St. Paul Guardian Ins. Co. v. Walsh Constr. Co.
St. Paul Guardian Ins. Co. v. Walsh Constr. Co.
2022 WL 1642311 (N.D. Ill. 2022)
March 30, 2022
Norgle, Charles Ronald, United States District Judge
Summary
The court found that Plaintiffs had failed to provide an adequate privilege log to Defendant, which was necessary to assess the privilege claims. As a result, the court held that Plaintiffs had forfeited the issue and overruled their objections to the Memorandum Opinion and Order, allowing the Electronically Stored Information to be withheld or produced as appropriate.
Additional Decisions
ST. PAUL GUARDIAN INSURANCE COMPANY, THE CHARTER OAK FIRE INSURANCE COMPANY, and TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA, Plaintiffs,
v.
WALSH CONSTRUCTION COMPANY, Defendant
v.
WALSH CONSTRUCTION COMPANY, Defendant
Case No. 1:15-cv-10324
United States District Court, N.D. Illinois, Eastern Division
Filed: March 30, 2022
Counsel
Roderick T. Dunne, David Benjamin Silvers, Devin Michael Lindsay, Howard J. Fishman, Paul Theobald Parker, Karbal, Cohen, Economou, Silk & Dunne, LLC, Chicago, IL, for Plaintiff St. Paul Guardian Insurance Company.David Benjamin Silvers, Devin Michael Lindsay, Howard J. Fishman, Roderick T. Dunne, Karbal, Cohen, Economou, Silk & Dunne, LLC, Chicago, IL, for Plaintiffs The Charter Oak Fire Insurance Company, Travelers Property Casualty Company of America.
Carrie Ellen Davenport, David Benjamin Goodman, Kalli Kling Nies, Goodman Law Group, Chicago, IL, Michelle Hemphill Ozuruigbo, City of Evanston, Evanston, IL, for Defendant.
Norgle, Charles Ronald, United States District Judge
ORDER
*1 Plaintiffs’ objections to the Magistrate Judge's October 12, 2021 ruling on Defendant's motion to compel [135] are overruled. The Court affirms the October 12, 2021 order [128] [129], but does not rule on Defendant's request for sanctions at this time. See Dkt. 145 at 13-14. Instead, Defendant is granted leave to file a separate motion for sanctions by April 11, 2022. Plaintiffs’ unopposed motion for leave to file a response to Defendant's request for sanctions [146] is granted. Plaintiffs’ response shall be filed by May 2, 2022. Defendant may file a reply by May 16, 2022. All pretrial issues, including Defendant's anticipated motion for sanctions, remain with the Magistrate Judge pursuant to the referral order. Dkt. 120.
STATEMENT
Plaintiffs are three insurance companies that bring a declaratory judgment action against Walsh Construction Company. They seek in part a ruling that there is no coverage for Walsh under any policy for the final judgment Walsh secured against an insured third party. Walsh filed a motion to compel production of documents on February 19, 2021. The case was then referred to the assigned Magistrate Judge for all pretrial issues. After the Magistrate Judge conducted a limited in camera review of certain claim notes, he granted the motion to compel in part and entered a Memorandum Opinion and Order (the “Memorandum Opinion”). Plaintiffs then objected to the findings of the Magistrate Judge, asking this Court to modify or set aside portions of the ruling and deny the motion to compel. For the following reasons, Plaintiff's objections are overruled and the Memorandum Opinion is affirmed in full.
When a party timely objects to a Magistrate Judge's written order stating a decision in a nondispositive matter, the Court must “modify or set aside any part of the order that is clearly erroneous or is contrary to law.” Fed. R. Civ. P. 72(a). “The clear error standard means that the district court can overturn the magistrate judge's ruling only if the district court is left with the definite and firm conviction that a mistake has been made.” Weeks v. Samsung Heavy Indus. Co., Ltd., 126 F.3d. 926, 943 (7th Cir. 1997). “Clear error” in the Seventh Circuit is error that “strikes us as wrong with the force of a 5 week old, unrefrigerated, dead fish.” S Indus., Inc. v. Centra 2000, Inc., 249 F.3d 625, 627 (7th Cir. 2001). And “[w]here the non-dispositive matter is a discovery matter, Rule 72 requires a district court to employ an abuse of discretion standard of review.” Desmond as Trustee for the Estate of Yellow CAB Affiliation, Inc. v. Taxi Affiliation Services, LLC, Case No. 17 cv 8326, 2021 WL 4498910, at *1 (N.D. Ill. June 1, 2021). “Magistrate judges have extremely broad discretion in controlling discovery when matters are referred to them for discovery supervision.” Id. (cleaned up).
