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Selective Insurance Co. of Southeast v. RLI Insurance Co.

United States District Court, N.D. Ohio, Eastern Division

March 31, 2017




         Non-Party Mazanec, Raskin and Ryder Co., L.P.A. filed a Motion for Order Requiring Payment of Costs. ECF No. 78. On September 16, 2016, Magistrate Judge Thomas Parker issued a report recommending that the Court grant the motion in part, and award $14, 174.31 as reasonable compensation for Mazanec's compliance with the subpoena issued by Defendant RLI Insurance Company (“RLI”). ECF No. 88 (Report and Recommendation). RLI objected. ECF No. 94.[1] The Court has reviewed the above filings, the relevant portions of the record, and the governing law and renders the ruling below.

         I. Procedural Backgound

         On de novo review, the following detailed recitation of the protracted manner in which this discovery dispute unfolded may be informative.

         RLI issued a Subpoena to Produce Documents, Information, or Objects in a Civil Action (the “Subpoena”) (ECF No. 40-2) to Non-Party Mazanec compelling the production of: “Complete attorney file, including all pleadings, discovery, correspondence, emails and other communications, and all work product including notes, memos, reports, etc. in defending the City of Barberton and employees in Clarence Elkins, et al. v. Summit County, OH, et al., ND Ohio Case No. 06-cv-03004.” ECF No. 40; ECF No. 40-2 at PageID #: 811 (emphasis added). Mazanec objected to the Subpoena pursuant to Rule 45(d)(2)(B) on three grounds relevant to this writing.[2] ECF No. 97-1. Mazanec objected on grounds that: (1) the Subpoena was over broad; (2) compliance would subject Mazanec to undue burden and expense; and (3) compliance would require disclosure of materials protected by attorney-client privilege or the work product doctrine. Id. at PageID #: 3876. For these and other reasons, Mazanec declined to produce any materials in response to the Subpoena. Id. at PageID #: 3877. Mazanec also filed a Motion to Quash Subpoena pursuant to Rule 45(d)(3)(A) asking the Court to “quash the Subpoena in its entirety” and to “impose an appropriate sanction against RLI and its counsel pursuant to []Rule 45(d)(1)” for undue burden and expense. ECF No. 41 at PageID #: 814; ECF No. 41-1 at PageID #: 816, 820. Mazanec's motion also stated that it was filing the motion to quash in order to “further preserve [its] objections.” ECF No. 41-1 at PageID #: 818. The matter was referred to Magistrate Judge Thomas M. Parker, pursuant to 28 U.S.C. § 636 and Local Rules 72.1 and 72.2(a), for resolution of the motion to quash.[3] ECF No. 52.[4]

         On June 2, 2016, the magistrate judge issued an Order (the “June Order”) (ECF No. 63) stating that, pursuant to Rule 45(d)[5], the Court:

is likely to order the non-part[y] to produce the non-privileged materials which RLI has subpoenaed. However, to avoid placing an undue burden on [Mazanec, ] the court intends to require RLI to bear the reasonable costs of the non-part[y's] production of the subpoenaed materials.

ECF No. 63 at PageID #: 1661. Pursuant to Rule 45(d)(2)(B)(ii), the magistrate judge found the costs incurred by a non-party for compliance with an order compelling production is reimbursable. ECF No. 63 at Page ID #: 1661-62. The magistrate judge concluded that “the protections of the work product doctrine are inapplicable here because the subpoenaed materials were not prepared in preparation for this litigation.” Id. at PageID #: 1660. In addition, the magistrate judge found that Mazanec had “not provided enough information to the court for it to fully consider and determine whether the [Subpoena would] require the disclosure of privileged materials and/or whether [the Subpoena would] subject the non-part[y] to an undue burden.” Id. at PageID #: 1661. Therefore, the magistrate judge ordered Mazanec to “prepare and file with the [C]ourt cost estimates for reviewing the subpoenaed records, preparing privilege logs, and producing the non-privileged documents subpoenaed by [RLI with] sufficient detail to permit RLI to determine whether it will modify its subpoenas so as to avoid certain costs.”[6] Id. at PageID #: 1662.

