MOORE v. DAN HOLDINGS, INC. et al
Filing
66
MEMORANDUM OPINION AND ORDER signed by MAG/JUDGE L. PATRICK AULD on 04/30/2013, that Defendant's Motion for Protective Order Regarding Certain Topics Listed in Plaintiff's Amended Rule 30(b)(6) Notice of Deposition (Docket Entr y 31 ) and Defendants' Motion for Protective Order Regarding Plaintiff's Notice to Depose Defendants' Legal Counsel (Docket Entry 33 ) are GRANTED. FURTHER that, pursuant to Federal Rules of Civil Procedure 26(c)(3) an d 37(a)(5)(A), Plaintiff must show cause why the Court should not order Plaintiff and/or her counsel to pay the reasonable expenses, including attorneys fees, Defendants incurred in connection with their Motions for Protective Order (Docket Entrie s 31 and 33 ), as follows: (1) on or before May 14, 2013, Defendants either shall file a notice waiving any right to reimbursement of expenses, including attorney's fees, related to said Motions or shall serve Plaintiff with a statement of the reasonable expenses, including attorney's fees, Defendants incurred in connection with said Motions; (2) if Defendants timely serve Plaintiff with such an expense statement, on or before May 28, 2013, Plaintiff either shall file a notice confirming her agreement to pay the expenses claimed by Defendants or shall file a memorandum of not more than 10 pages setting out Plaintiff's argument as to why the Court should not require Plaintiff and/or her counsel to pay such expenses (including any argument challenging the reasonableness of such expenses, along with a certification that Plaintiff has attempted to confer in good faith with Defendants about that subject); (3) if Plaintiff timely files a memorandum contesting pay ment of expenses claimed by Defendants, on or before June 11, 2013, Defendants may file a response of not more than 10 pages; and (4) if Defendants timely file a response, on or before June 18, 2013, Plaintiff may file a reply of not more than five pages. FURTHER that Plaintiff's Motion to Compel Discovery (Docket Entry 41 ) is DENIED, except that, on or before May 14, 2013: (1) Defendants shall respond to Interrogatory No. 4 as limited to any internal complaints, charge s, or lawsuits alleging race discrimination and/or retaliation during the last five years involving anyone who supervised Plaintiff or participated in any alleged employment action directed at Plaintiff; (2) Defendants shall submit to the Court f or in camera inspection the first document listed in their privilege log and a memorandum of not more than three pages explaining how the work product doctrine applies to said document; (3) Defendants shall gather corporate balance sheets covering the period from 2011 to the present or other comparable documents that reasonably would show the corporate Defendants' current net worth, so that they can make immediate service of such material on Plaintiff if later warranted; and (4) the Pa rties shall conduct the deposition of Dan Orr on mutually acceptable terms as to date, time, and location. FURTHER that the Motion to Quash and/or Modify Third-Party Subpoena Served upon Chris Moore (Docket Entry 37 ) and Defendants' M otion to Compel Compliance with Subpoena (Docket Entry 45 ) are DENIED, but the Parties shall conduct the deposition of Chris Moore on or before May 14, 2013, on mutually acceptable terms as to date, time, and location. FURTHER that Plaintiff's Motion to Extend the February 27, 2013 Discovery Deadline (Docket Entry 35 ) is DENIED. (Taylor, Abby)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
FELISHA RICH MOORE,
Plaintiff,
v.
DAN HOLDINGS, INC., a North
Carolina Corporation; DIVERS
ALERT NETWORK, INC., a North
Carolina corporation; and
WILLIAM ZIEFLE,
Defendants.
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1:12CV503
MEMORANDUM OPINION AND ORDER
This case comes before the Court on (1) Defendants’ Motion for
Protective Order Regarding Certain Topics Listed in Plaintiff’s
Amended Rule 30(b)(6) Notice of Deposition (Docket Entry 31);
(2) Defendants’ Motion for Protective Order Regarding Plaintiff’s
Notice to Depose Defendants’ Legal Counsel (Docket Entry 33);
(3) Plaintiff’s Motion to Extend the February 27, 2013 Discovery
Deadline (Docket Entry 35); (4) a Motion to Quash and/or Modify
Third-Party Subpoena Served upon Chris Moore (Docket Entry 37);
(5) Plaintiff’s Motion to Compel Discovery (Docket Entry 41); and
(6) Defendants’ Motion to Compel Compliance with Subpoena (Docket
Entry 45).
(See Docket Entries dated Mar. 26 and Apr. 9, 2013.)
For the reasons that follow, the Court will grant Defendants’
Motions for Protective Orders, will deny Plaintiff’s Motion to
Compel
further
responses
to
written
discovery,
except
as
to
Interrogatory No. 4 (as to which Defendants must serve Plaintiff
with a limited response), Document Request No. 11 (as to which
Defendants
must
make
a
sealed
submission
to
the
Court),
and
Document Request No. 16 (as to which Defendants must prepare a
limited response for possible future service upon Plaintiff), and
will deny (with instructions) Plaintiff’s Motion to Compel as to
Dan Orr’s deposition, the competing motions regarding Chris Moore’s
deposition, and Plaintiff’s discovery extension motion.
I. Defendants’ Motions for Protective Orders
Defendants
seek
to
limit
the
scope
of
the
corporate
Defendants’ Rule 30(b)(6) deposition(s) and to prevent Plaintiff
from deposing Defendants’ counsel regarding her investigation into
Plaintiff’s allegations of discrimination and retaliation.
Docket Entries 31 and 33.)
(See
With respect to the Rule 30(b)(6)
deposition(s), Defendants originally moved the Court to enter a
protective order for the purposes of: “(a) protect[ing] from
disclosure with respect to Topics 1, 2, 5, 8, 9, 10, and 12
information about Defendants’ communications with legal counsel and
work product of Defendants’ legal counsel or otherwise since the
information is protected by the attorney-client privilege and/or
work-product doctrine; (b) limit[ing] the scope of inquiry with
respect to Topics 1, 2, 8, and 12; and (c) exclud[ing] Topic 13
from the scope of inquiry.”
(Docket Entry 31 at 5.)
Subsequently,
in their Reply, Defendants represented that “disputes with respect
to Topics 8, 12, and 13 are now moot.
Counsel for the [P]arties
also resolved conflict with respect to Topics 1, 2, and 10, except
to
the
extent
information.
that
Plaintiff
Therefore,
what
continued
remains
-2-
to
before
seek
the
privileged
Court
are
Defendants’
objections
relating
to
matters
protected
by
the
attorney-client privilege and/or work product doctrine in Topics 1,
2, 5, 9, and 10.”
(Docket Entry 53 at 1-2 (internal citations and
footnotes omitted); see also Docket Entry 47 at 18.)
Via Topics 1, 2, 5, 9 and 10, Plaintiff seeks to depose the
corporate Defendants’ Rule 30(b)(6) witness regarding:
1.
For the time-period of 2008 through the present,
communications between [the corporate] Defendants’
respective Board of Directors and [Defendant]
William Ziefle about the claims and defenses at
issue in this case. Topic areas may include, but
are not limited to: (i) the underlying lawsuit;
(ii)
Plaintiff’s
internal
complaint
of
discrimination; (iii) Plaintiff’s [Equal Employment
Opportunity Commission (“EEOC”)] charge; (iv)
Plaintiff’s employment with the Defendants; (v)
prior lawsuits, charges and/or internal complaints
alleging discrimination and/or retaliation; (v)
[sic] investigations of lawsuits, charges and/or
internal complaints alleging discrimination and/or
retaliation; (vi) Defendants’ human resources
policies and procedures.
2.
For the time-period of 2008 through the present,
communications made at Board of Directors’ meetings
and/or other company functions between any of [the
corporate]
Defendants’
respective
Board
of
Directors (but not [Defendant] Ziefle) about the
claims and defenses at issue in this case. Topic
areas may include, but are not limited to: (i) the
underlying lawsuit; (ii) Plaintiff’s internal
complaint of discrimination; (iii) Plaintiff’s EEOC
charge; (iv) Plaintiff’s employment with the
Defendants; (v) prior lawsuits, charges and/or
internal complaints alleging discrimination and/or
retaliation; (v) [sic] investigations of lawsuits,
charges
and/or
internal
complaints
alleging
discrimination and/or retaliation; (vi) Defendants’
human resources policies and procedures.
. . . .
5.
Plaintiff’s
employment
with
including but not limited to
-3-
the
Defendants,
Plaintiff’s work
history; disciplinary history; wages; benefits; job
performance; and separation from the Defendants.
. . . .
9.
Plaintiff’s
complaint
discrimination/retaliation
investigation of the same.
10.
Mercy
Njenga’s
complaint
and
discrimination/retaliation and the
investigation of the same.
(Docket Entry 31-1 at 4-5.)1
and
charge
of
and the Defendants’
charge
of
Defendants’
The Parties’ dispute over these
Topics and the deposition of Defendants’ counsel thus involves the
same basic question:
whether the attorney-client privilege and/or
the work product doctrine preclude discovery into Defendants’
investigation of Plaintiff’s allegations and/or Ms. Njenga’s EEOC
charge.
