Progressive Casualty Insurance Company v. Federal Deposit Insurance Corporation et al

Filing 158

MEMORANDUM Opinion and Order re 106 Appeal of Magistrate Judge Decision to District Court. 102 Order is affirmed (See Order Text). Signed by Judge Mark W Bennett on 10/3/2014. (des)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF IOWA
WESTERN DIVISION
PROGRESSIVE CASUALTY
INSURANCE COMPANY,
No. C 12-4041-MWB
Plaintiff,
vs.
FEDERAL DEPOSIT INSURANCE
CORPORATION, as Receiver of Vantus
Bank; ARLENE T. CURRY; GARY L.
EVANS; DAVID M. ROEDERE;
BARRY E. BACKHAUS; RONALD A.
JORGENSEN; CHARLES D.
TERLOUW; JON G. CLEGHORN;
ALLEN J. JOHNSON; MICHAEL W.
DOSLAND; and MICHAEL S.
MODERSKI,

MEMORANDUM OPINION AND
ORDER REGARDING OBJECTIONS
TO MAGISTRATE JUDGE’S
AUGUST 22, 2014, DISCOVERY
RULING

Defendants.
___________________________
TABLE OF CONTENTS
I. 

INTRODUCTION........................................................................... 2 

II. 

LEGAL ANALYSIS ........................................................................ 4 
A. 
Standard Of Review ................................................................ 4 
B. 
Progressive’s Objections ........................................................... 5 
1. 
The challenged parts of the Order ...................................... 5 
2. 
Work-product disclosures ................................................. 5 
a. 
Judge Strand’s ruling ............................................. 5 
b. 
Arguments of the parties ......................................... 6 
c. 
Analysis .............................................................. 7 
3. 
Attorney-client privilege ................................................. 14 
a. 
Judge Strand’s ruling ........................................... 14 
b. 
Arguments of the parties ....................................... 15 
c. 
Analysis ............................................................ 17 

C. 

III. 

Everest’s Objections .............................................................. 22 
1. 
The challenged part of the ruling ..................................... 22 
2. 
Arguments of the parties ................................................ 24 
3. 
Analysis .................................................................... 27 

CONCLUSION ............................................................................ 30 

I.

INTRODUCTION

Plaintiff Progressive Casualty Insurance Company (Progressive) filed this action,
on April 25, 2012, seeking a declaration that there is no coverage under Directors &
Officers/Company Liability Insurance Policy For Financial Institutions Policy No.
100322780-01 (the Vantus Policy) from Progressive for the claims asserted by the Federal
Deposit Insurance Corporation, as Receiver for Vantus Bank, (FDIC-R) against the
former officers and directors of Vantus Bank in Sioux City, Iowa, as such claims were
stated in a May 7, 2010, letter to the directors and officers by the FDIC-R’s outside
counsel. The FDIC-R eventually filed a separate lawsuit, on May 20, 2013, against the
former officers and directors, pursuant to the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989 (FIRREA), 12 U.S.C. § 1811 et seq., alleging the gross
negligence, negligence, and breach of fiduciary duty of the former officers and directors.
See FDIC v. Dosland, C 13-4046-MWB. The FDIC-R’s claims are based primarily on
its allegations that the former officers and directors caused Vantus Bank to use $65
million—120 percent of its core capital—to purchase fifteen high risk collaterized debt
obligations backed by Trust Preferred Securities (CDO-TruPS) without due diligence and
2

in disregard and ignorance of regulatory guidance about the risks of and limits on
purchases of such securities.
One twist on the tortuous road to trial in this case is now before me. On August
22, 2014, United States Magistrate Judge Leonard T. Strand entered an Order (docket
no. 102) on two motions to compel by the FDIC-R. Two parts of Judge Strand’s Order
are at issue here. In Objections (docket no. 106), filed September 4, 2014, pursuant to
Rule 72(a) of the Federal Rules of Civil Procedure and N.D. IA. L.R. 72.1, Progressive
challenges Judge Strand’s conclusion that the portions of communications between
Progressive and its reinsurers redacted by Progressive on the basis of the attorney-client
privilege and/or work-product doctrine are not protected from discovery by the FDIC-R.
In Objections (docket no. 122), filed September 5, 2014, non-party Everest Reinsurance
Company (Everest) challenges Judge Strand’s conclusion that the FDIC-R is entitled to
obtain the documents described in its subpoena to Everest, as narrowed by the FDIC-R
in communications between counsel. The FDIC-R filed separate Responses (docket nos.
106 and 129) to Progressive’s and Everest’s Objections, and Progressive and Everest
filed Replies (docket nos. 130 and 131) in further support of their Objections.
I do not find that oral arguments are necessary to my review of Judge Strand’s
Order. Moreover, my crowded schedule is such that I cannot hear oral arguments soon
enough to avoid further delay of the discovery process in this case.

Under these

circumstances, I will consider Progressive’s and Everest’s Objections fully submitted on
the parties’ written submissions. Thus, I turn to consideration of Progressive’s and
Everest’s Objections.

3

II.

LEGAL ANALYSIS

A.

Standard Of Review

The pertinent parts of the statute and rules authorizing the powers of a federal
magistrate judge, 28 U.S.C. § 636(b)(1)(A), Rule 72(a) of the Federal Rules of Civil
Procedure, and N.D. IA. L.R. 72.1, all provide for review by a district judge of a
magistrate judge’s order on non-dispositive motions assigned to him or her to which
objections have been filed.

Where a litigant does not file a timely objection to a

magistrate judge’s order, triggering review by a district judge, the litigant “may not
challenge the [magistrate judge’s] order on appeal.” McDonald v. City of Saint Paul,
679 F.3d 698, 709 (8th Cir. 2012).
Section 636(b)(1)(A) and Rule 72(a) both specify that such review allows the
district judge to modify or set aside any parts of the magistrate judge’s order that are
“clearly erroneous or contrary to law.” See also Ferguson v. United States, 484 F.3d
1068, 1076 (8th Cir. 2007) (“A district court may reconsider a magistrate judge’s ruling
on nondispositive pretrial matters where it has been shown that the ruling is clearly
erroneous or contrary to law.” (citing § 636(b)(1)(A)). Although the Eighth Circuit
Court of Appeals does not appear to have clarified the meaning of “clearly erroneous”
in the context of a district court’s review of a magistrate judge’s ruling, the appellate
court’s formulation of the “clearly erroneous” standard for its own review of a lower
court’s ruling is as follows:
A district court clearly errs if its findings are “not supported
by substantial evidence in the record, if the finding[s are]
based on an erroneous view of the law, or if we are left with
the definite and firm conviction that an error has been made.”
Ostenfeld ex rel. Estate of Davis v. Delo, 115 F.3d 1388,
1393 (8th Cir. 1997).

