Astellas US Holding, Inc. v. Starr Indemnity and Liability Company et al

Filing 47

MEMORANDUM Opinion and Order. Signed by the Honorable Manish S. Shah on 5/30/2018: Defendants' motions to dismiss, 41 , 42 , and 43 are denied. Defendants shall answer the amended complaint by June 20, 2018 and a status hearing is set for June 26, 2018 at 9:30 a.m. [For further detail see attached order.] Notices mailed. (psm, )

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
ASTELLAS US HOLDING, INC., and
ASTELLAS PHARMA US, INC.,
Plaintiffs,

No. 17 CV 8220

v.

Judge Manish S. Shah

STARR INDEMNITY AND LIABILITY
COMPANY, BEAZLEY INSURANCE
COMPANY, INC., and FEDERAL
INSURANCE COMPANY,
Defendants.
MEMORANDUM OPINION AND ORDER
The government issued a subpoena to Astellas Pharma, Inc., demanding the
production of documents, and later entered into an agreement with Astellas
Pharma US to toll the statute of limitations on possible violations of criminal law.
Plaintiffs Astellas US Holding and Astellas Pharma US bring this action against
their insurers, Starr Indemnity and Liability Company, Beazley Insurance
Company, and Federal Insurance Company, for denying coverage for the expenses
incurred in response to the government’s investigation. Each of the defendants
move to dismiss plaintiffs’ amended complaint because, they say, the policies cover
losses from claims for wrongful acts and neither the subpoena nor the tolling
agreement count as covered claims. For the following reasons, those motions are
denied.

I.

Legal Standards
A motion to dismiss under Rule 12(b)(1) challenges the court’s subject-matter

jurisdiction. Fed. R. Civ. P. 12(b)(1). The plaintiff bears the burden of establishing
the elements necessary for subject-matter jurisdiction. Scanlan v. Eisenberg, 669
F.3d 838, 841–42 (7th Cir. 2012). By contrast, a Rule 12(b)(6) motion “tests whether
the complaint states a claim on which relief may be granted.” Richards v. Mitcheff,
696 F.3d 635, 637 (7th Cir. 2012). The complaint must contain factual allegations
that plausibly suggest a right to relief. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
When analyzing a motion under Rule 12(b)(1) or Rule 12(b)(6), the court accepts all
well-pleaded factual allegations as true and draws all reasonable inferences in favor
of the plaintiff. Scanlan, 669 F.3d at 841; Virnich v. Vorwald, 664 F.3d 206, 212 (7th
Cir. 2011). The court need not accept legal conclusions or conclusory allegations,
however. Virnich, 664 F.3d at 212.
II.

Background
Historically,

pharmaceutical

companies

sponsored

patient

assistance

programs that subsidized the purchase of drugs for certain Medicare beneficiaries.
[39] ¶ 19.1 For example, plaintiffs made charitable contributions to organizations
that assisted financially needy patients, and some of those patients may have taken
drugs sold by plaintiffs. Id. ¶ 26. The Department of Health and Human Services,
Office of Inspector General, announced that these programs risked violating the
anti-kickback statute, and beginning January 1, 2006, Medicare Part D
Bracketed numbers refer to entries on the district court docket. Page numbers are taken
from the CM/ECF header placed at the top of filings.
1

2

beneficiaries would no longer be eligible to participate in patient assistance
programs. Id.¶ 19. In May 2014, the OIG issued a supplemental bulletin to provide
additional guidance regarding patient assistance programs that were operated by
independent charities and that provided cost-sharing assistance for prescription
drugs. Id. ¶ 20.
On March 3, 2016, the United States Department of Justice issued a
subpoena to plaintiffs demanding certain documents relating to the DOJ’s industrywide investigation of pharmaceutical companies for alleged “Federal health care
offenses.” Id. ¶ 21. The subpoena commanded plaintiffs to appear before
government officials and to produce documents about plaintiffs’ payments to
charitable organizations that provided financial assistance to patients taking
plaintiffs’ drugs. Id. ¶ 24; [39-4]. It advised plaintiffs that failure to comply exposed
them to liability in judicial enforcement proceedings and punishment for
disobedience. [39-4]. Although the DOJ formally addressed the subpoena to Astellas
Pharma, Inc., plaintiffs’ Japanese parent company, the subpoena also used the term
“You,” which the subpoena defined as including the parent company’s subsidiaries.
[39] ¶ 22; see also [39-4]. Astellas Pharma US, the U.S.-based subsidiary, was the
only relevant entity for purposes of the subpoena because plaintiffs’ parent company
never provided charitable contributions to the patient assistance programs at issue
in the subpoena.2 [39] ¶ 22.

