Emerald Land Corp v. Trimont Energy (BL) L L C et al
Filing
300
MEMORANDUM ORDER granting in part and denying in part 249 Motion for Contempt and Sanctions. IT IS FURTHER ORDERED that the implied request to compel production of documents (ECF No. 262) is DENIED. Signed by Magistrate Judge Joseph H.L. Perez-Montes on 5/21/2021. (crt,Tice, Y)
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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
LAFAYETTE DIVISION
EMERALD LAND CORP.,
Plaintiff
CIVIL ACTION NO. 6:17-CV-01655
VERSUS
JUDGE SUMMERHAYS
TRIMONT ENERGY (B L) L.L.C.,
ET AL.,
Defendants
MAGISTRATE JUDGE PEREZ-MONTES
MEMORANDUM ORDER
Before the Court is Chevron U.S.A. Inc.’s (“Chevron’s) Motion for Contempt
and Sanctions (“Motion for Sanctions”) (ECF No. 249). Chevron claims that Plaintiff
Emerald Land Corporation (“Emerald Land”) has violated a Protective Order (ECF
No. 81) governing inadvertent disclosures during discovery.
Chevron seeks a
contempt finding and sanctions, including attorney’s fees and costs.
Emerald Land received inadvertently disclosed documents. Chevron provided
the requisite notice. Emerald Land failed to comply with the procedure set forth in
the Protective Order. Accordingly, the Motion for Sanctions is GRANTED IN PART
to the extent that Chevron seeks costs and attorney’s fees for Emerald Land’s
violation of the Protective Order. However, the record does not fully support a finding
of “bad faith” on Emerald Land’s part. So additional sanctions – including a contempt
finding – are unwarranted. The Motion (ECF No. 249) is thus DENIED IN PART in
that, and in all other, respects. 1
I.
Background
Emerald Land filed a petition for declaratory judgment and injunctive relief in
the Sixteenth Judicial District Court, St. Mary Parish, Louisiana, against Defendants
Trimont Energy (BL), L.L.C. and Whitney Oil & Gas, L.L.C.. ECF No. 1. In a second
amending petition, Emerald Land added Defendants Chevron, Chevron U.S.A.
Holdings, Inc., EnerVest Energy, L.P., EnerVest Operating, L.L.C., and Texas Energy
& Environmental, Inc. Id. 2 Chevron removed. Id.
On the parties’ joint motion (ECF No. 80), the Court entered a Stipulated
Protective Order (ECF No. 81) regarding confidential information sought in
discovery. The purpose of the Order (ECF No. 81) is to “allow the Parties to freely
exchange Confidential Documents and information with each other . . . and to avoid
any waiver of any privilege throughout the inadvertent production of documents
protected by the work product doctrine, the attorney-client privilege, the joint defense
or common interest privilege, and any other applicable privilege.” ECF No. 81 at 2.
The Protective Order (ECF No. 81) includes a provision on the implementation of the
return of inadvertently disclosed privileged documents. Id. at 9.
The Court also DENIES Emerald Land’s implicit request (ECF No. 262) to compel
production of documents.
1
Chevron U.S.A. Holdings, Inc. was voluntarily dismissed. ECF No. 55. And Texas Energy
was dismissed for failure to effect service. ECF No. 64.
2
2
Chevron claims Emerald Land “deliberately def[ied] the Protective Order”.
ECF No. 249-1 at 5. Chevron seeks a contempt finding, attorney’s fees, and costs. Id.
Chevron also seeks an order from the Court (1) directing Emerald Land to return or
destroy all copies of the disputed documents, and (2) prohibiting Emerald Land from
using them in any manner in this or other litigation. Id. at 6.
Chevron submitted: (1) email communication with L. Grossman, P.
Thibodeaux (“Thibodeaux”), and K. Miller (“Miller”) first dated February 20, 2021
(ECF No. 3); (2) the declaration of Joseph Coleman (“Coleman”), Project Manager for
Wild Well Control, Inc. (“Wild Well”) (ECF No. 294-4); and (3) the declaration of Louis
M. Grossman (“Grossman”), counsel of record for Chevron (ECF Nos. 249-5, 250).
Specifically, Chevron alleges their expert witness at Wild Well inadvertently
disclosed draft expert reports, including draft tables and figures, in their subpoena
response on January 27, 2021. 3
ECF No. 249-1 at 5. Chevron discovered the
inadvertent production on February 20, 2021 while preparing its Exhibit List. Id. at
6.
