Opinion
2017-009-L
08-09-2023
CLEAN AIR COUNCIL, THE DELAWARE RIVERKEEPER NETWORK, AND MOUNTAIN WATERSHED ASSOCIATION, INC. v. COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF ENVIRONMENTAL PROTECTION and SUNOCO PIPELINE, L.P., Permittee
DEP, General Law Division: Attention: Maria Tolentino (via electronic mail) For the Commonwealth of PA, DEP: Curtis C. Sullivan, Esquire Margaret O. Murphy, Esquire William J. Gerlach, Esquire George Jugovich, Jr., Esquire (via electronic filing system) For Appellant, Clean Air Council: Alexander G. Bomstein, Esquire Kathryn L. Urbanowicz, Esquire Joseph O. Minott, Esquire Lauren E. Otero, Esquire Elanor M. Breslin, Esquire (via electronic filing system) For Appellant, Delaware Riverkeeper Network: Kacy C. Manahan, Esquire (via electronic filing system) For Appellant, Mountain Watershed Association, Inc.: Melissa Marshall, Esquire (via electronic filing system) For Permittee: Robert D. Fox, Esquire Diana A. Silva, Esquire (via electronic filing system)
DEP, General Law Division:
Attention: Maria Tolentino (via electronic mail)
For the Commonwealth of PA, DEP:
Curtis C. Sullivan, Esquire
Margaret O. Murphy, Esquire
William J. Gerlach, Esquire
George Jugovich, Jr., Esquire (via electronic filing system)
For Appellant, Clean Air Council:
Alexander G. Bomstein, Esquire
Kathryn L. Urbanowicz, Esquire
Joseph O. Minott, Esquire
Lauren E. Otero, Esquire
Elanor M. Breslin, Esquire (via electronic filing system)
For Appellant, Delaware Riverkeeper Network:
Kacy C. Manahan, Esquire (via electronic filing system)
For Appellant, Mountain Watershed Association, Inc.:
Melissa Marshall, Esquire (via electronic filing system)
For Permittee:
Robert D. Fox, Esquire
Diana A. Silva, Esquire (via electronic filing system)
OPINION AND ORDER ON MOTION TO COMPEL
Bernard A. Labuskes, Jr., Judge
Synopsis
The Board largely grants a motion to compel responses to discovery requests that appear to be appropriately tailored to the issues potentially implicated in the parties' applications for attorney's fees and costs.
OPINION
Before the Board are the Appellants' application for fees and costs and, potentially, Sunoco Pipeline, L.P.'s ("Sunoco's") application for fees and costs. The Board previously denied both fee applications but the Pennsylvania Supreme Court vacated the Commonwealth Court's affirmance of our decision and remanded the matter to us for further consideration. Clean Air Council v. Cmwlth., 289 A.3d 928 (Pa. 2023).
The litigation underlying the fee applications is complex. There were two appeals. The first, docketed at EHB Docket No. 2017-009-L, was the Appellants' appeal of three E & S control permits and 17 water obstruction and encroachment permits issued by the Department of Environmental Protection (the "Department") to Sunoco. The second appeal, docketed at EHB Docket No. 2018-023-L, was the Appellants' appeal from a consent order and agreement entered into between Sunoco and the Department. There were multiple applications for temporary supersedeas, petitions for supersedeas, and settlement agreements in the appeals. Neither appeal culminated in a hearing on the merits. The Board consolidated the two appeals from April 2, 2018 until April 16, 2018, when the appeal docketed at 2018-023-L was marked closed and settled pursuant to a stipulated order of the parties, approved by the Board. The Appellants withdrew the appeal docketed at 2017-009-L on July 31, 2018. During the pendency of the appeals there was also some litigation in the Commonwealth Court. The Appellants and Sunoco filed their original applications for fees on August 30, 2018 and have since supplemented those applications following the remand. Included in both applications are requests for the reimbursement of expert witness fees.
Sunoco argues, among other things, that the Appellants' application was filed too late under the Board's rules to the extent it includes a demand for fees incurred in the 2018-023-L matter because the application was not filed within 30 days of the final order in that case. This is one of the many issues complicating this matter going forward.