(See Docket Entry 32 at 10-18; Docket Entry 34 at 9-18;
Docket Entry 47 at 8-13; Docket Entry 50 at 6-16; Docket Entry 53
at 2-10; Docket Entry 57 at 2-10.)2
1
The Complaint describes Defendant Ziefle as the “Chief
Executive Officer . . . of the [corporate] Defendant[s]” from 2010
until February 2012. (Docket Entry 1 at 2.) It also appears that
Defendant Ziefle served as Defendant DAN Holdings, Inc.’s general
counsel at one point (see Docket Entry 47 at 10) and that the
corporate Defendants designated him to serve as their Rule 30(b)(6)
witness in this action (id. at 3). Plaintiff has identified Ms.
Njenga as “a[n] [] African-American [former] employee of Defendants
who complained of race discrimination and retaliation and
thereafter filed an EEOC charge.” (Docket Entry 42 at 16.)
2
It appears that, with respect to these Topics, to the extent
Plaintiff sought information not directed to such investigations,
Defendants
responded,
including
by
“answer[ing]
questions
concerning Defendants’ investigation into [Ms.] Njenga’s internal
complaint” (Docket Entry 53 at 2 n.3) (as contrasted with the
subsequent investigation into her EEOC charge). Accordingly, as to
Ms. Njenga, the Court will address only issues concerning discovery
regarding Defendants’ investigation into her EEOC charge.
-4-
The United States Court of Appeals for the Fourth Circuit
employs the classic test regarding the attorney-client privilege:
The privilege applies only if (1) the asserted
holder of the privilege is or sought to become a client;
(2) the person to whom the communication was made (a) is
a member of the bar of a court, or his subordinate and
(b) in connection with this communication is acting as a
lawyer; (3) the communication relates to a fact of which
the attorney was informed (a) by his client (b) without
the presence of strangers (c) for the purpose of securing
primarily either (i) an opinion on law or (ii) legal
services or (iii) assistance in some legal proceeding,
and not (d) for the purpose of committing a crime or
tort; and (4) the privilege has been (a) claimed and (b)
not waived by the client.
In re Grand Jury Subpoena: Under Seal, 415 F.3d 333, 338 n.3 (4th
Cir.
2005).
The
work
product
doctrine
applies
to
material
“prepared because of the prospect of litigation when the preparer
faces an actual claim or a potential claim following an actual
event
or
series
litigation.”
Co.,
Inc.,
events
that
reasonably
could
result
in
National Union Fire Ins. Co. v. Murray Sheet Metal
967
original).
of
F.2d
980,
984
(4th
Cir.
1992)
(emphasis
in
demonstrate
The burden rests on the party resisting discovery to
the
applicability
of
either
privilege or the work product doctrine.
the
attorney-client
See Solis v. Food Emp’rs
Labor Relations Ass’n, 644 F.3d 221, 232 (4th Cir. 2011); In re
Grand Jury Subpoena, 415 F.3d at 338-39.
A. Investigation of Plaintiff’s Allegations
Defendants retained outside counsel regarding Plaintiff’s
allegations of discrimination and retaliation. (See Docket 32-2 at
4.)
Plaintiff argues that, as to any investigation made by such
counsel, “Defendants have waived, in whole or part, any valid
-5-
privilege objections” (Docket Entry 47 at 9), by “asserting a
number of ‘good faith’ and similar defenses” (id.).
In support of
that position, Plaintiff cites Chivers v. Central Noble Cmty. Sch.,
No. 1:04-CV-00394, 2005 WL 6567356, at *2-4 (N.D. Ind. Aug. 4,
2005) (unpublished), and Pray v. New York City Ballet Co., No. 96
CIV 5723 RLC, 1998 WL 558796, at *2 (S.D.N.Y. Feb. 13, 1998)
(unpublished). (See Docket Entry 47 at 9-10.) This argument lacks
merit because both Chivers and Pray (and other cases like them)
addressed discovery of investigations related to harassment claims.
In the harassment context, the reasonableness of remedial
measures represents a key issue in determining liability.
See
Chivers, 2005 WL 6567356, at *2 (observing that the plaintiffs had
to “prove that the defendants had actual knowledge of the sexually
harassing conduct, and that the defendants’ response to it was
‘clearly
unreasonable’
under
the
circumstances,”
such
that
discovery about the defendants’ investigation “is likely to speak
directly to whether [they] had actual knowledge of all of the
circumstances
surrounding
the
allegations
and
whether
their
response to such allegations was ‘clearly reasonable’”); Pray, 1998
WL 558796, at *2 (“Once an employer is made aware that its
employees are being subject to sexual harassment, it is under an
obligation to take reasonable steps to remedy it, and whether the
employer’s responsibility for remediation has been fulfilled is
determined
by
the
facts
in
each
case.”
(internal
citation
omitted)); see also Freeman v. Dal-Tile Corp., ___ F. Supp. 2d ___,
___, 2013 WL 1010601, at *19 (E.D.N.C. Mar. 14, 2013) (“‘The
-6-
negligence analysis can be divided into two separate inquiries,
looking first, into the employer’s actual or constructive knowledge
of harassment, and second, into the adequacy of the employer’s
remedial and preventative responses.’” (quoting Turnbull v. Topeka
State Hosp., 255 F.3d 1238, 1244 (10th Cir. 2001)).
asserts
that,
“although
[Chivers
and
Pray]
Plaintiff
involve
sexual
harassment claims, the principles underlying those cases (including
as to waiver arguments) are fully applicable here” (Docket Entry 47
at 9 n.4), but offers no reasoning or authority to establish how
her claims (none of which involve harassment) depend in any way on
any investigation conducted by Defendants’ counsel (see id.).3
Moreover, a review of Defendants’ cited defenses (see id. at
9 (citing “Answer [Fifth, Eighth & Eleventh Affirmative Defenses]
(Docket Entry No. 7)” (brackets in original))) refutes the notion
that
Defendants
have
made
their
counsel’s
investigation
of
Plaintiff’s allegations an issue in this case:
FIFTH AFFIRMATIVE DEFENSE
Defendants have at all times acted in a good faith
and in a lawful manner towards Plaintiff; all personnel
3
Plaintiff (whose Complaint demands punitive damages (see
Docket Entry 1 at 12)) also states:
The viability of a punitive damages claim turns upon
whether, among other things, Defendants’ [sic] committed
unlawful acts against Plaintiff in bad-faith.
Thus,
Defendants’ alleged good-faith conduct . . . - such as by
purportedly conducting appropriate investigations into
discrimination complaints – is clearly relevant . . . .
(Docket Entry 47 at 9 n.4.)
Again, however, Plaintiff has not
explained or cited authority showing how any investigation by
Defendants’ counsel could affect a punitive damages award for
claims arising prior to any such investigation. (See id.)
-7-
decisions with respect to Plaintiff, including but not
limited to any decisions with respect to promotion,
advancement, and compensation, were made for legitimate,
non-discriminatory, and non-retaliatory business reasons.
To
the
extent
that
Plaintiff’s
employment
with
[Defendant] DAN Holdings, Inc. is deemed to have been
involuntarily terminated, which is hereby expressly
denied, Plaintiff’s termination was made for legitimate,
non-discriminatory, and non-retaliatory business reasons.
. . . .
EIGHTH AFFIRMATIVE DEFENSE
Plaintiff’s negligent retention and supervision
claim is barred because [Defendant] Ziefle did not commit
a tortious or unlawful act against Plaintiff, and because
[Defendant] Ziefle was competent and fit for his job
position. Further, [Defendants] DAN Holdings, Inc. and
Divers Alert Network, Inc. had no reason to believe that
any of their employees, including [Defendant] Ziefle, was
incompetent or unfit for their respective job positions,
or that any employee had the proclivity to engage in an
unlawful act, or to believe that any of their employees
actually engaged in an unlawful act.
. . . .
ELEVENTH AFFIRMATIVE DEFENSE
Plaintiff’s Complaint fails to allege any facts
which would support an award of punitive damages or any
claims
pursuant
to
which
punitive
damages
are
recoverable. Defendants at all times acted in good faith
and in a lawful manner towards Plaintiff and had
reasonable grounds to believe that their actions did not
violate any statutes relied upon by Plaintiff or any
other law. Defendants’ lack of willfulness or intent to
violate such statutes or other law is asserted as a
defense to any claim for punitive damages.
(Docket Entry 7 at 13-15.)
Although these defenses do not reference any investigation by
Defendants’
counsel,
Plaintiff
points
to
this
exchange
from
Defendant Ziefle’s deposition to show that the investigation by
Defendants’ counsel nonetheless constitutes part of these defenses:
[Plaintiff’s Counsel]:
What’s evidence – what – what
are good faith actions to you
-8-
in connection with this case
that the companies took – or
you took toward [Plaintiff]?
. . . .
[Defendant Ziefle]:
Open and honest communication
about her job performance.
. . . About where we needed to
have
improvement,
exploring
other possible opportunities
for
her
within
the
organization.
I mean all of
the things that we’ve talked
about here today, none of it
was done with a design or with
an intent or even with a
decision that she wasn’t going
to be with the company going
forward.
Everything we did was to
try to make sure that she
stayed on as an employee and
that we found something that
she would enjoy doing and could
contribute to the company. To
me that’s good faith.
. . . .
[Plaintiff’s Counsel]:
Okay.
What about -- did you
conduct
the
internal
investigation
into
her
complaint in good faith?
[Defendant Ziefle]:
Again, I hired legal counsel to
give me legal advice.
To me
that’s good faith.
