Opinion
Civil Action No. 97-3829 SECTION: E/4
January 10, 2001
RULING ON MOTIONS
Waterman Steamship Corporation and Central Gulf Lines, Inc., (hereinafter "Waterman/CGL") filed a motion to dismiss the claims of Royal Sun, Boto Company, and Sun Alliance due to their failure to comply with the discovery orders of the Court, including but not limited to the orders of Magistrate Judge Roby of Dec. 3, 1999, and of Dec. 4, 2000. Claimants, Royal Sun Alliance Insurance (Hong Kong) Ltd., as claims agent for Sun Alliance and Long Insurance, PLC, (hereinafter the "Royal and Sun claimants") filed objections to the Magistrate Judge's ruling of Dec. 4, 2000, on Central Gulf Lines and Waterman Steamship's motion to compel. Both motions are opposed. Oral argument was requested and heard on these motions.
Facts
This is a limitation of liability proceeding in which the Royal and Sun claimants, who are insurance companies who paid insurance proceeds for lost cargo, have filed a claim for cargo damage and losses arising out of the sinking of the M/V GREEN OPAL in the Hoogley River near Calcutta, India. The present two motions concern discovery disputes between Limitation petitioners, Central Gulf Lines, Inc. and Waterman Steamship corporation and the Royal Sun claimants.
In December, 1999, Magistrate Judge Roby considered the motion of Waterman/CGL to compel discovery against the Royal and Sun claimants, seeking to have the corporate representatives of these claimants appear where their claims are filed, i.e., in the Eastern District of Louisiana, for their depositions and for the production of documents. The Royal Sun claimants agreed to have their representatives deposed under Rule 30(b)(6) of the Federal Rules of Civil Procedure, but sought to have the deposition accomplished through a video conference to avoid the cost of the representatives traveling from Hong Kong to New Orleans, Louisiana. Waterman/CGL suggested that the physical presence of the deponents was necessary because multiple documents must be reviewed in the course of the deposition and it was necessary for the documents to be produced in advance of the deposition. Waterman also urged the court to require the deponents to be deposed in the place where the claim was filed, arguing that the jurisprudence required it.
On December 3, 1999 (Rec. Doc. No. 129), the Magistrate Judge, in an effort to minimize the cost of litigation, but to assure that the documents would be available prior to the depositions, ordered that the Rule 30(b)(6) depositions of the Royal and Sun corporate representatives be taken by way of video conference, but that they were to produce the relevant documents 20 days prior to the deposition and to transmit electronically during the deposition any documents not previously produced.
The deponents claimed attorney-client and work-product privilege on many documents and did not produce them 20 days prior to the deposition. The video deposition, which began on January 13, 2000, is still incomplete. On August 15, 2000, Waterman filed a motion to compel the numerous documents which the Royal Sun claimants allege are privileged after conciliatory efforts failed.
On December 4, 2000, the Magistrate Judge ruled upon Waterman's motion to compel, noting that at oral argument she ordered Royal Sun to produce a privilege log to allow the Court to assess the applicability of the various privileges. The Magistrate Judge was unable to discern, from the initial privilege log, whether in fact that documents were privileged. The Magistrate Judge ordered Royal Sun to produce a more detailed privilege log which would allow that determination to be made, and advised counsel that if Royal Sun failed to demonstrate, via the privilege log, whether the documents were subject to the privilege, she would order them produced.
The Magistrate Judge carefully studied the revised privilege log and considered the documents listed in light of the appropriate law, noting that documents are protected by attorney-client privilege only when counsel prepared the document for the purpose of rendering legal advice.Simon v. G.D. Searle Co., 816 F.2d 397, 403-4 (8th Cir.), cert. denied, 484 U.S. 917 (1987). After painstaking review of the privilege log, the Magistrate Judge found that 93 specifically listed documents did not meet the criteria for falling within the protection of the privilege and overruled the invocation of the privilege and ordered the documents produced. She also found that the descriptions of the remaining documents were so vague and inadequate that she could not reach a decision on privilege, and ordered them produced to her for in camera review not later than Dec. 15, 2000.
The Magistrate Judge withheld ruling on whether the continuation of the deposition would be by video conference or in person in New Orleans and ordered Waterman to explain why certain topics of the corporate depositions were not explored during the initial deposition.
At the time the instant motions were filed, the Royal Sun claimants had not submitted the remaining documents to the Magistrate Judge for in camera review, and issued an order requiring that they show cause why they have not done so by January 10, 2001.
