Insured companies sued Travelers for allegedly misrepresenting the scope of coverage afforded for asbestos injury claims under certain Excess Overlayer Indemnity policies. At issue has been the discoverability of a memorandum prepared by Travelers in preparation for and involuntarily produced by Travelers in an earlier related lawsuit in federal court in Pennsylvania and, ultimately, the Third Circuit Court of Appeals. See Travelers Cas. & Sur. Co. v. Ins. Co. of N. Am., previously discussed here. That case involved a dispute surrounding layers of insurance provided for losses relating to breast implants and chemical products. In preparation for that litigation, Travelers requested that its general counsel prepare a reinsurance analysis memo addressing the reinsurance implications of different coverage scenarios for the breast implant claims.
In the present lawsuit, plaintiffs requested production of this memo on the theory that it likely contained information relevant to the current plaintiffs' claims and Travelers' prior interpretation of its policies. Travelers, however, refused to produce the memo, claiming that it was protected by attorney-client privilege. A January 2017 discovery ruling ordered an in camera review of the memo. Following the in camera review, the court has now ruled that the significant discussion and quotation of the memo's contents by the Third Circuit in the earlier lawsuit destroyed the privilege. While the general rule is that a party does not waive privilege for documents which it is compelled to produce, "the exhaustive discussion of it by the Third Circuit makes it impossible to consider it" privileged. The order cited the fact that the memo was admitted as an exhibit at trial as well as the fact that the Third Circuit extensively quoted from the memo and summarized testimony about it, all of which appeared in a published court ruling. As such, the memo was in the public domain, notwithstanding that the court records were later sealed. Travelers was ordered to produce the sections of the memo addressed by the Third Circuit to plaintiffs' counsel "for attorney's eyes only." ITT Corp. v. Travelers Cas. & Sur. Co., Case No. 12-38 (USDC D. Conn. Feb. 27, 2017).
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