Pursuant to the Protective Order, Grossman notified Thibodeaux and Miller
(counsel for Emerald Land) of the inadvertent disclosure, and requested return or
destruction of the documents. 4 Id. at 5. Chevron contends Emerald Land refused to
Chevron asserts the disclosure included nearly 150,000 pages included 25 drafts prepared
exclusively by Wild Well before it published its November 20, 2020 expert report. ECF No.
249-1 at 6.
3
4
Chevron asserts it demanded return of the following documents:
EMERALD LAND_WILD WELL_SDT_112860-112866; 128325; 128326; 128327; 128328;
128403; 129077; 129079; 129080; 129142; 129289; 129436; 129655; 129802; 130022; 130244;
130467; 130689; 130909; 131129; 131349; 131571; 131605; 131830; 132016; 132199; 132873;
133546; 134223; 134900; and 001_1.PNG – 007_7.PNG.
3
treat the materials as privileged, refused to sequester the materials, and still refuses
to return and destroy them, as required under both the Protective Order (ECF No.
81) and Fed. R. Civ. P. 26(b)(5)(B). Id. Chevron further alleges that, despite complete
awareness of the alleged privilege, Emerald Land reviewed the documents, informed
the Court the claim of privilege discussion was premature, and included the
documents in its Witness and Exhibit Lists (ECF No. 244). Id. And now, Emerald
Land seeks to use the documents in deposing Chevron’s expert witness. Id.
Emerald Land opposes, attaching: (1) email correspondence; (2) the Subpoena
Duces Tecum to Wild Well; (3) report excerpts; (4) excerpts of their Rule 30(b)(6)
corporate deposition of Stephen Conner (“Conner”) for Chevron; (5) excerpts of their
deposition of Kenneth B. Choate (“Choate”), Broussard Brothers, Inc.’s corporate
representative; and (6) excerpts of their deposition of Richard Kennedy (“Kennedy”),
Northstar Exploration Company’s corporate representative. ECF Nos. 262, 263 at 172.
According to Emerald Land, the disputed documents fall into three categories,
or “batches.” Emerald Land contends the first batch (“WILD WELL_SDT_12838”)
was prepared by a third-party consultant and was not privileged. Chevron ultimately
acquiesced. Id. The second batch (“WILD WELL_SDT_ 129077, 12079, and 134900)
includes stand-alone notes and memoranda that Wild Well prepared as part of its
ECF No. 249-1 at 6. Emerald Land later agreed to destroy seven privileged documents:
LAND_WILD WELL_SDT_112860-112866 and 128325-128327. ECF No. 249-1 at 7.
However, Chevron asserts Emerald Land asserted it intended to use the remaining
documents to “depose Joe Coleman regarding [them].” Id.
4
analysis, separate and apart from its report. Id. Rule 26 does not protect these
materials in Emerald Land’s view. Id. And the third batch includes “draft reports,”
which Emerald Land concedes are typically privileged. Id. However, Emerald Land
argues the portions of the draft reports that identify facts, data, or assumptions on
which the expert relied are not privileged. Id. at 4-5.
Once notified of the inadvertent disclosures, counsel for Emerald Land
responded to Grossman by email. Id. at 5. Emerald Land wished to explain its
position regarding the disputed documents. The exchange could fairly be called an
attempt to “confer.” However, Chevron immediately filed for contempt rather than
meet and confer, according to Emerald Land. Id.
Emerald Land admits they reviewed the documents in preparing for
depositions and in drafting motions.
Id. [Emerald Land filed a Supplemental
Opposition to “assist in answering questions posed by the Court at the hearing” by
providing a chronology. ECF No. 286.]
II.
Law and Analysis
A.
Rule 37 authorizes sanctions for failure to obey a discovery order.
