CSX Transportation, Inc. v. Gilkison et al
Filing
1366
MEMORANDUM OPINION AND ORDER AFFIRMING THE MAGISTRATE JUDGES ORDER 1336 DENYING DEFENDANT' S MOTION TO COMPEL PRODUCTION OF DOCUMENTS RESPONSIVE TO REQUEST NO. 3 IN ITS FOURTH SET OF REQUESTS REGARDING CSX'S THIRD AMENDED COMPLAINT. Signed by Senior Judge Frederick P. Stamp, Jr on 10/29/2012. (mji)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
CSX TRANSPORTATION, INC.,
Plaintiff,
v.
Civil Action No. 5:05CV202
(STAMP)
ROBERT N. PEIRCE, JR.,
LOUIS A. RAIMOND,
MARK T. COULTER,
and RAY HARRON, M.D.,
Defendants.
MEMORANDUM OPINION AND ORDER
AFFIRMING THE MAGISTRATE JUDGE’S ORDER
DENYING DEFENDANT’S MOTION TO COMPEL PRODUCTION OF
DOCUMENTS RESPONSIVE TO REQUEST NO. 3 IN ITS FOURTH
SET OF REQUESTS REGARDING CSX’S THIRD AMENDED COMPLAINT
I. Background1
On October 19, 2011, the plaintiff in the above-styled civil
action filed a third amended complaint against Robert N. Peirce,
Jr., (“Peirce”), Louis A. Raimond, Mark T. Coulter (collectively,
the “lawyer defendants”), and Ray Harron, M.D.
The third amended
complaint alleges that the lawyer defendants prosecuted fabricated
asbestos claims against CSX Transportation, Inc. (“CSX”), including
a claim filed on behalf of Earl Baylor (“Baylor”), and thereby
violated the Racketeer Influenced and Corrupt Organizations Act
(“RICO”), 18 U.S.C. § 1961, et seq., and the common law of West
Virginia.
1
For the purpose of resolving the pending motion, this Court
believes that the following abbreviated summary of this case is
sufficient.
Also
on
October
19,
2011,
the
lawyer
defendants
filed
counterclaims against CSX alleging that, in light of a release that
Baylor executed in connection with a prior claim, CSX committed
fraud (1) when it alleged in its amended complaint2 that it had
sustained damages in defending the Baylor asbestos claim; and (2)
when it did not immediately produce the release in response to a
discovery request in this case, instead of waiting until it
obtained a disclosure authorization from Baylor.3
Earlier this year, this Court denied the lawyer defendants’
motion to dismiss the third amended complaint (ECF No. 1050), and
also denied CSX’s motion to dismiss the counterclaims (ECF No.
1039).
CSX’s claims in the third amended complaint and the lawyer
defendants’ counterclaims are scheduled to be tried jointly on
December 11, 2012.
On October 4, 2012, this Court approved the
parties’ stipulation to dismiss defendant Mark T. Coulter.
Thus,
all claims against Mr. Coulter were dismissed and all counterclaims
brought by Mr. Coulter were dismissed.
2
The amended complaint was filed on July 5, 2007. ECF No.
208. Later, the plaintiff sought leave to file a second amended
complaint.
This Court denied the plaintiff’s motion to file a
second amended complaint -- a decision was eventually reversed by
the United States Court of Appeals for the Fourth Circuit.
3
Defendant Ray A. Harron also filed a separate counterclaim
against CSX.
ECF No. 875.
Harron later requested that his
counterclaim be dismissed. On January 30, 2012, this Court entered
an order granting Harron’s motion to voluntarily dismiss his
counterclaim without prejudice. ECF No. 928.
2
On September 10, 2012, the defendant, Robert N. Peirce, Jr.
filed a motion to compel the production of documents responsive to
Request No. 3 of defendant Peirce’s fourth set of document requests
to
plaintiff
complaint.
regarding
allegations
in
CSX’s
third
amended
Within this motion, Peirce is specifically seeking
documents that relate to damages sought by CSX in the form of legal
fees incurred by CSX in the prosecution of this action.
Defendant
Peirce argues that CSX’s legal bills that relate to CSX’s legal
fees are relevant, are not privileged, and should be timely
produced.
CSX filed a response wherein it argued that while it does
intend to seek attorneys’ fees incurred in the prosecution of the
case, the Court will determine this amount.
Therefore, CSX argues
that discovery of such information at this time is premature.
If
a verdict for the plaintiff is returned, however, and the plaintiff
files a fee application, CSX argues that at that time it would be
proper to address additional requests for information pertaining to
attorneys’ fees.
Defendant Peirce filed a reply arguing that
discovery of legal fees before a liability determination is in fact
proper.
Defendant Peirce claims that production of the legal fees
will not result in a second major litigation, as CSX would be
producing bills it already has.
On September 26, 2012, United States Magistrate Judge James E.
Seibert
held
an
evidentiary
hearing
3
regarding
this
motion.
Thereafter, on October 4, 2012, the magistrate judge issued an
order denying the motion to compel.
The magistrate judge asserted
that the attorneys’ fee information is not admissible at trial nor
is it reasonably calculated to lead to the discovery of admissible
evidence. Therefore, he concluded that it is not relevant and thus
not discoverable. The magistrate judge’s order also instructed the
parties that they may file written objections to his order within
fourteen
days
after
being
served
with
a
copy
of
the
Defendant Peirce filed objections on October 18, 2012.
order.
