U.S. ex rel. Rigsby v. State Farm Fire & Cas. Co.
U.S. ex rel. Rigsby v. State Farm Fire & Cas. Co.
2020 WL 13240061 (S.D. Miss. 2020)
December 22, 2020
Ozerden, Halil Suleyman, United States District Judge
Summary
Counter-Defendants Cori Rigsby and Kerri Rigsby sought review of a Magistrate Judge's Order granting in part and denying in part Counter-Claimant State Farm Fire and Casualty Company's Motion for Protective Order from the Rigsbys' Rule 30(b)(6) Deposition Notice. The Court denied the Rigsbys' Motion and affirmed the Magistrate Judge's Order, finding that State Farm's document shredding practices were not relevant to the Rigsbys' motives or knowledge at the time of the data dump.
Additional Decisions
UNITED STATES OF AMERICA ex rel. CORI RIGSBY and KERRI RIGSBY RELATORS/COUNTER-DEFENDANTS
v.
STATE FARM FIRE AND CASUALTY COMPANY DEFENDANT/COUNTER-CLAIMANT
v.
STATE FARM FIRE AND CASUALTY COMPANY DEFENDANT/COUNTER-CLAIMANT
Civil No. 1:06cv433-HSO-RHW
United States District Court, S.D. Mississippi, Southern Division
Filed December 22, 2020
Counsel
Derek Yoshio Sugimura, Pro Hac Vice, Weisbrod, Matteis & Copley, PLLC, Washington, DC, for Relator/Counter-Defendant Cori Rigsby.August J. Matteis, Jr. - PHV, Pro Hac Vice, Jonathan H. Silberman, Pro Hac Vice, Pamira Shah Matteis, Pro Hac Vice, Timothy M. Belknap, Pro Hac Vice, William E. Copley, Pro Hac Vice, Weisbrod, Matteis & Copley, PLLC, Washington, DC, Cecil Maison Heidelberg, Heidelberg Patterson Welch, PLLC, Ridgeland, MS, Virginia (Ginny) Y. Deliman, Taylor, Wellons, Politz & Duhe, LLC, Madison, MS, for Relators/Counter-Defendants.
Robert C. Galloway, Michael Clark McCabe, Jr., Butler Snow LLP, Gulfport, MS, Amanda B. Barbour, Benjamin McRae Watson, Emerson Barney Robinson, III, Phillip B. Abernethy, J. Kennedy Turner, III, Butler Snow LLP, Ridgeland, MS, Douglas W. Baruch, Pro Hac Vice, Jennifer M. Wollenberg, Pro Hac Vice, Morgan, Lewis & Bockius, LLP, Washington, DC, Mathea K. E. Bulander, Pro Hac Vice, Redgrave, LLP, Minneapolis, MN, Michael B. Beers, Pro Hac Vice, Butler Snow, Montgomery, AL, Thomas J. Frederick, Pro Hac Vice, Law Offices of Thomas J. Frederick, Naperville, IL, for Defendant/Counter-Claimant.
Ozerden, Halil Suleyman, United States District Judge
ORDER DENYING COUNTER-DEFENDANTS CORI RIGSBY AND KERRI RIGSBY'S MOTION [1620] FOR REVIEW OF MAGISTRATE JUDGE'S ORDER [1613]
*1 BEFORE THE COURT is Counter-Defendants Cori Rigsby and Kerri Rigsby's Motion [1620] for Review of Magistrate Judge's Order [1613], which granted in part and denied in part Counter-Claimant State Farm Fire and Casualty Company's Motion [1572] for Protective Order from the Rigsbys' Rule 30(b)(6) Deposition Notice [1512]. State Farm has filed a Response [1624] in opposition to the Motion [1620], and the Rigsbys did not file a reply. After due consideration of the Motion, related pleadings, the record, and relevant legal authority, the Court is of the opinion that the Rigsbys' Motion [1620] should be denied and that the Magistrate Judge's Order should be affirmed.
I. BACKGROUND
Relators Cori Rigsby and Kerri Rigsby (the “Rigsbys”) filed an initial Complaint [2] in this case on April 26, 2006, pursuant to the False Claims Act (“FCA”), 31 U.S.C. §§ 3729, et seq., followed by an Amended Complaint [16] and a Second Amended Complaint [1623]. On April 8, 2008, State Farm filed its Answer and Counterclaim [95], which has been amended three times. State Farm's Third Amended Counterclaim [1232] is now its operative pleading and alleges that the Rigsbys violated the Computer Fraud and Abuse Act, 18 U.S.C. § 1030, et seq. (“CFAA”), namely 18 U.S.C. §§ 1030(a)(2) (Count I) and 1030(a)(4) (Count II); committed common law fraud (Count III); violated the Mississippi Uniform Trade Secrets Act (Count IV); committed breach of contract (Count V); breached the duty of loyalty (Count VI); and engaged in a civil conspiracy (Count VII). See 3rd Am. Countercl. [1232] at 38-66. The Court has bifurcated the Rigsbys' FCA claims from State Farm's Counterclaims. See, e.g., Order [363] at 1-2.