4

Story v. Norwood, 659 F.3d 680, 685 (8th Cir. 2011). Like other courts, I have read
“contrary to law” within the meaning of Rule 72(a) (and, hence, § 636(b)(1)(A)) to mean
failure to apply or misapplication of relevant statutes, case law, or rules of procedure.
See United States v. Melton, 948 F. Supp. 2d 998, 1002 (N.D. Iowa 2013) (quoting
Catskill Dev., L.L.C. v. Park Place Entm’t Corp., 206 F.R.D. 78, 86 (S.D.N.Y. 2002)).
I will apply these standards in my consideration of Progressive’s and Everest’s
Objections.

B.
1.

Progressive’s Objections

The challenged parts of the Order

In the part of Judge Strand’s Order to which Progressive has leveled its Objections,
Judge Strand considered the FDIC-R’s motion to compel Progressive to produce the
portions of certain communications with and from its reinsurers that Progressive had
redacted on the basis of attorney-client privilege and/or the work product doctrine. I find
it helpful to consider separately the Objections concerning disclosure of purported workproduct information and purported attorney-client privileged information.1
2.

Work-product disclosures
a.

Judge Strand’s ruling

As to the FDIC-R’s motion to compel production of purported work product,
Judge Strand concluded, as follows:
Work Product Doctrine. FDIC-R argues the
reinsurance information is not protected by the work product
doctrine because the information was created in the ordinary
course of Progressive’s business. I agree. The documents
1

This separate consideration is appropriate, notwithstanding that the FDIC-R did
not so neatly separate its opposition to Progressive’s Objections on the basis of the
protection or privilege at issue.
5

were prepared and distributed to the reinsurance companies
and broker for business purposes. Progressive itself admits
that the documents were provided for case updates pursuant
to the reinsurance agreements, or in response to specific
requests, and included the matter’s history, its present
posture, current activity, assessments of coverage and liability
issues, amounts paid and reserved, and plans for future
handling. Doc No. 75 at 10. Those are all typical business
purposes for the reinsurance industry. Progressive has not met
its burden of showing that these documents were “prepared
or obtained because of the prospect of litigation.” Simon [v.
G.D. Searle & Co.], 816 F.2d [397,] 401 [(8th Cir. 1987)].
Therefore, they are not subject to protection under the work
product doctrine.
Order (docket no. 102), 7.
b.

Arguments of the parties

In its Objections, Progressive argues that the question concerning disclosure of
purported work product is not simply whether Progressive’s communications with its
reinsurers were prepared in the ordinary course of business, as Judge Strand premised in
his Order. Rather, Progressive argues, the question is whether those communications
contain opinion work-product information that pertains specifically to anticipated, and
ultimately filed, coverage litigation with the FDIC-R and/or litigation between the FDICR and the officers and directors. Progressive argues that such protected information
includes information regarding Progressive’s litigation and mediation strategies and
reserve information that Judge Strand has previously held is protected from disclosure.2
2

Progressive also contends that Judge Strand’s Order is clearly erroneous, because
Progressive has not waived protection for specific opinion work-product information
incorporated into the communications with its reinsurers at issue here. Progressive
contends that no waiver occurred, because its disclosures did not substantially increase

6

In response, the FDIC-R argues that Judge Strand’s conclusion that Progressive
created or received the alleged work-product information in the ordinary course of its
business is not clearly erroneous. Indeed, the FDIC-R argues that Progressive admitted
that the documents at issue were ordinary business documents. Furthermore, the FDICR argues, with respect to claims-related communications, insurance companies usually
are required by contract to notify their reinsurers of any claims for which the insurance
companies may seek reinsurance coverage, and are required to provide the following:
(1) a description of the claim; (2) the insurance company’s analysis of whether its policy
provides coverage for its policyholder; and (3) the estimated overall exposure.
In reply, Progressive argues that the law is “clear” that, even though a document
as a whole may have been prepared in the ordinary course of business, material contained
in such a document may still be protected as opinion work product prepared in
anticipation of litigation.
c.

Analysis

As Judge Strand noted, in this diversity case, the court “applies federal law to
work product claims.” PepsiCo, Inc. v. Baird, Kurtz & Dobson, L.L.P., 305 F.3d 813,
817 (8th Cir. 2002) (citing Baker v. General Motors Corp., 209 F.3d 1051, 1053 (8th

the opportunities for potential adversaries, such as the FDIC-R, to obtain that
information, when that information was only disclosed to its reinsurers and a reinsurance
broker (as a conduit to the reinsurers), who do not have interests adverse to Progressive’s,
but have, instead, the same incentives to keep the information confidential. This
“objection” is inapposite, however, because Judge Strand did not find any “waiver” of
work-product protection; rather, he found that Progressive had failed to establish that any
of the documents in question were protected by the work-product doctrine. See Order
(docket no. 102) at 7 (“[The documents] are not subject to protection under the work
product doctrine.”).

7

Cir. 2000) (en banc)). “The work product doctrine was designed to prevent ‘unwarranted
inquiries into the files and mental impressions of an attorney,’ and recognizes that it is
‘essential that a lawyer work with a certain degree of privacy, free from unnecessary
intrusion by opposing parties and their counsel.’” Simon v. G.D. Searle & Co., 816
F.2d 397, 400 (8th Cir. 1987) (quoting Hickman v. Taylor, 329 U.S. 495, 510-11)
(internal citations omitted). Further, “in order to protect work product, the party seeking
protection must show the materials were prepared in anticipation of litigation, i.e.,
because of the prospect of litigation.” PepsiCo, Inc., 305 F.3d at 817 (citing Binks Mfg.
Co. v. National Presto Indus., Inc., 709 F.2d 1109, 1118–19 (7th Cir.1983)).3
Whether documents were prepared in anticipation of litigation or in the ordinary
course of business is a factual determination. Simon, 816 F.2d at 401. The Eighth
Circuit Court of Appeals set out the following test for this factual determination:
[T]he test should be whether, in light of the nature of the
document and the factual situation in the particular case, the
document can fairly be said to have been prepared or obtained
because of the prospect of litigation. But the converse of this
is that even though litigation is already in prospect, there is
no work product immunity for documents prepared in the
3

