Burris et al v. Versa Products, Inc. et al

Filing 141

ORDER AND MEMORANDUM: 1. Plaintiffs' Motion to Compel Discovery (Doc. No. 128 ), is GRANTED IN PART and DENIED IN PART as more fully explained in the attached Memorandum; and 2. The attached Memorandum is hereby incorporated in this Order.(Written Opinion) Signed by Magistrate Judge Jeffrey J. Keyes on 02/19/2013. (MMP)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

Lowell P. Burris and Joyce P. Burris,

Civ. No. 07-3938 (JRT/JJK)

Plaintiffs,
v.
ORDER AND MEMORANDUM

Versa Products, Inc., G and L
Products, Inc., and Gulf Underwriters
Insurance Company,
Defendants.

Thomas F. Handorff, Esq., Handorff Law Offices, P.C., counsel for Plaintiffs.
Richard A. Lind, Esq., and Matthew D. Sloneker, Esq., Lind, Jensen, Sullivan &
Peterson, P.A., counsel for Defendants Versa Products, Inc., and G and L
Products, Inc.
Nicholas J. O’Connell, Esq., and Thomas A. Gilligan Esq., counsel for Defendant
Gulf Underwriters Insurance Company.

This matter is before the Court on Plaintiffs’ Motion to Compel Discovery.
(Doc. No. 128.) The Court held a hearing on Plaintiffs’ motion on February 6,
2013, at which the parties were represented by counsel. Based on the parties’
submissions, the argument of counsel, and on all the files and proceedings
herein, IT IS HEREBY ORDERED that:
1.

Plaintiffs’ Motion to Compel Discovery (Doc. No. 128), is GRANTED

IN PART and DENIED IN PART as more fully explained in the attached
Memorandum; and
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2.

The attached Memorandum is hereby incorporated in this Order.

Date: February 19, 2013
s/ Jeffrey J. Keyes
JEFFREY J. KEYES
United States Magistrate Judge

MEMORANDUM
In this product liability suit, Plaintiffs allege that Lowell P. Burris was injured
while using a defective ladder manufactured and distributed by Defendants Versa
Products, Inc. (“Versa”), and G and L Products, Inc (“G&L”). The accident that
caused Mr. Burris’s injuries occurred in 2001, and Plaintiffs brought this lawsuit in
2007. But now, more than five years later, this case continues due to a
somewhat complex procedural history.
After this matter commenced, Defendant Gulf Underwriters Insurance
Company (“Gulf”) brought a related coverage action in this District in which Gulf
disputed its alleged obligation to defend and indemnify Versa and G&L from
Plaintiffs’ product liability claims. Gulf had issued Versa a “claims made” policy
for the period from March 3, 2003, to March 3, 2004, and contended that neither
Versa nor Gulf received notice of Plaintiffs’ claim within that policy period. 1 The

1

Versa’s claims made policy issued by Gulf became part of the dispute
because Plaintiffs assert that they sent Versa a letter notifying Versa of their
claims on March 14, 2003. (See Doc. No. 130, Aff. of Thomas F. Handorff in
Supp. of Pls.’ Mot. to Compel (“Handorff Aff.”) ¶ 2, Attach. 1.)
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District Court granted Gulf’s motion for summary judgment in the coverage action
(Doc. No. 100), and this case was stayed while Plaintiffs appealed the coverage
decision to the Eighth Circuit. (See Doc. Nos. 101–02.)
The Eighth Circuit reversed and remanded the summary-judgment
decision in the coverage action, and following the issuance of the Eighth Circuit’s
Mandate, Gulf was allowed to intervene in this case. (Doc. No. 112.) After the
District Court allowed Gulf to intervene, the Court granted Plaintiffs’ request to
take discovery on coverage issues that would be litigated as part of the now
consolidated coverage and product liability actions. (Doc. No. 115, Mins. for
Telephone Hr’g (indicating that a deadline for coverage discovery was set by the
District Court).) Thereafter, the parties stipulated to the entry of a Protective
Order, which the undersigned adopted on November 27, 2012. (Doc. No. 116
(Stipulation); Doc. No. 117 (Protective Order).) Plaintiffs then served discovery
on Gulf and Versa concerning coverage issues. Because Plaintiffs are
dissatisfied with the responses Gulf and Versa provided, Plaintiffs filed their
Motion to Compel Discovery. (Doc. No. 128.)
Plaintiffs’ motion to compel raises three issues. First, Plaintiffs seek an
Order requiring Gulf to remove redactions it placed in fifty-one pages of
documents produced in response to Plaintiffs’ Rule 34 requests for production.
Second, Plaintiffs seek an order requiring Versa to provide more complete
responses to the Plaintiffs’ interrogatories and document requests. And finally,
Plaintiffs seek an order requiring Versa to produce its former President, David
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Lambert, for a deposition. The Court addresses each of these issues in turn.
I.

