Opinion
Civil Action No. 00-760 c/w 00-2154, Section "T" (2)
October 30, 2001
ORDER AND REASONS
Pending before me are two motions to compel defendants, Transocean Offshore (U.K.) Inc., Transocean Offshore Ventures Inc., Transocean Offshore USA, Inc. and Transocean Deepwater Drilling, Inc. (collectively referred to as "Transocean"), to produce certain documents. The first motion to compel was filed by defendants, Golden Lane Marine, Inc., N.J. Guidry and Sons Towing Company, Inc., Guidry Brothers Towing Company, Inc. and Harvey Gulf International Marine, Inc. (collectively referred to as "the Assist Tug Interests"), Record Doc. No. 120. The second motion was filed by third-party defendant and claimant, John E. Chance Associates, Inc. ("Chance"). Record Doc. No. work product immunity from discovery as to certain documents generated during Transocean's investigation of the pipeline rupture accident that gave rise to this litigation.
Transocean filed opposition memoranda to both motions. Record Doc. Nos. 127, 150. The Assist Tug Interests were granted leave to file a reply memorandum. Record Doc. Nos. 134, 135. Transocean received leave to file a supplemental/reply memorandum. Record Doc. No. 141. Chance was granted leave to file a supplemental memorandum and to supplement the record with a certified copy of a deposition transcript. Record Doc. Nos. 152, 154.
Ruling on the Assist Tug Interests' motion to compel was deferred and Transocean was ordered to produce the disputed documents to me for in camera review. Record Doc. Nos. 133, 149. Transocean complied with these orders and provided me with two sets of documents. The first set, produced under cover letter dated October 1, 2001, consists of the typed notes of Transocean employee, Richard Ward, dated January 24-26, 2000, of his interviews with crew members who were aboard the drilling rig TRANSOCEAN 96 when the accident occurred on January 21, 2000. It also contains handwritten and typed statements by the Transocean crew members, variously dated January 21-31, 2000. In addition, this group of documents includes a list of Transocean employees assigned to investigate the incident. These documents are responsive to both motions to compel.
The withheld documents are Bates-stamped numbers TR000003, TR000137-145, TR000147-175, TR000177-184, TR000186-187, TR0003ll-312, TR000317-318, TR000725-726, TR000731-732, TR000895-896, TR000905-917, TR000923 and TR000931-936.
Under cover letter dated October 23, 2001, Transocean also provided me with a binder of information entitled "TRANSOCEAN 96 Anchor Winch and Pipeline Investigation, "which is responsive to Chance's motion to compel. Transocean asserts work product immunity as to some of the documents contained in the binder, including the interview notes and statements described above, plus additional reports of post-accident observations, activities and conclusions created by other Transocean managers during its investigation. The cover sheet of the binder states that it contains a "Report for January 21, to January 30, 2000," prepared by Operations Manager Jimmy Moore and Rig Manager David Matlock.
The withheld documents are Bates-stamped numbers TR000003-14, TR000103-104, TR000121-128, TR000137-145, TR000147-175, TR000177-184 and TR000186-187.
Transocean has attached two exhibits to its memoranda in opposition to the motions: Richard Ward's declaration under penalty of perjury, Transocean Exh. A, and a copy of relevant portions of Transocean's Gulf Coast Divisions "HSE" Manual, concerning incident investigations. Transocean' s Exh. B.
Transocean did not provide a translation of the abbreviation.
Ward states in his declaration that he was a Rig Manager on another rig in January 2000 when he "was directed to investigate the incident under the procedure for excessive property damage in anticipation of litigation." He does not say who directed him to investigate or why he concluded that his work was being done in anticipation of litigation. He states that he interviewed crew members aboard the TRANSOCEAN 96 beginning on January 25, 2000, took notes of his observations, had the notes typed and provided those notes to the Gulf Coast Operations Manager in accordance with Transocean' s investigation procedure. Transocean Exh. A.
The HSE Manual, Safety Procedures, Incident Investigation, Section 5, describes the company's investigation procedure for incidents of "anticipated litigation." Transocean Exh. B, at p. 3-4-3. If legal action is anticipated,
1) [a]n attorney will be notified . . . and asked to investigate the incident in preparation for defense of the Company.
2) The attorney will be in charge of the investigation. At the discretion of the Division Manager or the investigating attorney, [additional listed persons, including a Rig Manager] may be asked to assist in the investigation . . .
3) With the assistance of all persons participating in the investigation, the attorney will prepare a detailed report of the facts surrounding and relevant to the incident.
4) The investigating attorney will provide the Vice President Operations and Vice President General Counsel with a report of the investigation.Id.
If litigation is not anticipated, the HSE Manual provides an alternative procedure that does not include the participation of an attorney.
