Claims And Issues

THE NATIONAL DISCOVERY CONFIDENTIALITY WEBINAR IS NEXT TUESDAY!

 Readers, here is a link to the Discovery Confidential! page of my website.  Thanks.--Dennis Wall

 Click here for the Mobile/Web Version

Discovery Confidentiality February 22, 2:00 p.m. ET–3:00 p.m. ET Pricing Private Attorney Members: $40 Legal Aid and Public Interest Members: $30 Nonmembers: $90 (if you have not yet been approved to attend NACA webinars, you must email [email protected] to be vetted to attend) Are you interested in learning the methodologies of stipulated protective orders proposed by defendants’ counsel in every case, large and small? The focus will be on federal court cases, but many of the same principles apply to state court cases, too. The webinar will include a discussion of standards for obtaining protective orders that the parties are bound to follow. This webinar will also provide tips and strategies to improve the pre-discovery stipulated protective orders that judges are most likely to enter in your clients’ cases. In addition, the speakers will examine typical provisions used in actual litigation.  This webinar is useful for practitioners at every level, from those who handle multi-district litigation to individual cases. What You Will Learn How to address negotiations over a stipulated protective order and how you can shape the best possible protections for your client What adversaries will likely propose in their pre-discovery umbrella and stipulated protective orders How to implement preemptive strategies, including judges’ model orders, local rules, and orders approved by the same judge or proposed by the same defendants in other cases Speakers Jody López-Jacobs is a consumer protection attorney based in Philadelphia.  Born in Lancaster, PA, Jody graduated magna cum laude from Temple University Beasley School of Law, where he served on the law review editorial board and won second place in an American Bar Association writing competition. After serving as a federal law clerk in the Eastern District of Pennsylvania, Jody joined the law firm Flitter Milz, PC, where he litigates individual and class actions involving repossessions, credit reporting, and financing fraud. Jody’s advocacy has resulted in millions of dollars in relief for consumers across the country. In 2021, Jody was named as one of Super Lawyers’ “Rising Stars.” Ariana Tadler is the founding partner of Tadler Law LLP, a WBENC-certified, women-owned boutique law firm that offers an array of litigation and legal counseling services. With more than twenty-seven years of experience advocating for consumers and investors against corporate fraud and abuse while litigating and managing securities, consumer and data breach class actions, and complex litigation, Ariana is considered one of the leading women litigators in the country. Ariana is regularly appointed by courts to leadership positions in large, complex federal, multi-district, and state coordinated proceedings because of her extensive experience managing complex litigation. Ariana is also recognized as one of the nation’s leading authorities on electronic discovery and pioneered the establishment of an e-Discovery Practice group within a plaintiffs’ firm structure more than fifteen years ago. Dennis Wall is an experienced litigator, mediator, and expert witness in Florida and federal trial and appellate courts. He is an AV- rated attorney and an elected member of the American Law Institute. He has personally litigated the issues addressed in this webinar. The author of four books, he is currently at work on a book about the presumption of public access to judicial and administrative records. He has dedicated a page on his website to resources on discovery confidentiality.   National Association of Consumer Advocates 1215 17th Street NW, 5th Floor, Washington, DC 20036 Phone: 202.452.1989 | Fax: 202.452.0099 Contact Us

NATIONAL DISCOVERY CONFIDENTIALITY WEBINAR COMING UP!

 Readers, here is a link to the Discovery Confidential! page of my website.  Thanks.--Dennis Wall

 Click here for the Mobile/Web Version

Discovery Confidentiality February 22, 2:00 p.m. ET–3:00 p.m. ET Pricing Private Attorney Members: $40 Legal Aid and Public Interest Members: $30 Nonmembers: $90 (if you have not yet been approved to attend NACA webinars, you must email [email protected] to be vetted to attend) Are you interested in learning the methodologies of stipulated protective orders proposed by defendants’ counsel in every case, large and small? The focus will be on federal court cases, but many of the same principles apply to state court cases, too. The webinar will include a discussion of standards for obtaining protective orders that the parties are bound to follow. This webinar will also provide tips and strategies to improve the pre-discovery stipulated protective orders that judges are most likely to enter in your clients’ cases. In addition, the speakers will examine typical provisions used in actual litigation.  This webinar is useful for practitioners at every level, from those who handle multi-district litigation to individual cases. What You Will Learn How to address negotiations over a stipulated protective order and how you can shape the best possible protections for your client What adversaries will likely propose in their pre-discovery umbrella and stipulated protective orders How to implement preemptive strategies, including judges’ model orders, local rules, and orders approved by the same judge or proposed by the same defendants in other cases Speakers Jody López-Jacobs is a consumer protection attorney based in Philadelphia.  Born in Lancaster, PA, Jody graduated magna cum laude from Temple University Beasley School of Law, where he served on the law review editorial board and won second place in an American Bar Association writing competition. After serving as a federal law clerk in the Eastern District of Pennsylvania, Jody joined the law firm Flitter Milz, PC, where he litigates individual and class actions involving repossessions, credit reporting, and financing fraud. Jody’s advocacy has resulted in millions of dollars in relief for consumers across the country. In 2021, Jody was named as one of Super Lawyers’ “Rising Stars.” Ariana Tadler is the founding partner of Tadler Law LLP, a WBENC-certified, women-owned boutique law firm that offers an array of litigation and legal counseling services. With more than twenty-seven years of experience advocating for consumers and investors against corporate fraud and abuse while litigating and managing securities, consumer and data breach class actions, and complex litigation, Ariana is considered one of the leading women litigators in the country. Ariana is regularly appointed by courts to leadership positions in large, complex federal, multi-district, and state coordinated proceedings because of her extensive experience managing complex litigation. Ariana is also recognized as one of the nation’s leading authorities on electronic discovery and pioneered the establishment of an e-Discovery Practice group within a plaintiffs’ firm structure more than fifteen years ago. Dennis Wall is an experienced litigator, mediator, and expert witness in Florida and federal trial and appellate courts. He is an AV- rated attorney and an elected member of the American Law Institute. He has personally litigated the issues addressed in this webinar. The author of four books, he is currently at work on a book about the presumption of public access to judicial and administrative records. He has dedicated a page on his website to resources on discovery confidentiality.   National Association of Consumer Advocates 1215 17th Street NW, 5th Floor, Washington, DC 20036 Phone: 202.452.1989 | Fax: 202.452.0099 Contact Us

CONFIDENTIALITY IN DISCOVERY NATIONAL WEBINAR!

Readers, here is a link to the Discovery Confidential! page of my website.  Thanks.--Dennis Wall

 Click here for the Mobile/Web Version

Discovery Confidentiality February 22, 2:00 p.m. ET–3:00 p.m. ET Pricing Private Attorney Members: $40 Legal Aid and Public Interest Members: $30 Nonmembers: $90 (if you have not yet been approved to attend NACA webinars, you must email [email protected] to be vetted to attend) Are you interested in learning the methodologies of stipulated protective orders  proposed by defendants’ counsel in every case, large and small? The focus will be on federal court cases, but many of the same principles apply to state court cases, too. The webinar will include a discussion of standards for obtaining protective orders that the parties are bound to follow. This webinar will also provide tips and strategies to improve the pre-discovery stipulated protective orders that judges are most likely to enter in your clients’ cases. In addition, the speakers will examine typical provisions used in actual litigation.  This webinar is useful for practitioners at every level, from those who handle  multi-district litigation to individual cases. What You Will Learn How to address negotiations over a stipulated protective order and how you can shape the best possible protections for your client What adversaries will likely propose in their pre-discovery umbrella and stipulated protective orders How to implement preemptive strategies, including judges’ model orders, local rules, and orders approved by the same judge or proposed by the same defendants in other cases Speakers Jody López-Jacobs is a consumer protection attorney based in Philadelphia.  Born in Lancaster, PA, Jody graduated magna cum laude from Temple University Beasley School of Law, where he served on the law review editorial board and won second place in an American Bar Association writing competition. After serving as a federal law clerk in the Eastern District of Pennsylvania, Jody joined the law firm Flitter Milz, PC, where he litigates individual and class actions involving repossessions, credit reporting, and financing fraud. Jody’s advocacy has resulted in millions of dollars in relief for consumers across the country. In 2021, Jody was named as one of Super Lawyers’ “Rising Stars.” Ariana Tadler is the founding partner of Tadler Law LLP, a WBENC-certified, women-owned boutique law firm that offers an array of litigation and legal counseling services. With more than twenty-seven years of experience advocating for consumers and investors against corporate fraud and abuse while litigating and managing securities, consumer and data breach class actions, and complex litigation, Ariana is considered one of the leading women litigators in the country. Ariana is regularly appointed by courts to leadership positions in large, complex federal, multi-district, and state coordinated proceedings because of her extensive experience managing complex litigation. Ariana is also recognized as one of the nation’s leading authorities on electronic discovery and pioneered the establishment of an e-Discovery Practice group within a plaintiffs’ firm structure more than fifteen years ago. Dennis Wall is an experienced litigator, mediator, and expert witness in Florida and federal trial and appellate courts. He is an AV- rated attorney and an elected member of the American Law Institute. He has personally litigated the issues addressed in this webinar. The author of four books, he is currently at work on a book about the presumption of public access to judicial and administrative records. He has dedicated a page on his website to resources on discovery confidentiality.   National Association of Consumer Advocates 1215 17th Street NW, 5th Floor, Washington, DC 20036 Phone: 202.452.1989 | Fax: 202.452.0099 Contact Us

BRING CLOSURE TO JEFFREY EPSTEIN'S VICTIMS.

The victims of Jeffrey Epstein deserve to have questions asked about his death.  This does not mean that he must have been murdered.  It means that questions about his death have not been asked, still need to be asked, and should be asked, including:

• Why was he left alone in his cell when he was on suicide watch?
• Why was he not watched, for that matter? Every person who is on suicide watch is supposed to be checked at least every 30 minutes.  Epstein's guards said they did not check on him for 3 hours.  Why not?
• Epstein had two guards. They both claim to have fallen asleep.  A forensic pathologist is a doctor who investigates deaths under these circumstances.  An expert forensic pathologist who specializes in unexplained prison deaths says that he has never had two people fall asleep at the same time who were keeping an eye on a supposed suicide risk.  Not in his entire career.  Not once.  What happened here?
• The surveillance videos of the area surrounding Epstein's cell, including the hallways, are corrupt and show no pictures. What happened to the surveillance videos?
• Bill Barr infamously said that the New York City jail where Epstein was incarcerated was not safe for him. That is the reason Barr gave for moving Epstein into a federal prison, where Epstein died.  What was the reason, really, that Epstein was moved?