“Fed. R. Civ. P. 37(b) empowers the courts to impose sanctions for failures to
obey discovery orders. In addition to a broad range of sanctions, including contempt,
Fed. R. Civ. P. 37(b)(2) authorizes the court to impose a concurrent sanction of
reasonable expenses, including attorney's fees, caused by the failure to obey a
discovery order.” Smith & Fuller, P.A. v. Cooper Tire & Rubber Co., 685 F.3d 486,
488 (5th Cir. 2012). Although a court “has broad discretion under Rule 37(b) to
5
fashion remedies suited to the misconduct,” usually, “a finding of bad faith or willful
misconduct [is required] to support the severest remedies under Rule 37(b) – striking
pleadings or dismissal of a case.” Id. (internal citations and quotations omitted).
Lesser sanctions do not require a finding of bad faith or willfulness. Id. (citing
Chilcutt v. United States, 4 F.3d 1313, 1323 n.23 (5th Cir. 1993), cert. den., 513 U.S.
979 (1994)).
Rule 37(b)(2)(A), provides that if a party “fails to obey an order to provide or
permit discovery,” a court “may issue further just orders,” including:
(i) directing that the matters embraced in the order or other designated
facts be taken as established for purposes of the action, as the prevailing
party claims;
(ii) prohibiting the disobedient party from supporting or opposing
designated claims or defenses, or from introducing designated matters
in evidence;
(iii) striking pleadings in whole or in part;
(iv) staying further proceedings until the order is obeyed;
(v) dismissing the action or proceeding in whole or in part;
(vi) rendering a default judgment against the disobedient party; or
(vii) treating as contempt of court the failure to obey any order except
an order to submit to a physical or mental examination.
Fed. R. Civ. P. 37(b)(2)(A). Thus, a party may seek sanctions and a finding of civil
contempt for another party’s violation of a court’s protective order. See Sandoval v.
Carrco Painting Contractors, 2016 WL 8679288, at *2 (W.D. Tex. Nov. 16, 2016)
(citing Lyn-Lea Travel Corp. v. Am. Airlines, Inc., 283 F.3d 282, 290 (5th Cir. 2002)
(upholding civil contempt order imposed as sanction for violation of a protective
order)).
“A party seeking a civil contempt order must demonstrate, by clear and
convincing evidence, ‘(1) that a court order was in effect, (2) that the order required
certain conduct by the respondent, and (3) that the respondent failed to comply with
6
the court's order.’” Lyn-Lea, 283 F.3d at 291 (citing FDIC v. LeGrand, 43 F.3d 163,
165 (5th Cir. 1995)).
Moreover, “the court must order the disobedient party, the attorney advising
that party, or both to pay the reasonable expenses, including attorney's fees, caused
by the failure, unless the failure was substantially justified, or other circumstances
make an award of expenses unjust.” Fed. R. Civ. P. 37(b)(2)(C).
B.
The Protective Order (ECF No. 81) controls the inadvertent disclosure
of the disputed documents.
The Protective Order (ECF No. 81) governs the parties’ obligations in
documents containing “Confidential Information.” ECF No. 81 at 1-2. “Confidential
Information” includes:
(a) internal financial information regarding costs, expenses, revenue
and/or profitability; (b) commercial information, including but not
limited to current and future business plans, business ownership,
research and development data, reservoir data, patent plans or data, as
well as operational technologies, technical methods, practices, and
procedures, which trade secrets or commercial information is of
technical or commercial advantage to its possessor; and (c) any other
proprietary information . . .related to the business of the party that
derives . . . value from not being known to business competitors . . ., the
disclosure of which may cause harm to the disclosing party.
Id. at 1-2. “Document[s]” include “writings, drawings, graphs, charts, photographs,
recordings, images, and other data compilations . . . from which information can be
obtained, whether produced or created by a Party or another person.” Id. at 2.
“Confidential Document” means any “[Document] which any Party designates as
Confidential.” Id.
7
The Protective Order (ECF No. 81) applies to all designated “Confidential
Documents” or “Confidential Information” which any Party designates as such and
produces subject to the terms of the Order. Id. at 3. However, the Protective Order
does not prevent a Party from challenging a confidentiality designation. ECF No. 81
at 5. Rather, “[o]n any challenge to the designation of any document or other record
or information as confidential, the burden of proving that the designation is
warranted and justified shall lie with the Party asserting the document contains
Confidential Information.” Id. at 6. The challenging party is obliged to: (1) notify
opposing counsel of the documents to be declassified and the reasons to do so; (2)
allow 10 days for consideration and negotiation; and (3) absent agreement, submit
the dispute to the Court for resolution. Id.