In PepsiCo, the Eighth Circuit Court of Appeals also observed, “Work product
is not discoverable unless the party seeking discovery has a substantial need for the
materials and cannot obtain the substantial equivalent through other means.” 305 F.3d
at 817 (citing FED. R. CIV. P. 26(b)(3)). The questions of the FDIC-R’s “substantial
need for the materials” and whether the FDIC-R “cannot obtain the substantial equivalent
through other means” (i.e., “hardship”) were not at issue in Judge Strand’s Order,
because he concluded that Progressive failed to meet its burden to show that the
documents in question were prepared or obtained because of the prospect of litigation.
See Order at 5 (citing the same “test” from Simon and explaining that, if the party
asserting protection meets its burden, the burden shifts to the party seeking the materials
to show “substantial need” and “undue hardship”); id. at 7 (finding that Progressive
failed to meet its burden to show that the documents in question were prepared or obtained
in anticipation of litigation).
8

regular course of business rather than for purposes of
litigation.
Simon, 816 F.2d at 401 (quoting 8 C. Wright & A. Miller, Federal Practice and
Procedure § 2024, at 198–99 (1970), with footnotes omitted, and finding that this test
was also consistent with the Advisory Committee Notes to Rule 26(b)(3) of the Federal
Rules of Civil Procedure). As the Eighth Circuit Court of Appeals has also explained,
“Documents are not protected under the work product doctrine . . . merely because the
other party transferred them to their attorney, litigation department, or insurer,” and they
are not protected if they “were assembled in the ordinary course of business or for other
nonlitigation purposes.” Petersen v. Douglas Cnty. Bank & Trust Co., 967 F.2d 1186,
1189 (8th Cir. 1992) (citing Simon, 816 F.2d at 401).4
In a part of its decision in Simon that is particularly apt here, the Eighth Circuit
Court of Appeals rejected a claim of work-product protection for “risk management
documents,” which had been “generated in an attempt to keep track of, control, and
anticipate the costs of Searle’s products liability litigation.” Simon, 816 F.2d at 400.
The court concluded as follows:
Applying this test, we do not believe it can be said that the
risk management documents were prepared for purposes of
litigation. We are no better qualified to evaluate the facts of
this case than the special master and the district court, and we
believe their conclusion that the risk management documents
are in the nature of business planning documents is a
reasonable factual conclusion. The risk management
department was not involved in giving legal advice or in
mapping litigation strategy in any individual case. The
4

Progressive does not argue that the mere selection and compilation of the
documents to be disclosed to reinsurers would reveal mental impressions concerning the
potential litigation, such that they are protected as work product. See Petersen, 967 F.2d
at 1189.
9

aggregate reserve information in the risk management
documents serves numerous business planning functions, but
we cannot see how it enhances the defense of any particular
lawsuit. Searle vigorously argues that its business is health
care, not litigation, but that is not the point. Searle's business
involves litigation, just as it involves accounting, marketing,
advertising, sales, and many other things. A business
corporation may engage in business planning on many fronts,
among them litigation.
Simon, 816 F.2d at 401 (footnote omitted).
Here, I conclude that Judge Strand did not clearly err in rejecting work-product
protection for the documents in question. See Ferguson, 484 F.3d at 1076 (standard of
review). Where the business of Progressive is insurance against risks, and the business
of reinsurers is reinsurance of risk policies, Judge Strand did not clearly err in finding
that the purported work-product documents, involving communications between
Progressive and its reinsurers, were “prepared in the ordinary course of business,” not
“in anticipation of litigation.” Simon, 816 F.2d at 401. First, Judge Strand articulated
the test from Simon for determination of whether documents are subject to work-product
protection. See Order (docket no. 102) at 5 (citing this test from Simon); see also Melton,
948 F. Supp. 2d at 1002 (explaining that “contrary to law” within the meaning of Rule
72(a) (and, hence, § 636(b)(1)(A)) means failure to apply or misapplication of relevant
statutes, case law, or rules of procedure). Furthermore, Progressive admitted that the
documents at issue were “prepared in the ordinary course of business”; the documents at
issue were in the nature of business planning documents; neither Progressive nor the
reinsurers were involved in giving legal advice or in mapping litigation strategy in any
individual case; the communications between Progressive and its reinsurers serve
numerous business functions; and Progressive’s and its reinsurers businesses involved
business planning on many fronts, among them litigation. Simon, 816 F.2d at 401.
10

Indeed, had I decided the issue in the first instance, I would have reached the same
conclusion as Judge Strand.
It appears to me that Progressive’s real objection is not that the documents
generally were not prepared in the ordinary course of business—Progressive concedes
that they were. Rather, it appears to me that Progressive’s real objection is that some
specific documents or some specific contents of those documents were prepared in
anticipation of litigation and, hence, at least those parts of the documents at issue are still
subject to work-product protection. In Simon, the Eighth Circuit Court of Appeals did
recognize that documents that were not themselves prepared in anticipation of litigation
may, nevertheless, be protected to the extent that they “reveal the mental impressions,
thoughts, and conclusions of an attorney in evaluating a legal claim.” 816 F.2d at 401.
On the other hand, the court observed, “The purpose of the work product doctrine—that
of preventing discovery of a lawyer’s mental impressions—is not violated by allowing
discovery of documents that incorporate a lawyer’s thoughts in, at best, . . . an indirect
and diluted manner.” Id. at 402.
Progressive did raise this argument—albeit without any citations to supporting
authority, such as Simon, for it—in its Response To [The FDIC-R’s] Motion To Compel
(docket no. 75), 9-10.5

Progressive conceded that it “does not argue that its

communications with its reinsurers were not generated in the ordinary course of business
or that they are inherently privileged or work product in their entirety.” Id. at 9. Rather,
Progressive argued,
The issue before the Court is the application of the
attorney-client privilege and work-product doctrine to specific
5

In contrast, Progressive cited copious authority in support of its contention that
it did not waive work-product protection, see Progressive’s Response To [The FDICR’s] Motion To Compel (docket no. 75) at 11-12, an issue that Judge Strand ultimately
did not reach in his Order.
11

documents prepared by claims attorneys at ABAIS [its
managing general agent with respect to this and other matters]
primarily for its and Progressive’s internal use. Progressive
provided these documents to its reinsurers as case updates
pursuant to the reinsurance agreements and/or in response to
their requests. These documents include the matter’s history,
its present posture, current activity, assessments of coverage
and liability issues, amounts paid and reserved, and plans for
future handling.
Long before any of these reports were authored, in or
about June 2008, Progressive and ABAIS retained outside
coverage counsel to assist with failed-bank matters. They
retained counsel with respect to the Vantus Bank matter in or
about May 2010. In preparing the reports for the Vantus Bank
matter, and other failed-bank matters, Progressive/ABAIS
claims attorneys incorporated legal advice, counsel, and
analysis provided to Progressive and ABAIS by their outside
counsel, as well as legal advice and analysis regarding the
FDIC’s underlying claim against former bank directors and
officers provided by their defense counsel. This information
is protected by the attorney-client privilege and/or workproduct doctrine. It is only the portions of Progressive’s
communications with its reinsurers reflecting such privileged
and/or work-product information that Progressive properly
has redacted.
Progressive’s Response To [The FDIC-R’s] Motion To Compel (docket no. 75) at 9-10
(footnotes omitted).
In his Order, Judge Strand did not explicitly consider Progressive’s argument for
“piecemeal” application of work-product protection to specific documents or specific
parts of documents that were otherwise prepared in the regular course of business. See
Order (docket no. 102) at 7. Nevertheless, in explicitly holding that Progressive had
failed to meet its burden to show that the documents were subject to work product
12

protection, Judge Strand explicitly relied on Progressive’s statements in the first
paragraph of the quotation, just above, from Progressive’s brief.

