Taylor v. Pilot Travel Centers, LLC

Filing 44

ORDER granting in part and denying in part 37 Motion for Sanctions. Signed by Chief Judge Karen E. Schreier on 8/4/2011. (KC)

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
SOUTHERN DIVISION
DAVID BLACK, as Special
Administrator of the Estate of
George Taylor, deceased,
Plaintiff,
vs.
PILOT TRAVEL CENTERS, LLC,
Defendant.

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CIV. 09-4170-KES

ORDER GRANTING IN PART
AND DENYING IN PART
PLAINTIFF’S MOTION FOR
SANCTIONS

Plaintiff, David Black,1 as special administrator of the estate of George
Taylor, filed suit against defendant, Pilot Travel Centers, LLC, alleging
negligence in a wrongful death cause of action when a truck driver struck and
killed Taylor in Pilot’s parking lot. During discovery, Pilot refused to produce
some documents related to a similar accident involving Gregory Zuba, which
occurred five years earlier and did not result in a lawsuit against Pilot. After
Black called Pilot’s counsel and sent multiple emails requesting the
information, Black moved to compel discovery. Pilot asserted that the attorneyclient privilege and the work product doctrine protected the documents. Pilot
did not provide Black with a privilege log.

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Helen Taylor, George Taylor’s wife, initially brought this action as
special administrator of George’s estate. After commencing this lawsuit, Helen
passed away and David Black, Helen’s nephew, was substituted as the special
administrator. Docket 33.

The court ordered Pilot to produce a privilege log and submit the
documents to the court for an in camera review. The court denied Black’s
motion for sanctions without prejudice.
Pilot withheld two groups of documents: (1) miscellaneous documents
protected by the attorney-client privilege and the opinion work product
doctrine; and (2) documents prepared by Pilot’s insurance investigator, which
Pilot asserted were privileged. After reviewing the documents in camera, the
court held that the first group of documents were not discoverable and the
second set were. Docket 35.
Black now moves for Rule 37 sanctions and requests $3,609.00 in
attorney’s fees and $9.80 in expenses and an award of fees and expenses
incurred in drafting the pending motion. Pilot resists. The motion is granted in
part and denied in part.
DISCUSSION
Federal Rule of Civil Procedure 37 governs when sanctions are
appropriate for a party’s failure to make disclosures in discovery. The court
employs Rule 37(a)(5)(A) if the motion to compel is granted, which provides that
sanctions are mandatory absent some limited exceptions. If the court grants
the motion to compel in part and denies it in part, the court uses Rule
37(a)(5)(C), under which the court has discretion to award sanctions.
Black contends that Rule 37(a)(5)(A) controls the sanctions award in this
case, because if Black had received a privilege log, he would not have requested
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the first group of miscellaneous privileged documents and, thus, the court
would have granted Black’s motion in its entirety:
Pilot cannot withhold a privilege log from Black, force him to file a
motion to compel all documents, and then add documents into the
privilege log that are clearly protected by the attorney-client
privilege and work product doctrine in order to avoid being held to
the standard in subsection 37(a)(5)(A). If the Court were to accept
Pilot’s tactics in this case, it would only encourage parties not to
produce a privilege log with the benefit of avoiding sanctions by
producing a privilege log after a motion to compel has been filed.
Docket 41 at 2. Black cites no precedent to support his argument.
Because the court granted Black’s motion to compel in part and denied it
in part and Black asserts no precedent to suggest that a case’s facts, and not
the court’s holding on the motion to compel, dictate which portion of Rule 37
should be used, Rule 37(a)(5)(C) applies to Black’s motion for sanctions.
Rule 37(a)(5)(C) provides that if a Rule 37 discovery 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). The district court has wide latitude in discovery and the appellate
court reviews “discovery matters only ‘for gross abuse of discretion resulting in
fundamental unfairness in the trial of the case.’ ” United States ex rel. O’Keefe
v. McDonnell Douglas Corp., 132 F.3d 1252, 1258 (8th Cir. 1998) (quoting Prow
v. Medtronic, Inc., 770 F.2d 117, 122 (8th Cir. 1985)). Similarly, the appellate
court only reverses a Rule 37 monetary award if the district court abused its
discretion. Sentis Group, Inc. v. Shell Oil Co., 559 F.3d 888, 899 (8th Cir. 2009)