[Plaintiff’s Counsel]:
That’s good faith. So that’s
good faith, you think, for
purposes of a defense?
[Defendant Ziefle]:
Again, I’m not a North Carolina
lawyer.
I’ve never practiced
in federal court. I can only
tell you what I know, what
you’re asking.
To me that
appears to be good faith.
(Docket Entry 47-9 at 19-21.)
-9-
This exchange does not support Plaintiff’s position that
Defendants have made their counsel’s investigation a part of any
affirmative defense. To the contrary, when asked to identify “good
faith
actions
.
.
.
[Defendants]
took
toward
[Plaintiff],”
Defendant Ziefle did not mention any investigation. Plaintiff then
inquired
whether
Defendant
Ziefle
“conduct[ed]
the
internal
investigation into [Plaintiff’s] complaint in good faith.”
When
Defendant Ziefle responded that he believed he acted in good faith
by hiring an attorney, Plaintiff’s counsel raised the specific
issue of an affirmative defense and Defendant Ziefle made clear
that he did not know whether hiring a lawyer constituted a defense.
Beyond the fact that the testimony cited by Plaintiff does not
show that Defendants have injected their counsel’s investigation
into the case, Defendants expressly have stated that they “have not
raised, and have confirmed that they do not intend to raise, the
adequacy of any investigation done by their legal counsel as a
defense.”
(Docket Entry 53 at 6; see also id. at 7 (“Nonetheless,
to the extent Plaintiff claims that Defendants made the adequacy of
their legal counsel’s privileged investigation at issue, which
Defendants expressly deny, Defendants confirm that the adequacy of
their
legal
counsel’s
privileged
asserted as a defense.”).)
investigation
is
not
being
Plaintiff, however, argues that, even
if Defendants did not place their counsel’s investigation at issue
via any asserted defense, they waived the attorney-client privilege
by using counsel to conduct a factual investigation in the ordinary
course
of
business.
(See
Docket
-10-
Entry
47
at
10-11
(“[T]he
investigator (Defendants’ counsel) compiled the facts and drew the
conclusions about how Defendants should respond to the complaint
[and] . . . Defendants cannot immunize their internal investigation
of Plaintiff’s complaint - which admittedly was conducted in the
ordinary course of business - under the cloak of attorney-client
and/or other privileges simply by asking outside counsel to conduct
the investigation.”).)
This contention also falls short.
As an initial matter, the assertion that Defendants’ counsel
investigated Plaintiff’s allegations as part of the ordinary course
of Defendants’ business cannot withstand scrutiny, as revealed by
this exchange during Defendant Ziefle’s Rule 30(b)(6) deposition:
[Plaintiff’s counsel]:
Okay. Is an investigation into
an internal complaint normally
done by Defendants in the
ordinary course of business?
[Defendants’ counsel]:
Objection.
[Defendant Ziefle]:
We had done investigations inhouse in the past.
As I
examined what was best in the
long-term
interest
of
the
company as far as addressing
those complaints if and when
they arise, I’ve come to the
conclusion it’s actually better
to bring in a third party,
certainly to consult with legal
counsel
and
follow
their
advice.
[Plaintiff’s counsel]:
Well, have Defendants always -regardless of who conducted the
investigation -- investigated
in the ordinary course of
business internal complaints
and discrimination?
[Defendant Ziefle]:
Uh-huh.
-11-
(Docket Entry 42-12 at 3.)
This testimony reflects that Defendant
Zeifle retained counsel not to conduct an investigation as part of
the normal course of business, but rather that he retained counsel
to provide legal advice.
Defendant
Moreover, elsewhere in his deposition,
Ziefle testified
that
he
knew
of
no
previous time
Defendants used outside counsel to investigate such allegations
(id. at 9) and that Defendants “retained counsel to give [them]
legal advice about what were apparently -- potential claims from an
employee” (Docket Entry 56-6 at 11).
With respect to her argument that an attorney who compiles
facts effectively waives the attorney-client privilege, Plaintiff
cites Harding v. Dana Transp., Inc., 914 F. Supp. 1084, 1096
(D.N.J.
1996),
with
the
following
parenthetical
reference:
“finding that [the] defendant waived attorney-client privilege by
fusing roles of internal investigator and legal advisor.”
Entry 47 at 11.)
(Docket
The cited portion of Harding does not support
Plaintiff’s position.
See Harding, 914 F. Supp. at 1096.
To the
contrary, on the cited page, the Harding Court discussed cases in
which defendants directly invoked legal advice as a defense and the
fact that the defendant in the harassment case before it “ha[d]
attempted to utilize the results of [its counsel’s investigation]
both as a defense to liability . . . and as an aspect of its
preparation for the . . . trial itself.”
Additionally,
elsewhere
in
Id.
Harding,
the
court
rejected the very argument that Plaintiff now presents:
-12-
expressly
[The plaintiffs] assert [that the defendant’s attorney]
was acting as a fact finder or investigator, and that
legal acumen was not required or utilized when he
conducted the interviews. The court does not find this
argument persuasive as this view overlooks Supreme Court
teaching that:
the privilege exists to protect not only the
giving of professional advice to those who can
act on it but also the giving of information
to the lawyer to enable him to give sound and
informed advice.
The first step in the
resolution
of
any
legal
problem
is
ascertaining
the
factual
background
and
sifting through the facts with an eye to the
legally relevant.
Upjohn [Co. v. United States], 449 U.S. [383,] 390
[(1981)].
In Upjohn, the Court confronted the
complexities of corporate representation.
The Court
noted that having a corporation as a client necessitates
obtaining
factual information
from
a
number
of
individuals within that corporation. Id. at 391. Thus,
an attorney who interviews various individuals within a
corporation may do so with the intent to enhance client
representation.
Harding, 914 F. Supp. at 1091 (internal footnote and parallel
citations omitted).
Simply put, Harding refutes, rather than
supports, Plaintiff’s position.
Finally, Plaintiff asserts that “Defendants still must be
[sic]
produce
a
corporate
designee
to
testify
about
factual
information relating to [the] internal investigations . . . .
In
particular, Defendants’ designee should be required to testify
about the identities of the witnesses interviewed; the length of
each witness interview; facts conveyed during the interview; the
length of each internal investigation; and the like.”
Entry 47 at 15.)
This argument cannot stand.
(Docket
Although the
attorney-client privilege “does not protect disclosure of the
-13-
underlying facts by those who communicated with the attorney,”
Upjohn, 449 U.S. at 395, “[d]iscovery was hardly intended to enable
a learned profession to perform its functions . . . on wits
borrowed from the adversary,” id. at 396 (internal quotation marks
omitted).
In other words, although Defendants cannot prevent fact
witnesses
from
presenting
information
during
the
course
of
discovery simply because such witnesses also provided information
to Defendants’ counsel, Plaintiff may not attempt to learn the
underlying facts simply by using discovery to inquire about the
investigation conducted by Defendants’ counsel.4
In sum, the attorney-client privilege and the work product
doctrine protect from discovery the investigation by Defendants’
counsel into Plaintiff’s allegations.
As a result, the Court will
grant Defendants’ Motions for Protective Order (Docket Entries 31
and 33) as to such matters.
4
To the extent Plaintiff relies on Farzan v. Wells Fargo
Bank, No. 12 Civ. 1217(RJS)(JLC), 2012 WL 6763570, at *3 (S.D.N.Y.
Dec. 28, 2012) (unpublished), for the proposition that “‘disclosure
of who [the attorney] interviewed as part of her investigation does
not reveal [the defendant’s] legal strategy, its analysis of [the
plaintiff’s] claims, or other protected information’” (Docket Entry
47 at 15), the Court finds persuasive the contrary determination of
other courts, see, e.g., Tracy v. NVR, Inc., 250 F.R.D. 130, 132
(W.D.N.Y. 2008) (“[D]isclosure of the identities of witnesses
interviewed and contacted would inevitably teach the requesting
party which individuals opposing counsel considers more or less
valuable as witnesses and how he or she is preparing for trial.”
(internal brackets and quotation marks omitted)); Commonwealth of
Mass. v. First Nat’l Supermarkets, Inc., 112 F.R.D. 149, 153 (D.
Mass. 1986) (“I agree with the line of cases . . . which hold that
interrogatories which seek the names of persons interviewed by an
adverse party’s attorney . . . are improper.”).
-14-
B. Investigation of Mercy Njenga’s EEOC Charge
Defendants rely on the work product doctrine to prevent
discovery
charge.
regarding
their
investigation
(See Docket Entry 53 at 9.)
of
Ms.
Njenga’s
EEOC
Plaintiff contends that the
work product doctrine cannot protect Defendants’ investigation of
Ms. Njenga’s EEOC charge because “Defendants’ investigation was not
conducted by outside counsel, nor was outside or other counsel
consulted during the investigation” (Docket Entry 47 at 13), and
because “Defendants’ investigation was conducted by [Defendant]
Ziefle in a non-legal capacity and in the ordinary course of
Defendants’
business”
(id.).
The
Court
rejects
Plaintiff’s
contention in those regards based on:
(1) persuasive authority that an investigation following an
EEOC charge constitutes activity in anticipation of litigation,
see, e.g., Malin v. Hospira, Inc., No. 08C4393, 2010 WL 3781284, at
*2 (N.D. Ill. Sept. 21, 2010) (unpublished) (“[The] interview notes
were
a
response
to
[the]
plaintiff’s
EEOC
charge.