In addition to items designated as “Confidential,” the Protective Order (ECF
No. 81) establishes a protocol for inadvertent disclosure. Id. at 9. The asserting party
must notify the receiving party of an inadvertent disclosure. Then, upon request, the
receiving party must promptly sequester and return the confidential documents, and
must destroy any copies without using confidential information. Id. The asserting
party has the right to designate documents as confidential, and to invoke these
protective provisions. And if the parties dispute the designation, then the reciving
party must seek relief from the Court by filing a Motion to Compel. Id. at 9-10.
C.
Emerald Land did not comply with the Protective Order (ECF No. 81).
Most of the facts underlying the Motion are undisputed. The Court entered
the Protective Order (ECF No. 81) on May 14, 2019. ECF No. 81. The Protective
8
Order (ECF No. 81) applies to documents provided in response to Emerald Land’s
subpoenas. ECF Nos. 262 at 6. 5 The Protective Order was in effect when the disputed
documents were exchanged.
And the Protective Order controlled inadvertent
disclosure.
However, the parties disagree about several related issues, including whether
Emerald Land substantially complied – or attempted to comply – with the Protective
Order, and whether Chevron precluded any discussion of the issue before filing the
Motion. And ultimately, the parties disagree about whether some of the disputed
documents are, in fact, confidential.
The record establishes that Chevron retained Wild Well to develop a plan to
perform the abandonment of wells and other decommissioning work on Emerald
Land’s property. ECF No. 249-4 at 2, ECF No. 249-5 at 1. Coleman attests he
prepared an expert report outlining this plan. ECF No. 249-4 at 2. In preparing his
report, he composed numerous drafts of various sections of the report. Id.
On January 27, 2021, Wild Well responded to Emerald Land’s Subpoena Duces
Tecum for production of materials related to its expert report. Id.; see also ECF No.
According to Emerald Land, the Wild Well report is a “compendium of expert opinions and
data supplied by three different companies: Wild Well, Warrior Energy Services (‘Warrior’),
a Wild Well affiliate, and Broussard Bros. Inc. (‘Broussard Bros.’).” ECF no. 262 at 6.
Emerald Land issued subpoenas to all three for their file materials. Id. Wild Well and
Warrior responded directly to Emerald Land through its in-house legal department, and
included a privilege log that referenced none of the documents. ECF No. 262 at 7. Emerald
Land asserts Wild Well’s updated privilege log from March 12, 2021 did not add any of the
documents at issue, and that none of the documents were produced with a confidential stamp.
5
Id.
9
286. Coleman attests Wild Well inadvertently produced the following documents to
Emerald Land:
EMERALD LAND_WILD WELL_SDT_112860-112866; 128325;
128326; 128327; 128328; 128403; 129077; 129079; 129080; 129142;
129289; 129436; 129655; 129802; 130022; 130244; 130467; 130689;
130909; 131129; 131349; 131571; 131605; 131830; 132016; 132199;
132873; 133546; 134223; 134900; and 001_1.PNG – 007_7.PNG.
ECF No. 249-4 at 2. Coleman attests that these documents include drafts of Wild
Well’s final expert report dated November 20, 2020, as well as Wild Well’s draft
tables, figures, and calculations specifically associated with drafts of its final expert
report. Id. He further attests the drafts “contain no facts, data, or assumptions that
were provided to Wild Well by Chevron’s counsel.” Id. at 3.
Grossman attests Wild Well’s drafts included tables, figures, and calculations
that were subsequently eliminated, modified, or changed through consultation with
counsel of record. ECF No. 249-5 at 1. Grossman attests he had several discussions
with Coleman concerning the appropriate scope of Wild Well’s subpoena responses.
Id.
Grossman is clear that Coleman was instructed not to produce privileged
documents, and thus, that the disclosure was inadvertent. Id.
