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The William Powell Co. v. National Indemnity Co.

United States District Court, S.D. Ohio, Western Division

September 26, 2017

NATIONAL INDEMNITY CO., et al., Defendants.

          Dlott, J.


          Karen L. Litkovitz, United States Magistrate Judge

         I. Background

         On April 11, 2017, the undersigned issued an Order granting in part a Motion to Compel and for Sanctions filed by plaintiff The William Powell Company (Powell) against defendant OneBeacon Insurance Company (OneBeacon). (Doc. 119). The Order directed OneBeacon to produce, among other documents, "Communications listed on the privilege log for which OneBeacon has asserted an attorney-client privilege but which have been disclosed to third parties other than Resolute [Management, Inc.] and NICO [National Indemnity Company]." (Id. at PAGEID#: 3032, ¶ 1.v). OneBeacon moves the Court to reconsider its ruling that OneBeacon waived any attorney-client privilege and work product protections by voluntarily disclosing documents to "presumed third parties." (Doc. 128 at 1). Powell opposes OneBeacon's motion, alleging there is no valid basis for the Court to reconsider its prior ruling. (Doc. 130). OneBeacon has filed a reply in support of its motion. (Doc. 132).

         In its motion to compel, Powell challenged the privilege log OneBeacon provided on September 2, 2016 and revised on November 10, 2016 as deficient under Fed.R.Civ.P. 26(b)(5)(A).[1] (Doc. 98). Powell moved to compel the disclosure of "hundreds" of communications OneBeacon had withheld as privileged on the ground OneBeacon had shared the documents with third parties, including insurers who did not appear to have an attorney-client relationship with OneBeacon, without providing any proof of a common interest or joint defense agreement. (Doc. 98 at PAGEID#: 1596, citing Exh. K; PAGEID#: 1607-08, citing Exh. O, OneBeacon privilege log legend). Powell did not challenge OneBeacon's claim of privilege as to documents OneBeacon had shared exclusively with Resolute and NICO under a Joint Defense Agreement those entities executed on December 3, 2014. (See Doc. 98 at PAGEID#: 1608-09, citing Exh. B, Joseph Brunner Decl., ¶ 14, Exh. 7 at 1). Powell challenged OneBeacon's claim of privilege only as to documents OneBeacon had shared with third parties who are not parties to the Joint Defense Agreement. (Doc. 98 at PAGEID#: 1608-09). Powell argued that OneBeacon had failed to satisfy its burden to show that the attorney-client privilege was not waived as to communications that were disclosed to Berkshire Hathaway, Inc. (Berkshire Hathaway), Armour Risk Management, Ltd. (Armour), National Union Fire Insurance Company (National Union), Continental Casualty Insurance Company (CNA), Trebuchet U.S. Holdings, Inc. (Trebuchet), Berkshire Reinsurance Group (BerkRe), and Charles A. Wagner Co. (Id.). Powell also noted that various information technology service providers appeared together with these entities on communications OneBeacon had listed on the privilege log. (Id.).

         The Court upheld Powell's challenge to OneBeacon's assertion of an attorney-client privilege for communications shared with third parties other than Resolute and NICO, rinding as follows:

As Powell does not challenge OneBeacon's assertion of the attorney-client privilege as to communications shared exclusively with Resolute and NICO, there is no dispute that OneBeacon did not waive the privilege as to those communications. OneBeacon has not carried its burden to show that it is entitled to assert an attorney-client privilege as to communications disclosed to any other third parties... . OneBeacon has not submitted any evidence to demonstrate the existence of a relationship between OneBeacon and any of the other entities that would give rise to a common interest and entitle the parties to share attorney communications without waiving the attorney-client privilege. OneBeacon's unsupported and conclusory assertions as to the functions of Armour and Trebuchet and "other entities" to whom communications have been disclosed do not suffice. (See Doc. 104 at PAGEID#: 2161-62). OneBeacon has waived the attorney-client privilege for documents on the privilege log that were disclosed to third parties other than NICO and Resolute, and OneBeacon must produce those documents.

(Doc. 119 at PAGEID#: 3027-28).

         II. Motion for reconsideration

         OneBeacon now asks the Court to reconsider its ruling under Fed.R.Civ.P. 54(b) and federal common law, which OneBeacon argues give the Court "broad discretion" to grant relief from interlocutory orders. (Doc. 128).

         OneBeacon initially contends that an in camera inspection of the documents at issue will allow the Court to ascertain whether OneBeacon waived the attorney-client privilege by disclosing the documents to third parties. (Doc. 128 at PAGEID#: 3587-3588, citing cases). OneBeacon argues that even absent an in camera inspection of the documents at issue, it is clear that OneBeacon did not waive the attorney-client privilege as to any of the documents by disclosing them to third parties. Rather, OneBeacon alleges that all of the third parties with whom the documents were shared "fall into one or more protected relationships." (Id. at PAGEID#: 3588). OneBeacon identifies these parties as Armour and Trebuchet, the "successors in interest" to OneBeacon (PAGEID#: 3589-90); David Malatesta, "Resolute-panel counsel" for the Charles A. Wagner Co. (PAGEID# 3591-3592); Berkshire Reinsurance Group (BerkRe), which OneBeacon states is a functional name given to "a division of Berkshire Hathaway's subsidiaries, including NICO and Resolute" (PAGEID#: 3592, citing Third Declaration of John Matosky, Exh. 1) (emphasis added by OneBeacon); and technology vendors who allegedly functioned as OneBeacon's agents (PageID#: 3593-94). (Doc. 128). OneBeacon asserts that the entries in its privilege log confirm that it did not communicate with National Union or CNA. (Id. at PAGEID#: 3589-90).

