the following documents:
All Documents concerning Communications with any Person, including any insurers,
insurance brokers or agents, regarding any actual or possible insurance coverage for
the Underlying Suits, including all notices to insurer and responses thereto request
seeking all documents concerning Riceland’s communications with any person,
including regarding any actual or possible insurance coverage for the underlying
suits, including all notices to insurers and responses thereto.
Docket entry #50, at 14. Riceland responded with general objections--that the request is overly
broad, vague and ambiguous and seeks information that is not relevant. Subject to its objections,
Riceland produced copies of its notices to insurers with respect to the underlying lawsuits and
Liberty asks the Court to compel Riceland to produce documents regarding Riceland’s
communications with brokers or other insurers regarding coverage for the underlying lawsuits.
Liberty notes that the Polices contain “other insurance” clauses that limit Liberty’s obligations if
other valid and collectible insurance in available. The Court agrees that the documents sought
are relevant to the coverage issues before the Court. Additionally, the Court finds that
Riceland’s blanket objections lack specificity. See Local Rule 33.1 (“A blanket objection . . .
will not be recognized. . . . The ground for objection must be stated with particularity.).
Accordingly, Riceland is directed to produce any documents regarding Riceland’s
communications with brokers or other insurers regarding coverage for the underlying lawsuits.
Liberty also propounded an interrogatory asking Riceland to identify any person with
knowledge regarding the “availability of insurance coverage, or lack thereof, to Riceland for the
Underlying Suits under any policy of insurance, including but not limited to the Polices issued
by Liberty.” Docket entry #50, at 5. In its response to this interrogatory, Riceland objected that
the phrase “availability of insurance coverage, or lack thereof” is vague and ambiguous.
Riceland also responded that its excess insurance carriers take the position that Liberty has yet to
exhaust the limits of the Polices and that “persons with knowledge concerning the availability of
coverage would include the insurers and/or their employees or representatives responding to the
tenders.” Docket entry #50, at 14.
In support of its motion to compel, Liberty sates that it is entitled to know the names of
any persons who have either evaluated coverage under the Polices or have knowledge relevant to
coverage. Riceland responds that it will amend its response to provide the names of individuals
who have evaluated coverage under the Polices, and the Court directs Riceland to amend its
Document Requests Concerning Other Policies
In its Request for Production of Documents No. 4, Liberty seeks all documents
concerning communications between Riceland and its insurers, brokers, agents, or underwriters
regarding the procurement, terms, negotiation, or issuance of any other liability insurance to
Riceland since January 2006, including primary, umbrella, excess, errors and omissions,
products, and recall insurance.
Riceland objects that Request No. 4 is vastly overbroad and seeks documents that are
immaterial to the issues joined in this action–including documents pertaining to insurance for
workers’ compensation, employment practices, fiduciary liability, and directors & officers’
liability and insurance policies that cover periods other than those at issue in this case. Liberty
contends that it is entitled to evaluate for itself whether the other insurance policies constitute
“other insurance” within the meaning of the Policies. The Court agrees and finds that Riceland
must produce documents responsive to Request No. 4.
For the reasons stated, Defendant’s motion to compel (docket entry #49) is GRANTED
IN PART AND DENIED IN PART as provided in this order. Plaintiff is directed to provide
discovery responses within twenty (20) days from the entry of this order.
IT IS SO ORDERED THIS 1st DAY OF AUGUST, 2011.
/s/Susan Webber Wright
UNITED STATES DISTRICT JUDGE
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