         Mazanec complied with the June Order by filing a cost estimate (ECF No. 66) indicating: (1) a total estimated cost for digital and physical document review and preparation of logs in the amount of $115, 060.00; (2) an estimated costs of preparation and review for document production by a vendor in an amount ranging from $2, 600.00 to $5, 200.00, excluding vendor costs for actual document production; and (3) an estimated cost of $3, 690.00 for attorney time preparing the cost estimate.[7] ECF No. 66 at PageID #: 1674. Because the Court was “not notified of any agreement between the parties and/or any proposed modification of the subpoena[] issued by [RLI]” after Mazanec's cost estimate had been filed, on July 19, 2016, the magistrate judge issued an Order (the “July Order”) (ECF No. 69) requiring RLI to file:

1) notice as to whether it will seek enforcement of the subpoena[] issued on [Non-Party Mazanec];
2) notice as to whether it is willing to reimburse [Mazanec] for the estimated costs of complying with the subpoena[]; and
3) in response to the cost estimate filed by [Mazanec], a legal brief stating any and all factual and legal arguments in response to Mazanec's argument that complying with the [RLI] subpoena would create an undue burden, pursuant to Fed. R. Civ. P[.] 45(A).

ECF No. 69 at PageID #: 1690-91.

         The parties engaged in some email communication over the following weeks in an attempt to resolve the discovery dispute. See ECF No. 71-1. During the attempt, RLI presented Mazanec with a pared down list of requested materials for production. ECF No. 71-1 at PageID #: 1705-06. By the pared down list, RLI requested:

1) The Defendants' initial disclosures;
2) The Defendants' answers to Elkins' interrogatories and requests for admission . . .;
3) The documents produced in response to the IRS subpoena in the Elkins bankruptcy, not including medical records;
4) Your office's correspondence with Elkins' counsel, and with any third parties including potential witnesses;
5)Your notes and internal memos, other than attorney-client communication, regarding witnesses, evidence, trial strategy, and insurance coverage.

Id. RLI noted in its July 25, 2016 email communicating the pared down list to Mazanec that: “[t]he first three items should be readily available and not require significant review, especially since item 3 was already pre-reviewed, and a privilege [log] prepared.” Id. at PagedID #: 1706. RLI also requested a cost estimate for the review and production of items 4 and 5. Id. In response, Mazanec concurred that “not too much review time would be required for the first 3 categories.” Id. at PageID #: 1703. Mazanec also provided some rough estimates of time and requested clarification as to items 4 and 5. Id. at PageID #: 1703-05. The email colloquy concluded with RLI's request that Mazanec produce the first 3 items without further delay. Id. at PageID #: 1701. Unfortunately, the parties were unsuccessful in reaching an agreement as to items 4 and 5. Mazanec declined to provide further cost estimates and to produce any documents on grounds that it maintained its original objections to the Subpoena (ECF No. 97-1) and the cost estimate filed with the Court (ECF No. 66), and would await a ruling from the magistrate judge on its pending motion to quash. Id.

         Thereafter, RLI did not move the court for an order compelling production pursuant to Rule 45(d)(2)(B)(i). Instead, RLI complied with the July Order by filing a Notice of Intent to Enforce Subpoenas and Response to Claims of Undue Burden (“Notice”) (ECF No. 71) requesting that the Court “enforce the subpoenas in their entirety.” ECF No. 71 at PageID #: 1695. RLI also requested that the Court clarify its ruling as to the waiver of attorney-client privilege. In addition, should the Court find attorney-client privilege not waived, RLI requested that the Court enforce the subpoena “with respect to documents not protected by attorney-client privilege and which are not burdensome to produce.” Id. at PageID #: 1697. As to the documents not protected by attorney-client privilege, RLI submitted to the Court that it “seeks only the following documents”:

1. Elkins and Barberton's initial disclosures;
2. Barberton's answers to written discovery and document production;
3. Documents produced in response to the IRS subpoena (except medical records);
4. [Mazanec's] emails and correspondence with opposing counsel and other ...

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