Mandarin Oriental, Inc. v. HDI Global Insurance Company

Background

Mandarin Oriental, Inc. sought insurance coverage for business-interruption losses that it attributed to the COVID-19 pandemic at hotels in Miami, New York, Washington, DC, and Boston. Mandarin sued HDI Global Insurance Company and Assicurazioni Generali S.p.A. The case concerns policies containing coverage for certain losses caused by infectious or contagious disease.

During discovery, the insurers withheld approximately 500 documents as privileged. Mandarin moved to compel documents concerning reinsurance, reserves, and communications involving the insurers’ lawyers, adjuster McLarens, accountant J.S. Held, employees of the insurers, and Mandarin’s broker, Marsh. The court privately reviewed ten sample documents.

Legal standards

The court explained that discovery generally includes relevant, nonprotected information that is proportional to the needs of the case. The attorney-client privilege protects confidential communications made to obtain or provide legal advice. Work-product protection generally covers documents prepared because of anticipated litigation, but not documents created in the ordinary course of business. The party asserting either protection bears the burden of proving that it applies.

Reinsurance information

The court found that communications with reinsurers could be relevant to Mandarin’s allegation that the insurers handled its claim in bad faith. Such communications could show the insurers’ internal views about the claims, coverage, and potential liability. The court therefore overruled the insurers’ relevance objection and directed them to produce any responsive reinsurance communications located through their continuing searches, unless another valid basis for withholding them, such as privilege, existed.

Reserve information

The court also found reserve information relevant because Mandarin alleged that the insurers acted in bad faith by failing to provide a coverage position or advance payment. Reserve information could shed light on the insurers’ views about coverage, liability, and the risks involved.

The court rejected the insurers’ privilege arguments because they offered only unsupported assertions and no evidence explaining why the attorney-client privilege or work-product protection applied. The court also found that the reviewed reserve documents appeared to have been created during the ordinary process of investigating and adjusting insurance claims, rather than because of anticipated litigation. The court concluded that the insurers had not shown that the reserve documents or reserve-related communications were protected.

Other communications

The court examined the remaining sample documents individually. It ordered production of several emails because they forwarded nonconfidential information, discussed communications with third parties, or did not request or provide legal advice. It upheld redactions for emails that contained requests for or discussions of legal advice from outside counsel.

The conclusion ordered the insurers to produce, by June 18, 2025, documents and communications concerning reinsurance and reserves and the specified emails from the reviewed samples, as well as any similar communications and documents withheld as privileged. The opinion’s conclusion appears to use sample-number labels that do not always match the sample descriptions in the body of the opinion; the substantive production directions are reported as the court listed them.

Disposition

Judge Sarah L. Cave granted in part and denied in part Mandarin’s motion to compel. The opinion did not require production of communications that the court found protected by attorney-client privilege, including communications requesting or providing legal advice.