The complaint also alleges that the DOJ entered into an agreement with plaintiffs that
the subpoena would apply to plaintiffs, not just plaintiffs’ parent company. [39] ¶ 22.
2

3

Although the government’s position is not stated in the subpoena, the DOJ
alleged that plaintiffs’ contributions to independent charity patient assistance
programs violated applicable law. Id. ¶¶ 27–29. The investigation is ongoing; and
the DOJ has subpoenaed additional documents from plaintiffs. Id. ¶ 30. On October
26, 2017, the DOJ entered into a “Limited Tolling Agreement on Statute of
Limitations” with Astellas Pharma US, which states that the DOJ “is currently
conducting a joint criminal and civil investigation of [] Astellas, and its officers,
employees, and agents,” and that “[t]he conduct being investigated includes,
without limitation, the possible violation by Astellas . . . of various federal criminal
statutes . . . in connection with Astellas’s payments to ‘501(c)(3)’ organizations that
provide financial assistance to Medicare beneficiaries.” Id. ¶ 31; see also [21-4]. The
parties agreed to toll the applicable statutes of limitation for Astellas’s possible
violations of law in making payments to organizations that gave financial
assistance to Medicare beneficiaries. [21-4].
After receiving the first subpoena, plaintiffs provided each of the
defendants—the insurance companies—timely written notice of the subpoena. [39]
¶ 34. Plaintiffs’ primary insurance policy came from Starr; that policy had a $5
million limit of liability excess of a $500,000 self-insured retention, id. ¶ 11, and it
provided: “The Insurer shall pay on behalf of the Company the Loss arising from a
Claim first made during the Policy Period . . . against the Company for any
Wrongful Act, and reported to the Insurer in accordance with the terms of this
policy,” [39-1] at 18. In addition to its primary policy with Starr, plaintiffs also had

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excess insurance policies with Beazley and Federal Insurance. Beazley’s policy
provided a $5 million limit of liability excess of the Starr policy’s $5 million limit of
liability and the applicable $500,000 self-insured retention. [39] ¶ 17. In order for
the Beazley policy to apply, all of the underlying limits had to have been exhausted
through payments of amounts covered under the Starr policy. Id. Federal provided a
$10 million limit of liability excess of the Starr policy’s and the Beazley policy’s
combined limits of $10 million and the applicable $500,000 self-insured retention.
Id. ¶ 18. The Federal policy only covers a loss if all of the underlying limits have
been exhausted through payments of amounts covered under the Starr and Beazley
policies. Id.
In response to plaintiffs’ notice of the subpoena, Beazley reserved its rights,
noting that “[a]s an excess carrier, Beazley cannot have any coverage obligations
until the underlying layer is exhausted,” id. ¶ 35, and Federal acknowledged receipt
of the notice, but stated that “it must reserve the right to raise all of the defenses
available to it under the policy and the law,” id. ¶ 36. Starr denied coverage,
asserting that “the Subpoena does not currently fall within the scope of coverage
afforded by the Policy” because “the definition of Claim requires . . . a written
demand for monetary, non-monetary or injunctive relief made against an Insured.
Here, there has been no written demand for relief made against any Insured[.] . . .
The Subpoena simply requests that certain documents be produced.” Id. ¶ 37.
Beazley and Federal both adopted Starr’s coverage positions, reservations of rights,
and defenses. Id. ¶ 38.

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Plaintiffs incurred defense costs that exceed the retention in the Starr policy.
Id. ¶ 45. While plaintiffs have complied with all of the applicable conditions of
Starr’s policy, Starr has refused to pay the amounts owed under that policy. Id.
¶¶ 46–47. After deducting the self-insured retention, plaintiffs’ defense costs have
exceeded the limits of liability of the Beazley policy and the underlying limits of the
Federal policy. Id. ¶ 50. Plaintiffs seek a declaration that Beazley and Federal must
pay all reasonable and necessary costs of investigating and defending “this Claim,”
up to the respective limits of liability. Id. ¶ 54.
Starr moved to dismiss plaintiffs’ complaint. [21]. Both Beazley and Federal
Insurance joined that motion. [24] at 2; [26] at 2. Additionally, Beazley filed its own
motion to dismiss plaintiffs’ amended complaint, [24], and Federal Insurance joined
that motion, [26] at 2. After the parties completed briefing defendants’ motions to
dismiss, plaintiffs moved for leave to file an amended complaint. [36] at 1 (citing
Fed. R. Civ. P. 15(a)(2), 19). In that motion, plaintiffs explained their intention to
address the issues defendants raised in their motions to dismiss by adding certain
factual allegations. Id. at 2. I granted plaintiffs’ motion for leave to file an amended
complaint, and I permitted defendants to adopt the arguments they had raised in
their motions to dismiss as well as in their responses to plaintiffs’ motion for leave
to amend the complaint. [40]. Plaintiffs filed a first amended complaint, [39], and
defendants moved to dismiss the amended complaint, adopting their previous
arguments, [41]; [42]; [43].

