Bryce Corporation v. XL Insurance America, Inc.

Background

Bryce Corporation filed a letter motion under Local Civil Rule 37.2 seeking a conference and an order compelling XL Insurance America, Inc. to produce all premium-related documents and unredacted versions of documents showing how XL calculated premiums for Bryce’s policies from 2019 through 2022. The requested information included XL’s confidential and proprietary numerical premium calculations.

XL opposed the request. XL argued that the premium calculations were not relevant to Bryce’s claims and that it had already produced documents concerning Bryce’s premiums, the reasons for premium changes, and the underlying inputs used in the calculations. XL stated that it had withheld only the specific numerical calculations used to establish the premiums.

Court’s Analysis

The court applied Federal Rule of Civil Procedure 26(b), which limits discovery to nonprivileged information relevant to a claim or defense and proportional to the needs of the case. The court rejected Bryce’s theory that the calculations should be produced merely because they might lead to admissible evidence. The court explained that the 2015 amendments to the Federal Rules of Civil Procedure eliminated that former formulation of the discovery standard.

The court determined that Bryce had not shown that XL’s premium calculations were relevant. According to the order, the dispute concerns the interpretation and enforceability of the operative policy language, the amount of Bryce’s covered loss, and XL’s conduct in evaluating and administering Bryce’s claims. The order states that Bryce’s entitlement to have its loss adjusted on either a Gross Profit or Gross Earnings basis will turn primarily on interpreting the policy, rather than on XL’s premium calculations.

The court also distinguished the case Bryce cited, Williams International Co. v. Zurich American Insurance Co. In that case, the court found premium calculations relevant to an ambiguity about which coverage limit applied. Here, the order states, the parties do not dispute that Bryce suffered losses covered under the policy’s Time Element provision or that the full policy limit applies to that program. The court therefore found the premium calculations too attenuated from the issues in this case.

Disposition

The court denied Bryce’s request without prejudice to renewal. It stated that Bryce could renew the request if information later supported a stronger argument that the inputs to XL’s premium calculations were relevant. The court also directed that, if XL’s representation that it had produced other premium-related documents was incorrect, or if XL had additional related materials, XL should promptly produce them. The clerk was directed to terminate the motion at docket number 58.

Judge Katherine Polk Failla’s order resolved the discovery dispute and did not decide the parties’ underlying insurance-coverage or loss-amount issues.