In re Takata Airbag Prods. Liab. Litig.
In re Takata Airbag Prods. Liab. Litig.
2020 WL 13310564 (S.D. Fla. 2020)
March 7, 2020
Moreno, Federico A., United States District Judge
Summary
The court conducted an in camera review of the Joint Defense Agreement and concluded that it was properly characterized as a joint defense agreement and not relevant to any claim or defense. The court found that the agreement contained standard, boilerplate language and did not contain any substantive information or factual details. Additionally, the court found that the agreement contained ESI, which was important to consider when determining the relevance of the document.
Additional Decisions
IN RE: TAKATA AIRBAG PRODUCTS LIABILITY LITIGATION
THIS DOCUMENT RELATES TO ALL ACTIONS
THIS DOCUMENT RELATES TO ALL ACTIONS
Master File No. 15-02599-MD-MORENO, MDL No. 2599
United States District Court, S.D. Florida
Signed March 07, 2020
Moreno, Federico A., United States District Judge
SPECIAL MASTER'S REPORT AND RECOMMENDATION REGARDING PLAINTIFFS’ MOTION TO COMPEL PRODUCTION OF HONDA'S AND TOYOTA'S JOINT DEFENSE AGREEMENTS WITH TAKATA
*1 This matter came before the Special Master on the Plaintiffs’ Motion to Compel Production of Honda's and Toyota's Joint Defense Agreements with Takata (Attachment 1). The undersigned has reviewed the Plaintiffs’ motion, and the responses from Defendants Toyota Motor Sales, U.S.A., Inc. (“Toyota”) (Attachment 2) and American Honda Motor Co., Inc. (“Honda”) (Attachment 3). The undersigned also conducted a telephonic hearing with counsel for Plaintiffs, Honda and Toyota on January 23, 2017 (Attachment 4), and thereafter performed an in camera review of the joint defense agreements at issue in Plaintiffs’ motion. Following the ex parte review of the joint defense agreements, the undersigned conducted two ex parte hearings with counsel for Toyota to address remaining questions.
Following the ex parte hearings, counsel for Toyota withdrew its opposition to Plaintiffs’ motion to compel and elected to produce a copy of its joint defense agreement with TK Holdings, Inc. dated September 21, 2007, and with Takata Corporation dated October 1, 2007, to Plaintiffs in a supplemental discovery response. Consequently, the undersigned recommends that Plaintiffs’ motion be denied as moot with respect to Toyota.
As to Honda, the undersigned recommends that Plaintiffs’ Motion to Compel Production of the Joint Defense Agreement should be denied. As described in further detail below, Honda's Joint Defense Agreement is not relevant to any claim or defense and it falls squarely within the protection of the work product privilege.
I. PROCEDURAL HISTORY
This discovery dispute arose from the Plaintiffs’ Second Request for Production, issued to Honda in June 2015, which sought production of “[a]ll joint defense agreements between [Honda] and Takata related to the Defective Airbags or the Relevant Recalls.” See Attachment 1, Exhibit A at 4; Attachment 4 at 7.
In its October 2015 Response to the Plaintiffs’ Second Request for Production, Honda confirmed the existence of a document titled Joint Defense Privilege and Confidentiality Agreement (“Joint Defense Agreement”) that was executed between Honda and TK Holdings Inc. on April 6, 2010, and then terminated in March 2015 after Honda learned that Takata repeatedly falsified data regarding the safety of Takata's airbag inflators. See Attachment 1, Exhibit C at 1; Attachment 3 at 3 n.2. Honda objected to the Plaintiffs’ request for several reasons, including that the requested document was protected from disclosure by the attorney-client privilege, the work product doctrine, and/or the joint defense privilege. See Attachment 1, Exhibit C at 1.
Pursuant to Local Rules 7.1(a)(3) and 26.1(i), and consistent with the Court's August 27, 2016, Order (ECF No. 666), Plaintiffs met and conferred with Honda on November 23, 2015. See Attachment 1 at 1-2; Attachment 4 at 8. Honda apparently maintained its position that the Joint Defense Agreement was privileged and would not be produced. See Attachment 4 at 8. Thereafter, in December 2015, the parties exchanged emails wherein they apparently agreed to prioritize other discovery requests, but the record before the undersigned is unclear as to whether the parties reached any understanding regarding the Joint Defense Agreement at that time. Id.