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(citing Int’l Bhd. of Elec. Workers, Local Union No. 545 v. Hope Elec., 380 F.3d
1084, 1105 (8th Cir. 2004)).
In awarding Rule 37 expenses, “[t]he fault concept . . . remains central.”
8B Charles Alan Wright, Richard L. Marcus & Arthur R. Miller, Federal Practice
and Procedure, § 2284 (3d ed. 2010). Rule 37 allows for expenses as a sanction
for improper conduct in discovery “to encourage extrajudicial discovery with a
minimum of court intervention.” Id. at § 2288. When the court overrules most
of the objections to a motion to compel and those objections were not
substantially justified, then sanctions in the form of expenses and fees are
appropriate. DIRECTV, Inc. v. Puccinelli, 224 F.R.D. 677, 692 (D. Kan. 2004).
“[T]hus is placed directly on attorneys a somewhat unique sanction to refrain
from the frivolous, to weigh carefully considerations of relevancy and privilege,
and to advise in accordance with their best judgment.” Wright, Miller & Marcus
§ 2288 (quotation omitted).
A. Privileged Documents
Regarding the first set of documents, South Dakota common law and the
Federal Rules of Civil Procedure require a party to produce a privilege log if the
party believes that documents sought during discovery are protected by the
attorney-client privilege or the work product doctrine. See, e.g., Fed. R. Civ. P.
26(b)(5)(a) (“When a party withholds information . . . claiming that the
information is privileged . . . the party must . . . describe the nature of the
documents, communications, or tangible things produced or disclosed . . . .”
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(emphasis added)); Dakota, Minn. & E. R.R. Corp. v. Acuity, 771 N.W.2d 623,
637 (S.D. 2009) (reasoning that a party claiming that the attorney-client
privilege protects against disclosure should submit a privilege log to the party
requesting the information).
Pilot did not produce a privilege log to Black until the court ordered Pilot
to do so. See Docket 28 at 8, 10 (“Pilot should record any document that
constitutes opinion work product in its privilege log and submit the documents
and the log to the court for an in camera review. . . . If Pilot wants the court to
review the documents that are allegedly protected by the attorney-client
privilege, it must create a privilege log . . . .”). Essentially, the court had to
instruct Pilot to follow its mandatory obligation to produce a privilege log.
Black asserts that if Pilot had provided him with a privilege log before he
filed his motion to compel, then Black would not have sought the privileged
documents. Docket 38 at 3. Pilot responds: “Plaintiff now asserts that had he
reviewed a privilege log, he would not have requested disclosure of the
documents held privileged by the Court. Were the Court to accept this
hindsight view of the matter, subsection 37(a)(5)(C) could become essentially
meaningless.” Docket 40 at 4.
Pilot’s argument misses the mark. According to Black, if Pilot had
provided a privilege log to him, Black would have agreed that the letters
between Attorney Hanson and Pilot are protected by the attorney-client
privilege and the documents with handwritten notes are protected by the work
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product doctrine. See Docket 36 (describing the nature of the documents).
Black would only have moved to compel the documents produced by the
insurance adjuster regarding Zuba’s death, which the court ultimately granted.
Due to Pilot’s failure to provide a timely privilege log, the parties and the court
expended time and expense in resolving issues that Black most likely would
not have raised if Pilot had followed the mandatory rule of providing a privilege
log.
B. Insurance Documents
Pilot continues to argue that it was justified in refusing discovery on the
documents prepared by Pilot’s insurance adjuster concerning Zuba’s death.
See Docket 40 at 5-6 (arguing that “the information in Pilot’s possession was
not only not relevant, but also not calculated to lead to the discovery of
admissible evidence.”). Because Pilot asserted the attorney-client privilege for
the insurance documents, South Dakota state law applies. Fed. R. Evid. 501.
In citing cases to support its position, however, Pilot only relies on cases
outside South Dakota and does not address South Dakota precedent.
