Unpublished Disposition, 904 F.2d 40 (9th Cir. 1990)

ORDER

In this consolidated action brought by the shareholders of Carnation Company, a settlement was reached whereby Carnation Company paid $13 million to the shareholders. During the process of that litigation certain protective orders were entered concerning some of the evidence. Continental Casualty Company, as the insurance carrier for the officers and directors of Carnation, participated in the litigation and was permitted access to the protected evidence during the course of the litigation.

Continental has advanced $6.5 million to Carnation for the settlement, but has reserved its rights to contest the amount it is required to pay toward the settlement under the terms of the policy. Carnation has instituted two separate actions to recover the $13 million paid in settlement and the amount spent on defense, fees, and costs.

Carnation has resisted discovery in the subsequent action, contending that it is precluded from producing documents because of the protective order previously entered in this action. It is apparent that the amount due under the Continental policy cannot be fairly determined without full access to these documents.

Continental sought to intervene in this action in order to modify the protective order to permit Continental to have access to the protected evidence. The order entered by the district court denying intervention was evidently entered because of a misunderstanding of the nature of the subsequent actions against the insurance carrier. The court was led to believe that the documents sought were not relevant.

The documents sought are clearly relevant and necessary to an allocation of the settlement figure that is covered and that which is not under the terms of the Continental policy. There is good cause necessitating the intervention and justifying a modification of the protective order.

Therefore, the order of the district court denying intervention is reversed. The district court is directed to allow the intervention and to modify the protective order to permit Continental's access to the documents requested.

REVERSED and REMANDED.