[The]
[p]laintiff argues that because the notes were made in conjunction
with what [the] plaintiff calls a ‘routine investigation’ then they
do not fall under the work product privilege.
But, again, we must
consider the entirety of the events. [The] [p]laintiff had already
filed her charge of discrimination.
The notes were, therefore,
prepared with ‘an eye toward litigation’ and fall within work
product
protection.”
(internal
footnotes
omitted));
Mills
v.
Federal Express Corp., 186 F.R.D. 376, 387-88 (W.D. Tenn. 1999)
(“[O]nce [the] plaintiff announced her intention to move forward
-15-
under federal discrimination laws by filing a racial discrimination
charge with the EEOC . . ., the investigatory work carried on by
[the]
defendant’s
employees
was
done
in
anticipation
of
litigation.”); and
(2) the fact that the work product doctrine does not apply
only to investigations conducted by counsel, see Fed. R. Civ. P.
26(b)(3)(A) (“[A] party may not discover documents and tangible
things that are prepared in anticipation of litigation . . . by or
for another party or its representative (including the other
party’s attorney,
consultant,
surety,
indemnitor,
insurer,
or
agent.”); see also Stewart v. Falley’s Inc., No. 00-1124-WEB, 2001
WL 1318371, *2 (D. Kan. Feb. 14, 2001) (unpublished) (“[The]
plaintiff argues that [the] defendant must also show that the
memorandum was prepared at the direction of an attorney. The court
disagrees.
The 1970 amendments to Rule 26 expressly extend the
work product protection to documents prepared for litigation by the
adverse party itself or its agent.” (citation omitted)).
Nor
has
Plaintiff
established
a
substantial
need
for
information related to Defendants’ investigation of Ms. Njenga’s
EEOC charge so as to overcome the protection afforded by the work
product doctrine.
Instead, Plaintiff merely states:
Even assuming arguendo that the work product privilege
was applicable to any of the internal investigations at
issue, Plaintiff has demonstrated a ‘substantial need’
for the requested information based upon its relevance
and importance to her claims and the fact that Plaintiff
has unsuccessfully (due to Defendants’ objections to
written discovery and/or at other depositions) tried to
obtain the information through other means.
-16-
(Docket Entry 47 at 14 n.6.)
suffice.
CV-W-GAF,
This conclusory statement does not
See, e.g., Hallmark Cards, Inc. v. Murley, No. 09-03772010
WL
4608678,
at
*6
(S.D.N.Y.
Nov.
9,
2010)
(unpublished) (“Incantation of the substantial need standard and
assertions that the need is ‘obvious’ are not sufficient . . . .”);
Marchello v. Chase Manhattan Auto Fin. Corp., 219 F.R.D. 217, 219
(D. Conn. 2004) (“[The] [p]laintiff’s conclusory allegation that he
has a ‘substantial need’ is not enough to meet the standard.”).
Accordingly,
the
Court
concludes
that
the
work
product
doctrine protects Defendants’ investigation into Ms. Njenga’s EEOC
charge
from
discovery
and
thus
will
grant
that
aspect
of
Defendants’ Motion for Protective Order (Docket Entry 31) as well.
C. Expenses
When a court rules on a motion for a protective order,
“[Federal] Rule [of Civil Procedure] 37(a)(5) applies to the award
of expenses.”
Fed. R. Civ. P. 26(c)(3).
That cross-referenced
rule provides, in relevant part, as follows:
If the motion is granted –- . . . the court must, after
giving an opportunity to be heard, require the party or
deponent whose conduct necessitated the motion, the party
or attorney advising that conduct, or both to pay the
movant’s reasonable expenses incurred in making the
motion, including attorney’s fees. But the court must
not order this payment if:
(i) the movant filed the motion before attempting in good
faith to obtain [relief] without court action;
(ii) the opposing party’s [action] was substantially
justified; or
(iii) other circumstances make an award of expenses
unjust.
-17-
Fed. R. Civ. P. 37(a)(5)(A) (emphasis added).
Because the Court
has granted the instant Motions, it will order Plaintiff to show
cause why she and/or her counsel should not have to pay the
reasonable expenses Defendants incurred in bringing said Motions.
II. Plaintiff’s Motion to Compel
As a result of further discovery disputes, Plaintiff
moves the Court for an order: (i) granting Plaintiff’s
motion to compel discovery; (ii) compelling Defendants to
fully respond to certain written discovery requests
identified by Plaintiff; (iii) compelling Defendants to
submit to the Court for in camera review the documents
identified in their privilege log; (iv) compelling
Defendants to produce their corporate designee(s) to
complete the Rule 30(b)(6) deposition; (v) compelling
Defendants
to
produce
Dan
Orr
for
deposition;
(vi)
awarding
Plaintiff
the
expenses,
including
reasonable attorneys’ fees, incurred in having to bring
this motion; and (vii) granting such other relief that is
just and appropriate.
(Docket Entry 41 at 1.)
A. Plaintiff’s Interrogatories and Document Requests
Plaintiff asks the Court to compel Defendants to respond to
the following interrogatories:
4.
Identify any internal complaints, administrative
charges or lawsuits in the last five (5) years
alleging
employment
discrimination
and/or
retaliation against any of the Defendants.
For
each state:
a.
the date when the complaint, charge or lawsuit
was filed;
b.
the tribunal, forum and civil number or other
numerical designation assigned to the matter;
c.
the name of the complainant or plaintiff;
d.
current status of the matter; and
e.
final disposition of the matter.
. . . .
-18-
7.
Explain in detail the manner in which the
Defendants investigated Plaintiff’s complaints of
discrimination.
(Docket Entry 41-1 at 4, 6.)
Similarly, Plaintiff seeks an order compelling Defendants to
respond to the following document requests:
6.
Produce all communications created, sent or
received
by
[Defendant]
Ziefle,
Panchabi
Vaithiynathan, Dan Orr, Betty Orr, the Board of
Directors and/or any other Defendant manager
concerning Plaintiff including, but not limited to,
Plaintiff’s job performance; salary; promotion(s)
requested and/or received; job duties, separation
of employment; complaints of discrimination; and
any other communications related to the terms of
Plaintiff’s employment.
. . . .
11.
Produce all communications between Plaintiff and
any of Defendants’ managers, including but not
limited
to
[Defendant]
Ziefle
and
Panchabi
Vaithiynathan, about: (i) Plaintiff’s complaints
of discrimination and Defendants’ investigation of
the same; and (ii) Plaintiff’s separation from
Defendants,
including
but
not
limited
to
communications regarding the allegations contained
in Paragraphs 48 and 49 of the Complaint.
. . . .
14.
Produce the complete state and federal corporate
tax returns for Defendants for the years 2005 to
present.
. . . .
15.
Produce all profit and loss statements for
Defendants for the years 2005 through the present.
. . . .
16.
Produce all corporate balance sheets for Defendants
for the years 2005 through the present.
(Docket Entry 42-2 at 5-10.)
-19-
i. Interrogatory No. 4
Plaintiff’s brief supporting the instant Motion reports a
“willing[ness] to limit the scope of Interrogatory No. 4 solely to
internal
complaints,
charges
or
lawsuits
alleging
race
discrimination and/or retaliation during the last five years.”
(Docket Entry 42 at 13.)
on relevance grounds.
Defendants, however, continue to object
(See Docket Entry 56 at 8-9.)
“Evidence of
other lawsuits is typically only relevant if those lawsuits involve
similar claims and can be used to establish a pattern or habit or
routine practice.”
543-D-M2,
2009
(unpublished).
F & A APLC v. Core Funding Grp., L.P., No. 07-
WL
2214184,
at
*2
(M.D.
La.
July
23,
2009)
Accordingly, although a “request for information
about all discrimination actions filed against an employer sweeps
too broadly,” Dooley v. Recreation & Parks Comm’n for Parish of E.
Baton Rouge, No. 08-715-A-M2, 2009 WL 1939022, at *4 (M.D. La. July
6, 2009) (unpublished) (internal quotation marks and citation
omitted), a plaintiff generally may pursue discovery limited to
“the relevant time period, to the particular type of discrimination
alleged in the complaint, and to the divisions or departments where
the plaintiff and his/her supervisors worked,” id.
Given those general principles, Plaintiff’s Interrogatory No.
4, with the restrictions she proposes (see Docket Entry 42 at 13)
and an additional limitation to matters involving anyone who
supervised Plaintiff or participated in any alleged employment
action
directed
at
her,
warrants
enforcement.
Defendants’
contention that Plaintiff may have discovery only as to allegations
-20-
by similarly-situated individuals and that no such individuals
exist because only “Plaintiff requested and took a medical leave
. . ., then decided, based upon the advice of her legal counsel,
not to return to work, and informed Defendants of the same” (Docket
Entry 56 at 9) takes too narrow a view of relevance at the
discovery stage, see generally Kinetic Concepts, Inc. v. Convatec
Inc., 268 F.R.D. 226, 238-39 (M.D.N.C. 2010) (discussing scope of
discovery).
Accordingly, the Court will order that, on or before
May 14, 2013, Defendants respond to Plaintiff’s Interrogatory No.
4, as limited above to remedy its original overbreadth.
ii. Interrogatory No. 7
Interrogatory No. 7, which seeks discovery regarding the
investigation by Defendants’ counsel of Plaintiff’s discrimination
allegations, runs afoul of the attorney-client privilege and work
product doctrine, as outlined in Section I.
