Grimsley v. The Manitowoc Company, Inc. et al
Filing
46
MEMORANDUM (Order to follow as separate docket entry). 41 Signed by Honorable William W. Caldwell on 7/13/17. (sc)
UNITED STATES DISTRICT COURT FOR THE
MIDDLE DISTRICT OF PENNSYLVANIA
CRYSTAL GRIMSLEY, Individually and
as Administratrix of THE ESTATE OF
RICKIE L. GRIMSLEY,
Plaintiff
v.
THE MANITOWOC COMPANY, INC.,
et al.,
Defendants
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:
:
:
: CIVIL NO. 1:15-CV-1275
:
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:
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MEMORANDUM
I.
Introduction
Before this court is a motion by Defendant Grove U.S. L.L.C. (“Grove”) to
obtain a protective order or to quash a third-party subpoena directed to its purported
workers’ compensation insurance carrier, Sentry Insurance Company (“Sentry”). (Doc.
41). The subpoena seeks production of documents from Sentry’s workers’ compensation
claim file, which pertains to a crane accident resulting in the death of Plaintiff Crystal
Grimsley’s late husband, decedent Rickie L. Grimsley. (Doc.44-1 at 4). Grove argues that
it has standing to file this motion because it is insured by Sentry and has an interest in the
subject matter of the subpoena, and that Sentry’s workers’ compensation file may contain
documents protected by attorney-client privilege or the work product doctrine. (Doc. 42 at
7-11). Grove contends that documents from the workers’ compensation claim file should
first be screened by its lawyers so that Grove may withhold and identify in a privilege log
any potentially privileged documents. Because Grove has not met its respective burdens
to establish standing or to assert privilege over unspecified documents in Sentry’s claim
file, we will deny its motion.
II.
Background
On June 29, 2015, Plaintiff, individually and as executrix of decedent’s
estate, filed a complaint in this court against Defendants The Manitowoc Company, Inc.
(“Manitowoc”), Manitowoc Crane Companies, LLC (“MCC”), Manitowoc Cranes, LLC
(“Manitowoc Cranes”), Grove, and Kyle Mellott (“Mellott”). 1 (Doc. 1). According to the
complaint, the Corporate Defendants form a chain of ownership: Grove is owned by
Manitowoc Cranes, which is owned by MCC, which is owned by Manitowoc; in other
words, Grove, Manitowoc Cranes, and MCC are, directly or indirectly, wholly owned
subsidiaries of Manitowoc. (See id. ¶¶ 29-36). The complaint brings negligence, wrongful
death, and survival claims against all Defendants, as well as strict liability claims against
the Corporate Defendants. (Id. ¶¶ 68-90).
This lawsuit arises from a crane accident on August 29, 2013, which resulted
in decedent’s death (“Incident”). (See id. ¶ 1). The complaint alleges that at around 2:40
p.m. that day, decedent was working as a heavy-equipment mechanic and acting as a
yard signalman at a Manitowoc crane manufacturing facility in Shady Grove, Pennsylvania
(“Facility”) when a crane driven by Mellott, who was not licensed to operate cranes, was
being moved to an open lot on the Facility and turned too sharply, striking and killing
decedent as a result of being crushed between the moving crane and another parked
crane. (See id. ¶¶ 1, 9, 51-64). Decedent was fifty-nine years old and had worked at the
Facility for more than twenty-five years. (Id. ¶ 9). As alleged in the complaint, the record
owner of the Facility’s property was Grove, but the Facility bore Manitowoc’s name and
was “held out to the public” as one of Manitowoc’s regional headquarters. (Id. ¶¶ 9, 19,
1
In this opinion, we refer to The Manitowoc Company, Inc. as “Manitowoc,” and we
collectively refer to all three Manitowoc entities as the “Manitowoc Defendants.” We also
collectively refer to the Manitowoc Defendants and Grove as the “Corporate Defendants.”
2
23-26). The complaint does not contain allegations as to decedent’s employer, but
alleges that Mellott was employed by Manitowoc. (Id. ¶ 41-43).
On September 8, 2015, Defendants moved to dismiss the complaint, arguing
that they were immune from suit under various provisions of Pennsylvania’s Workers’
Compensation Act (“PWCA”), see 77 P.S. §§ 72, 481(a). (Docs. 8 & 10). On October 29,
2015, we granted each of Defendants’ motions and dismissed the complaint in its entirety.
(Doc. 17). First, we dismissed the complaint as to Grove, finding that it was entitled to
immunity under PWCA § 481(a) because “the allegations in the complaint suggest that
Grove was [decedent]’s employer at the time of the [I]ncident.” (Doc. 16 at 7). Second,
we perceived language in the complaint highlighting the Manitowoc Defendants’ dominion
and control over Grove as an allegation that the Manitowoc Defendants and Grove were a
single entity; therefore, we interpreted the complaint as an attempt to pierce the corporate
veil under an alter-ego theory against the Manitowoc Defendants and dismissed the
complaint as to those Defendants, surmising that, under the circumstances, the
Pennsylvania Supreme Court would grant immunity to each Manitowoc Defendant
because they qualified as an “employer,” along with Grove, under § 481(a). (Id. at 7-10).
Finally, we dismissed the complaint as to Mellott, finding that he was immune from suit
under PWCA § 72 because he and decedent were “fellow employees.” (Id. at 12).
On November 19, 2015, Plaintiff filed a motion for reconsideration, arguing
that this court erred by finding Grove was decedent’s employer; by reading into the
complaint an alter-ego theory that was not pleaded; and by treating the Corporate
Defendants as a single entity that was entitled to immunity under PWCA. (Docs. 18 & 19).
