U.S. Specialty Insurance Company v. Catalent, Inc.

Filing 54

MEMORANDUM OPINION AND ORDER.....Catalents March 10, 2017 motion for reconsideration is denied. (Signed by Judge Denise L. Cote on 6/9/2017) (gr)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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:
U.S. SPECIALTY INSURANCE COMPANY,
:
:
Plaintiff,
:
:
-v:
:
CATALENT, INC.,
:
Defendant.
:
:
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16cv4414 (DLC)
MEMORANDUM OPINION
AND ORDER

APPEARANCES:
For the Plaintiff:
Jeffrey S. Weinstein
Emilie Bakal-Caplan
Sara F. Lilling
Mound Cotton Wollan & Greengrass LLP
One New York Plaza, 44th Floor
New York, NY 10004-1486
For the Defendant:
Elizabeth A. Edmondson
Jenner & Block LLP
919 Third Avenue
New York, NY 10022-3908
John H. Mathias, Jr.
David M. Kroeger
Jenner & Block LLP
353 N. Clark Street
Chicago, IL 60654
DENISE COTE, District Judge:
On March 10, 2017, Catalent, Inc. (“Catalent”) filed a
motion for reconsideration of the February 24 Opinion granting
the motion for judgment on the pleadings brought by U.S.
Specialty Insurance Company (“USSIC”).

U.S. Specialty Ins. Co.

v. Catalent, Inc., No. 16cv4414 (DLC), 2017 WL 728704 (S.D.N.Y.

Feb. 24, 2017) (“2017 Opinion”).

For the reasons discussed

below, Catalent’s motion for reconsideration is denied.
DISCUSSION
The standard for granting a motion for reconsideration is
“strict.”

Analytical Surveys, Inc. v. Tonga Partners, L.P., 684

F.3d 36, 52 (2d Cir. 2012) (citation omitted) (discussing a
motion under Rule 59(e), Fed. R. Civ. P.).

“[R]econsideration

will generally be denied unless the moving party can point to
controlling decisions or data that the court overlooked.”
(citation omitted).

Id.

“A motion for reconsideration should be

granted only when the defendant identifies an intervening change
of controlling law, the availability of new evidence, or the need
to correct a clear error or prevent manifest injustice.”

Kolel

Beth Yechiel Mechil of Tartikov, Inc. v. YLL Irrevocable Tr., 729
F.3d 99, 104 (2d Cir. 2013) (citation omitted).

It is “not a

vehicle for relitigating old issues, presenting the case under
new theories, securing a rehearing on the merits, or otherwise
taking a second bite at the apple.”

Analytical Surveys, 684 F.3d

at 52 (citation omitted).
Familiarity with the 2017 Opinion is presumed.

Only those

facts necessary to understand the arguments presented in the
motion for reconsideration are repeated here.

USSIC issued a

“Special Coverages Policy” to Catalent effective June 9, 2014 to
June 30, 2017 (the “Policy”).

Between January and October of
2

2015, Catalent detected several instances of “out-of-place”
capsules during the execution of its quality control procedures
in its manufacturing facility in Beinheim, France.

Because of

the contaminations, the National Agency for the Safety of
Medicines and Health Products, the primary French pharmaceutical
regulatory agency, suspended operations at Catalent’s Beinheim
facility.

Catalent sustained losses in excess of $10,000,000

related to the suspension.

Crucial to this motion, “Catalent

never received a written or oral demand for money related to the
contamination and admits that it has not identified a ‘sum of
monies or the monetary value of any other consideration
surrendered by or on behalf of the INSURED as an extortion
payment’ arising from these events.”
at *2 (quoting Policy language).
relevant here for “Hazard 4.

Catalent, 2017 WL 728704,

The Policy provides coverage as

Extortion Property Damage.”

A

Hazard 4 LOSS is defined as “the sum of monies or the monetary
value of any other consideration surrendered by or on behalf of
the Insured as an extortion payment arising from one event or
connected series of events.”

(Emphasis supplied.)

USSIC denied coverage for the business losses related to the
contaminations and filed this declaratory judgment action on June
13, 2016.

Catalent moved for judgment on the pleadings on

3

October 7, and USSIC cross-moved on October 28. 1

The 2017

Opinion found that “[t]he parties agree that no ‘Extortion
Property Damage’ or ‘LOSS’ as defined in Hazard 4 of the Policy
has occurred” and that “the plain language of the Policy is
unambiguous that coverage for . . . additional expenses is
predicated on the existence of an event that qualifies as a
Hazard 4 event.”

Catalent, 2017 WL 728704, at *4.

Catalent’s principal argument on reconsideration relies on a
deposition taken the day before the 2017 Opinion was issued. 2
USSIC’s Rule 30(b)(6) witness testified that in order for there
to be coverage under the Policy there must be a “loss or a demand
for a loss.”

In other words, to qualify for coverage under the

Policy, the policyholder need not pay an extortion amount “as
long as there is the demand for an extortion payment.”
Even if it were proper to consider this testimony on a
motion for reconsideration, and it is not, this testimony does
not suggest that the motion for reconsideration should be
granted.

The deposition testimony indicates that, at the very

least, a demand for payment is necessary for coverage under
Hazard 4 of the Policy, even if no payment is made.

Catalent

The March 10 Opinion incorrectly stated that USSIC filed the
first motion for judgment on the pleadings, and Catalent crossmoved.
1

The parties vigorously dispute whether this evidence is
properly considered on reconsideration or at the motion for
2

4

previously admitted that it never made an extortion payment and
does not now suggest that it received a demand for an extortion
payment.
Conclusion
Catalent’s March 10, 2017 motion for reconsideration is
denied.
Dated:

New York, New York
June 9, 2017
__________________________________
DENISE COTE
United States District Judge

judgment on the pleadings stage.
5