The Court therefore
denies this aspect of Plaintiff’s instant Motion.
iii. Document Request No. 6
Document Request No. 6 seeks “all communications created, sent
or received by [Defendant] Ziefle, [three other employees of the
corporate Defendants], the Board of Directors [of the corporate
Defendants]
and/or
any
other
concerning Plaintiff . . . .”
[of]
Defendant[s’]
manager[s]
(Docket Entry 42-2 at 5.)
In
bringing the instant Motion, Plaintiff represented that Defendants
produced “only a small handful” of documents responsive to said
Request.
(Docket Entry 42 at 14.)
Defendants countered that,
despite their objections to the overbreadth and burdensomeness of
-21-
Document Request No. 6, they “conducted a good faith review of
their documents and produced over 6,000 responsive documents.”
(Docket Entry 56 at 16.)
Moreover, Defendants attached a letter,
dated November 1, 2012, from their counsel to Plaintiff’s counsel,
describing their facially-reasonable efforts to locate materials
responsive to Document Request No. 6 and noting:
“We are glad to
consider additional search terms that Plaintiff believes may need
to
be
considered,
assuming
such
additional
requests
are
not
duplicative, are relevant to Plaintiff’s allegations, and are
reasonably accessible without causing an undue burden or cost to
our clients.”
(Docket Entry 56-9 at 2-3.)
Plaintiff’s Reply does
not dispute Defendants’ representations as to their search efforts
and the
quantity
otherwise
production.
Under
address
of documents
the
produced;
adequacy
of
nor
does
Defendants’
said
Reply
search
and
(See Docket Entry 63.)
these
circumstances,
the
Court
denies
relief
to
Plaintiff based on the conclusion that the burden of any further
response to this Request would “outweigh[] its likely benefit,
considering 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), particularly given the
Request’s obvious overbreadth, see, e.g., Regan-Touhy v. Walgreen
Co., 526 F.3d 641, 649-50 (10th Cir. 2008) (“[W]e agree with the
district court that [the request for] . . . ‘all documents . . .
that refer to, mention or relate in any way to [the] [p]laintiff
-22-
. . .’ is overly broad. . . .”); DeFreitas v. Tillinghast, No.
2:12CV235JLR, 2013 WL 209277, at *3 (W.D. Wash. Jan. 17, 2013)
(unpublished) (“[The requests at issue] are not reasonably targeted
or specific, and are overbroad on their face.
[The] burden of
producing many years worth of all communications relating to [the
plaintiff] outweighs the likely benefits to [him], and the great
cost required to produce all such communications . . . .”).5
iv. Document Request No. 11
In response to Document Request No. 11, which demands “all
communications between Plaintiff and Defendants’ managers . . .
about (i) Plaintiff’s complaints of discrimination and Defendants’
investigation of the same; and (ii) Plaintiff’s separation from
Defendants” (Docket Entry 42-2 at 8 (emphasis added)), Defendants
state: “There are no materials responsive to Plaintiff’s [Document]
Request [No.] 11 other than what has already been produced and what
is identified on Defendants’ privilege log” (Docket Entry 56 at 16
(citing Docket Entry 42-5)).
Plaintiff’s Reply offers no basis to
question this representation.
(See Docket Entry 63.)
As to the issue of Defendants’ privilege log, Plaintiff’s
initial brief
in
support of
the instant
Motion
asserts
that
“Defendants should be compelled to submit to the Court for in
camera review the documents identified in their privilege log, so
that
the
Court
can
determine
5
whether
these
documents
are
Given this conclusion, the Court declines Plaintiff’s
generalized demand (see Docket Entry 42 at 14) for in camera
examination of documents in Defendants’ privilege log to determine
if they should have to make further production as to this Request.
-23-
discoverable (in whole or part).”
(Docket Entry 42 at 18.)
Only
the first-listed document in Defendants’ privilege log, i.e., the
document identified as “Emails between [Plaintiff], [Defendant]
Ziefle, and/or [Defendants’ counsel]” (Docket Entry 42-5 at 2),
could contain material responsive to Document Request No. 11.6
Although Defendants’ privilege log describes said document as
subject to the work product doctrine, said log does not show how
the work product doctrine would apply to any e-mail which Plaintiff
sent or received.
See generally JJK Mineral Co., LLC v. Swiger,
___ F.R.D. ___, ___ n.2, 2013 WL 663283, at *6 n.2 (N.D.W. Va.
2013) (“Work product may be discoverable if a party waives its
immunity and discloses its work product . . . .”).
Court
cannot
determine
from
Defendants’
Because the
privilege
log
what
portion(s) of this e-mail chain Plaintiff sent or received or how
the work product doctrine would apply to any e-mail Plaintiff sent
or
received,
the
Court will
order Defendants to
submit
said
document to the Court for in camera inspection, along with a sealed
memorandum of no more than three pages justifying the withholding
(or redaction) of said document, on or before May 14, 2013.
v. Document Request Nos. 14-16
“Document Request Nos. 14-16 seek the following information
for the years 2005 to the present: (i) Defendants’ state and
6
In other words, Plaintiff does not appear as an author or
recipient of any of the other documents listed in Defendants’
privilege log (see Docket Entry 42-5) and thus such documents could
not constitute “communications between Plaintiff and any of
Defendants’ managers” (Docket Entry 42-2 at 8).
-24-
federal corporate tax returns; (ii) Defendants’ profit and loss
statements;
and
(iii)
Defendants’
(Docket Entry 42 at 15.)
corporate
balance
sheets.”
According to her supporting brief, “in an
effort to compromise on this issue, Plaintiff is willing to narrow
[these requests] to the 2010 to present time-period.”
(Id.)
To
establish the relevance of such discovery, said brief points only
to “Plaintiff’s punitive damages claims.” (Id. (citing Cook v.
Robinson, No. 5:11CV6, 2011 U.S. Dist. LEXIS 89307, at *9 (N.D.W.
Va. Aug. 11, 2011) (unpublished), and Shearin v. Safelite Glass
Corp., No.
(E.D.N.C.
4:97CV81BO2,
Apr.
15,
1998
1998)
U.S.
Dist.
LEXIS
(unpublished)).)
8115,
at
Defendants
*1-5
oppose
discovery of the requested financial information, even as narrowed,
on the ground that “Plaintiff has made no showing that her claim
for punitive damages is viable, and only if and when she does will
such documents potentially become discoverable.”
(Docket Entry 56
at 17 & n.18 (citing Interstate Narrow Fabrics, Inc. v. Century
USA, Inc., No. 1:02CV00146, 2004 WL 444570, at *1 (M.D.N.C. Feb.
24, 2004) (unpublished), and Blount v. Wake Elec. Membership Corp.,
162 F.R.D. 102, 105 (E.D.N.C. 1993)).)
address that argument.
Plaintiff’s Reply does not
(See Docket Entry 63.)
“Unless otherwise limited by court order, . . . [p]arties may
obtain
discovery
regarding
any
nonprivileged
relevant to any party’s claim or defense . . . .”
26(b)(1).
“[A]
defendant’s
financial
matter
that
is
Fed. R. Civ. P.
position
is
a
proper
consideration in assessing punitive damages, see Pacific Mut. Life
Ins. Co. v. Haslip, 499 U.S. 1, 22 (1991).”
-25-
Stamathis v. Flying J,
Inc., 389 F.3d 429, 442 (4th Cir. 2004) (internal parallel citation
omitted). Moreover, Plaintiff’s Complaint lists “punitive damages”
in the final relief request.
(Docket Entry 1 at 12.)
In addition,
the Complaint expressly asserts an “entitle[ment] to punitive
damages in accordance with and as provided by 42 U.S.C. § 1981,” as
part
of
Plaintiff’s
claims
under
Section
1981
discriminatory and retaliatory employment actions.
67.)
for
racially
(Id., ¶¶ 60,
Further, in connection with Plaintiff’s state law claims for
“Wrongful Discharge in Violation of North Carolina Public Policy”
and “Negligent Retention and Supervision,” the Complaint alleges in
conclusory terms that “[t]he conduct, acts and omissions of the
Defendants constitute malicious, willful and wanton conduct or were
in reckless disregard and indifference to [Plaintiff’s] rights”
(id.,
¶¶
74,
80),
language
consistent
with
North
Carolina’s
statutory standard for punitive damages, see N.C. Gen. Stat.
§ 1D-15(a)(2) and (3) (identifying “Malice” and “Willful and wanton
conduct” as among “aggravating factors” a plaintiff must prove to
support award of punitive damages).
However,
“[e]ven
assuming
that [the
requested
financial]
information is relevant (in the broadest sense), the simple fact
that [it] is discoverable . . . does not mean that discovery must
be had.
On its own initiative or in response to a motion for
protective order under [Federal] Rule [of Civil Procedure] 26(c),
a district court may limit . . . ‘discovery methods otherwise
permitted’ . . . if it concludes that ‘(i) the discovery sought is
unreasonably cumulative or duplicative, or is obtainable from some
-26-
other source that is more convenient, less burdensome, or less
expensive . . . or (iii) the burden or expense of the proposed
discovery outweighs its likely benefit.’”
Nicholas v. Wyndham
Int’l Inc., 373 F.3d 537, 543 (4th Cir. 2004) (quoting Fed. R. Civ.