See id. (“The

documents were prepared and distributed to the reinsurance companies and broker for
business purposes. Progressive itself admits that the documents were provided for case
updates pursuant to the reinsurance agreements, or in response to specific requests, and
included the matter’s history, its present posture, current activity, assessments of
coverage and liability issues, amounts paid and reserve, and plans for future handling.
Doc No. 75 at 10. Those are all typical business purposes for the reinsurance industry.”).
I cannot find that Judge Strand’s conclusion that Progressive failed to meet its
burden to show that the documents in question were entitled to work-product protection—
including his implicit finding that not even portions of those documents were entitled to
such protection—was clearly erroneous. See Ferguson, 484 F.3d at 1076 (standard of
review). This is so, for three reasons. First, the fact that specific documents or parts of
documents were prepared by ABAIS claims attorneys does not necessarily establish that
they are subject to work-product protection. Cf. Petersen, 967 F.2d at 1189. Second,
preparation of specific documents or parts of documents by claims attorneys at ABAIS
for its and Progressive’s “internal use” does not unambiguously show that such “internal
use” was “in anticipation of litigation,” rather than “in the ordinary course of business,”
where the business of an insurance company and its managing agent is risk management.
Cf. Simon, 816 F.2d at 401 (“A business corporation may engage in business planning
on many fronts, among them litigation.”). Third, Progressive also conceded that the
documents were provided to the reinsurers as case updates pursuant to the reinsurance
agreements and/or in response to their requests—that is, Progressive conceded that the
specific documents or parts of documents were prepared—and would have been prepared
anyway—“in the ordinary course of business.” Indeed, had I considered this issue in the
instance, I also would have concluded that Progressive had failed to meet its burden to
13

show that that even portions of the documents in question were entitled to work-product
protection.
Progressive’s Objections to Judge Strand’s rejection of work-product protections
for the documents in question are overruled.
3.

Attorney-client privilege
a.

Judge Strand’s ruling

Progressive also objects to Judge Strand’s Order as erroneously granting the
FDIC-R’s motion to compel production of purported attorney-client privileged
documents. In his Order, Judge Strand ruled as follows:
Attorney-Client Privilege. FDIC-R argues that even if
Progressive’s reinsurance documents contain attorney-client
communications, any privilege was waived when Progressive
voluntarily disclosed the documents to the reinsurers and
broker. Again, I agree. Progressive waived any applicable
attorney-client privilege when it distributed the
communications to its reinsurers and broker.
While Progressive admits that it voluntarily disclosed
privileged communications to third parties, it relies on the
common interest doctrine to argue that the attorney-client
privilege was nonetheless preserved. Even assuming Iowa
recognizes the common interest doctrine, I find that
Progressive has failed to establish that it applies here. As
noted above, the doctrine applies only when the parties share
a common legal interest. The relationship between
Progressive and its reinsurers and broker is commercial and
financial in nature, not legal. The information Progressive
disclosed was in furtherance of its business relationship with
the reinsurers and broker. The sole purpose of disclosure was
to obtain or maintain reinsurance policies to cover
Progressive’s insurance risks. That is, of course, the
commercial nature of the reinsurance industry.
14

Progressive has not shown that the privileged
information contained in the documents at issue was disclosed
in order to build a legal defense or strategy for litigation.
While Progressive contends that the reinsurers’ interests are
aligned with its own because the reinsurers and Progressive
would face liability for loss if Progressive is ultimately
ordered to pay proceeds under the Vantus Policy, that fact is
the basis of the reinsurance industry and, indeed, the sole
purpose of reinsurance. The unique circumstances of the
reinsurance business do not automatically give rise to a
common legal interest.
In this case, Progressive has not shown that its
reinsurers are actively participating in Progressive’s litigation
and legal defense, or that they have any obligation to do so.
There is no evidence establishing a joint strategy or legal
enterprise, which is central to the common interest doctrine.
The argument that “if Progressive loses, so do its reinsurers”
does not come close to establishing that the common interest
doctrine applies (assuming, again, that Iowa law even
recognizes that doctrine).
Any disclosure by
privileged communications
operated as a waiver of
Progressive cannot now
communications.

Progressive of attorney-client
to its reinsurers and/or broker
the privilege under Iowa law.
claim privilege over those

Order (docket no. 102), 7-8.
b.

Arguments of the parties

In support of its Objections to this part of Judge Strand’s Order, Progressive argues
Judge Strand’s conclusion that the “common interest” exception does not apply in the
circumstances of this case is clearly erroneous and contrary to law. Progressive argues
that there is no waiver of the attorney-client privilege where, as here, there is a “common
interest” among the parties with whom the documents are shared. Progressive concedes
15

that no Iowa courts appear to have addressed the issue of the “common interest” exception
to waiver, but Progressive argues that courts around the country have concluded that the
“common interest” exception applies to communications between insurers and reinsurers,
at least when, as here, their interests regarding the availability of coverage under a policy
are aligned. Progressive argues that the facts here show both the existence of a common
legal interest and communications made in the course of and in furtherance of that
interest.

The common legal interest on which Progressive relies is the express

authorization in the reinsurance agreements for the reinsurers to participate with
Progressive in the defense of any claim, loss, or legal proceeding likely to involve the
reinsurer. Progressive then argues that the documents in question where provided in
direct furtherance of the common legal enterprise between Progressive and the reinsurers.
In its Opposition, the FDIC-R argues that Judge Strand properly rejected
Progressive’s argument that the “common interest” exception prevented a waiver,
because he found that, even if the exception was recognized under Iowa law, Progressive
failed to establish any common legal, as opposed to commercial or financial, interest with
its broker and reinsurers. The FDIC-R also argues that, contrary to Progressive’s
assertions, courts around the country have repeatedly rejected assertions of privilege
where documents have been shared with reinsurers. The FDIC-R asserts that Progressive
does not dispute that the documents at issue were voluntarily disclosed to multiple third
parties, which, alone, is enough to support Judge Strand’s finding of waiver. The FDICR argues that, even if the “common interest” exception applied, the exception only
protects privileged documents—it is not an independent privilege, but an exception to
waiver when privileged documents are exchanged between parties with the required
“common interest.” The FDIC-R argues that Progressive failed to show either the
required “common legal interest,” where the “common interest” was commercial or
financial, not legal, or that the documents were exchanged in furtherance of that
16

“common legal interest.”

