Pharmacia LLC v. Grupo De Inversiones Suramericana S.A., as successor-in-interest to Compania Agricola De Seguros S.A. Bogota, Colombia et al

Filing 166

ORDER ADOPTING REPORT AND RECOMMENDATIONS for 158 Report and Recommendations re 118 SEALED MOTION DEFENDANTS LONDON INSURERS' PHASE ONE MOTION FOR SUMMARY JUDGMENT filed by ASSICURAZIONI GENERALI DE TRIESTE E VENIZIA S.p.A., FIDELIDADE INSURANCE COMPANY OF LISBON, Excess Insurance Company Limited, HELVETIA SWISS INSURANCE COMPANY f/k/a ALBA GENERAL INSURANCE COMPANY LIMITED, Stronghold Ins. Co. Ltd., AGEAS INSURANCE LIMITED f/k/a BISHOPSGATE INSURANCE COMPANY, Tenecom Ltd., f/k/a Yasuda Fire & Marine Ins. Co. (UK) Ltd., ALLIANZ SUISSE VERSICHERUNGS-GESELLSCHAFT f/k/a HELVETIA ACCIDENT SWISS INSURANCE COMPANY, DELTA-LLOYD NON-LIFE INSURANCE COMPANY LTD., Mitsui Sumitomo Insurance Co., Ltd., as success or-in-interest to Sumitomo Marine & Fire Ins. Ltd., UNIONAMERICA INSURANCE COMPANY LIMITED, as successor-in-interest to ST. KATHERINE INSURANCE COMPANY, Winterthur Swiss Insurance Co., WORLD AUXILIARY INSURANCE CORPORATION LIMITED, LONDON AND EDINBURGH INSURANCE COMPANY LIMITED f/k/a LONDON AND EDINBURGH GENERAL INSURANCE COMPANY LIMITED, St. Paul Surety Europe Ltd., as successor-in-interest to St. Katherine Insurance Co., Ltd., Unionamerica Insurance Company, Markel International Insurance Company, Ltd., as successor-in-interest to Terra Nova Ins. Co. Ltd., THE BALOISE FIRE INSURANCE COMPANY LIMITED, WINTERTHUR SWISS INSURANCE COMPANY f/k/a ACCIDENT AND CASUALTY INSURANCE COMPANY OF WINTERTHUR SWITZERLAND.. Signed by District Judge Robert W. Schroeder, III on 5/10/2019. (nkl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION
PHARMACIA LLC,
Plaintiff,
v.
GRUPO DE INVERSIONES
SURAMERICANA S.A., AS
SUCCESSOR-IN-INTEREST TO
COMPANIA AGRICOLA DE SEGUROS
S.A. BOGOTA, COLOMBIA ET AL,
Defendants.

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Case No. 2:15-cv-00920-RWS-RSP

ORDER
Before the Court is the Report and Recommendation of Magistrate Judge Payne (Docket
No. 158) (the “Report”) recommending denial of Defendants’ Motion for Summary Judgment
(Docket No. 118). Defendants filed an Objection to the Report and Recommendation (Docket No.
160). After considering the briefing for Defendants’ Motion for Summary Judgment (Docket Nos.
118, 135, 139, 145), Defendants’ Objection to the Report and Recommendation (Docket No. 160)
and Plaintiff’s Response to the Objection (Docket No. 162), the Court agrees with the conclusions
reached by the Magistrate Judge within his Report and, therefore, ADOPTS his recommendation.
I.

Background
The Defendants1 (collectively, “Insurers” or “London Market Insurers”) previously

provided liability insurance to Pharmacia LLC (hereinafter “Monsanto”).2 Docket No. 160 at 2;
see Docket No. 162 at 2. Beginning in the 1980s, Monsanto became obligated to pay for damage
and injury caused by environmental contamination from polychlorinated biphenyls (“PCBs”).

