Travelers v. Marsh Management

Termont Superior Court
Filed 03/24/26
Chittenden Unit

VERMONT SUPERIOR COURT CIVIL DIVISION
Chittenden Unit Case No. 25-CV-02622
175 Main Street
Burlington VT 05402
802-863-3467
.vermontjudiciary.org

Travelers Casualty and Surety Company
(f/k/a The Aetna Casualty and Surety Company),
Plaintiff

V. DECISION ON MOTIONS

Marsh Management Services, Inc.,
Defendant

RULING ON MOTION TO ENFORCE SUBPOENA AND CROSS MOTION TO QUASH

This is an action to enforce a foreign subpoena issued pursuant to Rule 45(f) of the
Vermont Rules of Civil Procedure. Plaintiff Travelers Casualty and Surety Company
("Travelers") is seeking an order requiring Vermont company Marsh Management Services, Inc.
("MMS") to produce documents it asserts are relevant to an insurance coverage action pending in
New Jersey Superior Court, Atlanta International Insurance Co. v. Johnson & Johnson, No.
MID-L-003563-19 (the "New Jersey action" or "J&J Case"), to which MMS is not a party.
MMS opposes the motion to enforce and cross-moves for an order quashing the subpoena under
Rule 45(£)(3).!

Factual and Procedural Background

The following relevant information is drawn from the parties' filings. In the New Jersey
action, Johnson & Johnson ("J&J') is seeking coverage from Travelers and other insurance
companies for its liabilities associated with its talc products. Middlesex Assurance Company
("Middlesex") is J&J's captive insurer and is a subsidiary of J&J. MMS is a management
provider located in Colchester, Vermont, that contracted with Middlesex to provide
administrative and regulatory services. In the New Jersey action, J&J is seeking a declaration
that insurers other than Middlesex, including Travelers, owe J&J a duty to defend and indemnify
it in the underlying talc product liability actions being litigated around the country. Travelers
filed cross-claims seeking various declarations regarding the rights and obligations of the parties
under the policies Travelers issued to J&J and how defense and indemnity costs for the talc
claims should be allocated across the various insurance policies.

'
Travelers has also filed a motion for leave to file a sur-reply and a motion to seal deposition
testimony. MMS and Middlesex did not file a separate motion seeking leave to file a sur-reply,
but sought leave as part of the sur-reply they filed.
The issue of allocation across the triggered insurance policies is a key dispute in the New
Jersey action. According to Travelers, J&J and Middlesex, assisted by MMS, added an
endorsement to a Middlesex policy in 2018 that purports to cap Middlesex’s available limits for
the underlying talc claims to $100 million despite the fact that earlier policies provided for much
higher limits. Travelers served the instant subpoena on MMS in an effort to obtain documents
related to Middlesex’s insurance program, including the endorsement, the relationship between
Middlesex and MMS, the services MMS provides to Middlesex, and MMS’s handling of the talc
claims. MMS has produced some documents responsive to the subpoena, but it claims that
certain communications are protected by the attorney-client privilege and/or are subject to work
product protection. MMS has also refused to produce some documents on relevance grounds.

Middlesex joins MMS in opposing the motion to enforce and seeking to quash the
subpoena. 2 Middlesex asserts that it contracts out its captive management to MMS and has no
employees of its own. In other words, MMS is the functional equivalent of Middlesex. In
responding to Travelers’ and other insurers’ discovery requests in the J&J Case, Middlesex
contends it treated the documents that MMS maintains on behalf of Middlesex as its own.
Middlesex asserts that these documents are in Middlesex’s care, custody, and control, and that
Middlesex already included them in its search for and production of documents. Middlesex
contends that the privilege assertions Travelers contests concern privileges asserted and held by
Middlesex.

The subpoena issued by this Court is nearly identical to an earlier subpoena duces tecum
propounded on MMS in 2021. Although that subpoena was not issued through the Vermont
courts, MMS responded to the subpoena in October 2022. Ex. 1. 3 According to Middlesex, the
instant subpoena seeks production of many of the same documents the insurers sought pursuant
to the 2021 subpoena. 4 MMS agreed to look for any responsive documents that postdate its
initial production to the 2021 subpoena and has determined that there are none. MMS and
Middlesex assert the instant subpoena be quashed because it seeks the same information that was
sought in 2021. Opp. & Cross-Mot. to Quash at 8.

