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Weyerhaeuser Co. v. Novae Syndicate 2007

United States District Court, W.D. Washington, Seattle

June 18, 2019

WEYERHAEUSER COMPANY, Plaintiff,
v.
NOVAE SYNDICATE 2007, et al., Defendants.

          ORDER ON PLAINTIFF'S MOTION FOR LEAVE TO FILE A SUPPLEMENTAL DECLARATION

          The Honorable James L. Robart U.S. District Court Judge.

         I. INTRODUCTION

         Before the court is Plaintiff Weyerhaeuser Company's (“Weyerhaeuser”) motion for leave to file the supplemental declaration of James Drake, an expert on English law. (Mot. (Dkt. # 74).) Defendants Novae Syndicate 2007 (“Novae”), Apollo Liability Consortium 9984 (“Apollo”), SCOR UK Company Ltd. (“SCOR”), Starstone Syndicate 1301 (“Starstone”), Hiscox Dedicated Corporate Member Limited as representative member of Syndicate 33 at Lloyd's (“Hiscox”), and Starr Underwriting Agents Ltd. (“Starr”) (collectively, “Defendants”) oppose the motion. (Hiscox/Starr Resp. (Dkt. # 76) (opposition of Hiscox and Starr (collectively, “Hiscox/Starr”)); Defs. Resp. (Dkt. # 77) (opposition of Novae, Apollo, SCOR, and Starstone).) The court has considered the motion, the parties' submissions concerning the motion, the relevant portions of the record, and the applicable law. Being fully advised, [1] the court GRANTS Weyerhaeuser's motion for leave to file the supplemental declaration of Mr. Drake. Additionally, the court GRANTS Defendants leave to file, no later than July 3, 2019, supplemental authority on the English law of non-mutual collateral estoppel, as explained more fully herein.

         II. BACKGROUND

         This case involves excess liability insurance policies that Weyerhaeuser purchased from Defendants for the 2016-17 policy year. Weyerhaeuser filed suit on April 20, 2018. (See Compl. (Dkt. # 1).) Weyerhaeuser seeks a declaratory judgment that it is not required to arbitrate in the United Kingdom any insurance coverage dispute that may arise between Weyerhaeuser and Defendants. (See Id. ¶¶ 35-37.)

         On April 30, 2018, former Defendant XL Catlin Syndicate 2003 (“XL Catlin”) filed a parallel action (“the English Action”) in the High Court of Justice of England and Wales (“the English High Court”). (See Stip. MTS (Dkt. # 12) at 1.) On December 21, 2018, the English High Court ruled that, under the language of the policy XL Catlin issued Weyerhaeuser, Weyerhaeuser is required to arbitrate insurance coverage disputes with XL Catlin in London. (See 1/2/19 JSR (Dkt. # 59) at 2, Exs. A, B.) The relevant language in the XL Catlin policy is the same as that in Defendants' policies. (See Cordell Decl. (Dkt. # 6) ¶ 6.)

         While the English Action was pending, Weyerhaeuser filed a motion for summary judgment. (See MSJ (Dkt. # 36).) The parties subsequently stipulated to multiple extensions of the noting date. (See 9/11/18 Not. (Dkt. # 38) at 2; 10/11/18 Not. (Dkt. # 40) at 2.) In January 2019, after the English High Court issued its decision, the court ordered the parties to submit supplemental briefing on the preclusive effects, if any, of the English High Court's ruling with respect to Weyerhaeuser's action against Defendants. (1/25/19 Order (Dkt. # 64) at 2); 1/31/19 Order (Dkt. # 66) at 1-2); see also Defs. Supp. Br. (Dkt. # 67); Pl. Supp. Br. (Dkt. # 68); Defs. Supp. Resp. (Dkt. # 72); Pl. Supp. Resp. (Dkt. # 73).) Supplemental briefing closed on February 15, 2019. (1/31/19 Order at 2.)

         In their supplemental briefs, the parties disagree about whether the English High Court's decision precludes Weyerhaeuser from challenging arbitration clauses in the excess insurance policies issued by Defendants. Defendants contend that the court should afford preclusive effect to the English High Court's judgment and thereby find that Weyerhaeuser is required to arbitrate coverage disputes with Defendants. (Defs. Supp. Br. at 3-8.) Weyerhaeuser, on the other hand, argues that the court must not give preclusive effect to the English High Court's judgment because (1) Defendants were not parties to the English Action or in privity with XL Catlin, and (2) the court must apply the law on issue preclusion of the jurisdiction where the prior judgment was rendered, and English law does not recognize non-mutual collateral estoppel. (Pl. Supp. Br. at 6-7.) To support that argument, Weyerhaeuser submitted the first declaration of Mr. Drake, an expert on English law, alongside its supplemental brief. (See 2/7/19 Drake Decl. (Dkt. # 70).)