On January 4, 2016, we denied Plaintiff’s motion, finding that, even if we committed error
3
in concluding that Grove was decedent’s employer, our conclusions as to Defendants’
immunity “required the same result given that neither the allegations in the complaint nor
Plaintiff’s arguments reasonably suggested that an entity other than the named Corporate
Defendants employed [decedent] at the [F]acility.” (Doc 22 at 3). We found dismissal of
the complaint without leave to amend proper “because no matter how the case was
pleaded . . . [Defendants] would be cloaked with immunity.” (Id.) On January 27, 2016,
Plaintiffs appealed our decisions to the Third Circuit. (Doc. 23).
On January 10, 2017, the Third Circuit reversed our decision granting
Defendants’ motions to dismiss, reinstated the complaint as to all Defendants, and
remanded for further proceedings. Grimsley v. Manitowoc Co., Inc., 675 F. App’x 118,
119 (3d Cir. 2017). First, the panel reversed our determination that Grove was decedent’s
employer, finding that “[e]ven if select facts ‘suggest that Grove was [decedent’s] employer
at the time of the [I]ncident,’ those facts do not establish that Grove is subject to dismissal
as a matter of law.” Id. at 121. Next, because we “erred in according immunity to Grove,”
the panel also held that it was error for us to extend that immunity to the Manitowoc
Defendants, and to find Mellott to be decedent’s co-employee. See id. & n.4. Finally, “to
clarify the nature of the claims that remain,” the panel added that “[a] fair reading of the
[c]omplaint discloses that [P]laintiff sued the Manitowoc [Defendants] on a direct
participation theory,” and that we therefore “incorrectly characterized plaintiff’s claims” as
attempting to pierce the corporate veil. Id. at 121-22. To the extent the complaint alleged
that the Manitowoc Defendants exercised dominion and control over Grove, the panel
stated that Plaintiff is master of her complaint, has “repeatedly insisted” that she will not
4
pursue alter-ego liability, and “should simply be estopped from making a veil-piercing
argument in any further proceeding.” Id. at 122.
Defendants filed their answers to the complaint on March 2, 2017. (Docs. 35
& 36). In their answer, the Manitowoc Defendants denied being Mellott’s or decedent’s
employer on the day of the Incident. (Doc. 36 ¶ 25). In a separate answer, Grove
admitted that it was Mellott’s and decedent’s employer 2 and that Mellott was driving a
crane without a crane operator’s license, but denied that Mellott was required to carry
such a license while driving—as opposed to “operating”—a crane. (Doc. 35 ¶¶ 25, 35, 41,
53). Grove also denied that Manitowoc controlled any manner or method of work done at
the Facility, and averred that decedent “put himself in the blind spot of the crane being
driven by [Mellott] . . . and despite being told by another employee to move, unfortunately
failed to do same, and was struck by the crane.” (Id. at ¶¶ 39, 56).
This case proceeded to discovery and, on April 20, 2017, Plaintiff noticed
Defendants of her intent to serve third-party subpoenas on various entities pursuant to
Federal Rule of Civil Procedure 45. (Doc. 42-2 at 2). One of the subpoenas was directed
to Sentry and requested that Sentry produce “any and all documents, including
correspondence with the insured relating to” Sentry’s workers’ compensation claim file and
its third-party liability insurance claim file. (Id. at 4). The subpoena did not identify who
the “insured” was for each claim file, but identified the claim number and date of the
Incident attached to each claim. (Id.)
On April 24, 2017, upon receiving the third-party subpoena, Defendants’
counsel, who represents all Defendants in this action, expressed his intent to file a motion
for a protective order on Grove’s behalf. (Doc. 42-3). Alternatively, Defendants’ counsel
2
Grove admitted to being decedent’s employer despite no such allegation in the complaint.
5
proposed that Plaintiff allow Sentry to produce each claim file to him to be screened for
documents potentially protected by attorney-client privilege or the work product doctrine,
and then have Defendants’ counsel produce any discoverable documents to Plaintiff along
with a privilege log. (See Doc. 42 at 3). On May 1, 2017, Plaintiff’s counsel agreed to
Defendants’ proposal as to Sentry’s third-party liability insurance claim file, believing
Grove to be insured by Sentry with respect to that claim, but did not agree with respect to
Sentry’s worker’s compensation claim file, arguing that Sentry’s workers’ compensation
coverage “is wholly separate from” any third-party liability coverage that Sentry provides
for Grove. (Doc. 42-4). Plaintiff sent Defendants a modified third-party subpoena
requesting that Sentry produce all documents, including correspondence with Sentry’s
insured, relating only to Sentry’s workers’ compensation claim file. (Doc. 42-5).
On May 2, 2017, a case management conference was held with the parties,
during which this court was notified of the discovery dispute. On May 9, 2017, Grove filed
the instant motion under Federal Rules of Civil Procedure 26(c) and 45(d)(3) for a
protective order or to quash the modified third-party subpoena to Sentry regarding
documents in Sentry’s workers’ compensation claim file. (Doc. 41). In its motion, Grove
argues that it is insured by Sentry for workers’ compensation and that Sentry’s claim file
may contain documents protected by attorney-client privilege or the work product doctrine.
(Doc. 42 at 7-11). Plaintiff argues that Grove does not have standing to challenge the
third-party subpoena because Manitowoc is Sentry’s “insured” for workers’ compensation
coverage. (Doc. 44 at 18-20). Plaintiff contends that Grove conflates third-party liability
insurance coverage it has been provided by Sentry “with the wholly separate workers’
compensation insurance coverage provided by Sentry . . . to [Manitowoc].” (Id. at 21).
6
III.
Discussion
Federal Rule of Civil Procedure 45 “establishes the rules for discovery
directed to individuals and entities that are not parties to the underlying lawsuit.” First
Sealord Sur. v. Durkin & Devries Ins. Agency, 918 F. Supp. 2d 362, 382 (E.D. Pa. 2013).
