O'Rear v. Diaz

Background

S. O’Rear sued her employer, Merkley + Partners Inc., its parent company, Omnicom Group Inc., and Armando Diaz. She alleges that Diaz, identified in the opinion as Merkley’s creative director, sexually assaulted and raped her after a holiday happy hour. Her claims include sexual harassment and negligent supervision under Title VII of the Civil Rights Act of 1964, along with related New York state and city claims.

This order addressed discovery disputes about two insurance policies held by the corporate defendants. Federal Rule of Civil Procedure 26(a)(1)(A)(iv) generally requires a party to disclose insurance agreements under which an insurer may have to pay all or part of a possible judgment or reimburse payments made toward that judgment.

Employment Practices Liability Policy

The corporate defendants had produced their Employment Practices Liability Insurance policy, but redacted the retention deductible, premium amounts, and defense-cost limitation terms. O’Rear moved to compel an unredacted copy. The defendants argued that the redacted financial information was confidential and irrelevant and could unfairly affect O’Rear’s litigation strategy.

The court rejected those arguments and ordered production of the policy in unredacted form. It held that Rule 26 required production and that the defendants had not justified excluding the redacted information. The court also noted that the disclosure rules recognize insurance information’s importance to settlement and trial decisions, even though disclosure might sometimes give an opposing party a tactical advantage.

General Liability Policy

O’Rear also sought Merkley’s General Liability Insurance policy. She argued that Merkley’s reporting the matter to its general-liability carrier showed that the policy could not be excluded from discovery based on an unquestionable lack of coverage.

The corporate defendants represented that the carrier had denied coverage and that they did not dispute that denial. On the condition that the defendants were permanently disclaiming any attempt to challenge the denial, the court agreed that the General Liability policy did not fall within Rule 26(a)(1)(A)(iv)’s disclosure requirement. The court therefore denied O’Rear’s motion to compel production of that policy.

The order states that if the corporate defendants reserve the right to challenge the carrier’s denial of coverage, they must immediately notify the court and O’Rear.

Confidentiality and disposition

The court authorized Merkley and Omnicom to designate the insurance-policy information they produce as confidential under the existing protective order. The court’s conclusion states that it granted in part and denied in part O’Rear’s letter motion to compel production of the corporate defendants’ insurance policies, authorized the confidentiality designations, and directed the Clerk of Court to terminate the motions at Dockets 70 and 74.

This was a discovery order; it did not decide whether O’Rear’s underlying claims were legally valid or whether the alleged conduct occurred.