GULF’S REDACTIONS
As noted, Gulf produced several pages of documents in response to

Plaintiffs’ requests for production under Rule 34, but redacted material on fiftyone of those pages. Following some discussions between the parties’ counsel,
Gulf informed Plaintiffs that the redacted portions “relate to formulaic
computations for insurance pricing which are considered proprietary trade
secrets.” (Doc. No. 134, Aff. of Nicholas J. O’Connell (“O’Connell Aff.”) ¶ 2,
Attach. 1.) Gulf also took the position that it need not disclose that redacted
information to Plaintiffs because the information would not be relevant to the
coverage issues. (Handorff Aff. ¶ 11, Attach. 10 at 1.) In addition, Gulf noted
that the redactions on one page of its production “relate to attorney/client
communications.” (O’Connell Aff. ¶ 2, Attach. 1.) Further, Gulf provided Plaintiffs
with a “Summary of Redacted Documents” that generally described what material
had been redacted. (Id. ¶ 3, Attach. 2.)
Plaintiffs argue that Gulf’s redactions in these documents are improper and
request that Gulf be compelled to eliminate all redactions from its documents.
(Doc. No. 129, Pls.’ Mem. in Supp. of Mot. to Compel (“Pls.’ Mem.”) 6–7.) 2 In

2

Plaintiffs also state in their memorandum that they would like the Court to
order Gulf to “provide substantive answers to Burris’ interrogatories[,]” “rather
than refer to documents.” (Pls.’ Mem. 7.) However, Plaintiffs have failed to
properly present any dispute concerning Gulf’s responses to Plaintiffs’
interrogatories because they have not specified the particular interrogatories that
(Footnote Continued on Following Page)
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opposing the motion, Gulf stands by its assertions that the information was
properly redacted because it is irrelevant and constitutes “proprietary trade
secrets” that should not be disclosed to Plaintiffs. (See Doc. No. 133, Gulf’s
Mem. in Opp’n to Pls.’ Mot. to Compel 6–8.) Gulf submitted a copy of the
redacted material, along with an unredacted copy of the documents, to the Court
for in camera review.
The Court has reviewed the documents at issue and concludes that the
vast majority of the redactions at issue must be removed. Although Gulf claims
that many of the redactions were necessary to avoid disclosure of trade secrets,
“there is no absolute privilege [against disclosure] for trade secrets and similar
confidential information.” See Fed. Open Mkt. Comm. of Fed. Reserve Sys. v.
Merrill, 443 U.S. 340, 362 (1979) (alteration in original). Nor has Gulf established
that any of the redacted information actually qualifies as a legitimate trade secret.
To support its trade secret claim, Gulf offered only the conclusory assertion that it
considers the information “proprietary trade secrets.” That conclusory assertion
will not suffice, and Gulf has failed to show that the information is not generally
known or readily ascertainable, that the information derives independent
economic value from secrecy, or that the information is the subject of reasonable