Grossman discovered a draft report was included in Wild Well’s Subpoena
Duces Tecum response on January 27, 2021. Id. Grossman informed Thibodeaux and
Miller. Id.; see also ECF Nos. 249-3 at 3, 286 at 2. Grossman demanded immediate
return of the listed documents and destruction of any copies, and otherwise, if
challenged, that they be sequestered until a ruling from the Court. ECF Nos. 249-3
at 3, 249-5 at 4. Grossman plainly complied with the Protective Order.
10
On February 23, 2021, Emerald Land filed a Notice of Proposed Agenda in
connection with the Court’s February 24, 2021 status conference. ECF No. 235.
Emerald Land’s agenda included the issue of Coleman’s deposition date and
Chevron’s assertion of the “claw back” provision of the Protective Order. Id. at 2. At
the status conference (ECF No. 240), Emerald Land represented it was working on a
substantive response to Chevron’s email hopefully that same day, and that the issue
is premature until they can get out a response. But two days later, Emerald Land
filed its Exhibit and Witness List (ECF No. 244) including documents Chevron
asserts were inadvertently disclosed. ECF No. 244 at 21-30. Then, on March 2, 2021,
Emerald Land responded to Grossman’s email concerning the inadvertent disclosure
with its position concerning the asserted privileges and inadvertent disclosure. ECF
Nos. 249-3 at 1, 286 at 2. Grossman agreed that one document – 128328 – was
prepared and produced by a third party and eliminated it from the request. ECF Nos.
253-1 at 5, 263 at 1. Grossman further stated the email exchange constituted a formal
discovery conferenced and advised Chevron would file a motion for relief.
Id.
Grossman further noted objection to use of any of the referenced documents at
Coleman’s deposition. Id.
The Protective Order (ECF No. 81) secured Chevron’s right to promptly
demand return of the inadvertently disclosed documents from the receiving party.
ECF No. 81. It allowed Emerald Land to file a motion to compel thereafter. But it
did not allow Emerald Land to review and utilize the disputed documents. And it
11
certainly did not allow Emerald Land to withhold the disputed documents pending a
discussion with Chevron, a deposition, or anything else.
Instead, the Protective Order required Emerald Land to sequester, return, and
destroy copies of the disputed documents upon Chevron’s notice, and to seek relief
from the Court if needed. And Emerald Land simply did not do so. Thus, Emerald
Land failed to comply with the Protective Order.
In several respects, Emerald Land failed to comply with the Protective Order. 6
Moreover, after Chevron informed Emerald Land of the inadvertent disclosure of
allegedly privileged documents and information, it is apparent that Emerald Land
reviewed and considered the disputed documents. 7
ECF No. 249-3 at 1. The
Protective Order prevents a party “who receives privileged information by reading a
privileged Document [from] utilizing or employing that information, directly or
indirectly, in the prosecution or defense of this Lawsuit.” ECF No. 81. Emerald Land,
to date, has only agreed to return and destroy “112860-112866 and 128325-128327”
which it agrees are privileged. Emerald Land did not seek to compel production.
D.
Chevron is entitled to sanctions of attorney’s fees and costs in bringing
this motion.
Rule 26(b)(5)(B) of the Federal Rules of Civil Procedure also requires that after notification
that information was produced that is subject to a claim of privilege, a party must promptly
return, sequester, or destroy the specified information and any copies it has; must not use or
disclose the information until the claim is resolved . . . and may promptly present the
information to the court under seal for a determination of the claim.” Fed. R. Civ. P.
26(b)(5)(B).
6
Emerald Land also asserted its intentions to depose Chevron’s expert regarding the
disputed documents and to introduce the documents at trial. ECF Nos. 249-3 at 1-2, 244.
7
12
Because Emerald Land failed to comply with the Protective Order, Chevron is
entitled to recompense in some form. The Court entered the Protective Order to
prevent the type of potential prejudice at issue here – specifically, revelation of
privileged information that cannot now be “unseen” and that may factor into the
strategic undercurrents of the case. There is no direct remedy for that potential
prejudice once incurred.
However, the Court may award costs and attorney’s fees as a remedy, even
where noncompliance was not intentional. And the Court will do so here. Within 14
days of this Order, Chevron will file under seal a Notice listing and evidencing the
costs and fees incurred in prosecuting the Motion.