Neither the Appellants nor Sunoco are seeking reimbursement for all of their fees. Rather, the Appellants are only seeking fees for those "portions of the underlying proceedings where Sunoco was the party providing Appellants the concessions binding its hands going forward." They say they have parsed out work "related to" a stipulated order entered on August 10, 2017 in EHB Docket No. 2017-009-L, and the aforementioned stipulated order entered on April 16, 2018 in the consolidated appeals. It remains to be determined how the Appellants divided out those fees from fees incurred in whole or in part related to other aspects of the underlying litigation. Sunoco is also only seeking some of its fees, which it has also unilaterally divided out according to its own view of entitlement.
The Appellants also seek reimbursement of the fees they incurred in appealing our original decision on their fee application.
On March 27, 2023, we held a telephonic case management conference with the parties following the Supreme Court's remand. We established prehearing procedures leading up to an evidentiary hearing set to begin on November 13, 2023. Among other things, and with the parties' agreement, we ordered that all discovery is to be completed by September 29. The Appellants have resisted some of Sunoco's discovery requests, which has resulted in Sunoco filing the motion to compel that is currently before us.
Sunoco served the Appellants with three discovery requests: (1) a Notice of Intent to Serve Non-Party Subpoenas for document production and depositions of the Appellants' experts, (2) a Notice of Depositions of the Appellants' Attorneys, and (3) a Second Request for Production of Documents. Sunoco's Second Request for Production of Documents seeks communications between the Appellants and the Department pertinent to the developments in the underlying litigation upon which the Appellants base their claim for fees and costs. The requests seek information regarding the Appellants' development of time records and expenses underlying their fee application. The requests also seek documents relevant to the Department's payment to the Appellants of $27,500 in attorney's fees and costs pursuant to a July 26, 2018 Stipulation of Settlement.
In addition, Sunoco noticed the depositions of the attorneys who represented the Appellants in this matter and for whom the Appellants seek fees: Alexander G. Bomstein, Esquire, Kathryn Urbanowicz, Esquire, and Melissa Marshall, Esquire. Sunoco also served a Notice of Intent to Serve Subpoenas pursuant to Pennsylvania Rule of Civil Procedure 4009.1 to obtain documents and depose Aaron J. Stemplewicz, Esquire, former attorney of the Delaware Riverkeeper Network, as well as three experts engaged by the Appellants in connection with this litigation and for whom the Appellants seek to recover fees and costs: Phillip C. Getty, P.G., Mark W. Eisner, P.G., and Amy Parrish, P.G..
On May 8, 2023, the Appellants served objections to Sunoco's Notice of Intent to Serve Subpoenas. The Appellants objected to each of the proposed subpoenas, claiming they were sought in bad faith, would cause unreasonable annoyance, embarrassment, oppression, burden, or expense, were beyond the scope of discovery, would invade the attorney-client privilege and/or attorney work-product doctrine, and would require an unreasonable investigation. Following Sunoco's service of the discovery requests and Notices of Deposition, the Appellants' counsel also advised Sunoco's counsel that they objected to the depositions of the Appellants' counsel Alexander G. Bomstein, Esquire, Kathryn Urbanowicz, Esquire, and Melissa Marshall, Esquire. On May 18, 2023, the Appellants served Sunoco with objections to Sunoco's Second Request for Production of Documents. The Appellants objected to each and every document request, and at least initially, declined to provide either substantive responses or produce any of the requested documents.
In accordance with Board Rule 1021.93, 25 Pa. Code § 1021.93, throughout May and through early June, Sunoco's counsel met and conferred with the Appellants' counsel to attempt to resolve the Appellants' objections to the discovery requests, notice of depositions, and proposed subpoenas. These meet and confer attempts were made through multiple phone calls between counsel for the parties, as well as email exchanges. It appears that both parties made some concessions. Among other things, Sunoco agreed not to depose Aaron Stemplewicz, former counsel for Appellant Delaware Riverkeeper Network. Sunoco also agreed to take the depositions of the Appellants' experts remotely in a total of a day and a half, as a concession to the Appellants' concerns regarding timing and costs associated with the depositions. The Appellants also made some concessions. Unfortunately, the parties were not able to resolve their differences in the end, which brings us to Sunoco's motion to compel. Sunoco wants the Appellants to comply with its discovery requests as modified by the parties' mutually accepted concessions. The Appellants oppose the motion, but we find that their objections for the most part lack merit, and to some extent, reflect what we believe may be a fundamental misunderstanding of the nature of the inquiry presently before us. The Department has not weighed in on the dispute.