P. 26(b)(2)(C)).
Additionally, “[a] court may, for good cause,
issue an order to protect a party or person from annoyance,
embarrassment, oppression, or undue burden or expense, including
[as
pertinent
here]
.
.
.
(A)
forbidding
the
disclosure
or
discovery; (B) specifying . . . [the] time . . . for the disclosure
or discovery; . . . [or] (D) forbidding inquiry into certain
matters, or limiting the scope of disclosure or discovery to
certain matters . . . .”
Fed. R. Civ. P. 26(c)(1).
A noted scholar who has served since 1996 as a reporter to the
Advisory Committee on Civil Rules of the Judicial Conference of the
United States has observed that litigants often pursue discovery of
sensitive matters less for the substantive value of such discovery
and more for “the strategic value of discovery into sensitive
areas.
One recurrent example on the plaintiff side is discovery
regarding
a
defendant’s
net
worth
or
financial
connection with claims for punitive damages.”
condition
in
Richard L. Marcus,
A Modest Proposal: Recognizing (At Last) that the Federal Rules Do
Not Declare that Discovery is Presumptively Public, 81 Chi.-Kent L.
Rev. 331, 340 (2006).
courts
(particularly
Given such considerations, for decades,
state
courts)
have
“conclude[d]
that
examination of a defendant’s financial records or status, either to
establish liability for punitive damages or the amount to be
-27-
awarded therefor, should not be permitted until plaintiffs have
demonstrated some factual basis for their punitive damage claim.”
Moran v. International Playtex, Inc., 103 A.D.2d 375, 377, 480
N.Y.S.2d 6, 8 (N.Y. App. Div., 2d Dep’t 1984) (internal citations
omitted).
In other words, “[t]he ease with which claims for
punitive damages can be asserted makes it apparent that such claims
may result in abuse and harassment if their mere assertion entitles
plaintiffs
to
financial
discovery.”
Id.
(internal
citations
omitted); accord, e.g., Tennant v. Charlton, 377 So.2d 1169, 1170
(Fla. 1979) (“[T]rial court[s] should always be sensitive to the
protection of a party from harassment and from an overly burdensome
inquiry. . . .
If plaintiffs were allowed unlimited discovery of
defendants’ financial resources in cases where there is no actual
factual basis for an award of punitive damages, the personal and
private financial affairs of defendants would be unnecessarily
exposed and, in some cases, the threat of such exposure might be
used by unscrupulous plaintiffs to coerce settlements . . . .”).7
In Blount (one of the cases cited by Defendants in opposition
to
the
financial
discovery
Plaintiff
seeks
to
compel),
our
neighboring federal court to the east took note of such cases
7
Other decisions recognize that the existence of a protective
order restricting a plaintiff’s ability to further disseminate
sensitive financial information (a consideration which Plaintiff
cited in support of her argument for compelled disclosure of such
information in this case (see Docket Entry 42 at 15)) does not
sufficiently address the above-referenced concerns.
See, e.g.,
Ledee v. Devoe, 484 S.E.2d 344, 348 (Ga. App. 1997) (“Who would
want any strangers to have access to the type of financial
information requested in this case . . . regardless of the
safeguards imposed to restrict access only to those strangers?”).
-28-
“support[ing] the proposition that a plaintiff must make some kind
of factual showing that a viable claim for punitive damages exists
before allowing discovery of financial worth.”
at 105.
the
Blount, 162 F.R.D.
The Blount Court then declined to compel any discovery of
financial
information
requested
in
that
case
until
the
defendants had an opportunity to file a dispositive motion directed
to the punitive damages issue.
See id.
United States Magistrate
Judge Wallace W. Dixon subsequently cited Blount with approval in
refusing to compel production of tax returns in a case where “there
ha[d] been no credible showing to date by [the] [p]laintiff that
[it] [wa]s entitled to an award of punitive damages on the claims
alleged [t]here.”
Interstate Narrow Fabrics, Inc. v. Century USA,
Inc., 1:02CV146, at 1 n.1 (M.D.N.C. Sept. 22, 2003) (unpublished).
In so ruling, Magistrate Judge Dixon stated that, “[i]f that
[credible] showing [of entitlement to punitive damages] is made, or
if the punitive damages claim survives summary judgment, the motion
for production of [the] tax returns may be renewed.”
Id.8
At least two federal courts have declined to follow Blount on
the grounds that it merely reflects North Carolina law, that (when
a plaintiff has requested punitive damages) financial information
satisfies the relevance test for discovery under the Federal Rules
8
Defendants’ brief opposing the instant Motion cites a
subsequent decision in the same case, in which then-Chief Judge N.
Carlton Tilley, Jr. referenced Magistrate Judge Dixon’s earlier
ruling in the course of granting a renewed motion to compel
production of the tax returns at issue after the plaintiff’s
punitive damages claim survived summary judgment. See Interstate
Narrow Fabrics, 2004 WL 444570, at *1.
-29-
of Civil Procedure, and/or that delaying discovery pending a
factual showing as to the basis for punitive damages or motion
practice directed at the merits of the punitive damages demand
would introduce unwarranted inefficiencies.
See Grosek v. Panther
Transp., Inc., 251 F.R.D. 162, 166 n.3 (M.D. Pa. 2008); E.E.O.C. v.
Environmental & Demolition Servs., Inc., 246 F.R.D. 247, 249 (D.
Md. 2007).
The Court finds such reasoning unpersuasive.
First,
the rationale behind Blount (as endorsed by Magistrate Judge Dixon
and cases from numerous jurisdictions) does not represent some
quirk of North Carolina law, but instead fits comfortably within
the
discovery
principles
enshrined
in
Federal
Rule
of
Civil
Procedure 26. Second, as discussed above, relevance alone does not
determine the proper scope of discovery under Federal Rule of Civil
Procedure 26.
Third, the need to mitigate the recognized risk of
harassment and undue burden that arises in this context outweighs
the concern for inefficiency attendant to the remedy prescribed.
Accordingly, this Court opts to join the growing number of
federal courts across the country that take the general view that
the mere inclusion of a bald demand for punitive damages in a
pleading does not entitle a litigant to discovery of sensitive
financial information.
See, e.g., Jackson-Heard v. Elizabeth City
State Univ., No. 2:12CV8BO, 2013 WL 594896, at *2 (E.D.N.C. Feb.
15, 2013) (unpublished) (“[A] number of courts have required a
prima facie showing of entitlement to punitive damages before
requiring production of sensitive financial information. . . . The
court finds that plaintiff has not demonstrated that the discovery
-30-
she seeks is relevant at this time.
Most basically, she has not
shown that she is entitled to punitive damages.”); Richbourg v.
Jimerson, No. CV-12-136-TUC-BGM, 2012 WL 4355906, at *2 (D. Ariz.
Sept. 24, 2012) (unpublished) (“Although [Federal] Rule [of Civil
Procedure] 26(b)(1) allows for broad discovery, a litigant’s right
to that discovery is not unlimited. . . .
[T]he [c]ourt has the
inherent power to control discovery as it deems necessary.
[The]
[p]laintiffs’ [c]omplaint states that ‘[the] [d]efendants’ conduct
was fraudulent,
evil
and
in
bad faith,
thus
entitling
[the]
[p]laintiffs to punitive damages in an amount to be proven at
trial.
[The plaintiffs] have not plead any facts to support this
broad conclusion. . . .
as
well
as
the
[I]n light of the lack of a factual basis,
burden
to
the
[d]efendants,
the
financial
information is not relevant at this time.” (internal citations
omitted)); Lanigan v. Babusch, No. 11C3266, 2011 WL 5118301, at *4
(N.D. Ill. Oct. 27, 2011) (unpublished) (“[The] [p]laintiff seeks
punitive damages on the broad and conclusory allegation that [the
defendant’s]
conduct
was
intentional,
malicious,
willful
and
wanton.
Accordingly, the [c]ourt finds it more appropriate to
postpone
[net
worth]
discovery
until
it
appears
that
[the
defendant] will be liable for punitive damages.”).9
9
Even the two cases cited by Plaintiff in support of her
request for compelled production of Defendants’ financial
information (see Docket Entry 42 at 15) do not conflict with this
trend. More specifically, the first of those cases came before the
court only after the defendant conceded that the plaintiff “had
established a prima facie case for punitive damages . . . [and]
agree[d] to produce financial information,” Shearin, 1998 U.S.
(continued...)
-31-
In
this
Plaintiff’s
case,
request
application
for
of
compelled
that
general
production
of
rule
defeats
Defendants’
corporate tax returns, profit and loss statements, and corporate
balance sheets.
As with the pleadings in the above-cited cases,
Plaintiff’s Complaint does not support its demand for punitive
damages with factual allegations that clearly would warrant such
relief, but instead relies on boilerplate language.
Entry 1 at 9-12.)
(See Docket
Nor, in connection with his instant Motion, did
Plaintiff proffer any factual showing that would justify a punitive
damages award.
(See Docket Entries 41, 42, 63.)
Moreover, the Fourth Circuit has recognized that “not every
action under [S]ection 1981 warrants an award of punitive damages.
. . .
It is an extraordinary remedy and is designed to punish and
deter
particularly
discrimination
[or
egregious
conduct.
retaliation]
Although
constitutes
any
form
reprehensible
of
and
abhorrent conduct, not every lawsuit under [S]ection 1981 calls for
submission of this extraordinary remedy to a jury.”