“A subpoena under Rule 45 ‘must fall within the scope of proper discovery under [Federal
Rule of Civil Procedure] 26(b)(1).’” Id. (quoting OMS Invs., Inc. v. Lebanon Seaboard
Corp., No. 08–2681, 2008 WL 4952445, at *2 (D.N.J. Nov. 18, 2008)). Under Rule 45, it is
within the sound discretion of district courts to “ensure compliance with subpoenas, while
avoiding unfair prejudice to persons who are the subject of a subpoena’s commands.”
Audi of Am., Inc. v. Bronsberg & Hughes Pontiac, Inc., No. 3:16-CV-2470, 2017 WL
2212505, at *1 (M.D. Pa. May 17, 2017).
Here, Plaintiff seeks to issue a third-party subpoena to Sentry requesting
production of its workers’ compensation claim file related to the Incident. (Doc. 44-1 at 4).
The parties do not appear to contest that information in the claim file falls within the proper
scope of discovery pursuant to Rule 26(b)(1). (Docs. 41 ¶¶ 11-12 & 44 at 8). However,
Grove moves to obtain a protective order or quash the third-party subpoena, claiming that
it is insured by Sentry for workers’ compensation and holds a personal right or privilege
over unspecified documents in the claim file. (Doc. 42 at 7-11). The instant motion thus
boils down to (1) who is “insured” by Sentry for workers’ compensation pursuant to
Plaintiff’s third-party subpoena; and (2) whether an insured party to litigation has standing
to obtain a protective order or quash a third-party subpoena directed to its purported
workers’ compensation insurance carrier by asserting claims of attorney-client privilege or
7
work product over unspecified documents in its insurer’s claim file. Because Grove fails to
supply sufficient information to answer these questions, we will deny its motion.
Federal Rule of Civil Procedure 45(d)(3)(A) requires a court, upon motion, to
quash or modify a subpoena that, among other things, “requires disclosure of privileged or
other protected matter, if no exception or waiver applies.” Fed. R. Civ. P. 45(d)(3)(A). The
party moving to quash such a subpoena “bears a ‘heavy burden’ of demonstrating that an
enumerated basis for quashing the subpoena exists.” Malibu Media, LLC v. Doe, No.
4:15-CV-2281, 2016 WL 524248, at *2 (M.D. Pa. Feb. 10, 2016).
In the alternative to a motion to quash a third-party subpoena under Rule 45,
a party may also seek a protective order over certain discovery requests pursuant to
Federal Rule of Civil Procedure 26(c). See Mun. Revenue Servs., Inc. v. Xspand, Inc.,
No. 07–42, 2007 WL 1875793, at * 1 (E.D. Pa. June 27, 2007) (“[A]nalysis of
Rule 45([d])(3)(A) motions is similar to analysis of Federal Rule of Civil Procedure 26(c)
motions for a protective order.”). In pertinent part, Rule 26(c)(1) provides:
A party or any person from whom discovery is sought may move for a
protective order . . . . The motion must include a certification that the
movant has in good faith conferred or attempted to confer with other
affected parties in an effort to resolve the dispute without court action. The
court may, for good cause, issue an order to protect a party or person from
annoyance, embarrassment, oppression, or undue burden or expense,
including one or more of the following:
(A) forbidding the disclosure or discovery;
...
(D) forbidding inquiry into certain matters, or limiting the scope of
disclosure or discovery to certain matters; . . . .
Fed. R. Civ. P. 26(c)(1). Like Rule 45(d)(3)(A), “Rule 26(c) places the burden of
persuasion on the party seeking the protective order.” Cipollone v. Liggett Grp., Inc., 785
8
F.2d 1108, 1121 (3d Cir. 1986), cert. denied, 484 U.S. 976 (1987). Under Rule 26(c), it is
“well-established that a party wishing to obtain an order of protection over discovery
material must demonstrate that ‘good cause’ exists for the order of protection.” Pansy v.
Borough of Stroudsburg, 23 F.3d 772, 786 (3d. Cir. 1994). “Good cause is established on
a showing that disclosure will work a clearly defined and serious injury to the party seeking
closure. The injury must be shown with specificity.” Id. (quoting Publicker Indus., Inc. v.
Cohen, 733 F.2d 1059, 1071 (3d Cir. 1984)). “‘Broad allegations of harm, unsubstantiated
by specific examples or articulated reasoning,’ do not support a good cause showing.” Id.
(quoting Cipollone, 785 F.2d at 1121).
A. Grove lacks standing to challenge Plaintiff’s third-party subpoena
Whether a party has standing to challenge a third-party subpoena under
Rules 45(d)(3)(A) and 26(c) depends on the challenge being advanced. “‘Generally
speaking, a party does not have standing to quash a subpoena served on a third party.’”
Thomas v. Marina Assocs., 202 F.R.D. 433, 434 (E.D. Pa. 2001); see also Davis v. Gen.
Accident Ins. Co. of Am., No. 98–4736, 1999 WL 228944, at *2 (E.D. Pa. Apr. 15, 1999)
(“Ordinarily, only the non-parties whom were served with the subpoenas may move to
have them quashed under Federal Rule of Civil Procedure 45([d])(3)(A).”). An exception
to this rule exists, however, where “the party seeks to quash based on claims of privilege
relating to the documents being sought.” Thomas, 202 F.R.D. at 434; First Sealord, 918
F. Supp. 2d at 382 (“An exception to this rule permits a party to move to quash when it
‘claims some personal right or privilege in respect to the subject matter of a
subpoena . . . directed to a nonparty.’” (quoting Davis, 1999 WL 228944, at *2)).
