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Us Bank National Association, A National v. Phl Variable Insurance Company

December 10, 2012

US BANK NATIONAL ASSOCIATION, A NATIONAL ASSOCIATION AS SECURITIES INTERMEDIARY FOR LIMA
ACQUISITION LP,
PLAINTIFF,
v.
PHL VARIABLE INSURANCE COMPANY, A CONNECTICUT CORPORATION,
DEFENDANT.



The opinion of the court was delivered by: James C. Francis IV United States Magistrate Judge

(ECF)

MEMORANDUM AND ORDER

This case arises out of twelve life insurance policies known as Phoenix Accumulator Universal Life ("PAUL") policies owned by US Bank National Association ("US Bank") and issued by PHL Variable Insurance Company ("PHL"). US Bank alleges that PHL breached the terms of the policies and violated various laws by raising the cost of insurance rates on those policies in 2010 and 2011. PHL now moves to compel US Bank's production of documents and response to interrogatories. For the reasons set forth below, PHL's motion is granted in part and denied in part.

Background

The factual background of this dispute is laid out in my November 5, 2012 Memorandum and Order. In brief, the policies at issue are universal life insurance policies which allow policyholders to pay as much money as they want into their policy accounts each month as long as the account balance is sufficient to cover policy charges, including a "cost of insurance charge."

(First Amended Complaint ("FAC"), ¶ 2). If the balance is not met, the policies will ultimately lapse. (FAC, ¶ 2). The policies at issue permit the insurer to adjust cost of insurance rates, but only based on certain specified factors, the most significant of which is mortality. (FAC, ¶ 4). US Bank alleges that, although life expectancy has increased, which should lead to a reduction in the cost of insurance, PHL has increased its cost of insurance rates. (FAC, ¶ 4). According to the plaintiff, PHL has done so both to increase its fees and to prompt policyholders to allow their policies to lapse rather than pay higher fees, thereby relieving PHL of the risk of ever having to pay out on the policies. (FAC, ¶ 7).

On April 13, 2012, PHL served its First Set of Requests for Production of Documents (Proof of Service dated April 13, 2012, attached as part of Exh. 1 to Declaration of Melanie D. Phillips dated Oct. 25, 2012 ("Phillips Decl.")), and First Set of Interrogatories (Proof of Service dated April 13, 2012, attached as part of Exh. 2 to Phillips Decl.). On May 17, 2012, US Bank served its Objections and Responses to PHL's First Set of Requests for Production (Plaintiff U.S. Bank National Association's Objections and Responses to Defendant PHL Variable Insurance Company's First Set of Requests for Production of Documents dated May 17, 2012 ("Pl. Resp. to Def. Req."), attached as Exh. 3 to Phillips Decl.), and to PHL's First Set of Interrogatories (Plaintiff U.S. Bank National Association's, as Securities Intermediary for Lima Acquisition LP, Objections and Responses to Defendant PHL Variable Insurance Company's First Set of Interrogatories dated May 17, 2012, attached as Exh. 4 to Phillips Decl.). The parties have exchanged numerous letters and conferred telephonically in an effort to resolve disputes over PHL's document requests and interrogatories. (Declaration of Jason H. Gould dated Oct. 19, 2012 ("Gould Decl."), ¶¶ 8, 10-11, 13-20, 22-24; Phillips Decl., ¶¶ 8-9, 11-15, 18-19).

Discussion

A. Production Generally, "[p]arties may obtain discovery regarding any non-privileged matter that is relevant to any party's claim or defense[.]" Fed. R. Civ. P. 26(b)(1). "Although not unlimited, relevance, for the purpose of discovery, is an extremely broad concept." Condit v. Dunne, 225 F.R.D. 100, 105 (S.D.N.Y. 2004); see also Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978). It "'encompass[es] any matter that bears on, or that could lead to other matters that could bear on, any issue that is or may be in the case." Schoolcraft v. City of New York, No. 10 Civ. 6005, 2012 WL 2161596, at *12 (S.D.N.Y. June 14, 2012) (quoting Oppenheimer Fund Inc., 437 U.S. at 351). "Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence." Fed. R. Civ. P. 26(b)(1). The burden of demonstrating relevance is on the party seeking discovery. See, e.g., King County, Washington v. IKB Deutsche Industriebank AG, No. 09 Civ. 8387, 2012 WL 3553775, at *1 (S.D.N.Y. Aug. 17, 2012).

Once relevance has been shown, it is up to the responding party to justify curtailing discovery. Condit, 225 F.R.D. at 106. "[T]he court must limit the frequency or extent of discovery" where:

(i) the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive;

(ii) the party seeking discovery has had ample opportunity to obtain the information by discovery in the action; or

(iii) the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues.

Fed. R. Civ. P. 26(b)(2)(C). "General and conclusory objections as to relevance, overbreadth, or burden are insufficient to exclude discovery of requested information." Melendez v. Greiner, No. 01 Civ. 7888, 2003 WL 22434101, at *1 (S.D.N.Y. Oct. 23, 2003). "Instead, the objecting party must show specifically how, despite the broad and liberal construction afforded the federal discovery rules, each request is not relevant or how each question is overly broad, burdensome or oppressive." Tourtelotte v. Anvil Place Master Tenant, LLC, No. 3:11CV1454, ...


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