There is a new government in town.  The department of justice has a second chance now.  It has a chance to be a Justice Department.  The FBI also has a second chance now.  Second chances are rare indeed, but they too have one.  The FBI can and should investigate now; it did not investigate before.

"The government has an obligation to investigate this part of the story, if for no other reason than to bring closure for all the women he abused."  Julie K. Brown, Perversion of Justice 566 (2021).

Please read the disclaimer.  This blog article ©2021 Dennis J. Wall.  All rights reserved.

DOJ UNFATHOMABLE SECRECY: WHY TRY TO SHIELD HER FROM TESTIFYING?

On February 8, 2021 -- 19 days after Joe Biden was inaugurated as President of the United States -- the justice department filed a motion to quash a subpoena for the testimony of Betsy DeVos.

          They didn't have to.

          But they did.

          In fact, there was and still is a lawsuit pending in federal court in California in which Ms. DeVos was likely to be deposed.  The lawsuit in California was filed on behalf of students who alleged lots of things went wrong in the loan program administered by then-Secretary of Education Betsy DeVos, to make a long story short.

          Ms. DeVos was no longer the Secretary of Education when the justice department filed its motion to quash a subpoena in the California case for her deposition.  So the justice department did not have to try to shield her, a private citizen, from testifying in a judicial proceeding.

          But they did.

          Beyond that, the federal judge in California had already expressed his willingness that Ms. DeVos should be deposed in that case.  The federal judge in question happens to be one of the most respected judges in the federal court system, let alone in the Northern District of California.

          But the justice department filed its motion anyway.

          In Florida.  They filed their motion in Florida.  Why?

They went about as far away as you can get from California and still be in the continental United States.  To say again, they filed their motion in Florida on February 8, 2021.  Look it over here:  Download In re Subpoena Served on Elisabeth DeVos Doc. No. 1 Motion to Quash Subpoena on Betsy DeVos filed Feb. 8 2021 (S.D. Fla. No. 21-mc-14073).

          I have read the motion.  It is snarky at times; it is snide on occasion.  The opposing parties took the unusual step of calling it "inappropriate."  That would not be an unusual description in most of today's lawsuits.  However it is not something that is often said about pleadings filed by the U.S. Department of Justice.

          The motion was signed by KEVIN P. HANCOCK, Esquire, a person who identified himself as a Trial Attorney in the Federal Programs Branch of the DOJ Civil Division.

          MR, HANCOCK, the one who signed the motion, was previously a law clerk at the Third Circuit Court of Appeals for Judge Maryanne Trump Barry.

          If this kind of game-playing had taken place in private practice, there would almost certainly have been unpleasant consequences as a result.  To say again, they did not have to try to shield Betsy DeVos from testifying, but they did.  They filed their motion despite the fact that the federal judge in the California case had already expressed his willingness for Ms. DeVos to testify.  And they filed their motion in Florida, not in California where the case was pending.  Above all, they got paid for it, at our expense, at the expense of the federal taxpayer.

          On April 7, 2021, the federal judge in Florida sent the motion to the federal judge in California to decide.  Here is the order from the federal judge in Florida:  Download In re Subpoena Served on Elisabeth DeVos Doc. No. 28 Order Granting Transfer to California filed April 7 2021 (S.D. Fla. No. 21-mc-14073).  The justice department has not brought its motion to the California judge's attention or asked for their motion to be heard.  They have not dared.

          It only took the justice department two months to lose.

          We can expect that the justice department will lose motions.  However we have a right to expect that the lawyers in that department will behave professionally.

          Particularly since we are the ones paying his salary.

Please Read The Disclaimer.  ©2021 Dennis J. Wall.  All rights reserved.

FINALLY FOUND THE VIDEO. HERE IT IS.

I searched a long time for the video released by Lev Parnas's attorney. It was first reported by ABC News, apparently. That TV news organization reported it in print. They are a visual news organization, not a print news organization. ABC News did not link to the visual news. They did not link to the video.

I also searched print news organizations including the Washington Post, the New York Times, and the Associated Press websites. I did not find a link to the video on any of them.

I remember that a video surfaced during Mitt Romney's campaign for President of the United States not that long ago. It seems now to me that the Romney video was everywhere. What a contrast to 2020.

Continuing with the recap of my searches, I found snippets of the video on CNN's website and on The Guardian newspaper online. Snippets. Meaning just a few seconds or minutes of what they wanted me to hear and see.

At the end of a long search, I found a link to the complete unedited video, here at the website of United Press International (UPI). I knew that UPI is a fierce competitor of Associated Press (AP), which you will recall was one of the original reporters, in print only so far, that the video existed. Here is the UPI site for the complete unedited video: https://www.upi.com/Top_News/US/2020/01/25/Video-Take-her-out-Trump-appears-to-say-about-Ukraine-ambassadors-removal/8161579993544/.

It is not Hollywood issue, so to speak. It was taken on a cellphone by a person, like most of us, whose talents clearly do not include filming videos. But it is jaw-dropping nonetheless. Substance over form. Not very 2020 I guess.

Please Read The Disclaimer. ©2020 Dennis J. Wall. All Rights Reserved.

SPEAK, MR. BARR, SPEAK.

A guest article by John K. DiMugno, Esquire, a California attorney, legal educator, and the author or coauthor of multiple legal treatises and legal periodicals published by Thomson Reuters.

William P. Barr, Attorney General of the United States, recently spoke at the American Law Institute’s Annual Meeting in Washington, D.C. The ALI likely extended the invitation shortly after Mr. Barr’s confirmation when there was hope that he would play a role similar to that of the departed General Mattis and General McMaster and place guardrails on the President’s more authoritarian instincts. By the time of the Annual Meeting, those hopes had evaporated. Mr. Barr’s dissembling about the contents of the Mueller Report raised serious concerns about the Attorney General’s complicity in administration efforts to undermine the rule of law.

This Blog highlighted the incongruity between Mr. Barr’s conduct in office and the core mission of the ALI. Notably, Mr. Wall’s post made no attempt to silence Mr. Barr, a solution that would have satisfied the wishes of many in the ALI who were rightfully appalled by Mr. Barr’s transparent attempt to mislead the American public. But barring Mr. Barr from speaking would have entangled the ALI in partisan politics, something the organization scrupulously avoids for good reason. Staying above the political fray insulates the ALI’s Restatements of the Law against charges of political bias and broadens their influence on courts and legislatures around the country.

Mr. Wall’s proposed solution—letting Mr. Barr speak while contributing the ALI’s earnings from the speech to legal aid societies around the country—perfectly balanced those competing concerns. It had the salutary effect of simultaneously benefitting public interest groups that desperately need the money while drawing attention to questions about Mr. Barr’s integrity.

Mr. Barr’s penchant for making transparently misleading and often contradictory statements has left some wondering what he hopes to achieve other than aggrandize power and influence in the Trump administration. Sharon LaFraniere, Charlie Savage and Katie Benner, People Are Trying to Figure Out William Barr. He’s Busy Stockpiling Power, New York Times on line, June 9, 2019. 

He misled the American public about the contents of the Mueller Report knowing full well that when the report was released several weeks later his lies would be evident to everyone.

When Mr. Barr sought confirmation as Attorney General, he told the U.S. Senate that he had known Robert Mueller for years and did not believe that Mr. Mueller would engage in a “witch hunt.”  Yet, shortly before his confirmation hearings, he sent a memo to the Justice Department characterizing the obstruction of justice charges against the President as “asinine” and sent an e-mail stating he saw far less reason to scrutinize the Trump campaign’s ties to Russia than to investigate whether donations to Hillary Clinton’s family foundation had influenced her actions as secretary of state. Once he was confirmed, he enabled the President’s attempts to distract from the contents of the Mueller Report by opening an investigation of those who investigated him.

When Mr. Barr was seeking confirmation, he told the U.S. Senate Judiciary Committee that he was willing to reconsider the Justice Department’s decision not to defend the Affordable Care Act (ACA).  But, when he became Attorney General, he put the resources of the Justice Department behind litigation in Texas federal district court seeking to invalidate the entire Affordable Care Act.

As the song goes, “There’s something happening here. What it is ain’t exactly clear.” Buffalo Springfield, For What It’s Worth.  I say let Mr. Barr speak. Listen closely to what he says and watch what he does. Only then will whatever is happening start to become clear.

Download John DiMugno 06 13 19 Blog Article for IC Also (2)

Please Read The Disclaimer.

GOOD CAUSE OR NOT GOOD CAUSE, THAT IS THE QUESTION.

The federal courts have held that what is "good cause" for a protective order to keep a document or testimony from seeing the light of day is essentially the same amount of "good cause" needed to seal that evidence.  The good cause must be shown by evidence in the record and not merely contended by assertions of counsel or their clients whether in litigation between businesses or in any other type of litigation.  See, e.g., Villery v. Beard, No. 1:15-cv-00987-DAD-BAM (PC), 2018 WL 6304410, at *4 (E.D. Cal. December 3, 2018) (in civil rights action filed by a state prisoner, McAuliffe, USMJ, recognized that "good cause" is the standard "which applies to [sealing] non-dispositive discovery type motions" and holding that good cause was shown regarding "confidential health information and confidential investigatory information obtained from witness interviews, and in the absence of any objection");  Contour IP Holdings, LLC v. GoPro, Inc., No. 17-cv-04738-WHO, 2018 WL 6574188, at *1 n.1 (N.D. Cal. December 12, 2018) (Orrick, USDJ, holding in a patent infringement action that good cause was not provided "to warrant preserving the secrecy of sealed discovery material attached to nondispositive motions.").

It's all in the showing of good cause.  Or the lack of a showing of good cause.

Please Read The Disclaimer.  ©2018 Dennis J. Wall.  All Rights Reserved.

OPEN THE EVIDENCE ENVELOPE, PLEASE.

