Hege et al v. Aegon USA LLC et al
ORDER granting in part and denying in part 63 Motion for Protective Order as set out in this order; granting 66 Motion to Compel; granting 69 Motion to Compel. Transamerica shall produce the documents ordered to Plaintiffs on or before May 16, 2011. Signed by Honorable G Ross Anderson, Jr on 5/10/11.(gpre, )
UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH CAROLINA
Hege, et al. v. Aegon USA, LLC, et al. )
Bowman v. Aegon USA, LLC, et al.
Miller v. Aegon USA, LLC, et al.
Bridgmon v. Aegon USA, LLC, et al.
C/A No.: 8:10-cv-1578-GRA
C/A No.: 7:10-cv-1630-GRA
C/A No.: 7:10-cv-1631-GRA
C/A No.: 1:10-cv-1635-GRA
These matters are before the Court on Plaintiffs’ Motion to Compel and
Omnibus Motion to Compel Production of Documents (collectively the “Motions to
Compel”), and Defendant Transamerica Life Insurance Company (“Transamerica”)’s
Motion for Protective Order.1
Through their Motions to Compel, Plaintiffs seek
production of documents Transmerica claims are protected by attorney–client
privilege and the work product doctrine. Meanwhile, in its Motion for Protective
Order, Transamerica seeks to prevent Plaintiffs’ counsel from eliciting certain
testimony from one of its actuaries. For the reasons set forth herein, Plaintiffs’
Motions to Compel are granted. Transamerica’s Motion for Protective Order is
granted in part and denied in part.
Plaintiffs and Transamerica have filed their respective motions in each of
the above-captioned cases.
Page 1 of 19
These cases arose out of a 2005 decision by Life Investors Insurance
Company (“Life Investors”), a predecessor of Transamerica,2 to change the payment
methodology for its supplemental cancer policies. The policies pay claims based on
the “actual charges” the policyholder incurs for certain treatments. Before the
change, Life Investors paid benefits according to the amount the insured’s healthcare
provider initially billed the insured, even if the provider later accepted a lesser amount
as payment in full. However, after April 1, 2006, Life Investorspaid benefits based
on the amount the provider accepted as payment in full, even if that amount was
less than the amount it initially billed.
For many years, Life Investors and its predecessors sold supplemental cancer
policies that offered uncapped benefits for chemotherapy and radiation treatment.
Due to the rising costs of those treatments, Life Investors eventually stopped selling
the policies; however, because a number of the policies that had already been issued
were guaranteed renewable for the insured’s lifetime, Life Investors continued to
service a substantial block of these policies. These remaining policies were referred
to as Discontinued Supplemental Insurance (“DSI”) policies.
As the pool of DSI policyholders shrank over time, the loss ratio on DSI
policies likewise grew. To compensate for the increasing loss ratio, Life Investors
Effective October 2, 2008, Life Investors merged into Transamerica.
Unless otherwise indicated, all references to Transamerica in this Order
include Life Investors.
Page 2 of 19
imposed several premium rate increases on DSI policyholders. In April 2004, Life
Investors convened a taskforce (the “DSI Taskforce” or “Taskforce”) to identify the
causes of the high loss ratio and consider ways to avoid or mitigate future premium
increases. The Taskforce was chaired by Stephen Gwin, an actuary, and included
members of Life Investors’ legal, actuarial, financial, and claims departments.
After initial review, the Taskforce determined that because Life Investors paid
claims according to the amount medical providers billed, it was often paying DSI
policyholders more than providers actually accepted. The Taskforce also concluded
that the phrase “actual charges” in the DSI policies meant that Life Investors had to
pay only the amount that a provider actually accepted as payment in full. Over the
summer and fall of 2004, Taskforce members consulted with both in-house and
outside counsel regarding various issues related to the Taskforce’s proposed
interpretation of “actual charges.”3
In October 2004, Life Investors retained the law firm of Jorden Burt LLP
(“Jorden Burt”) to analyze the legality of the proposed change and the risk that Life
Investors would face litigation if it made the change. At Jorden Burt’s request, Gwin
Defendants maintain that Life Investors did not changes its interpretation
of “actual charges” but instead merely amended its claims processing
requirements. At least one other court hearing a case against Life
Investors has squarely rejected that proposition. See Lindley v. Life Invs.
