United States District Court, W.D. Washington, Seattle
FEDERAL DEPOSIT INSURANCE CORPORATION as Receiver for Washington Mutual Bank, Plaintiff,
ARCH INSURANCE COMPANY, et al., Defendants.
ORDER GRANTING IN PART PLAINTIFF'S MOTION TO
S. Lasnik, United States District Judge.
matter comes before the Court on “Plaintiff Federal
Deposit Insurance Corporation's Motion to Compel
Defendants to Produce Documents.” Dkt. # 67. Having
reviewed the parties' briefing, declarations, exhibits,
and the remainder of the record,  the Court finds as follows.
case, plaintiff Federal Deposit Insurance Corporation, as
Receiver for Washington Mutual Bank (“FDIC-R”),
sues various insurance companies for refusing to cover
certain losses under fidelity bond insurance policies held by
Washington Mutual Bank (“WaMu”). FDIC-R alleges
that WaMu suffered these losses as a result of a criminal
mortgage fraud scheme perpetrated on WaMu by two of its
lenders. In discovery, FDIC-R seeks documents related to the
insurers' handling, adjustment, or investigation of
WaMu's claim; defendants respond that most of the
requested documents are either irrelevant, privileged, or too
voluminous to produce. Dkt. ## 76, 78, 80.
the Federal Rules of Civil Procedure, parties may generally
obtain discovery regarding any non-privileged matter that is
relevant to any party's claim or defense and proportional
to the needs of the case. Information need not be admissible
at trial to be discoverable. Fed.R.Civ.P. 26(b)(1). During
discovery, a party served with requests for production must
comply within 30 days. Fed.R.Civ.P. 34(b)(2)(A). The party
seeking discovery may move for an order compelling disclosure
or discovery after good-faith attempts to obtain compliance
without court action have been unsuccessful. Fed.R.Civ.P.
defendants have asserted that WaMu's losses are not
covered by the terms of the insurance policies, the materials
sought by FDIC-R are indeed relevant to the insurance
companies' defenses. See Milgard Mfg., Inc. v.
Liberty Mut. Ins. Co., No. C13-6024BHS, 2015 WL 1884069,
at *2 (W.D. Wash. Apr. 24, 2015). The FDIC-R's First
Document Request Nos. 1-4 seek documents from the
insurers' “claim files” for the claim giving
rise to this suit and are certainly relevant to the
parties' claims and defenses. Documents discussing or
clarifying the meaning of the disputed policy terms are
relevant even if not contained in WaMu's underwriting
files. Polygon Northwest Co., LLC v. Steadfast Ins.
Co., No. C08-1294RSL, 2009 WL 1437565, at *2 (W.D. Wash.
May 22, 2009) (“[T]he manner in which [the insurer] has
handled the claims of other insureds with identical policy
language is potentially relevant to this action. Evidence
that [the insurer] has acted in an inconsistent manner in
resolving claims where similar policies were involved could
undermine defendant's position that the language in
question is clear and unambiguous.” (internal quotation
marks omitted)). And while the parties dispute the
admissibility of extrinsic evidence to resolve the meaning of
ambiguous policy language, requested material need not be
admissible to be discoverable. Fed.R.Civ.P. 26(b)(1).
even relevant discovery must be proportional to the needs of
the case. Fed.R.Civ.P. 26(b)(1). Defendants argue that
production of all requested materials would be unduly
burdensome, as the FDIC-R's requests for production are
worded quite broadly. See Dkt. # 67, App'x A
(seeking documents “related to” the contested
claim, the meaning of the disputed policy terms, and
reinsurance policies). The Court agrees that the FDIC-R's
requests, read literally, would require the production of all
documents that contain the disputed policy terms, as
those documents would shed light on the “meaning”
of the policy terms. Defendants have shown that production of
all such documents would be unduly burdensome, and so the
Court will limit the scope of First Document Request Nos. 14
and 15, and of Second Document Request No. 2, to materials
(1) from the period of 2004 through 2008; (2) that
contemplate a dispute over the meaning of the relevant policy
term; (3) in the context of a fidelity bond insurance policy
like the ones at issue in this case.
defendants may not evade their discovery responsibilities
through the wholesale assertion of attorney-client or
work-product privilege. Rather, defendants may assert
specific, applicable privileges in a privilege log.
the foregoing reasons, plaintiff's motion to compel (Dkt.
# 67) is GRANTED in part. The parties are directed to meet
and confer and to work in good faith to narrow the categories
of materials sought, which will further reduce the burden on
defendants and will maximize the utility of discovery for
 Defendants move to strike arguments
raised for the first time in plaintiff's reply brief.
Dkt. # 92. It is true that the Court may not rely on
arguments raised for the first time in a moving party's
reply brief without giving the non-moving party an
opportunity to respond. See Provenz v. Miller, 102
F.3d 1478, 1483 (9th Cir. ...