On July 20, 2023, Sunoco filed a motion for leave to file a memorandum of law in reply to the Appellants' response to Sunoco's motion to compel. The Appellants did not respond to the motion for leave. Because the motion has already been adequately briefed by both Sunoco and the Appellants, we deny the motion for leave. Sunoco's memorandum of law attached to its motion for leave played no role in our consideration of the motion to compel.
Discovery before the Board is governed by the relevant Pennsylvania Rules of Civil Procedure. 25 Pa. Code § 1021.102(a). Generally, a party may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter involved in the pending action and appears reasonably calculated to lead to the discovery of admissible evidence. Pa.R.Civ.P. 4003.1. No discovery may be obtained that is sought in bad faith or would cause unreasonable annoyance, embarrassment, oppression, burden, or expense with regard to the person from whom discovery is sought. Pa.R.Civ.P. 4011; Haney v. DEP, 2014 EHB 293, 296-97. "[T]he Board is charged with overseeing ongoing discovery between parties during the litigation and has wide discretion to determine appropriate measures necessary to insure adequate discovery while at the same time limiting discovery where required." Northampton Twp. v. DEP, 2009 EHB 202, 205.
Discovery before the Board is also governed by a proportionality standard. Discovery obligations must be consistent with the just, speedy, and inexpensive determination and resolution of litigation disputes. Clean Air Council v. DEP, 2016 EHB 567, 571 (citing 2012 Explanatory Comment Prec. Rule 4009.1, Part B). The Board considers the following factors when evaluating whether a discovery request is proportional: (1) The nature and scope of the litigation, including the importance and complexity of the issues and the amounts at stake; (2) The relevance of the information sought and its importance to the Board's adjudication in the given case; (3) The cost, burden, and delay that may be imposed on the parties to deal with the information; (4) The ease of producing the information and whether substantially similar information is available with less burden; and (5) Any other factors relevant under the circumstances. Tri-Realty Co. v. DEP, 2015 EHB 552, 556-57; 2012 Explanatory Comment Prec. Rule 4009.1, Part B.
Several justifications for resisting Sunoco's discovery requests pervade the Appellants' response in opposition to Sunoco's motion to compel. Most of them have little merit. Initially, the Appellants' response to Sunoco's motion seems to reflect a mistaken impression that they should be able to submit some affidavits and bills to Sunoco and that Sunoco should then write them a check for approximately half a million dollars without Sunoco having any opportunity to probe the accuracy or reasonableness of those bills. The Appellants vaguely complain that Sunoco has been unreasonable, refused to compromise, and is simply trying to harass the Appellants. Our review of Sunoco's discovery requests and the parties' communications leading up to the instant dispute does not bear out those lamentations. Contrary to the Appellants' complaint, we have reviewed Sunoco's discovery requests and they appear to largely be appropriately tailored to the issues at hand. Sunoco is seeking relevant information going to the heart of the Appellants' claim for fees. The parties' communications reveal that Sunoco has already limited its requests in the spirit of compromise, and we detect no evidence of an intent to harass the Appellants. It does not appear to us that either party is acting in bad faith here. The Appellants' accusation that Sunoco is engaged in a campaign of harassment is not borne out by the record.
The Appellants' next complaint is that Sunoco is seeking stale information. (E.g. Sunoco wants to "drag experts out of retirement to interrogate them about their opinions on litigation five years ago." (App. Memo at 2.)) This complaint is, at best, curious, because the fees and expenses that are the subject of the instant proceedings were in fact incurred starting more than five years ago. The information is necessarily becoming stale because of the lengthy litigation and appeals process regarding the fee applications, not because of anything that Sunoco has done.
The Appellants next rely on the rules regarding the discovery of experts as a basis for responding to Sunoco's discovery requests regarding its experts. See Pa.R.Civ.P. 4003.5. It would seem to us, however, that those rules were developed with the merits litigation in mind, i.e., concerning the facts known and opinions held by an expert on the substantive merits issues in a case. Those rules should give way to some extent in litigation of a fee application seeking reimbursement for the fees and expenses of the very experts the Appellants would now shield from discovery. Allowing the Appellants to simply submit their experts' bills and demand that Sunoco pay them without any opportunity to inquire into the basis for those bills seems problematic regarding consultants, whose bills are notoriously lacking in detail. Sunoco is entitled to inquire into, among other things, the work performed and to explore how if at all that work contributed to any alleged success achieved by the Appellants related to those parts of the complex proceedings that are the subject of their fee application. We are informed that there were some discussions between the parties on streamlining this discovery. The Appellants refused to make the experts available for depositions but suggested that interrogatories be served instead. Sunoco offered to conduct the depositions remotely over a combined day and a half as a reasonable and efficient way of dealing with this discovery. We are not convinced that further efforts at compromise would be fruitless and we encourage the parties to continue their efforts.
