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Wielgus v. Ryobi Technologies

August 4, 2010

JAROSLAW WIELGUS, PLAINTIFF,
v.
RYOBI TECHNOLOGIES, INC., ONE WORLD TECHNOLOGIES, INC., AND HOME DEPOT USA, INC., DEFENDANTS.
RYOBI TECHNOLOGIES, INC., ONE WORLD TECHNOLOGIES, INC., AND HOME DEPOT USA, INC., THIRD-PARTY PLAINTIFFS,
v.
JTD CONSTRUCTION, INC., THIRD-PARTY DEFENDANT.



The opinion of the court was delivered by: Young B. Kim United States Magistrate Judge

Magistrate Judge Young B. Kim

MEMORANDUM OPINION and ORDER

Before the court are the motions of defendants Ryobi Technologies, Inc., One World Technologies, Inc., and Home Depot USA, Inc., for sanctions [96] against third-party defendant JTD Construction, Inc. ("JTD") for failure to respond to their written discovery requests and to compel [98] JTD or Travelers Insurance Company ("Travelers") to produce documents requested in their third-party subpoena. Plaintiff in this case filed a product liability case, on March 19, 2008, against defendants alleging that the power saw he purchased in 2006 was unsafe as it lacked a flesh-detection safety feature and that the lack of this safety feature caused him serious personal injury on March 26, 2006. Although the caption identifies Jaroslaw Wielgus ("Wielgus") as the party plaintiff, he is involved in this case in name only. Because Travelers compensated Wielgus in his workers' compensation claim against his employer JTD, Travelers now sues defendants under its subrogation rights. In defense of this action, defendants filed a third-party complaint against JTD. The defense of JTD in this action is also financed by its insurer, Travelers. For the following reasons, defendants' motion for sanctions [96], treated as a motion to compel, is granted and their motion to compel [98] is granted in part and denied in part:

Procedural History and Background

On December 5, 2008, defendants served a subpoena on Travelers for "[a]ny and all records relating to worker's compensation cause no. FZW2491, Jaroslaw Wielgus v. JTD Construction, Inc." The subpoena ordered Travelers to produce the records by December 22, 2008. (R. 98, Ex. A.) Travelers never responded to the subpoena. (R. 98.) Six months later--and more than a year ago--on May 13, 2009, defendants served JTD with their first set of interrogatories and requests to produce. (R. 96, Exs. A, B, C.) Pursuant to Federal Rules of Civil Procedure 33(b)(2) and 34(b)(2), JTD had until on or about June 12, 2009, to respond to the discovery requests. Through four extensions of the discovery completion deadline, JTD never responded to defendants' written discovery requests.

On November 3, 2009, defendants served Travelers with a more detailed subpoena requesting documents pertaining to Wielgus' workers' compensation claim against JTD. (R. 98, Ex. B.) In this subpoena, defendants requested the following:

Please produce any and all records in your possession of any kind and nature pertaining to the individual referenced below including but not limited to the complete workers' compensation file, any and all prior and subsequent workers' compensation claims, all medical records, medical examination reports, medical bills, employment records and wage loss documentation, documentation reflecting any and all workers' compensation payments and/or settlements, vocational rehabilitation records, correspondence, workers' compensation petition(s), Form 45 accident reports, investigative notes and reports, witness statements, witness lists, photographs, videotapes, films, CD-roms, any and all other materials of any type relating to the individual referenced below and/or the subject claim.

(R. 98, Ex. B.) The subpoena required a response by November 17, 2009. Travelers did not respond to the subpoena. However, on December 4, 2009, JTD advised defendants that Travelers sent the responsive documents to JTD. (R. 98, Ex. C.) JTD further advised that it was withholding various categories of documents based on "attorney-client and/or attorney work product privileges." (Id.) Ten days later, on December 14, 2009, defendants asked JTD to provide them with a detailed privilege log. (R. 96, Ex. D.) JTD did not release any logs explaining the nature of the privilege it asserted.

On January 26, 2010, the court permitted JTD until February 16, 2010, to answer defendants' written discovery requests, which were still outstanding. According to the January 26, 2010, order, "JPM [sic] Construction is granted leave to respond to written discovery on or by 2/16/2010." (R. 87.) JTD ignored this order and again failed to respond to the outstanding interrogatories and request to produce. On March 10, 2010, defendants again requested JTD to provide the long overdue responses to their written discovery and the privilege log they asked for back in December 2009 within 14 days. (R. 96, Ex. D.) JTD ignored this request as well.

Then on April 6, 2010, the court ordered JTD to either produce the documents responsive to the Travelers subpoena or to submit a privilege log to defendants by April 20, 2010. (R. 88.) JTD ignored this order and offered defendants nothing. Defendants tried again to secure JTD's compliance with the court order and requested the outstanding discovery answers, but to no avail. (R. 96, Ex. E.) On May 26, 2010, the parties appeared for a status hearing. When asked by the court why JTD failed to turnover the ordered privilege log, JTD did not have a response. JTD merely asked for another chance to produce its privilege log. The court granted the oral request and permitted JTD one more chance to produce a privilege log by June 11, 2010. (R. 92.) On June 9, 2010, JTD finally sent defendants its privilege log in response to the documents defendants asked for in its subpoena to Travelers. (R. 93.) However, JTD still has not answered defendants' interrogatories or requests to produce. (R. 96.)

