Opinion
Civil Action No. 01-3063, Section "L"(2)
June 10, 2002
ORDER AND REASONS
Plaintiff, St. Paul Fire and Marine Insurance Company ("St. Paul"), filed a motion for partial reconsideration of this court's prior discovery order or for a protective order concerning certain documents responsive to defendant's Request for Production No. 5, which St. Paul alleges are protected from discovery. Record Doc. No. 57. I ordered plaintiff to produce the documents to me for in camera review, Record Doc. No. 58, and St. Paul did so. Defendant, SSA Gulf Terminals, Inc. ("SSA"), filed a memorandum in opposition to the motion. Record Doc. No. 67.
Having reviewed the documents in camera, I find that they are not covered by the work product doctrine and must be disclosed to SSA, with the few exceptions described below, which may be redacted.
In its privilege log, which is attached to SSA's opposition memorandum as Exhibit A, St. Paul listed four categories of documents that it had withheld from production. The first two categories cover correspondence between St. Paul's claims managers and its counsel after the June 11, 2001 sinking at issue. However, in its motion for reconsideration, plaintiff asserts only the work product doctrine, not the attorney-client privilege. My review of the documents produced in camera reveals no correspondence with plaintiff's attorneys in the instant suit, nor has plaintiff identified the names of any other attorneys as generators or recipients of any of the documents. Accordingly, it appears that these two categories of documents do not exist. If they exist, they certainly have not been produced to me for in camera review. IT IS ORDERED that no later than ten (10) days of entry of this order, St. Paul must amend its privilege log to state clearly whether these documents exist. If so, they must be produced to me for in camera review immediately.
The third category of St. Paul's privilege log includes that portion of St. Paul's claims file dated after the filing of suit by the insured against St. Paul in the United States District Court for the Western District of Washington. Counsel for St. Paul has advised the court that suit was filed in the Western District of Washington in September 2001. The fourth category includes correspondence between St. Paul's Director of Global Marine Claims, Phil Broderick, and St. Paul's reinsurer. Documents from these two categories appear to be included in the documents produced to me for in camera review.
St. Paul argues that the documents were prepared in anticipation of litigation or for trial and are therefore protected from discovery by Fed.R.Civ.P. 26(b)(3). Generally, a party may not obtain discovery of otherwise discoverable documents and tangible things that are "prepared in anticipation of litigation" unless the party makes the showing described in the rule.
The work product protection arises under federal law and is governed by Fed.R.Civ.P. 26(b)(3), which provides that
a party may obtain discovery of documents and tangible things [within the scope of discovery] and prepared in anticipation of litigation or for trial by or for another party or by or for that other party's representative . . . 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. In ordering the discovery of such materials when the required showing has been made, the court shall protect against disclosure of the mental impressions. conclusions. opinions. or legal theories of an attorney or other representative of a party concerning the litigation.
Fed.R.Civ.P. 26(b)(3) (emphasis added).
St. Paul, 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 or for trial. Guzzino v. Felterman, 174 F.R.D. 59, 63 (W.D. La. 1997) (Tynes, M.J.) (citingHodges, Grant Kaufmann v. United States, 768 F.2d 719, 721 (5th Cir. 1985)).
The Fifth Circuit has described the standard for determining whether a document has been prepared in anticipation of litigation as follows. "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); Guzzino, 174 F.R.D. at 63; Blockbuster Entertainment v. McComb Video, 145 F.R.D. 402, 404 (M.D. La. 1992) (Riedlinger, M.J.);Hill Tower, Inc. v. Department of Navy, 718 F. Supp. 562, 565 (N.D. Tex. 1988).
It is not dispositive that the persons who prepared the reports 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 or for trial. 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).