A person designated by the Offshore Installation Manager (OIM)/Base Manager will be in charge of the investigation of the incident. At the discretion of the OIM or person in charge of the investigation, the following [listed] persons [including a Rig Manager] may be asked to assist in the investigation of the incident.Id. at p. 3-4-5. "With the assistance of any persons participating in the investigation, the person in charge of the investigation will prepare a detailed report" of the facts and details surrounding and relevant to the incident, and provide his report to the OIM/Base Manager, who will route it to another appropriate manager, but not to an attorney. Id. at p. 3-4-6. The purpose of a post-accident investigation is to determine whether any corrective action is needed and to reduce the probability of the incident recurring, Id. at pp. 3-4-6, 3-4-7.
Chance attached to its reply memorandum an excerpt from the deposition of Transocean' s employee, Thomas Keeton, who testified that he flew out to the rig on the same helicopter as Ward after the incident to assume the duties of Offshore Installation Manager. Record Dcc. No. 154, Chance's Motion to Supplement the Record, Chance Exh. A, Thomas Keeton deposition transcript, at pp. 206-07. Keeton stated that Ward told him that his purpose was to conduct an investigation. Id. at p. 208. He said Ward did not indicate that he had spoken with any attorneys for Transocean. Id. at p. 207. Keeton testified that the purpose of a formal, post-accident investigation is to discover the facts "so that shortcomings and experiences can be communicated in the company." Id. at pp. 287-88. He said that Transocean had such a policy before the accident and continues to have such a policy, and that investigators are "dispatched to the rigs on a regular basis" even after minor incidents.Id. at p. 288.
Having reviewed the documents in camera, the submissions of the parties, the arguments of counsel and the applicable law, IT IS ORDERED that both motions to compel are GRANTED and that Transocean's work product objections to production of the documents are overruled for the following reasons.
Transocean argues that Ward's notes, the statements he took from crew members, the list of investigation team members and the other investigation reports in the binder are work product prepared in anticipation of litigation, which are protected from discovery, and that movants have failed to make the showing required under Fed.R.Civ.P. 26 (b)(3) to obtain work product. I find that Transocean has failed to carry its burden to show that these documents were prepared in anticipation of litigation. Therefore, the documents are not work product and must be produced to movants.
Rule 26(b)(3) codifies the work product doctrine.
[A] party ray obtain discovery of documents and tangible things otherwise discoverable under subdivision (b)(1) of this rule and prepared in anticipation of litigation or for trial by or for another party or by or for that other party's representative (including the other party's attorney, consultant, surety, indemnitor, insurer, or agent) only upon a showing that the party seeking discovery has substantial need of the materials in the preparation of the party's case and that the party is unable without undue hardship to obtain the substantial equivalent of the materials by other means.
Fed.R.Civ.P. 26(b)(3) (emphasis added).
Transocean, as the party seeking protection, bears the burden to show that the disputed documents are work product, i.e., that they were prepared in anticipation of litigation. Guzzino v. Felterman, 174 F.R.D. 59, 63 (W.D. La. 1997) (Tynes, M.J.) (citing Hodges, Grant Kaufmann v. United States, 768 F.2d 719, 721 (5th Cir. 1985)). "The law is settled that "excluded from the work product doctrine are materials assembled in the ordinary course of business, or pursuant to public requirements unrelated to litigation.'" Id. at 62 (quoting United States v. El Paso Co., 682 F.2d 530, 542 (5th Cir. 1982) (citing Rule 26(b)(3) advisory committee notes)).
The Fifth Circuit has described the standard for determining whether a document has been prepared in anticipation of litigation as follows:
It is admittedly difficult to reduce to a neat general formula the relationship between preparation of a document and possible litigation necessary to trigger the protection of the work product doctrine. We conclude that litigation need not necessarily be imminent, as some courts have suggested, as long as the primary motivating purpose behind the creation of the document was to aid in possible future litigation.United States v. Davis, 636 F.2d 1028, 1039 (1981) (citations omitted) (emphasis added); accord In re Kaiser Alum. Chem. Co., 214 F.3d 586, 593 (5th Cir. 2000), cert. denied, 121 S.Ct. 1354 (2001).
It is not dispositive that Ward and the other managers who prepared the "TRANSOCEAN 96 Anchor Winch and Pipeline Investigation" report are not attorneys. Rule 26(b)(3) protects from discovery documents prepared by a party's agent, as long as they are prepared in anticipation of litigation. As the Supreme Court explained:
At its core, the work-product doctrine shelters the mental processes of the attorney, providing a privileged area within which he can analyze and prepare his client's case. But the doctrine is an intensely practical one, grounded in the realities of litigation in our adversary system. One of those realities is that attorneys often must rely on the assistance of investigators and other agents in the compilation of materials in preparation for trial. It is therefore necessary that the doctrine protect material prepared by agents for the attorney as well as those prepared by the attorney himself.United States v. Nobles, 422 U.S. 225, 238-39 (1975) (emphasis added).