The FDIC-R argues that merely having the authority to

participate in Progressive’s defense of a claim does not establish that the reinsurers have
the required “common legal interest.” The FDIC-R also argues that the documents were
exchanged because of contractual obligations, not because of a “common legal interest.”6
c.

Analysis

Judge Strand was correct that, in a diversity case, such as this, the determination
of whether attorney-client privilege applies is governed by state law. See FED. R. EVID.
501; Union Cnty., Iowa v. Piper Jaffray & Co., Inc., 525 F.3d 643, 646 (8th Cir. 2008)
(“Because this is a diversity case, the determination of whether attorney-client privilege
applies is governed by state law.”). Progressive concedes that Judge Strand’s conclusion
that Iowa courts have never expressly recognized the “common interest” exception as an
exception to waiver of the attorney-client privilege is not contrary to law. See Ferguson,
484 F.3d at 1076 (standard of review); see also Melton, 948 F. Supp. 2d at 1002
(explaining that “contrary to law” within the meaning of Rule 72(a) (and, hence,
§ 636(b)(1)(A)) means failure to apply or misapplication of relevant statutes, case law,
or rules of procedure). Progressive appears to argue that Judge Strand should,
nevertheless, have found the “common interest” exception applicable here and that his
conclusion that it was not was clearly erroneous. I find no such clear error.
First, Judge Strand did consider, in the alternative, whether Progressive had
established that the “common interest” exception is applicable, if it were recognized
under Iowa law. Second, Progressive does not object to Judge Strand’s legal formulation
of the requirements to establish the “common interest” exception, see Order at 6, as
contrary to law. See Ferguson, 484 F.3d at 1076 (standard of review); see also Melton,

6

Progressive’s Reply is devoted entirely to supporting its Objections to the “work
product” part of Judge Strand’s Order.
17

948 F. Supp. 2d at 1002 (explaining that “contrary to law” within the meaning of Rule
72(a) (and, hence, § 636(b)(1)(A)) means failure to apply or misapplication of relevant
statutes, case law, or rules of procedure). I agree that Judge Strand correctly described
the legal requirements for application of the exception.
More specifically, in a case on which Judge Strand relied, involving an assertion
of an exception for communications between an insurer and a reinsurer, the United States
District Court for the Southern District of New York explained the exception as follows:
“A ‘common interest’ doctrine, erroneously called
‘common interest privilege’ or ‘joint defense privilege,’ is an
exception to the general rule that voluntary disclosure of
confidential, privileged material to a third party waives any
applicable privilege,” Sokol v. Wyeth, Inc., No. 07 Civ.
8442(SHS)(KNF), 2008 WL 3166662, *5 (S.D.N.Y. Aug. 4,
2008) (citation omitted). “It serves to protect the
confidentiality of communications passing from one party to
the attorney for another party where a joint defense effort or
strategy has been decided upon and undertaken by the parties
and their respective counsel.” United States v. Schwimmer,
892 F.2d 237, 243 (2d Cir.1989). It exists “to protect the free
flow of information from client to attorney ... whenever
multiple clients share a common interest about a legal
matter.” Id. at 243–44. The doctrine “is not an independent
source of privilege or confidentiality” so that “[i]f a
communication is not protected by the attorney-client
privilege or the attorney work-product doctrine, the common
interest doctrine does not apply.” Sokol, 2008 WL 3166662,
at *5 (citations omitted); see also HSH Nordbank AG New
York Branch v. Swerdlow, 259 F.R.D. 64, 71
(S.D.N.Y.2009) (“HSH Nordbank”).
Obtaining the protections of the common interest
doctrine requires a two-part showing. First, the parties
exchanging otherwise privileged information must establish
“a common legal, rather than commercial, interest.” Sokol,
18

2008 WL 3166662, at *5. “The key consideration is that the
nature of the interest be identical, not similar, and be legal,
not solely commercial.” North River Ins. Co. v. Columbia
Cas. Co., No. 90 Civ. 2518(MJL)(JCF), 1995 WL 5792 at
*3 (S.D.N.Y. Jan. 5, 1995) (citation omitted) (“North
River”). For courts to find such a common legal interest, the
parties must have come to an agreement, “though not
necessarily in writing, embodying a cooperative and common
enterprise towards an identical legal strategy.” Lugosch v.
Congel, 219 F.R.D. 220, 237 (N.D.N.Y.2003); see, e.g.,
Schwimmer, 892 F.2d at 243 (examining whether “a joint
defense effort or strategy has been decided upon and
undertaken by the parties and their respective counsel.”);
HSH Nordbank, 259 F.R.D. at 72. Courts may look to
whether “multiple persons are represented by the same
attorney” or any other evidence to demonstrate the existence
of “coordinated ... legal efforts.” Bank Brussels Lambert v.
Credit Lyonnais (Suisse) S.A., 160 F.R.D. 437, 446, 448
(S.D.N.Y.1995) (quotation omitted).
Second, the parties must establish that any exchange of
privileged information was “made in the course of
formulating a common legal strategy [,]” and that the parties
understood that the communication would be in furtherance
of the shared legal interest. Sokol, 2008 WL 3166662, at *5,
7 (“[T]he vital element in establishing that the attorney-client
privilege applies is that the communication is made in
confidence for the purposes of obtaining legal advice from the
attorney.”). One fact courts often consider in assessing this
factor is whether an attorney for either party participated in
the exchange of privileged information. See, e.g., HSH
Nordbank, 259 F.R.D. at 72 (“[C]ounsel for one of the parties
was actively engaged in the communications at issue. Thus,
this is not a situation where the various non party lenders and
Nordbank discussed subject matter previously discussed with
counsel and now seek to assert privilege for that reason
19