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III.

Analysis
Plaintiffs brought this action against Starr for breaching its duty under the

policy to pay for a loss plaintiffs suffered. Starr’s policy provides: “The Insurer shall
pay on behalf of the Company the Loss arising from a Claim . . . against the
Company for any Wrongful Act.” [39-1] at 18. The parties dispute whether there
was: (1) a “Claim” (2) that was asserted against the “Company” (3) for a “Wrongful
Act.” Courts must interpret the terms of an insurance policy in the context of the
entire policy and the parties’ intentions. Emp’rs Ins. of Wausau v. James McHugh
Constr. Co., 144 F.3d 1097, 1104 (7th Cir. 1998); Travelers Ins. Co. v. Eljer Mfg.,
Inc., 197 Ill.2d 278, 292 (2001). If the policy language is unambiguous, as it is here,
courts ascertain the parties’ intent from the language’s plain, ordinary, and popular
meaning. Travelers Ins., 197 Ill.2d at 292–93. Applying these standards to the
allegations of the amended complaint leads to a conclusion in favor of coverage.
The policy defines a “Wrongful Act,” in relevant part, as “any actual or
alleged breach of duty, neglect, error, misstatement, misleading statement,
omission or act by the Company.” [39-1] at 21–22. Plaintiffs allege that the DOJ told
them that the DOJ contended that plaintiffs’ donations to independent charity
patient assistance programs violated the law and did not comport with the OIG
bulletins. [39] ¶ 27. The DOJ issued the subpoena to plaintiffs because of these
allegedly unlawful acts. See id. ¶ 29. And because the DOJ alleged that plaintiffs
charitable contributions were unlawful, those acts constitute an “alleged . . . error, .
. . , or act” under the policy. See [39-1] at 22. These allegations in the complaint are

7

sufficient to allege that plaintiffs were accused of committing wrongful acts under
the policies, and that the DOJ issued the subpoena in response to plaintiffs’
wrongful acts.
Plaintiffs allege that the DOJ requested that they enter into a tolling
agreement. [39] ¶ 31. The tolling agreement stated that the DOJ is “conducting a
joint criminal and civil investigation” of plaintiffs’ “possible violation . . . of various
federal criminal statutes.” [21-4] at 2. Since the policy’s definition of a “Wrongful
Act,” includes an “alleged . . . act,” [39-1] at 22, the tolling agreement’s reference to
a “possible violation,” together with the allegation that the government told
plaintiffs that Astellas’s conduct violated the law, is enough to allege that the DOJ
entered into the agreement because of plaintiffs’ wrongful act.
The policy’s definition of “Company” includes the “Parent Company” as well
as “any Subsidiary of the Parent Company.” Id. at 7. Astellas US Holding is listed
as the “Parent Company” in the policy, id. at 2, and plaintiffs allege that the policy
also covers Astellas Pharma US. [39] ¶ 22 (“APUS (an Insured under the Policy)”).
Drawing all reasonable inferences in plaintiffs’ favor, I conclude that Astellas
Pharma US is a subsidiary of Astellas US Holding under the policy. As a result,
Astellas Pharma US and Astellas US Holding are each the “Company” under the
policy.3

Starr argues that plaintiffs have not established that Astellas Pharma US is a
“Subsidiary” of Astellas US Holding—the named insured parent company in the policy–and
as a result, the policy does not cover Astellas Pharma US. [33] at 2 n.2. I reject Starr’s
argument because I accept plaintiffs’ factual allegation that Astellas Pharma US is an
insured under the policy. See [39] ¶ 22. The corporate relationships between the entities,
with some factual development, is likely to be undisputed, but for now, I read the complaint
3

