King v. CVS Pharmacy, Inc et al

Filing 21

MEMORANDUM AND ORDER: Plaintiff's 15 Motion to Compel is GRANTED. CVS shall provide to the plaintiff within ten (10) days of entry of this order the following documents: Bates WC-006 through WC-019. The remaining documents submitted for in camera review, Bates WC-001 through WC-005, are protected by the work product and need not be produced. Signed by Magistrate Judge William B Carter on 4/21/2010. (BJL, )

U N IT E D STATES DISTRICT COURT E A S T E R N DISTRICT OF TENNESSEE at CHATTANOOGA M A R Y FRANCIS KING P l a i n t if f ) ) ) ) C V S PHARMACY, INC.; CVS CAREMARK, ) an d REVCO DISCOUNT DRUG CENTERS, INC. ) D efen d a n ts )

N o . 1:09-cv-209 C o l lie r /C a r te r

M E M O R A N D U M AND ORDER I. Introduction P la in tiff moves to compel the production of documents generated by claims adjusters w o rk in g on her insurance claim for worker's compensation benefits arising from an injury she su stain ed while employed with defendants (collectively referred to as "CVS"). [Doc. 15]. CVS asserts these documents are protected by the work product doctrine. To the extent that adjusting th e plaintiff's claim for worker's compensation benefits in the ordinary course of business was the d riv ing force behind the preparation of the requested documents, plaintiff's motion to compel is GRANTED. II. Relevant Facts and Procedural History T h is is an action brought under the Americans with Disabilities Act (ADA), 42 U.S.C. § 12112 et. seq., and the Tennessee Disability Act, Tenn. Code. Ann. § 8-50-1-3, alleging CVS d iscrim in ated against her by refusing to allow her to work due to a disability or due to CVS' p ercep tio n of a disability. P laintiff alleges the following: In February of 2007, while working for CVS as a shift sup ervisor, the plaintiff sustained an injury to her shoulder which required medical treatment.

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P laintiff made a claim for worker's compensation insurance benefits. Plaintiff eventually returned to work between March 2008 and early May 2008 as a shift supervisor with certain restrictions on lifting. However, on May 2, 2008, CVS informed plaintiff that she could no longer work unless h e r physician released her to work with no restrictions. Plaintiff's physician released her to work b u t restricted her to lifting no more than ten pounds. Because she could not return to work without restrictio n s, she was terminated. Plaintiff asserts she was able to perform all the essential functions o f a shift supervisor with this restriction and that CVS' refusal to accommodate this restriction v iolated the ADA and the Tennessee Disability Act. III. Analysis T h e work product doctrine, first articulated by the Supreme Court in Hickman v. Taylor, 3 2 9 U.S. 495 (1947), protects the mental processes of an attorney from inquiry by an opposing party. Hickman, 329 U.S. at 511. "The doctrine is designed to allow an attorney to `assemble inform ation , sift what he considers to be relevant from the irrelevant facts, prepare his legal the o ries and plan his strategy without undue and needless interference ... to promote justice and to pro tect [his] client's interests.'" In re Columbia/HCA Healthcare Corp. Billing Practices L itig a tio n , 293 F.3d 289, 294 (6 th Cir. 2002) (brackets original) (quoting Hickman, 329 U.S. at 51 0). The work product doctrine, as it applies to documents and tangible things, is now em bo died in Fed. R. Civ. P. Rule 26(b)(3). Under Rule 26, if documents and other tangible things w ere prepared in anticipation of litigation by or for the other party or by or for the other party's re p re sen tativ e, a party may obtain discovery of the materials "only upon a showing that the party seek in g discovery has substantial need of the materials in the preparation of the party's case and

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tha t the party is unable without undue hardship to obtain the substantial equivalent of the materials by other means." Fed. R. Civ. P. 26(b)(3). "The work-product doctrine is a procedural rule of federal law;" thus, Rule 26(b)(3) app lies in diversity cases. In re Professionals Direct Ins. Co, 578 F.3d 432 (6 th Cir. 2009). The party seeking work product protection bears the burden to show such protection is warranted. In re Columbia/HCA Healthcare Corp. Billing Practices Litigation, 293 F.3d at 294. Even if a party is able to show substantial need and undue burden to obtain "fact work product," "opinion work pro du ct," material reflecting the attorney's mental impressions, opinions, or legal theories, remains unobtainable. Id. The dispute in this case centers on the meaning of "in anticipation of litigation." This ph rase as it applies to insurance companies presents an especially thorny problem because in su ran ce companies, by the very nature of their business, have a duty to investigate claims and regularly do so for the purpose of determining whether a claim will be paid and are often involved in litigation with claimants whose claims have been denied. See Urban Outfitters, Inc. v. DPIC C os. , Inc., 203 F.R.D. 376, 379 (N.D. Ill. 2001) ("because of the nature of their work, documents generated by insurance companies investigating claims or potential claims present special ch allen ges when applying the work product doctrine"); Rinaldi Fast Foods, Inc. v. Great American In s. Co., 123 F.R.D. 198, 202 (M.D. N.C. 1988) ("An insurance company cannot reasonably argue tha t the entirety of its claims files are accumulated in anticipation of litigation when it has a duty to in v e s tig ate , evaluate and make a decision with respect to the claims made on it by its insured"). T h e Sixth Circuit addressed this issue in In re Professionals Direct Ins. Co, 578 F.3d 432 (6 th Cir. 2009). In that case, an insurance company sought a writ of mandamus to vacate a