alone.”); cf. Walsh v. Northrop Grumman Corp., 165 F.R.D.
16, 18 (E.D.N.Y.1996) (“Salomon wants to protect
confidences it shared with its own attorneys and then shared,
not with Northrop's attorneys, but with Northrop. To extend
the common interest doctrine that far would mean that a party
could shield from disclosure any discussions it had with
another person about a matter of common interest simply by
discussing that matter first with its attorneys.”) (citations
omitted).
Fireman’s Fund Ins. Co. v. Great Am. Ins. Co. of New York, 284 F.R.D. 132, 139-40
(S.D.N.Y. 2012); see also Order at 6 (relying, in part, on Fireman’s Fund Ins. Co., 284
F.R.D. at 139-40).
The court in Fireman’s Fund Insurance rejected a categorical rule that insurers
and reinsurers share a joint legal interest based on a reinsurer’s obligations to cover the
insurer’s payment obligations. Id. at 140. The court in Fireman’s Fund Insurance
rejected such an argument, because, unlike the relationship between an insurer and an
insured, there is no “duty to defend” between a reinsurer and an insurer, and expressly
concluded that “‘a common interest cannot be assumed merely on the basis of the status
of the parties.’” Id. (quoting North River Ins. Co. v. Columbia Cas. Co., No. 90 Civ.
2518(MJL)(JCF), 1995 WL 5792, *4 (S.D.N.Y. Jan. 5, 1995). What is required is
evidence of an agreement (although not necessarily a written agreement) between an
insurer and its reinsurer that establishes a “‘cooperative and common enterprise towards
an identical legal strategy.’” Id. at 141 (quoting Lugosch v. Congel, 219 F.R.D. 220,
237 (N.D.N.Y. 2003)). Not only did the court in Fireman’s Fund Insurance find no
common legal interest sufficient to support application of the “common interest”
exception, it also found no sufficient evidence that the purportedly privileged materials
were exchanged “‘in the course of formulating a common legal strategy’ or ‘for the
purpose of obtaining legal advice from’” the reinsurer. Id. The parties in that case had
20

not pointed to the involvement of attorneys in the exchange of the documents, which
“might have supported such a finding,” nor had the parties pointed to evidence of a “legal
necessity of exchanging otherwise protected information.” Id.
Here, Judge Strand, likewise, concluded that Progressive and its reinsurers do not
have a common legal interest merely because the reinsurers may have an obligation to
pay Progressive’s losses; rather the relationship between Progressive and its reinsurers
and reinsurance broker is commercial and financial, id., and that finding is not clearly
erroneous. Judge Strand also did not clearly err in concluding that Progressive also failed
to establish that an agreement between it and its reinsurers established a “‘cooperative
and common enterprise towards an identical legal strategy.’” Id. at 141 (quoting Lugosch
v. Congel, 219 F.R.D. 220, 237 (N.D.N.Y. 2003)). A contractual authorization for the
reinsurers to participate in litigation with Progressive falls well short of evidence
satisfying that requirement. As Judge Strand found, “There is no evidence establishing
a joint legal strategy or legal enterprise, which is central to the common interest
doctrine,” Order at 8, and I find no clear error in that finding. I also find no clear error
in Judge Strand’s conclusion, like the conclusion in Fireman’s Fund Insurance, 284
F.R.D. at 141, that Progressive failed to establish that any exchange of the documents in
question was in furtherance of a common legal interest, or was a matter of legal necessity,
rather than in furtherance of Progressive’s commercial or financial relationship with its
reinsurers, even if some of the documents were purportedly prepared by ABAIS’s claims
attorneys.
In short, I do not find any part of Judge Strand’s disposition of the attorney-client
privilege issue that is contrary to law or clearly erroneous. See Ferguson, 484 F.3d at
1076 (standard of review); see also Melton, 948 F. Supp. 2d at 1002 (meaning of
“contrary to law”). Again, had I considered this issue in the first instance, I would have

21

decided it the same way. Progressive’s Objections to this part of Judge Strand’s Order
are overruled.
Thus, Progressive’s Objections to Judge Strand’s Order are overruled in their
entirety.

C.

Everest’s Objections

I turn, next, to non-party Everest’s September 5, 2014, Objections (docket no.
122). In those Objections, Everest challenges Judge Strand’s conclusion that the FDICR is entitled to obtain the documents described in its subpoena to Everest, as narrowed
by the FDIC-R in communications between counsel.
1.

The challenged part of the ruling

The challenged part of Judge Strand’s Order is the following:
Everest complains about both the relevance of the
information sought by FDIC-R’s subpoena and the alleged
burden that compliance would impose. It also invokes the
same arguments, discussed and rejected above, that
Progressive has raised as to the preservation of attorney-client
privilege and work product protection when documents are
shared between an insurer and reinsurer.
Everest’s arguments as to relevance are not wellfounded. Everest adopts Progressive’s arguments concerning
the scope of the March 10, 2014, order. That order has
nothing to do with Everest. Instead, as discussed above, the
order simply compelled Progressive to respond to FDIC-R’s
document requests 12 and 23. The fact that those requests
were of a limited scope does not somehow control the scope
of all other discovery. While FDIC-R is not entitled to
demand responses to those requests that exceed the scope of
their express terms, FDIC-R is free to make other requests
that go beyond that scope.
22

Nor does the fact that Everest was not a reinsurer of
the Vantus Policy automatically place Everest off-limits for
discovery in this case. Generally, a party may obtain
discovery regarding any nonprivileged matter that is relevant
to any claim or defense. See Fed. R. Civ. P. 26(b)(1). The
scope of permissible discovery is broader than the scope of
admissibility. See, e.g., Hofer v. Mack Trucks, Inc., 981 F.2d
377, 380 (8th Cir. 1992). FDIC-R has offered a plausible
explanation as to how Progressive’s communications with
reinsurers concerning its standard form policy might be
relevant to the interpretation and construction of the policy
provisions at issue in this case. Because it is undisputed that
Everest has reinsured Progressive with regard to other
policies using the same form, it is not obvious that Everest
cannot possibly possess relevant information.
As for Everest’s complaints about the effort and
expense that would be required in order to respond to the
subpoena, the Federal Rules of Civil Procedure protect
nonparties from being subjected to “undue burden or
expense” in responding to a subpoena. See Federal Rule of
Civil Procedure 45(d). Indeed, federal courts are particularly
mindful of Rule 45's undue burden and expense limitations.
Miscellaneous Docket Matter No. 1 v. Miscellaneous Docket
Matter No. 2, 197 F.3d 922, 927 (8th Cir. 1999); accord
American Broadcasting Co. v. Aereo, Inc., No. 13-MC-0059,
2013 WL 5276124, at *7 (N.D. Iowa Sept. 17, 2013);
Precourt v. Fairbank Reconstruction Corp., 280 F.R.D. 462,
467 (D.S.D. 2011). Here, while the original scope of the
subpoena was quite broad, I find that FDIC-R later took
reasonable steps to narrow that scope and eliminate any undue
burden. Everest, by contrast, repeatedly took the position that
it would conduct no search, and would produce no documents,
in response to the subpoena. This was a mistake. Everest has
had the subpoena for six months. During that time, it could
have taken steps to retrieve and produce at least some of the
23

requested information. Instead, it simply rejected each
attempt by FDIC-R to negotiate a resolution. Now, Everest
will have to comply on an expedited basis.
I find that FDIC-R is entitled to obtain the documents
described in the subpoena, as narrowed by FDIC-R in
communications between counsel. See Doc. No. 77-5 at 2-4
(Exhibit C to FDIC-R’s motion). While this will no doubt
impose some burden on Everest, I find Everest has failed to
demonstrate that the burden will be undue under the
circumstances.
Order at 10-12 (footnote omitted).
2.

