CLEVELAND CONSTRUCTION INC v. STELLAR GROUP INCORPORATED et al
Filing
53
ORDER denying 52 Motion for Protective Order. Ordered by US DISTRICT JUDGE CLAY D. LAND on 10/23/2017 (tlf).
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
COLUMBUS DIVISION
UNITED STATES OF AMERICA for
the use and benefit of
CLEVELAND CONSTRUCTION, INC.,
*
*
Plaintiff,
*
vs.
*
STELLAR GROUP, INC.and LIBERTY
MUTUAL INSURANCE COMPANY,
CASE NO. 4:16-CV-179(CDL)
*
*
Defendants.
*
O R D E R
Cleveland Construction, Inc. (“Cleveland”) provided labor
and
materials
on
a
construction
project
pursuant
to
a
subcontract with Stellar Group, Inc. (“Stellar”), the general
contractor
for
the
project.
Stellar,
blaming
Cleveland
for
delays in the project, has not paid Cleveland all that Cleveland
claims it is owed.
amounts
owed
counterclaims
under
for
Cleveland brings this action to recover
its
subcontract
damages
allegedly
with
Stellar.
caused
by
Stellar
Cleveland’s
delays.
Cleveland denies that it is responsible for the delays in
the project, and it seeks to obtain discovery of communications,
including
those
related
to
settlement
discussions,
between
Stellar and VOA Associates (“VOA”), the architectural firm for
the project.
Cleveland maintains that the communications are
1
relevant
because
they
would
quantify
Stellar’s
delay
claim
against VOA, thereby undermining the credibility of Stellar’s
delay-related counterclaim against Cleveland.
protective
order
communications.
preventing
Even
though
the
the
Stellar seeks a
disclosure
settlement
of
those
discussions
were
between Stellar and a third party who is not a party to this
action, Stellar argues that those settlement negotiations are
nevertheless not discoverable.
remainder
of
this
Order,
For the reasons explained in the
Stellar’s
motion
(ECF
No.
52)
is
denied.
DISCUSSION
The resolution of the pending motion is straightforward.
Federal Rule of Civil Procedure 26(b)(1) clearly describes the
scope
of
discovery
in
federal
courts:
“Parties
may
obtain
discovery regarding any nonpriviledged matter that is relevant
to any party’s claim or defense and proportional to the needs of
the case . . . .”
Proportionality is not an issue here, and
therefore, the resolution of the pending motion depends upon
whether
the
information
sought
is
“nonprivileged”
and
“relevant.”
According to the Federal Rules of Evidence, “[t]he common
law—as
interpreted
by
United
States
courts
in
the
light
of
reason and experience—[generally] governs a claim of privilege.”
Fed. R. Evid. 501.
“But in a civil case, state law governs
2
privilege
regarding
a
claim
or
defense
supplies the rule of decision.”
Court
to
Georgia
no
Eleventh
appellate
settlement
Instead,
Circuit
decision
communications
Stellar
Id.
argues
for
of
Appeals
recognizing
that
a
the
state
law
Stellar has pointed the
Court
between
which
party
a
decision
privilege
and
a
communications
or
for
non-party.
should
be
protected based upon the principles underlying Federal Rule of
Evidence 408.
Rule 408 governs whether evidence is admissible
at trial, not whether it is privileged in discovery.
Moreover,
the evidence that Cleveland seeks to discover would likely not
be excluded under Rule 408.
Rule 408 contemplates that the
compromise offers and negotiations that would not be admissible
relate to the disputed claim between the parties to the action,
not a disputed claim between one party to the action and a nonparty.
The
Court
acknowledges
that
at
least
one
recognized a “settlement negotiation privilege.”
Circuit
has
See Goodyear
Tire & Rubber Co. v. Chiles Power Supply, Inc., 332 F.3d 976,
979-81
(6th
Cir.
2003)
(“The
public
policy
favoring
secret
negotiations, combined with the inherent questionability of the
truthfulness
of
any
statements
made
therein,
leads
us
to
conclude that a settlement privilege should exist . . . .”).
But others have not.
See In re MSTG, Inc., 675 F.3d 1337, 1342-
48 (Fed. Cir. 2012) (declining to recognize such a privilege for
3
a patent holder’s settlements with other alleged infringers); In
re Gen. Motors Corp. Engine Interchange Litig., 594 F.2d 1106,
1124
n.20
(7th
privilege).
Cir.
1979)
(declining
to
recognize
such
a
In light of the absence of any indication from the
Eleventh Circuit Court of Appeals or any Georgia appellate court
that such a “settlement privilege” exists in this Circuit, the
Court declines to invent one for this case.
Court
finds
that
the
discovery
sought
Accordingly, the
by
Cleveland
is
“nonprivileged.”
The
next
question
is
whether
the
information
seeks is relevant to any of the issues in the case.
Cleveland
A matter is
relevant if it has “any tendency to make a fact more or less
probable than it would be without the evidence” and the fact “is
of consequence in determining the action.”
& (b).
to
The information sought by Cleveland is clearly relevant
Cleveland’s
contends
Fed. R. Evid. 401(a)
that
defense
the
to
project
Stellar’s
was
counterclaim.
delayed
237
days,
Cleveland is responsible for 224 days of delay.
Stellar
and
that
If Stellar
and/or its expert has maintained elsewhere that other parties
are
responsible
for
more
than
13
days
of
delay,
then
that
evidence would be probative on the issue of whether Cleveland is
in fact responsible for the amount of delay that Stellar claims.1
1
Stellar argues that the Court should use a heightened “particularized
relevancy” standard in evaluating whether the information sought is
4
CONCLUSION
Finding
that
Cleveland
seeks
discovery
of
nonprivileged
matters that are relevant to a claim or defense in this action,
the
Court
denies
Stellar’s
Second
Corrected
Motion
for
Protective Order (ECF No. 52).2
IT IS SO ORDERED, this 23rd day of October, 2017.
S/Clay D. Land
CLAY D. LAND
CHIEF U.S. DISTRICT COURT JUDGE
MIDDLE DISTRICT OF GEORGIA
discoverable.
The Court finds no support for a two-tiered relevancy
framework under Rule 26.
If the information is not subject to a
privilege, which the Court has concluded it is not, then the
traditional relevancy standard should apply.
2
As previously noted, Stellar makes no argument that the discovery
should be prohibited on proportionality grounds.
5
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?