United States District Court, S.D. Mississippi, Eastern Division
BURROUGHS DIESEL, INC. PLAINTIFF
THE TRAVELERS INDEMNITY COMPANY OF AMERICA DEFENDANT
ORDER ON MOTION TO COMPEL DISCOVERY
MICHAEL T. PARKER UNITED STATES MAGISTRATE JUDGE.
MATTER is before the Court on Plaintiff's Motion  to
Compel Discovery. Having carefully considered the
parties' submissions and the applicable law, the Court
finds that the Motion should be granted in part and denied in
lawsuit arises out of an alleged hydrochloric acid tank
failure owned by Baker Petrolite, not a party to this
litigation, on October 14, 2016. The alleged failure resulted
in acid travelling through the air and damaging
Burroughs' real and personal property. Travelers
Indemnity Company of America (TIA) had previously issued a
commercial property insurance policy to Burroughs. After
Burroughs' property was allegedly damaged by hydrochloric
acid, it filed a claim with TIA. On October 18, 2016, TIA
retained Albert Nalibotsky to represent TIA in its
anticipated subrogation claim against Baker. On October 20,
2016 Mr. Nalibotsky was retained by Travelers Property
Casualty Company of America (TPPCA) to represent it in a
separate subrogation lawsuit arising out of the same
hydrochloric acid tank failure.
November 2, 2016, TIA informed Burroughs that it would likely
deny the claim. On February 22, 2017, TIA issued a denial
letter. On March 28, 2018, Burroughs filed suit against TIA
bringing several claims stemming from the denial of coverage.
January 4, 2019, Burroughs filed the instant motion to compel
discovery. Burroughs disputes a wide array of redactions and
in some cases a failure to produce documents on the part of
TIA. TIA responded to the motion stating that several of the
disputed issues had been resolved but maintained that the
Court should not compel production of several of the
documents at issue, citing attorney-client privilege and the
work-product doctrine. On February 1, 2019, Burroughs filed
its reply and the matter is ripe for consideration.
Additionally, the Court ordered TIA to submit the withheld or
redacted documents for in camera review. The Court
has now had the opportunity to review the records at issue.
Court applies the standard set forth in Federal Rule of Civil
26(b)(1) which allows for discovery of material that is
proportional to the needs of the case and non-privileged.
“The party seeking discovery bears the burden of
showing its necessity.” Freeman v. United
States, 556 F.3d 326, 341 (5th Cir. 2009). The party,
however, that resists discovery by claiming a privilege has
the burden of establishing the privilege. Enron Corp.
Sav. Plan v. Hewitt Assocs., L.L.C., 258 F.R.D. 149, 160
(S.D. Tex. 2009). Discovery is “to be accorded a broad
and liberal treatment to effect [its] purposes of adequately
informing litigants in civil trials.” Herbert v.
Lando, 441 U.S. 153, 176 (1979). “At some point,
however, discovery yields diminishing returns, needlessly
increases expenses, and delays the resolution of the
parties' dispute.” Willis v. City of
Hattiesburg, 2016 WL 918038, at *2 (S.D.Miss. Mar. 10,
2016). Discovery disputes are left to the discretion of the
trial court. Freeman, 556 F.3d at 341. Having
carefully considered the Motion, the Court rules as follows:
Interrogatory Interrogatory No.
4: As to your employees who were involved in
the claim handling of the subject commercial property claim
by Plaintiff, describe all training and training materials of
each employee who worked on the subject claim, and describe
any and all claims manuals or protocol which your employees
were required to follow or reference in handling the subject
claim, including, but not limited to, manuals or procedures
to be followed before denying a claim or issuing a
reservation of rights.
moves to compel the production of the Knowledge Guide and any
other manuals, procedures, or protocols required to be
followed in handling the subject claim or denying a claim.