8

The policy defines “Claim” as any:
(1) written demand for monetary, non-monetary or injunctive relief
made against an Insured;
(2) judicial, administrative or regulatory proceeding, whether civil or
criminal, for monetary, non-monetary or injunctive relief commenced
against an Insured, including any appeal therefrom, which is
commenced by:
(i) service of a complaint or similar pleading;
(ii) return of an indictment, information or similar document (in
the case of a criminal proceeding); or
(iii) receipt or filing of a notice of charges;
(3) arbitration proceeding commenced against an Insured by service of
a demand for arbitration;
(4) formal civil, criminal, administrative or regulatory investigation of
an Insured Person, which is commenced by the filing or issuance of a
notice of charges, formal investigative order or similar document
identifying such Insured Person as a person against whom a
proceeding identified in (2) or (3) above may be commenced;
(5) written request to toll or waive the applicable statute of limitations
relating to a potential Claim against an Insured for a Wrongful Act; or
(6) Derivative Demand, solely under Insuring Agreement D. if
purchased by the Insured.
[39-1] at 18–19. The subpoena satisfies subpart (1) because it is a written demand
for plaintiffs to appear before government officials and to produce specific
documents. This is a demand for non-monetary relief. The tolling agreement
satisfies subpart (5) because the agreement informs Astellas Pharma US that the
DOJ is “conducting a joint criminal and civil investigation” of plaintiffs’ “possible
violation . . . of various federal criminal statutes.” [21-4] at 2. It continues: “[we]
have agreed . . . to toll the applicable statutes of limitation . . . for the conduct
described [above.]” Id. It also warns Astellas Pharma US that it “may be charged
with any of the foregoing offenses or violations and/or any other offenses.” Id. at 3.
to allege that Astellas Pharma US is a subsidiary of Astellas US Holding and that plaintiffs
will prove that fact.

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This language is the equivalent of a “written request to toll . . . the applicable
statute of limitations relating to a potential Claim against an Insured for a
Wrongful Act.” See [39-1] at 19. The potential “Claim” being both the subpoena and
a potential indictment for violations of federal criminal law based on payments to
organizations subsidizing Medicare beneficiaries’ purchase of plaintiffs’ drugs, the
“Insured” being Astellas Pharma US, and the “Wrongful Act” being plaintiffs’
“potential violation,” as discussed above.
In sum, I conclude that plaintiffs have sufficiently alleged that the DOJ
asserted two claims against Astellas Pharma US for a wrongful act. And, I reject
Starr’s arguments to the contrary. Although Starr agrees that the policy language is
unambiguous and should be read to give its plain meaning, Starr disagrees that a
“demand for relief” includes production of documents in response to a subpoena.
Starr defines “relief” as “legal remedy or redress,” or as “‘[t]he redress or benefit,’
especially ‘equitable in nature (such as an injunction or specific performance), that a
party asks of a court.’” [21] at 9 (citing as MusclePharm Corp. v. Liberty Ins.
Underwriters, Inc., 712 Fed. App’x. 745, 754 (10th Cir. 2017) (citing Relief,
Merriam-Webster Dictionary, https://www.merriam-webster.com/dictionary/relief
(last visited May 29, 2018); Relief, BLACK’S LAW DICTIONARY (10th ed. 2014)), and
because the subpoena only seeks information and does not make a request of the
court, Starr concludes that they do not fit within the plain meaning of a demand for
relief.4 The threatened enforcement proceedings are discrete from the informational

Starr emphasizes that “the most recent Illinois case” to consider this issue “expressly
rejected” the notion that subpoenas qualify as written demands for relief. [21] at 9 (citing
4

