Sheppard v. Liberty Mutual Insurance Company et al
ORDERED that Plaintiff's 175 Motion to Quash Subpoena and Notice of Records Deposition is GRANTED IN PART to the extent that the subpoena is modified as outlined above. FURTHER ORDERED that Plaintiff's 264 Motion to Quash Subpoena and Notice of Records Deposition and Motion for Protective Order is GRANTED in full given that this subpoena seeks no settlement documents. FURTHER ORDER that Plaintiff's 189 Motion to Overrule Rile Power, Inc.'s Objections and Compel Meani ngful Responses to Plaintiff's Discovery Sanctions is GRANTED IN PART to the extent that the Court orders Riley to respond to plaintiff's discovery requests related to any facility at which Sheppard worked and at which Riley Power may have had boilers. Signed by Magistrate Judge Daniel E. Knowles, III on 1/23/2017. (cms)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
JESSE FRANK SHEPPARD
LIBERTY MUTUAL INSURANCE COMPANY, ET AL.
SECTION "R" (3)
On January 4, 2017, three motions came on for oral hearing before the undersigned.
Present were Gerolyn Roussel on behalf of plaintiff and Susan Kohn, James Guidry, Jennifer
Adams, John Hainkel, and David Stein on behalf of various defendants. After the oral hearing,
the Court took the motions under advisement. Having reviewed the pleadings and the case law,
the Court rules as follows.
The complaint alleges as follows. On February 11, 2016, plaintiff filed his Petition for
Damages in the Civil District Court for the Parish of Orleans alleging the defendants, which
plaintiff collectively refers to as the “asbestos companies,” caused or contributed to his
development of asbestos-related lung cancer. In particular, plaintiff claims that from
approximately 1967 through 1992 during his employment “in various positions by and on the
premises of Freeport‘s Port Sulphur facility, Grand Isle facility, Garden Island Bay facility,
Caminada facility, as well as various drilling rigs,” he was exposed on a “daily basis” to “asbestos and
asbestos-containing products manufactured, distributed, and sold by the ‘asbestos companies.’” The
alleged years of asbestos-exposure are extended to 1994 in the following paragraph. All defendants are
alleged to be “jointly, severally, and in solido liable” to plaintiff.
Defendants removed the case to this Court on March 22, 2016 on the basis that this Court
possesses original jurisdiction under the Outer Continental Shelf Lands Act (“OCSLA”).
The Motions to Quash
The Parties’ Arguments
Two of the motions before the Court are near-identical motions:
Plaintiff’s Motion to
Quash Subpoena and Notice of Records Deposition [Doc. #175] and Plaintiff’s Motion to Quash
Subpoena and Notice of Records Deposition and Motion for Protective Order [Doc. #264]. Both
motions present substantially the same arguments and will be combined for purposes of this Order.
On December 15, 2016, counsel for The McCarty Corporation (“McCarty”) issued a Notice
of Records Deposition and Subpoena to Timothy J. Young of The Young Firm, which seeks
production of any documents or information provided to any bankruptcy trusts as well as any and
all settlement documents and checks reflecting payments made to Jesse Frank Sheppard by any
The Young Firm represented Sheppard in an earlier asbestosis suit that was dismissed.
Current counsel represents Sheppard on a claim based on his diagnosis with cancer. Citing case
law from other circuits, Sheppard contends that courts have held that settlement documents,
including statements of exposure in settlement releases, are not discoverable. Sheppard argues
that allowing such discovery would deter settlement in asbestos litigation. Sheppard notes that in
Davis v. Johns-Manville Products, 1990 WL 162844, *1 (E.D. La. October 16, 1990), the court
held that the disclosure of settlements would not lead to the discovery of admissible evidence
because such information would not prove liability, would not influence the amount of
contribution to which a defendant may be entitled, and would not result in a reduction of a final
judgment against the defendant.
Sheppard asks the Court to quash the notice of deposition to Young and find that the
information sought is neither relevant nor proportionate to the needs of the case.
On December 22, 2016, counsel for General Electric Company (“GE”) issued a Notice of
Records Deposition and Subpoena to Malissa Antonucci, Manville Personal Injury Settlement
Trust, which seeks production of (Topic Nos.) (3) any and all claims made to the Manville
Personal Injury Settlement Trust by or on behalf of Jesse Frank Sheppard; (4) any and all claims
documents referencing any claim(s) made to the Manville Personal Injury Settlement Trust by or
on behalf of Jesse Frank Sheppard; and (5) any and all sworn statements, affidavits, and/or
depositions given by or on behalf of Jesse Frank Sheppard. Sheppard seeks to quash the foregoing
topic numbers in the subpoena for the same reasons that he seeks to quash the subpoena
propounded on Young.