Ins. Co. of Am., No. 08-cv-379, 2009 WL 2163513, at *6 (N.D. Okla.
Jul. 17, 2009) (“While defendant may call this a revision in claim
procedures, it also reflects a change in its interpretation of ‘actual
Page 3 of 19
performed analyses and calculations on the financial impact the proposed change
would have on DSI policy funds and premiums. Gwin memorialized his work in a
series of charts and tables (collectively, the “Gwin Charts” or “Charts”), which he
provided to Jorden Burt. In April 2005, Jorden Burt completed its opinion and risk
assessment, which it provided to Life Investors in a 185-page report (the “Jorden
In early 2005, the DSI Taskforce presented its findings and
recommendations to Connie Whitlock, Life Investors’ Senior Vice President.
Whitlock also received a copy of the Jorden Burt Report. In July 2005, Whitlock
adopted the Taskforce’s proposal and decided to change Life Investors’ DSI payment
methodology; going forward, claims would be paid according to the amount
healthcare providers accepted as full and final payment. Whitlock announced her
decision in an internal memorandum dated July 22, 2005.
After the change became effective in 2006, a number of policyholders sued
Life Investors over the change. Jorden Burt represented Transamerica in a number
of the “actual charges” cases. In 2008, at Jorden Burt’s request, Gwin performed
additional analyses and calculations for Jorden Burt to use in mediation and
Transamerica filed its Motion for Protective Order in these matters on February
25, 2011. Plaintiffs filed their Motions to Compel on February 28 and March 3. On
March 8, the Court directed the parties to attempt to resolve their dispute over the
Page 4 of 19
documents Plaintiffs sought in their Motions to Compel; if they could not totally
settle the dispute, the Court would conduct in camera review of any remaining
Although the parties resolved their dispute with respect to the majority of
documents, they did not agree on the discoverability of others. On April 8, 2011,
Transamerica delivered to chambers copies of the following documents, over which
the parties could not agree:
Internal Life Investors emails regarding analysis of the “actual charges”
language on the DSI policies, dated July 8, 2004 (TLICPriv-0013, a/k/a
LIPriv-Lindley 0021), and July 9, 2004 (TLICPriv-0014, a/k/a LIPrivLindley 0065, and TLICPriv-0015, a/k/a LIPriv-Lindley 0105);
A string of emails between Life Investors employees and outside
attorneys regarding analysis of DSI claims processing, dated October
25, 2004 (TLICPriv-0063, a/k/a LIPriv-Lindley 0027);
A list of questions regarding the proposed change in claims payment,
prepared by Life Investor’s General Counsel Mark Edwards (TLICPriv0004, a/k/a LIPriv-Lindley 0168), and an email dated May 20, 2004,
forwarding those questions to other Life Investors personnel (TLICPriv0005, a/k/a LIPriv-Lindley 0169);
Handwritten notes taken by Stephen Gwin and Kelly Adams, a Life
Investors vice president, at a May 27, 2004 meeting regarding the
proposed change in claims payment (TLICPriv-0255, a/k/a LIICA
005158, and TLICPriv-0256, a/k/a LIICA 005171);
The “Financial Analysis” section of the Jorden Burt Report and Exhibits
B and D–O to the Report (TLICPriv-0198);
The Gwin Charts (TLIC-Priv-0114, TLIC-Priv-0115, TLIC-Priv-0127,
TLIC-Priv-0133, TLIC-Priv-0177, TLIC-Priv-0178, TLIC-Priv-0179, TLICPriv-0180, TLIC-Priv-0181, TLIC-Priv-0197, TLIC-Priv-0204, TLIC-Priv0241, TLIC-Priv-0242, TLIC-Priv-0243, TLIC-Priv-0244, TLIC-Priv0245, TLIC-Priv-0246, and TLIC-Priv 0247); and
Page 5 of 19
A draft of Whitlock’s internal memorandum dated May 26, 2005, with
attached fax cover sheet (TLICPriv-0231, a/k/a LIPriv-Lindley 0131).
The parties filed statements outlining the grounds of dispute for each document, as
well as responses to the pending motions.