To be clear, the Appellants may need to present expert testimony in support of their fee application, but this is distinct from expert participation in the litigation in the underlying appeals. As one example, the Appellants allege in their fee application that, as a result of their efforts, Sunoco drilled in "more stable rock formations where drilling fluids were less likely to escape into wetlands, streams, and drinking wells." Whether there were such "more stable rock formations" is a question it would seem can only be answered by experts. This is an entirely different area of inquiry, and in this area the limitations on expert discovery clearly do apply. Similarly, the Appellants claim their efforts in the underlying appeals resulted in Sunoco engaging in better engineered management practices. Sunoco disputes this at multiple levels, but the point here is that expert disputes over this aspect of the case are covered by the discovery rules regarding experts, without limitations. In contrast, to the extent it is proven that Sunoco drilled in "more stable rock formations" or used better management practices, and those things happened because of the Appellants' efforts (causation), the extent to which the Appellants' experts made them happen and charged fees for it would seem to be entirely relevant in the fees litigation. These are admittedly fine distinctions, but the Appellants' wholesale objection to the deposition of their experts regarding their work in the underlying litigation are not well taken.
The Appellants further lament that Sunoco's discovery requests are overly broad given "the very narrow issue of attorneys' fees and costs." (App. Memo at 11.) Again, this complaint has no merit. Sunoco is seeking precisely the sort of information that is directly relevant to the fee application. Although we will not take this opportunity to expound on our understanding of the Supreme Court's Opinion remanding the matter to us, we can at a minimum say that the inquiry mandated by the Court is anything but a "very narrow" inquiry. For example, we may need to assess who is at "fault" for "errors" committed in the permitting process. See Clean Air Council, supra, 289 A.3d at 953 ("Each case, complicated and rife with the potential for mistake, error, or even mis- or malfeasance, stands alone. In a given case, fault for an error (if any) may lie to a greater extent with either DEP or the applicant. Here is where the broad discretion conferred upon the Board, discretion that, once exercised, may only be evaluated for its abuse, is vital."). We, of course, have no record based on an evidentiary hearing on the merits to go on. Even if we did, it is unlikely the Board would have made findings of "fault." These findings must be made for the first time here. The Board's extremely broad discretion in awarding fees, perhaps limited only by the need not to base it entirely on a bad faith finding or otherwise act arbitrarily and capriciously, necessarily entails a broad inquiry. We do not discern anything in Sunoco's discovery requests that falls outside of this very broad inquiry.
Indeed, there are several other factors that militate in favor of broad discovery in this matter. We are on essentially new ground from a legal standpoint. The Supreme Court has severely cautioned against a narrow reading of the law. There was no final Adjudication in this case; we have no evidence of record on the merits. There was not even a final settlement of one of the appeals, and the final settlement in the other appeal did not involve Sunoco. If we get into a catalyst-type analysis, there are multiple factual disputes that will need to be resolved, including the extent to which any success was achieved, and the extent to which any success can be attributed to the Appellants' efforts. There is a potential issue regarding the appropriate allocation of any fees to be awarded between the Department and Sunoco. We are, of course, not bound by any allocation determinations made in the context of the Appellants and the Department's settlement agreement regarding fees. Both the Appellants and Sunoco are only requesting fees for parts of the case, but it remains to be seen how those parts can be separated from the overall effort. It cannot be forgotten that very substantial fees are at stake in this case. There is the disputed question of whether the Supreme Court's vacatur resurrected Sunoco's petition. This is only a partial list and is in addition to the normal panoply of issues raised in connection with any fee application. For the Appellants to claim that we are only faced with a very narrow inquiry is simply not true.