In this context, the Seventh Circuit has held that
the mere fact that litigation does eventually ensue does not, by itself, cloak materials . . . with the work product privilege; the privilege is not that broad. Rather, we look to whether in light of the factual context the document can fairly be said to have been prepared or obtained because of the prospect of litigation. While much of the paperwork generated by insurance companies is prepared with an eye toward a possible legal dispute over a claim, it is important to distinguish between an investigative report developed in the ordinary course of business as a precaution for the remote prospect of litigation and materials prepared because some articulable claim, likely to lead to litigation, has arisen.Logan v. Commercial Union Ins. Co., 96 F.3d 971, 976-77 (7th Cir. 1996) (quotations and citations omitted); accord National Union Fire Ins. Co. v. Murray Sheet Metal Co., 967 F.2d 980, 984 (4th Cir. 1992); Hill Tower, Inc., 5718 F. Supp. at 565 ("The mere fact this report deals with facts, opinions, and recommendations that later may be the focus of litigation does not establish that there was the expectation of litigation when this document was drafted") (citing Senate of P.R. v. United States Dep't of Justice, 823 F.2d 574, 586 (D.C. Cir. 1987);Coastal States Gas Corp. v. Department of Energy, 617 F.2d 854, 865 (D.C. Cir. 1980)); C.A. Wright, A.R. Miller R.L. Marcus, Federal Practice and Procedure § 2024, at 343-46 (1994) (hereinafter "Wright Miller").
"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.'" Guzzino, 174 F.R.D. at 62 (quoting United States v. El Paso Co., 682 F.3d 530, 542 (5th Cir. 1982) (citing Rule 26(b)(3) advisory committee notes)).
Factors that courts rely on to determine the primary motivation for the creation of a document include the retention of counsel and his involvement in the generation of the document and whether it was a routine practice to prepare that type of document or whether the document was instead prepared in response to a particular circumstance. If the document would have been created regardless of whether litigation was also expected to ensue, the document is deemed to be created in the ordinary course of business and not in anticipation of litigation.Piatkowski v. Abdon Callais Offshore, L.L.C., No. 99-3759, 2000 WL 1145825, at *2 (E.D. La. Aug. 11, 2000) (Roby, M.J.) (citations omitted).
Thus, investigative reports that are routinely prepared after all incidents, regardless of the possibility of litigation, are prepared in the regular course of business and are not protected from discovery by Rule 26(b)(3). Louisiana Envtl. Action Network, Inc. v. Evans Indus., Inc., No. 95-3002, 1996 WL 325588, at *2 (E.D. La. June 11, 1996) (Duval, J.); Cochran v. St. Paul Fire Marine Ins. Co., 909 F. Supp. 641, 645 (W.D. Ark. 1995); First Pac. Networks Inc. v. Atlantic Mut. Ins. Co., 163 F.R.D. 574, 582 (N.D. Cal. 1995); Blough v. Food Lion, Inc., 142 F.R.D. 622, 624 (E.D. Va. 1992), vacated on other grounds, 4 F.3d 984 (4th Cir. 1993); Hill Tower, Inc., 718 F. Supp. at 567.
This case is very similar to Allendale Mut. Ins. Co. v. Bull Data Sys. Inc., 152 F.R.D. 132 (N.D. Ill. 1993), in which the Illinois district court used the same standard that the Fifth Circuit uses for determining when a document was prepared in anticipation of litigation. That court's holding is relevant and applicable in the instant case.
In the present case, not one of the documents in the possession of [the reinsurers], and allegedly protected by the work product privilege, were prepared in anticipation of litigation. Each document seems to have been created as part of the ordinary course of business between the insurer and its reinsurers. It is the very nature of an insurer's business to investigate and evaluate the claims of its insured, and the fact that the investigation and evaluation continues after litigation commences is not conclusive roof that material has been created to aid in that litigation. Moreover, [the primary insurer] was contractually obligated to continually notify its reinsurers of the status of the . . . claim, and such routine notifications do not qualify as work product of an attorney or agent of [the primary insurer] prepared in anticipation of litigation.Id. at 137 (citing Harper v. Auto-Owners Ins. Co., 138 F.R.D. 655, 662-63 (S.D. Ind. 1991)) (emphasis added). Thus, the court held, "in-house insurance documents" are not protected by the work product doctrine. The documents in that case included those created by one reinsurer's claims director as part of his normal duty to monitor losses; by the primary insurer's claims representative as part of her duties in investigating the claim and reporting the results of that investigation to the reinsurer; a letter from the reinsurer to its retrocessionaires to keep them informed of the course of the investigation; a memo from an underwriter to his underwriting supervisor; and an agenda that was created as part of an informational meeting between the primary insurer, its counsel and its reinsurers. Id. "In other words, these documents are mere insurance business material." Id. The documents withheld by St. Paul are extremely similar in nature, that is, in their content, creators and addressees, to those in Allendale Mut. Ins. Co., and the result here should be the same.
