Louisiana Generating LLC et al v. Illinois Union Insurance Company

Filing 110

RULING: Illinois Union Insurance Company's 73 Motion for Contempt Against Wells Fargo Insurance Services USA, Inc. is granted in part, and denied in part. Wells Fargo shall produce the withheld documents responsive to the defendants subpoena within seven days. No objections will be allowed. Defendants request to find Wells Fargo in contempt and for an award of attorneys fees is denied. Signed by Magistrate Judge Stephen C. Riedlinger on 12/14/2011. (JDL)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

LOUISIANA GENERATING, L.L.C. AND
NRG ENERGY, INC.

CIVIL ACTION

VERSUS

NUMBER 10-516-JJB-SCR

ILLINOIS UNION INSURANCE COMPANY
RULING ON MOTION FOR CONTEMPT
Before
Company’s

the

court

Motion

for

Services USA, Inc.

is

defendant

Contempt

Illinois

Against

Wells

Record document number 73.

Union

Insurance

Fargo

Insurance

The motion is

opposed.1
Plaintiffs

Louisiana

Generating,

L.L.C.

and

its

parent

corporation NRG Energy, Inc. filed this declaratory judgment action
seeking

a

determination

of

coverage

under

a

Custom

Premises

Pollution Liability Insurance Policy issued by Illinois Union
Insurance Company.

Plaintiffs requested defense and coverage for

damages resulting from a separate action in which the United States
government

sought

injunctive

relief

and

civil

penalties

from

Louisiana Generating for certain alleged violations of the Clean
Air Act.

Illinois Union denied coverage under the policy and

refused to defend the plaintiffs.

1

Record document numbers 92 and 93, filed by plaintiff
Louisiana Generating LLC and Wells Fargo Insurance Company USA,
Inc., respectively. Defendant filed a reply to each opposition.
Record document numbers 105 and 106.

On May 18, 2011, the defendant serveda Notice of Subpoena
Duces Tecum and Subpoena to Produce Documents, Information, or
Objects on non-party Wells Fargo Insurance Services USA, Inc.
Wells Fargo was subsequently granted an informal extension of time
by the defendant to respond until June 16, 2011.2

Wells Fargo and

the defendant agreed that production would be made by uploading the
responsive documents to a secure internet site which the defendant
could access with password.

Due to technical difficulties, Wells

Fargo did not provide the defendant with the link to the website
and the password to access the requested documents until June 29,
2011.
On June 30, 2011, the defendant requested Wells Fargo to
confirm whether documents had been withheld and to provide a
privilege/redaction log for any such documents.

On July 7, Wells

Fargo forwarded via email a privilege log prepared by counsel for
the plaintiffs which identified 17 withheld documents.
On July 14 the defendant filed this motion seeking production
of the withheld documents.

Defendant argued that because Wells

Fargo or the plaintiffs failed to properly object to the subpoena
within 14 days after the subpoena was served, as required under
Rule 45, Fed.R.Civ.P., they waived any objections to the subpoena.
Both the plaintiffs and Wells Fargo filed oppositions to the
defendant’s motion.

2

Plaintiffs argued that its privilege claims

Record document number 92, Exhibit A
2

were not waived because the defendant had sufficient notice prior
to the 14-day deadline that Wells Fargo needed additional time to
collect and review the numerous documents requested and that the
plaintiffs

wanted

to

review

of

the

documents

for

privileged

materials.

In support of their argument, the plaintiffs relied on

evidence showing that counsel for Wells Fargo maintained regular
correspondence with the defendant’s

counsel before and after both

the regular and extended deadlines to advise them of technical
difficulties with the production and the plaintiffs’ counsel’s
request for review.3

Plaintiffs argued that they were unable to

object to production or assert a privilege until they were able to
review the documents.
response

to

privilege.

the

Plaintiffs also argued that Wells Fargo’s

subpoena

cannot

waive

their

attorney-client

Alternatively, the plaintiffs argued that the Rule 45

time limitations for objections should be disregarded due to the
unusual circumstances presented in this matter, including the lack
of relevance and the overbreadth of the information sought and the
cooperation of the subpoenaed party.
Wells Fargo argued in its opposition memorandum that, as a
non-party to this litigation, it should not be penalized or held in
contempt for withholding documents.