The Magistrate Judge agreed with Defendant that Plaintiffs overwhelmingly relied on generic and boilerplate language to support their claims of privilege. See Smith-Brown v. Ulta Beauty, Inc., No. 18 CV 610, 2019 WL 2644243, at *1 (N.D. Ill. June 27, 2019) (finding privilege log descriptions “problematic” when limited to words such as “in anticipation of litigation” or “reflects legal advice”). The Magistrate Judge held that because Plaintiffs failed to respond to Defendant's form-based objections, Plaintiffs had forfeited the issue. Dkt. 129 (Memorandum Opinion) at 5-6 (citing John K. MacIver Inst. for Pub. Pol'y, Inc. v. Evers, 994 F.3d 602, 614 (7th Cir. 2021)). However, the Magistrate Judge did find that some log entries established the applicability of privilege, including entries that reflected protected work product. Memorandum Opinion at 13-14 (for example, “Draft Complaint for Declaratory Judgment prepared by external coverage counsel”). Further, the Magistrate Judge conducted a limited in camera review of certain claim notes, concluding that some of them should be withheld. Id. at 16-18.
*2 Plaintiffs argue that the Magistrate Judge's ruling was clearly erroneous, contrary to law, and “overly broad.” Dkt. 136 at 2. Specifically, they argue that the Magistrate Judge did not make a substantive legal determination that any of the specific documents at issue failed to establish privilege, emphasizing that a cursory review of the subject documents would have revealed that the withheld documents were in fact privileged. Dkt. 136 at 2 (“Insurers will suffer insurmountable prejudice in this action if this court does not intervene.”). In support of their argument, Plaintiffs offer in-depth descriptions of seven[1] allegedly “representative examples” to show that the hundreds of documents ordered by the Magistrate Judge to be produced are privileged. Dkt. 136 at 4. But, as discussed further below, even accepting that the communications were privileged or protected work product, that does not mean that the Magistrate Judge abused his discretion by holding that Plaintiffs forfeited the issue because the privilege logs were inadequate under Rule 26(b)(5). Fed. R. Civ. P. 26(b)(5)(A)(ii) (parties withholding discoverable information by asserting privilege must describe the documents or communications in a manner that “will enable other parties to assess the claim.”).
First, the Court notes that Plaintiffs already had ample opportunity to provide an adequate privilege log to Defendant. Plaintiffs first received Defendant's written discovery requests in February 2020. Plaintiffs then delivered responses, with no privilege log, in July 2020. They further produced an eight-page log in August 2020. Walsh informed Plaintiffs of alleged defects in this log, but when Plaintiffs supplemented their production in September 2020, they again produced redacted documents with no privilege log. Plaintiffs failed to provide a supplemental log by January 2021, so Defendant followed up and provided Plaintiffs a detailed description of the previous log's alleged inadequacies. When Plaintiffs did produce a supplemental log in February 2021, Defendant asserted that the log failed to cure the defects and filed the motion to compel. The Magistrate Judge properly admonished Plaintiffs that their “inexplicable months-long” delay was “unacceptable.” Memorandum Opinion at 6. Plaintiffs still offer no explanation for their delay.
Most importantly, Plaintiffs had the opportunity to respond to Defendant's argument that most of the descriptions in Plaintiffs’ privilege logs used boilerplate, generic language that failed to provide adequate information to evaluate the assertions of privilege. See Surgery Ctr. at 900 N. Mich. Ave., LLC v. Am. Physicians Assurance Corp., Inc., 317 F.R.D. 620, 632 (N.D. Ill. 2016) (privilege log entries must describe the withheld documents “in a manner that allows the reader to assess the claim.”). Indeed, Plaintiffs were given an extension of time to respond to Defendant's arguments, but Plaintiffs’ response brief did not address Defendant's form-based arguments at all. Dkt. 110. Instead, Plaintiffs spent their response arguing that (1) the court should strike Walsh's motion for failure to meet and confer with Plaintiffs, (2) communications with in-house attorneys are protected, (3) Defendant's interpretation of the concept of a control group was wrong, and (4) the Court should conduct an in camera review. Id. at 4-10. The Magistrate Judge properly found that the boilerplate language used in many of the privilege log entries, including “based on confidential communication” and “re: legal advice and strategy,” was “entirely conclusory.” Memorandum Opinion at 9-10; id. at 11 (the phrase “regarding coverage,” which was used in at least 500 log entries, “simply does not help the court understand the subject matter of each withheld document or determine with particularity the applicability of each privilege claim.”). Accordingly, the Magistrate Judge did not commit clear error or abuse his discretion when he held that Plaintiffs forfeited the issue by failing to even try to rebut Walsh's argument. John K. MacIver Inst. For Pub. Pol'y, Inc. v. Evers, 994 F.3d 602, 614 (7th Cir. 2021) (“A party who does not sufficiently develop an issue or argument forfeits it.”); Allen v. City of Chicago, 865 F.3d 936, 943 (7th Cir. 2017) (“It is well settled that arguments presented for the first time on appeal are waived.” (cleaned up)).
