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S.T. Specialty Foods, Inc. v. Copesan Services, Inc.

United States District Court, D. Minnesota

January 2, 2020

S.T. Specialty Foods, Inc., Plaintiff,
v.
Copesan Services Inc. and Wil-Kil Pest Control Company, Inc., Defendants.

          ORDER

          HILDY BOWBEER UNITED STATES MAGISTRATE JUDGE

         Plaintiff S.T. Specialty Foods, Inc. (“S.T. Specialty”) moves to compel Defendants[1] to fully respond to several discovery requests. For the reasons set forth below, the motion is granted in part and denied in part.

         I. Background

         A. Factual Background

         S.T. Specialty, a food products manufacturer, arranged with Copesan to conduct a fumigation at S.T. Specialty's food processing facility in Brooklyn Park, Minnesota beginning on Friday, September 30, 2016. (Compl. ¶ 1 [Doc. No. 1].) S.T. Specialty alleges that Copesan used a pesticide that caused virtually all the mechanical equipment in the facility to fail, including manufacturing equipment, forklifts, printers, and computer servers. (Id. ¶ 30.) S.T. Specialty discovered the damage on Monday, October 3, 2016, when its employees returned to work. (Id.) S.T. Specialty did not initially suspect the fumigant caused the damage, and began to investigate various possible causes, such as an electrical surge. (Hutchinson Decl. Ex. A [Doc. No. 28-1].)

         On Monday, October 10, 2016-one week after the fumigation was completed- Ryko Cenin of S.T. Specialty called John Degner, the sales and service manager for Wil-Kil, to “ask some questions” about the fumigant Copesan used and its “potential of fine electrical damage.” (Stellpflug Decl. Ex. 1 [Doc. No. 35 at 5].) Degner recounted his conversation with Cenin in an email to colleagues at Copesan, reporting that “[Cenin] is stating that they are running into some issues with some of their equipment and asked if it was fumigant related.” (Id.)

         On November 2, 2016, Rob Musiel, a manager at Copesan, called Diane Evans, a Senior Claim Examiner for Sedgwick Claims Management Services, a third-party claims manager for Copesan's insurer (hereafter “Sedgwick”), to put the insurer “on notice of S.T. Specialty's claim.” (Evans Decl. ¶¶ 2, 5 [Doc. No. 34].) Musiel advised Evans that S.T. Specialty “was alleging that a fumigation provided at the S.T. Specialty Facility in Brooklyn Park, MN by representatives of Copesan and Wil-Kil over the weekend of September 30, 2016 had caused damage to equipment estimated to be over $100, 000.” (Id. ¶ 6.) Musiel further advised Evans that Copesan disagreed strongly with the allegation that the fumigation had caused the damage, “wished to defend against the claim” and intended “to put up an aggressive fight against these allegations.” (Id. ¶¶ 7-9.)

         On November 17, 2016, Thuan Moran, Senior Director of Operations for S.T. Specialty's parent company, wrote a formal letter to Copesan in which he stated S.T. Specialty had concluded that Copesan's fumigant had caused “widespread damage and loss, ” and that “[a]s the expert, Copesan was obligated to provide much clearer direction and oversight in terms of protecting ST's equipment.” As a result, Moran stated, S.T. Specialty was seeking $515, 955.42 to cover the loss. (Evans Decl. Ex. B [Doc. No. 34 at 8].) Copesan forwarded the letter to Sedgwick on or around December 2, and Evans began communicating directly with S.T. Specialty. (Evans Decl. ¶¶ 10-11.) In a telephone call with Moran on December 13, she learned that “only ‘some' of the damaged equipment was still available to be inspected.” As a result of that “loss of evidence, ” she thought “litigation would even more certainly ensue.” Id.

         On December 15, 2016, Evans had a telephone conversation with Sedgwick's regular counsel in Minnesota, Janet Stellpflug. Less than a week later, Evans hired a local claims adjuster, Stephen Kessler, who in turn, on December 22, retained Ryan Haase, a consulting engineer with expertise in metallurgy. (Evans Decl. ¶¶ 12-14.) Over the course of the next four months, Haase and others began working with S.T. Specialty to collect and test samples of the ruined electrical components. (Hutchinson Decl. Ex. D [Doc. No. 28-4 at 7-21].) It appears those interactions were cooperative. (See Hutchinson Decl. Ex. D (examples of communications between S.T. Specialty and Sedgwick representatives)). None of the communications from S.T. Specialty during this period appear to have explicitly threatened litigation, but Evans states that Haase and Kessler “were both hired … to defend the claims being made that were unsupported, ” and that they were “aggressively defending and preparing for litigation by investigating and attempting to gather evidence.” (Evans Decl. ¶ 15.)

         In April of 2017, Copesan formally retained Stellpflug as outside counsel on the case. (Stellpflug Decl. ¶¶ 2-3.) She first contacted S.T. Specialty on behalf of Copesan on April 27, 2017. (Pl.'s Mem. Supp. at 9 [Doc. No. 27].) In September 2018, S.T. Specialty filed suit against Copesan. (Compl. [Doc. No. 1].)