Analysis

I. Motion for Sanctions

The motion is granted.*fn1 The court must treat defendants' motion for sanctions as a motion to compel under Federal Rule of Civil Procedure 37. On January 26, 2010, the court entered an order granting JTD additional time to respond to defendants' written discovery requests. (R. 87.) Although defendants' interpretation of the court's order of January 26, 2010, that the court ordered JTD to respond to the discovery requests by February 16, 2010, is reasonable, the court did not specifically order JTD to respond by February 16, 2010. As such, the court must treat defendants' motion for sanctions as a motion to compel JTD to respond to their written discovery requests.

The record amply demonstrates that JTD has failed to respond to defendants' written discovery requests and JTD has failed to show any cause for its failure to answer in a timely manner despite having had more than a year to formulate its response. Because JTD has failed to timely respond to defendants' interrogatories and request to produce, JTD must respond fully and completely to the interrogatories and request for production of documents by no later than August 20, 2010. JTD may not pose any objections to the interrogatories and requests for production of documents as those objections, if any, are considered to have been waived. See Fed. R. Civ. P. 33(b)(4), 34(b)(2)(A); see also, Autotech Technologies Ltd. Partnership v. Automationdirect.com, Inc., 236 F.R.D. 396, 398 n.2 (N.D. Ill. 2006)(objections to request for production of documents under Rule 34 are deemed waived unless timely made); Lincoln Diagnostics, Inc. v. Panatrex, Inc., No. 07 CV 2077, 2008 WL 4330182, *3 (Sept. 16, 2008)(untimely objections to Rule 34 requests are deemed waived).

II. Motion to Compel

The motion is granted in part and denied in part.*fn2 JTD has withheld certain documents responsive to defendants' subpoena served on its insurer, Travelers, based on the attorney-client and attorney work-product privilege.*fn3 As a general matter, Federal Rule of Civil Procedure 26(b)(1) provides that a party may "obtain discovery regarding any matter, not privileged, that is relevant to any party's claim or defense-including the existence, description, nature, custody, condition and location of any books, documents, or other tangible things and the identity and location of persons who know of any discoverable matter." Pursuant to Federal Rule of Civil Procedure 26(b)(5), when a party withholds information otherwise discoverable by claiming privilege, the party must then make the privilege claim and then disclose a privilege log contain the following information for each document: (1) the date, the author and all recipients, along with their capacities; and (2) subject matter of the document, purpose for its production, and an explanation as to why the document is privileged or immune from discovery. The explanation must be sufficiently specific to allow the court to determine whether the claimed privilege or immunity is applicable.

The attorney-client privilege protects verbal and written communications exchanged in confidence between a client and an attorney for the purpose of obtaining legal advice. See Upjohn Co. v. United States, 449 U.S. 383, 394-99 (1981). In a diversity action, such as in this action, the applicability and scope of attorney-client privilege is governed by the law of the forum state. Urban Outfitters, Inc. v. DPIC Companies, Inc., 203 F.R.D. 376, 378 (N.D.Ill.2001); see also Fed. R. Evid. 501. Illinois law governing attorney-client privilege is identical to federal law in that they both require the court to determine whether legal advice of any kind was sought from an attorney in his or her capacity as an attorney, whether the material sought in discovery contains communication related to the purpose of seeking such legal advice and whether such communication was made in confidence. See id. and Sandra T.E. v. South Berwyn Sch. Dist. 100, 600 F.3d 612, 618 (7th Cir. 2010).

The Supreme Court of Illinois has also extended the attorney-client privilege to communications between an insured and insurer where the insurer owes an obligation to defend the insured. Pietro v. Marriot Senior Living Servs., Inc., 348 Ill.App.3d 541, 552 (Ill.App.Ct. 2004). The rationale for the extension of the privilege is that agents of insurers serve as a communication conduit between an insured and the attorney to be retained by the insurer for the benefit of the insured and his or her defense. People v. Ryan, 30 Ill.2d 456, 461 (Ill. 1964) In order to rely on this subset insurer-insured privilege under the broader attorney-client privilege, the party asserting the privilege must show the following: "(1) the identity of the insured; (2) the identity of the insurance carrier; (3) the duty to defend a lawsuit; and (4) that a communication was made between the insured and an agent of the insurer." Id. Of course, in order for the privilege to attach, such communication must have remained confidential.

While the attorney-client privilege is governed by Illinois law in this case, the work-product doctrine is determined by federal law. See Fed. R. Civ. P. 26(b)(3). Unlike the attorney-client privilege, work-product privilege protects documents prepared by attorneys in anticipation of litigation for the purpose of analyzing, evaluating and preparing a client's case. See United States v. Smith, 502 F.3d 680, 689 (7th Cir.2007). As such, the court must determine whether the documents sought in discovery contains an attorney's thought processes and mental impressions in order to decide whether the work-product doctrine applies. See Sandra T.E., 600 F.3d at 621-22. However, the courts in the Northern District of Illinois have construed Rule 26(b)(3) to limit this protection to one who is a party (or a party's representative) to the litigation in which discovery is sought. See Cook v. City of Chicago, No. 06 CV 5930, 2010 WL 331737, *1 (Jan. 26, 2010).

Here, JTD has withheld the following documents*fn4 asserting both the attorney-client and attorney work-product privilege:

1. 150 pages of Travelers' Internal Claim Handlers' File Activity Notes from various workers' compensation claims handlers assigned to the claim throughout the years detailing file activity, investigation, and ...


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