1
2

See Docket No. 118-1 for a complete list of Defendants.
Pharmacia LLC was formerly known as The Monsanto Company.

Docket No. 118 at 3. Monsanto sought to shift this burden to the Defendants, which denied the
claims. Id. This prompted Monsanto to sue its insurers in Delaware for breach of their obligations
under the insurance policies. Id. The Insurers and Monsanto eventually entered into a settlement
agreement in 1995 wherein Monsanto agreed to release a portion of the coverage. See generally
Docket No. 119-2. However, this 1995 settlement agreement included a carve-out whereby the
Insurers remained obligated to provide coverage for certain claims. Docket No. 119-2 at 8. The
language of the carve-out states that:
[n]otwithstanding (a) through (e) above, the following shall not constitute
“Released Claims” as defined herein and, accordingly, Monsanto does not, by
virtue of this Agreement, release the London Market Insurers for claims of the type
described in subsections (i) through (iii) immediately below:
i.

where recovery is sought (and all of the following four conditions
have been fulfilled):
(1) arising out of the end-use of goods or products manufactured,
sold or distributed by Monsanto; and
(2) after Monsanto has relinquished to others possession of such
goods or products; and
(3) where such end-use occurs away from Monsanto’s premises; and
(4) where the underlying claim against Monsanto alleges either
negligence, strict liability, a defect (including failure to warn) or the
ultrahazardous nature of the goods or products.

Docket No. 119-2 at 7 (emphasis added).
After the parties executed the settlement agreement, another 740 claimants sued Monsanto
and alleged that they each developed non-Hodgkin’s lymphoma (“NHL”) from exposure to
Monsanto PCBs. Docket No. 118 at 1; Docket No. 160 at 2; Docket No. 135 at 2. The parties
agree that the present dispute is whether those claims properly fall within the scope of the carveout such that Defendants are obligated to provide coverage. Docket No. 118 at 1; Docket No. 135
at 1.

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II.

Procedural Posture
In their Motion for Summary Judgment, Defendants argued that the claims did not seek

recovery for injury from end-use of a product and, instead, merely asserted exposure to PCBs from
the environment. Docket No. 118 at 19–20. Defendants argued that the carve-out did not apply
unless a plaintiff’s complaint made specific allegations (or the plaintiff expressly testified) that
exposure came from a product in end-use. However, the Report rejected this argument, and
concluded that “[a] claim seeks ‘recovery . . . arising out of end-use of a product’ within the
meaning of the 1995 Settlement Agreement if the pleadings, the arguments of counsel at trial, or
the expert testimony seeks to impose liability at least in part based on exposure resulting from the
end-use of a product in which PCBs were used.” Docket No. 158 at 9–10. The Report identified
instances where claimants sought recovery arising out of the end-use of a product and concluded
that these instances gave rise to a genuine fact issue. Id. at 10.
Analysis of Defendants’ Objections

III.

Defendants now object to the evidentiary burden to which the Magistrate Judge held
Monsanto.

Specifically, Defendants object that the Report “did not recognize that it was

Monsanto’s burden to come forward with specific evidence sufficient to permit a jury to conclude
that each allegedly non-released claim falls within the carve-out.”

Docket No. 160 at 1.

Defendants also object that “reli[ance] on statements from two cases” is insufficient “as ground[s]
for finding disputed issues as to all claimants.” Id. at 1–2 (emphasis in original).
“The moving party is ‘entitled to a judgment as a matter of law’ [when] the nonmoving
party has failed to make a sufficient showing on an essential element of her case with respect to
which she has the burden of proof.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). “Of
course, a party seeking summary judgment always bears the initial responsibility of informing the