Wells Fargo asserted that it

acted as expeditiously as possible and was contractually required

3

Record document number 93, attached Affidavit of Patricia
Allen and Exhibit A.
3

to maintain the confidentiality of its client and to withhold any
documents that the plaintiffs asserted were privileged.

Wells

Fargo argued that these circumstances present an adequate excuse
for its failure to comply with the subpoena.
A review of the record shows that on July 2 the defendant
agreed to an informal, i.e. not granted by the court, extension
until June 16 for Wells Fargo to respond to the subpoena.

Rule

45(2)(B) requires that objections to a subpoena be served before
the earlier of the time specified for compliance or 14 days after
the subpoena is served.

There is no documentation between the

parties or Wells Fargo after June 16 indicating that another formal
extension for production was granted.

While the communications

between counsel for Wells Fargo and the defendant indicated the
defendant’s acknowledgment of Wells Fargo’s late production due to
technical difficulties, this courtesy is not a substitute for
another extension of the Rule 45 objection deadline.

Thus, June

16, 2011 was the deadline to serve written objections to production
and any objections were waived after that date.
Rule 45(c)(3) sets forth the procedural mechanism to protect
a person subject to a subpoena.

Neither Wells Fargo nor the

plaintiffs filed a timely motion to quash or modify the subpoena.
The record shows that the plaintiffs’ request to review the
documents was communicated by Wells Fargo to defendant on June 23.
Defendant also received a privilege log after the deadline for

4

objections expired.

However, these circumstances do not support

finding that the defendant waived its right to assert procedural
deficiencies under Rule 45.
Plaintiffs’ argument that its untimely objections should be
excused because of its late receipt of the documents from Wells
Fargo is unpersuasive.
controlling.

The cases cited by the plaintiffs are not

Courts within the Fifth Circuit have consistently

held that failure to serve timely objections to a Rule 45 subpoena
generally results in a waiver of all grounds for objection,
including privilege.4
excused

under

Even if the Rule 45 time limitation could be

special

circumstances,

the

evidence

shows

that

plaintiffs had sufficient notice and time to review the subpoena
itself and to either obtain another informal extension from the
defendant or file a motion to quash or modify the subpoena.
Neither of these options required full review of the responsive
documents.

Plaintiffs

failed

to

use

the

proper

procedural

mechanisms afforded to them to protect their interest in the
documents.
Rule 45(e) states in pertinent part that “[t]he issuing court
may hold in contempt a person who, having been served, fails
without adequate excuse to obey the subpoena.”

4

Pursuant to 28

Piazza’s Seafood World, L.L.C. v. Odom, 2011 WL 364437, 3
(M.D.La. Aug. 19, 2001); Isenberg v. Chase Bank USA, N.A., 661
F.Supp.2d 627, 629 (N.D.Tex. July 13, 2009); and Douga v. D&B Boat
Rentals, Inc., 2007 WL 677202, 1 (W.D.La. Feb. 28, 2007).
5

U.S.C. § 636(e)(6), a magistrate judge cannot grant a motion for
contempt, but can only certify the facts regarding any failure to
obey the subpoena to the district judge, and order an appearance
before the district judge to show cause why that person should not
be held in contempt.

With respect to Wells Fargo’s actions, the

record demonstrates Wells Fargo did not act in bad faith in
withholding

the

alleged

privilege

documents

requested

by

the

subpoena.

Wells Fargo established that technical difficulties

prohibited

a

timely

production

and

that

the

defendant

was

consistently notified of Wells Fargo’s efforts and intentions.
Considering all the circumstances, a certification of facts to the
district judge that Wells Fargo should be held in contempt is not
warranted.

For these same reasons, an award of attorney’s fees

against Wells Fargo is denied.
Accordingly, the Illinois Union Insurance Company’s Motion for
Contempt Against Wells Fargo Insurance Services USA, Inc. is
granted in part, and denied in part. Wells Fargo shall produce the
withheld documents responsive to the defendant’s subpoena within
seven days. No objections will be allowed. Defendant’s request to
find Wells Fargo in contempt and for an award of attorney’s fees is
denied.
Baton Rouge, Louisiana, December 14, 2011.

STEPHEN C. RIEDLINGER
UNITED STATES MAGISTRATE JUDGE
6