Motions to Compel
Parties to civil litigation have broad discovery rights.
They may obtain
discovery regarding “any nonprivileged matter that is relevant to any party’s claim
or defense,” including any information that “appears reasonably calculated to lead
to the discovery of admissible evidence.” Fed. R. Civ. P. 26(b)(1). Courts are to
construe broadly rules enabling discovery. Nat’l Union Fire Ins. Co. of Pittsburgh, PA
v. Murray Sheet Metal Co., 967 F.2d 980, 983 (4th Cir. 1992) (“National Union”)
(quoting Hickman v. Taylor, 329 U.S. 495, 507 (1947)). Conversely, limitations on
discovery are to be construed narrowly. See, e.g., Hawkins v. Stables, 148 F.3d
379, 383 (4th Cir. 1998) (“[T]he attorney–client privilege is to be narrowly
construed . . . .”); RLI Ins. Co. v. Conseco, Inc., 477 F. Supp. 2d 741, 748 (D. Md.
2007) (“[A]ssertions of evidentiary privilege are narrowly and strictly construed . .
. .” (citing Trammel v. United States, 445 U.S. 40, 50–51 (1980))).
Transamerica asserts both attorney–client privilege and work product immunity
over each document remaining in dispute.
Because Transamerica could avoid
production under either theory, this Court addresses each argument separately.
Page 6 of 19
These cases are diversity actions.
In such cases, the availability of an
evidentiary privilege is governed by the law of the forum state. Fed. R. Evid. 501;
Hottle v. Beech Aircraft Corp., 47 F.3d 106, 107 n.5 (4th Cir. 1995). Thus, this
Court shall apply South Carolina law to Transamerica’s assertions of attorney–client
“The attorney–client privilege protects against disclosure of confidential
communications by a client to his attorney.” State v. Owens, 424 S.E.2d 473, 476
(S.C. 1992) (citing State v. Love, 271 S.E.2d 110 (S.C. 1980)). The privilege is to
be construed strictly, State v. Doster, 284 S.E.2d 218, 219 (S.C. 1981), and
balanced against the public interest in the proper administration of justice, id. at 220
(citing NLRB v. Harvey, 349 F.2d 900 (4th Cir. 1965); Sepler v. State, 191 So. 2d
588 (Fla. Dist. Ct. App. 1966)). Furthermore, not every communication within the
attorney and client relationship is privileged. Id. at 219. The communication must
relate to a fact of which the attorney was informed by her client, outside the
presence of strangers, for the purpose of securing primarily an opinion on law, legal
services, or assistance in some legal proceeding. Marshall v. Marshall, 320 S.E.2d
44, 47 (S.C. Ct. App. 1984) (internal citations omitted).
The privilege consists of the following essential elements: (1) where legal
advice of any kind is sought (2) from a professional legal advisor in his capacity as
such, (3) the communications relating to that purpose, (4) made in confidence (5) by
Page 7 of 19
the client, (6) are at his instance permanently protected (7) from disclosure by
himself or by the legal advisor, (8) except where the protection is waived.
Tobaccoville USA, Inc. v. McMaster, 692 S.E.2d 526, 529 (S.C. 2010) (citing
Doster, 284 S.E.2d at 219–20). The party asserting the privilege has the burden of
proving every element.
See Love, 271 S.E.2d at 112 (citing 81 Am. Jur. 2d
Witnesses § 221).
Under South Carolina law, the party asserting the privilege must establish lack
of waiver. City of Myrtle Beach v. United Nat’l Ins. Co., No. 4:08-1183-TLW-SVH,
2010 WL 3420044, at *5 (D.S.C. Aug. 27, 2010) (applying South Carolina law);
Tobaccoville USA, Inc., 692 S.E.2d at 529. Waiver may be either explicit or implied.
See Floyd v. Floyd, 615 S.E.2d 465, 484 (S.C. Ct. App. 2005). One way a party
may implicitly waive the privilege is by placing a privileged communication “at issue”
in a case. For example, in Floyd, a defendant facing a claim of breach of fiduciary
duty argued that his actions were reasonable and made “several general attestations”
that he had acted on advice of counsel. Such attestations were sufficient to place
his communications with counsel at issue, thereby waiving the privilege. Id.