9
Here, as a party to this action, Grove ordinarily does not have standing to
quash or seek a protective order over the third-party subpoena directed to its insurer,
Sentry, unless Grove shows that it has some personal interest in, or privilege with respect
to, the subpoena’s subject matter—Sentry’s workers’ compensation claim file. Grove
attempts to demonstrate its interest in Sentry’s claim file by maintaining that it is Mellott’s
and decedent’s employer and that it is insured by Sentry for third-party liability and
workers’ compensation insurance. (Doc. 41 at 2-3). Plaintiff contends that Sentry insures
Manitowoc, not Grove, for workers’ compensation, and supplies documentation showing
same; therefore, Plaintiff argues that Grove lacks standing to quash the subpoena or
obtain a protective order. (Doc. 44 at 20-21). As a result, there appears to be a dispute
as to what type of insurance Sentry provides, and for which Defendants. Both Plaintiff and
Grove supply this court with conflicting exhibits to support their contentions as to who is
insured by Sentry.
Plaintiff urges that Manitowoc, as decedent’s purported employer and
Sentry’s insured, began paying workers’ compensation benefits immediately after
decedent’s death. To support her contention, Plaintiff provides decedent’s W2 forms for
2005, 2006, 2007, 2008, 2009, 2010, 2011, and 2012. (Docs. 44-4 to 44-9). Each of
those W2 forms lists decedent’s employer as “The Manitowoc Company, Inc. Agent for
Grove US, LLC.” (See id.) In other words, the W2 forms for those eight years list
Manitowoc—as Grove’s agent—as decedent’s employer. 3 Notably, each W2 appears to
list the Federal Employer Identification Number (“EIN” or “FEIN”) for Manitowoc, not
3
Although the instant motion concerns which Defendants are insured by Sentry for workers’
compensation so as to claim standing, we note that facts about decedent’s employment—namely,
the “employer” or “insured” on whose behalf Sentry pays benefits—is relevant to our inquiry.
10
Grove. Because W2 forms are typically issued by employers in January for reporting an
employee’s preceding year’s wages and withheld taxes, decedent’s 2012 W2 form was
presumably issued in January 2013, and therefore was presumably his last-issued W2
before his death from the August 2013 Incident; that 2012 W2 lists Manitowoc’s EIN.
Plaintiff also provides exhibits immediately following the Incident, which
identify Manitowoc as decedent’s purported employer and as Sentry’s insured for workers’
compensation. On August 30, 2013, the day after decedent’s death, a First Report of
Injury Form, apparently filled out by—or on behalf of—decedent’s “employer,” 4 was
submitted to Pennsylvania’s Department of Labor & Industry’s Bureau of Workers’
Compensation (“Workers’ Compensation Bureau”). (Doc. 44-11 at 2-4). Under “Employer
Information,” the form listed “Grove Cranes Worldwide” as decedent’s employer; however,
both parties agree that no such company exists. 5 (Doc. 44-11 at 3); (Docs. 41 at 3 & 43
¶ 4). Plaintiff asserts that “Grove Cranes Worldwide” is actually Manitowoc because, in
that same “Employer” section, the form contains Manitowoc’s EIN. (Doc. 44-11 at 3).
Under “Insurer Information,” the form also lists Manitowoc’s name, along with its EIN, as
Sentry’s “Insured” for workers’ compensation, and provides Sentry’s workers’
compensation claim number for the Incident. (Id.) On September 10, 2013, a Notice of
Temporary Compensation Payable (NTCP) was filed with the Workers’ Compensation
Bureau, which listed “Grove Cranes Worldwide” as decedent’s employer, but did not
4
See 77 Pa Stat. § 994 (“An employer shall report such injuries to the Department of Labor
and Industry . . . .”); 34 Pa. Code § 121.5(a) (“The employer shall file a first report of injury . . . .”).
5
Confusingly, a Sentry claims representative also sent letters to decedent and Plaintiff just
after the Incident in which the claims representative again identifies Sentry’s “Insured” as “Grove
Cranes Worldwide,” which, as noted, is an entity that does not exist. (See Docs. 44-12 & 44-13).
11
contain a corresponding EIN. 6 (Doc. 44-14). On October 1, 2013, a Subsequent Report
of Injury form was filed, listing Manitowoc’s EIN next to “Employer FEIN” and containing
Sentry’s EIN as corresponding to “Insurer’s FEIN.” (See Doc. 44-15 at 4).
On October 18, 2013, a corporate payroll analyst for Manitowoc sent Plaintiff
a letter enclosing a check for decedent’s final wages, and stating that Plaintiff would
receive an IRS Form 1099 in January 2014 to be used for her 2013 tax returns. (Doc. 4416). The subsequent 1099-MISC form issued for decedent’s final wages lists Manitowoc,
along with its EIN, as the payer. (Doc. 44-17). Around that same time, Grove is listed as
Mellott’s employer pursuant to a notice of determination issued by Pennsylvania’s Office of
Unemployment Compensation Benefits; it is not clear how this employment determination
was made. (Doc. 44-19 at 2). In October 2013, Plaintiff retained counsel and notified
Grove of her intent to file this lawsuit. (Doc. 44-18).
Once Plaintiff notified Grove of her intent, documentation begins pointing
away from Manitowoc and toward Grove as being decedent’s employer and being
Sentry’s insured for workers’ compensation. On decedent’s 2013 W2 form, presumably
issued in January 2014 (after the Incident), his employer is, apparently for the first time,
identified as “Grove US, LLC. c/o The Manitowoc Company, Inc.” 7 (Doc. 44-20). The
2013 W2 also now lists, for the first time, the EIN for Grove, not Manitowoc. (Id.) In other
6
An employer may issue an NTCP where it is uncertain as to whether a workers’
compensation claim is compensable or as to the extent of its liability. See 77 Pa. Stat. §
717.1(d)(1). If, after investigation, an employer fails to file a Notice of Stopping of Compensation
within ninety days, the NTCP is converted to a Notice of Compensation Payable, and the employer
is deemed to have admitted liability under the PWCA. Id. § 717.1(d)(6).
7
We note that Grove stresses that their entity name is “Grove U.S. L.L.C.” and takes issue
with being named as “Grove U.S., L.L.C.” in Plaintiff’s complaint. (Doc. 41 at 2). Grove does not
raise any concern with the comma in its entity name in decedent’s W2 forms.