(Footnote Continued from Previous Page)
are at issue or given any recitation of why any response or objection is improper.
D. Minn. LR 37.1 (discussing the form of discovery motions). As a result, the
Court offers no opinion on whether Gulf properly responded to Plaintiffs’
interrogatories.
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efforts to maintain its secrecy. See Ikon Office Solutions, Inc. v. Dale, 170 F.
Supp. 2d 892, 897 (D. Minn. 2001) (citing Minn. Stat. § 325C.01, subd. 5,
Minnesota’s version of the Uniform Trade Secrets Act).
In addition, Gulf has failed to demonstrate why the Protective Order in this
case will fail to protect its interests or that there is some substantial likelihood that
Plaintiffs or any other party will fail to scrupulously adhere to the Protective
Order’s non-disclosure provisions. When the Court entered the Protective Order,
it concluded that there was good cause to allow the parties to conduct discovery
while designating certain information “Confidential” so that it would not be
disclosed or used outside this litigation. When information is labeled confidential
by the producing party, it cannot be published by the party receiving it, and it can
only be used in the litigation. (See Doc. No. 117, Protective Order ¶ 3.) The
parties stipulated that the Protective Order the Court entered was sufficient to
protect their interests in preventing wider dissemination of sensitive information.
No party indicated that its interests required the right to redact proprietary
information from the materials it would produce during discovery. This is not a
case where the opposing party is a competitor of the insurance company;
Plaintiffs are an injured man who fell off a ladder and his wife. The parties did
not even ask for the right to produce certain information under a “Confidential
Attorney’s Eyes Only” designation. And the Court has not authorized the parties
to do either. In the typical case, like this one, a protective order such as the one
the Court entered here will suffice to prevent the type of competitive harm Gulf
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suggests would occur by allowing Plaintiffs to see the redacted information. Gulf
has not explained why this case is any different.
Gulf next argues that it properly redacted the information because the
undisclosed information is not relevant. However, Gulf offers no support for the
proposition that a party may properly redact portions of a document on grounds
that some, but not all, of the document is relevant or responsive. Just as Gulf did
not obtain permission to redact alleged trade secrets from its discoverable
documents, Gulf neither sought nor obtained permission to redact discoverable
documents on the grounds that portions of those documents are irrelevant or
nonresponsive. The practice of redacting for nonresponsiveness or irrelevance
finds no explicit support in the Federal Rules of Civil Procedure, and the only
bases for prohibiting a party from seeing a portion of a document in the Rules are
claims of privilege or work-product protection. Fed. R. Civ. P. 26(b)(5); see
Steven J. Purcell, Document Production in Federal Litigation: Can You Redact
for Nonresponsiveness?, 59-Dec. Fed. Law. 22 (Dec. 2012) (discussing lack of
support for nonresponsiveness redactions in the Federal Rules of Civil
Procedure). In addition, redacting allegedly nonresponsive or irrelevant portions
of discoverable documents “breed[s] suspicions.” In re State Street Bank and
Trust Co. Fixed Income Funds Inv. Litig., Nos. 08-md-1945 (RJH)(DFE), 08-Civ.0333 (RJH)(DFE), 2009 WL 1026013, at *1 (S.D.N.Y. Apr. 8, 2009). Parties
making such redactions unilaterally decide that information within a discoverable
document need not be disclosed to their opponents, thereby depriving their
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opponents of the opportunity to see information in its full context and fueling
mistrust about the redactions’ propriety. And if the Court were to allow such a
practice it would improperly incentivize parties to hide as much as they dare.
That is a result at odds with the liberal discovery policies, the adversary process,
and the Court’s obligation to read the Rules “to secure the just, speedy, and
inexpensive determination of every action and proceeding.” Fed. R. Civ. P. 1.
None of this is intended to imply that Gulf or its counsel attempted to hide the ball
here. But because these types of redactions find no support in the Rules and are
fraught with the potential for abuse, the Court will not permit them unless the
circumstances provide an exceedingly persuasive justification to do so.
For these reasons, the Court grants Plaintiffs’ request for removal of
redactions in part. Gulf must remove the redactions it placed in the following
documents submitted to the Court:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