Furthermore, as noted above, the Court may impose stricter sanctions upon a
finding of willful noncompliance or “bad faith.” Emerald Land escapes this finding,
but narrowly.
The parties agreed upon the text of the Protective Order before
submitting it to the Court. Its relevant provisions were clear. And again, Emerald
Land plainly failed to comply with them. Little justification is possible. However,
Emerald Land seems to have made some effort to inform the Court about, and to
resolve, the dispute. Chevron fully complied. But Chevron’s declaration in email
traffic preceding this Motion – though perhaps understandable – precluded Emerald
Land from complying at that belated point.
Thus, the record does not fully support a finding of “bad faith.” Absent that
finding, no additional sanctions are warranted.
E.
Emerald Land’s request to compel production of the remaining
documents is denied.
13
In the interests of efficiency, the Court construed Emerald Land’s briefs and
arguments to imply a request to compel production of the disputed documents not
otherwise addressed. 8 Essentially, Emerald Land seeks a determination that some
of the disputed documents are not, in fact, confidential.
Specifically, Chevron argues draft reports and disclosures of testifying experts
are shielded from discovery as privileged work product. ECF No. 249-1 at 8 (citing
Fed. R. Civ. P. 26(b)(4)(B)). 9
Rule 26(b)(4) protects communications between a
testifying expert and a party’s attorney, except for communications relating to expert
compensation, attorney-provided facts, data, or assumptions relied upon in forming
expert opinions. Fed. R. Civ. P. 26(b)(4)(C). Chevron objects to production of Wild
Well’s draft reports, including draft tables, calculations, figures, and charts protected
under Rule 26(b)(4). ECF Nos. 249-1 at 9, 271 at 5-6. Coleman attested that the
inadvertently produced documents are privileged drafts of expert reports, draft
calculations, draft tables, and draft figures prepared by Wild Well, and that the
documents do not contain facts, data, or assumptions that were provided by Chevron’s
counsel. ECF Nos. 294-4, 271 at 4.
The parties agreed prior to the hearing concerning the privilege designation of certain
documents: WILD WELL_SDT_12838, 112860-112866 and 128325-128327. Chevron agreed
12838 was not privileged and withdrew its assertion of privilege. Emerald Land agreed
8
112860-112866 and 128325-128327 were privileged and returned and destroyed all
copies. Emerald Land’s motion to the extent it applies to these documents is DENIED
AS MOOT.
9
Draft expert reports, in any form, are protected. Fed. R. Civ. P. 26(b)(4)(B).
14
Chevron correctly notes that, under the Protective Order, inadvertent
disclosure shall not be deemed a waiver of attorney-client privilege or work-product
privilege. Id. Nevertheless, Chevron clarifies that great measures were taken to
ensure production of over 150,000 responsive documents did not include privileged
documents or communications, and that any disclosure was inadvertent and did not
waive the privilege. Id. at 10-11; see also ECF No. 249-5.
Emerald Land contends 129077, 129079, and 134900 are stand-alone notes
and memorandum prepared by Wild Well as part of its analysis, separate from its
report. ECF No. 262 at 4. Emerald Land also argues that the documents include
unprotected assumptions and foundational date on which Wild Well’s opinion is
based. Id. Emerald Land asserts the remainder of the documents are styled as draft
reports, which it admits are privileged. Id. However, Emerald Land contends the
privilege does not extend to portions of the draft reports that identify facts, data, or
assumptions on which the expert relied. Id. at 4-5 (citing United States ex rel Wall
v. Vista Hospice Care, 319 F.R.D. 498, 510-11 (N.D. Tex. 2016)). 10
Chevron responds that Emerald Land attaches excerpts of summary charts
from draft reports and mischaracterizes them as purely factual in nature. ECF No.
271 at 4-5. And Chevron contends that adopting Emerald Land’s position would
eliminate the protections under Rule 26(b)(4) protecting draft reports. Id. Regardless,
According to Emerald Land in its Supplemental Opposition (ECF No. 286), the parties
agreed to postpone Wild Well’s March 31, 2021 deposition until the Court resolves this
discovery dispute. ECF No. 286 at 2.