Stephens v.
South Atl. Canners, Inc., 848 F.2d 484, 489-90 (4th Cir. 1988)
(internal citation omitted).
Similar considerations apply to
Plaintiff’s state-law claims. See, e.g., Ayscue v. Mullen, 78 N.C.
App. 145, 149, 336 S.E.2d 863, 866 (1985) (“Punitive damages are
9
(...continued)
Dist. LEXIS 8115, at *2, and, in the other case, the court quoted
with approval the proposition that “‘[t]ax returns may generally be
discovered for purposes of supporting a punitive damages claim only
where the plaintiff has made a prima facie showing of entitlement
to them,’” Cook, 2011 U.S. Dist. LEXIS 89307, at *9 (quoting SMD
Software, Inc. v. Emove, Inc., No. 5:08CV403FL, 2010 WL 2232261, at
*2 (E.D.N.C. June 2, 2010) (unpublished)).
-32-
allowed only in cases where the tortious conduct is accompanied by
some element of aggravation. . . . [T]here was an entire lack of
those
elements
of
outrageous
conduct
that
would
subject
the
defendants to punitive damages.”).
Finally, the facts alleged in the Complaint reflect that: (1)
the
corporate
Defendants
hired
Plaintiff,
promoted
her,
and
retained her over a number of years, during which time they reduced
the size of their work-force by laying-off others (Docket Entry 1
at 3); (2) Plaintiff received a raise in 2010 (at a time when
Defendant Ziefle apparently led the corporate Defendants) (id. at
5); (3) Defendant Ziefle fired others outside of Plaintiff’s race
(id. at 7); and (4) after Defendants allegedly fired Plaintiff,
Defendant Ziefle offered to re-hire her (id. at 8-9).
Assuming
that Plaintiff has asserted a viable claim against Defendants for
race discrimination and/or retaliation in violation of Section 1981
or for related state-law torts, the foregoing conceded facts, at a
minimum, appear to call into serious question the viability of any
request for punitive damages in light of the applicable law.
Under
these
circumstances,
the
Court
will
not
compel
Defendants to respond to Document Request Nos. 14-16 at this time.
Plaintiff, however, may file a new motion making a renewed request
for discovery of this sort if she can make a factual showing that
would support an award of punitive damages.
Alternatively, if the
Court ultimately denies Defendants’ pending Motions for Judgment on
the Pleadings and for Summary Judgment (Docket Entries 19 and 59)
as to any of Plaintiff’s claims and Defendants do not otherwise
-33-
secure an order precluding submission of Plaintiff’s punitive
damages demand to the fact-finder, Plaintiff could seek production
of such evidence before trial, perhaps even without any further
factual showing.
Given those possibilities and to avoid delay if
and when Plaintiff’s right to discovery of financial information
becomes ripe, the Court will order Defendants to gather some such
material now, so that it can make immediate service on Plaintiff at
the time production becomes appropriate.
In that regard, the Court notes that, in general, “[o]nly
current net worth relates to punitive damages.
Net sales and
income, even if current, is not relevant . . . .”
Happel v. Wal-
Mart Stores, Inc., No. 02C7771, 2007 WL 495277, at *3 (N.D. Ill.
Feb. 9, 2007) (unpublished); see also Metropolitan Bus. Mgmt, Inc.
v. Allstate Ins. Co., No. CV05-8306CAS(CWx), 2009 WL 2424291, at *3
(C.D. Cal. Aug. 6, 2009) (observing that “net worth . . . is
defined by Black’s Law Dictionary as ‘a measure of one’s wealth,
usually calculated
as
the excess
of total
assets
over
total
liabilities’” (internal brackets omitted)), aff’d, 448 F. App’x 677
(9th Cir. 2011). Further, courts generally do not order production
of tax returns if an alternative source of equivalent information
exists.
See Interstate Narrow Fabrics, 2004 WL 444570, at *2.
Accordingly, at this time, the Court will order Defendants to
gather only corporate balance sheets for the period from 2011 to
the present or other comparable documents that reasonably would
show their current net worth.
-34-
B. Production of Corporate Designee
Plaintiff moves the Court to compel Defendants to produce a
witness to respond to questions regarding “factual and other
questions relating to Defendant’s investigation of Plaintiff’s
discrimination complaint,” as well as “any investigation Defendants
conducted in response to [Ms.] Njenga’s EEOC charge.”
Entry 42 at 16.)
(Docket
Given the discussion in Section I regarding the
applicability of the attorney-client privilege and/or work product
doctrine to Defendants’ investigations into Plaintiff’s allegations
and Ms. Njenga’s EEOC charge, the Court will deny this request.
C. Deposition of Dan Orr
Plaintiff and Defendants failed to reach an agreement on the
time and location for the deposition of Dan Orr.
According
to
Plaintiff,
in
mid-January
(See id. at 4-5.)
2013,
she
“advised
Defendants that she wanted to depose Defendants’ witness Dan Orr”
and, because the Parties could not agree on a date for said
deposition over the next month, she “served a notice scheduling Mr.
Orr’s deposition for February 27, 2013 at Plaintiff’s counsel’s
offices in Chapel Hill.”
(Id. at 4.)
Plaintiff contends that,
when Defendants informed her that Mr. Orr would be out of the
country from February 22, 2013, through the end of the month, she
“sent an
deposition
email
for
dated
February
February
21,
19,
2013
2013 scheduling
in
Chapel
Hill”
Mr.
and
Orr’s
that
Defendants “refused to produce Mr. Orr for deposition in Chapel
Hill on that date.”
(Id. at 5.)
Plaintiff states that, “to save
the [P]arties and the Court time and resources, Plaintiff offered
-35-
a compromise proposal that would have allowed the [P]arties to
depose Mr. Orr and Mr. Moore . . . after February 27, 2013 with the
Court’s permission [which] Defendants rejected.”
(Id.)
Defendants present a somewhat differing account of the events
surrounding
Mr.
Orr’s
proposed
deposition.
According
to
Defendants, after Plaintiff informed them, in January 2013, that
she planned to depose Dan Orr, they proposed February 20, 2013, and
Plaintiff confirmed acceptance of that date.
5 (citing Docket Entry 56-2 at 2).)
(Docket Entry 56 at
Defendants further assert
that, after the Parties agreed to a mediation date of February 26,
2013, and a deposition date for another witness of February 21,
2013, Plaintiff sought to move the mediation to February 20, 2013,
and Mr. Orr’s deposition to February 25-27, 2013, but Defendants
responded that Mr. Orr was out of the country at that time.
(Id.)
Per Defendants, after further informing Plaintiff that Mr. Orr was
unavailable on February 21 and 22, 2013, they suggested deposing
Mr. Orr on February 20, 2013 - the same day as the mediation - or
conducting the mediation on the earlier-agreed date of February 26,
2013.
(Id. at 6.)
Defendants contend that Plaintiff refused to
conduct the deposition on the same day as the mediation and instead
requested that Mr. Orr’s deposition proceed on February 18 or 19,
2013, or February 28 or March 1, 2013, if the parties filed a joint
motion to extend discovery.
(Id.)
Defendants acknowledge that
they did not consent to extend discovery and responded again that
Mr. Orr would make himself available on February 19 or 20, 2013.
(Id.)
Plaintiff thereafter sent a notice indicating an intention
-36-
to depose Mr. Orr on February 27, 2013 - a date she knew he was out
of the country.
(Id. at 7.)10
Under these circumstances, the Court will order the Parties to
confer and to establish a mutually acceptable date, time, and
location for Mr. Orr’s deposition to occur before May 14, 2013.
D. Expenses
As a final matter, Plaintiff requests “expenses, including
reasonable attorney’s fees, incurred in having to bring [the
instant Motion].”
(Docket Entry 42 at 19.)
“Rule 37 provides
generally for sanctions against parties or persons unjustifiably
resisting discovery.”
notes, 1970 Amend.
Fed. R. Civ. P. 37 advisory committee’s
More specifically:
If the motion is granted - or if the disclosure or
requested discovery is provided after the motion was
filed - the court must, after giving an opportunity to be
heard, require the party or deponent whose conduct
necessitated the motion, the party or attorney advising
that conduct, or both to pay the movant’s reasonable
expenses incurred in making the motion, including
attorney’s fees.
But the court must not order this
payment if:
(i) the movant filed the motion before attempting in good
faith to obtain the disclosure or discovery without court
action;
(ii) the opposing party’s nondisclosure, response, or
objection was substantially justified; or
(iii) other circumstances make an award of expenses
unjust.
10
Mr. Orr also noted that Plaintiff provided a notice, rather
than a subpoena, despite the fact that Mr. Orr considers himself a
third-party witness. (See Docket Entry 56 at 7 n.4.) Because the
Parties and Mr. Orr appear to have agreed that he should sit for a
deposition, the Court declines to address that matter further.
-37-
Fed. R. Civ. P. 37(a)(5)(A).
However, “[i]f the motion is granted
in part and denied in part, the court . . . may, after giving an
opportunity to be heard, apportion the reasonable expenses for the
motion.” Fed. R. Civ. P. 37(a)(5)(C). Plaintiff has achieved very
little relief via the instant Motion and thus the Court declines to
order any cost-shifting in her favor.11
III. Competing Motions Regarding Deposition of Chris Moore
During
the
discovery
period,
a
dispute
arose
between
Defendants and non-party Chris Moore (represented by Plaintiff’s
counsel) regarding the location and time of Mr. Moore’s deposition.