BurrisGulfProd000003–4;
BurrisGulfProd000007–8;
BurrisGulfProd000011;
BurrisGulfProd000013;
BurrisGulfProd000015–25;
BurrisGulfProd000028–33;
BurrisGulfProd000054;
BurrisGulfProd000056;
BurrisGulfProd000068;
BurrisGulfProd000076;
BurrisGulfProd000080–81;
BurrisGulfProd000090–93;
BurrisGulfProd000101–05;
BurrisGulfProd000107–09;
BurrisGulfProd000113;
BurrisGulfProd000119;
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• BurrisGulfProd000158; and
• BurrisGulfProd000176. 3
Gulf must remove these redactions within fourteen days, unless Gulf files an
objection to this Order with the District Court. If Gulf files such an objection, it
need not remove these redactions unless and until the District Court overrules
those objections. Finally, although Gulf must remove the redactions in the pages
listed above for purposes of discovery, whether that information may be redacted
if any of these documents is offered at trial remains to be seen. That issue is not
before the Court at this time.
One final issue concerning Gulf’s redactions remains. Gulf redacted three
paragraphs in BurrisGulfProd000174 on the basis that the information included in
those paragraphs was protected by the attorney-client privilege. Because this is
a diversity action, the Court resolves questions of attorney-client privilege
according to state law. Fed. R. Evid. 501 (indicating that in a civil case, state law
governs privilege regarding a claim or defense for which state law supplies the
rule of decision); see Bituminous Cas. Corp. v. Tonka Corp., 140 F.R.D. 381, 386
(D. Minn. 1992) (citing Fed. R. Evid. 501). The privilege must be narrowly

3

In its redaction log, Gulf claimed that the information in
BurrisGulfProd000176 had to be redacted because it “relates to the reserve that
was set by Gulf upon receiving notice of Burrises’ claim in January 2008.” Gulf
does not offer any justification for redacting information concerning an amount an
insurer sets aside as a reserve. It does not claim that this information is
privileged or that it is work product that is protected from disclosure. Nor does it
offer any other rationale for this redaction.

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construed, and the party resisting disclosure bears the burden of presenting facts
to establish the privilege’s existence. Bituminous Cas. Corp., 140 F.R.D. at 386.
Under Minnesota law, 4 information is protected from disclosure under the
attorney-client privilege if it is part of a confidential communication between the
client and the client’s attorney and it was made for the purpose of securing legal
advice. See Brown v. St. Paul City Rwy, 241 Minn. 15, 33, 62 N.W.2d 688, 700
(1954). The mere fact that a client has requested an attorney to act as counsel
or consulted with counsel is not protected by the privilege. See Baskerville v.
Baskerville, 246 Minn. 496, 502, 75 N.W.2d 762, 767 (1956) (“The fact of the
creation or the existence of the relationship of attorney and client is within the
attorney’s own knowledge and that knowledge is collateral to, but not an
ingredient of, any confidential communication upon which the attorney is asked to
give professional advice or aid.”); Henderson v. Eckern, 115 Minn. 410, 413, 132
N.W. 715, 716 (1911) (“It was not error for the court to receive in evidence letters
from the defendant to his attorney showing a request to and employment of the
attorney to foreclose the chattel mortgages.”).
To support its claim of privilege, Gulf stated in its redaction log that “[t]he
redacted information references communications between Gulf and legal
counsel.” (O’Connell Aff. ¶ 3, Attach. 2 at 5.) But Minnesota law does not protect
every document that merely references communications between a client and
4

The parties did not raise any argument that another state’s law would
supply the rule of decision. See Fed. R. Evid. 501.
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counsel. It is the substance of the request for legal advice and the advice given
that is protected from disclosure. See Bituminous Cas. Corp., 140 F.R.D. at 387
(concluding that only certain documents prepared by party’s counsel “containing
the substance of client communications . . . may be withheld from discovery on
the ground of attorney-client privilege”). Having reviewed BurrisGulfProd000174,
the Court concludes that only some of the information redacted from that
document is protected by the attorney-client privilege. Accordingly, Plaintiffs’
request to remove redactions is granted in part and denied in part with respect to
this document. Specifically, the Court concludes as follows:
• The redaction in the first paragraph, which is preceded by the date
“4/29/08,” may remain redacted in its entirety because that
paragraph includes the substance of legal advice obtained from
Gulf’s counsel;
• The redaction in the second paragraph, which is preceded by the
date “4/4/08,” must be removed because that paragraph does not
disclose the substance of any communication made for the purpose
of securing legal advice; and
• In the third paragraph, in the redaction following the date “2/26/08,”
only the final sentence may be redacted because it includes the
substance of legal advice from Gulf’s counsel. The information in
the other sentences discloses only the existence of an attorneyclient relationship and the fact that counsel was consulted.
As with the Court’s Order concerning Gulf’s redactions based on their supposed
irrelevance and trade-secret protection, Gulf must remove these redactions
within fourteen days, unless Gulf files an objection to this Order with the District
Court. If Gulf files such an objection, it need not remove these redactions unless
and until the District Court overrules those objections.
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II.