10

investigation, the argument goes. Id. at 11 (citing Ctr. for Blood Research, Inc. v.
Coregis Ins. Co., 305 F.3d 38, 43 (1st Cir. 2002)). But, the complaint alleges that the
DOJ had determined that plaintiffs violated federal health care laws, and it is
reasonable to infer that enforcement proceedings would swiftly follow any noncompliance by the plaintiffs in response to the subpoena. In this context, I do not
conclude that the subpoena merely requested, as opposed to demanded, information.
Because courts may compel parties to give testimony or to produce documents as
demanded in the subpoena, I also conclude that the subpoena demanded a form of
non-monetary relief and that the subpoena was not distinct from the potential
enforcement proceedings—it defined the scope of the judicial enforcement.
Starr also argues that interpreting the policy to allow the subpoena to fall
within subpart (1) would render subpart (4) superfluous, and courts must interpret
policies to give effect to each provision. Id. at 11 (citing Cincinnati Ins. Co. v.
Gateway Const. Co., 372 Ill.App.3d 148, 152 (1st Dist. 1992)). Subpart (1) is broader
than subpart (4), but as plaintiffs observe, each of the policy’s subparts offer
alternative forms of coverage; they do not limit one another. Any overlap between
Fed. Ins. Co. v. Ill. Funeral Director’s Ass’n, 2010 WL 5099979 (N.D. Ill. 2010)). Starr’s
description of Federal Insurance is inaccurate, though. That court did not consider whether
grand jury subpoenas were a demand for relief; rather, the court decided that the
subpoenas did not satisfy the definition of a “Claim” under that policy because they were
not directed to “Insured Persons” and they did not allege that the defendants had engaged
in any “Wrongful Acts.” Fed. Ins., 2010 WL 5099979 at *4. It is true that the court
considered the contours of a “demand for relief” under the relevant policy, but the court
only did so with respect to a letter from the Illinois Office of the Comptroller. In considering
that question, the court rejected the defendants’ attempts to frame the letter as a request
for responses to routine audit findings, and the court concluded that the letter was a
written demand for nonmonetary relief under the policy because: (1) the letter described the
audit findings as “an intolerable situation that [the company] must rectify,” and (2) the
letter threatened to take action against the business if it did not timely respond. Id. at *5.

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the subparts is by design. Subpart (4) is also different because it covers an
investigation of an insured person against whom a proceeding may be commenced,
but arguably does not require a present demand for relief against that person. My
interpretation of subpart (1) does not make subpart (4) superfluous.5
Relatedly, Starr argues that plaintiffs’ interpretation would lead to an absurd
result, [21] at 11 (citing Foxfield Realty v. Kubala, 287 Ill.App.3d 519, 524 (2d Dist.
1997)), because the policy is only meant to protect insureds from potential liability
due to allegations of wrongdoing, which the subpoena lacked. But I disagree with
Starr’s characterization of the subpoena. The broad definition of a “Claim,” which
includes overlapping subparts, indicates that the policy was designed to cover
something like the subpoena—which is a demand for relief in response to an
accusation of wrongdoing. Thus, the “result” in this insistence—that Starr may
have to cover plaintiffs’ costs related to the subpoena—is not absurd, it is precisely
what the policy intended.
Regardless of whether the subpoena satisfies subpart (1), Starr asserts that
the subpoena is not a “Claim” under the policy because there is nothing to support a
finding that this document was issued “for a Wrongful Act,” as required by the
policy. See [39-1] at 18. Starr notes that the subpoena does not state or allege that
plaintiffs made improper charitable contributions or that the plaintiffs committed
any other wrongdoing. In fact, the subpoena was issued under 18 U.S.C. § 3486,

For these same reasons, I reject Beazley’s related argument that the more “specific”
language in subpart (4), and not the more “general” language in subpart (1), governs
whether the subpoena is a “Claim” under the policy. See [24] at 12.
5

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which grants the Attorney General authority to commence an investigation by
issuing subpoenas even if the Attorney General has not identified a wrongful act.
See Ctr. for Blood Research, 305 F.3d at 43. Starr points to the statute’s language,
which recognizes the likelihood that no case or proceeding may arise from the
production of records in response to such subpoenas. See 18 U.S.C. § 3486(a)(8).
Therefore, Starr concludes, this type of an administrative subpoena does not
necessarily amount to an “allegation.” [33] at 7 (citing Employers’ Fire Ins. Co. v.
ProMedica Health Systems, Inc., 524 Fed. App’x. 241, 248 (6th Cir. 2013)).
Since the policy does not define “alleged,” Starr urges the court to adopt the
ordinary meaning of the term, which it defines as “asserted to be true as described”
or “accused but not yet tried.” [21] at 13–14 (citing Employers’ Fire Ins., 524 Fed.
App’x. at 247). Yet, the policy only requires that a “Claim” was made “for any
Wrongful Act.” It is not necessary for the subpoena to include language that asserts
that plaintiffs engaged in an actual or alleged wrongful act. Here, plaintiffs have
alleged that the DOJ issued the subpoena because the DOJ had alleged that
plaintiffs engaged in federal health care violations. That allegation provides a basis
to conclude that the subpoena was issued “for” a “Wrongful Act,” even if the
subpoena itself did not contain the allegation.
With respect to the tolling agreement, Starr does not dispute that it is a
“written request to toll” the statute of limitations under subpart (5); but, Starr
disputes that the agreement relates to “a potential Claim” under subpart (5). To
support this point, Starr refers to its original arguments about why the subpoena is