Assuming, without deciding, that Transamerica has met its burden on the
other elements of attorney–client privilege, it nonetheless has given short shrift to
this element.4 First, it contends waiver is established because although Plaintiffs
Indeed, Transamerica omitted waiver from its recitation of the privilege’s
(See Transamerica’s Resp. 7, Hege ECF No. 87;
Transamerica’s Resp. 7, Hege ECF No. 88.)
Page 8 of 19
initially asserted waiver in their Motions to Compel, they have not identified waiver
as a basis for continued dispute over the remaining documents. Transamerica’s
contention misses the point. Even if Plaintiffs have somehow abandoned their
waiver argument,5 such abandonment does not, ipso facto, establish the element for
Transamerica. It still bears the burden of proving every element of the privilege,
including lack of waiver. See Wilson v. Preston, 662 S.E.2d 580, 585 (S.C. 2008)
(citing Love, 271 S.E.2d at 110).
Second, Transamerica argues it has not waived the privilege because it has
never raised advice of counsel as an affirmative defense in these cases. Expressly
claiming advice of counsel as an affirmative defense is not the only way to put
privileged communications at issue. City of Myrtle Beach, 2010 WL 3420044, at
*5. For example, in City of Myrtle Beach, an insurance bad faith action arising under
South Carolina law, the defendant insurer asserted reasonableness and good faith as
affirmative defenses, but it did not explicitly claim reliance on advice of counsel. The
insured later sought production of communications between the insurer and its
outside counsel regarding coverage. In analyzing the insurer’s claim of privilege over
those communications, the court noted that “[a]n insurer’s thoughts and knowledge
are at the center of a claim for bad faith.” Id., at *4. The court reasoned that
“‘when a litigant seeks to establish its mental state by asserting that it acted after
The Court is not convinced such abandonment has, in fact, occurred.
While Plaintiffs did not explicitly restated their waiver argument, they do
continue to contest Transamerica’s privilege claims.
Page 9 of 19
investigating the law and reaching a well-founded belief that the law permitted the
action it took, then the extent of its investigation and the basis for its subjective
evaluation are called into question.’” Id., at *5 (quoting State Farm Mut. Auto. Ins.
Co. v. Lee, 13 P.3d 1169 (Ariz. 2000)). Accordingly, the court concluded, the
insurer had put its communications with counsel at issue by asserting reasonableness
and good faith. Thus, its privilege claim failed. Id., at *7.
One element of a South Carolina insurance bad faith claim is that the refusal
to pay resulted from the insurer’s bad faith or unreasonable action. See Howard v.
State Farm Mut. Auto. Ins. Co., 450 S.E.2d 582, 586 (S.C. 1994). An insurer is to
be judged by the evidence before it at the time it denied the claim or, if the insurance
company did not specifically deny the claim, by the evidence it had before it at the
time the suit was filed. Id. at 584.
Like the insurer in City of Myrtle Beach, Transamerica asserts, as affirmative
defenses, that it acted in good faith and that its decision to change its payment
methodology was reasonable. It also asserts that it engaged in no unlawful conduct
and that it did not breach any common law or contractual duty owed to Plaintiffs.
Under Howard and City of Myrtle Beach, Transamerica has put at issue the evidence
Life Investors’ decisionmakers had before them and the basis for their subjective
When Whitlock learned policyholders were being paid more than healthcare
providers were accepting as final payment, she asked for a “legal review.” (Dep. of
Page 10 of 19
Connie Whitlock, 317:16, Feb. 15, 2011, ECF No. 87-3.) That legal review was part
of the DSI Taskforce’s work. Furthermore, Whitlock and other management-level
personnel received the Jorden Burt Report. These facts indicate that the legal advice
and analysis Life Investors sought and received was intertwined with the other
considerations in play when Whitlock decided to change its “actual charges”
Accordingly, such advice and analysis bears upon the
reasonableness of Life Investors’ decision, which Transamerica has put at issue.
Applying that conclusion to in camera review of the disputed documents, this Court
finds that Transamerica has put each of the remaining documents at issue, thereby
precluding their protection under attorney–client privilege.