During the course of discovery on State Farm's Counterclaims, the Rigsbys filed a Federal Rule of Civil Procedure 30(b)(6) Notice of Deposition of State Farm. See Not. [1512]. The Notice identified 47 topics for examination. See id. at 2-7. After “the parties reached an agreement as to the vast majority” of these topics, Mem [1573] at 2, the Rigsbys subsequently served a Revised Notice [1568] outlining 17 topics for inquiry, see Rev. Notice [1568] at 3-5.
State Farm responded with a Motion [1572] for Protective Order with respect to Topics 1, 2, 9, 10, 11, 14, 15, and 17 in the Revised Notice [1568]. See Mot. [1572] at 2. The parties were able to reach an agreement as to Topics 9, 10, and 11, leaving a dispute as to Topics 1, 2, 14, 15, and 17. See Rebuttal [1587] at 1; see also Rev. Notice [1568] at 3-5.
The Magistrate Judge granted State Farm's Motion [1572] for Protective Order in part and denied it in part. See Order [1613] at 1-5. The only issue presented in the current Motion [1620] for Review is the Magistrate Judge's resolution of Topic 15, which requested that State Farm designate an individual knowledgeable to testify regarding “State Farm's practice of shredding documents in its Gulfport and Biloxi offices in 2005 and 2006.” Rev. Notice [1568] at 4.
The Magistrate Judge determined that “State Farm's document shredding practices are not material to the issue of whether the Rigsbys improperly took or disclosed State Farm's confidential, proprietary, and trade secret information.” Order [1613] at 4. The Magistrate Judge concluded that “[t]his topic of inquiry appears to be a fishing expedition based on the Rigsbys' speculative suspicions that State Farm was doing something improper because they witnessed shredder trucks at State Farm's Biloxi office in 2006.” Id. The Magistrate Judge noted that although such evidence might be relevant to the Rigsbys' FCA claim, it was “not relevant or discoverable as to State Farm's counterclaim.” Id.
*2 The Rigsbys timely filed a Motion [1620] for Review of the Magistrate Judge's Order [1613] seeking review only as to Topic 15. See Mot. [1620] at 1, 3-4. They assert that the Magistrate Judge's Order [1613] improperly contradicted this Court's prior rulings concerning the Rigsbys' motives, and they ask the Court to modify or set aside this portion of the Order [1613]. See Fed. R. Civ. P. 72(a); see also Mot. [1620] at 3-4. State Farm has filed a Response [1624] in opposition, contending that no conflict exists and pointing out that the Rigsbys make no arguments with respect to the Magistrate Judge's other, independent ground for striking Topic 15, namely that the Rigsbys lacked any factual basis to inquire into State Farm's document retention practices and that they were engaging in an improper “fishing expedition.” See Resp. [1624] at 1-2, 5-9.
II. DISCUSSION
A. Relevant legal standards
A district judge must consider timely objections to a magistrate judge's order on a non-dispositive matter, and modify or set aside any part of the order that is “clearly erroneous or is contrary to law.” 28 U.S.C. § 636(b)(1)(A); Fed. R. Civ. P. 72(a); see also L.U. Civ. R. 72(a)(1)(B). An order is “clearly erroneous” if the court “is left with the definite and firm conviction that a mistake has been committed.” Anderson v. City of Bessemer City, 470 U.S. 564, 573 (1985) (quotation omitted); see also Alphonse v. Arch Bay Holdings, L.L.C., 618 F. App'x 765, 768 (5th Cir. 2015).
Pursuant to Federal Rule of Civil Procedure 26(b)(1), “[p]arties 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 ....” Fed. R. Civ. P. 26(b)(1). Under Rule 30(b)(6), the entity named in the notice of deposition “must designate one or more officers, directors, or managing agents, or designate other persons who consent to testify on its behalf; and it may set out the matters on which each person designated will testify.” Fed. R. Civ. P. 30(b)(6). “The persons designated must testify about information known or reasonably available to the organization.” Id.
A party from whom discovery is sought may move for a protective order, and [t]he court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including one or more of the following:
(A) forbidding the disclosure or discovery; [and]
* * *
(D) forbidding inquiry into certain matters, or limiting the scope of disclosure or discovery to certain matters ....
Fed. R. Civ. P. 26(c)(1)(A), (D).
The United States Supreme Court “has more than once declared that the deposition-discovery rules are to be accorded a broad and liberal treatment to effect their purpose of adequately informing the litigants in civil trials,” but it has also recognized that the requirement that the material sought be “relevant” should be firmly applied. Herbert v. Lando, 441 U.S. 153, 177 (1979). “[T]he district courts should not neglect their power to restrict discovery where justice requires protection for a party or person from annoyance, embarrassment, oppression, or undue burden or expense.” Id. (quotations omitted).