INTERROGATORIES AND DOCUMENT REQUESTS
Because the second request in Plaintiffs’ motion to compel concerns

Versa’s corporate status, the Court considers the following information relevant.
Until 2005, Versa was technically an active Wisconsin corporation. However, in
December 2005, Versa filed articles of dissolution with the Wisconsin
Department of Financial Institutions. (See Doc. No. 13, Attachs. 1–2.) Thus,
Versa currently has no employees, officers, directors, or other representatives,
(see Handorff Aff. ¶ 3, Attach. 2 at 1), and likely has not had any officers or
employees since at least December 2005.
After the Eighth Circuit remanded the coverage action, Plaintiffs served
several interrogatories and document requests concerning coverage issues on
Versa. In response to Plaintiffs’ Interrogatories, Versa’s counsel indicated that
Versa has no employees, officers, directors, or other representatives who can
respond to Plaintiffs’ discovery requests on behalf of the dissolved corporation.
(Handorff Aff. ¶ 3, Attach. 2, passim.) In response to Plaintiffs’ requests for
production of documents and things, Versa’s counsel lodged various objections,
informed Plaintiffs that Versa no longer has any documents, and referenced their
answers to Plaintiffs’ interrogatories asserting that Versa no longer has any
representatives. (Handorff Aff. ¶ 3, Attach. 2 at 7–10.) In other words, Versa told
Plaintiffs that it was unable to respond to Plaintiffs’ discovery requests.
Plaintiffs argue that these responses are improper, asserting that Versa’s
lawyers should have attempted to contact Versa’s former president, David
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Lambert, to provide answers to the interrogatories and documents, but they failed
to do even that. (Doc. No. 129, Pls.’ Mem. in Supp. of Mot. to Compel (“Pls.’
Mem.”) 7.) Versa counters that it did attempt to contact Mr. Lambert, who is not
a party to this action, through his attorney, to see if Mr. Lambert would be willing
to assist in the preparation of Versa’s responses to Plaintiffs’ discovery requests.
But Lambert’s counsel told Versa’s attorneys that Lambert has no authority to act
on behalf of the dissolved corporation, and that he would not cooperate in
preparing such responses. (Doc. No. 135, Def. Versa’s Mem. in Opp’n to Pls.’
Mot. to Compel (“Versa’s Mem.”) 2–3.)
Thus, it appears that Versa’s position is that it has not, cannot, and does
not have to provide a substantive response to Plaintiffs’ discovery requests. But
Versa has cited no law to support the proposition that a party to a lawsuit has no
duty to respond substantively to discovery requests simply because it is a
dissolved corporation. Versa is a party to this action—it has answered the
Complaint and denied liability—and Wisconsin law 5 provides that a dissolved
corporation “continues its corporate existence . . . to wind up and liquidate its
business and affairs,” and that “[d]issolution of a corporation does not . . .
[p]revent the commencement of a civil, criminal, administrative or investigatory
proceeding by or against the corporation in it its corporate name.” Wis. Stats.
§ 180.1405. If a dissolved Wisconsin corporation may still be a party in a civil
5

See Fed. R. Civ. P. 17(b)(2) (providing that a corporation’s capacity to sue
or be sued is determined “by the law under which it was organized”).
13

