Roc Nation LLC v. HCC International Insurance Company, PLC

Background

Roc Nation LLC sued HCC International Insurance Company, PLC over an insurance claim. Roc Nation had purchased two policies from HCC covering the life of Jordan Feldstein, who was the founder of Career Artist Management LLC and a close friend of Adam Levine, the lead vocalist of Maroon 5. After Feldstein died, Roc Nation submitted a claim that HCC denied.

Roc Nation’s amended complaint alleged breach of contract, breach of the implied covenant of good faith and fair dealing, and sought declaratory relief. Roc Nation alleged that HCC misrepresented its policy, improperly denied its claims, and delayed investigations and denied claims of similarly situated policyholders in bad faith. HCC asserted counterclaims, including a request for a declaration that Roc Nation failed to cooperate with HCC’s investigation and that HCC properly denied coverage.

The parties had been conducting discovery since July 16, 2019. Roc Nation asked the court to require HCC to produce communications between HCC and lawyers from Vogrin Frimet. Roc Nation argued that the lawyers were acting as claims investigators rather than providing legal services. HCC argued that the lawyers were providing legal advice. The court ordered HCC to submit the disputed documents for private judicial review.

Legal standards

Because this was a diversity case, the court applied New York law to attorney-client privilege. That privilege protects confidential communications made in an attorney-client relationship for the purpose of obtaining legal advice. It protects communications, not the underlying facts. In the insurance context, claim-handling activities are generally subject to discovery even when a lawyer performs them. The key question is whether the lawyer was primarily investigating the claim or providing legal advice.

The court applied federal law to the work product doctrine. That doctrine protects documents or tangible things prepared by or for a party or its representative because of the prospect of litigation. Materials prepared in the ordinary course of business, or that would have been created in essentially the same form regardless of litigation, are not protected merely because litigation later occurs.

Court’s framework

The court found that Vogrin Frimet served both as a claims investigator and as legal counsel at different times. It therefore required HCC to disclose materials reflecting factual investigation, including requests for claim information, factual results of the investigation, and factual sections of legal memoranda. HCC could withhold communications primarily involving legal advice, legal strategy, legal doctrine, case law, settlement strategy, or communications that facilitated legal advice, such as scheduling emails.

The court also required disclosure of documents authored by, signed by, or shared with Roc Nation. It held that attachments were not automatically privileged merely because they were attached to a privileged email; an attachment had to contain or refer to legal advice to be withheld. HCC also did not have to disclose documents that were not responsive to Roc Nation’s requests.

Documents HCC could withhold

The court held that many internal communications between HCC and Vogrin Frimet were properly withheld in full or in redacted form. These materials involved legal issues, legal advice, legal analysis, legal strategy, settlement, or drafts sent to HCC for review and approval. The court also held that certain communications coordinating discussions about legal issues were protected.

Documents requiring fewer redactions

For two Vogrin Frimet memoranda, the court held that the attorney-client privilege protected only part of each document. HCC had to disclose the portions describing facts about Roc Nation’s claim and HCC’s investigation, while it could continue withholding the portions containing case law, legal analysis, and legal strategy.

For several email chains involving settlement discussions, the court held that communications between Vogrin Frimet and HCC were protected but earlier communications between Vogrin Frimet and Roc Nation’s counsel were not. HCC had to produce redacted versions that disclosed those nonprivileged communications.

Documents HCC had to disclose

The court ordered HCC to produce policy documents, a purchase agreement signed by Roc Nation, Career Artist Management LLC, and Feldstein, and Feldstein’s autopsy report. The court held that these underlying documents and factual materials did not become privileged merely because they were attached to or provided to a privileged email.

The court also ordered disclosure of communications involving a doctor who was asked to review Feldstein’s autopsy report and provide an opinion about the claim. The court found that these communications concerned claims investigation, not legal advice. It also held that the work product doctrine did not apply because HCC had not shown that the communications were prepared because of anticipated litigation; their primary purpose appeared to be assessing the claim.

Other materials that had to be disclosed included Roc Nation’s responses to HCC’s requests for information, agreements authored by Career Artist Management LLC and Feldstein, a letter Vogrin Frimet drafted in its investigative role, documents sent by Roc Nation in response to requests for claim information, notes and a spreadsheet from HCC’s forensic accountants, a letter from Roc Nation about an interim payment and settlement discussions, and HCC’s large loss report. The court found that the large loss report contained the results of the claim investigation, was responsive to Roc Nation’s requests, and was not a communication made to obtain legal advice. HCC had to produce it in full.

Documents not decided at that time

The court declined at that time to decide whether two documents should be produced in full. It had previously ordered HCC to produce tightly redacted versions of those documents because HCC’s privilege log did not identify an attorney recipient or sender. The opinion therefore did not resolve whether additional disclosure was required.

Disposition

The court resolved the discovery disputes by sustaining HCC’s privilege claims as to most of the contested documents while ordering HCC to produce, in full or with specified redactions, documents that were not fully protected by attorney-client privilege or the work product doctrine. The court directed HCC to make the required productions promptly and stated that the opinion resolved the parties’ most recent discovery dispute.