McGrath v. Nationwide Mutual Insurance Company et al

Filing 76

ORDER finding as moot 61 Motion for Protective Order; granting in part 69 Motion to Compel. Signed by Magistrate Judge Terence P. Kemp on 2/24/2017. (agm)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
Debra McGrath,

:

Plaintiff,

:

v.

:
:

Nationwide Mutual Insurance
Company, et al.,
Defendants.

Case No. 2:16-cv-284
JUDGE GEORGE C. SMITH
Magistrate Judge Kemp

:
:
ORDER

Plaintiff Debra McGrath filed this action asserting claims
for breach of contract, breach of the duty of good faith and fair
dealing, fraud, misrepresentation, unjust enrichment, unlawful
discrimination, wrongful discharge, and infliction of emotion
distress, all arising out of the parties’ business arrangement
which spanned a number of years and which ended in 2012.

The

case was filed in the Court of Common Pleas of Allegheny County,
Pennsylvania, removed to the United States District Court for the
Western District of Pennsylvania, and ultimately transferred to
this Court.
A number of discovery issues arose while the case was
pending elsewhere, and a number of discovery-related motions have
been filed.

The Court and the parties discussed some of them in

a conference held in 2016.

More recently, the parties advised

the Court that decisions are still required on two of the issues
raised by those motions.

Those issues relate to Ms. McGrath’s

request for documents contained on the computer of a non-party
and to her request for information about people whom she claims
to be comparables for purposes of her discrimination claim.
Court will discuss each of these issues in turn.
I.

Richard Marnic’s Computer

The issue of Mr. Marnic’s computer is raised in Ms.

The

McGrath’s motion to compel discovery (Doc. 69) and the
accompanying memorandum (Doc. 70).

She characterizes the issue

this way.
According to Ms. McGrath, she had asked Nationwide to
produce any documents on Mr. Marnic’s computer which related
either to her or to the allegations in the complaint.

Nationwide

responded that it produced copies of such documents which resided
on its servers, but that it could not produce any documents which
were located solely on Mr. Marnic’s computer because he was not a
Nationwide employee and it had no control over his documents.
Ms. McGrath casts doubt on the accuracy of this claim, arguing
that Nationwide produced Mr. Marnic for deposition in response to
a notice - something it would not ordinarily do for a non-party and Nationwide’s counsel represented him at the deposition.

She

also points out that in a prior court filing, Nationwide
represented that it was searching documents held by various
records custodians, and it named Mr. Marnic as one of them.

It

then produced emails for which he was the “document custodian.”
Given these facts, she argues that Nationwide cannot credibly
claim both that it has no control over him and that it produced
documents for which he was the custodian.
In its response, Nationwide repeats its assertion that Mr.
Marnic is an independent contractor who owns and operates his own
insurance agency.
business.

He also owns all of the computers used in his

It again states that the emails it produced were those

which were located in Mr. Marnic’s Nationwide email account, and
were therefore found on Nationwide’s servers, and that nothing
about this production proves that it has the ability either
produce the computer which Ms. McGrath wants to search or force
Mr. Marnic to do so.

Nationwide also notes that it would have

been a simple matter for Ms. McGrath to send Mr. Marnic a
subpoena for his emails but that she never did so.
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In her reply,

Ms. McGrath repeats her argument that if Mr. Marnic were not an
employee, Nationwide would not have voluntarily produced him for
a deposition without the need for a subpoena to be served on him.
Under Fed.R.Civ.P. 34, a party to litigation must produce
documents which fall within the permissible scope of discovery,
as defined in Rule 26, and over which it has possession, custody,
or control.

Those three words each cover somewhat different

concepts, but they all focus on whether the responding party has
either physical possession of the documents in question or has
the legal right to obtain them.

Consequently, “federal courts

have consistently held that documents are deemed to be within the
‘possession, custody or control’ for purposes of Rule 34 if the
party has actual possession, custody or control, or has the legal
right to obtain the documents on demand.”

In re Bankers Trust

Co., 61 F.3d 465, 469 (6th Cir. 1995).
Sometimes, the facts relating to who has custody or control
of documents create a legal question about who has rights to
obtain the documents on demand.
purely factual.

Sometimes, however, the issue is

And sometimes it is both.

Here, neither party has presented any facts in support of
their position.

Rather, they simply argue either that Mr. Marnic

is not a Nationwide employee - a fact which, if true, may not
entirely resolve the issue of whether Nationwide can force him to
turn over his computer for its inspection - or that he is.

The

latter argument appears to be based almost entirely on the fact
that Nationwide was able to get Mr. Marnic to sit for a
deposition without forcing Ms. McGrath to subpoena him.