In an Amended Order in Multidistrict Litigation against pharmaceutical manufacturers, one judge unintentionally perhaps highlighted the need for disclosure, not concealment, of evidence.  Insurance coverage questions may become difficult if not impossible to decide if this pattern continues.

The Amended Order came in this MDL case:  In Re:  Abilify (Aripiprazole) Product Liability Litigation, No. 3:16-md-2734, 2018 WL 1357914 (N.D. Fla. March 15, 2018).  It was an opinion denying motions for summary judgment because the Court ruled that there were genuine issues of material fact.

"Plaintiffs allege that, after taking Abilify as prescribed, they developed impulsive and irrepressible urges to engage in certain harmful behaviors, including impulsive gambling, eating, shopping, and sex.  Defendants deny the allegations and maintain that Abilify could not, and did not, cause Plaintiffs' impulse control problems."  In Re:  Abilify (Aripiprazole) Product Liability Litigation, No. 3:16-md-2734, 2018 WL 1357914, at *1 (N.D. Fla. March 15, 2018).

The Court held that there were genuine issues of material fact surrounding these allegations and denials in a huge record of apparently conflicting evidence:

Now, having carefully considered the law, the voluminous record, and the parties' arguments, the Court concludes that Plaintiffs have satisfied their burden to demonstrate that a genuine dispute of material fact exists as to whether Abilify can cause uncontrollable impulsive behaviors in individuals taking the drug.

In Re:  Abilify (Aripiprazole) Product Liability Litigation, No. 3:16-md-2734, 2018 WL 1357914, at *1 (N.D. Fla. March 15, 2018).

The problem is that the public cannot possibly know what the apparently conflicting evidence actually was.  The opinion is riddled with holes for redacted evidence, like this one:  "Moreover, the record reflects [*** REDACTED ***]."    In Re:  Abilify (Aripiprazole) Product Liability Litigation, No. 3:16-md-2734, 2018 WL 1357914, at *26 (N.D. Fla. March 15, 2018).  Say again, please; what is it that the record reflects?

We simply do not know a lot of what witnesses testified and documents revealed.  "Portions of the briefing and record in this matter were filed under seal. This redacted version of the Court's Order omits references to information included in sealed materials."  In Re:  Abilify (Aripiprazole) Product Liability Litigation, No. 3:16-md-2734, 2018 WL 1357914, at *1 n.1 (N.D. Fla. March 15, 2018).  If a judge omits references to evidence, yet tells us that the Court's ruling is based on what appears to the Court to be contradictory evidence, what value does that serve and whose?

Arguably not the value of the public, who pay to maintain the judicial system.

In particular, how can insurance coverage questions be resolved in this situation?  Does the blacked-out evidence show that consequences or side-effects from using this drug were perhaps neither expected nor intended from the standpoint of the pharmaceutical companies, and thus not a covered "accident" or "occurrence"?

Is it possible that there is an exclusion applicable to this evidence?

How can we know answers to questions like these without seeing the evidence?

And whose interests are served by blacking out the evidence in cases like this?

Please Read The Disclaimer.  ©2018 by Dennis J. Wall.  All Rights Reserved.

DISCOVERY BEHIND A DEFENSE IN ALABAMA.

In Hibbett Patient Care, LLC v. Pharmacists Mut. Ins. Co., No. CA 16–00231–WS–C, 2017 WL 4817992, at *1 (S.D. Ala. January 26, 2017) (Cassady, USMJ), the plaintiffs "bring three causes of action against PMIC, which include breach of contract, bad faith failure to investigate, and bad faith denial of a claim."  The plaintiffs requested production of all writings concerning a certain lawyer's evaluation of claims for an insurance company, after the defendant insurance company apparently raised advice of this counsel as a defense.

The Magistrate Judge granted production but limited it to the case before the Court:

Request for Production No. 17

    Plaintiffs’ Request for Production No. 17 asks Defendant to “produce all writings pertinent to [the lawyer in question] or his law firm’s evaluation of any Pharmacists Mutual claim” from the past ten years. (Doc. 36–1, ¶ 17).

Hibbett Patient Care, LLC v. Pharmacists Mut. Ins. Co., No. CA 16–00231–WS–C, 2017 WL 4817992, at *5 (S.D. Ala. January 26, 2017) (Cassady, USMJ).

          The Court's well-reasoned ruling on production in response to this request for production, is well worth quoting:

Accordingly, the motion to compel is GRANTED to the extent that Defendant shall produce for inspection all writings pertinent to [the  lawyer's] or his law firm's evaluation of claims involving Alabama insureds that were presented to PMIC within five years of the date of the evaluation that is relevant to this action. In addition, the evaluations and other writings responsive to this request are also limited to those involving policies of insurance that may be characterized as similar to the policy issued to the Plaintiffs.

    Therefore, the motion to compel with regard to Request for Production No. 17 is GRANTED IN PART AND DENIED IN PART. The production of information is limited to similar policies of insurance written to Alabama residents that were presented within five years prior to the evaluation by [the lawyer] that is relevant to this action.

Hibbett Patient Care, LLC v. Pharmacists Mut. Ins. Co., No. CA 16–00231–WS–C, 2017 WL 4817992, at *6 (S.D. Ala. January 26, 2017) (Cassady, USMJ).

Please Read The Disclaimer.  ©2017 by Dennis J. Wall.  All Rights Reserved.

DISCOVERING UNDERWRITING FILES: NOT IN PENNSYLVANIA DEC ACTION OVER COVERAGE.

An insured was not entitled to discovery of its liability carrier's underwriting files in the carrier's action for declaratory relief, in Westfield Ins. Co. v. Icon Legacy Custom Modular Homes, 321 F.R.D. 107 (M.D. Pa. 2017).

The carrier's dec action revolved around the language of the policy it issued.  In seeking discovery of underwriting materials, the policyholder defendant did not show that the policy was ambiguous regarding the language at issue.  The Court in that case accordingly held that there was no basis for discovery of the carrier's underwriting files without such a showing.

Please Read The Disclaimer.  ©2017 by Dennis J. Wall.  All Rights Reserved.

Related articles

DISCOVERY OF UNDERWRITERS' FILES:  NOT IN FEDERAL CASE IN PENNSYLVANIA.

AN UNOPPOSED CHRISTMAS MIRACLE IN PENNSYLVANIA.

This is a story of a Christmas miracle in Pennsylvania.  Part of this story is a tale of ways to deal with a Judge's ruling, among other things.  That tale was told yesterday on Insurance Claims and Bad Faith Law Blog, and the story comes out of the reported decision in Golon, Inc. v. Selective Ins. Co., No. 17cv0819, 2017 WL 6397447 (W.D. Pa. December 14, 2017). 

As yesterday's article on Insurance Claims and Bad Faith pointed out, in that case Selective's lawyers filed an "unopposed emergency motion" to reseal some documents that the District Judge had previously ordered to be unsealed and so to be made public.

The Judge had found that a total of three documents out of over a thousand pages of documents were properly "withheld and/or redacted" for one reason or another.  The District Judge's ruling was that all of the remaining documents, then, were not privileged and thus were properly a part of the public record and should not be sealed.  Selective contested the "public view" part of the Court's ruling, in part, with an unopposed motion.  Its unopposed motion was an emergency motion at that, the idea being it seems that to open these documents to public view would be an "emergency."

The District Judge pointed out that he recognized that this emergency motion was unopposed.  In footnote 1 of his opinion, the District Judge not only recognized that the plaintiff did not oppose resealing these documents, "the granting of Selective's Emergency Motion would remove the documents from public view."

Never again does the Court return to explicitly address the fact that this motion was not opposed.  However, the Court's ruling despite the fact that this request to reseal documents and keep them out of the public view, is clear.  Despite the lack of opposition by the other party to sealing documents in this particular lawsuit involving these particular individual parties, "the Court had to balance the impact of shielding non-privileged documents from the public against the public's right to view them."  (Emphasis added.)

In this case, the Court made its own determination on the secrecy issue.  It did not rely on the advocacy of the parties and their lawyers that were before the Court in this unique case.  The Court did not rely simply on the so-called advocacy system of justice, in which the truth is supposed to emerge, more or less, from the theoretically adversary positions taken by the parties in individual cases.

That is the judicial philosophy that animates so many judges' rulings approving stipulated protective orders to conceal evidence and keep settlements a secret in so many cases.

In this case, a Christmas miracle happened.  The Court considered its ruling on secrecy here, and the Court not the parties ruled.  The Court had already ruled that the documents in question were not privileged, and so "the Court finds that absent a privilege, these documents may not be shielded."  Even though the parties were in agreement to keep the documents a secret from the public, still, the Court ruled, these documents should not be kept secret because of "the public's right to view them."  (Emphasis added.)

In sum, an agreement made for whatever reason did not control the outcome.  There are laws.  Let those who have ears to hear, let them hear.  This is the Christmas miracle that this case presents to all of us.

Happy Holidays to All, and to All a Good 2018!

Dennis Wall is at work on a forthcoming book about Concealed Evidence and Secret Settlements. 

Please Read The Disclaimer.  ©2017 by Dennis J. Wall.  All Rights Reserved.

Related articles

Video Displays "Lender Force-placed Insurance Practices".

FLORIDA TRADE SECRET ASSERTION DID NOT PREVAIL, UNTIL IT DID.

Incredible!  Trade secret raised against discovery.  Burden of proof was on the defendant raising the trade secret immunity from discovery.  The Magistrate Judge held that the defendant did not prove a trade secret.

Then, the Magistrate held:  "Thus, its assertion of the trade secret privilege does not prevent discovery of the documents for which it was asserted. Nevertheless, in an abundance of caution, Defendant is permitted to designate documents as trade secrets or confidential and their use is limited to this case."  Say what?  Not trade secrets but treat as trade secrets for everyone else in the world except this case?

The decision came in Hallmark Ins. Co. v. Maxum Cas. Ins. Co., No: 6:16-cv-2063-Orl-37GJK, 2017 WL 3730376 (M.D. Fla. August 14, 2017).

Dennis Wall is at work on a book about how concealed evidence takes our money, forecloses on our homes, and changes our lives.

Please Read The Disclaimer.  ©2017 by Dennis J. Wall.  All Rights Reserved.

WORK PRODUCT DOES NOT CONCEAL COMMUNICATIONS UNLESS "NEED TO KNOW."