TIA produced a Knowledge Guide in response to this
interrogatory on December 13, 2018, but according to
Burroughs 419 of the 440 pages produced had redactions. TIA
argues that this particular discovery dispute is not ripe for
consideration because Burroughs failed to comply with Local
Uniform Civil Rule 37(a), which requires the parties to
consult in good faith before seeking a conference with the
court or filing discovery motions. TIA represents that any
issue Burroughs had with the Knowledge Guide was not
communicated until January 3, 2019 during a telephonic
conference with the Court, and Burroughs filed this instant
Motion to Compel the next day. In its response and
supplemental response, TIA raises several objections to
producing the full Knowledge Guide, generally relating to
relevance and proportionality.
Court is unpersuaded by TIA's ripeness argument. The
issue here has been addressed in conference with the Court
and the Court needs no further conference before considering
the issue. Nothing in TIA's Response suggests that yet
another conference would be fruiful.
Rule of Civil Procedure 26(b)(1) states “Parties may
obtain discovery regarding any nonprivileged matter that is
relevant to any party's claim or defense and proportional
to the needs of the case….” Material is
considered relevant if there is “any possibility”
that it can relate to a claim or defense of a party.
S.E.C. v. Brady, 238 F.R.D. 429, 436-437 (N.D. Tex.
2006). The discovery requested need not be admissible at
trial, it must only be presumed that it will lead to
discovery of admissible evidence. Id.
Court finds that the Knowledge Guide,  which TIA's
claims adjusters use as a reference, is relevant to the
claims in this case. Additionally, the Court finds that its
production, in unredacted form, would not be burdensome.
Producing the unredacted document should be far less
burdensome than the amount of time previously spent redacting
hundreds of pages.
reviewed the Knowledge Guide, it is plain that much of the
information in it does not apply to this case. It is equally
plain, however, that TIA redacted information that is
relevant to the claims and issues. Perhaps more importantly,
the redactions are so frequent and indiscriminate that the
context of much of the unredacted information is unclear or
useless. The entire Knowledge Guide should be produced.
extent TIA is concerned about producing trade secrets or
information that it deems sensitive, a protective order was
entered in this case to address that issue. See
Order . The parties may designate material as
confidential and to seek leave to file documents under seal
pursuant to Local Uniform Civil Rule 79. The Knowledge
Guide should be produced in unredacted form.
any other manuals, procedures, and protocols regarding the
handling of this claim or the denying of any claim, TIA
asserts that no such materials exist. TIA states that the
parties agreed to limit any training material to those used
to respond to claims regarding chemical spills. Burroughs
counters that the narrowing of such materials is not
appropriate, and it continues to seek all training materials
related to the handling of this claim. After reviewing the
Knowledge Guide, the Court agrees that the restrictions put
in place by TIA are too narrow. TIA should produce all
training manuals, procedures, and protocols utilized by
claims handlers in this case. The Court, therefore, finds
that the Motion to Compel as to Interrogatory No. 4 should be
Requests for Production
No. 1: Please produce all documents, emails,
and electronically stored data which in any way relate to the
allegations of the Complaint and the Plaintiff's claim
for damages to its real and personal property.
objected to producing some portions of this requested
material asserting attorney-client privilege and work-product
doctrine. The Court will first address whether the
attorney-client privilege applies to the communications
involving Ms. Grenier, TIA's in-house counsel, and Mr.
Nalibotsky, TIA's and TPCCA's subrogation counsel.
TIA asserts that communications with Ms. Grenier were
withheld because she rendered legal advice to claims
personnel and was acting as an attorney when these
communications were made. Burroughs counters that
attorney-client privilege cannot be asserted as to
communications with Ms. Grenier because TIA responded to a
separate interrogatory stating that “no in-house or
other attorney participated in the claim handling or denial
of claim.” See [52-1] at 13.
also asserts attorney-client privilege as to communications
with Mr. Nalibotsky in his capacity as TIA's subrogation
counsel and as TPCCA's subrogation counsel. An affidavit
was submitted from Mr. Nalibotsky stating that he was
retained on October 16, 2016 to represent TIA in regard to
any subrogation claim it might have, but at an unspecified
date his representation of TIA ceased after TIA denied
Burroughs' claim. Aff. [75-3]. Mr. Nalibotsky currently
represents TPCCA in a separate subrogation lawsuit arising
from the same hydrochloric acid tank failure. Id.