In camera review also reveals that some documents are not privileged for other
reasons. In October 2006, Gwin revealed to the Tennessee Department of Insurance
some of the financial calculations that he performed for Jorden Burt and
memorialized in the Gwin Charts. Under South Carolina law, voluntary disclosure
of a privileged communication to a third party waives attorney–client privilege not
only as to the specific communication disclosed, but also as to all communications
between the same attorney and the same client on the same subject. Marshall, 320
S.E.2d at 46–47 (citing United States v. Jones, 696 F.2d 1069 (4th Cir. 1982);
Duplan Corp. v. Deering Milliken, Inc., 397 F. Supp. 1146 (D.S.C. 1975)). Thus,
assuming the Gwin Charts were ever privileged, Gwin’s revelation to the Department
waived the privilege for all of the Gwin Charts.
Page 11 of 19
Furthermore, two disputed documents are nothing more than transmittal
papers. For example, the email in TLICPriv-0005 transmits a document from an inhouse attorney to other Life Investors employees. “Correspondence that merely
transmit documents to or from an attorney, even at the attorney’s request for
purposes of rendering legal advice to a client, are neither privileged nor attorney work
product.” Guidry v. Jen Marine LLC, No. 03-0018, 2003 WL 22038377, at *2 (E.D.
Therefore, the email in TLICPriv-0005 and the fax cover sheet in
TLICPriv-0231 (a/k/a LIPriv-Lindley 0131) are not protected under either doctrine.
Work Product Doctrine
Federal law governs the work product doctrine in diversity cases. United Coal
Cos. v. Powell Constr. Co., 839 F.2d 958, 966 (3d Cir. 1988). Under Federal Rule
of Civil Procedure 26(b)(3), things prepared “in anticipation of litigation” are generally
protected from discovery, whether they were prepared by a party’s attorney,
consultant, or other agent. The party claiming work product protection has the
burden of establishing entitlement to it. Sandberg v. Va. Bankshares, Inc., 979 F.2d
332, 355 (4th Cir. 1992).
In evaluating a claim of work product protection, the first and central inquiry
is whether the thing the party seeks to protect was prepared “in anticipation of
litigation.” A party often may prepare documents for multiple purposes, “not only
out of a concern for future litigation, but also to prevent reoccurrences, . . . to
respond to regulatory agencies,” and for a variety of other reasons. Nat’l Union, 967
Page 12 of 19
F.2d at 984.
“Determining the driving force behind the preparation of each
requested document is therefore required in resolving a work product immunity
question.” Id. The mere fact that litigation eventually ensues does not, by itself,
cloak materials with work product immunity. “The document must be prepared
because of the prospect of litigation when the preparer faces an actual claim or a
potential claim following an actual event or series of events that reasonably could
result in litigation.” Id. (internal citations omitted); see also Allendale Mut. Ins. Co.
v. Bull Data Sys., Inc., 152 F.R.D. 132, 136 (N.D. Ill. 1993) (“[T]he anticipation of
future litigation must have been the primary motivation which led to the creation of
the documents. . . . Documents which do not refer to work product prepared by an
attorney or other agent of a party to aid in forthcoming litigation, and which were
generated in the ordinary course of business, are discoverable.”); Janicker v. George
Washington Univ., 94 F.R.D. 648, 650 (D.D.C. 1982) (stating that, to fall within the
protection of the privilege, “the primary motivating purpose behind the creation of
a document or investigative report must be to aid in possible future litigation”).
Under National Union, “a court must be satisfied that the document or tangible
thing was not created during the ordinary course of business, . . . or for any
non-litigation reason.” Suggs v. Whitiker, 152 F.R.D. 501, 505–06 (M.D.N.C. 1993)
(emphasis added) (citing Nat’l Union, 967 F.2d at 984). If the work would have
been done in any event, it is not protected work product. RLI Ins. Co. v. Conseco,
Inc., 477 F. Supp. 2d 741, 747 (E.D. Va. 2007).
Page 13 of 19
Here, Plaintiffs contend all the disputed documents were prepared in the
ordinary course of business because they concerned the business purposes of
identifying the causes of the high loss ratio on DSI policies, determining ways to
avoid the high loss ratio, evaluating the financial impact of paying claims based on
the final amount accepted as payment-in-full, and implementing a new claims
payment methodology. Conversely, Transamerica argues all the documents were
prepared in anticipation of litigation because Edwards recognized the threat of
policyholder litigation in May 2004. (See Edwards Decl. ¶ 4, Hege ECF No. 83-1.)