For the
reasons set forth below, this Court affirms the order of the
magistrate judge.
II.
Applicable Law
As to nondispositive pretrial matters, a magistrate judge’s
ruling may be reversed only on a finding that the order is “clearly
erroneous or is contrary to law.”
Fed. R. Civ. P. 72(a); 28 U.S.C.
§ 636(b)(1). “A finding is ‘clearly erroneous’ when although there
is evidence to support it, the reviewing court on the entire
evidence is left with a definite and firm conviction that a mistake
has been committed.”
United States v. United States Gypsum Co.,
333 U.S. 364, 395 (1948).
In light of the broad discretion given
to a magistrate judge in the resolution of nondispositive discovery
disputes, the court should only overrule a magistrate judge’s
determination if this discretion is abused.
Detection Sys., Inc.
v. Pittway Corp., 96 F.R.D. 152, 154 (W.D. N.Y. 1982).
4
III.
Discussion
Defendant Peirce objects to the magistrate judge’s order,
claiming that CSX’s current legal bills relate to its claimed
damages and potential monetary recovery and are thus relevant and
should be produced.
To support this claim, defendant Peirce first
argues that because CSX has placed its legal fees at issue by
claiming them as part of its alleged damages, the defendant is
entitled to discovery on that issue.
This Court, however, agrees
with the magistrate judge concerning this issue and finds that this
evidence is not in fact relevant and therefore not discoverable.
As stated by the magistrate judge, Federal Rule of Civil
Procedure 26(b)(1) permits the discovery into “any matter, not
privileged, that is relevant to the claim or defense of any party.”
This evidence sought “need not be admissible at trial if the
discovery appears reasonably calculated to lead to the discovery of
admissible evidence.”
Fed. R. Civ. P. 26(b)(1).
Federal Rule of
Evidence 401 states that evidence is relevant if “it has any
tendency to make a fact more or less probable than it would be
without
the
evidence”
and
determining the action.”
“the
fact
is
of
consequence
in
According to Federal Rule of Civil
Procedure 54(d), claims for attorneys’ fees “must be made by motion
unless the substantive law requires those fees to be proved at
trial as an element of damages . . . no later than 14 days after
the entry of judgment.” Thus, unless substantive law requires, the
5
amount of attorneys’ fees is not “of consequence” in determining
the initial judgment. Instead, it is the court’s responsibility to
determine and assess the attorneys’ fees once a motion is made
after the entry of judgment.
As the advisory committee notes to
the 1993 Amendments of Rule 54(d)(2) states, such awards “should be
made in the form of a separate judgment . . . since such awards are
subject to review in the court of appeals.”
While it is true that CSX is requesting attorneys’ fees in
this action, the statutes under which CSX is requesting these fees
do not require a party to prove these fees at trial, nor has this
Court or the magistrate judge found any case law indicating such a
requirement.
See 18 U.S.C. § 1964(c).
Consequently, if a verdict
is entered in CSX’s favor, CSX must file a motion with this Court
and thereafter this Court will make the determination of the amount
of attorneys’ fees, if any, that will be awarded to CSX.
Such an
award, if made, will be awarded in a separate judgment. The amount
of attorneys’ fees, then, is not a “fact of consequence” in the
determination of the initial judgment, but rather it is a fact that
this Court will only take into account if it makes an award of
attorneys’
fees
in
a
separate
judgment.
Moreover,
as
the
magistrate judge indicates, the advisory committee notes to the
1993 Amendments of Rule 54(d)(2) state that even after the initial
judgment is entered and the Court is requested to assess attorneys’
fees pursuant to Rule 54, discovery would only be useful to parties
6
“[o]n rare occasion.”
Thus, this Court finds that information
regarding CSX’s current attorneys’ fees is certainly not relevant
discoverable evidence in the pretrial context.
Defendant Peirce cites to advisory committee notes from 1993
regarding Federal Rule of Civil Procedure 26’s provision requiring
the initial disclosure of damages calculations.
that
the
initial
disclosure
requirements
The notes state
were
adopted
“to
accelerate the exchange of basic information about the case” and
were “designed to eliminate certain discovery, help focus the
discovery that is needed, and facilitate preparation for trial or
settlement.” Fed. R. Evid. 26 advisory committee’s notes (emphasis
added).
Defendant Peirce cites the notes for the proposition that
it is important to determine a party’s potential liability exposure
as
it
pertains
to
the
possibility
of
settlement.
As
such,
defendant Peirce argues that he is entitled to the discovery of
information relating to CSX’s current attorneys’ fees. This Court,
however, finds that these notes, which relate specifically to the
initial disclosures required under Rule 26, are not relevant to
such discovery in this instance as defendant Peirce’s requests do
not concern initial disclosures.
The final argument advanced by defendant Peirce concerns
whether CSX may object to production of its legal bills on the
grounds of privilege.
Due to this Court’s findings above, it is
unnecessary to address this subject at length because CSX will not
7
be compelled to produce said documents.
It is enough to note that
the magistrate judge in this case previously determined that such
billing records are not subject to attorney-client privilege.
ECF
No. 1093 *8-9.
IV.
Conclusion
For the reasons set forth above, C.F.R. § the magistrate
judge’s order denying defendant’s motion to compel production of
documents responsive to Request No. 3 in its fourth set of requests
regarding CSX’s third amended complaint (ECF No. 1336) is hereby
AFFIRMED.
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein.
DATED:
October 29, 2012
/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE
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