ELECTRIC INSURANCE COMPANY v. ELECTROLUX NORTH AMERICA, INC.
Filing
134
LETTER OPINION AND ORDER Ordered that Deft. must produce the following non-privileged discovery from the litigation files to the extent that the discovery was not previously produced with the claims files: investigative materials, including expert assessments, etc., Signed by Magistrate Judge Michael A. Shipp on 8/22/11. (dc, )
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
CHAMBERS OF
MARTIN LUTHER KING COURTHOUSE
50 WALNUT ST. ROOM 2042
NEWARK, NJ 07102
973-645-3827
MICHAEL A. SHIPP
UNITED STATES MAGISTRATE JUDGE
Not for Publication
LETTER OPINION AND ORDER
August 22, 2011
VIA CM/ECF
All counsel of record
Re:
Electric Insurance Co. v. Electrolux North America, Inc.
09-3792 (FSH) (MAS)
Dear Counsel:
This matter comes before the Court upon a dispute regarding the discoverability of the nonprivileged content of litigation files related to certain dryer fires. Plaintiff Electric Insurance
Company (“EIC” or “Plaintiff”) asserts that the Court‟s previous orders covered the production of
litigation files. Defendant Electrolux North America, Inc. (“Electrolux” or “Defendant”) strongly
contests Plaintiff‟s position. For the reasons set forth below, the Court orders Defendant to produce
specific, clearly-defined categories of discovery from the litigation files, which were not produced
from the claims files.
I.
Background
The parties are well-versed in the facts surrounding this matter. Therefore, the Court will
address only those facts relevant to the instant dispute. According to Plaintiff, the Defendant was
ordered to produce:
„[a]ll documents that concern, refer or relate to any other incidents involving fires
allegedly caused by 5.7 cubic foot frontload gas dryers manufactured or sold by
Electrolux.‟ (Request No. 10.) Further, Electrolux was ordered to identify all
claims, including cases in litigation, involving fires „allegedly occurring in 5.7
cubic foot frontload gas dryers manufactured or sold‟ by Electrolux (Interrogatory
No. 17), and to produce all documents that concern, refer or relate to those claims
and cases. (Request No. 18.)
(Docket Entry No. (“Doc. No.”) 122 (“Pl.‟s 5/4/11 Ltr.”) 3.) Therefore, Plaintiff argues, Electrolux
cannot argue in good faith that the Court‟s July 15, 2010 and September 23, 2010 Orders do not
require the production of responsive, non-privileged documents contained in Electrolux‟s litigation
files. (Id.)
Defendant disputes Plaintiff‟s assertion that Electrolux has not produced any documents
from its litigation files. According to Defendant:
Electrolux has turned over all the relevant claim and litigation files associated
with the model product at issue. Moreover, Electrolux has produced copies of
the Complaints filed in every lawsuit relating to a 5.7-cubic-foot gas dryer fire
(over the past ten years), along with the underlying claims files for all such cases
that Electrolux‟s Risk Group maintained prior to sending [the files] to Litigation.
Those claims files contain investigative materials, including expert assessments,
inspection reports, photographs, and correspondence among Electrolux and the
claimants (or their attorneys).
(Doc. No. 131 (“7/20/11 Joint Ltr.”) 5.) Electrolux argues that “EIC may obtain the „substantial
equivalent‟ of information contained in Electrolux‟s [l]itigation [f]iles by simply reviewing the
docket sheets for the matters identified by Electrolux and requesting copies of the filings it needs.”
(Doc. No. 99 (“3/8/11 Ltr.”) 6.) Finally, Electrolux asserts that the burden of locating, identifying
and logging the information in the litigation files outweighs any possible benefit to EIC, because
most of the information in the litigation files is either protected by the attorney-client privilege or by
confidentiality orders entered in those cases. (Id. at 7-8.)
II.
Legal Standard & Analysis
Under Federal Rule of Civil Procedure 26(b), upon a finding of good cause, a court may order
discovery of any matter relevant to a party‟s claims, defenses or the subject matter involved in the
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action. Notably, Rule 26 is to be construed liberally in favor of disclosure, as relevance is a broader
inquiry at the discovery stage than at the trial stage. Tele-Radio Sys. Ltd. v. De Forest Elecs., Inc., 92
F.R.D. 371, 375 (D.N.J. 1981). While relevant information need not be admissible at trial in order to
grant disclosure, the burden remains on the party seeking discovery to “show that the information
sought is relevant to the subject matter of the action and may lead to admissible evidence.” Caver v.