In a similar case against Life Investors, an Oklahoma district court passed upon
precisely this issue and concluded as follows:
Defendant argues that it could reasonably have anticipated that litigation
would be filed if it changed its interpretation of actual charges. . . .
However, until defendant made a firm decision to change its
interpretation of “actual charges,” defendant had no reason to believe
that “actual charges” litigation was likely to arise. Defendant also
argues that the Taskforce consulted with in-house and outside counsel,
and several hypothetical litigation scenarios were discussed. . . . While
there may have been a hypothetical risk that litigation might arise out
this decision, the mere fact that the Taskforce consulted in-house or
outside counsel about potential litigation scenarios does not mean that
defendant was acting in anticipation of litigation.
09-CV-0429-CVE-PJC, 2010 WL 1741407, at *4 (N.D. Okla. Apr. 28, 2010). This
Court finds the Lindley district court’s reasoning consistent with National Union’s rule
that the protection arises only “following an actual event or series of events that
reasonably could result in litigation.”
967 F.2d at 984.
Page 14 of 19
This Court therefore
concludes that Life Investors did not “anticipate litigation” until it decided to change
its claims methodology. Prior to that decision, the DSI Taskforce’s “driving force”
behind creating the documents was to determine the causes of the DSI policies’ high
loss ratios and then to keep the policies financially viable while avoiding premiums
increases. These were primarily business purposes. Until the decision was made,
there was no event that “reasonably could result in litigation.” Litigation over the
proposed change to DSI claims payment methodology was not a real likelihood, but
rather merely a general possibility.6
The question, then, is when did Life Investors make that decision? Whitlock
testified that she made the decision to change the methodology and that the decision
was hers to make. (Dep. of Connie Whitlock 91:19–91:25, Jan. 7, 2010, Belue v.
Aegon USA, LLC, 7:08-cv-3830 (D.S.C.), Hege ECF No. 66-8.) She made this
decision in July 2005.
(Transamerica’s Resp. 5.) Thus, Transamerica did not
anticipate litigation, within the meaning of Rule 26(b)(3), until July 2005.
This Court acknowledges that in Lindley, the magistrate who initially
decided the dispute concluded that Transamerica began anticipating
litigation when it contacted Jorden Burt in October 2004, see Lindley v.
Life Invs. Ins. Co. of Am., 267 F.R.D. 382, 401 (N.D. Okla. 2010), and
that on appeal of the magistrate’s order, the district judge affirmed the
magistrate’s conclusion, see Lindley, 2010 WL 1741407, at *4.
However, the district judge reviewed the magistrate’s conclusion with
great deference, and the district judge’s reasoning quoted above suggests
that, were the issue initially before by the district judge, she may we;;
have reached a different conclusion.
Page 15 of 19
All of the remaining disputed documents were created before Whitlock
changed the claims methodology. Accordingly, none of them were prepared in
anticipation of litigation and therefore are not protected attorney work product.
In sum, Transamerica’s arguments regarding the remaining disputed
documents are without merit.7 Because the disputed documents are sufficiently
relevant to the claims and defenses in these cases, see Fed. R. Civ. P. 26(b)(1),
Plaintiffs’ Motions to Compel are granted.
Motion for Protective Order
Transamerica’s Motion for Protective Order concerns the deposition of Stephen
Gwin. As discussed above, in 2004, Gwin performed financial calculations and
prepared Charts reflecting his analysis, which Jorden Burt attorneys used for their
Report. When litigation over the new payment methodology ensued, Jorden Burt
also represented Life Investors in many of the actions. In 2008, at Jorden Burt’s
direction, Gwin performed additional analyses and calculations for Jorden Burt to use
in mediation and settlement negotiations in several cases.
On February 18, 2011, Plaintiffs’ counsel deposed Gwin and asked Gwin the
This Court’s Order applies only to the documents submitted for in camera
review, as those documents are the only ones over which a live dispute
still exists. This Court expresses no opinion as any other documents, and
its Order should not be construed to extend to any document not
specifically mentioned on pages 5 or 6 of this Order.
