In the Olin Corp. case,1 one of Olin Corporation’s (“Olin”) three carriers admitted only a small amount of liability and the other two delayed making a coverage decision. So, Olin filed suit in federal court against all three, seeking entry of a declaratory judgment that it was entitled to coverage.

Olin requested the “claim file … , … underwriting file, premium setting information, reserves and reinsurance [information], and general company-wide manuals, guidelines, claims-handling procedures, directives relating to policy drafting and policy drafting history, and other such information.” Over run-of-the-mill objections from the carriers, the U.S. District Court of Nevada ordered production of all such documents. Below is a snapshot of the Court’s reasoning.

Regarding Olin’s request for claim file information, the Court held the information was relevant to three of the carriers’ affirmative defenses2 and rejected the carriers’ argument that Olin could not obtain discovery related to the defenses because the defenses were only conditionally raised. Regarding Olin’s request for premium setting information, the Court held the “type and extent of coverage requested and paid for is directly relevant to whether Olin has a right to recover from [the carriers].” Regarding reserve information, the Court held such information was germane to:

[W]hether Olin is entitled to recover under the policy because it could show evidence of [the carriers’] initial evaluation of the sufficiency of Olin’s Proof of Loss. This is also relevant to whether the incident at issue falls within the coverage provided by the policy. Though its probative value for the proposition that setting a reserve, required by law, somehow constitutes an admission of coverage by [the carriers] may be questionable, it is relevan[t] to whether the incident is covered.

Regarding reinsurance information, the Court held that such information was discoverable because it could shed light on the carriers’ “analysis regarding the sufficiency of Olin’s proof of loss, and [Olin’s] satisfaction of contractual prerequisites.”

Carriers frequently refuse to provide the kind of information discussed above, so this 100% pro-policyholder decision should prove useful to policyholder practitioners. In sum, despite the Olin Corp. decision being handed down in Vegas, the decision should not stay in Vegas.

To read previous posts in my series on discovery decisions, click here.

1 Olin Corp. v. Continental Cas. Co. et al., No. 2:10-cv-00623, 2011 WL 3847140 (D. Nev. Aug. 30, 2011).
2 “Those defenses assert that Olin has not provided all information necessary to allow [the carriers] to make a coverage determination, that Olin failed to comply with and [is] in breach of applicable policy provisions, and that Olin’s claim falls outside the policy’s coverage grant.” Id. at *3.