In Baxter Int'l, Inc. v. AXA Versicherung, 320 F.R.D. 158 (N.D. Ill. 2017), the issue was discoverability in the insured's action for indemnification.  The defendant insurer failed to show in that case that correspondence with its co-insurers and reinsurers was protected by the work product doctrine.  More specifically, the carrier's correspondence at issue was concerned with how much coverage was available to the insured with respect to the underlying claims.

---------------------------------------------------------------------------------------------------

SIGN UP FOR HEALTH INSURANCE ON www.HealthCare.gov!

Enrollment begins next week on November 1, 2017.

Please Read The Disclaimer.  ©2017 by Dennis J. Wall.  All Rights Reserved.  

UMBRELLA PROTECTIVE ORDERS IN INSURANCE COVERAGE CASES.

Umbrella protective orders are often proposed and entered in insurance coverage cases.  They forestall discovery in advance, and in the usual case they often act as a bar to disclosing information that might be damaging to the insurance company. 

Umbrella protective orders are discussed at length by Dennis J. Wall, "Attorneys Decide, Judges Sign Off:  Protecting and Sealing Concealed Evidence Including in Insurance Coverage and Bad Faith Cases," ©2017 Matthew Bender & Company, a member of LexisNexis, in New Appleman on Insurance / Critical Issues in Insurance Law, pp. 1-88 (Spring 2017).

Dennis Wall is at work on a book about how concealed evidence and secret settlements change our lives.

Please Read The Disclaimer.  ©2017 by Dennis J. Wall.  All Rights Reserved.

DEATH AND COVERAGE IN FLORIDA: A CONTINUING STORY.

First installment, "They Called But No-One Came:  Liability Insurance Coverage Questions":  Monday, 09.18.17.  The second of three installments focused on liability insurance coverage questions regarding the Florida power company, "IS YOUR GENERATOR WORKING?" also at http://insuranceclaimsissues.typepad.com/insurance_claims_and_issu/2017/09/is-your-generator-working-the-first-installment-they-called-but-no-one-came-liability-insurance-coverage-questions-monda.html .  In this the final installment, we will address liability insurance coverage questions concerning the Florida nursing home.

Here is the story that continues to develop behind our insurance coverage questions.  I cautioned from the beginning of the first installment that this is a developing story,  that we do not know all the facts, and that much more remains to be reported as time goes on.

Those cautions have been borne out in the past week since I posted my first article in this series.  There are now eleven people who reportedly died after Hurricane Irma struck Florida and specifically struck a Florida nursing home.   The nursing home's air conditioning went out.  It got hot.  Very hot.

Eleven people have died from the heat.

A number of people and corporations played a role in this story.  Together we addressed liability insurance coverage questions regarding the Florida governor in the first installment, and in the second installment we addressed some liability insurance coverage questions surrounding the Florida power company.  In this last installment, together we will address liability insurance coverage questions involving the Florida nursing home.  To write again what I wrote at the outset:  What follows is from the reporting so far on what happened.   The reporting is not complete even now.  There are competing stories on lots of points.  As yet, only some things have been finalized, but they are enough to see the outlines of some important liability insurance coverage questions.

The focus of this series of articles is not on whether there may be any good claims of potential liability, but on whether there are claims to potential liability insurance coverage.

1. The Florida nursing home: Questions of Liability.

The Florida nursing home seems to be a target of opportunity for placing blame on what went wrong at the nursing home that resulted in eleven people dying when the nursing home's air conditioning failed during Hurricane Irma.  Yet it should never be overlooked that there are many actors in this play.

"Somewhere in between, the misery of a nursing home teetering toward tragedy was reported to every official channel, but no attempt was made to transfer the residents to a safer place, or even to the air-conditioned hospital practically next door."  Ellen Gabler, Sheri Fink & Vivian Yee, "At Florida Nursing Home, Many Calls for Help, But None That Made a Difference" (New York Times online, posted Saturday, September 23, 2017), also available at https://www.nytimes.com/2017/09/23/us/nursing-home-deaths.html?hpw&rref=us&action=click&pgtype=Homepage&module=well-region&region=bottom-well&WT.nav=bottom-well.

After so many people died, the Florida governor insisted that his Florida Agency for Health Care Administration adopt emergency rules requiring nursing homes to have backup generators.  But that is not the way it was before Irma and before so many people died.

There were calls to require emergency backup generators at Florida nursing homes long before Hurricane Irma was a little breeze somewhere in the Atlantic Ocean.  The expense of operating a Florida nursing home caused these calls to go without any meaningful response.  To put it another way, money talked and people in power listened.

"Very few nursing homes had generators powerful enough to keep the air-conditioning running. In 2006, Florida lawmakers considered requiring nursing homes to maintain generators to ensure comfortable temperatures during disasters. But the industry raised concerns about the cost, according to The Miami Herald, and the bill died. Last week, after the Hollywood Hills deaths, Mr. Scott announced new rules requiring those generators."  Ellen Gabler, Sheri Fink & Vivian Yee, New York Times supra.

Certainly, the Florida nursing home is experiencing its share of allegations that it was either the sole cause or a contributing cause of these people's horrible deaths.  The current owners of the Florida nursing home have run a facility that received below-average ratings from Medicare even before Irma.  And they have experienced allegations related to Medicare and nursing homes before Irma, as well, including allegations of kickbacks.  See Ellen Gabler, Sheri Fink & Vivian Yee, New York Times supra (reporting that the current owners of the Florida nursing home "were among defendants who paid $15.4 million in 2006 to settle federal and state civil claims that they had paid kickbacks to doctors in exchange for patient admissions.").

No evidence of previous wrongdoing including kickbacks, even if admissible, would prove the allegations of wrongdoing now.  What evidence there is to prove the allegations now will depend in the end on what evidence is uncovered or introduced in the inevitable lawsuits that are the result of these tragic deaths.  See, e.g., "Report:  Before Deaths, Nursing Home Called Rick Scott's Emergency Number Three Times, To No Avail" (Tampa Bay Times staff, posted online on Friday, September 15, 2017), also available at http://www.tampabay.com/news/politics/stateroundup/report-nursing-home-called-rick-scotts-emergency-number-three-times-to-no/2337665.

("On Friday, a Miami law firm filed a complaint against the Hollywood facility ....); "'Red Flag' Calls Signaled Post-Irma Deaths at Nursing Home" (Associated Press copyrighted story published online in The New York Times on Saturday, September 16, 2017), also accessible at https://www.nytimes.com/aponline/2017/09/16/us/ap-us-hurricane-irma-nursing-home-deaths-.html (reporting that a family member of a surviving resident "hired an attorney after her 93-year-old mother became severely dehydrated on Wednesday.").

Our focus here remains on the liability insurance coverage questions arising from this tragedy.  In this final installment of a continuing series of articles, our particular focus here is on liability insurance coverage questions which confront the Florida nursing home.

2. Liability Insurance Coverage Questions and the Florida nursing home.

The liability insurance coverage questions surrounding the Florida nursing home in this circumstance are similar to the liability insurance coverage questions that surround the Florida power company which were previously asked here.

The questions that follow are not all the questions that can or will be raised concerning the Florida nursing home's liability insurance coverages.  Some of these questions may not apply.

"Occurrence":  Was there an accident neither expected nor intended from the standpoint of the insured, in this instance, neither expected nor intended from the standpoint of the Florida nursing home?  This is where the history of Medicare inspections and evaluations of the Florida nursing home may prove relevant.

In the context of Directors and Officers coverage if any for the operators of the Florida nursing home:  Is there any covered conduct at issue on the part of the Florida nursing home's directors and officers?  Alternatively or additionally, is any potentially "covered conduct" excluded because of the availability of liability insurance coverage, if any, under other liability insurance policies available to the directors and officers?

The number of occurrences, if any.  Was there one or were there 11 or more "occurrences," if any?  Was there one occurrence (if any) because, say, there was at least arguably one practice and procedure at the Florida nursing home which resulted in the damages that might be complained of here?  Or were there at least 11 occurrences (again, if any) because so far 11 people have died?  Or if there were any occurrences under the insurance policies at issue, were there more than 11, counting all the people who were injured but who have not died?

Time will tell, and it bears repeating:   Over time the answers to liability insurance coverage questions like these will likely be given by the Florida courts.

Please Read The Disclaimer.  ©2017 by Dennis J. Wall.  All Rights Reserved.

ADVISING ABOUT YOUR PREVIOUS "PRIVILEGED" ADVICE?

The person who is now in charge of counseling the current Secretary of the Treasury on what to do about Fannie Mae and Freddie Mac, the two conduits both of Federal government mortgage guarantees and of Federal government revenue from their continuing operations, has previous experience it seems.  When he previously made his money in the financial sector, the same individual was in charge of a unit at a "huge asset manager."  The current counselor's former employer, the huge asset manager, advised the Federal government on the future of Fannie Mae and Freddie Mac. 

Shareholders of Fannie Mae and Freddie Mac sued the Federal government because the Federal government diverted Fannie's and Freddie's revenues to the Federal Treasury and away from the shareholders.

In their lawsuit, the shareholders requested many documents showing the analysis the advisers gave to the Federal government about whether and how Fannie and Freddie are profitable now and in the future.  These are of course exactly the issues on which the Treasury counselor, well, now counsels the Treasury.

The Federal government understandably has refused to let those analyses see the light of day, or for that matter, let the shareholders see them.

Many questions come to mind now.  Among them:  Does it make any difference to that discovery dispute that the supervising consultant of "Fannie and Freddie's loss and capital projections" is now a counselor to Treasury on Fannie and Freddie's loss and capital projections?

Does it add anything that the current counselor helped to bundle mortgage loans for Fannie and Freddie to buy, which went south very badly.  In fact, they performed so badly that the allegedly bad mortgage loans were one of the reasons that the Fannie and Freddie's Federal overseer, the Federal Housing Finance Administration, sued and settled for $1.25 billion?

Or that the company that bundled the loans and employed the current Treasury counselor and former consultant on Fannie and Freddie's finances, settled with the Department of Justice for $2.6 billion in large measure because of those mortgages?  See Gretchen Morgenson, "Business Day / Fair Game / The Man in Charge of Fixing Fannie and Freddie Knows Them All Too Well" (New York Times Online, posted Friday, April 7, 2017), also available at https://nyti.ms/2oax0J3.