*2 The dispute over the Joint Defense Agreement apparently went dormant for nearly nine months, until it was raised again during the context of a “meet and confer” conference call in September 2016. See Attachment 2 at 3; Attachment 3 at 1; Attachment 4 at 7–9.[1] According to the Plaintiffs, the issue went dormant because “the parties agreed to table any dispute over joint defense agreements in order to prioritize the production of other documents and the negotiation of search terms.” See Attachment 1 at 1; Attachment 4 at 8. Honda vigorously disputes that the parties “agreed to table any dispute regarding the joint defense agreements,” and states that the parties effectively reached an impasse in December 2015. See Attachment 2 at 2-3; Attachment 3 at 1; Attachment 4 at 14–17. Honda argues, therefore, that the Plaintiffs’ motion to compel is untimely and is barred by the Court's Briefing Scheduling Order at Docket Entry 666, which modifies Southern District of Florida Local Rule 26.1(i)(1) and requires the parties to raise discovery disputes within thirty (30) days from when “counsel determines that the discovery dispute cannot be amicably resolved through the meet and confer process.”[2] See ECF No. 666; Attachment 4 at 15-17.
II. ANALYSIS
A. In Camera Review of the Joint Defense Agreement Was Necessary and Warranted.
The undersigned conducted a detailed in camera review of the Joint Defense Agreement between Honda and TK Holdings Inc. to ascertain its relevance and the applicability of any potential privileges. Although Honda indicated in its initial brief that it was willing to provide its Joint Defense Agreement for in camera review, it nonetheless argued that such a review was not warranted because the Plaintiffs’ articulated theory of relevance was sheer speculation and “utterly implausib[le].” See Attachment 3 at 2, Attachment 4 at 24-25. The Plaintiffs, on the other hand, argued that in camera review was indispensable, and that the undersigned could not possibly make an informed decision about relevance and privilege without reviewing the content of the document. See Attachment 1 at 5; Attachment 4 at 13–14, 30, 57.
After reviewing the case law cited in the parties’ briefs, and considering the parties’ arguments during the January 23rd hearing, the undersigned concluded that in camera review was necessary and warranted for two independent reasons. First, the undersigned believes it is inappropriate to rely exclusively on Honda's characterization of the disputed document as a “joint defense agreement” without making an independent assessment. In Jeld-Wen, Inc. v. Nebula Glasslam International, Inc., then-Magistrate Judge Robin Rosenbaum concluded that the “Defendants’ characterization [of an agreement] ... does not end the inquiry,” and therefore conducted an in camera review to “make an independent determination regarding the nature of the [a]greement,” noting that such “[a]greements may serve more than one purpose and may contain more than one agreement within them.” No. 07-22326-CIV, 2008 WL 756455, at *5 (S.D. Fla. Mar. 11, 2008) (citing McNally Tunneling Corp. v. City of Evanston, No. 00-C-6979, 2001 WL 1246630, *1 (N.D. Ill. Oct. 18, 2001)). After conducting the in camera review, Jeld-Wen concluded that the disputed document served dual-purposes, containing both settlement provisions, which were determined to be discoverable, and joint-defense provisions, which were determined not to be discoverable. Id. at *6–11. Similarly, in McNally Tunneling, which Jeld-Wen cited extensively, the Court stated it was “not bound by [the parties’] characterization of the document,” and therefore conducted an in camera review of the defendant's purported joint defense agreement. McNally Tunneling Corp., 2001 WL 1246630, at *1-4 (N.D. Ill. Oct. 18, 2001). As in Jeld-Wen, McNally Tunneling concluded that the “document contains both a settlement agreement ... and a joint defense agreement,” subjecting the document to two distinct legal analyses. Id.