Arguments of the parties

Everest asserts that this part of Judge Strand’s Order is contrary to law, because
it fails to take into account the limitation on duplicative discovery in Rule 26(a)(2)(C).
Everest explains that, in communications between counsel, the FDIC-R’s counsel agreed
that the FDIC-R was “not seeking documents beyond those ordered to be produced by
Progressive.” Everest also explains that the FDIC-R had argued that the material sought
from Everest was not duplicative of documents already produced by Progressive, because
Progressive’s disclosures had been “deficient,” but Judge Strand concluded in his Order
that Progressive’s production was only deficient as to redaction of the documents on the
basis of attorney-client privilege and/or work product protection. Everest argues that
duplicative production cannot be based on a finding that the production might contain
additional relevant material.

Indeed, Everest contends that the Order fails even to

consider Everest’s argument that the discovery demanded in the subpoena is duplicative
of discovery that the FDIC-R has already obtained from Progressive and that is otherwise
available from the reinsurers who actually reinsure the Vantus Policy. Instead, Everest
argues that the Order considered only “relevance” under Rule 26(b)(1). Everest also
argues that, even if there is no duplication, there is no question that the FDIC-R could
24

have obtained the discovery demanded in its subpoena to Everest by way of document
requests to Progressive, but the FDIC-R never tried to do so.
Everest also argues that Judge Strand’s Order is contrary to law, because it fails
to consider the heightened standard for relevance applicable to discovery from nonparties, which it argues is different from the Rule 26(b)(1) standard that applies to
discovery from parties. Everest cites cases that it argues establish that discovery from
non-parties requires a greater showing of “necessity,” and more sensitivity to
inconvenience and harassment of the entity from whom the discovery is sought. Everest
argues that, under this heightened standard, Judge Strand should have found that the
discovery sought by the subpoena imposed an undue burden.
In response, the FDIC-R argues that mere overlap with documents obtained
elsewhere is not the standard for barring discovery under Rule 26(b)(2)(C); rather, the
question is whether the discovery sought is unreasonably cumulative or duplicative, or
can be obtained from some other source that is more convenient, less burdensome, or
less expensive. Thus, the FDIC-R contends that it is not enough to argue that the
materials sought can be obtained from someone else. Indeed, the FDIC-R argues that
courts have recognized that differences between documents that should be identical, but
that were obtained from different sources, may be critical evidence. The FDIC-R also
argues that the Order is factually correct, because the FDIC-R is not simply seeking
discovery from Everest that is entirely duplicative of discovery sought from Progressive.
The FDIC-R identifies the following as examples of non-duplicative documents sought
from Everest: (1) documents exchanged between Everest and ABAIS, American Bankers
Mutual Insurance, Ltd., (ABMI), which is the parent company of ABAIS, or Guy
Carpenter, a reinsurance broker; (2) documents reflecting Everest’s own audits of claims;
and (3) documents from Everest’s claim files for claims by the FDIC-R reflecting
Progressive’s oral communications regarding coverage. The FDIC-R also argues that
25

Everest has mischaracterized Judge Strand’s Order, listing the ways in which it had
narrowed the documents requested from Everest in its communications with Everest. The
FDIC-R explains that Everest takes out of context the quote from one of its counsel’s
communications, on which Everest particularly relies, because that communication, as a
whole, reflects that the discovery requests to Everest are not duplicative of Progressive’s
production. The FDIC-R also argues that the limitations that Judge Strand placed on
discovery from Progressive expressly did not preclude additional or broader discovery
from other entities. Finally, the FDIC-R argues that Everest may be the only source of
some materials that were “lost” when Progressive sold its former Professional Liability
Group (PLG) to ABMI in or about 2010, which ABMI then reformulated as its subsidiary,
ABAIS, because there was no centralized transfer of email from Progressive to ABAIS,
even though many of Progressive’s former employees in the PLG moved to ABAIS.
The FDIC-R also disputes Everest’s contention that Judge Strand applied the
wrong “relevance” standard to discovery from non-parties. The FDIC-R argues, first,
that Everest cannot raise this contention now, because it failed to do so before Judge
Strand.

Just as importantly, the FDIC-R argues, Judge Strand applied the correct

“relevance” standard, as set out in Rule 26(b)(1), which applies to all parties or entities
from whom discovery is sought. In the alternative, the FDIC-R points out that Judge
Strand did take note of the fact that Everest is a non-party, that he recited his awareness
of the “undue burden or expense” limitation in Rule 45, and that his “relevance” findings
satisfy any standard.
In reply, Everest argues that the FDIC-R has mischaracterized its Objections,
because Everest is actually arguing that Judge Strand’s Order requires discovery that is
entirely duplicative of the discovery that Progressive already provided to the FDIC-R,
not that the FDIC-R seeks discovery that is entirely duplicative of discovery that the
FDIC-R pursued from Progressive. Everest explains its objection to be that, because
26

Judge Strand limited the documents that Everest is required to produce to those documents
responsive to the subpoena, as “modified to reflect the limitations to which the FDIC-R
ha[d] already agreed,” Order at 13, and because the FDIC-R agreed in a July 2, 2014,
e-mail, identified in the Order at 2-4, that it was not seeking any documents from Everest
“beyond those ordered to be produced by Progressive,” the discovery required under the
Order modifying the subpoena is “entirely duplicative” of the discovery that Progressive
has already provided to the FDIC-R. Everest also argues that, because the FDIC-R
agreed not to seek documents from Everest “beyond the documents ordered to be
produced by Progressive,” the Order requires Everest to perform a file-by-file search for
documents that Progressive has already produced to the FDIC-R and, thus, the Order is
contrary to Rule 26(b)(2)(C). Everest also argues that the FDIC-R is wrong that the
“documents ordered to be produced by Progressive” identified in the Order include
reinsurance communications that Progressive was ordered to produce in any action, not
just in this action.
3.

