WILLIAM A. LEMONS, JR., M.D., Plaintiff, v. PRINCIPAL LIFE INSURANCE COMPANY, Defendant Case No.: 2:18-CV-1040-CLM United States District Court, N.D. Alabama, Southern Division Filed July 09, 2019 Counsel Lee Price Fernon, Thomas O. Sinclair, Sinclair Law Firm, LLC, Birmingham, AL, for Plaintiff. Ashlee Dee Riopka, Edward M. Holt, Grace Robinson Murphy, Maynard Cooper & Gale PC, Birmingham, AL, for Defendant. Ragsdale, Barry A., Special Master REPORT AND RECOMMENDATION OF SPECIAL MASTER *1 Pursuant to the Court's Order of May 17, 2019 (Doc. 43) and Fed.R.Civ.P. 53(a)(1)(c), the undersigned was appointed by this Court to meet with the parties, examine and review the pending discovery disputes in this matter, and to submit a report regarding a recommended resolution of those disputes. The undersigned met with counsel for the parties on June 3, 2019 and it was agreed that the undersigned could proceed to consider and submit a report regarding the parties' discovery disputes based on the filings to date and that no further argument was required. The undersigned then proceeded to analyze and review the parties' submissions regarding the discovery matters, including the Parties' Joint Report Concerning Discovery Requests to Defendant (Doc. 37), the transcript of the parties' meet-and-confer (Doc. 38), and other matters material to the discovery disputes. The parties' disputes are ripe for resolution. APPLICABLE STANDARD Federal Rule of Civil Procedure 26(b)(1) provides in part: Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of discovery in resolving the issues, and whether the burden of expense of the proposed discovery outweighs its likely benefit. Furthermore, “[i]nformation within this scope of discovery need not be admissible in evidence to be discoverable.” Fed. R. Civ. P. 26(b)(1). Proportionality requires counsel and the court to consider whether relevant information is discoverable in view of the needs of the case. See Graham & Co., LLC v. Liberty Mut. Fire Ins. Co., No. 2:14-cv-2148-JHH, 2016 WL 1319697, at *3 (N.D. Ala. April 5, 2016); Walker v. Life Ins. Co. of N. Am., No. 5:16-cv-00506-HNJ, ECF No. 73, at p. 2 (N.D. Ala. June 7, 2018). Whether a particular discovery request is “proportional to the needs” of the case involves consideration of several non-exclusive factors: “the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.” Fed. R. Civ. P. 26(b)(1). “Any application of the proportionality factors must start with the actual claims and defenses in the case, and a consideration of how and to what degree the requested discovery bears on those claims and defenses.” Graham, 2016 WL 1319697 at *3 (citing Witt v. GC Servs. Ltd. P'ship, 307 F.R.D. 554, 569 (D. Colo. 2014)). The court must “consider these and all the other factors in reaching a case-specific determination of the appropriate scope of discovery.” Rule 26 2015 advisory committee note. DISCUSSION Based on a review of the filings and discussions with counsel, there are currently seven (7) matters in dispute involving discovery Plaintiff seeks from Defendant.[1] Those disputes are as follows: (1) Claims and training manuals; (2) Prior deposition testimony; (3) Defendant's files and records regarding Plaintiff; (4) Employee evaluations and compensation; (5) Reserves information; (6) Format and organization of Defendant's production; and (7) Leave to conduct one additional deposition. Each of these issues will be addressed in turn. 1. Claims and training manuals. *2 Plaintiff's Request for Production No. 2 seeks documents that “detail [an] employee's duties and requirements,” including training and employee manuals and other instructive materials. Similarly, Request for Production No. 12 seeks various types of training and procedural manuals. In response, Defendant objected on grounds such as scope, burdensomeness, and proportionality. Defendant has previously produced a number of individual disability manual provisions responsive to Plaintiff's request, including a supplemental production on April 22, 2019 and April 23, 2019, and the parties have reached a partial agreement about certain provisions of the manuals that Plaintiff agrees need not be produced. However, Plaintiff seeks the production of additional materials from the Defendant's manuals. Plaintiff has provided Defendant with a high-lighted copy of the menu of the Individual Disability Claims Procedures Manual, indicating the 35-40 additional provisions requested by Plaintiff. After reviewing the parties' arguments and submissions as well as the relevant case law, it is the undersigned's recommendation that Defendant should be ordered to produce the additional sections of its Individual Disability Claims Procedures Manual as requested by Plaintiff in the high-lighted menu of that manual previously provided. The production of these additional provisions would satisfy Defendant's obligations under Plaintiff's Requests for Production 2 and 12. 