Zogenix, Inc. v. Federal Insurance Company

Background

The court addressed three matters after a September 22, 2021 conference with counsel: Zogenix’s request to file a summary-judgment motion, Zogenix’s motion for relief from a nondispositive pretrial order entered by Magistrate Judge Illman, and Federal Insurance Company’s motion to extend pretrial deadlines and the trial schedule.

The proposed summary-judgment motion concerned whether Federal Insurance Company had a duty to defend Zogenix in the underlying matters. The opinion states that Federal Insurance Company conceded that the entire action would become moot if summary judgment were granted in its favor.

Rulings

The court granted Zogenix’s request to bring a summary-judgment motion on the sole issue of the duty to defend, covering Counts 1, 2, and 3. Zogenix could not file a later summary-judgment motion. Federal Insurance Company could file a cross-motion on the same issue without giving up the ability to file a later motion on another issue. The court set deadlines for the motion, opposition, reply, and hearing, and required the parties to submit one joint set of operative insurance policies and other undisputed documents.

The court vacated the existing scheduling order. To that extent, it partially granted Federal Insurance Company’s motion to alter the schedule. The court noted that 30 days of discovery remained under the existing schedule and said it would consider that period when issuing a new scheduling order.

The court temporarily stayed compliance with Magistrate Judge Illman’s discovery order until the summary-judgment motions were resolved and the court issued a further order. It then denied the motion for relief from that discovery order without prejudice to refiling, explaining that the issues required more than expedited and abbreviated briefing. The court understood that Zogenix would narrow the motion because Zogenix had indicated it would not challenge the entire discovery order.

If the discovery motion proceeded, the court required full briefing on three issues: whether the rule from Montrose Chemical Corp. and related cases was procedural rather than substantive; whether Zogenix’s separate claim for breach of the implied covenant of good faith and fair dealing affected the protections it claimed under that line of cases, including whether the claim was duplicative or required different elements or relief; and whether the action should be stayed if the court found a duty to defend.

The court also granted Zogenix’s administrative motion to seal designated portions of its motion for relief from the discovery order, solely for purposes of resolving that motion. The court found the request sufficiently justified under the applicable good-cause standard.

Disposition and significance

This was a case-management and discovery order, not a decision on the merits of the duty-to-defend dispute. The order terminated Docket Nos. 72, 73, and 76. Judge Yvonne Rogers did not decide whether Federal Insurance Company owed a duty to defend.