(See Docket Entries 37 and 45.)
Mr. Moore, Plaintiff’s husband,
contends that, in late January 2013, Defendants advised Plaintiff
that they wanted to take Mr. Moore’s deposition and sent an email
dated January 28, 2013, stating that they would seek to depose Mr.
Moore on February 21, 2013.
(Docket Entry 36 at 2.)
However, Mr.
Moore maintains that he did not receive a subpoena until February
17, 2013, and that he only then learned of the proposed deposition
location and time - i.e., Greensboro at 10:00 a.m.
(Id. at 2-3.)
According to Mr. Moore, on February 19, 2013, he objected to that
proposal and offered to appear at his counsel’s offices in Chapel
11
Indeed, given that the Court has deemed most of Plaintiff’s
arguments in support of the instant Motion meritless, it likely
could require Plaintiff to show cause why she should not have to
pay a significant portion of Defendants’ expenses occasioned by its
filing. However, in light of the fact that Plaintiff obtained some
relief and arguably had substantial justification for some of the
unsuccessful aspects of the instant Motion, the Court exercises its
discretion under Federal Rule of Civil Procedure 37(a)(5)(C) to
leave the Parties to bear their own respective expenses.
-38-
Hill, on February 21, 2013, at 1:00 p.m.
(Id. at 3.)
Mr. Moore
acknowledges that Defendants agreed to his proposed time, but
complains
about
deposition site.
their
insistence
that
Greensboro
remain
the
(Id. at 4.)
In Mr. Moore’s view, because he drives Plaintiff from their
home in
Roxboro,
Virginia,
North Carolina,
Defendants’
proposal
constitutes an undue burden.
to her
to
job
depose
in
him
(See id. at 2.)12
Clarksville,
in
Greensboro
Mr. Moore seeks “an
order: (i) quashing Defendants’ third-party subpoena/deposition
notice; (ii) requiring that Defendants modify any future subpoena
so that the deposition location be at a place that is closer to Mr.
Moore’s residence in Roxboro, North Carolina; (iii) requiring that
Defendants modify any future subpoena so that the deposition date
does not interfere with Mr. Moore’s work schedule at his new job;
and (iv) awarding to Mr. Moore the fees and costs incurred in
having to prosecute this motion.”
(Docket Entry 37 at 1.)
Defendants filed a competing Motion to Compel (Docket Entry
45), which argues that, despite their confirming Mr. Moore’s
availability
deposition
on
time
February
to
21,
2013
accommodate
his
12
(id.
at
schedule
3),
changing
(id. at
4),
the
and
Defendants observe that “the driving distance between Mr.
Moore’s residence in Roxboro and the Greensboro location [proposed
for the deposition] is 72.59 miles, with an estimated driving time
of 1 hour and 35 minutes.
Interestingly, the driving distance
between Mr. Moore’s residence in Roxboro and the Chapel Hill
location Plaintiff’s counsel indicated would not be ‘unduly
burdensome’ is quite comparable -- 50.43 miles, with an estimated
driving time of 1 hour and 6 minutes.” (Docket Entry 46 at 9-10
(citing Docket Entry 45-8).)
-39-
receiving an email from Mr. Moore’s counsel on February 19, 2013,
indicating that Mr. Moore could appear in Greensboro on February
21, 2013, if Defendants “insist[ed]” on that location (id. at 5
(citing Docket Entry 45-6 at 4)), Mr. Moore did not appear for his
deposition (id. at 6).
Defendants request that the Court compel
Mr. Moore to appear for a deposition.
(Id.)
The entirety of the instant dispute focuses on the time and
location of Mr. Moore’s deposition.
Given that the proposed
deposition date has now passed, the instant Motions are effectively
moot; however, the Court instructs counsel to immediately confer in
an attempt to find a mutually acceptable date, time, and location
for Mr. Moore’s deposition to occur on or before May 14, 2013.13
IV. Plaintiff’s Motion to Extend Discovery
Based largely on the foregoing discovery disputes, Plaintiff
seeks a six-week extension of the discovery period.
(See Docket
Entry 35.) Defendants oppose “a blanket extension on all discovery
. . . [in favor of] allow[ing] the Court . . . [to make] directives
tailored to the actual motions after they are decided by the
13
The Court will not award any expenses to Mr. Moore under
Federal Rule of Civil Procedure 45(c)(1).
In this regard, the
Court finds no basis to conclude that the designation of Greensboro
as the location for his deposition imposed an undue burden.
Accordingly, although the Court encourages counsel to seek common
ground, it will not require Defendants to depose him elsewhere
based on the existing record. The Court similarly adjudges that
Mr. Moore has no right to have the setting of his deposition
dictated absolutely by his work schedule and/or his practice of
driving Plaintiff to work, see Irons v. Karceski, 74 F.3d 1262,
1264 (D.C. Cir. 1996) (rejecting notion that any loss of earnings
due to deposition constitutes undue burden), and thus the Court
declines to enter any prospective order to such effect.
-40-
Court.”
(Docket Entry 43 at 3-4.)
A scheduling order “may be
modified only for good cause and with the judge’s consent.”
R. Civ. P. 16(b)(4).
Fed.
The Court concludes that good cause does not
support a general extension of discovery and that the specific
relief ordered by the Court suffices.
V. Conclusion
The attorney-client privilege and/or work product doctrine
preclude discovery of Defendants’ investigations into Plaintiff’s
allegations and Ms. Njenga’s EEOC charge.
With respect to written
discovery sought by Plaintiff, Defendants must serve Plaintiff with
a limited response as to one interrogatory, must make a limited in
camera submission, and must prepare some financial documents for
possible future service.
Finally, the Parties must cooperate to
accomplish the depositions of Mr. Orr and Mr. Moore in short order
and without a general extension of the discovery period.
IT IS THEREFORE ORDERED that Defendant’s Motion for Protective
Order Regarding Certain Topics Listed in Plaintiff’s Amended Rule
30(b)(6) Notice of Deposition (Docket Entry 31) and Defendants’
Motion for Protective Order Regarding Plaintiff’s Notice to Depose
Defendants’ Legal Counsel (Docket Entry 33) are GRANTED.
IT IS FURTHER ORDERED that, pursuant to Federal Rules of Civil
Procedure 26(c)(3) and 37(a)(5)(A), Plaintiff must show cause why
the Court should not order Plaintiff and/or her counsel to pay the
reasonable expenses, including attorney’s fees, Defendants incurred
in connection with their Motions for Protective Order (Docket
Entries 31 and 33), as follows:
-41-
(1) on or before May 14, 2013, Defendants either shall file a
notice waiving any right to reimbursement of expenses, including
attorney’s fees, related to said Motions or shall serve Plaintiff
with a statement of the reasonable expenses, including attorney’s
fees, Defendants incurred in connection with said Motions;
(2) if Defendants timely serve Plaintiff with such an expense
statement, on or before May 28, 2013, Plaintiff either shall file
a notice confirming her agreement to pay the expenses claimed by
Defendants or shall file a memorandum of not more than 10 pages
setting out Plaintiff’s argument as to why the Court should not
require
Plaintiff
and/or
her
counsel
to
pay
such
expenses
(including any argument challenging the reasonableness of such
expenses, along with a certification that Plaintiff has attempted
to confer in good faith with Defendants about that subject);
(3) if Plaintiff timely files a memorandum contesting payment
of expenses claimed by Defendants, on or before June 11, 2013,
Defendants may file a response of not more than 10 pages; and
(4) if Defendants timely file a response, on or before June
18, 2013, Plaintiff may file a reply of not more than five pages.
IT IS FURTHER ORDERED that Plaintiff’s Motion to Compel
Discovery (Docket Entry 41) is DENIED, except that, on or before
May 14, 2013:
(1) Defendants shall respond to Interrogatory No. 4 as limited
to any internal complaints, charges, or lawsuits alleging race
discrimination
and/or
retaliation
-42-
during
the
last
five
years
involving anyone who supervised Plaintiff or participated in any
alleged employment action directed at Plaintiff;
(2)
Defendants
shall
submit
to
the
Court
for
in
camera
inspection the first document listed in their privilege log and a
memorandum of not more than three pages explaining how the work
product doctrine applies to said document;
(3) Defendants shall gather corporate balance sheets covering
the period from 2011 to the present or other comparable documents
that reasonably would show the corporate Defendants’ current net
worth, so that they can make immediate service of such material on
Plaintiff if later warranted; and
(4) the Parties shall conduct the deposition of Dan Orr on
mutually acceptable terms as to date, time, and location.
IT IS FURTHER ORDERED that the Motion to Quash and/or Modify
Third-Party Subpoena Served upon Chris Moore (Docket Entry 37) and
Defendants’ Motion to Compel Compliance with Subpoena (Docket Entry
45) are DENIED, but the Parties shall conduct the deposition of
Chris Moore on or before May 14, 2013, on mutually acceptable terms
as to date, time, and location.
IT IS FURTHER ORDERED that Plaintiff’s Motion to Extend the
February 27, 2013 Discovery Deadline (Docket Entry 35) is DENIED.
/s/ L. Patrick Auld
L. Patrick Auld
United States Magistrate Judge
April 30, 2013
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