2. Prior deposition testimony. Plaintiff's Request for Production No. 1 seeks “all depositions, trial testimony and other sworn statements of [Defendant's] employees, consultants, medical professionals and physicians who have performed any services with respect to the Plaintiff's claims.” In response, Defendant objected on grounds of relevance, breadth, burden, scope, and proportionality. Defendant's investigation identified five potentially responsive deposition transcripts, but Defendant maintains that the matters at issue in these depositions are not relevant to the issues in this case. Plaintiff requests that the court compel production of the transcripts. Courts are divided over the wholesale production of depositions taken in other litigation, with most courts limiting production of prior depositions to those of identified custodians over a limited time frame. See, e.g., Capital Ventures Intern. v. J.P. Morgan Mortg. Acquisition Corp., No. 12-10085-RWZ, 2014 WL 1431124, at *1 (D. Mass. 2014); In re Tier 1 Jeg Telecommunications Cases, No. 4:07-cv-00043, 2011 WL 13302040, at *1 (S.D. Iowa 2011). Although Defendant contends that the five responsive depositions that it has identified do not involve issues relevant to this action, there does not appear to be any way to confirm that contention without fully reviewing each of the five depositions. Defendant also contends that some of the depositions are subject to protective orders in the other civil actions in which they were taken and that the depositions contain personal and private information which would have to be redacted. Defendant has copies of the deposition transcripts, so there is very little burden associated with producing them. After considering the parties' arguments and authorities, it is the recommendation that Defendant be ordered to produce transcripts of any depositions of the relevant custodians (persons identified in response to Interrogatory 2) taken within four years prior to the filing of the Plaintiff's disability claim to the present. To the extent, that there is personal information that needs to be redacted from these depositions, Defendant should undertake those redactions prior to production. The transcripts would be produced pursuant to the Protective Order entered in this action (Doc. 27). 3. Defendant's files and records regarding Plaintiff. Plaintiff's Request for Production No. 6 seeks “all application and underwriting files pertaining to all policies the Plaintiff ever applied for with [Defendant's] subsidiaries.” Request for Production No. 7 seeks “all documents, statements, and communications between [Defendant] and any other party that directly pertain to the issuance of insurance to the Plaintiff or administration of claims on the Plaintiff's behalf.” Request for Production No. 16 similarly seeks any documents “pertain[ing] to the Plaintiff's claim or claims for benefits,” including “any files pertaining to any other policies purchased by Plaintiff.” Defendant objected to each request on grounds of relevance, burden, breadth, and proportionality. Defendant has produced responsive documents that pertain to the policy at issue in this case, including a supplemental production of Defendant's claim file documents stemming from Plaintiff's ongoing disability, as well as a copy of the application file for the policy at issue. Defendant withheld documents unrelated to Plaintiff's disability policy or his claim thereunder. Plaintiff maintains that he is entitled to all documents concerning him in any way, regardless of whether they are related to the policy at issue or his claim for “Regular Occupation” Rider benefits, and requests that the court compel such production. *3 Plaintiff does not dispute that Defendant has already produced all responsive documents related to the policy that forms the basis of his claim. Requiring Defendant to produce all documents related to policies that are not at issue, therefore, would be disproportionate to the needs of this case. As a result, the undersigned recommends that the Court sustain Defendant's objections and deny Plaintiff's requested relief on this issue. 4. Employee evaluations and compensation. Plaintiff's Interrogatory No. 3 and Requests for Production Nos. 4, 11, and 20 generally seek personnel file information and documentation regarding Defendant's claims personnel that were involved with the handling of Plaintiff's claim. In particular, the requests seek compensation information, employee evaluations, and entire personnel files. Plaintiff argues this information goes to whether Defendant incentivized or punished employees to influence their treatment of claims. Defendant objected on various grounds, centering on the impropriety of discovering confidential personnel files. Defendant has produced documents reflecting how employees are compensated and evaluated, and provided a sworn statement that employees are paid fixed salaries and receive performance bonuses unrelated to their claims paid or denied. Plaintiff requests the court compel Defendant to provide additional information and documents regarding employee-specific compensation and evaluations. In light of Defendant's production and sworn responses, the strong public policy against the discovery of personnel files in Alabama (see Walker v. Life Ins. Co. of North America, No. 5:16-cv-00506-HNJ, ECF No. 73 at pp. 9 – 10, (N.D. Ala, June 7, 2018)), and the availability of more appropriate discovery vehicles (e.g., depositions), the undersigned recommends that the Court sustain Defendant's objections and deny Plaintiff's requested relief. 