In the New Jersey action, the court has appointed retired Judge Dennis M. Cavanaugh of
the United States District Court for the District of New Jersey to handle all discovery disputes
and serve as Special Discovery Adjudicator. According to Middlesex, Travelers had no need to
serve an out-of-state subpoena given that MMS has already responded to a virtually identical

2
Travelers objects to Middlesex joining in MMS’s opposition to the subpoena, contending it
should have filed a Rule 24 motion to intervene. However, since the subpoena relates to the
underlying New Jersey action where Middlesex is a party and concerns documents as to which
Middlesex claims privilege and/or work product protection, and the arguments are made by the
parties in a joint submission, the Court discerns no prejudice to Travelers or reason to disregard
Middlesex’s arguments.
3
Although the earlier subpoena was propounded by other insurers not including Travelers,
Travelers received access to MMS’s production in 2022 and the accompanying privilege log.
See Reply at 5-6.
4
Middlesex represents that it has produced “tens of thousands of documents from its files
maintained at MMS’s offices in Vermont.” Opp. & Cross-Mot. to Quash at 6.
2
subpoena and MMS’s documents are already subject to discovery through Middlesex. Travelers
has not moved to compel documents from Middlesex or MMS that were withheld based on
privilege or work product in the J&J Case, which motion would come before the Special
Discovery Adjudicator who is available for this express purpose. MMS does not contest the
New Jersey court’s jurisdiction to address discovery disputes concerning Middlesex documents
in its possession based on its role as Middlesex’s captive manager. Opp. & Cross-Mot. to Quash
at 10. Middlesex and MMS argue that by seeking to enforce the instant subpoena, Travelers is
attempting to evade the New Jersey court’s jurisdiction.

Discussion

The parties devote considerable time arguing over whether MMS is a functional
employee of Middlesex, whether Middlesex should be permitted to appear in this proceeding,
whether Middlesex has the right to assert the attorney-client privilege over some of MMS’s
communications, and whether Vermont or New Jersey law should apply. However, the Court
finds the more important issue at this stage is whether it is even appropriate for a Vermont court
to address the motion to enforce given that the underlying case is pending in New Jersey, a
Special Discovery Adjudicator has been appointed specifically to address the substantive issues
the parties raise, and, perhaps most important, MMS has asserted that it will not challenge New
Jersey’s jurisdiction to resolve the discovery disputes.

Vermont has adopted the Uniform Interstate Depositions and Discovery Act (“UIDDA”),
with modifications appropriate to Vermont practice. See V.R.C.P. 45, Reporter’s Notes – 2011
Amdt. (“The [UIDDA] sets forth an efficient and inexpensive procedure for litigants to depose
out of state individuals and for the production of discoverable materials that may be located out
of state.”). The UIDDA provides an avenue for a party to enforce a subpoena in a foreign
jurisdiction and for a non-party to move to quash a subpoena in the non-party’s home-state.
UIDDA § 6. However, “it was never intended to divest [the trial state] of jurisdiction to resolve
discovery disputes between the parties.” Catalina Mktg. Corp. v. Hudyman, 212 A.3d 997, 1001
(N.J. Super. Ct. App. Div. 2019); see also UIDDA § 6, cmt. (“Nothing in this act limits any party
from applying for appropriate relief in the trial state.”).

Moreover, “principles of comity can provide [a] . . . basis for nonintervention by a
Vermont court in a dispute that has already come before some other forum.” Cavallari v.
Martin, 169 Vt. 210, 215, 732 A.2d 739, 743 (1999); accord Nijensohn v. Ring, 2022 VT 16,
¶ 13, 216 Vt. 329 (“Comity principles may apply when multiple courts have jurisdiction over the
same dispute.”). The purpose of the doctrine is

to foster cooperation among the states, preclude forum-shopping, avoid multiple
or inconsistent judgments, and promote judicial economy by allowing a court, in
its discretion, to stay or dismiss a proceeding where an action concerning the
same parties and the same subject matter has been commenced in another
jurisdiction capable of granting prompt and complete justice.