Please Read The Disclaimer.  ©2017 by Dennis J. Wall.  All Rights Reserved.

BEFORE YOU AIM, CHECK IF YOU HAVE LIVE AMMUNITION.

In a bad faith case in Federal Court in Florida, a file we shall call here the "*** File" was originally put together by the Plaintiff's attorney who represented the current Plaintiff in the underlying case.  The *** File included the underlying attorney's notes regarding what to do with the insurance carrier's offer of policy limits to settle the underlying case.  The same insurance carrier involved in the underlying liability case is the Defendant in the current bad faith case.

During the underlying case the underlying attorney contacted the current attorney who is representing the same Plaintiff in the bad faith case, about what to do as a result of the policy limits offer in the underlying case.  The underlying attorney's notes concerning that issue were in the *** File along with what appears may have been everything else that was ever in it.

The District Judge resolved several competing motions which included the Plaintiff's motion to compel return of the *** File on the ground that it had been inadvertently produced, and Plaintiff's motion to disqualify the Defendant's counsel and for sanctions.

The District Court said with respect to some of the arguments:

Defendant also accuses Plaintiff's counsel and [legal assistant] of being untruthful in their statements that [Plaintiff's counsel's legal assistant] did not tell her supervising attorneys that she produced the *** File and that they did not discuss the *** File from the time [the legal assistant] produced it until the time that Defense counsel requested to take [a Plaintiff's attorney's] deposition. (See Doc. 81 at 10–11 (arguing that Plaintiff's assertion “defies logic and reason,” “strains believability” and either is “untrue or further evidence of the entire want of care and lack of diligence....”). Such accusations are unprofessional and baseless.⁷

⁷Defense counsel's unabashed accusations against Plaintiff's counsel of being untruthful is disconcerting. These are serious accusations that can result in serious consequences; they should not be made lightly or without proper support. There was no basis for Defense counsel's recrimination. Before making any such allegations in the future, Defense counsel would be well advised to review the portion of the Oath of Admission to the Florida Bar that states: “To opposing parties and their counsel, I pledge fairness, integrity, and civility, not only in court, but also in all written and oral communications.”

Walker v. GEICO Indemnity Co., No. 6:15-cv-1002-Orl-41KRS, 2017 WL 1174234, at *6 & n.7 (M.D. Fla. March 30, 2017) (Mendoza, J.).

This case also involved many other facts and circumstances, several declarations and affidavits, at least a couple of depositions, and quite a few cases cited by the lawyers.  The District Judge ended up disqualifying the Defendant's law firm, and ordering the Clerk to terminate the lawyers from that firm as counsel of record in the case.

In addition, the District Judge took the Plaintiff's bad faith attorneys up on their firm offer to withdraw from the case once these issues were decided.  If they do not withdraw as they said they would, said the District Court, then in effect they were ordered to show cause why they did not withdraw.

Oh, yes.  And the District Court ordered the *** File returned to the Plaintiff.

Trial lawyers often think of themselves as warriors.  Every warrior knows that when in combat, be sure you've got live ammunition before you open fire.

Please Read The Disclaimer.  ©2017 by Dennis J. Wall.  All Rights Reserved. 

COUNSEL REPLACED IN PAST HELD RELEVANT BY U.S. MAGISTRATE IN ILLINOIS.

DESPITE THE FACT THAT THE PLAINTIFF NEVER PLED THE CLAIM.

In a bad faith action against a medical malpractice carrier, a U.S. Magistrate confronted and resolved the following discovery issue concerning evidence of past cases in which the defense lawyer was replaced:

Interrogatory No. 7

    The Surgery Center asks defendants to identify all cases in which they retained [L & G] and in which attorney [J.L.] was removed from the case during litigation. The Center argues that the replacement of the attorney who evaluated the case as having a $10 million value with one who estimated a 90% chance of victory shows defendants' total control of the defense. The Surgery Center further contends that this discovery is relevant to its allegations of a pattern and practice of bad faith claims handling. [Dkt. #60, at 9]. But, contrary to the Center's brief, the Complaint does not allege a “pattern and practice of unreasonable claims handling.” Moreover, The Surgery Center does not make an argument that past practices might be relevant in the context of Fed.R.Evid. 406, (further citations omitted).

* * *

Rules of practice and procedure are devised to promote the ends of justice, not to defeat them. A rigid and undeviating judicially declared practice under which courts would invariably and under all circumstances decline to consider all questions which had not previously been specifically urged or supported would be out of harmony with this policy. Orderly rules of procedure do not require sacrifice of the rules of fundamental justice.  Hormel v. Helvering, 312 U.S. 552, 556–557, 61 S.Ct. 719, 85 L.Ed. 1037 (1941). Here its application seems somewhat ill advised. The information sought is relevant to the meaning to be accorded by the jury to the fact—if indeed it is a fact—that in one or more cases [J.L.] was replaced before trial (or perhaps during trial) by [L & G].

    The motion to compel is granted as to Interrogatory No. 7.

Surgery Ctr. at 900 N. Mich. Ave., LLC v. American Physicians Assur. Corp., No. 15 cv 4336, 2016 WL 6962840, at *5-*6 (N.D. Ill. November 29, 2016) (Cole, USMJ) (emphasis added).

Please Read The Disclaimer.  ©2017 by Dennis J. Wall.  All Rights Reserved.

"$150 THOUSAND AND FOUR WEEKS FOR A PRIVILEGE LOG?" Check!

Subtitle:  Even accused predatory lenders have to comply with some laws.  In this case, with case law.

This is an insurance coverage dispute in which the Plaintiffs seek coverage from the defendant insurers for a $212.5 million dollar settlement with DOJ and HUD of a claim of violation of the False Claims Act relating to errors and omissions in underwriting and origination of HUD mortgage loans.

First Horizon Nat'l Corp. v. Houston Cas. Co., NO. 2:15-cv-2235-SHL-dkw, 2016 WL 5867268, at *1 (W.D. Tenn. October 5, 2016) (Vescovo, Chief U.S.M.J.).

The many factors mandated by case law for a document-by-document privilege log of documents withheld during discovery were thoroughly applied in this case.

One of those factors calls for a comparison of the amount at issue with the withholding party's best estimate of the cost of producing a document-by-document privilege log, which is usually required but not always depending on such things as hardship.

In this case, the plaintiffs claiming coverage, which are the accused predatory lenders who settled with DOJ and HUD, withheld documents in response to a request for production.  Basically, the requested production was of all communications regarding certain claims arising out of their representations regarding mortgage loan underwriting during a stated period of time.

The plaintiffs withheld many documents but did not provide the usual document-by-document privilege log required by case law.  Rather, their first response to the requested production was to withhold about a mountain of documents with "categorical logs."  They "produced a six-page categorical log that grouped thousands of documents created over the course of five years into one of nine categories."    First Horizon Nat'l Corp. v. Houston Cas. Co., NO. 2:15-cv-2235-SHL-dkw, 2016 WL 5867268, at *1 (W.D. Tenn. October 5, 2016).

Then, they also "supplemented" their production and their privilege log addressing certain document-by-document communications including between them and their insurance broker, between them and their auditing firm, between them and their "in-house counsel," and a review of their operations by the HUD Office of Inspector General.  Apparently, they still maintained a "categorical privilege log" for thousands of other documents they withheld under a claim of privilege:

The categorical privilege log provided by First Tennessee contains nine categories of communications which group thousands of documents created over the course of five years dating back to July 2010. The communications include dozens of authors and recipients and lumps together documents concerning many matters into broad categories. The Plaintiffs take the position that their privilege log indexing withheld documents by category is sufficient because preparing a document-by-document privilege log would be an undue burden and the additional information to be gleaned from a more detailed log would not be of no material benefit to the Defendants. The Defendants insist that the Plaintiffs should be required to produce a document-by-document privilege log instead of a categorical log.

Their insurance companies, which had served the requests for production in the first place, filed a motion to compel better production and a better, document-by-document privilege log.  It is not entirely clear from the opinion in this case, but the insurance companies' motion to compel apparently addressed all of the plaintiffs' privilege log.  The insurance companies were particularly interested in compelling a better privilege log "for 5,941 emails withheld as privileged."  First Horizon Nat'l Corp. v. Houston Cas. Co., NO. 2:15-cv-2235-SHL-dkw, 2016 WL 5867268, at *4 (W.D. Tenn. October 5, 2016).

The plaintiffs countered that for many reasons the usual law did not apply to them.  They argued that they are not required, like other parties claiming privilege during discovery, to produce a document-by-document privilege log to support the claim.  One of the several things the plaintiffs argued in this case was that it would be "an undue burden."  Producing a line-item privilege log, as it were, would cost $150,000 and take 3 to 4 weeks, they said.  First Horizon Nat'l Corp. v. Houston Cas. Co., NO. 2:15-cv-2235-SHL-dkw, 2016 WL 5867268, at *6 (W.D. Tenn. October 5, 2016).

The Court was not impressed with any of the arguments offered to support the plaintiffs' blanket assertion of privilege in this case.  "Given the amount in controversy," which the Court put at $75 Million for insurance coverage here, "the Plaintiffs' estimated cost of production of a document-by-document log does not constitute undue burden."    First Horizon Nat'l Corp. v. Houston Cas. Co., NO. 2:15-cv-2235-SHL-dkw, 2016 WL 5867268, at *6 (W.D. Tenn. October 5, 2016) (Vescovo, Chief U.S.M.J.).

In the end, none of the plaintiffs' arguments against compliance with the case law convinced the Court in this case.   The Court granted the defendant insurance companies' motion to compel production of a document-by-document privilege log.  First Horizon Nat'l Corp. v. Houston Cas. Co., NO. 2:15-cv-2235-SHL-dkw, 2016 WL 5867268, at *7 (W.D. Tenn. October 5, 2016) (Vescovo, Chief U.S.M.J.).

The lesson here is that proportionality is relative.  The case law ordinarily requires a party to prepare and produce a document-by-document privilege log if that party makes the choice to withhold discovery under a claim that the documents are privileged.  In a case like this one involving millions of dollars among other things, it is "proportional" to require a document-by-document privilege log that costs $150,000 and 3 to 4 weeks of time.  These numbers for compliance are big but in the context of withholding documents from discovery these numbers not absolute, not to be considered alone or by themselves.  Rather, these numbers are to be considered in the context of the litigation including the amount in controversy.  In short, if "proportionality" is a new rule for discovery then the costs of compliance have to be considered in terms of "proportionality" too.