However, Transocean's evidence fails to establish that the primary motivating purpose behind the investigations conducted by Ward and the other managers was to aid in possible future litigation. Instead, it appears that the investigation was conducted in the ordinary course of business "to find out everything possible, as soon as possible, after the accident." St. James Stevedoring Co. v. Femco Mach. Co., 173 F.R.D. 431, 433 (E.D. La. 1997) (Africk, M.J.) (quotation omitted). Investigation of the causes and results of a marine casualty is routine, expected and necessary for many reasons, including determination of human errors, evaluation of equipment failures, assessments of loss and prevention of similar accidents in the future. Keeton testified that investigators are "dispatched to the rigs on a regular basis" even after minor incidents so that "shortcomings and experiences can be communicated in the company."
For example, the courts have held that when marine surveyors in a casualty case
are acting at the request of liability insurers, in a case where attorneys for the assured have not yet been appointed, and the surveyors do not report directly to counsel, the surveys are not regarded as "prepared in anticipation of litigation," even though an eventual suit by the cargo owner or its insurer is well within the bounds of reasonable possibility. . . . Where shortly after a casualty an insurance company retains a surveyor to conduct an investigation which will assist insurers m performing these or related functions, they are simply doing business as usual, and the documents generated thereby are not protected from discovery.Insurance Co. of N. Am. v. M/V Savannah, No. 94 Civ. 8846, 1995 WL 608295, at *1 (S.D.N.Y. Oct. 17, 1995); accord St. James Stevedoring Co., 173 F.R.D. at 433-25.
Although "prudent parties anticipate litigation, and begin preparation prior to the time suit is formally commenced," C.A. Wright, A.R. Miller R.L. Marcus, Federal Practice and Procedure § 2024, at 343 (1994), the evidence in the instant case does not support a conclusion that anticipation of litigation was the primary motivating purpose for Transocean's investigation. If a party or its attorney prepares a document in the ordinary course of business, "it will not be protected [from discovery] even if the party is aware that the document may also be useful in the event of litigation." Occidental Chem. Corp. v. OHM Remediation Servs. Corp., 175 F.R.D. 431, 435 (W.D.N.Y. 1997) (quotation and citations omitted).
Based on the current record, particularly the detailed description of Transocean's procedures in the HSE Manual, including the differentiation made in the manual concerning attorney involvement when litigation is anticipated and no attorney involvement when litigation is not anticipated, and the absence in Ward's declaration or the reports prepared by the other members of the investigation team of any indication that attorneys were directly involved in the investigation, it is most probable that Transocean would have undertaken the same investigation regardless whether litigation was anticipated. See Miller v. Federal Express Corp., 186 RRD. 376, 386, 387 (W.D. Tenn. 1999) (defendant routinely investigated all job discrimination complaints through the Personnel Department under the direction of the Legal Department; documents generated during investigation before filing of formal EEOC complaint were prepared in ordinary course of adjusting employee complaints and were not work product simply because corporate counsel directed the investigation); Occidental Chem. Corp., 175 F.R.D. at 435 ("Even if these documents were prepared with an eye toward litigation, it is indisputable that the documents also contain information which plaintiff would be expected to obtain or compile in the ordinary course of its business of overseeing the performance of environmental remediation work under its contract with defendant."); Guzzino, 174 F.R.D. at 63 (ultimate investigation by securities regulators and filing of more than one hundred civil lawsuits "does not cloak the documents created by Dean Witter's investigation of the Morgan City office with work product immunity because the evidence does not establish that the primary motivating purpose behind the investigation and the creation of the withheld documents was to aid in possible future litigation. Instead, the evidence presented by Dean Witter indicates that the investigation was conducted in the ordinary course of business and/or to prepare for potential investigations by [securities regulators].").
The evidence and documents presented by Transocean do not bear any indicia that Ward and the other managers were working with or at the direction of Transocean' s attorneys primarily to prepare for future litigation.
When a party or the party's attorney has an agent do work for it in anticipation of litigation, one way to ensure that such work will be protected under the work product doctrine is to provide clarity of purpose in the engagement letter. . . . [C]learly the most effective way to guard against inadvertent loss of the protection offered by the work product doctrine is to ensure that management's written authorization to proceed with the investigation identifies, as specifically as possible, the nature of the litigation that is anticipated. An affidavit from counsel indicating that such work was done at his direction in anticipation of specified litigation will also help a party meet its burden under Rule 26(b)(3) of establishing that the work was done in anticipation of litigation.Pacamor Bearings, Inc. v. Minebea Co., Ltd., 918 F. Supp. 491, 513 (D.N.H. 1996) (quotations and citations omitted).