*3 Second, the undersigned agrees with Plaintiffs that “the relevancy of a joint defense agreement depends upon the language in the agreement.” Warren Distrib. Co. v. InBev USA LLC, No. 0701053 (RBK), 2008 WL 4371763, at *2 (D.N.J. Sept. 18, 2008). In virtually all the cases cited by the parties, the courts performed a detailed analysis of the joint defense agreements, oftentimes on a paragraph-by-paragraph basis, to ascertain their relevance as well as the applicability of any asserted privileges. See, e.g., Jeld-Wen, 2008 WL 756455, at *5; Ford Motor Co. v. Edgewood Props., 457 F.R.D. 418, 428 (D.N.J. 2009); R.F.M.A.S., Inc. v. Mimi SO, No. 06 CIV. 13114, 2008 WL 465113, at *1 (S.D.N.Y. Feb. 15, 2008); Warren Distrib. Co., 2008 WL 4371763, at *3; McNally Tunneling Corp., 2001 WL 1246630, at *1-4.
Based on the foregoing reasoning, the undersigned ordered Honda to produce the disputed joint defense agreements for in camera review after the January 23, 2017 hearing.
B. The Disputed Document Is Properly Characterized as a Joint Defense Agreement.
The undersigned has carefully reviewed the April 6, 2010, Joint Defense Agreement between Honda and TK Holdings, Inc. Paragraphs 1 through 19 of the agreement contain standard, boilerplate joint-defense language. These paragraphs establish the terms, conditions, and limitations for the sharing of privileged and confidential information between the parties. They do not contain any substantive information or factual details.
The Joint Defense Agreement also contains several “recitals,” designated with the letters A through G, which precede the nineteen numbered paragraphs referenced above. The undersigned finds that Recitals E through G also contain boilerplate language, none of which is specific to claims, defenses or facts in this case. Recitals A through D, on the other hand, are not boilerplate provisions, and instead reference facts and circumstances that are specific to the issues in this case and reflect the parties’ basis for entering into the agreement.
After conducting the independent assessment described above, the undersigned concludes that Honda has properly characterized the document as a joint defense agreement. Unlike the disputed documents in Jeld-Wen and McNally Tunneling, Honda's agreement does not serve multiple purposes; its exclusive purpose is to facilitate the sharing of privileged documents and information, in furtherance of common defense interests, without waiving privilege.
C. The Joint Defense and Confidentiality Agreement Between Honda and TK Holdings Is Not Relevant
The next step in the inquiry is to determine whether any of the paragraphs in the agreement are relevant under Federal Rule of Civil Procedure 26(b). See, e.g., Warren Distrib., 2008 WL 4371763, at *2 (“[I]n order to decide if the Agreement must be produced the Court must first determine if it is relevant. If the Court determines that the Agreement is relevant it must then decide if it is privileged ....”); Jeld-Wen, 2008 WL 756455, at *10–11 (analyzing the threshold question of the relevance of the joint defense provisions before assessing whether they were subject to the work-product privilege).
According to Rule 26(b)(1), “[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense.” “Information within this scope of discovery need not be admissible in evidence to be discoverable.” Id. “The Courts have long held that relevance for discovery purposes is much broader than relevance for trial purposes, and as such discovery should ordinarily be allowed under the concept of relevancy unless it is clear that the information sought has no possible bearing on the subject matter of the action.” Adelman v. Boy Scouts of Am., 276 F.R.D. 681, 688 (S.D. Fla. 2011) (quoting Dunkin’ Donuts, Inc. v. Mary's Donuts, Inc., No. 01-0392, 2001 WL 34079319, at *2 (S.D. Fla. Nov. 1, 2001)).
*4 The Plaintiffs argue that the Honda agreement is relevant, especially considering its timing, because it was signed “shortly before [the National Highway Traffic Safety Administration (“NHTSA”)] closed its first investigation into Honda, approximately eight (8) months before it recalled another 304,000 vehicles, and three years before Takata submitted a Defect Information Report to NHTSA.” See Attachment 1 at 1; Attachment 4 at 56-57. According to Plaintiffs, this supports their theory that the auto manufacturer defendants, including Honda, knew of widespread defects for years but minimized the problem to avoid the cost and negative publicity associated with larger, nationwide recalls. Id.