Burroughs argues that Mr. Nalibotsky could not have been
counsel for TIA in a subrogation matter because TIA so
promptly denied Burroughs' claim that there was never a
subrogation claim to investigate.
state law governs the application of the attorney client
privilege in this matter. See Fed. R. Evid. 501.
“A client has a privilege to refuse to disclose- and to
prevent others from disclosing- any confidential
communication made to facilitate professional legal services
to the client.” Miss. R. Evid. 502(b). “[The]
privilege protection attaches to those communications that
would facilitate the rendition of legal services or
advice.” United Investors Life Ins. Co. v.
Nationwide Life Ins. Co., 233 F.R.D. 483, 487 (N.D.
Miss. 2006) (emphasis in original). It is important to bear
in mind, however, that the attorney-client privilege only
extends to communications and not to facts. Upjohn Co. v.
United States, 449 U.S. 383, 395 (1981).
reviewing the documents in camera as well as the
parties' submissions, the Court finds that Ms. Grenier
was acting in her capacity as counsel to TIA and that
communications between Ms. Grenier and TIA representatives
are protected to the extent that they were made to facilitate
professional legal services or advice. TIA's
interrogatory response representing that no attorneys
“participated” in the claims handling and the
denial of the claim is disingenuous and misleading, as
numerous communications with attorneys are in the claims file
now at issue. Moreover, the interrogatory itself plainly asks
for the identity of any attorneys who were called upon to
give legal advice. While TIA may object to identifying the
advice given on privilege grounds, the name of an attorney is
not privileged. The answer was pure gamesmanship. As the
attorney is clearly listed on the privilege log, it is
perplexing that TIA saw fit to avoid disclosing the
attorney's name in this discovery response.
responses should be straight-forward. Dollar v. Long
Mfg., N.C., Inc., 561 F.2d 613, 614 (5th Cir. 1977)
(holding that “discovery by interrogatory requires
candor in responding.”). This response was neither
straightforward nor candid. The Court, however, will not
compel TIA to disclose communications between itself and its
counsel solely based on this evasive response since the
communications between claims handlers and Ms. Grenier were
properly disclosed on the privilege log. The communications
were properly withheld.
Mr. Nalibotsky, the Court finds that he was acting as counsel
for TIA concerning any subrogation claim TIA may have
possessed. Mr. Nalibotsky's affidavit specifically states
that he was counsel for TIA. Aff. [75-3]. This is further
verified by the Court's in camera review of
certain documents. Any communications between Mr. Nalibotsky
and TIA representatives for the purpose of seeking legal
advice is protected by attorney-client privilege, as long as
Mr. Nalibotksy was employed or retained by TIA. That a
subrogation claim did not materialize does not mean that one
was not considered or that TIA did not seek advice about
pursuing a claim or did not evaluate one.
other withheld materials, TIA argues that the work-product
doctrine applies to all materials created before January 17,
2017. Burroughs argues that work-product doctrine cannot be
claimed for the redacted or withheld material because it was
communicated that the claim would be denied on November 2,
2016, only a few weeks after the claim was submitted, and TIA
could not have prepared for a subrogation claim when it so
promptly denied coverage.
work-product doctrine protects material prepared in
anticipation of litigation created by an attorney. See
generally Hickman v. Taylor, 329 U.S. 495 (1947).
“[T]he doctrine protect[s] material prepared by agents
for the attorney as well as those prepared by the attorney
himself.” U.S. v. Nobles, 422 U.S. 225,
238-239 (1975). Yet, “when relevant and non-privileged
facts remain hidden in an attorney's file and where
production of those facts is essential to the preparation of
one's case, discovery may properly be had.”