10
15
Chevron asserts Emerald Land is not entitled to retain or discover entire drafts. Id.
at 6.
1.
Wild Well’s materials are protected under Rule 26(b)(4)(B), (C).
Emerald Land argues 129077, 129079, and 134900 consist of “notes, task lists,
outlines, memoranda, presentations, and draft letters authored by” the expert or
other third parties that are not privileged. Id. at 9. The documents were compiled by
Wild Well in formulating its opinion, and that 129077 and 129079 include summary
charts comparing Emerald Land’s expert’s costs estimates to Chevron’s costs. Id.
Emerald Land further contends that 134900 identifies data and assumptions
relied upon by Wild Well, including day rates driving costs and items Wild Weld Well
did not consider in formulating its cost estimate opinions. Id. Emerald Land attaches
excerpts of charts in 134900, arguing this information is not privileged and that “day
rates” are data and assumptions used in formulating Wild Well’s opinion. Id.
Emerald Land further asserts the chart referencing “Items Not Considered” is key to
showing Chevron’s experts ignored real world obstacles, thus arriving at a “low-ball”
estimate. Id. at 11. Emerald Land asserts that cost estimates compared to Emerald
Land’s, the day rates on which those estimates rely, and the list of “items not
considered” are not privileged. Id.
An expert’s “spreadsheets, graphs, and analyses . . . [which] are interpretations
of data that reflect counsel’s mental impressions and result from the expert’s and
counsel’s collaborative efforts to organize, marshal, and present data” are “separate
and distinct from the underlying facts and data themselves.” In re Elysium Health-
16
ChromaDex Litigation, 2021 WL 1249223, at *2 (S.D.N.Y. Apr. 5, 2021) (citing Davita
Healthcare Partners, Inc. v. United States, 128 Fed. Cl. 584, 591 (Fed. Cl. 2016)). And
“spreadsheets, graphs, presentations, and charts are protected under Rule
26(b)(4)(B), so long as the documents were prepared by the testifying expert to be
included in draft expert reports.” Id.
However, the 2010 Advisory Committee’s Note states that the exception under
Rule 26(b)(4)(C)(iii) “is limited to those assumptions that the expert actually did rely
on in forming the opinions to be expressed” and “[m]ore general attorney-expert
discussions about hypotheticals, or exploring possibilities about hypothetical facts,
are outside this exception.” Fed. R. Civ. P. 26(b)(4)(C), Advisory Committee Note to
2010 Amendment. Moreover, Coleman attests that the production included Wild
Well’s draft tables, figures, and calculations specifically associated with drafts of Wild
Well’s expert report. ECF No. 294-4 at 3. Coleman attests these “drafts contain no
facts, data, or assumptions that were provided to Wild Well by Chevron’s counsel.”
Id. at 3. Thus, Emerald Land fails to establish sufficient evidence to establish the
documents fall within the exceptions of Rule 26(b)(4)(C).
2.
Coleman’s draft reports are protected under Rule 26(b)(4)(B), (C).
Emerald Land argues the remaining documents, though styled as draft reports
which are typically privileged, include portions that identify “facts or data that the
attorney provided and the expert considered” or “assumptions that the attorney
provided and the expert relied on.” ECF No. 262 at 12 (citing Wall, 319 F.R.D. at 508).
Emerald Land contends the remaining Wild Well’s draft reports at issue include
17
portions falling under that exception and are not privileged. Id. Emerald Land
referenced redlined draft reports, arguing they show Kean Miller, counsel to Chevron,
provided those facts, data, and assumptions to Wild Well. Id. at 13 (citing to excerpts
of the draft reports). 11
In Wall, the court found that the provisions of Rule 26(b) did not afford
protection in draft reports when counsel provides facts, data, and assumptions that
are relied upon and included in the final report. Wall, 319 F.R.D. at 508-09 (requiring
disclosure of those portions of a draft expert report transmitted between an attorney
and expert that identify facts, data, or assumptions provided by an attorney).
However, the remainder of any draft report would be covered as work-product under
Rule 26(b)(4)(B) and Rule 26(b)(4)(C). Id. at 509. Here, by contrast, there is no
evidence that Coleman’s expert report was “ghost-written” by counsel for Chevron.