5. Reserves information. Plaintiff's Interrogatory No. 12 seeks “the amount of reserves [Defendant] assigned to Plaintiff's disability claim, including specifically any changes made hereto.” Defendant objected on grounds of breadth, relevance, scope, burden, and proportionality. Defendant also responded by stating under oath that claims analysts do not have direct access to reserve information for particular claims and that claims personnel do not consider reserve information. Further, Defendant has affirmed that it did not use claims analytics or predictive modeling in its determination of Plaintiff's claim, or with respect to individual disability claims generally. Plaintiff requests that the court compel the production of additional materials pertaining to how reserves or other financial information, including claims analytics, impact Defendant's claim determinations. As the court noted in Graham & Co., LLC v. Liberty Mutual Fire Ins. Co., No. 2:14-cv-02148-JHH, 2016 WL 1319697, at *6 (N.D. Ala., April 5, 2016) the majority of courts have held that reserve information is irrelevant to the determination of a first-party bad faith claim, such as the present case. The undersigned is persuaded that no material factual issue exists to remove this action from the majority rule. Further, in light of Defendant's sworn statement that it did not use financial information in the determination of Plaintiff's claim (or with respect to claims generally), Plaintiff's requested information does not appear relevant to the issues in this case. Accordingly, the undersigned recommends that this Court sustain Defendant's objections and deny Plaintiff's requested relief on this issue. 6. Format and organization of Defendant's production. *4 In addition to seeking information and/or documentation in response to the foregoing requests, Plaintiff also seeks production of the claim file for Plaintiff's claim in native format. Plaintiff states that production of the claim file in native format could avoid the document duplication contained in the claim file that was previously produced to Plaintiff in PDF format. Alternatively, Plaintiff seeks production of the claim file “in the manner in which” the claim file is kept in the usual course of business, citing Fed. R. Civ. P. 34(b)(E)(i). In response, Defendant maintains that the Court's November 13, 2018 Scheduling Order (Doc. 23) sets forth requirements regarding production of electronically stored information (“ESI”), and that it fully complied with these requirements, and the requirements of Rule 34, in producing the claim file to Plaintiff in PDF format. Defendant further states that, by permitting production in PDF Format, the Court's Scheduling Order enables it to exchange discoverable information without undue burden or cost. Moreover, Defendant argues that production in native format would result in even further document duplication, and therefore would not address the issue of duplication which Plaintiff seeks to address by requiring production in native format. With respect to production of ESI in the course of discovery, the Court's Scheduling Order provides, in pertinent part, as follows: a. Disclosure or discovery of electronically stored information SHALL be handled as follows: (1) to the extent it exists, relevant, non-privileged electronic information will be produced by the parties in either PDF or hard copy format, to enable the parties to exchange discoverable information without undue burden of costs. A requesting party may obtain relevant, non-privileged electronic information in a format other than PDF or hard copy only upon agreement by the parties or a showing of substantial need to the Court for such information in that format; and (2) the parties will meet and confer if a particular issue involving ESI arises and will attempt in good faith to resolve the production of ESI to avoid court intervention. (Id. at 2). Given that Defendant has produced the claim file for Plaintiff's claim in PDF format, as required by the Court's Scheduling Order, and considering that Plaintiff has not provided a showing of significant need for native production, the undersigned recommends that this Court sustain Defendant's objections and deny Plaintiff's requested relief regarding production in native format. 7. Leave to conduct one additional deposition. Plaintiff has indicated that he wants to depose the six (6) people identified by Defendant as being substantively involved in the handling of Plaintiff's claim, one Rule 30(b)(6) representative of Defendant, and the agent who sold the subject policy – a total of eight (8) depositions. This Court's Scheduling Order only permits seven (7) depositions. Defendant opposes Plaintiff's request to take the additional deposition. It does not appear that the additional deposition will present any particular burden on Defendant and Plaintiff's request is not unreasonable. As a result, the undersigned recommends that this Court grant Plaintiff leave to take one additional deposition. Finally, the parties have indicated that, depending on how long it takes for them to comply with any discovery order from this Court, the Court's Scheduling Order may need to be amended in order to accommodate any additional discovery, including depositions. The undersigned recommends that the Court direct the parties to meet and confer and to submit a proposed amended Scheduling Order to the Court. Footnotes [1] Counsel have indicated that there are additional discovery disputes involving Plaintiff's Second Set of Discovery Requests (served on March 4, 2019) and Defendant's request to issue subpoenas to a number of third parties. Because the undersigned is unclear whether these additional disputes fall within the scope of this Court's order of appointment, they have not been addressed in this Report and Recommendation. Should this Court decide that the undersigned could be of assistance in attempting to resolve these additional disputes, the undersigned is obviously more than willing to do so in a subsequent report.