Hickman, 329 U.S. at 511.
party asserting the privilege bears the burden of proving
that the information requested is privileged.”
Barker v. Kinder Morgan Se. Terminals, LLC, 2007 WL
4333843, at *1 (S.D.Miss. Dec. 6, 2007) (referencing In
re Santa Fe Int'l Corp., 272 F.3d 705, 710 (5th Cir.
2001)). The Court must consider for what purpose the document
or documents at issue were created. If the “primary
motivating purpose” in creating the documents was to
aid possible future litigation, then the work-product
doctrine applies. United States v. Davis, 636 F.2d
1028, 1040 (5th Cir. 1981).
Court is of the opinion that materials produced by TIA
subrogation specialists prior to January 17, 2017 were in
anticipation of litigation and protected by the work-product
doctrine. Albert Nalibotsky sent a letter on October 19, 2016
to Baker Hughes on behalf of Travelersputting Baker
Hughes on notice of potential litigation and evidenced
TIA's intent to potentially pursue a subrogation claim.
See Resp. [75-3].
further submits that work done after January 17, 2017 and the
work-product of TPCCA is protected by the work-product
doctrine. TIA discontinued its subrogation efforts on January
17, 2017, according to its file records. See TIA
636. Specifically, TIA points to work done by Mr. Edwards, an
expert consultant, who performed work in 2017 for both TIA
and TPCCA concerning the underlying tank failure. Burroughs
disputes this assertion and argues that TIA and TPCCA are
entirely separate entities. Burroughs argues that TPCCA's
subrogation case “involves a separate and distinct
insurer with its own counsel (Albert Nalibotski, TPC
subrogation counsel), over an unrelated subrogation claim
under a separate insurance policy, all of which are not at
issue or involved in this case.” Memo.  at 10.
argues that “TIA and TPCCA are related entities with a
common legal interest in litigating their cases, the
work-product privilege applies to protect these
materials.” The Court has not found a case considering
Mississippi law on common-interest privilege in the realm of
work product, but it has been addressed in the context of
attorney-client privilege. The common-interest privilege
“extends to statements made in multiple party cases in
which different lawyers represent clients who have common
interests.” Miss. R. Evid. 502 cmt. “Rule 502
does not broadly construe the common interest
privilege.” United Inv's Life Ins. Co v.
Nationwide Life Ins. Co, 233 F.R.D. 483, 487 (N.D. Miss.
2006). “[T]he party asserting the privilege must have
been, at the time of the communication, a co-party to pending
litigation with the party to whom it bears a relationship of
common interest.” Id. at 487-488.
not demonstrated that TPCCA and itself meet the common
interest standard under Mississippi Rule of Evidence 502 and
have not provided any binding authority to support its
position. TIA and TPCCA are not co-parties in this lawsuit.
No matter how expansive or overlapping TIA and TPCCA's
business interests are, they cannot shelter their
communications or shared documents with the common interest
privilege. TIA may not claim the work-product doctrine for
materials produced by TPCCA after TIA denied Burroughs'
Court finds that the Motion to Compel as to Request No. 1
should be GRANTED IN PART as to all materials withheld based
on work product after January 17, 2017 and DENIED as to all
other relief requested.
No. 3: Please produce all training materials
and documentation which was used in the training of employees
who participated in any way in the handling of the subject
discussed previously, TIA shall produce the unredacted
Knowledge Guide and all training materials and protocols
utilized in the claim at issue. The Motion to Compel as to
Request No. 3 is GRANTED.
No. 4: Please produce the claims handling
manual of Travelers' protocol for handling commercial
property claims which would be applicable to the claims
handling of the subject claim, issuing a reservation of
rights or the denial of the subject claims.
discussed previously, TIA shall produce the unredacted
Knowledge Guide and all training materials and protocols
utilized in the claim at issue. The ...