Furthermore, this court has already ruled that the information sought
by Black is not only relevant but also that the general rule in South Dakota is
that an insurance company’s investigative materials are not protected by the
work product privilege unless the documents were prepared for a specific event
with a real possibility of becoming an actual adversary proceeding. Docket 35
at 6-7. Pilot beared the burden of proof on this issue but offered no colorable
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evidence that Pilot faced a real possibility of an adversary proceeding related to
Zuba’s accident. Thus, the court found that Black could receive the documents
in discovery. Docket 35 at 7-8. Pilot had no basis in objecting to disclosure of
these documents, especially after the court’s first order regarding the motion to
compel, which stated that the evidence was relevant and discoverable. Docket
28 at 8.
C. Amount of Fees and Expenses
Attorney’s fees and expenses are appropriate under Rule 37(a)(5)(C) in
this case. If Pilot had produced the mandatory privilege log, then Black would
not have moved to compel on the first set of documents that are protected by
the attorney-client privilege and the work product doctrine. Regarding the
second group of documents, Black made no colorable argument and presented
no convincing facts that the either the attorney-client privilege or the work
product doctrine protected against disclosure of the documents.
Black requests attorney’s fees in the amount of $3,609 and expenses in
the amount of $9.80. Black also requests an award of attorney’s fees and
expenses incurred in drafting this motion for sanctions.
In determining whether the requested attorney’s fees are reasonable,
courts utilize the lodestar method. See, e.g., Walitalo v. Iacocca, 968 F.2d 741,
747-48 (8th Cir. 1992) (remanding a case for the district court to use the
lodestar method in calculating attorney fees); Jorstad v. IDS Realty Trust, 643
F.2d 1305, 1312-13 (8th Cir. 1981) (employing the lodestar calculation for
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determining reasonable attorney’s fees). Under the lodestar method, “the
district court multiplies a reasonable number of hours for the work performed
by a reasonable hourly rate.” Farmers Co-op Co. v. Senske & Son Transfer Co.,
572 F.3d 492, 500 (8th Cir. 2009) (citing H.J., Inc. v. Flygt Corp., 925 F.2d 257,
259-60 (8th Cir. 1991)). “Next, the court may adjust the amount based upon
the particular circumstances of the case.” Id. (citing Blum v. Stenson, 465 U.S.
886, 888 (1984)).
Pilot objects to neither the hourly rates charged by Black’s attorneys nor
the amount of time spent in drafting the motion to compel. Black utilized three
attorneys and a paralegal with varying hourly billing rates: a paralegal with a
billing rate of $90 (1.1 hours); an associate with a rate of $150 (14.1 hours); a
partner with a rate of $200 (3.6 hours); and a partner with a rate of $250 (2.7
hours). In total, the attorneys and paralegal expended 21.5 hours in
researching, drafting, and reviewing the motion to compel and its supporting
documents and reviewing Pilot’s brief in opposition. Docket 39-1.
Due to Pilot’s broad assertion that the attorney-client privilege and work
product doctrine protected the documents requested by Black, and the number
of cases relied on by Pilot that had to be researched by Black, which the court
ultimately found unpersuasive, 21.5 hours is a reasonable amount of time to
prepare the motion to compel, the brief in support, and the reply brief.
The hourly rates charged by Black’s attorneys and paralegal are
reasonable for this jurisdiction. While 21.5 hours is a significant amount of
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time, the court will balance the number of hours charged in drafting the
motion to compel by not awarding fees and expenses incurred in drafting this
motion for sanctions. After reviewing Pilot’s conduct regarding the discovery of
these documents, the court agrees that an award of $3,618.80 is appropriate.
Accordingly, it is
ORDERED that plaintiff’s motion for sanctions (Docket 37) is granted in
part and denied in part. Plaintiff is awarded judgment in the amount of
$3,618.80.
Dated August 4, 2011.
BY THE COURT:

/s/ Karen E. Schreier
KAREN E. SCHREIER
CHIEF JUDGE

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