Clear Blue Specialty Insurance Company v. OZY MEDIA, INC.

I. BACKGROUND

26 A. Underlying Proceedings and Order to Advance Defense Costs 27 In recent years, Ozy Media has faced four parallel legal proceedings (the “Underlying 1 Proceedings”): (i) a criminal investigation by the U.S. Attorney’s Office for the Eastern District 2 of New York (the “E.D.N.Y. Criminal Action”); (ii) a civil enforcement investigation by the U.S. 3 Securities and Exchange Commission (the “SEC Investigation”); (iii) a civil securities fraud action 4 filed by an Ozy Media investor in the N.D. Cal. (LifeLine Legacy Holdings, LLC v. Ozy Media, et 5 al., No. 21-cv-07751-BLF, N.D. Cal.) (the “LifeLine Lawsuit”); and (iv) the present action. See 6 Intervention Order 1–2. Clear Blue initiated the present action on November 11, 2021, seeking to 7 rescind the D&O Policy based on material misrepresentations. See Compl., ECF No. 1. On July 8 12, 2022, Defendants moved for injunctive relief. See Mot. for Prelim. Inj., ECF No. 51. In an 9 order dated April 20, 2023 (the “Preliminary Injunction Order”), the Court granted injunctive 10 relief as to Mr. Watson only, and accordingly ordered Clear Blue to advance Mr. Watson’s 11 defense costs in…