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words, decedent’s eight years of W2 forms preceding the Incident list Manitowoc’s EIN in
the employer EIN field, but, after the Incident, Grove’s EIN is provided. (Id.)
In March 2014, upon investigation of the Incident by the United States
Department of Labor’s Occupational Safety & Health Administration (OSHA), Grove was
identified as decedent’s employer and was fined $5,250; it is unclear how OSHA arrived at
its employment determination. (See Doc. 1-6 at 2). In July 2014, an attorney for Sentry
wrote to Plaintiff’s counsel about Plaintiff’s proposition for a settlement regarding Sentry’s
third-party liability insurance, which Sentry appears to provide for Grove. (Doc. 44-21). In
that letter, Sentry identifies Grove as its insured, but only references its third-party liability
insurance claim number, not its workers’ compensation claim number. (Id.) Finally, on
October 16, 2015, after the instant action was filed, an “Amended/Corrected” NTCP form
was filed with the Workers’ Compensation Bureau, which now identifies Grove as
decedent’s employer, includes Grove’s EIN, and lists Sentry as Grove’s workers’
compensation insurer. (Doc. 44-22).
For the instant motion, we begin by emphasizing that our primary focus is on
Grove’s disputed insurance relationship with Sentry, and whether Grove has shown an
interest in, or privilege over, documents in Sentry’s workers’ compensation claim file so as
to have standing to challenge Plaintiff’s third-party subpoena. The parties’ disagreement
as to decedent’s employment with Grove or Manitowoc only provides context to the instant
dispute as to whom Sentry insures for workers’ compensation.
In opposition to Grove’s motion, Plaintiff points to documents—in particular,
forms filed with Pennsylvania’s Workers’ Compensation Bureau immediately after the
Incident—which suggest that, for workers’ compensation, Sentry insures, and began
13
making payments on behalf of, Manitowoc. (See Doc. 44 at 14). Grove rebuts Plaintiff’s
assertions as being “based on the misconception that the insured under the workers’
compensation policy at issue is [Manitowoc],” and maintains that Plaintiff’s argument “is
not supported by the relevant documentation produced in this case.” (Doc. 45 at 2).
Despite its burden to demonstrate standing, however, Grove does not supply
this court with the workers’ compensation policy that it states is “at issue.” (See id.).
Indeed, Grove seems to insinuate that Sentry may provide insurance for both itself and
Manitowoc, admitting that Sentry “is the insurer for Defendants in this case,” but “under a
different insurance policy.” (Doc. 41 at 4 n.2). Grove does not clarify Plaintiff’s purported
“misconception” by supplying this court with definitive proof of its insurance relationship
with Sentry, such as an insurance contract or declaration page with Sentry for workers’
compensation as of the date of the Incident. Rather, Grove points solely to the
“Amended/Corrected” NTCP form, filed with the Workers’ Compensation Bureau after suit
was filed in this case, as proof that “it is without a doubt that [Sentry’s] insured is [Grove].”
(Doc. 45 at 3). Grove maintains that documents referencing Manitowoc as Sentry’s
insured are “mistake[s]” that were corrected, and intimates that we should disregard the
First and Subsequent Report of Injury forms—which identify Manitowoc as Sentry’s
insured and decedent’s employer—because those forms were completed by a “Sentry
claims adjuster.” (See Doc. 45 at 3, 8). However, it appears that such report of injury
forms must be submitted by, or on behalf of, “[t]he employer.” See 34 Pa. Code §
121.5(a). Thus, even if Sentry submitted those reports of injury, it was doing so on behalf
of its insured, which Sentry identified at the time as Manitowoc via Manitowoc’s EIN.
14
Those reports of injury notwithstanding, Grove maintains that they were
“corrected in a legally binding document” when Sentry filed an amended NTCP after
commencement of this lawsuit. (Doc. 45 at 8). Grove, however, provides no authority for
why the original NTCP is negated or why the prior report of injury forms listing Manitowoc
as Sentry’s insured must be disregarded. Grove also fails to explain why documentation
appears to show that Manitowoc admitted liability for the Incident by having Sentry pay
workers’ compensation benefits on its behalf for almost two years before the amended
NTCP was filed. See supra nota 6 (citing 77 Pa. Stat. § 717.1(d)(6)). Neither Grove nor
Manitowoc (since both are represented by the same counsel) definitively clarify the
confusion surrounding whom Sentry insures, and for what, at the time of the Incident,
even though they could have both supplied this court with proof of any policies with
Sentry. 8 Grove bears the burden of showing a particular interest or privilege in Sentry’s
workers’ compensation claim file for the instant motion, and has failed to supply this court
with definitive proof of what insurance relationship existed, when, and between whom.
Rather, Grove mostly attempts to clarify decedent’s employment relationship, 9 despite
conceding that the only issue for the present motion is “what entity is the insured on the
[w]orkers’ [c]ompensation claim for Sentry.” (Doc. 45 at 4).
Here, given Grove’s failure to clarify the conflicting documentation as to
Manitowoc’s or Grove’s potential workers’ compensation insurance relationship with
8
We note that even if we were supplied with Manitowoc’s and Grove’s insurance policies,
such documents, to the extent they showed both entities were insured for workers’ compensation
by Sentry, would not necessarily resolve which policy covered the Incident.
9
For example, Grove addresses decedent’s W2 forms from 2005 through 2012 by explaining
that “[t]he fact that [Manitowoc] acted as [Grove’s] agent on certain matters does not convert
[Manitowoc] into decedent’s employer.” (Doc. 45 at 7). We note that even if such clarification
were pertinent to this motion, it does not explain why eight years of W2 forms list Manitowoc’s EIN,
but then, after the Incident, Grove’s EIN appears for the first time in decedent’s 2013 W2 form.