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discov ery order by the district court requiring it to produce documents which the insurance co m p an y alleged were work product. The discovery order had been issued in an underlying action, b r o u g h t by a law firm against the law firm's malpractice insurance company, in which the law firm alleged breach of contract and bad faith in the insurance company's processing of a malpractice claim against the law firm. In examining this issue of when work product protection attached, the Sixth Court in s tr u c te d : T o determine whether a document has been prepared "in anticipation of litigation," and is thus protected work product, we ask two questions: (1) whether that d o cu m en t was prepared "because of" a party's subjective anticipation of litigation, as contrasted with ordinary business purpose; and (2) whether that subjective an ticip atio n was objectively reasonable. United States v. Roxworthy, 457 F.3d 590, 59 4 (6th Cir.2006). If a document is prepared in anticipation of litigation, the fact th at it also serves an ordinary business purpose does not deprive it of protection, id. at 598-99, but the burden is on the party claiming protection to show that anticipated litigation was the "driving force behind the preparation of each requ ested document." Roxworthy, 457 F.3d at 595 (quoting Nat'l Union Fire Ins. C o . of Pittsburgh v. Murray Sheet Metal Co., 967 F.2d 980, 984 (4th Cir.1992)). In re Professionals Direct Ins. Co, 578 F.3d at 439. In applying these principals, the Court stated, " [m ]ak in g coverage decisions is a part of the ordinary business of insurance and if the `driving fo rce' behind the preparation of these documents was to assist Professional Direct in deciding cov erage, then they are not protected by the work-product doctrine." Id. Deciding whether the w ork product doctrine applies in the insurance context is a "difficult, fact intensive task" which requ ires an examination of the disputed documents. Id. at 439 - 440. The Court concluded the district court had properly ordered the disclosure of documents the insurance company had gen er ated after the law firm had notified the insurance company of a potential malpractice claim bu t before the insurance company had issued a second reservation of right letter to the law firm. Id.

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at 439. Many of the documents which the Sixth Circuit held were properly disclosed had been p re p ar ed by attorneys for the insurance company whom the Court found "had dual functions" in th at "[t]hey were advising Professionals Direct on the business decision of whether to deny cov erage and they were doing legal work in anticipation of litigation." Id. at 439. If the driving fo rce behind preparation of these documents was to assist Professional Direct in deciding cov erage, then these documents were not protected by the work product doctrine, even if prepared by attorneys. Id. A number of courts in other jurisdictions have also been faced with this particular d isco v ery dilemma as it relates to insurance companies, and a majority of them have applied a stan d ard based on whether the documents were prepared primarily for the purpose of adjusting the claim or primarily in anticipation of litigation.1 See e.g., Caremark Inc., v. Affiliated Computer Serv. Inc., 195 F.R.D. 610, 616 (N.D. Ill. 2000) ("[i]f a document would have been created re gar d less of whether litigation was anticipated or not, it is not work product."); Guidry v. Jen M a rin e LLC, 2003 WL 22038377 *5 (E.D. La. Aug. 22, 20003) ("if the party asserting the p riv ilege cannot make a factual showing that the primary purpose of the insurance investigation w as in anticipation of litigation, the court may conclude that the investigation was conducted in the ord inary course of investigating a potential insurance claim."). Accord Falkner v. General Motors C o rp ., 200 F.R.D. 620, 623 (S.D. Iowa 2001); S.D. Warren Co. v. Eastern Electric Corp. 201 F .R .D . 280, 282-84 (D. Maine 2001); Holton v. S & W Marine, Inc., 2000 WL 1693667 * 3 (E.D. La. Nov. 9, 2000).

See S.D. Warren Co. v. Eastern Electric Corp. 201 F.R.D. 280, 282-84 (D. Maine 2001) for a c o m p r e h en s iv e discussion of the variety of approaches employed by courts to determine what insurance company d o c u m e n t s are and are not protected by the work product doctrine.

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T hese basic principals have also been applied to worker's compensation cases. See Logan v. Commercial Union Ins. Co., 96 F.3d 971, 976-977 (7 th Cir. 1996); Barber v. Dolgencorp of T exas, Inc., 2010 WL 1375193 (E.D. Tex. Mar. 31, 2010). T h e Court now turns to the documents at issue in this case. Determining the validity of a w o rk er's compensation claim and deciding whether to pay and what to pay is an ordinary function o f any adjuster reviewing a claim for worker's compensation insurance. Most of the documents s u b m itte d for in camera review, Bates WC-006 through WC-019, fall into this category. They w e re prepared by an insurance claims adjuster as part of the claims adjuster's file in the ordinary co u rs e of business to determine what worker's compensation benefits the plaintiff was entitled to receive. Anticipation of litigation was not the driving force behind their preparation. Thus Bates W C -00 6 through WC-019 are discoverable. On the other hand, Bates WC-001 through WC-005, documents also prepared by a claims ad jus ter, all make reference to the fact that the plaintiff has retained attorney Doug Hamill to rep resen t plaintiff in her worker's compensation claim. These documents appear to provide info rm ation to CVS representatives concerning potential negotiations with plaintiff's counsel to settle plaintiff's worker's compensation claim. Once a claims adjuster begins negotiating with a claim ant's attorney, the adjuster is outside the normal business activity expected to adjust an in su ran ce claim. Reports of preparations to negotiate and investigations in aid of such negotiations w ith an attorney are made in anticipation of litigation and are therefore protected by the work pro du ct doctrine. IV. Conclusion A ccord ingly, for the reasons stated herein, CVS shall provide to the plaintiff within ten

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(1 0 ) days of entry of this order the following documents: Bates WC-006 through WC-019. The r em a in in g documents submitted for in camera review, Bates WC-001 through WC-005, are p ro tected by the work product doctrine and need not be produced. S O ORDERED. ENTER:

Dated: April 21, 2010

s/William B. Mitchell Carter UNITED STATES MAGISTRATE JUDGE

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