B. Analysis
The question presented is whether Topic 15 in the Revised Notice [1568], which references “State Farm's practice of shredding documents in its Gulfport and Biloxi offices in 2005 and 2006,” Rev. Notice [1568] at 4, is relevant to the claims advanced in State Farm's Third Amended Counterclaim [1232]. The Rigsbys take the position that the Magistrate Judge's Order [1613] contradicted the Court's prior rulings concerning the Rigsbys' motives. See Mot. [1620] at 3-4. According to them, “[t]his Court has ruled at least three times that [their] motives for accessing and copying [State Farm's] documents are both material and disputed facts in this case.” Mot. [1620] at 1.
*3 Relators misapprehend the Court's prior rulings. For example, in the Court's April 10, 2020, Order [1614], it was considering State Farm's Motion [1563] for Partial Summary Judgment on the Rigsbys' Fifth Affirmative Defense (Unclean Hands). See Order [1614] at 1. As the Court explained, unclean hands is an equitable doctrine providing that one who comes to equity must come with clean hands, and the inequitable conduct at issue must bear a direct relationship to the proceeding it which it is being invoked. See id. at 5 (citing Claimant ID 100235033 v. BP Expl. & Prod., Inc., 941 F.3d 801, 811 (5th Cir. 2019); Estate of Nelson v. Nelson, 266 So. 3d 1008, 1018 (Miss. Ct. App. 2018), reh'g denied (Dec. 4, 2018), cert. denied sub nom. Perkins v. Nelson, 267 So. 3d 278 (Miss. 2019)).
The Court found that whether State Farm was entitled to summary judgment on the Rigsbys' unclean hands defense appeared to depend at least in part on the Rigsby's intentions or motivations for obtaining the documents from State Farm's computers. See Order [1614] at 6. The factual question precluding summary judgment was whether the Rigsbys' motivation was to further their and their attorneys' own interests in pursuing policyholder lawsuits, or to uncover and report fraud to the Government. See id.
The issue before the Court was not whether the Rigsbys were conducting a “data dump” because they feared documents may be shredded before they could retrieve them, as the Rigsbys now assert. That concern could have been present whether the Rigsbys were trying to assist with policyholder lawsuits or were instead attempting to uncover and report fraud to the Government. Whether or when State Farm was shredding documents goes more to the timing the Rigsbys' actions and would not be relevant to the inquiry of what the Relators' actual motivation was for procuring the documents from State Farm. Therefore, Relators' dependence upon the Court's prior Orders regarding their intent or motivation is not persuasive.
The Rigsbys suggest that their “data dump” of State Farm's documents was motivated at least in part by their observing shredder trucks outside of State Farm's office in Biloxi, Mississippi, and Topic 15 relates to what State Farm's actual shredding practices were. However, the Rigsbys' motives could only be based upon what they actually knew or personally observed at the time, while Topic 15 seeks to prove the truth of their suspicions about State Farm's document shredding after the fact. This is not relevant to what the Rigsbys actually knew, or what their motives were, at the time they decided to conduct the data dump.
Proving State Farm's actual document retention policies, of which the Rigsbys knew nothing at the time, has no relevance to what they believed or suspected might be occurring at the time they decided to conduct the data dump. Nor does it have any bearing on whether the Rigsbys' motive for downloading State Farm's information was based upon their desire to further other litigation against State Farm or whether it was to uncover fraud. Thus, the Magistrate Judge's decision with respect to Topic 15 did not contradict the Court's prior Orders [1217], [1607], [1614].
Considering the record as a whole, the Rigsbys have not shown that any part of the Magistrate Judge's Order was clearly erroneous or contrary to law. 28 U.S.C. § 636(b)(1)(A); Fed. R. Civ. P. 72(a); see also L.U. Civ. R. 72(a)(1)(B). The Court agrees with the Magistrate Judge's assessment that State Farm's document shredding practices are not relevant to whether or why the Rigsbys took or disclosed State Farm's confidential, proprietary, and trade secret information and that this topic appears to be a fishing expedition with respect to State Farm's Counterclaim. See Order [1613] at 4. Having thoroughly considered the Magistrate Judge's Order [1613] and the parties' briefs, the Court is not “left with the definite and firm conviction that a mistake has been committed.” Anderson, 470 U.S. at 573. The Rigsbys' Motion [1620] for Review should be denied.
III. CONCLUSION
*4 IT IS, THEREFORE, ORDERED AND ADJUDGED that, Counter-Defendants Cori Rigsby and Kerri Rigsby's Motion [1620] for Review of Magistrate Judge's Order [1613] is DENIED, and the Magistrate Judge's Order [1613] Granting in Part and Denying in Part Counter-Claimant State Farm Fire and Casualty Company's Motion [1572] for Protective Order is AFFIRMED.
SO ORDERED AND ADJUDGED, this the 22nd day of December, 2020.