No such contemporaneous indicia of attorney involvement are present in the current record. Transocean makes assertions in its memorandum in opposition to Chance's motion and in its reply memorandum that the "investigation was begun at the direction of Transocean's general counsel," Record Doc. No. 141, at p. 2, "[w]ithin hours of the incident" because "[e]ven at that time litigation was expected." Record Doc. No. 150, at p. 2. However, this assertion is wholly unsupported by any evidentiary materials. Transocean acknowledges in its opposition memoranda that Ward "was assigned to investigate and ordered by the gulf Coast Division manager to conduct interviews on the rig." Id. at p. 3; Record Doc. No. 127, at p. 4. Ward's declaration does not say who directed him to proceed, although he states clearly that he reported the results of his investigation to the Gulf Coast Operations Manager. Transocean Exh. A. The list of team members who participated in the investigation does not include an attorney, TR000003, and my in camera review found no indication in the "TRANSOCEAN 96 Anchor Winch and Pipeline Investigation" binder that any of the withheld reports were requested by or distributed to attorneys. See TR000003, TR000005-014, TR000103-104, TR000121-128.
Ward's declaration and the HSE Manual do not support Ward's conclusory statement that he was directed to investigate the accident under the procedures for investigation in anticipation of litigation. Transocean concedes in its opposition memorandum to Chance's motion that the company's written procedure for investigating incidents of "anticipated litigation" was not followed. Record Doc. No. 150, at p. 4. The lack of evidence to support the involvement of any attorney indicates that Ward investigated under and followed the procedure for incidents in which litigation is not anticipated. See Transocean Exh. B, HSE Manual, at pp. 3-4-5, 3-4-6, 3-4-7.
Even if the court were to accept as true the assertion of Transocean' s counsel, which is not supported by evidence, that its general counsel directed Ward (or his superiors) to undertake an investigation, an attorney's mere order to conduct an investigation is not dispositive and does not necessarily lead to the conclusion that the primary motivating purpose behind the creation of the documents was to aid in possible future litigation. For example, in In re Kidder Peabody Secs. Litig., 168 F.R.D. 459 (S.D.N.Y. 19%), the general counsel for the securities finn, Kidder Peabody ("Kidder"), hired outside counsel within days of discovering that one of Kidder's major traders had swindled it, which had caused it to overstate its earnings substantially. Outside counsel immediately "undertook an intensive fact-finding investigation to determine what had occurred and why." Id. at 463. Despite affidavits by Kidder's general counsel and outside counsel that the investigation's purpose was to permit outside counsel to defend Kidder's legal interests in future regulatory and legal proceedings and that outside counsel had indeed defended the firm in subsequent legal proceedings, the court found that anticipation of litigation was not the primary purpose of Kidder's retention of outside counsel and counsel's conduct of employee interviews. "On this issue, Kidder's affiants offer no meaningful evidence. Instead, Kidder simply parrots the legal standard that the interviews were conducted principally as an aid to litigation." Id. While the court believed that Kidder's investigation was conducted, in part, to prepare for anticipated litigation, the court found that Kidder also hired outside counsel in part "for the specific purpose of having him conduct an internal inquiry in order (1) to find out what [its trader] had done and why it had taken so long to discover the wrongdoing, and (2) to prepare a report summarizing his factual conclusions in detail and making recommendations for corrective action by Kidder." Id. at 465. Most critically, the court concluded that "Kidder would have hired outside counsel to perform such an inquiry even if no litigation had been threatened at the time . . . . [I]t is painfully evident that the . . . scandal presented Kidder not only with a serious legal problem, but with a major business crisis," and that hiring outside counsel was designed to handle that business crisis. Id.
The facts in the instant case are similar to those in Kidder, M/V Savannah, Miller, Occidental Chem. Corp. and Guzzino. In all of these cases, post-incident investigations were undertaken, sometimes with the direct involvement of an attorney, yet the courts found that the investigations were conducted in the ordinary course of business because the record could not support a conclusion that the primary motivating purpose of the investigation was to aid in possible future litigation. I find that Transocean in the instant case has failed to sustain its burden to prove that the withheld documents were created primarily in anticipation of litigation. The work product doctrine therefore does not protect the documents from discovery, and it is unnecessary to examine whether the movants have demonstrated substantial need for the materials and undue hardship in obtaining their substantial equivalent by other means.
Accordingly, IT IS ORDERED that both motions to compel are GRANTED and that Transocean must produce the withheld documents to the movants' counsel within ten (10) days of entry of this order.