McCarty 1 notes that Sheppard did not sue it in the earlier litigation, Aarons v. Phillips 66
Company, in which Young represented Sheppard.
During his deposition, counsel showed
Sheppard an “Affidavit of Exposure” produced to counsel for Chevron by Young in the earlier
litigation. Sheppard acknowledged the document and his signature. McCarty seeks to discover
whether Sheppard filed other claims with other bankruptcy trusts. McCarty contends that the
information is necessary to demonstrate the fault of other parties at trial.
For all intents and purposes, McCarty also refers to GE when the Court discusses
McCarty’s arguments. Any discrete argument advanced by GE will be outlined below.
McCarty argues that the information is relevant to causation and setoffs. It notes that
several states – but not Louisiana – have enacted litigation to reduce the opportunity to suppress
evidence to analyze causation and to determine liability for exposure in asbestos civil tort actions.
McCarty argues that Sheppard’s claims are subject to Louisiana’s pre-comparative fault law,
which means that all non-settling defendants are entitled to a credit for the virile share of settled
entities if the settled entities are proved to be at fault at trial.
McCarty further contends that the settlement agreements are discoverable to establish
whether Sheppard reserved or waived any rights with respect to potential recoveries from the
released parties. McCarty argues that any assertions regarding a plaintiff’s alleged exposure to the
products of a bankrupt entity are considered admissions against their own interests.
Citing the case law relied on by Sheppard, McCarty argues that all of the opinions are
inapposite because the courts only held that a settlement agreement was inadmissible – not nondiscoverable – to prove liability, and/or the amount of the settlement is not discoverable.
While GE advances the same arguments to this Court, GE – as noted – propounded its
subpoena on a different entity, the Johns Manville Trust. GE contends that there is evidence that
Sheppard submitted a claim to the Manville Trust and received compensation for exposure to
asbestos, the same asbestos alleged in this lawsuit. GE notes that to submit a claim, a claimant
must sign a proof of claim form in which he certifies that all representations as to exposure to
asbestos by Johns-Manville products are true and accurate. GE thus propounded a notice of
records deposition and subpoena on the Trust to obtain information concerning Sheppard’s claim,
evidence that Sheppard himself criticizes GE for failing to attach to its motion for partial summary
Law and Analysis
Federal and state courts have routinely held that claims submitted to asbestos bankruptcy
trusts are discoverable. See Willis v. Buffalo Pumps, Inc., No. 12cv744, 2014 WL 2458247 (C.D.
Cal. June 2, 2014); Nat’l Union Fire Ins. Co. v. Porter Hayden Co., 2012 WL 628493 (D. Md.
Feb. 24, 2012); Ferguson v. Lorillard Tobacco Co. Inc., 2011 WL 5903453 (E.D. Pa. Nov. 22,
2011); Shepherd v. Pneumo-Abex, L.L.C., 2010 WL 3431633 (E.D. Pa. Aug.30, 2010); In re
Asbestos Prods. Liab. Litig. (No. VI), 2009 WL 6869437 (E.D. Pa. Sept.18, 2009). However, the
courts have also recognized a distinction between claim submissions and settlement offers or other
documents received from the bankruptcy trusts. Courts have generally found that documents
provided from the trusts to plaintiffs regarding offers of compromise or settlement amounts are
not discoverable. See Willis, 2014 WL 2458247, at *2; Asbestos Prods. Liab. Lit., 2009 WL
6869437, at *1 (compelling the plaintiffs to produce claim forms and other documents submitted
to bankruptcy trusts, but allowing the plaintiffs to withhold documents that contained “specific
instances of offers of compromise, as opposed to factual assertions of economic loss.”); Shepherd,
2010 WL 3431633, at *2 (granting the defendants’ request for bankruptcy trust claims submitted
by the plaintiff but allowing the redaction of any reference to offers of compromise or ultimate
settlement amounts); Nat’l Union Fire Ins. Co., 2012 WL 628493, at *4 (denying motion to quash
subpoenas to bankruptcy trusts where the subpoenaed information did not include settlement
figures or evidence of negotiations or compromise); Ferguson, 2011 WL 5903453 at *1 (ordering
the plaintiff to respond to discovery seeking claims submitted to bankruptcy trusts, but allowing
the plaintiff to redact references to offers of compromise or settlement amounts).