This case contains an education in discovery particularly in insurance coverage cases.  Other rulings in First Horizon v. Houston Casualty were addressed here on October 12, 2016.

Please Read The Disclaimer.  ©2016 by Dennis J. Wall.  All Rights Reserved.

JUDGES ALONE DECIDE CONFIDENTIALITY IN INSURANCE COVERAGE CASE.

The decision in First Horizon Nat'l Corp. v. Houston Cas. Co., No. 2:15-cv-2235-SHL-dkv, 2016 WL 5867268 (W.D. Tenn. October 5, 2016) (Vescovo, Chief U.S.M.J.) came in the course of ...

...  an insurance coverage dispute in which the Plaintiffs seek coverage from the defendant insurers for a $212.5 million dollar settlement with DOJ and HUD of a claim of violation of the False Claims Act relating to errors and omissions in underwriting and origination of HUD mortgage loans. In defense, the Defendants contend, inter alia, that the claim is “interrelated” to an earlier claim made by First Tennessee and thus barred under a later policy and that First Tennessee failed to timely notify the Defendants of the claim.

First Horizon Nat'l Corp. v. Houston Cas. Co., No. 2:15-cv-2235-SHL-dkv, 2016 WL 5867268, at *1 (W.D. Tenn. October 5, 2016) (Vescovo, Chief U.S.M.J.).

In this decision, the Court dealt with many issues.  One of the more unusual issues illustrates the judicial prerogative over secrecy in litigation.

The plaintiffs, a bank and its parent, withheld many documents on the ground that a federal agency, HUD and specifically the "HUD Office of the Inspector General," placed a "General Confidentiality Restriction" on production of what in the end turned out to be three documents that the plaintiffs withheld on this ground.  "The Plaintiffs do not claim that these documents are privileged and do not dispute the relevancy of these documents."  First Horizon Nat'l Corp. v. Houston Cas. Co., No. 2:15-cv-2235-SHL-dkv, 2016 WL 5867268, at *11 (W.D. Tenn. October 5, 2016) (Vescovo, Chief U.S.M.J.).

The plaintiffs also apparently did not say why HUD supposedly declared the withheld documents to be "confidential," saying only that HUD had done so.

This was not good enough for the Chief U.S. Magistrate Judge here.  "'[C]onfidentiality is not a recognized basis for withholding discovery,' even when such a confidentiality restriction is imposed by a U.S. agency," she ruled.  Further, the Court had already entered a protective order in this case and that ended the matters of what to designate and how to declare it "confidential" in the litigation.  "[A]ny confidentiality concerns are adequately addressed by a protective order, which is already in place in this litigation."  Therefore, ruled the Court, since the documents in question are relevant and not otherwise privileged, "the Plaintiffs must produce these documents."  First Horizon Nat'l Corp. v. Houston Cas. Co., No. 2:15-cv-2235-SHL-dkv, 2016 WL 5867268, at *11 (W.D. Tenn. October 5, 2016) (Vescovo, Chief U.S.M.J.).

The protective order in question is Document No. 129, filed on January 7, 2016.  I found it through PACER.  On the first page, the protective order recites that the parties submitted their own proposed protective order but the Court in this case rewrote it.

On the last page, the protective order entered by the Court recognizes a presumption that is recommended to all other U.S. District Courts and State Courts to recognize as well:

23. As there is a presumption in favor of open and public judicial proceedings in the federal courts, this Order shall be strictly construed in favor of public disclosure and open proceedings wherever possible. The Order is also subject to the Local Rules of this District and the Federal Rules of Civil Procedure on matters of procedure and calculation of time periods. To the extent that there is any conflict between the terms of this Order and rules of the Court, the rules of the Court will govern. Nothing in this Protective Order shall be deemed to be a decision by the Court as to how documents and other material will be handled at the trial of this matter. Nothing in this Protective Order shall be construed to prevent this Court from disclosing any facts relied upon by it in making or rendering any finding, ruling, order, judgment, or decree of whatever description.

These rulings expand beyond the insurance coverage case in which they were made, of course.  These rulings conclusively demonstrate that all questions of confidentiality concerning discovery in litigation are always questions which must be resolved by Courts and by no-one and nothing else.

Please Read The Disclaimer.  ©2016 by Dennis J. Wall.  All Rights Reserved.

CONCEALED BY STIPULATION AND COURT ORDER.

In Braden v. Foremost Insurance Co., No. 4:15-cv-4114, 2016 WL 1417849 (W.D. Ark. April 8, 2016), a Federal Judge in Arkansas essentially rewrote Federal Rule of Civil Procedure 26 with the agreement of the counsel of record in that particular case, and with the agreement of the parties if the parties knew about it.

Rule 26 provides that materials in a court file may be sealed if they are "a trade secret or other confidential research, development, or commercial information."  The Rule has been interpreted pretty consistently since it was written to require proof before a court can enter an order sealing materials from public view.

In the Braden v. Foremost Insurance Co. case, as in many cases in contrast, the secrecy order was simply signed by a Federal Judge based on an agreement written by the lawyers "[t]o protect the confidentiality of materials which may contain confidential, proprietary, commercially sensitive, trade secret, or personal information of Foremost's insureds …."  Braden v. Foremost Insurance Co., No. 4:15-cv-4114, 2016 WL 1417849, at *1 (W.D. Ark. April 8, 2016).

Protecting personal information of insureds is something all reasonable people can agree is deserving of protection.  So, let's get beyond that.  In fact, the parties submitted a separate stipulation on that, and the Judge signed that one, too.

However, Rule 26 does not contemplate a blanket order entered in advance of any discovery protecting whatever a lawyer in the case prefers to keep under wraps wholesale.

The experience of Rule 26 shows clearly that secrecy was meant for individualized determinations.  Lawyers' secrecy stipulations demean that experience by surrounding whole swaths of testimony and documentation in blanket secrecy, if permitted by judges.  Rule 26 depends instead on a determination by a court after adversary proceedings on particular materials or groups of materials for the most part.  This way of reaching secrecy determinations is consistent with most other aspects of a judicial system that has been built on the belief that adversary proceedings are the best available engine of determining facts in litigation. 

Rule 26 also does not authorize the concealment of testimony and documentation simply because someone thinks it should be kept "confidential, proprietary, [or] commercially sensitive ...."  Before the advent of secrecy stipulations and blanket confidentiality orders approving secrecy stipulations without the need for any evidence at all, the party seeking secrecy has always had to prove a need for secrecy.

Perhaps nothing could illustrate this better than the fact that the secrecy order filed on April 8, 2016 in Braden v. Foremost Insurance Co. does not mention Rule 26 even once.  Without the Rule, what could possibly be the source of authority to make anything in that case confidential or secret or hidden from public view?  There being no such authority cited, the inescapable conclusion is naturally that there is no such legitimate authority at all.

Further, the particular secrecy stipulation offered and accepted in the Arkansas case is an expanded version of what has been a fairly uniform proposed secrecy stipulation used throughout the United States, in many kinds of cases.  As noted, however, this one is an expanded version, 20 paragraphs long.  The Court's Order approving it occupies 5 printed pages from Westlaw.

It is incredible to accept that these stipulations are a result of intellectual horse trading, or the product of a debate over ideas.  The interests of the plaintiffs and of the defendants, particularly in these large cases, are widely separated into one side of the litigation which generally thrives on disclosure in all things including discovery, and another side of the litigation which covets secrecy.  Since when do secrecy orders require all those words if they are legitimate?

What was this particular case about anyway?  It is telling that there is not a word about the nature of the case in any of the 20 paragraphs or 5 pages.  I had to go to PACER ("Public Access to [Federal] Court Electronic Records") to find out.  It is about insurance coverage, not state secrets or anything of that kind.

The Class Action Complaint contains allegations that Foremost routinely depreciated labor in calculating the value of repairs. 

There are not even any allegations of first-party insurer bad faith to take this case out of the routine and ordinary class and into the sphere of silence and secrecy.

The overuse and over-approval of secrecy stipulations is stifling the founding idea of access to court in the United States.  Silent as fog, baseless secrecy orders are enabling the willful elevation of short-term fees over long-term survival of a democracy.  Future articles will address this unwelcome step toward rewriting Rule 26 when the lawyers and the judges, and perhaps the parties in particular cases, want to seal the evidence from public view.

Please Read The Disclaimer.  ©2016 by Dennis J. Wall, author of "Insurance Claims and Issues" (forthcoming Thomson Reuters 2016).  All rights reserved.

Related articles

Current Cases Sealing Court Records Including Insurance Cases.

"INSURANCE CLAIMS AND ISSUES," THE BOOK: COMING IN 2016!

 

 Storm Clouds lined up over the Gulf of Mexico.  Photograph and text copyright 2015-2016 by Dennis J. Wall.

I am hard at work on an anthology of the best blogs from "Insurance Claims and Issues."  The anthology I submit to my publisher will keep all hyperlinks intact, including links to the Insurance Claims and Bad Faith Law blog.  When articles posted on Insurance Claims and Bad Faith Law blog are important to the anthology of "Insurance Claims and Issues," I am including them in the anthology too.

As each previously posted article is updated, the posted articles will remain just as available here as they always have been.  New articles will benefit from me being better informed and better equipped to discuss future insurance claims and issues.

I have contracted with Thomson Reuters (West Publishing Company to those fortunate to have the experience) to publish "Insurance Claims and Issues," the Book, in the late Spring or early Summer of 2016.  Best wishes to everyone for a joyous and Happy New Year!

Please Read The Disclaimer.  ©2016 by Dennis J. Wall, author of "Insurance Claims and Issues" (forthcoming Thomson Reuters 2016).  All rights reserved.

Related articles

Convincing Anyone Yet? Coverage, Contraception, and the Court.

CYBERINSURANCE:  MANY DATA-LESS RISKS TO UNDERWRITE & PREMIUMS TO CHARGE.

THE ALI RESTATEMENT PROJECT OF THE LAW OF LIABILITY INSURANCE.