3
Chandler v. Vt. Mut. Ins. Co., Docket No. 2014-030, 2014 WL 3714930, at *2 (Vt. May 2014)
(unpub. mem.) (quotation omitted). 5 As New Jersey recognizes: “The question is not whether a
state court has the power to exercise jurisdiction over a case filed within its jurisdiction, but
whether the court should restrain itself and not exercise that power.” Sensient Colors Inc. v.
Allstate Ins. Co., 939 A.2d 767, 774 (N.J. 2008). In Sensient Colors, the Supreme Court of New
Jersey noted that, “[i]f we are to have harmonious relations with our sister states, absent
extenuating circumstances sufficient to qualify as special equities, comity and common sense
counsel that a New Jersey court should not interfere with a similar, earlier-filed case in another
jurisdiction that is capable of affording adequate relief and doing complete justice.” Id.
(quotations omitted). Thus, “comity is not a rule of law, but one of practice, convenience, and
expediency.” Nijensohn, 2022 VT 16, ¶ 15 (quoting In re Dennis’ Estate, 98 Vt. 424, 426, 129
A. 166, 167 (1925)).

While most of the cases addressing comity involve situations where two separate lawsuits
have been filed in different states, the same principle applies here, where Vermont has
jurisdiction over non-party MMS but the subpoena relates to discovery in a case pending in New
Jersey. Although MMS is domiciled in Vermont, it manages the business of Middlesex, which is
domiciled in New Jersey, and Middlesex is wholly owned by J&J, the insured in the New Jersey
action. This Court has no knowledge of the issues that have come before the Special Discovery
Adjudicator in the J&J Case, but that individual is certainly in a superior position to determine
whether MMS should be treated as a functional employee of Middlesex and whether the
assertions of privilege and the work product doctrine as the reason for Middlesex and MMS’s
refusal to produce particular communications and documents is appropriate, as well as the
validity of Middlesex and MMS’s contention that the subpoena seeks documents not relevant to
the J&J Case. See UIDDA, § 6, cmt. (specifically identifying a motion to quash “on grounds of
relevance” as an example of relief that is appropriate to seek in the trial state). Further, as
Travelers admits, it “has already brought multiple discovery disputes to the Special Discovery
Adjudicator in the Coverage Action, and, since the filing of Travelers’ Motion here, Travelers
has moved to compel Middlesex to produce certain documents that Middlesex inappropriately
withheld in the Coverage Action.” Reply at 5. It is likely that there is significant overlap
between the documents Travelers seeks here and those Travelers is currently pursuing in New
Jersey, and the New Jersey court should have the opportunity to rule on such questions, which
could well moot or narrow the issues raised here. The Court is not inclined to interfere with that
competent process, nor provide an avenue for an end run around the jurisdiction of the Special
Discovery Adjudicator appointed for this precise purpose.

Simply put, the risk of inconsistent judgments, considerations of judicial economy, and
respect for the principles of comity compel this Court to defer any ruling on Travelers’ motion to
enforce and MMS’s cross-motion to quash in favor of the parties seeking a resolution of their
ongoing discovery disputes before the Special Discovery Adjudicator in the J&J Case. The

5
Trial courts are free to “consider three-justice decisions from [the Vermont Supreme] Court
for their persuasive value, even though such decisions are not controlling precedent.” Washburn
v. Fowlkes, Docket No. 2015-089, 2015 WL 4771613, at *3 (Vt. Aug. 2015) (citing V.R.A.P.
33.1(d)).

4
Court’s order below will direct the parties to do so, and the Court will stay consideration of the
instant motions pending such review and determination in the New Jersey action. 6

Order

For the foregoing reasons, the Court DEFERS ruling on the Motion to Enforce Subpoena
(Mot. #2) and the Cross-Motion to Quash until the New Jersey court has had the opportunity to
consider whether the documents at issue are privileged and/or protected from discovery by the
work product doctrine and are otherwise relevant, and to address all other issues raised by the
parties in connection with the instant subpoena.

The parties are HEREBY ORDERED to seek a resolution of their discovery disputes
before the Special Discovery Adjudicator specially appointed in the New Jersey action. If the
Special Discovery Adjudicator is unable to resolve the parties’ discovery disputes, they may
return to this Court. In such case, the parties shall promptly notify the Court of any rulings by
the Special Discovery Adjudicator and their impact on the pending motions.

Travelers’ Motion to File Under Seal portions of a deposition and brief and Motion to
File a Sur-Reply (Mots. 9 & 10) are GRANTED. Likewise, MMS and Middlesex’s request for
leave to file a sur-reply is also GRANTED.

Electronically signed on March 24, 2026 at 11:49 AM pursuant to V.R.E.F. 9(d).

________________________________
Megan J. Shafritz
Superior Court Judge

6
In light of its decision, the Court declines to hold oral argument on the motions at this time.
5