In the instant case, St. Paul has submitted no evidence to establish that the primary motivating purpose behind the conferences, investigations and reports referred to in the withheld memoranda was to aid in future or current litigation. There is no evidence that the documents were prepared by or for attorneys. Instead, it appears that the conferences, investigations and reports were conducted and created 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.
Although "prudent parties anticipate litigation, and begin preparation prior to the time suit is formally commenced," Wright Miller, § 2024, at 343, the evidence in the instant case does not support a conclusion that anticipation of litigation or trial use was the primary motivating purpose for St. Paul's investigation and the conferences and other information memorialized in the documents produced for in camera review. 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. Co. v. OHM Remediation Servs. Corp., 175 F.R.D. 431, 435 (W.D.N.Y. 1997) (quotation and citations omitted).
St. Paul has made only conclusory assertions that the documents withheld are covered by the work product doctrine and has failed to carry its burden to show that they were reasonably prepared in anticipation of litigation or for trial. See Piatkowski, 2000 WL 1145825, at *2 ("[t]he information provided to the Court does not satisfy the defendant's burden of demonstrating that the primary motivating purpose in securing the witness statements was in furtherance of a sufficiently identifiable resolve to litigate, rather than a more or less routine investigation of a possibly resolvable claim"); Disidore v. Mail Contractors of Am., Inc., 196 F.R.D. 410, 414 (D. Kan. 2000) (although insurance company hired attorney to conduct claims investigation, evidence failed to show a purpose other than routine claims investigation); Guzzino, 174 F.R.D. at 63 (defendant failed to establish that primary motivating purpose behind investigation and creation of documents was to prepare for future litigation).
There are a few exceptions to my conclusions above. St. Paul has not numbered, Bates-stamped or labeled the documents, which makes it difficult for the court to identify particular documents. However, the following excerpts appear to disclose legal strategies, are therefore protected by the work product doctrine and may be redacted by St. Paul before it produces the documents to SSA.
1. In the document entitled "Total Current/New Reserve: $1,000," at page 5 (the page beginning with "need to reach an agreement with Titan"), St. Paul may redact the fifth and sixth paragraphs beginning with "Most of the crew" and ending with "known as the Delta Conveyor System."
2. On the same page, St. Paul may redact the second to last paragraph beginning with "After the statements" and ending with "jurisdiction and location."
3. On the page headed "Jill Bloss's Email 10/31/2001 12:03:12 PM," St. Paul may redact the same two paragraphs as in #1 above.
4. On the page headed "Jill Bloss's Email 01/25/2002 01:50:07 PM" (there are two copies of this page within the documents), St. Paul may redact the second to last paragraph beginning with "Last Friday we received" and ending with "for its removal."
5. On the page headed "Jill Bloss's Email 01/25/2002 08:16:16 AM," St. Paul may redact the same paragraphs as in #1 and #2 above.
6. On another page also headed "Jill Bloss's Email 01/25/2002 08:16:16 AM," St. Paul may redact from the first paragraph the sentences beginning with "Coverage counsel is" through "vessel to underwriting."
7. On the same page, next paragraph, St. Paul may redact the sentence beginning with "We have given."
With the exception of these seven excerpts, IT IS ORDERED that St. Paul must produce the documents to SSA immediately because they are not protected by Rule 26(b)(3), the work product doctrine or any other exclusion from discovery.