Page 16 of 19
Did you make any documentary contributions by way of charts
or exhibits or other data to the report?
Were you asked to make any calculations as to the value to
insureds or class members of the Runyan class action
(Dep. of Stephen Gwin, 125:23–127:9, Feb. 18, 2011, Hege ECF No. 62-3.)
Transamerica’s attorney objected to the questions and instructed Gwin not to answer.
(Id. at 126:1–126:2,127:10–127:14.)
Transamerica seeks an order precluding Plaintiffs from eliciting deposition
testimony from Gwin regarding (1) his documentary contributions to the Jorden Burt
Report, and (2) calculations he made at the request of counsel in connection with
mediation and settlement discussions.
Transamerica argues the testimony in
question is protected by both attorney–client privilege and the work product doctrine.
A court may, for good cause, issue an order protecting a party or person from
discovery likely to result in annoyance, embarrassment, oppression, or undue burden
or expense. Fed. R. Civ. P. 26(c)(1). Among other things, a court may forbid or limit
the scope of inquiry into certain matters.
The party seeking
protection must show “good cause” by making a specific demonstration of facts in
support of the request, as opposed to conclusory or speculative statements about
the need for a protective order and the harm that will be suffered without one.
Brittain v. Stroh Brewery Co., 136 F.R.D. 408, 412 (M.D.N.C. 1991).
Page 17 of 19
This Court’s analysis regarding Plaintiffs’ Motions to Compel resolves both
portions of Transamerica’s Motion for Protective Order. First, Transamerica argues
attorney–client privilege and the work product doctrine preclude Gwin from testifying
about his contributions to the Jorden Burt Report. As discussed above, though,
neither the Jorden Burt Report nor Gwin’s contributions thereto are protected under
either theory. Thus, Transamerica’s arguments regarding Gwin’s contributions to the
Jorden Burt Report are without merit. Plaintiffs’ counsel may question Gwin only
about the calculations and analyses he conducted, as well as the resulting charts he
prepared, for use in the Jorden Burt Report. See Fed. R. Civ. P. 26(c)(2).
Transamerica also seeks to protect Gwin from testifying about the calculations
and analyses he performed in connection with confidential mediation and settlement
negotiations in several “actual charges” lawsuits against Transamerica.
negotiations took place in 2008, well after Transamerica began “anticipating”
litigation in July 2005.
Indeed, by 2008, Transamerica had moved past mere
anticipation into the thick of actual litigation, as DSI policyholders had filed numerous
actions across the country. Thus, Transamerica’s request for protection from this
line of questioning is warranted. See Elkins v. District of Columbia, 250 F.R.D. 20,
26 (D.D.C. 2008) (stating that, in order for work product doctrine to apply, the
materials in question need not have been specifically for the case in which their
discovery is later sought). Plaintiffs’ counsel may not inquire into the calculations
or analyses Gwin performed for the purposes of settlement or mediation negotiations.
Page 18 of 19
IT IS THEREFORE ORDERED THAT Plaintiffs’ Motion to Compel (Hege ECF No.
66; Bowman ECF No. 30; Miller ECF No. 31; Bridgmon ECF No. 36) and Omnibus
Motion to Compel Production of Documents (Hege ECF No.69; Bowman ECF No. 33;
Miller ECF No. 34; Bridgmon ECF No. 39) are GRANTED. Transamerica shall produce
the documents ordered above to Plaintiffs on or before May 16, 2011.
IT IS FURTHER ORDERED THAT Transamerica’s Motion for Protective Order
(Hege ECF No. 63; Bowman ECF No. 27; Miller ECF No. 28; Bridgmon ECF No. 33)
is GRANTED IN PART and DENIED IN PART. Before the closing date for discovery
in these cases, Stephen Gwin’s deposition shall be re-opened so that Plaintiffs’
counsel may question Gwin about the calculations and analyses he conducted, as
well as the Charts he prepared, for use in the Jorden Burt Report. Plaintiffs’ counsel
shall not question Gwin regarding the calculations and analyses he conducted for
settlement and mediation negotiations.
IT IS SO ORDERED.
May 10 , 2011
Anderson, South Carolina
Page 19 of 19
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