The 1993 Amendment Advisory Committee’s Note to Rule 26 states:
Rule 26(a)(2)(B) does not preclude counsel from providing assistance to
experts in preparing the reports . . . The report is to disclose the data
and other information considered by the expert and any exhibits or
charts that summarize or support the expert’s opinions. Given this
obligation of disclosure, litigants should no longer be able to argue that
materials furnished to their experts to be used in forming their opinions
– whether or not ultimately relied upon by the expert – are privileged or
otherwise protected from disclosure when such persons are testifying or
being deposed.
Emerald Land further notes that redlined draft reports demonstrate that Wild Well
changed the assumptions underlying its opinion. Id. (citing to excerpts referencing the
deletion of a note regarding potential increase in durations of operations with new
information and obstacles). Emerald Land contends this shows Wild Well did not originally
operate on that assumption and only relied on it after Chevron asked it to. Id. at 14. Emerald
Land argues the redlines show counsel to Chevron instructed Wild Well to change the facts,
data, and assumptions underlying its analysis, thus those portions are not privileged. Id.
11
18
Fed. R. Civ. P. 26(a)(2)(B), Advisory Committee Note to 1993 Amendment.
The 2010 Advisory Committee’s Note states that discovery authorized by the
exceptions under Rule 26(b)(4)(C) does not extend beyond those specific topics. Fed.
R. Civ. P. 26(b)(4)(C), Advisory Committee Note to 2010 Amendment.
Rule
26(b)(4)(C)(ii) “applies only to communications ‘identifying” the facts or data provided
by counsel; further communications about the potential relevance of the facts or data
are protected.” Id. Likewise, the exception under Rule 26(b)(4)(C)(iii) “is limited to
those assumptions that the expert actually did rely on in forming the opinions to be
expressed” and “[m]ore general attorney-expert discussions about hypotheticals, or
exploring possibilities about hypothetical facts, are outside this exception.” Id.
A party seeking discovery outside of the three exceptions enumerated in Rule
26(b)(4(C), or regarding draft expert reports or disclosures, must show “that the party
has a substantial need for the discovery and cannot obtain the substantial equivalent
without undue hardship.” Id. Here, Chevron establishes the documents at issue do
not fall under the exceptions to Rule 26(b)(4)(C). Coleman attests he was retained by
Chevron to develop a plan to perform the abandonment of wells and other
decommissioning work on Emerald Land’s property. ECF No. 294-4 at 3. He was
asked to prepare an expert report outlining that plan, of which he composed
numerous drafts of various sections of the report. Id. Wild Well inadvertently
produced documents in response to Emerald Land’s Subpoena Duces Tecum,
including drafts of his final report dated November 20, 2020. Id. Coleman attests
that the “drafts contain no facts, data, or assumptions that were provided to Wild
19
Well by Chevron’s counsel.” Id. at 3. Chevron’s counsel Grossman attests to the
same. ECF No. 249-5.
Emerald Land has also failed to show that it cannot obtain substantially
equivalent information without undue hardship. Emerald Land may explore nonprivileged data underlying the reports by deposition. Thus, there is no basis to
compel production by Chevron (or to allow retention by Emerald Land).
III.
Conclusion
Accordingly, IT IS ORDERED that Chevron’s Motion for Contempt and
Sanctions (ECF No. 249) is GRANTED IN PART to the extent it seeks a finding that
Emerald Land violated the Protective Order and an award of costs and fees. Emerald
Land is obliged to return and destroy the disputed documents – as identified above –
in accordance with the Protective Order. And pursuant to Local Rule 54.2, Chevron
shall file a motion for attorney’s fees and costs within 14 days of the date of this Order.
IT IS FURTHER ORDERED that Chevron’s Motion (Doc. 249) is DENIED IN
PART in all other respects, including to the extent it seeks an express finding of civil
contempt or additional sanctions.
IT IS FURTHER ORDERED that the implied request to compel production of
documents (ECF No. 262) is DENIED.
SIGNED on Friday, May 21, 2021.
__________________________________________
JOSEPH H.L. PEREZ-MONTES
UNITED STATES MAGISTRATE JUDGE
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