No. 21-1698

LIONBRIDGE TECHNOLOGIES, LLC, f/d/b/a Lionbridge Technologies, Inc.

Plaintiff, Appellant,

v.

VALLEY FORGE INSURANCE COMPANY,

Defendant, Appellee,

H.I.G. MIDDLE MARKET LLC; ENDURANCE ASSURANCE CORPORATION; NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA,

Third Party Defendants.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Patti B. Saris, U.S. District Judge]

Before

Kayatta, Selya, and Thompson, Circuit Judges.

Nicholas D. Stellakis, with whom Walter J. Andrews, Kevin V. Small, and Hunton Andrews Kurth LLP were on brief, for appellant.

Kirk Pasich, Christopher Pasich, and Pasich LLP on brief for United Policyholders, amicus curiae.

William L. Boesch, with whom Regina E. Roman, Kenneth N. Thayer, and Sugarman, Rogers, Barshak & Cohen P.C. were on brief, for appellee.

November 21, 2022 THOMPSON, Circuit Judge. This case pits an insured, Lionbridge, against its general liability insurer, Valley Forge, to answer whether Valley Forge had to foot Lionbridge's million- dollar legal bills when the company fended off a trade-secrets lawsuit in Manhattan brought by a competitor. Valley Forge initially paid for some of Lionbridge's defense under a reservation of rights (in insurance-speak, tentative coverage), but only a fraction of what Lionbridge had racked up. So, Lionbridge sued Valley Forge in the District of Massachusetts seeking full coverage, and fighting back, Valley Forge counterclaimed seeking a declaratory judgment of absolution from policy coverage.1 As the case progressed below, each side moved to compel discovery responses from the other, including what they both objected was attorney/client information (usually considered off-limits in a lawsuit). Relevant here, a magistrate judge denied Valley Forge's request for information exchanged between Lionbridge and its lawyers, which Valley Forge objected up to the district court. Both parties eventually cross-moved for partial summary judgment on a few of the key legal issues related to coverage.

The district court went on to grant the portion of Valley Forge's motion to compel that sought privileged information but,

1 Though not relevant to the issues on appeal, Valley Forge also cross claimed against other interested persons to this dispute.

- 3 - at the parties' request, stayed all discovery until it ruled on the cross-motions for summary judgment. So then, ruling in summary judgment favor for Valley Forge, the district court bought the argument that Valley Forge should be let off the policy coverage hook entirely (save for what it had already paid out) concluding it did not owe Lionbridge a duty to defend (i.e., to pay for its defense). The district court also dismissed all of Lionbridge's claims.

Now, to us. On the coverage issue, we disagree, and therefore reverse the district court's summary judgment ruling and direct the entry of summary judgment in favor of Lionbridge on the duty to defend. On the discovery dispute, we affirm the district court's ruling and direct the court to tailor a discovery order that addresses the parties' objections.

BACKGROUND

The Underlying Lawsuit

The coverage dispute now before us arose from a lawsuit ("Underlying Lawsuit") brought against Lionbridge, a company involved in the language-translation industry, in April 2019 in the Southern District of New York by its main competitor in that industry, TransPerfe