The opinion of the court was delivered by: Terrence F. McVerry United States District Court Judge
Pending before the Court are: PLAINTIFF'S MOTION TO RESOLVE A DISPUTED CLAIM OF PRIVILEGE PURSUANT TO FED. R. CIV. P. 26(b)(5)(B) (Document No. 128); PLAINTIFF'S MOTION TO STRIKE OR EXCLUDE THE DECLARATION OF GLENN ALAN MELNICK (Document No. 130); the NOTICE OF CLASS ACTION SETTLEMENT AND MOTION TO STAY CLASS RELATED PROCEEDINGS (Document No. 162) filed by Defendant; PLAINTIFF'S FIRST MOTION TO COMPEL PRODUCTION OF DOCUMENTS PURSUANT TO FED. R. CIV. P. 37 (Document No. 165); and PLAINTIFF'S MOTION TO ENLARGE THE DISCOVERY PERIOD (Document No. 188). The motions have been exhaustively briefed (Document Nos. 141, 152, 159, 160, 173, 177, 180, 187, 190, 198) and are ripe for disposition.*fn1
This purported class action case has had a protracted and complicated procedural history, which will not be repeated in full. The case involves interpretation of the term "actual charges" in a supplemental cancer insurance policy. On June 25, 2009, Plaintiff notified the Court of her decision (and that of her two daughters) to opt out of a national class action proposed settlement that has been preliminarily approved by the Circuit Court of Pulaski County, Arkansas in Runyan v. Transamerica Life Ins. Co., Case No. CV-09-2066-3 (the "Runyan Action"). Accordingly, there is no longer a compelling reason to withhold ruling on the pending discovery motions in this case as Plaintiff's individual claims, at a minimum, will go forward in this forum.
A. Disputed Claim of Privilege
This motion involves six pages of calculations that Plaintiff believes were created by Life Investors' actuary, Stephen Gwin, in late 2004 to analyze the financial impact of changing the company's treatment of "actual charges." In essence, Gwin concluded that by changing the manner in which the company treated "actual charges," Defendant would reduce benefit payments by 23.2%. Defendant contends that the documents are subject to the attorney-client privilege and/or attorney work product protection and were inadvertently produced.
Federal Rule of Civil Procedure 26(b)(5)(B) states:
(B) Information Produced. If information produced in discovery is subject to a claim of privilege or of protection as trial-preparation material, the party making the claim may notify any party that received the information of the claim and the basis for it. After being notified, a party must promptly return, sequester, or destroy the specified information and any copies it has; must not use or disclose the information until the claim is resolved; must take reasonable steps to retrieve the information if the party disclosed it before being notified; and may promptly present the information to the court under seal for a determination of the claim.
The producing party must preserve the information until the claim is resolved.
Plaintiff contends that Defendant cannot meet its burden to establish a claim of privilege. Both parties agree that the documents at issue do not contain any indication on their face that they were prepared by an attorney, or for the purpose of assisting an attorney or might be privileged. Instead, Defendant asserts that the documents are privileged based on Gwin's deposition testimony that he prepared them at the request of outside litigation counsel.
Plaintiffs also contend that the documents contain calculations made for business reasons, i.e., to determine the financial impact of the revised treatment, rather than legal reasons. Finally, Plaintiff argues that even assuming that the documents were privileged, the privilege was waived due to Defendant's intentional production, its tardy assertion of the privilege, and its affirmative efforts to use similar calculations by Gwin. Defendant responds that it took reasonable steps to preserve the privilege and gave timely notice of the inadvertent production. In essence, the attorney supervising the privilege review did not know that another lawyer in her office had asked Gwin to prepare the documents at issue. Defendant further explains that it is not attempting to conceal the non-privileged facts underlying Gwin's analysis, and indeed, that it permitted Gwin to be deposed on those facts.*fn2
Plaintiff's reply brief points out that there is no evidence that the documents at issue were ever provided to the outside counsel who allegedly requested them. Moreover, Plaintiffs argue that any privilege/protection was waived because the record establishes that information from the documents was provided to state regulators and used for other business purposes. More generally, Plaintiff argues that the documents do not contain the type of "confidential communications" that fall within the privilege, but rather, are simply unprivileged facts.
The Court agrees with Plaintiff. The documents at issue are governed by the principles described in Rhone-Poulenc Rorer, Inc. v. Home Indemnity Co., 32 F.3d 851, 862 (3d Cir. 1994) and Philadelphia v. Westinghouse Electric Corp., 205 F. Supp. 830, 831 (E.D. Pa. 1962):
While documents may be protected from disclosure in discovery because they contain confidential communications that are privileged, that protection may be inapplicable to facts incorporated in the communication. Upjohn Co. v. United States, 449 U.S. 383, 395-396, 101 S.Ct. 677, 685-86, 66 L.Ed.2d 584 (1981).
[T]he protection of the privilege extends only to communications and not to facts. A fact is one thing and a communication concerning that fact is an entirely different thing. The client cannot be compelled to answer the question, 'what did you say or write to the attorney?' but may not refuse to disclose any relevant fact within his knowledge merely because he incorporated a statement of such fact into his communication to his attorney. Id. (quoting City of Philadelphia, Pa. v. Westinghouse Elec. Corp., 205 F. Supp. 830, 831 (E.D.Pa.1962)).
As the Court in City of Philadelphia further explained:
A fact is one thing and a communication concerning that fact is an entirely different thing. The client cannot be compelled to answer the question, 'What did you say or write to the attorney?,' but may not refuse to disclose any relevant fact within his knowledge merely because he incorporated a statement of such fact into his communication to his attorney.
The documents at issue do not disclose any attorney-client communications. Rather, they represent a basic financial analysis prepared by a non-lawyer. The documents were obtained from Gwin's file and gave no indication on their face that the attorney-client privilege might be implicated. That the facts contained in the documents may have been requested by a lawyer, or were conveyed to a lawyer, does not make the facts themselves privileged. While the conversations between Gwin and counsel would be privileged, ...