Honda disputes the relevance of the Joint Defense Agreement, also relying heavily on timing issues. It points out that the agreement “was not entered into until April 2010—a year and a half after Honda initiated the first recall of Takata airbag inflators, and months after subsequent expansions of the initial recall.” See Attachment 3 at 1 (emphasis in original); Attachment 4 at 24–25. Honda claims it reported the recalls to NHTSA and also sent NHTSA-compliant notices of the defect to thousands of customers, all prior to the joint defense agreement. See Attachment 3 at 1–2. Given that Honda entered into its Joint Defense Agreement with Takata after it had processed multiple recalls, Honda argues there is a fundamental logical flaw in the Plaintiffs’ argument that the agreement is relevant to show the timing and extent of Honda's knowledge. See Attachment 3 at 1; Attachment 4 at 24–25.
After considering the parties’ relevance arguments, and performing the in camera review described in Section II.B., supra, the undersigned concludes that the April 6, 2010, Joint Defense Agreement between Honda and TK Holdings, Inc. is not relevant to any claim or defense in this matter, even under the extremely broad discovery standards set forth in Rule 26. In reaching this conclusion, the undersigned is less concerned about the timing of the agreement, and more concerned about its content, finding persuasive the rationale in Warren Distributing and Ford Motor Company.
In Warren Distributing, the plaintiff moved to compel the production of a joint defense privilege and confidentiality agreement between a defendant and the parent company of a co-defendant. 2008 WL 4371763, at *1. After conducting an in camera review of the agreement, the court denied the plaintiff's motion to compel on relevance grounds, explaining that “the Agreement does not contain any substantive information” and that “[t]he Agreement merely contains language that the parties typically include in joint defense agreements to protect from discovery privileged information revealed to a third party.” Id. at *3.[3] The court further noted that the only aspects of the agreement that were arguably relevant, including the names of the parties and the date of the agreement, were already known to the plaintiff. Id.
*5 Similarly, in Ford Motor Company, the court analyzed whether a joint defense agreement between the plaintiff and other parties was discoverable by the defendant. 257 F.R.D. at 428. Relying heavily on the logic from Warren Distributing, Ford Motor Company concluded that the joint defense agreement was not discoverable because it “contain[ed] standard and boilerplate language that ... is not relevant to any claim or defense.” Id. The court did, however, order the plaintiff to disclose the names of the parties to the joint defense agreement because the defendant “ha[d] a right to know which parties are maintaining a joint defense against it.”
As was the case in Warren Distributing and Ford Motor Company, most of the paragraphs in Honda's Joint Defense and Confidentiality Agreement with TK Holdings contain standard, boilerplate language “that the parties typically include in joint defense agreements to protect from discovery privileged information revealed to a third party.” Warren Distrib. Co., 2008 WL 4371763, at *3. As noted above, the nineteen numbered paragraphs and the introductory recitals designated with the letters (E) through (G) do not contain any substantive information, factual details or other case-specific information that is relevant to the Plaintiffs’ claims and defenses, and are therefore irrelevant under Rule 26(b)(1). Consequently, these paragraphs in Honda's Joint Defense Agreement are distinguishable from the joint defense paragraphs in Jeld-Wen, which were deemed relevant (but nonetheless protected by the work-product doctrine) because they specifically “touch[ed] on the Defendants’ trial strategies.” 2008 WL 756455, at *10. Moreover, to the extent that the mere existence of the agreement, the names of the parties to the agreement, or the date of the agreement is relevant, that information was already disclosed in Honda's Response to Plaintiffs’ Second Request for Production. See Attachment 1, Exhibit C.
The remaining portions of Honda's Joint Defense Agreement—namely, the introductory recitals designated with the letters A through D—do not merely contain boilerplate language; instead, they contain language specific to the issues in this case. Nonetheless, the undersigned concludes that these recitals are not relevant to prove “what ... Honda knew about the defect and when they knew it,” see Attachment 1 at 5, as argued by the Plaintiff, or to any claim or defense in the case. As noted by Honda, the Joint Defense Agreement was executed in April 2010, long after Honda already publicly acknowledged the defect by notifying NHTSA, initiating multiple recalls, and sending NHTSA-compliant notices to its customers. Thus, Honda's knowledge was already well-established at that time. More importantly, recitals A through D do not, as the Plaintiffs theorize, contain any language that tends to prove that Honda knew about the defect any sooner or believed it was more widespread than what was publicly acknowledged. On the contrary, these recitals largely just recite information about the defect that was already in the public domain.