15
Sentry, we conclude that Grove has failed to meet its burden of supplying sufficient
evidence to establish standing to seek a protective order over or quash the third-party
subpoena directed to Sentry. The exhibits submitted by the parties show confusion
regarding whom Sentry insured at the time of the Incident for workers’ compensation, and
Grove fails to adequately clarify such confusion so as to demonstrate its personal interest
in, or claim of privilege over, Sentry’s workers’ compensation claim file for the Incident.
Additionally, we note the speculative nature of Grove’s motion in that Grove
asserts that Sentry’s claim file “may contain” documents or information protected by
attorney-client privilege or the work product doctrine. (Doc. 41 ¶¶ 20, 27). Grove’s broad
and imprecise assertions as to non-specific, potentially privileged documents in Sentry’s
claim file fall short of showing “good cause” to obtain a protective order under Rule 26(c),
Pansy, 23 F.3d at 786, and certainly do not meet Grove’s “heavy burden” under Rule
45(d)(3)(A) for establishing a claim of privilege in order to quash a subpoena, see Malibu
Media, LLC, 2016 WL 524248, at *2. As such, we will deny Grove’s motion to quash or
obtain a protective order over Plaintiff’s third-party subpoena to Sentry because Grove has
not met its burden of demonstrating standing with respect to its motion.
B. Grove fails to meet its burden of establishing attorney-client
privilege or work product with respect to Sentry’s claim file
However, even assuming an insured-insurer relationship exists between
Grove and Sentry, we reject Grove’s arguments that such a relationship, without more,
establishes its claims of attorney-client privilege or work product doctrine over unspecified
documents that Sentry’s claim file “may contain.” (Doc. 41 ¶¶ 20, 27). We are
unconvinced that Grove, as an insured party to the instant litigation, may assert attorneyclient privilege or work product over its insurer’s workers’ compensation claim file based
16
solely on its insurance relationship, where its insurer is not a party to this litigation, does
not appear to contest coverage of the workers’ compensation claim, and where there are
insufficient facts to show that Grove and Sentry share common legal interests or that
Sentry’s claim file contains documents prepared in anticipation of litigation.
First, we reject Grove’s sweeping claim that, as Sentry’s insured, it shares a
common legal interest with Sentry and that, as such, any communications in Sentry’s
claim file, “if they are between Grove, its insurer and its attorneys, and they are to obtain
legal advice, . . . are protected by the attorney-client privilege and not discoverable.”
(Doc. 42 at 8). Federal courts sitting in diversity look to state law for applicable legal
principles on issues of privilege. See Fed. R. Evid. 501; United Coal Co. v. Powell Constr.
Co., 839 F.2d 958, 965 (3d Cir.1988). Pennsylvania law recognizes the attorney-client
privilege. 42 Pa. Cons. Stat. § 5928. The privilege operates “in a two-way fashion to
protect confidential client-to-attorney or attorney-to-client communications made for the
purpose of obtaining or providing professional legal advice.” Gillard v. AIG Ins. Co., 15
A.3d 44, 59 (Pa. 2011). The burden of proving application of the attorney-client privilege
is on the party asserting the privilege, who must establish:
(1) The asserted holder of the privilege is or sought to become a client.
(2) The person to whom the communication was made is a member of the
bar of a court, or his subordinate.
(3) The communication relates to a fact of which the attorney was informed
by his client, without the presence of strangers, for the purpose of securing
either an opinion of law, legal services or assistance in a legal matter, and
not for the purpose of committing a crime or tort.
(4) The privilege has been claimed and is not waived by the client.
Pa. Dep’t of Educ. v. Bagwell, 114 A.3d 1113, 1123-24 (Pa. Commw. Ct. 2015).
17
Although “[i]t is well-established that once attorney-client communications
are disclosed to a third party, the attorney-client privilege is waived[,]” see id. at 1124
(citing Commonwealth v. Chmiel, 738 A.2d 406 (1999)), Pennsylvania courts have
recognized the attorney-client privilege as extending, in certain cases, to co-clients or
clients sharing common legal interests via the “common interest” (also known as
“community of interest” or “joint defense”) and “co-client” doctrines, see Mine Safety
Appliances Co. v. N. River Ins. Co., 73 F. Supp. 3d 544, 573 (W.D. Pa. 2014) (“The
principles and boundaries of these doctrines remain unsettled under Pennsylvania law.”).
“The ‘common interest’ exception can arise where separate clients retain
different attorneys who then share information with each other pursuant to a common
legal interest.” Id. (citing CAMICO Mut. Ins. Co. v. Heffler, Radetich & Saitta, LLP, No.
CIV. A. 11-4753, 2013 WL 315716, at *2 (E.D. Pa. Jan. 28, 2013)). Typically, the doctrine
applies when “co-defendants are required to retain separate counsel to avoid potential
conflicts over contingent or subsidiary issues that might arise in the case.” Id.; In re
Condemnation by City of Phila. in 16.2626 Acre Area, 981 A.2d 391, 397-98 (Pa. Commw.
Ct. 2009). Pursuant to the doctrine, information “generated from the shared attorneyclient communications” can be “shared pursuant to this common interest,” and, as such,
the attorney-client privilege does not exist “as between those clients,” but the
communications “remain privileged as to all others.” Mine Safety, 73 F. Supp. 3d at 573
(citing In re Teleglobe Commc’ns Corp., 493 F.3d 345 (3d Cir. 2007)). For the common
interest doctrine to apply, “separate counsel for different clients is required,” and the
clients “must be parties to litigation or involved in similar or related legal proceedings that
implicate essentially the same interest against a common adversary.” Id.