lawsuit, which Versa has not disputed here, then it has a duty under the Federal
Rules of Civil Procedure to respond to discovery that is properly served on it.
Fed. R. Civ. P. 33(b)(1)(B) (requiring interrogatories to be answered by any agent
or officer of a corporation); Fed. R. Civ. P. 34 (b)(2)(A) (requiring the party to
whom the request is directed to respond); cf. In re Grand Jury Subpoenas Issued
to Thirteen Corps., 775 F.2d 43, 48 (2d Cir. 1985) (concluding that because New
York law allowed a dissolved corporation to be sued even after its dissolution,
that dissolved entity was required to respond to subpoenas relating to predissolution conduct); Johnson v. RAC Corp., 491 F.2d 510, 514 (4th Cir. 1974)
(allowing plaintiff to complete discovery in a products liability case against a
defendant corporation even though the corporation allegedly dissolved more than
three years earlier under a Delaware statute); St. Paul Fire & Marine Ins. Co. v.
Schilli Transp. Servs., Inc., No. 2:08cv176, 2010 WL 2629485, at *3–*4 (N.D. Ind.
June 28, 2010) (rejecting a defendant’s argument that it should not be required to
respond to discovery because of the “hundreds of hours” that would be involved
in trying to answer discovery requests in light of the defendant’s defunct status).
According to Versa’s attorney, Versa’s only former officer apparently
refuses to help Versa respond to discovery because he believes that he can
thereby protect the dissolved corporation. Whether he can legitimately protect
the dissolved company in this manner is not an issue currently before the Court,
but Versa’s obligation to comply with the discovery rules is. Thus far, it has failed
to comply with those obligations, and as a party to this litigation, Versa must act
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more diligently in attempting to respond to discovery. Versa’s attorneys can
certainly continue to reach out to Mr. Lambert and any other former employees to
get input on the information encompassed by Plaintiffs’ discovery requests. They
can request access to and permission to copy whatever documents Mr. Lambert
has in his possession that they have not yet seen, and they can produce any
responsive documents, use them to answer interrogatories, or properly refer to
them under Rule 33(d).
What Versa cannot do, free of consequences, is tell Plaintiffs that they are
just out of luck. In the event Versa persists in its position that it will not provide
substantive answers to interrogatories or document requests, those
consequences may include preventing Versa from contesting issues addressed
in the discovery or defending itself using documents or other pieces of
information that have not been produced. See Fed. R. Civ. P. 37(d)(1)(A)(ii)
(providing for sanctions for failure to answer interrogatories or requests for
inspection); Fed. R. Civ. P. 37(d)(3) (providing that the Court may impose
sanctions under Rule 37(b)(2)(A)(i)–(vi)). It may also be subject to other more
dispositive sanctions, including the entry of judgment against it. Fed. R. Civ. P.
37(b)(2)(A)(v)–(vi). This is not to say that Versa should be subject to such
sanctions now; but it has failed to comply with its discovery obligations in
response to the discovery Plaintiffs served after the remand, and continued
failure to comply may result in these or other sanctions being imposed. For
these reasons, Plaintiffs’ motion to compel is granted to the extent that Versa
15

must provide substantive responses to Plaintiffs’ interrogatories and document
requests, and provide supplemental answers to that discovery within thirty days
of this Order and Memorandum.
III.

DAVID LAMBERT DEPOSITION
Finally, Plaintiffs ask the Court to compel Versa to produce David Lambert

for a deposition. Plaintiffs have not served a deposition notice on Versa prior to
bringing their motion, but have asked Versa’s counsel to make Lambert available
for a deposition. Because no notice has been served, it is unclear whether
Plaintiffs are seeking to compel a Rule 30(b)(6) deposition or to depose Mr.
Lambert in his capacity as an individual. Because Plaintiffs have specified an
individual they wish to depose rather than to depose Versa, the corporation, 6 the
Court construes Plaintiffs’ motion to be seeking a deposition of Lambert in his
individual capacity. In any event, the failure to serve a notice means that Versa
is under no obligation to produce a witness under Rule 30(b)(6) or otherwise.
Therefore, Plaintiffs’ motion is denied to the extent it requests the Court order
Lambert’s deposition.
Because Mr. Lambert is not a party to this action and is not a current
employee of Versa, Plaintiffs must use the subpoena process under Federal Rule

6

See Charles Alan Wright & Arthur R. Miller, Federal Practice and
Procedure § 2103 (3rd ed. 2010) (“Because Rule 30(b)(6) imposes on the
organization the obligation to select the individual witness, the party seeking
discovery under that provision of the rule is not permitted to insist that it choose a
specific person to testify unless in response to a Rule 30(b)(6) notice.”).
16

of Civil Procedure 45 to obtain Lambert’s appearance at such a deposition.
According to Versa’s counsel, this can be readily accomplished because
Lambert’s attorney has indicated that Lambert would willingly respond to a
properly served subpoena. (Doc. No. 136, Aff. of Matthew D. Sloneker
(“Sloneker Aff.”) ¶ 4.)
JJK

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