Majority Holds No Negligence Cause of Action by Insured Against I.A.

NEVADA UNTIMELY DISCLOSURE OF EXPERT IN FEDERAL COURT LEADS TO DISQUALIFICATION.

International Space Station's "Good Morning" Wakeup to Western United States.  Image Courtesy of NASA.


The Federal Court in Nevada emphasized that the plaintiff in the case of Cohan v. Provident Life & Accident Ins. Co., No. 2:13-cv-00975-LDG(CWH), 2015 WL 5458682 (D. Nev. Signed September 16, 2015), is a medical doctor.  The District Judge emphasized this fact to in turn emphasize the Magistrate Judge's conclusion in the case that the plaintiff was intimately involved in discovery, presumably including the discovery dispute at issue in this decision.

The nature of the plaintiff's occupation ultimately had no effect whatsoever on the outcome of the defendant's motion to disqualify a late-filed plaintiff's expert witness.

Here is how that discovery controversy came about.  Think about the events involved during these timeframes to "see" what the parties, the Magistrate Judge and the District Judge, and the other lawyers in the case had to think about at the time.

The plaintiff changed treating physicians a little less than one month before the parties were due to designate experts under a Court Order.

Plaintiff's attorney became aware of the change a little later, some 3 weeks before the deadline.

The lawyer first arranged a meeting with the new treating physician-expert nearly 4 weeks after the deadline passed.

The new treating physician-expert was still not designated as of the time that the lawyer met with him.  At their meeting, the expert told the lawyer that he, the treating physician-expert, was not yet in a position to give an opinion when or whether the plaintiff would be able to work.  Cohan v. Provident Life & Accident Ins. Co., No. 2:13-cv-00975-LDG(CWH), 2015 WL 5458682, *1 (D. Nev. Signed September 16, 2015).

By this time, seven or eight weeks had passed, depending on which starting point is used, whether the starting point is the date the new expert was retained or the date when the attorney found out that the new expert was retained.  The next thing that happened was that the plaintiff's attorney and the defendant's attorney agreed to request an extension of the deadlines for discovery and for the filing of dispositive motions.  According to the District Judge who later reviewed the record, the lawyers acknowledged in their stipulation that the deadlines for designating experts had already passed and that their stipulation would not extend the deadlines for designating experts.

Nearly a month more passed after the stipulation was filed jointly requesting that the parties' deadlines for discovery and for filing dispositive motions be extended.  Then, the plaintiff's attorney filed a "Supplemental Disclosure of Expert Witnesses, designating [the new treating physician] as an expert …."  Cohan v. Provident Life & Accident Ins. Co., No. 2:13-cv-00975-LDG(CWH), 2015 WL 5458682, *1 (D. Nev. Signed September 16, 2015).

The defendant filed a motion to strike the supplemental disclosure.  The Magistrate Judge held a hearing on the motion.  The Magistrate Judge entered an order that the motion be granted, and the plaintiff objected.  On review by the District Judge of the Magistrate Judge's order, the plaintiff argued on the basis of two unpublished decisions, one authored by the same Magistrate Judge in a different case, and one decided by a Federal Court in California.  As the District Judge viewed these two decisions, neither one stood for the propositions for which the plaintiff submitted them.  Cohan v. Provident Life & Accident Ins. Co., No. 2:13-cv-00975-LDG(CWH), 2015 WL 5458682, *1 (D. Nev. Signed September 16, 2015).

The District Judge relied instead on a decision of the Ninth Circuit Court of Appeals and denied the plaintiff's objection to the Magistrate Judge's order that the admittedly late-designated expert should be stricken.

 Please Read The Disclaimer.  ©2015 by Dennis J. Wall, author of Litigation and Prevention of Insurer Bad Faith (3d ed. Thomson Reuters West in 2 Volumes, with 2015 Supplements), including Sections 8:17 and 12;18 addressing Expert Witness issues in third-party and first-party insurance cases, respectively.  All rights reserved.

EXPERT PHYSICIAN BASES CAUSATION OPINION ON PLAINTIFF'S ACCOUNT, WITNESS EXCLUDED.

The case of Carmody v. State Farm Mut. Auto. Ins. Co., No. 6:14-cv-830-Orl-37KRS, 2015 WL 5542534 (M.D. Fla. September 18, 2015) is not being decided in a vacuum.  The plaintiff in that case claims uninsured motorist benefits from the defendant.  After entering a Case Management and Scheduling Order which set out deadlines including for expert witness disclosure as is usual under such orders, the Court sanctioned the plaintiff "for his untimely and insufficient expert witness disclosures" including by limiting the testimony of one Dr. Masson, whom the plaintiff disclosed as a "treating physician," to "'opinions formed based on observations made during the course" of Dr. Masson's treatment of the plaintiff.  Carmody v. State Farm Mut. Auto. Ins. Co., No. 6:14-cv-830-Orl-37KRS, 2015 WL 5542534, *1 (M.D. Fla. September 18, 2015).

After taking Dr. Masson's deposition, the defendant filed a motion to exclude his opinion testimony on causation.  Dr. Masson testified in his deposition that he relied on an MRI study done on a date he did not know when, and on "the history provided to him by Plaintiff."  Dr. Masson further testified that he did not review the plaintiff's prior medical reports or the plaintiff's medical history, and that he did not talk to plaintiff's "prior doctors of therapists before making his causation opinion."  Carmody v. State Farm Mut. Auto. Ins. Co., No. 6:14-cv-830-Orl-37KRS, 2015 WL 5542534, *3 (M.D. Fla. September 18, 2015).

The Court observed that "Courts frequently exclude causation opinion testimony from expert witnesses who -- like Dr. Masson -- based their opinions on a plaintiff's account of the facts without consideration of other possible causes of an injury."  Carmody v. State Farm Mut. Auto. Ins. Co., No. 6:14-cv-830-Orl-37KRS, 2015 WL 5542534, *3 (M.D. Fla. September 18, 2015).  The Court was aware too of Dr. Masson's testimony that "the injuries he found during his physical examination of Plaintiff were 'consistent with the story the patient gave [him].'"  Carmody v. State Farm Mut. Auto. Ins. Co., No. 6:14-cv-830-Orl-37KRS, 2015 WL 5542534, *3 n.3  (M.D. Fla. September 18, 2015).

Based on the law, "and a careful review of the record -- particularly Dr. Masson's deposition," the Court granted the defendant's motion in this insurance case.

Please Read The Disclaimer.  ©2015 by Dennis J. Wall, author of Litigation and Prevention of Insurer Bad Faith (3d ed. Thomson Reuters West in 2 Volumes, with 2015 Supplements).  All rights reserved.  

ADVICE OF INSURANCE CARRIER’S COUNSEL PUT AT ISSUE BY CARRIER.

               Under Oklahoma law that mirrors the law of many other jurisdictions in this regard, it was held that an insurance company waived attorney-client privilege and work product immunity in a case in which the carrier sued an adjuster for indemnity and negligence.  The carrier contended that it would not have had to defend or settle an underlying lawsuit filed by the carrier's policyholder against the carrier, but for the alleged errors and omissions of the adjuster handling the policyholder's claim for the carrier.

              The Court’s opinion makes it clear that the carrier raised the privilege and immunity against discovery of certain advice given to the carrier by attorneys it consulted on whether the lawsuit filed by the carrier’s policyholder should be settled because of the carrier’s potential exposure to a bad faith claim and the value of the carrier’s exposure to a bad faith claim.  Seneca Ins. Co. v. Western Claims, Inc., 774 F.3d 1272, 1274-75 (10th Cir. 2014).

               So, the case that confronted the Court was a lawsuit filed by the carrier to recover indemnity and to recover damages for alleged negligence, in which the plaintiff carrier asserted privileges from discovery over the advice on which the carrier allegedly relied in paying the money which it now sought to recover from the adjuster it hired to handle the underlying hail damage claim made by its policyholder.  Because of the adjuster's handling of the policyholder's hail damage claim, the carrier alleged, the policyholder was dissatisfied and sued the carrier for "mishandling" the claim.

               The Tenth Circuit panel held that Oklahoma law would apply a waiver of the attorney-client privilege in this case because the carrier “affirmatively put at issue its attorney’s advice by invoking ‘advice of counsel’ to support its claims in this litigation.”  The plaintiff carrier had to prove the reasonableness of its underlying settlement in order to recover indemnity, and the carrier asserted that it relied on advice of counsel that the settlement was reasonable.  Seneca Ins. Co. v. Western Claims, Inc., 774 F.3d 1272, 1276-77 (10th Cir. 2014).  [Emphasis added.]  Of course, in order to recover the amount of its underlying settlement as damages under a negligence theory, the plaintiff would still have to prove that its settlement was reasonable.  Under both claims alleged by the carrier, implied indemnity and negligence, the reasonableness of the underlying settlement was an issue in the carrier’s suit against the adjuster.

               It is interesting that the carrier contended it did not waive attorney-client privilege because, the carrier contended, the adjuster could pursue discovery regarding the reasonableness of the carrier’s settlement from sources other than the communications of the attorneys for the carrier.  However, the carrier’s officers testified that they made their decision to settle the underlying case on the advice of counsel.  Seneca Ins. Co. v. Western Claims, Inc., 774 F.3d 1272, 1277 (10th Cir. 2014).

               For the same reasons, the Tenth Circuit panel held that Oklahoma law would apply a waiver of the work product qualified immunity “by putting the correspondence at issue.”    Seneca Ins. Co. v. Western Claims, Inc., 774 F.3d 1272, 1278 (10th Cir. 2014).

               The twin waivers were held to apply in this case not so much on account of the nature of the carrier’s suit for implied indemnity and negligence.  More to the point, the carrier’s own officers testified that there were no other sources from which to obtain evidence on the reasonableness of the carrier’s settlement, an issue in the carrier’s lawsuit whichever theory of liability was at issue, implied indemnity or negligence.

Please Read The Disclaimer.  ©2015 by Dennis J. Wall.  All Rights Reserved.  No Claim to Original U.S. Government Works.

 

UNKNOWN FEDERAL AGENTS STOP DEFAMATION LAWSUIT. INSURANCE CLAIM DENIED ALSO?