         Powell argues that while courts have discretion to reconsider interlocutory orders, such relief is extraordinary in nature and should be granted sparingly to promote the interest of finality in Court rulings. (Doc. 130 at PAGEID#: 3634). Powell alleges that OneBeacon has not satisfied the standard for reconsideration in this case because the evidence OneBeacon has submitted in support of its motion is not "new" evidence that was previously unavailable to it. (Id. at PAGEID#: 3634-3635). Powell alleges that even if the Court were to consider the evidence submitted by OneBeacon, that evidence does not show that OneBeacon was entitled to withhold on grounds of privilege communications that OneBeacon disclosed to third parties. Powell contends that OneBeacon has not shown that communications with National Union are protected by an attorney-client privilege (PAGEID#: 3637); OneBeacon's allegations are insufficient to establish a common legal interest between Armour/Trebuchet and OneBeacon (PAGEID#: 3637-3639); and in contradiction to its current representations, OneBeacon previously identified BerkRe as a separate entity from NICO and Resolute (PAGEID#: 3640-41). (Doc. 130). Powell further disputes OneBeacon's contention that this Court is required to conduct an in camera review of the documents in issue because federal law governs the procedure the Court follows in deciding which documents are privileged. (Id. at PAGEID#: 3636, n.2).

         III. Standard of review

         OneBeacon's motion for reconsideration of the Court's interlocutory order on Powell's motion to compel and for sanctions is reviewable under Fed.R.Civ.P. 54(b) and the common law. Rodriguez v. Tern. Laborers Health & Welfare Fund, 89 Fed.Appx. 949, 959 (6th Cir. 2004) (quotation omitted); see also Hiles v. Army Rev. Bd. Agency, No. 1:12-cv-673, 2015 WL 4778831, at *16 (S.D. Ohio Aug. 13, 2015) (Report and Recommendation), adopted, 2016 WL 561186 (S.D. Ohio Feb. 12, 2016). A district court has the implicit authority under both common law and Rule 54(b) to "reconsider interlocutory orders and to reopen any part of a case before entry of final judgment." Rodriguez, 89 Fed.Appx. at 959. Although district courts are permitted to "afford such relief from [interlocutory orders] as justice requires," courts "traditionally . . . will find justification for reconsidering interlocutory orders when there is (1) an intervening change of controlling law; (2) new evidence available; or (3) a need to correct a clear error or prevent manifest injustice.[2] Id. (citations omitted); Louisville/Jefferson Co. Metro Gov't v. L.P., 590 F.3d 381, 389 (6th Cir. 2009); Hiles, 2015 WL 4778831, at *16. See also Northeast Ohio Coalition for Homeless v. Brunner, 652 F.Supp.2d 871, 877 (S.D. Ohio 2009) ("Motions for reconsideration are not intended to relitigate issues previously considered by the Court or to present evidence that could have been raised earlier.").

         IV. Analysis

         1. Request for in camera inspection

         As an initial matter, OneBeacon argues that an in camera review of the documents at issue will resolve whether it is entitled to withhold those documents under the attorney-client privilege.[3] (Doc. 128 at PAGEID#: 3587-3588). OneBeacon argues that Ohio law "requires a court deciding issues of privilege to conduct an in camera inspection to determine the extent to which the privilege applies or has been waived before ordering a party to produce information that is claimed to be privileged." (Id.). It is not clear whether the gist of OneBeacon's argument is that the Ohio requirement is binding on a federal court tasked with determining the applicability of the Ohio attorney-client privilege in a case before it or whether OneBeacon is simply urging the Court to follow Ohio procedures in this regard. To the extent OneBeacon argues that an in camera review is mandatory, the Court rejects its argument as unsupported.

         First, OneBeacon has not cited any cases to show that Ohio's in camera review requirements are binding on federal courts. Further, the holdings of the cases OneBeacon cites do not support its position that an Ohio court must conduct an in camera review whenever an attorney-client privilege is asserted. Instead, the holdings of the cases OneBeacon cites are more limited than this broad proposition. See In re Subp. Duces Tecum Served Upon Atty. Potts, 796 N.E.2d 915, 916 syll. ¶ 2 (Ohio 2003) (holding in the context of a criminal proceeding that an in camera review is required whenever a privilege is asserted as to subpoenaed documents); Peyko v. Frederick, 495 N.E.2d 918, 919 syll. ¶ 2 (Ohio 1986) and Moskovitz v. Mt. Sinai Med. Or., 635 N.E.2d 331, 351 (Ohio 1994) (holding that an in camera review is required to determine which documents in a claims file are privileged if a plaintiff who has obtained a judgment files a motion for prejudgment interest under Ohio Rev. Code § 1343.03 and the defense asserts the attorney-client privilege with regard to the contents of the claims file). Cf. In re Antitrust Grand Jury, 805 F.2d 155, 168 (6th Cir. 1986) (holding that an in camera review is required where district court was required to review the documents to determine if they were subject to a subpoena under the crime-fraud exception).[4] None of the circumstances or holdings of these cases apply here.

         The Court found in its prior Order that an in camera review was not warranted and instead formulated a set of rules to be applied in determining whether categories of documents withheld by OneBeacon were protected by the attorney-client privilege or under the work product doctrine. OneBeacon has proffered no reason for the Court to reconsider its prior ruling in this regard. The Court declines to revisit its prior decision and will not conduct an in camera review of the third-party documents it previously held were not entitled to protection under the attorney-client privilege.

         2. Consideration of ...

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