Analysis

Judge Strand drew the standards for “relevance” and the “scope” of discovery
from Rule 26(b) and Hofer v. Mack Trucks, Inc., 981 F.2d 377 (8th Cir. 1992). Rule
26(b)(1) provides, as follows:
(1) Scope in General. Unless otherwise limited by court
order, the scope of discovery is as follows: Parties may
obtain discovery regarding any nonprivileged matter that is
relevant to any party's claim or defense—including the
existence, description, nature, custody, condition, and
location of any documents or other tangible things and the
identity and location of persons who know of any discoverable
matter. For good cause, the court may order discovery of any
matter relevant to the subject matter involved in the action.
Relevant information need not be admissible at the trial if the
discovery appears reasonably calculated to lead to the
27

discovery of admissible evidence. All discovery is subject to
the limitations imposed by Rule 26(b)(2)(C).
FED. R. CIV. P. 26(b)(1). The cited portion of Rule 26(b), which states limitations on
the frequency and extent of discovery, provides as follows:
(C) When Required. On motion or on its own, the court
must limit the frequency or extent of discovery otherwise
allowed by these rules or by local rule if it determines that:
(i) the discovery sought is unreasonably cumulative or
duplicative, or can be obtained from some other source
that is more convenient, less burdensome, or less
expensive;
(ii) the party seeking discovery has had ample
opportunity to obtain the information by discovery in
the action; or
(iii) the burden or expense of the proposed discovery
outweighs its likely benefit, considering the needs of
the case, the amount in controversy, the parties'
resources, the importance of the issues at stake in the
action, and the importance of the discovery in
resolving the issues.
FED. R. CIV. P. 26(b)(2). Nothing in the language of Rule 26 or the Advisory Committee
Notes suggests that different standards of relevance or limitations on the frequency and
extent of discovery are applicable to non-parties than are applicable to parties to the
litigation.
Thus, as the Eighth Circuit Court of Appeals explained in Hofer,
Rule 26(b) of the Federal Rules of Civil Procedure is
widely recognized as a discovery rule which is liberal in scope
and interpretation, extending to those matters which are
relevant and reasonably calculated to lead to the discovery of
admissible evidence. Kramer v. Boeing Co., 126 F.R.D. 690,
692 (D.Minn.1989) (and cases cited therein). While the
28

standard of relevance in the context of discovery is broader
than in the context of admissibility (Rule 26(b) clearly states
that inadmissibility is no grounds for objection to discovery),
Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 98 S.Ct.
2380, 57 L.Ed.2d 253 (1978), Culligan v. Yamaha Motor
Corp., USA, 110 F.R.D. 122 (S.D.N.Y.1986), this often
intoned legal tenet should not be misapplied so as to allow
fishing expeditions in discovery. Some threshold showing of
relevance must be made before parties are required to open
wide the doors of discovery and to produce a variety of
information which does not reasonably bear upon the issues
in the case.
Hofer, 981 F.2d at 380. Like Rule 26, Hofer does not recognize standards or limitations
on relevance or the scope of discovery from a non-party separate or different from those
for discovery from a party to the litigation.
Judge Strand also recognized, however, that Rule 45, which permits subpoenas
for documents from non-parties, requires “[a] party or attorney responsible for issuing
and serving a subpoena must take reasonable steps to avoid imposing undue burden or
expense on a person subject to the subpoena.” FED. R. CIV. P. 45(d)(1). The Advisory
Committee Notes to the 1991 amendment of Rule 45 explain, “Paragraph (d)(1) extends
to non-parties the duty imposed on parties by the last paragraph of Rule 34(b), which was
added in 1980.” Id., Advisory Committee Notes to 1991 Amendments. Thus, this rule
also does not impose a different standard for discovery of documents from non-parties
than from parties, simply a separate recitation of the standard.
I do not find Judge Strand’s reliance on these standards to determine the relevance
or the scope of discovery from a non-party to be contrary to law. See Ferguson, 484
F.3d at 1076 (standard of review); see also Melton, 948 F. Supp. 2d at 1002 (meaning
of “contrary to law”).

29

Nevertheless, the Eighth Circuit Court of Appeals has hinted that the need for and
the burden of discovery from a non-party should be taken into consideration, when a
party may, instead, be able to obtain discovery directly from another party to the
litigation. See Government of Ghana v. ProEnergy Servs., L.L.C., 677 F.3d 340, 345
& n.5 (8th Cir. 2012). That said, Judge Strand was clearly aware that Everest was a
non-party to this litigation, and he did consider the burdens of the discovery on Everest.
The thrust of Everest’s Objections appears to be that, in his Order, Judge Strand
did not recognize that the discovery he was ordering from Everest is duplicative of the
discovery that he was or had ordered from Progressive. Everest contends that the
duplicativeness of the discovery is apparent from the FDIC-R’s counsel’s representations
about the limitations on discovery from Everest in communications to Everest, which
Judge Strand specifically incorporated into his Order. Yet, Judge Strand specifically
identified the communications of the FDIC-R’s counsel that narrowed the scope of what
Everest was compelled to produce. See Order at 12 (citing FDIC-R’s Motion To Compel
Everest Reinsurance Company’s Compliance With Subpoena, Exhibit C (docket no. 775) at 2-4). That citation is to an e-mail from the FDIC-R’s counsel that cogently explains
the comment of the FDIC-R’s counsel on which Everest relies and why the FDIC-R’s
request to Everest is not duplicative or cumulative of discovery already received from
Progressive. Thus, not only do I conclude that Judge Strand did not clearly err by
ordering discovery from Everest that was so duplicative or cumulative or so readily
available from Progressive as to be barred by Rule 26(b)(2), see Ferguson, 484 F.3d at
1076 (standard of review), I entirely agree with his order compelling such discovery.
Everest’s Objections to Judge Strand’s Order are overruled.
III.

CONCLUSION

Upon the foregoing,
30

1.

Plaintiff Progressive’s September 4, 2014, Objections (docket no. 106) to

Judge Strand’s August 22, 2014, Order (docket no. 102) are overruled;
2.

Non-party Everest’s September 5, 2014, Objections (docket no. 122) to

Judge Strand’s August 22, 2014, Order (docket no. 102) are overruled; and
3.

Judge Strand’s August 22, 2014, Order (docket no. 102) is affirmed.

IT IS SO ORDERED.
DATED this 3rd day of October, 2014.

______________________________________
MARK W. BENNETT
U.S. DISTRICT COURT JUDGE
NORTHERN DISTRICT OF IOWA

31