*3 Plaintiffs insist that the Magistrate Judge erred by not conducting a “full in camera review” of all documents. Dkt. 136 at 10. The Court disagrees. “Whether to conduct an in camera review to assess privilege claims is within the court's discretion.” Wier v. United Airlines, Inc., No. 19 CV 7000, 2021 WL 1517975, at *3 (N.D. Ill. Apr. 16, 2021). Plaintiffs submitted a months-late privilege log that failed to provide information required to assess the privilege claims and made no effort to explain their failure or counter Defendant's form-based objections to the log. Though Plaintiffs state that the “sheer volume of privilege assertions and the nature of their content made extensive descriptions difficult,” that does not excuse Plaintiffs’ failure to comply with Rule 26(b)(5)(A)(ii). Dkt. 136 at 11. And Plaintiffs did not show that evidence proving privilege could only be presented by revealing information that was sought to be protected. United States v. Tratner, 511 F.2d 248, 252 (7th Cir. 1975). “An in camera inspection is not a substitute for compliance with the Federal Rules of Civil Procedure, nor is it a convenient vehicle that allows a shifting of the burden of discovery from the parties and their lawyers to the court under the circumstances that now exist.” United States ex rel. McGee v. IBM Corp., No. 11 C 3482, 2017 WL 1232616, at *3 (N.D. Ill. Apr. 4, 2017). Accordingly, the Magistrate Judge's findings were not clear error nor an abuse of discretion.
Plaintiffs argue that the Magistrate Judge's ruling is internally inconsistent and contradictory. According to Plaintiffs, the ruling allows Plaintiffs to withhold certain documents—including those described in the privilege logs as “Draft pleading relative to pending lawsuit ...” and “Request for BI Policy comment ...”—while compelling the production of other documents that contain communications fitting those same categories or descriptions. Dkt. 136 at 8-9. The argument is unpersuasive, as it focuses on the actual content of the communications rather than the descriptions provided in the privilege logs. The Magistrate Judge's ruling was based primarily on the insufficiency of the log entry descriptions. The Magistrate Judge found that most log entries did not provide enough information to assess the claim of privilege, while certain other entries did. See Memorandum Opinion at 14 (“a handful of additional log entries include just enough information to provide the needed context—when combined with other information in the logs—from which the court can conclude that the work product doctrine applies.”). Plaintiffs’ failure to provide more accurate or detailed descriptions is of their own doing, and any resulting “inconsistency” in the substance of the production rests with Plaintiffs and not the Magistrate Judge.
Lastly, Plaintiffs contend that the Magistrate Judge ruled inconsistently by both (1) granting their motion for a protective order, see dkt. 114, 131, and granting in part Defendant's motion to compel. But the rulings are not inconsistent. In granting the motion for protective order, the court applied a balancing test and concluded that the information likely to be obtained from the deposition of in-house counsel Huckenpoehler would likely be cumulative, duplicative, or obtainable from other sources. That ruling does not contradict the separate ruling at issue here that (1) Plaintiffs’ boilerplate privilege log entries were insufficient to establish privilege and (2) Plaintiffs had forfeited the point by not responding to Defendant's argument.
Plaintiffs cannot now cure their privilege log defects or offer arguments they failed to raise prior to the entry of the October 12, 2021 ruling. The Magistrate Judge did not commit clear error or abuse his discretion. Plaintiffs’ objections to the Memorandum Opinion and Order are overruled.
IT IS SO ORDERED.
ENTER:
Footnotes
According to Defendant, Plaintiffs used boilerplate privilege descriptions for approximately 1,285 of 1,600 privilege log entries. Dkt. 145 at 5; Dkt. 105 at 12.