We are not suggesting the Department would need to pay any more fees. We simply point out that, if we find the Appellants are entitled to X fees, we still must decide how much of those fees should be paid by Sunoco. See Clean Air Council, 289 A.3d at 952 (Board is best positioned to determine what considerations should inform the allocation of responsibility for fees, if any, between the Department and a permit applicant); id. at 953 (Board must make an assessment of who is responsible for fees and whether a permit applicant is "as responsible" for fees as the Department is, or vice-versa).
The Appellants argue that Sunoco's discovery requests will force the revelation of privileged material. Initially, the fact that some information from a particular witness or contained in a particular document may be privileged does not entitle the Appellants to preclude Sunoco from obtaining any information from a particular witness or document. See In re Thirty-Third Statewide Investigating Grand Jury, 86 A.3d 204, 215 (Pa. 2014) ("Generally, evidentiary privileges are not favored, as they operate in derogation of the search for truth." (internal quotation omitted)); BouSamra v. Excela Health, 210 A.3d 967, 975 (Pa. 2019) ("Courts should permit utilization of an evidentiary privilege only to the very limited extent that excluding relevant evidence has a public good transcending the normally predominant principle of utilizing all rational means for ascertaining the truth." (internal quotation omitted)). Privilege claims must be narrowly tailored and justified with specificity. St. Luke's Hosp. of Bethlehem v. Vivian, 99 A.3d 534, 542 (Pa. Super. 2014) (party asserting a privilege must produce sufficient facts to show that privilege is properly invoked). The Appellants may object to specific questions but they cannot rely on privilege to prevent the deposition of a witness altogether.
Second, privilege must to some extent bend to the inquiry required in fees litigation. As our Supreme Court noted in In re Estate of McAleer, 248 A.3d 416 (Pa. 2021), with respect to the attorney-client privilege:
Though a mainstay of our legal system, the privilege is not absolute. Because it "has the effect of withholding relevant information from the factfinder," courts construe the privilege narrowly to "appl[y] only where necessary to achieve its purpose." Fisher v. United States, 425 U.S. 391, 403, 96 S.Ct. 1569, 48 L.Ed.2d 39 (1976). Where the interests protected by the privilege conflict with weightier obligations, the former must yield to the latter.Id. at 425-26. See also Barrick v. Holy Spirit Hospital of the Sisters of Christian Charity, 32 A.3d 800, 812 (Pa. Super. 2011) (attorney work-product discoverable if directly relevant to the underlying action), aff'd, 91 A.3d 680 (Pa. 2014). We look forward to the parties' elucidation on how we are to conduct the broad inquiry mandated by the Supreme Court without delving into what would otherwise constitute privileged matters. In the meantime, the Board has various mechanisms available to protect privileged materials, such as filings under seal and in camera review, should such mechanisms become necessary.
The Appellants say Sunoco's discovery is out of all proportion to the fees requested. They point out the danger the fee litigation will end up using more resources than the underlying litigation. We do not disagree, but we fail to see how that eventuality can be avoided given the Supreme Court's instructions on remand combined with the complicated facts involved in what might turn out to be a catalyst-type case, and we fail to see how the potential danger translates into some arbitrary limitation on Sunoco's otherwise reasonable discovery requests in this case. The Appellants have asked for approximately half a million dollars in fees and expenses. Furthermore, we wonder whether the Appellants' tack of resisting discovery and requiring the Board to resolve a motion to compel is accomplishing anything more than adding time and expense to the proceedings. The Appellants concede that some of Sunoco's discovery is "fair game." They of course fail to define the boundaries of what they consider acceptable with any degree of specificity. Simply failing to produce witnesses for any deposition questions or produce any documents is not the appropriate way to proceed. Accordingly, we issue the Order that follows.
ORDER
AND NOW, this 9th day of August, 2023, in consideration of Permittee Sunoco Pipeline L.P.'s Motion to Compel and the Appellants' opposition thereto, it is hereby ordered that the Motion to Compel is granted. It is further ordered as follows:
1. The Appellants shall provide responses to Sunoco's Second Set of Requests for Production within 21 days of entry of this Order; 2. Appellants shall produce for deposition Alexander G. Bomstein, Esquire, Kathryn Urbanowicz, Esquire, and Melissa Marshall, Esquire; and 3. Appellants' Objections to Permittee's Notice of Intent to Serve Subpoenas to Phillip C. Getty, P.G., Mark W. Eisner, P.G., and Amy Parrish, P.G. are overruled. 4. Sunoco's Motion for Leave to file a reply memorandum is denied.