               In May, 2013, a nonprofit corporation called “American Coalition Against Nuclear Iran” a/k/a “United Against Nuclear Iran” (“UANI”) wrote a public letter to Mr. Victor Restis alleging that Mr. Restis and his shipping company illegally participated in exporting “Iranian oil in violation of international sanctions.”  Next, the Coalition united to write and disseminate press releases, and “postings on social media” including its Facebook page “and on UANI’s website,” all repeating the alleged libel that Mr. Restis and his shipping company participated in these illegal actions.  Victor Restis v. American Coalition Against Nuclear Iran, Inc., No. 13 Civ 5032 (ER), Doc. 316, Opinion and Order filed March 23, 2015, at pp. 2-3 (S.D.N.Y.).  Later in 2013, Mr. Restis and his company filed suit.  Download Victor Restis v. American Coalition Against Nuclear Iran, Doc. 316, Filed 03.23.15 (S.D.N.Y. No. 13 Civ. 5032 (ER)).

               In 2014, an unknown, unnamed agency of the Federal Government requested and received permission to intervene in the civil defamation case.  The Federal Government demanded that the lawsuit had to be dismissed because of “the state secrets privilege.”  (The agency is unknown because the Federal Judge did not name it on the ground of national security.)

               The Federal Judge explained the states secret privilege after he had two ex parte meetings with unknown, unidentified Federal agents.  As the Federal Judge explained the states secret privilege, it “is a common law evidentiary rule that allows the government to withhold information from discovery when disclosure would be inimical to national security.”    Victor Restis v. American Coalition Against Nuclear Iran, Inc., No. 13 Civ 5032 (ER), Doc. 316, Opinion and Order filed March 23, 2015, at p. 4 (S.D.N.Y.).  (The Federal Judge’s admission to the two ex parte meetings with the unidentified Federal agents is on page 7 of his Opinion and Order.)

               The Federal Judge’s Opinion and Order in this civil case went beyond “a common law evidentiary rule that allows the government to withhold information from discovery,” however.  In it, the Federal Judge ordered that the private plaintiffs’ defamation claim be dismissed because the state secrets privilege required dismissal here.  The Federal Judge explained his ruling of dismissal on the basis that Federal Courts have ordered that claims must be dismissed where evidence as to claims or defenses necessarily carried an inherent and unacceptable risk of exposing state secrets.  That this was the first dismissal of a civil case involving purely private litigants in which the Federal Government had demanded dismissal, did not change the view of this case in the Federal Judge’s eyes.  “[T]he Court is convinced,” he wrote, “that further litigation of this action would impose an unjustifiable risk of disclosing state secrets.”  This was so even if the case were tried in his chambers.  Victor Restis v. American Coalition Against Nuclear Iran, Inc., No. 13 Civ 5032 (ER), Doc. 316, Opinion and Order filed March 23, 2015, at pp. 12-13 (S.D.N.Y.).

               In sum, even if the plaintiffs could prove actionable defamation in this case without using the “state secrets” but only putting on non-privileged evidence available in the public domain, still this case presented an “unacceptable risk,” an “unjustifiable risk,” of exposing state secrets.  Accordingly, the Federal Government’s demand had to be followed and this civil defamation case was dismissed.

               Since the plaintiffs no longer have a pending prosecution of their defamation claim in suit at the present time, what if the plaintiffs pursue their claim against the defendants without a lawsuit.  (The defendants in the civil defamation suit included not just the nonprofit corporation but also individuals associated both with that company and with the alleged defamation.)  If the plaintiffs pursue their claim without their defamation lawsuit, the question becomes whether the defendants’ insurance companies, if any, can now deny coverage on the ground that to allow the claim to proceed against their policyholders would necessarily pose an “unacceptable risk” and an “unjustifiable risk” of exposing state secrets?

               Another question arises, too, of course:  Can defendants, whether operating through nonprofit corporations or otherwise, raise the shield of “state secrets” every time they allegedly libel or slander someone?

Please Read The Disclaimer.  ©2015 by Dennis J. Wall.  All Rights Reserved.  No Claim to Original U.S. Government Works.

SECRET INSURANCE CASES: THE RULES AND THE OPPORTUNITIES FOR REBUTTAL.

    The rules which allow for secrecy in insurance and other cases are not inflexible.  Although the presumption is that openness is the default rule, the presumption is rebuttable.  The rules and the opportunities for rebuttal are explored in these articles posted on Legal Solutions Blog and linked here for your ease of reference: 

Presumption that court records are open to the public: The default rule January 28, 2015;  

The default presumption of public access to court records is rebuttable February 3, 2015; and

The default presumption of public access to court records is rebuttable (Part 2 of 2) February 5, 2015.

Please Read The Disclaimer.  Copyright 2015 by Dennis J. Wall.  All rights reserved.  No claim to Original Works of the Legal Solutions Blog or Thomson Reuters and West.

COMMUNICATIONS TO REINSURERS NOT BLANKET ATTORNEY CLIENT PRIVILEGED.

             The case of Progressive Casualty Insurance Co. v. Federal Deposit Insurance Corp.[1] is an action for declaratory relief filed by a D&O insurer.  The Director’s and Officer’s Liability Insurance carrier sued the Federal Deposit Insurance Corporation in its capacity as Receiver of Vantus Bank, and the carrier also sued the bank’s former officers and directors.

              The FDIC served the plaintiff D&O carrier with a request for production of the following reinsurance-related materials, in pertinent part:

12. All documents relating to the purchase, placement or ceding of any reinsurance by you that relate to the Policy, including all status reports provided by you to such reinsurance companies and memoranda relating to meetings with reinsurers.

 * * *

 23. All documents relating to any communications with any reinsurer about the Claims.

          The carrier responded to both paragraphs of requested discovery with identically worded blanket objections.  The carrier’s blanket objections included the “further objections” that the requested documents are “protected from disclosure by the attorney-client privilege, the work-product doctrine, or any other applicable privileges or protections.”[2]

          The United States Magistrate Judge ruling on these objections overruled the blanket attorney-client privilege assertion, with a caveat.  First, the Court pointed out without deciding the issue that the FDIC “would have a strong argument” that the insurance company waived attorney-client privilege and work product protections as to any privileged communications the insurer shared with its reinsurer.

          The Court further observed that “of course, blanket assertions of privilege are highly disfavored.”

          Then the Court attached its caveat to overruling the D&O insurer’s objections to this discovery.  Clearly the carrier was going to have to do something other than assert a blanket objection in order to preserve a privilege to bar this discovery:  “If Progressive contends that any of the documents addressed by this order are protected by a privilege, it may withhold those documents and describe them in a privilege log.”[3]  These are the documents as to which the D&O carrier was required by this Court to state specific privilege objections in a privilege log, if the carrier wants to continue to withhold those documents from discovery in this case:

   Progressive will be ordered to supplement its response to document request numbers 12 and 23 to produce the following documents: (1) its communications with its reinsurers regarding the Disputed Provisions [of the insurance contract], (2) its communications with its reinsurers regarding the FDIC–R's claims against the Bank's former officers and directors, (3) its communications with its reinsurers regarding coverage under its standard policy form for claims by the FDIC acting as receiver, and (4) any reinsurance policies that are implicated by FDIC–R's lawsuit against the Bank's officers and directors. If Progressive contends that any of the documents addressed by this order are protected by a privilege, it may withhold those documents and describe them in a privilege log. Progressive shall comply with this order on or before April 21, 2014.[4]

          The D&O carrier seems to have caught a break.  Its blanket assertions of privilege were not totally overruled by any means.  To the contrary, it has been given another opportunity to write out more specific grounds for asserting privileges including the attorney-client privilege, with respect to each such document it wants to continue to withhold.

Please Read The Disclaimer.  ©2015 by Dennis J. Wall.  All rights reserved.  No claim to Original U.S. Government Works. 

     

---

[1] Progressive Cas. Ins. Co. v. Federal Dep. Ins. Corp., 298 F.R.D. 417 (N.D. Iowa 2014).

 

[2] Progressive Cas. Ins. Co. v. Federal Dep. Ins. Corp., 298 F.R.D. 417, 424 (N.D. Iowa 2014).

 

[3] Progressive Cas. Ins. Co. v. Federal Dep. Ins. Corp., 298 F.R.D. 417, 425 (N.D. Iowa 2014).

 

[4] Progressive Cas. Ins. Co. v. Federal Dep. Ins. Corp., 298 F.R.D. 417, 425 (N.D. Iowa 2014).

 

 

Related articles

When Carriers Collide: Discovering Experts' Investigation of Sandy Claims.

Current Cases Sealing Court Records Including Insurance Cases.

WHEN CARRIERS COLLIDE: DISCOVERING EXPERTS' INVESTIGATION OF SANDY CLAIMS.

Insurance carriers should always be prepared by retaining experts who are not just experienced in publicly presenting themselves and their testimony about the particular claim, but who also understand what is involved in investigating claims of the kind involved in the particular case.         

    Further, it has been held that the parties, particularly the insurance companies who retain these experts, should be prepared to provide appropriate discovery concerning them, as well as being prepared to provide discovery concerning their investigations and evaluations in the case.  For example, it has been held that insurance companies handling catastrophe claims after Sandy were required to provide the following requested production:

 

any drafts, redlines, markups, reports, notes, measurements, photographs and written communications related thereto—prepared, collected or taken by any engineer, adjustor or other agent or contractor affiliated with any defendant, relating to the properties and damage at issue in each and every case, whether such documents are in the possession of defendant or any third party.[1]

---

[1] In re Hurricane Sandy Cases, No. 14 MC 41, 2014 WL 7011069, *1 (E.D.N.Y. December 11, 2014).  [Emphasis in original.]  This was an order issued by a Committee of three United States Magistrate Judges managing “more than 1,000 Hurricane Sandy cases”.  The Committee of Magistrates approved the previous ruling of Magistrate Brown in one of the cases that the defendant insurance company would be required to respond to the quoted production request, and affirmed that this discovery ruling applies to all of the Hurricane Sandy cases.

 

---

 Reprinted with the permission of Thomson Reuters West from the manuscript of the author's 2015 Supplement chapters in “Catastrophe Claims:  Insurance Coverage for Natural and Man-Made Disasters” ©2015 by Thomson Reuters West.

 

Please Read The Disclaimer.

Related articles

Adjusting Sandy Sanctions in New York.