18
By contrast, “[t]he ‘co-client’ exception to the attorney-client privilege comes
into play when two or more clients utilize the same attorney.” Mine Safety, 73 F. Supp. 3d
at 574 (citing CAMICO, 2013 WL 315716, at *2). “When this exception applies, the default
rule is that all communications in the course of the joint representation are discoverable by
each client in the event of litigation between them but otherwise remain privileged as
against third parties.” Id. Co-client undertakings are distinguishable “from situations
where a lawyer represents a single client, but another person with allied interests
cooperates with the client and the client’s lawyer.” Id. (quoting CAMICO, 2013 WL
315716, at *4). “[A] co-client relationship does not exist simply by virtue of the insurerinsured relationship.” Id. (quoting CAMICO, 2013 WL 315716, at *3). In fact, even where
an insurer hires an attorney for its insured, it is not clear that the co-client doctrine applies.
See id. (“Some federal courts have interpreted Pennsylvania law to encompass an
absolute rule whereby the insured and insurer are always considered to be co-clients
when the carrier pays for the defense. . . . Others have rejected this notion.”).
Here, we reject Grove’s broad assertion that, by virtue of its purported
insured-insurer relationship with Sentry, Grove’s attorneys “jointly represent[] or act[] for
the common interest of” both Sentry and Grove, and that Grove and its insurer jointly hold
attorney-client privilege “as to any third-part[ies].” (Doc. 45 at 5). We initially note that it is
unclear whether Grove relies on the “common interest” or “co-client” doctrine to assert
attorney-client privilege, as citations in its briefing appear to conflate the doctrines. (See
id.). In any event, Grove provides little information, beyond asserting that it is insured by
Sentry, as to how either doctrine applies in this case. For instance, it is not apparent
whether Sentry and Grove are represented by separate counsel, a requirement for
19
application of the common interest doctrine, or by the same counsel, which is indicative of
the co-client doctrine.
Moreover, as to the common interest doctrine, we note that Sentry is not a
party to the instant action and has not denied workers’ compensation coverage with
respect to the Incident. Consequently, Grove has not shown with any particularity how
Sentry is involved in similar or related legal proceedings so as to share common legal
interests with Grove in mounting a defense in this case. See Mine Safety, 73 F. Supp. 3d
at 573 (“[A] shared common business interest or an interest that is solely commercial is
insufficient to warrant application of the privilege.”); In re Condemnation, 981 A.2d at 399
(“Evidence that . . . parties supported each other’s separate efforts by sharing information
and/or legal strategy is not evidence that the two shared a common legal interest.”).
Grove has also not shown how it is Sentry’s co-client, as there is no indication that Sentry
is paying for Grove’s counsel, and Sentry’s only apparent interest in this litigation is to
generally minimize its insured’s exposure to liability. See Mine Safety, 73 F. Supp. 3d at
574 (“[A] shared interest between a carrier and an insured in minimizing the insured’s
exposure to liability does not in itself create a co-client relationship.”). 10
Aside from Grove’s lack of proof, we also hesitate to extend the “common
interest” or “co-client” doctrines to the instant dispute where Grove’s attorneys represent
more than just Grove, but all Defendants in this action. Extension of either doctrine in this
case would have the effect of allowing counsel for Mellott and the Manitowoc Defendants
to preemptively screen Sentry’s workers’ compensation claim file where those Defendants
have not asserted or demonstrated any claim of privilege over the file. Accordingly, we
10
See also Ingersoll-Rand Equip. Corp. v. Transp. Ins. Co., 963 F. Supp. 452, 454 (M.D. Pa.
1997) (Caldwell, J.) (“When an insurer retains an attorney to represent an insured, pursuant to the
insurer’s duty to defend, that attorney’s client is the insured, not the insurer.”).
20
find that Grove has not met its burden of showing that it shares a common legal interest or
is a co-client with Sentry so as to permit its assertions of attorney-client privilege over its
purported insurer’s workers’ compensation claim file.
Next, we reject Grove’s assertions that it may assert the work product
doctrine over documents in Sentry’s claim file. “The work product doctrine is governed by
a uniform federal standard set forth in [Federal Rule of Civil Procedure] 26(b)(3).” In re
Cendant Corp. Sec. Litig., 343 F.3d 658, 661 (3d Cir. 2003). Rule 26(b)(3) provides that
“a party may not discover documents and tangible things that are prepared in anticipation
of litigation or for trial by or for another party or its representative (including the other
party’s attorney, consultant, surety, indemnitor, insurer, or agent),” unless otherwise
discoverable or the party shows substantial need for the material. Fed. R. Civ. P. 26(b)(3).
The work-product doctrine “protect[s] the confidentiality of papers prepared by or on behalf
of attorneys in anticipation of litigation,” thus “enabling attorneys to prepare cases without
fear that their work product will be used against their clients.” In re Chevron Corp., 633
F.3d 153, 164 (3d Cir. 2011) (quoting Westinghouse Elec. Corp. v. Republic of the Phil.,
951 F.2d 1414, 1428 (3d Cir. 1991)). “The party seeking the protection has the burden of
proving the doctrine applies.” Mine Safety, 73 F. Supp. 3d at 569.
To determine whether a document is prepared “in anticipation of litigation,”
the appropriate inquiry is whether “in light of the nature of the document and the factual
situation in the particular case, the document can be fairly said to have been prepared or
obtained because of the prospect of litigation.” Montgomery County v. MicroVote Corp.,
175 F.3d 296, 305 (3d Cir. 1999) (quoting In re Grand Jury Proceedings, 604 F.2d 798,
803 (3d Cir. 1979)). Materials prepared “in the ordinary course of business” or pursuant to
21
regulatory requirements or for other non-litigation purposes do not constitute documents
prepared in anticipation of litigation so as to be protected under the work product doctrine.
Martin v. Bally's Park Place Hotel & Casino, 983 F.2d 1252, 1260 (3d Cir. 1993).
“[F]ederal courts have consistently ruled that the work product doctrine is not
inapplicable merely because the material was prepared by or for a party’s insurer or
agents of the insurer.” United Coal Cos. v. Powell Const. Co., 839 F.2d 958, 966 (3d Cir.