13

not a “Claim” under the policy. Having rejected that argument to conclude that the
subpoena is a “Claim,” I now find that the tolling agreement is related to a
“Claim”—the subpoena. Nevertheless, Starr insists that the tolling agreement is not
a “Claim” because it does not reference a “Wrongful Act.” Starr emphasizes how the
tolling agreement states that the DOJ is investigating the “possible violation” of
various criminal statutes and that no decision on that investigation has been made.
[21] at 14 (citing Emplr’s Fire Ins. Co., 524 Fed. App’x at 248, 250). This is not
persuasive because the policy’s definition of a “Wrongful Act” includes an “alleged
. . . act” and Starr has not established that a “possible violation” does not fit within
that definition. See [39-1] at 22. In addition, the complaint alleges that the
government told plaintiffs that it believed the payments to patient assistance
programs violated federal law. Consequently, I find that the complaint adequately
alleges that the tolling agreement satisfies subpart (5) and constitutes a “Claim”
under the policy. Defendants’ motions to dismiss plaintiffs’ amended complaint for
failure to state a claim are denied.
Beazley and Federal Insurance argue that plaintiffs’ claim for declaratory
judgment should be dismissed for lack of subject-matter jurisdiction because the
claim is not ripe for adjudication. They argue that as excess insurers, they are only
obligated to cover plaintiffs’ losses until the primary insurance policy has been
exhausted. According to defendants, plaintiffs failed to allege that such exhaustion
has occurred; thus, their policies have not been triggered and plaintiffs’ claim is
premature. Plaintiffs disagree; they point to allegations in the complaint that the

14

defense costs they have paid thus far have implicated the defendants’ excess
insurance policies. In the event that plaintiffs receive a favorable ruling with
respect to their rights under Starr’s policy, plaintiffs’ argue that defendants’
obligations to pay the full limits of liability under their policies will immediately
become due.
“A suit is ripe when ‘the facts alleged, under all the circumstances, show that
there is a substantial controversy, between parties having adverse legal interests, of
sufficient immediacy and reality to warrant the issuance of a declaratory
judgment.’” Cent. States, Southeast and Southwest Areas Health and Welfare Fund
by Bunte v. Am. Int’l Grp., Inc., 840 F.3d 448, 451 (7th Cir. 2016) (citation omitted).
When the declaratory judgment action involves an excess insurance policy, courts
look to see whether the events that trigger the excess policy’s coverage are likely to
occur. See Cushman & Wakefield, Inc. v. Ill. Nat’l Ins. Co., 2015 WL 2259647, at *4
(N.D. Ill. 2015). Accepting the allegations in the complaint as true, it is likely that
plaintiffs have incurred enough costs to exhaust the relevant limits provided by the
excess policies.6 Since Starr has not paid plaintiffs the amounts it owes under the
policy, the excess policies have not been triggered yet; but that is not enough to
defeat jurisdiction here. A substantial controversy is brewing between the parties;
plaintiffs need not wait for Beazley and Federal Insurance to breach their policies
Beazley argues that the costs plaintiffs allege they have incurred are not eligible for
reimbursement because those costs are beyond the scope of the policy’s definition of
“Defense Costs.” See [24] at 8. At this stage of the litigation, I reject this argument because
I accept plaintiffs allegations that “[t]he Defense Costs that Astellas has incurred to date
exceed the applicable retention in the Starr Policy,” [39] ¶ 45, and that “[t]he total Defense
Costs, after deducting the self-insured retention, have exceeded the respective Underlying
Limits of the Federal Policy and the Limits of Liability of the Beazley Policy,” id. ¶ 50.
6

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before bringing suit. MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 137 (2007).
Defendants’ motions to dismiss plaintiffs’ declaratory judgment claim are denied.
IV.

Conclusion
Defendants’ motions to dismiss, [41], [42], and [43] are denied. Defendants

shall answer the amended complaint by June 20, 2018 and a status hearing is set
for June 26, 2018 at 9:30 a.m.
ENTER:
___________________________
Manish S. Shah
United States District Judge

Date: May 30, 2018

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