Plaintiffs have cited only three cases that allegedly support the proposition that joint defense agreements are discoverable. The first cited case, In re: San Juan DuPont Plaza Hotel Fire Litigation, makes a passing reference to an earlier order wherein the court disclosed the defendants’ joint defense agreement. No. MDL-721, 1989 WL 996278, at *2 (D.P.R. Sept. 14, 1989). Based on available court records, it is impossible to ascertain the court's rationale for its decision.[4] Similarly, in the second cited case, Oasis Research, LLC v. EMC Corporation, the court referenced an earlier order wherein it required the defendants to produce their joint defense agreement. No. 4:10-CV-435, 2015 WL 5318119 (E.D. Tex. Sept. 11, 2015). Although not cited or provided by the parties, the undersigned located a copy of the earlier opinion and found that the court provided no rationale for its decision. Oasis Research, LLC v. EMC Corp., No. 4:10-CV-435 (E.D. Tex. July 22, 2015) (ECF No. 898). Finally, in Shaw Group, Inc. v. Zurich American Insurance Company, the court ordered disclosure of a defendant's joint defense agreement, but, in that case, the defendant did not argue that the agreement was irrelevant or protected by the work product doctrine. No. CIV. A. 12-257-JJB-RLB, 2014 WL 1784051, at *14 (M.D. La. May 5, 2014). Instead, the defendant only argued that it was protected by the attorney-client privilege, and the defendant was permitted to redact the agreement accordingly. Id. The undersigned does not find these cases persuasive and, in any event, they appear to be against the weight of authority nationally, as evidenced by the other cases cited herein.
D. The Joint Defense and Confidentiality Agreement Between Honda and TK Holdings Is Protected by the Work Product Doctrine.
*6 The undersigned further concludes that the Joint Defense Agreement between Honda and TK Holdings is protected by the work product privilege, as it applies through the joint defense or common interest doctrine. Federal Rule of Civil Procedure 26(b)(3) codifies the work-product privilege, stating that “[o]rdinarily, a party may not discover 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).” The privilege is qualified, however, such that a party can obtain work product if it “shows that it has substantial need for the materials to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by other means.” Id. If, however, the work product reveals the “mental impressions, conclusions, opinions, or legal theories of a party's attorney ... concerning the litigation,” then the court must protect it from disclosure. Id. See also United Kingdom v. United States, 238 F.3d 1312, 1322 (11th Cir. 2001) (noting that opinion work product is “almost always protected from disclosure”) (citations omitted).
Based on the in camera review, the undersigned finds that Honda's Joint Defense Agreement was clearly prepared in anticipation of specified types of litigation and was executed by the parties’ respective attorneys. Moreover, although much of the agreement contains boilerplate language, as noted above, it nonetheless qualifies as opinion work product insofar as it reflects the attorneys’ collective legal opinions and conclusions regarding the manner and method by which privileged information should be exchanged, and the conditions and limitations that should govern the parties’ use of such information. Likewise, recitals A through D reflect the parties’ reasons for entering into the Joint Defense Agreement, and therefore necessarily reflect the mental impressions and opinions of the parties’ counsel. See R.F.M.A.S., 2008 WL 465113, at *1 (collecting cases that support its holding that “[a]s a general matter, a joint-defense agreement fits within the broad definition of work product, which embraces documents prepared because of the prospect of litigation”).
The undersigned also finds that the Joint Defense Agreement between Honda and TK Holdings contains ample evidence that the parties had common defense interests with respect to the specified litigation at the moment the agreement was executed. Recitals A through E clearly explain and establish the common interests between Honda and TK Holdings, thereby implicating the joint defense doctrine. See Fojtasek v. NCL (Bahamas) Ltd., 262 F.R.D. 650, 654 (S.D. Fla. 2009) (citations omitted) (“the joint defense doctrine is an extension of the work product doctrine and allows parties facing a common litigation opponent to exchange privileged communications and attorney work product in order to prepare a common defense without waiving either privilege.”); Warren Distrib., 2008 WL 4371763, at *2 (holding that in order for the joint defense or “community of interest” privilege to be applicable “all members of the community must share a common legal interest in the shared communication”); Jeld-Wen, 2008 WL 756455, at *11 (quoting Visual Scene, Inc. v. Pilkington Bros., PLC, 508 So. 2d 437 (Fla. 3d DCA 1987)) (“[u]nder the common interest doctrine, ‘litigants who share unified interests [may] exchange ... privileged information to adequately prepare their cases without losing the protection afforded by the privilege.’ ”).