In addition, at least one court has reasoned:
[W]hile the proofs of claim are partially settlement documents, they are also
presumably accurate statements of the facts concerning asbestos exposure of the
plaintiffs. While they may be filed by the attorneys, the attorneys do stand in the
shoes of the plaintiffs and an attorney’s statement is an admission under New York
law. Therefore, any factual statements made in the proofs of claim about alleged
asbestos exposure of the plaintiff to one of the bankrupt’s products should be made
available to the defendants who are still in the cases.
In re New York City Asbestos Litig., 966 N.Y.2d 347, at *5 (N.Y. Sup. Ct. Nov. 15, 2012).
The Court finds the reasoning of these cases sound and applicable to this case. Accordingly,
the Court finds all documents that Sheppard submitted to the bankruptcy trusts, including claim
forms, supporting documentation, and supplemental information are discoverable. However,
McCarty’s subpoena also specifically seek documentation regarding “settlements.” Because
specific instances of offers to compromise are generally not discoverable, the Court finds that it is
not appropriate for McCarty to request settlement information from the trusts or from Young.
Federal Rule of Civil Procedure 45(d)(A) provides that a court may modify a subpoena as an
alternative to quashing a subpoena entirely. Fed. R. Civ. P. 45(d)(A). Accordingly, the Court will
modify McCarty’s subpoena to exclude requests for documents related to settlements, offers of
compromise, and payments under settlement agreements. GE’s subpoena requires no modification
given that it seeks no settlement information.
However, Sheppard may redact settlement
information from any documents that it must produce to McCarty and/or GE.
The Motion to Overrule
The Parties’ Arguments
The third motion before the Court is Plaintiff’s Motion to Overrule Riley Power, Inc.’s
Objections and Compel Meaningful Responses to Plaintiff’s Discovery Sanctions. [Doc. #189].
Riley Power objected to the majority of plaintiff’s discovery requests that seek information
regarding asbestos-containing products that it manufactured, sold, etc. It objected on the ground
that Sheppard did not recognize the name Riley Stoker or testify to working on a Riley Power
boiler during his deposition. However, Sheppard testified that he worked on numerous boilers,
including work that required him to handle insulation. While Sheppard admittedly did not
recognize the Riley Power name, counsel has learned that Riley Power’s boilers were present at
Sheppard’s work locations.
Sheppard asks the Court to overrule Riley Power’s objection to Int. No. 5 and to all those
requests that referred to its response to Int. No. 5.
Riley Power notes that it delivered amended responses to Sheppard on December 21, 2016
and argues that the motion is thus moot. Riley Power contends that Sheppard never testified to
working on a boiler outside of the Garden Island Bay Facility. Riley Power has already filed its
motion for summary judgment with an affidavit that reflects that Riley Power had no boilers at
said facility. Riley Power thus contends that the information sought is neither relevant nor
proportionate to the needs of the case.
Law and Analysis
It is not clear from the record before the Court that this motion is moot, as Riley Power
argues. If it is not, the Court denies the motion except as to any facility at which Sheppard worked
and at which Riley Power had boilers. The Court finds this information proportionate to the needs
of the case. Fed. Rule Civ. P. 26(b)(1). That Sheppard did not testify that he recognized the name
Riley Power or potentially confused where he might have worked next to boilers is of no moment.
That is the precise point of discovery. Not every plaintiff knows the name of the manufacturer of
a product by which he may have been harmed. Indeed, not every plaintiff expects that he will be
harmed by a certain product, thereby necessitating the need to remember the name of the
manufacturer in case – 40 years down the road – he develops a disease that may have been caused
by that product.
For the foregoing reasons,
IT IS ORDERED that Plaintiff’s Motion to Quash Subpoena and Notice of Records
Deposition [Doc. #175] is GRANTED IN PART to the extent that the subpoena is modified as
IT IS FURTHER ORDERED that Plaintiff’s Motion to Quash Subpoena and Notice of
Records Deposition and Motion for Protective Order [Doc. #264] is GRANTED in full given that
this subpoena seeks no settlement documents.
IT IS FURTHER ORDERED that Plaintiff’s Motion to Overrule Rile Power, Inc.’s
Objections and Compel Meaningful Responses to Plaintiff’s Discovery Sanctions [Doc. #189] is
GRANTED IN PART to the extent that the Court orders Riley to respond to plaintiff’s discovery
requests related to any facility at which Sheppard worked and at which Riley Power may have had
New Orleans, this 23rd day of January, 2017.
DANIEL E. KNOWLES, III
UNITED STATES MAGISTRATE JUDGE
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