City of Trenton, 192 F.R.D. 154, 159 (D.N.J. 2000). However, under Federal Rule of Civil
Procedure 26(b)(2)(C), a court may limit discovery when the burden is likely to outweigh the
benefits. See Bayer AG v. Betachem, Inc., 173 F.3d 188, 191 (3d Cir. 1999). Specifically, a
discovery request may be denied if this Court finds that there exists a likelihood that the resulting
benefits would be outweighed by the burden or expenses imposed as a consequence of the discovery
after assessing the following factors: (i) the unreasonably cumulative or duplicative effect of the
discovery; (ii) whether “the party seeking discovery has had ample opportunity to obtain the
information by discovery in the action;” and (iii) “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)(C).
While Defendant argues that the Court did not order production of litigation files, a review
of this Court‟s previous Orders does not reveal any such limitation. Rather, a literal reading of the
Court‟s previous Orders would indicate that litigation files are included in Plaintiff‟s discovery
requests. In addition, the Court is not persuaded by Electrolux‟s assertion that Plaintiff can obtain
the information from alternative sources, including the various case dockets, because Electrolux did
not provide a list of the case names and docket numbers until after March 25, 2011. Indeed,
considerable discovery in the litigation files may not be listed on the various case dockets, and
documents from some state court litigations cannot be accessed electronically; thus, the discovery
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may only be in Defendant‟s possession. It is also clear that Plaintiff cannot obtain certain discovery
in the method suggested by Defendant.
Nevertheless, the Court finds it necessary to assess whether any limitations on the discovery
are now warranted based on the application of Rule 26(b)(2)(C) considerations. After carefully
considering the discovery that has been produced to date in connection with the Rule 26(b)(2)(C)
factors, including the needs of the case and the importance of the discovery in resolving the issues,
the Court finds that Plaintiff is entitled to investigative materials, including expert assessments,
inspection reports, photographs and correspondence among Electrolux and the claimants (excluding
correspondence to/from attorneys, which is protected as attorney-client privilege). Plaintiff is
entitled to this discovery, regardless of whether the information is located in the claims files or the
litigation files. Defendant asserts that it provided such discovery to Plaintiff as part of the claims
files. However, the Court finds that Defendant‟s assertion that it produced comprehensive claims
files to Plaintiff fails, as it does not appear that the claims files were complete. This was most
recently demonstrated by Defendant‟s correspondence, which was submitted to the Court in
conjunction with the Court‟s in camera review of certain e-mail messages. In connection with the
in camera review, the Court requested five PDF documents that were attached to certain e-mail
messages at issue. Defendant only produced three of the five, indicating:
Pursuant to Chamber‟s [sic] request on Friday, enclosed please find copies of the
attachments contained within the 15 privileged documents that remain in dispute.
...
All of these documents were previously produced to plaintiffs in the original claims file
production. However, the emails to which they are attached have been withheld on work
product grounds as discussed in our previous submissions to the Court.
We are unable to locate the two attachments contained in the emails at Bates No. M20853
and M20855. These documents were unavailable in the original claims file production.
(Def.‟s 8/9/11 Ltr. 1.)
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Therefore, it appears to the Court that certain relevant discovery may not have been
contained in the claims files at all or may have been removed or misplaced. This is particularly
noteworthy as Electrolux provided in the joint proposed final pretrial order that it contemplates
filing motions in limine to preclude Plaintiff from introducing evidence of other similar incidents
based on an assertion that there is insufficient proof to demonstrate substantial similarity with the
facts and circumstances of this matter. This would not be equitable if the discovery is incomplete.
III.
Conclusion
Based on a careful consideration of the Rule 26(b)(2)(C) factors, and for good cause shown,
the Court ORDERS that Defendant must produce the following non-privileged discovery from the
litigation files to the extent that the discovery was not previously produced with the claims files:
investigative materials, including expert assessments, inspection reports and photographs. By
August 29, 2011, the parties shall meet and confer regarding the specific discovery that was not
provided with the claims files.1 Defendant shall produce the required discovery by September 16,
2011.
s/ Michael A. Shipp___________________
MICHAEL A. SHIPP
UNITED STATES MAGISTRATE JUDGE
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The exact discovery produced from the claims files may not be clear to counsel for Defendant
based on the change of counsel late in the case. Therefore, counsel must meet and confer to ensure
that discovery from the litigation files is not duplicative of the discovery from the claims files and
that Plaintiff has been provided with the ordered discovery. The Court has not issued a Report and
Recommendation regarding its assessment of Defendant‟s compliance with its discovery obligations
due to certain outstanding discovery-related issues, including the privilege log issue. However, the
Court notes that it has been extremely encouraged by the cooperation between Plaintiff‟s counsel
and Defendant‟s new counsel. As the Court stated during the telephone status conference on the
record on August 3, 2011, counsel exemplified both the intent and spirit of the meet and confer
process by narrowing its privilege disputes from over 200 items to just 15. The Court is confident
that counsel can meet and confer regarding the discovery from Defendant‟s litigation files and
expeditiously bring this remaining discovery issue to conclusion.
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