Finally, even assuming arguendo that certain portions of the Joint Defense Agreement qualify as fact work product, not opinion work product, Plaintiffs have failed to show “substantial need” for the materials or that they cannot obtain equivalent information without “undue hardship.” As in most cases involving alleged corporate misconduct, if the Plaintiffs seek to discover the timing and extent of Honda's knowledge of the defect, they can presumably do so with less intrusive methods of discovery, including depositions of Honda's current and former employees, and analysis of the documentary evidence that the parties are exchanging in discovery. Given that discovery in this matter is ongoing, coupled with Plaintiffs’ claim that they have already unearthed substantial evidence that the automotive defendants, including Honda, were aware of the defects and not merely victims of Takata's misrepresentations, see e.g. ECF No. 1414 at 3-4, the undersigned concludes that Plaintiffs should not be permitted to access documents otherwise protected by the work-product doctrine.
III. CONCLUSION
*7 For the foregoing reasons, the undersigned Special Master hereby recommends that the District Court should enter an Order:
A. DENYING AS MOOT Plaintiffs’ Motion to Compel the Production of the Joint Defense Agreements between Toyota and Takata Holdings, Inc.
B. DENYING the Plaintiffs’ Motion to Compel Honda's Joint Defense and Confidentiality Agreement with TK Holdings.
PURSUANT TO THE COURT'S ORDER OF APPOINTMENT OF SPECIAL MASTER [E.C.F. No. 453], OBJECTIONS TO THE SPECIAL MASTER'S REPORT AND RECOMMENDATION MUST BE FILED WITHIN 5 DAYS OF THE FILING OF THE REPORT, WITH A RESPONSE DUE BY OPPOSING COUNSEL WITHIN 5 DAYS OF THE FILING OF OBJECTIONS.
Respectfully submitted this 7th day of March, 2017.
Footnotes
Honda's Response (Attachment 3) adopted the timeliness arguments that were set forth in Toyota's Response (Attachment 2).
The parties continued to vigorously debate the timeliness of the Plaintiffs’ motion during the January 23, 2017 hearing. See Attachment 4 at 7–18. Given that the timeliness dispute apparently hinges on emails, “meet and confer” telephone calls, and the parties’ recollection and interpretation of these communications, most of which are outside the record, the undersigned will not decide this motion on timeliness grounds and will instead address the substantive issues of relevance and privilege.
Warren Distributing cited several other decisions that addressed the discoverability of joint defense agreements, and that “doubted their relevance to issues in dispute and ... barred their production.” Id. at *3 (citing Fort v. Leonard, No. 7:05-1028-HFF-WMC, 2006 WL 2708321, at *3 (D.S.C. Sept. 20, 2006) (finding that the terms of a written or oral joint defense agreement were not relevant or discoverable and that communications amongst counsel were privileged under the common interest rule); Broessel v. Triad Guar. Ins. Corp., 238 F.R.D. 215, 217 (W.D.Ky. 2006) (holding that joint defense agreements requested by the plaintiff did not have to be produced because they were not relevant to the claim or defense of any party); United States v. Int'l Longshoremen's Ass'n, No. 05-3212(ILG)(VVP), 2006 WL 2014093, at *1 (E.D.N.Y. July 18, 2006) (stating that “information concerning joint defense agreements is sensitive, and ... disclosure of such information should not be lightly ordered” and that “the relevance of the information should be well-established before compelling its disclosure.”).
Although not provided by Plaintiffs, the undersigned attempted to find a copy of the earlier order, docket entry 499, wherein the court ordered disclosure of the joint defense agreement. Apparently due to its age, that document is unavailable online via CM-ECF.