EFG Bank AG, Cayman Branch v. AXA Equitable Life Insurance Company

Filing 413

MEMORANDUM OPINION AND ORDER: For the reasons set forth within, Plaintiffs' second motion in limine is GRANTED, and their fourth, fifth, and sixth motions in limine are DENIED. The Court reserves judgment on Plaintiffs' first, third, seventh, and eighth motions in limine. -- SEE ORDER. (Signed by Judge Jesse M. Furman on 10/25/2023) (ab)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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EFG BANK AG, CAYMAN BRANCH et al.,
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Plaintiffs,
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AXA EQUITABLE LIFE INSURANCE CO.,
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Defendant.
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THE DUFFY 2004 LLC et al.,
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Plaintiffs,
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-v:
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AXA EQUITABLE LIFE INSURANCE CO.,
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Defendant.
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17-CV-4767 (JMF)

17-CV-4803 (JMF)
MEMORANDUM
OPINION AND
ORDER

JESSE M. FURMAN, United States District Judge:
In these consolidated cases, familiarity with which is presumed, Plaintiffs bring claims
against AXA Equitable Life Insurance Co. (“AXA”) for breach of contract in connection with an
increase in the “cost of insurance” or “COI” — a monthly charge deducted from the value of a
policyholder’s account — on a subset of Athena Universal Life II (“AUL II”) universal life
insurance policies. Trial is scheduled to begin on October 30, 2023. In advance of trial, each
side has filed multiple motions in limine. See ECF Nos. 308, 313. 1 The Court previously

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Unless otherwise indicated, all record citations are to 18-CV-2111. By Order dated
September 5, 2023, the Court granted the parties’ request to file all motion in limine briefing and
related documents on that docket. See 18-CV-2111, ECF Nos. 304, 343.

resolved AXA’s motions in limine. See ECF No. 401; 17-CV-4767, ECF Nos. 387, 388. The
Court rules on Plaintiffs’ motions in limine as follows:
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Motion in Limine #1: The Court is inclined to agree with AXA that the DFS “NoObjection Letter” is relevant to custom and usage evidence with respect to the meaning of
“given class” and that, used for that purpose, it is not hearsay. (AXA’s other relevance
arguments appear to be moot in light of the LSH settlement.) The parties should be
prepared to address the Rule 403 issues — especially insofar as the Letter speaks to more
than the meaning of “given class” — at the final pretrial conference tomorrow. The
parties should also be prepared to clarify whether there is any evidence of “regulatory
submissions and responses” beyond the “No-Objection Letter.”

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Motion in Limine #2: The motion is granted to the extent that it seeks to preclude AXA
from asserting a STOLI defense as to Plaintiffs’ claims or presenting evidence regarding
the origination of Plaintiffs’ policies specifically — relief that AXA does not even appear
to oppose. The Court is inclined to think that some, albeit limited, evidence regarding
STOLI concerns may be relevant and admissible as context or explanation for AXA’s
COI rate increase — specifically, to rebut Plaintiffs’ argument that AXA improperly
targeted investor-owned policies, see ECF No. 334 (“AXA Mem.”), at 15-16, and to
“establish . . . that STOLI practices would be expected to increase mortality experiences,”
id. at 16-18. Plaintiffs’ objections to such evidence, if any, can and should be addressed
during trial.

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Motion in Limine #3: The motion is granted without objection to the extent that
Plaintiffs seek to preclude evidence concerning the ethics or morals of Plaintiffs’
investments in life insurance as well as Plaintiffs’ internal controls to prevent criminal
activities — all of which is irrelevant to the issues on trial. See AXA Mem. 19 (“AXA
has no intention of introducing evidence concerning the ethics of Plaintiffs’ investments
in life insurance.”). As discussed below, Plaintiffs’ own models may be relevant to the
issues at trial. Accordingly, to the extent that Plaintiffs seek to preclude evidence relating
to their investment strategies and business models, their motion is denied without
prejudice to objections at trial. Finally, AXA should be prepared to explain at the final
pretrial conference how the evidence at issue pertains to whether and how “Plaintiffs’
own business practices” — as opposed to investing practices generally — “impacted the
actuarial justification for the COI Increase.” AXA Mem. 18.