         On March 12, 2019, Weyerhaeuser filed the present motion for leave to file the supplemental declaration of Mr. Drake. (See Mot. at 1-2; see also Praecipe (Dkt. # 75); 3/12/19 Drake Decl. (Dkt. # 75-1).) Hiscox/Starr filed an opposition to Weyerhaeuser's motion. (See Hiscox/Starr Resp.) Novae, Apollo, SCOR, and Starstone joined in Hiscox/Starr's opposition and filed a separate opposition. (See Defs. Resp.) In addition to opposing Weyerhaeuser's motion, Defendants request that, should the court consider Mr. Drake's supplemental declaration, the court also grant Defendants leave to file supplemental authorities on applicable English law. (See Hiscox/Starr Resp. at 6; Defs. Resp. at 1 (joining Hiscox/Starr's arguments).)

         III. ANALYSIS

         A district court has broad discretion to determine whether a party may supplement a summary judgment record. See, e.g., Navellier v. Sletten, 262 F.3d 923, 941 (9th Cir. 2001) (noting that the Ninth Circuit “review[s] . . . challenges to trial court management for abuse of discretion”); Block v. Solis, No. C08-1850JLR, 2010 WL 2079688, at *9 (W.D. Wash. May 20, 2010) (granting the plaintiff's motion for leave to file a supplemental declaration on summary judgment, even though the motion was untimely); Moreno v. Ross Is. Sand & Gravel Co., No. 2:13-cv-00691-KJM-KJN, 2015 WL 5604443, at *5 (E.D. Cal. Sept. 23, 2015) (noting that “[a] district court has discretion to permit a litigant to supplement the summary judgment record”) (citing Betz v. Trainer Wortham & Co., 610 F.3d 1169, 1171 (9th Cir. 2010)). When assessing motions to supplement the record, the court should be mindful that public policy favors the disposition of cases on their merits, and that “disposition of a case on a more complete record must be preferred to disposition on a less complete record.” Block, 2010 WL 2079688, at *9 (citing In re Phenylpropanolamine (PPA) Prods. Liab. Litig., 460 F.3d 1217, 1228 (9th Cir. 2006) (en banc)).

         Weyerhaeuser contends that the court grant its motion because Mr. Drake's supplemental declaration responds to arguments on English law that Defendants raised for the first time in their responsive supplemental brief. (Mot. at 2.) Specifically, Weyerhaeuser asserts that Defendants “waited until their response brief to argue, for the first time, that UK law would permit them to use the UK judgment to preclude Weyerhaeuser from making arguments on the arbitrability issue.” (Id. (citing Defs. Supp. Resp. at 4-5).) In the proffered supplemental declaration, Mr. Drake addresses specific arguments that Defendants made in their responsive brief concerning non-mutual collateral estoppel under English law. (See 3/12/19 Drake Decl. ¶¶ 5-24.) He also expressly opines that English law does not permit non-mutual collateral estoppel. (See Id. ¶ 25.)

         Defendants first oppose Weyerhaeuser's motion on the ground that their responsive supplemental brief raised no new arguments on the English law of issue preclusion. (Defs. Resp. at 2-3.) The court agrees that, for the most part, Defendants simply critiqued the arguments that Mr. Drake advanced in his initial declaration. (See Defs. Supp. Resp. at 4-5.) Defendants did assert-for the first time-that “an English court would find sufficient identity between [Defendants] and XL Catlin such that it would not be unfair for Weyerhaeuser to be bound to the result of litigation between it and XL Catlin in subsequent litigation . . . .” (Id. at 5 n.1.) Although new, this argument responded directly to Weyerhaeuser's contention that English law does not countenance non-mutual collateral estoppel. (See, e.g., Pl. Supp. Br. at 6 (citing 2/7/19 Drake Decl. ¶¶ 7, 9).) Weyerhaeuser's suggestion that it was unfairly surprised by Defendants' arguments on that point thus rings hollow. (See Mot. at 2.) This consideration weighs against granting Weyerhaeuser's motion.

         Defendants also insist that Weyerhaeuser's motion is untimely. Specifically, Defendants argue that Weyerhaeuser should have “promptly notif[ied] the [c]ourt and adverse parties of perceived problems with [the] submitted briefing, ” instead of filing a motion to supplement the record nearly a month after the supplemental briefing period closed. (Defs. Resp. at 3; see also Hiscox/Starr Resp. at 4-5.) Weyerhaeuser, for its part, states that any delay in its filing is attributable to the “very busy calendar” of Mr. Drake, who “was unable to turn full attention to this unexpected assignment on such short notice.” (Reply (Dkt. # 78) at 3.) The court agrees that, to the extent Weyerhaeuser believed that Defendants had improperly raised a new argument in its supplemental response, Weyerhaeuser would have been ...


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