1988). “Counsel for an insurer may invoke work product protection in favor of documents
prepared by it in anticipation of litigation even though the insurer is not a named party in
an action.” Id. “Federal courts are not in agreement as to whether an insurer’s claim file,
prepared after an accident that may generate a potential claim, can be protected from
discovery under Rule 26(b)(3).” Basinger v. Glacier Carriers, Inc., 107 F.R.D. 771, 773
(M.D. Pa. 1985) (Caldwell, J.). 11 “Rule 26(b)(3) was not intended to protect all insurance
claim files from discovery but, at the same time, by its very language, the Rule does
protect without reference to any exception for insurance companies, materials prepared in
anticipation of litigation.” Id. As such, whether documents in an insurer’s claim file are
prepared in the ordinary course of the carrier’s business of investigating claims or in
anticipation of litigation is a fact-dependent inquiry. Id.; see also Natale v. Wal-Mart
Stores, Inc., No. 3:15-CV-0808, 2016 WL 3467715, at *2 (M.D. Pa. June 24, 2016). In
making this determination, courts consider whether documents are prepared before a
decision as to coverage was made, and whether a claim was accepted or denied. 12
11
See Mary Beth Brookshire Young, The Work Product Doctrine: Functional Considerations
and the Question of the Insurer’s Claim File, 64 U. CHI. L. REV. 1425, 1430-32 (1997)
(summarizing five approaches taken by courts).
12
See AKH Co. v. Universal Underwriters Ins. Co., 300 F.R.D. 684, 688 (D. Kan. 2014)
(“Courts have routinely applied a rebuttable presumption ‘that neither attorney work product nor
22
Here, because the third-party subpoena to Sentry has not yet been served,
we lack sufficient information as to whether any documents in Sentry’s workers’
compensation claim file are protected by the work product doctrine. Grove argues that
“there may be work product” in Sentry’s claim file that “pertains to the instant case.” (Doc.
42 at 10). Plaintiff argues that Grove’s assertions amount to “hypothetical speculation”
and are “nothing more than conjecture.” (Doc. 44 at 27). Grove responds that it should
still be permitted to screen Sentry’s claim file for work product and then produce any
discoverable documents from the file because there would be no prejudice to Plaintiff in
doing so, and because “the damage cannot be undone” if Plaintiff were allowed to receive
the documents. (Doc. 42 at 11). Plaintiff retorts that, at minimum, because of the shifting
information as to Sentry’s insured, Sentry should be directed to provide its response to the
third-party subpoena to this court, an appointed magistrate, or a discovery master for in
camera review. (Doc. 44 at 14).
We agree with Plaintiff that because Grove bears the burden of showing that
the work product doctrine applies, and because its claims of what Sentry’s claim file “may
contain” are speculative, (Doc. 41 ¶ 27), Grove has not satisfied its burden of asserting
work product over Sentry’s claim file. Despite bearing the burden of establishing the
doctrine, and despite being in the best position to do so, Grove has presented no
attorney-client privilege protects an insurer’s investigatory file on an insured's claim from discovery
before a final decision is made’ as to that claim.” (quoting Lindley v. Life Investors Ins. Co. of Am.,
267 F.R.D. 382, 399 (N.D. Okla. 2010)); Camacho v. Nationwide Mut. Ins. Co., 287 F.R.D. 688,
694 (N.D. Ga. 2012) (“Insurance claim files generally do not constitute work product in the early
stages of investigation, when the insurance company is primarily concerned with deciding whether
to resist the claim . . . or to reimburse the insured and forget about the claim thereafter.”); Ring v.
Commercial Union Ins. Co., 159 F.R.D. 653, 660 (M.D.N.C. 1995) (“[T]he general rule is that a
reasonable possibility of litigation only arises after an insurance company has made a decision
with respect to the claim of its insured. Therefore, and in general, only documents accumulated
after the claim denial will be done in anticipation of litigation.”).
23
support—beyond its bare assertions—for what communications its attorneys have had
with Sentry in anticipation of litigation which it believes may be contained in Sentry's claim
file so as to be covered by the work product doctrine. Importantly, we note that Sentry has
not yet been served with Plaintiff’s third-party subpoena, and will have a chance to review
its claim file and to object to any particular documents or communications as protected by
attorney-client privilege or work product. In contrast to the speculative arguments before
us, Sentry knows what documents are in its file and can make claims of privilege over
specific documents which, if needed, can be submitted to this court for in camera review.
In sum, the present dispute requires this court to speculate as to what types
of insurance Sentry provides to Grove, Manitowoc, or both, what common legal interests,
if any, Sentry has in this litigation, and what conversations, if any, Grove’s attorneys may
have had with Sentry in anticipation of litigation that may be contained in Sentry’s workers’
compensation claim file. Grove essentially claims that speculation on these questions
weigh in favor of its ability to assert attorney-client privilege or work product over Sentry’s
claim file. We disagree. Grove bears the burden of showing standing and the application
of attorney-client privilege or work product doctrine with respect to its motion to quash or
obtain a protective order over Plaintiff’s third-party subpoena to Sentry. Grove has failed
to satisfy its burden, and we will therefore deny its motion.
IV.
Conclusion
Grove has failed to meet its burden of supplying sufficient evidence of its
insured-insurer relationship with Sentry so as to demonstrate standing to seek a protective
order or quash Plaintiff’s third-party subpoena for Sentry’s workers’ compensation claim
file. Grove has also failed to demonstrate that either attorney-client privilege or the work
24
product doctrine apply to unspecified documents in Sentry’s claim file. Accordingly, we
will deny Grove’s motion (Doc. 41) to obtain a protective order and to quash the third-party
subpoena directed to Sentry. An appropriate order will issue.
/s/ William W. Caldwell
William W. Caldwell
United States District Judge
Date: July 13, 2017
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