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Motion in Limine #4: The motion is denied substantially for the reasons stated by AXA
in its opposition. See AXA Mem. 21-24. In fact, the Court previously ruled that “[a]
reasonable factfinder could certainly rely” on evidence that AXA’s mortality assumptions
were “consistent with or lower than the mortality assumptions that certain institutional
investors, including some Individual Plaintiffs, used in deciding to purchase” the policies
at issue. In re AXA Equitable Life Ins. Co. COI Litig., 595 F. Supp. 3d 196, 225
(S.D.N.Y. 2022). Plaintiffs provide no basis for reconsideration of that ruling. Nor do
they provide a basis to bring what amounts to an untimely Daubert motion to preclude
the testimony of AXA’s expert. That said, Plaintiffs may object to particular questions at
trial — for example, if they believe that AXA is confusing the issues by conflating
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individual life expectancy with large population mortality assumptions.
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Motion in Limine #5: The Court agrees with Plaintiffs that evidence of their “financial
status, ownership, sophistication, other investments, due diligence conducted on the
Plaintiffs’ Policies, role or advice of any advisors, and Investor Plaintiffs’ subjective
interpretation/understanding of the Plaintiffs’ Policies” is almost certainly irrelevant to
the question of whether AXA breached the parties’ contracts — the only issue at trial —
and, thus, inadmissible. ECF No. 314 (“Pls.’ Mem.”), at 32-33. It does not matter, for
example, whether Plaintiffs reviewed the AULII contracts or understood their terms (or
the relevant risks) before investing. That said, some of the evidence that Plaintiffs seek
to preclude (e.g., their places of business) seems innocuous, see AXA Mem. 28-29, and
some may be relevant to industry custom and usage of the term “given class,” see id. at
25-26. For these reasons, the motion is denied without prejudice to particularized
objections at trial.

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Motion in Limine #6: The motion is denied substantially for the reasons stated by AXA
in its opposition. See AXA Mem. 31-35. The Court previously ruled that evidence of
“mortality experience subsequent to the COI Increase . . . is relevant, though not
dispositive, in determining the reasonableness of a projection or prediction,” AXA COI
Litig., 595 F. Supp. 3d at 252 (citing cases), and Plaintiffs provide no basis for
reconsideration of that ruling at this stage. See, e.g., In re Gen. Motors LLC Ignition
Switch Litig., No. 14-MD-2543 (JMF), 2017 WL 4417693, at *7 (S.D.N.Y. Oct. 3, 2017)
(emphasizing that parties should avoid using motions in limine to ask “the Court to
decide issues that the Court has effectively already decided”); see also Ruzhinskaya v.
HealthPort Techs., LLC, No. 14-CV-2921 (PAE), 2016 WL 7388371, at *1 (S.D.N.Y.
Dec. 20, 2016). 2

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Motion in Limine #7: The Court rejects AXA’s argument that evidence concerning lapse
protection riders is relevant because the jury should know that “policyholders were
informed and understood at the time of Policy issuance that the risk of COI increases was
a real one and a central feature of AULII.” AXA Mem. 36. The question for the jury at
trial is whether AXA breached the parties’ contracts by increasing the COI rates; whether
Plaintiffs were informed that there was a risk of such increases is not relevant to that
question. To the extent it has any relevance, the probative value is substantially
outweighed by the dangers of confusion, wasting time, and unfair prejudice. See Fed. R.
Evid. 403. That said, the Court reserves judgment on Plaintiffs’ motion pending oral
argument at the final pretrial conference on whether, or to what extent, evidence of lapse
protection riders is relevant to damages. See id. at 36-37.

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Motion in Limine #8: The Court is inclined to think that one of the three emails
referenced by the parties, see ECF No. 321-1, may be relevant to industry custom and
usage of “given class.” But the other two emails, see ECF Nos. 321-2, 321-3, do not

The new authorities cited by Plaintiffs are both too late and too little, as they merely
confirm an uncontroversial proposition that AXA does not dispute: namely, that the jury’s role in
this case is to determine whether AXA’s COI rate increase was reasonable, “not with hindsight,
but at the time made.” Pls.’ Mem. 33 (quotation marks omitted).
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appear to be relevant to that issue — and AXA does not reference them in its opposition
memorandum. The parties should be prepared to address the Rule 403 issues with
respect to ECF No. 321-1 — especially insofar as the email speaks to more than the
meaning of “given class” — at the final pretrial conference tomorrow. The parties should
also be prepared to clarify whether there is any evidence of “third party views” at issue
other than that one email.
In light of the foregoing, Plaintiffs’ second motion in limine is GRANTED, and their
fourth, fifth, and sixth motions in limine are DENIED. The Court reserves judgment on
Plaintiffs’ first, third, seventh, and eighth motions in limine.
SO ORDERED.
Dated: October 24, 2023
New York, New York

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JESSE M. FURMAN
United States District Judge

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