         B. S.T. Specialty's Subpoenas to Kessler and Sedgwick

         On July 22, 2019, S.T. Specialty served Stephen Kessler, Sedgwick's local claims adjuster, with a subpoena to testify and produce all documents related to his inspection of S.T. Specialty's facility. (Hutchinson Decl. Ex. G [Doc. No. 28-7].) A week later Copesan responded via letter to say that it did not object to Kessler's deposition, but that portions of his testimony and certain documents would be withheld on grounds of attorney-client privilege and/or work product. (Hutchinson Decl. Ex. H [Doc. No. 28-8].) S.T. Specialty later withdrew the request for Kessler's deposition but maintained its request for documents. ((Pl.'s Mem. Supp. at 20.) Kessler produced some documents (Stellpflug Decl. Exs. 4, 5). As of the date the motion was argued, Kessler had not himself served objections or a privilege log, nor had he moved to quash the subpoena, and Copesan's privilege log did not include a log of the documents that were withheld from Kessler's production, although it appeared likely there was significant overlap between the documents on Copesan's log and the documents withheld from Kessler's production. (See Pl.'s Mem. Supp. at 21; Hutchinson Decl. Ex. E [Doc. No. 28-5].)

         In September or October 2019, S.T. Specialty served Sedgwick, through Evans, with a subpoena for all documents related to the investigation of the claimed damage at S.T. Specialty's facility.[2] (Hutchinson Decl. Ex. I [Doc. No. 28-9].) Attorney Stellpflug, on behalf of Copesan, served formal objections asserting both work product protection and attorney-client privilege. (Hutchinson Decl. Ex. J [Doc. No. 28-10].) Sedgwick did, however, produce approximately “500 pages of documents, almost all of which [S.T. Specialty] itself has already produced in this case.” (Pl.'s Mem. Supp. at 21.) As with Kessler, Sedgwick did not separately serve objections to the subpoena or a privilege log, or move to quash the subpoena, but again, there appeared to be significant overlap between the documents on Copesan's log and the documents withheld by Sedgwick. (See Pl.'s Mem. Supp. at 21-22; Hutchinson Decl. Ex. E.)[3]

         C. S.T. Specialty's Subpoena to Haase

         On July 22, 2019, S.T. Specialty served Copesan's engineering consultant Ryan Haase with a subpoena seeking his deposition on September 6, 2019, and production of all documents relating to his inspection of the S.T. Specialty facility and related analysis and testing of the equipment. (Hutchinson Decl. Ex. K [Doc. No. 28-11].) A week later Copesan served objections both to the deposition and to the demand for documents, asserting that Haase was a non-testifying consulting expert retained in anticipation of litigation under Federal Rule of Civil Procedure 26(b)(4)(D). (Hutchinson Decl. Ex. L [Doc. No. 28-12].) As Defendants' counsel made it clear Haase would not appear for the September 6 deposition, Plaintiff canceled the deposition (although it has not withdrawn the subpoena). Haase did not separately object, move to quash the subpoena, or produce a privilege log, and he has not produced any documents.

         II. Discussion

         S.T. Specialty filed the instant motion on November 4, 2019, seeking to compel production of documents that fall generally into three categories. First, S.T. Specialty seeks to discover documents in the possession of Copesan that were generated in the immediate aftermath of the fumigation and during the insurance claim investigation. Specifically, the documents sought by S.T. Specialty include documents Copesan withheld on work product grounds that were generated after Ryko Cenin's call to Copesan on October 10. 2016, and prior to April 27, 2017, when Stellpflug first contacted S.T. Specialty shortly after she was formally retained to represent Copesan in this matter.[4] The documents include notes, timelines, emails, and reports. (Pl.'s Mem. Supp. at 7-9; Def. Mem. Opp'n at 8; Hutchinson Decl. Ex. E [Doc. No. 28-5].) Copesan has produced some responsive documents, but has withheld a number of others on the ground that they were produced in anticipation of litigation and are therefore protected by the work product doctrine.

         Second, S.T. Specialty moves to enforce the subpoenas it served on Sedgwick and Kessler to compel production of documents relating to their investigation and assessment of S.T. Specialty's claims. Finally, S.T. Specialty seeks to enforce the subpoena it served on Haase seeking information pertaining to Haase's inspection and testing of S.T. Specialty's equipment and his analysis of S.T. Specialty's claims.

         As to all three categories of documents, S.T. Specialty contends that any documents generated at least prior to April 27, 2017, were not generated in anticipation of litigation and therefore were not properly withheld on work product grounds. In addition, S.T. Specialty contends that any objections to the Sedgwick, Kessler, and Haase subpoenas were waived because the subpoena recipients themselves did not object or move to quash the subpoenas, and Copesan did not have standing to interpose objections on their behalf.

         Federal Rule of Civil Procedure 26(b)(3) delineates the scope of work product protection in the federal courts:

Ordinarily, a party “may not discovery documents and tangible things that are prepared in anticipation of litigation or for trial by or for another party or its representative (including the other party's attorney, consultant, surety, indemnitor, insurer, or agent).

Fed. R. Civ. P. 26(b)(3)(A). In addition, Rule 26(b)(4)(D) protects facts known or opinions held by an expert “who has been retained or specially employed by another party in anticipation of litigation or to prepare for trial and who is not expected to be called as a witness at trial.”

         Thus, while work product is often that of an attorney, the work product doctrine is not confined to information or materials gathered or assembled by a lawyer, nor need it have been requested by an attorney or communicated by or to a client of an attorney. Diversified Indus., Inc. v. Meredith, 572 F.2d 596, 603 (8th Cir. 1977).

         Moreover, work product protection may, and often does, begin before a lawsuit is actually ...


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