Waterman/CGL's Motion to Dismiss
Waterman/CGL move to dismiss the claims of the Royal Sun claimants because of violations of discovery orders that they characterize as so egregious as to warrant dismissal. This Court has reviewed the record and does not find that dismissal is an appropriate sanction. The Royal Sun claimants asserted privilege on these documents and responded to all motions to compel. They timely objected to the Magistrate Judge's ruling that the documents be produced, and the fact that they did not also seek a stay order does not equate to a flagrant disregard of the Magistrate Judge's ruling. Dismissal of the claims of the Royal Sun claimants is not warranted by the circumstances here.
Objections of Royal Sun Claimants to Magistrate Judge's Order
The Royal Sun Claimants object to the Magistrate Judge's order compelling the production of 93 specified documents because the ruling orders the production of these documents which they argue are protected against disclosure by attorney-client and attorney work product privilege. They suggest that the Magistrate Judge misconstrued the import of the documents and the privilege law as it affects these documents.
This Court has reviewed this voluminous record as well as the Magistrate Judge's opinion. It is plain that the Magistrate Judge understood the limitations of the evidentiary rules surrounding the assertion of such privileges and applied those rules to the revised privilege log that counsel for Royal Sun prepared. The burden was on Royal Sun to prepare a privilege log which would allow the Magistrate Judge to determine whether the documents listed were for the purpose of obtaining legal advice, or were transmittal letters, letters sent for review by both legal and non-legal staff, investigation documents containing factual information regarding the result of the investigation and business recommendations, but not as a legal service or to render a legal opinion, or client fee arrangements. The latter types of documents have been held not to be protected by privilege.
The Royal Sun claimants are taking the position that any correspondence or communication between a lawyer and his client is protected by privilege. In order to assert attorney-client privilege, the burden is on the one asserting the privilege to establish that (1) he made a confidential communication; (2) to a lawyer or his subordinate; (3) for the primary purpose of securing either a legal opinion or legal services, or assistance in some legal proceeding. United States v. Neal, 27 F.3d 1035, 1048 n. 24 (5th Cir. 1994). Such privilege "shields communications from the lawyer to the client only to the extent that these are based on, or may disclose, confidential information provided by the client or contain advice or opinions of the attorney." Wells v. Rushing, 755 F.2d 376, 379 n. 2 (5th Cir. 1985). It similarly only "protects communications from the client to the attorney made in confidence for the purpose of obtaining legal advice." Id. Blanket claims of privilege are disfavored. United States v. El Paso Co., 682 F.2d 530, 539 (5th Cir. 1982). While the purpose of the privilege is to encourage full and frank communication between attorneys and clients, because privileges effectively withhold relevant information from the factfinder, they apply only where necessary to achieve their purpose. United States v. Robinson, 121 F.3d 971, 974 (5th Cir. 1997), citing Fisher v. United States, 425 U.S. 391, 403, 96 S.Ct. 1569, 1577 (1976). Further, most authorities hold that a litigant waives the privilege when he "place(s) the information protected by it in issue through some affirmative act for his own benefit, and to allow the privilege to protect against disclosure of such information would be manifestly unfair to the opposing party."Conkling v. Turner, 883 F.2d 431, 434 (5th Cir. 1989), quoting Hearn v. Rhay, 68 F.R.D. 574, 581 (E.D. Wash. 1975)
According to the oft-repeated arguments of the Royal Sun claimants themselves, this is a simple case of their asserting a claim to recoup the insurance proceeds they paid for cargo damaged in the sinking of M/V GREEN OPAL. From their standpoint, they are innocent cargo. Despite this, these claimants made a blanket assertion of attorney-client and work product privilege on in excess of 200 documents and expected the Court to study each and every one of them instead of preparing a proper privilege log containing enough information necessary for the Magistrate Judge to determine whether the contents of the document sufficed to meet all the criteria for the privileges. She did study the revised log and made a logical determination, based upon the information provided, that the enumerated documents did not satisfy all the elements for attorney-client and/or work product privilege.
After reviewing the matter, the Court finds that the Royal Sun claimants have not demonstrated that the Magistrate Judge's ruling finding that the documents were not entitled to protection from production under the attorney-client or work product privileges was clearly erroneous or contrary to law. 28 U.S.C. § 636(b)(1).
Accordingly, for the above and foregoing reasons,
IT IS ORDERED that the motion of Waterman/CGL to dismiss the claims of the Royal Sun claimants for discovery violations be and is hereby DENIED; IT IS FURTHER ORDERED that the Royal Sun claimants' objections to the Magistrate Judge's Order be and are hereby OVERRULED. The documents are to be produced within 3 days so that the Jan. 31, 2001 witness deposition deadline can be met.