That

fact does not demonstrate an employment relationship, however; it
may simply mean that once the notice was served, Nationwide asked
Mr. Marnic if he would appear, and he said yes.
The Court cannot resolve this issue without any evidence at
all.

Distinguishing between independent contractors and
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employees can be decidedly difficult, even in the context of a
full-blown evidentiary hearing.

And even if someone is an

independent contractor, there may be a provision in the contract
which gives one side or the other rights over information or even
devices on which information is stored.

On the current record,

it is simply impossible to determine if Nationwide has a legal
right to obtain Mr. Marnic’s computer or to require him to
produce either an image of the information on it or permit
Nationwide to do the same.

The simplest solution to this dilemma

would, of course, to have been to subpoena the information by use
of a subpoena duces tecum, and if the parties still disagreed
about who should bear the cost of that proceeding, they could
have either compromised that issue or chosen to litigate it
without having it prevent discovery from moving forward.
they still can discuss such a compromise.

Perhaps

In the interim,

however, Nationwide’s counsel has signed a discovery response
certifying that Nationwide does not have possession, custody, or
control of Mr. Marnic’s computer, and Ms. McGrath has not
presented any evidence to the contrary.

Consequently, the Court

will deny the motion to compel as filed and on the basis of the
present record.
II.

Form 1099s

As the Court understand it, the second outstanding issue
involves Ms. McGrath’s request for 1099 forms for “Replacement
Agency Executives” in the Western Pennsylvania area for the years
from 2007 to 2012.

She argues in her memorandum (Doc. 70) that

she needs this information to prove damages on her age
discrimination claim.

Nationwide disputes the relevance of these

documents, arguing that if both Ms. McGrath and the other
similarly-situated individuals were employees, it might be proper
for her to compare her compensation to theirs, but since neither
she nor the other individuals were Nationwide employees, and
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because their business operations and opportunities differed,
there is no productive comparison to be made.

It also notes that

the information being sought is confidential, and that if
production of this information is ordered, the agents in question
should be given an opportunity to be heard on the issue.
Ms. McGrath’s reply (Doc. 73) provides additional
information about this request.

She argues that because these

individuals were given earnings opportunities in her region which
she should have been given had Nationwide “lived up to its
promises,” id. at 4, it is relevant to the damage she suffered.
She concedes that the damage experts might debate the probative
value of this information, but that is a different argument from
whether the information is discoverable.
The Court concludes that the information in question is
relevant, at least for discovery purposes, on the issue of
damages.

The other individuals involved worked in Ms. McGrath’s

region and held positions similar to hers.

Even if they were not

salaried employees of Nationwide, and even if there are
differences between their businesses and the position which Ms.
McGrath claims she should have been offered, the money they
earned might shed some light on the earnings potential for the
position or positions Ms. McGrath claims an entitlement to.

She

is correct that the weight of this evidence may be debatable, but
that should not prevent her from obtaining it and permitting her
expert to determine how much weight to give it in the damages
analysis.
Nationwide has raised an issue about confidentiality and
suggested that the affected individuals be given an opportunity
to be heard before this information is produced.

There is a

protective order in place, and Ms. McGrath has also indicated
that she does not object to the redaction of any information
which does not go to the damages issue.
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When her discovery

requests placed this information at issue, had Nationwide felt
obligated to gather input from the individuals in question, it
could have done so as part of its response; when the motion to
compel was filed, it had an additional opportunity to do that.
If, by now, it has not solicited input from these individuals, it
bears the burden of that omission.

The Court will not stay or

delay its order pending such input.
III.

Order

For the foregoing reasons, the motion to compel (Doc. 69) is
granted in part.

Nationwide shall produce the Form 1099s in

question within fourteen days, subject to the existing protective
order and any redactions to which the parties agree.

Further,

the Court understands that Nationwide’s motion for a protective
order (Doc. 61) is moot and that motion shall be removed from the
Court’s pending motions list.
IV.

Motion for Reconsideration

Any party may, within fourteen days after this Order is
filed, file and serve on the opposing party a motion for
reconsideration by a District Judge.

28 U.S.C. §636(b)(1)(A),

Rule 72(a), Fed. R. Civ. P.; Eastern Division Order No. 14-01,
pt. IV(C)(3)(a).

The motion must specifically designate the

order or part in question and the basis for any objection.
Responses to objections are due fourteen days after objections
are filed and replies by the objecting party are due seven days
thereafter.

The District Judge, upon consideration of the

motion, shall set aside any part of this Order found to be
clearly erroneous or contrary to law.
This order is in full force and effect even if a motion for
reconsideration has been filed unless it is stayed by either the
Magistrate Judge or District Judge.

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S.D. Ohio L.R. 72.3.

/s/ Terence P. Kemp
United States Magistrate Judge

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