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district court of the basis for its motion, and identifying those portions of ‘the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,’
which it believes demonstrate the absence of a genuine issue of material fact.” Id. “This initial
burden remains with the moving party even when the issue involved is one on which the nonmovant will bear the burden of proof at trial.” Russ v. Int’l Paper Co., 943 F.2d 589, 592 (5th Cir.
1991). “Simply filing a summary judgment motion does not immediately compel the party
opposing the motion to come forward with evidence demonstrating material issues of fact as to
every element of its case.” Id. at 591. “[I]t is never enough simply to state that the non-moving
party cannot meet its burden at trial.” Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir.
1991); see also id. (citing Clark and noting that the law of the Fifth Circuit and Eleventh Circuit
is identical in regards to the burdens on summary judgment).
As an initial matter, the Court agrees with the Report that a claim seeks recovery arising
out of end-use of a product “if the pleadings, the arguments of counsel at trial, or the expert
testimony seeks to impose liability at least in part based on exposure resulting from the end-use of
a product in which PCBs were used.” Docket No. 158 at 9–10. This interpretation properly
accounts for the Settlement Agreement’s provision for partially released claims where injuries
arise from both a released cause and a non-released cause.

See Docket No. 119-2 at 8

(acknowledging that an end-use “may occur at multiple stages while the product or material is in
the stream of commerce” and further establishing that certain uses were released).3
The Magistrate Judge correctly identified that Defendants did not meet their initial burden.
As the movant, Defendants bore the burden of showing the absence of a genuine issues as to any

The Report also recommended that the Court reject Monsanto’s position that any exposure from open-use
applications are necessarily within the scope of the carve-out. Docket No. 158 at 9 n.2. The Court agrees and adopts
this recommendation.
3

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material fact. Clark, 929 F.2d at 606–7 (citing Adickes v. S.H. Kress & Co., 398 U.S. 144 (1970)).
“[U]nless the [Defendants meet their] burden under Rule 56, the obligation of the opposing party
does not arise even if no opposing evidentiary material is presented by the party opposing the
motion.” Id. at 607. “[U]nder certain circumstances [Defendants] may meet [their] Rule 56 burden
without negating an element of the non-moving party’s claim and [] under such circumstances it
is sufficient to point to materials on file that demonstrate that the party bearing the burden of proof
at trial will not be able to meet that burden.” Id. at 608. But, “[e]ven after Celotex it is never
enough simply to state that the non-moving party cannot meet its burden at trial.” Id.
In their motion, Defendants’ argued that none of the claims were covered under their
interpretation of the carve-out. Monsanto responded with its own interpretation of the carve-out
and examples of claims that were carved out from the release. Defendants failed to carry their
burden to establish, by cites to the record or otherwise, that Monsanto could not prove its case as
to any one of the 740 claimants at trial.4 Thus, Monsanto was not obligated to provide specific
evidence that the carve-out applied to each of the 740 individual claims. Accordingly, the
Magistrate Judge correctly rejected Defendants’ narrow interpretation of the carve-out and
concluded that Monsanto provided sufficient evidence to overcome summary judgment.
IV.

Conclusion
Because the Court agrees with the conclusions reached by the Magistrate Judge in his

Report, Defendants’ objections to the Magistrate Judges’ Report (Docket No. 160) are

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Defendants’ Objections to the Report highlight this error by focusing on Monsanto’s burden at trial but failing to
acknowledge Defendants’ own burden under Rule 56. See Docket No. 160 at 5. Defendants objected that “only the
applicability of the carve-out was at issue on summary judgment” and “to defeat summary judgment Monsanto
admittedly had the burden to show sufficient evidence to persuade a jury that the conditions were met.” Id. Whether
that is ultimately true at trial, Defendants never explained how their motion did more than “simply [] state that
[Monsanto] cannot meet its burden at trial” to establish that the carve-out applies.

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OVERRULED, and the Court ADOPTS the Magistrate Judge’s Recommendation. Defendants’
Motion for Summary Judgment (Docket No. 118) is DENIED.
So ORDERED and SIGNED this 10th day of May, 2019.

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ROBERT W. SCHROEDER III
UNITED STATES DISTRICT JUDGE

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