The opinion of the court was delivered by: Tucker, J.
Presently before the Court is the three-part Motion of Defendant ("the Motion"), filed on June 13, 2011 requesting that this Court: (1) preclude Plaintiff from introducing testimony related to a May 3, 2011 ex parte meeting; (2) preclude Plaintiff from producing expert testimony; and (3) direct that certain facts be taken as established in this action. (Doc. 30.) For the reasons stated below, this Court GRANTS the Motion with respect to part 1, but DENIES parts 2 and 3.
This case arises over what Plaintiff Regis Insurance Company ("Plaintiff" or "Regis") alleges was an unfounded rating downgrade by Defendant A.M. Best, Inc. ("Defendant" or "A.M. Best."). Defendant has been in the business of rating insurance companies for over 100 years and is described by Plaintiff as the "bellwether of insurance company analysis." (Compl.) Thus, "an insurer will rise or fall on its Best rating." (Compl.)
In January 2010, Defendant downgraded Plaintiff's rating from a B to a B-, and its outlook from "stable" to "negative," primarily due to an outstanding consent judgment entered against Plaintiff's parent company, Tiber holding Corporation ("Tiber"), in excess of $25 million. (Compl.) The 2010 rating was the first time Defendant considered the financial condition of Tiber in connection with its rating of Regis. (Compl.) Plaintiff argues that the consent judgment against Tiber should not have been considered in its rating as the judgment has existed for over ten years and cannot be used to attach any of Regis' assets and thus has no effect on Regis' financial condition. Plaintiff further submits that the rating downgrade has caused over $400,000 in lost business in less than six months, which is approximately 20% of its gross written premium for a similar period of time in 2009. (Compl.)
The instant action was initiated with the filing of the Complaint on June 30, 2010.
The Complaint alleges five counts: (1) tortious interference with contractual relations; (2) tortious interference with prospective contractual relations; (3) commercial disparagement; (4) libel; and (5) seeks a declaratory judgment. On January 18, 2011 this Court entered a Revised Scheduling Order, setting a deadline of March 15, 2011 for Plaintiff's expert report. On February 24, 2011, at Plaintiff's request and with Defendant's consent, this Court again entered a Revised Scheduling Order, setting a deadline of May 2, 2011 for Plaintiff's expert report, which has yet to be produced.
On May 16, 2011 this Court granted Defendant's Motion to Compel the Production of Documents. (Doc. 29.) Plaintiff was ordered to "provide to Defendant all available, requested documents" within ten (10) days and to "provide a detailed account to Defendant concerning any items that it is unable to produce." (Doc. 29.) On June 27, 2011, Plaintiff filed its Amended Responses and Objections to Defendant's Second Demand for Production of Documents. Also relevant to this litigation is that on May 3, 2011 counsel for Plaintiff, Clifford Haines, Esq.-after agreeing with counsel for Defendant, Michael K. Furey, Esq., that neither party would be represented by counsel at any future rerating meetings of Regis-attended and participated in such a meeting without notifying counsel for Defendant. (Doc. 30-1, ¶¶ 3, 4; Doc. 30-2, ¶¶ 6-7, 9.) Each of Defendant's three motions presently before the Court is discussed in turn.
Motion to Preclude Testimony from the May 3, 2011 Ex Parte Meeting
In January 2011, during the deposition of one of Defendant's employees, counsel for Plaintiff and counsel for Defendant agreed that they would take no part in any rating meeting or other aspect of Regis' rerating process. (Doc. 30-1, ¶ 3.) As part of the rerating process, on May 3, 2011 representatives of Plaintiff met with representatives of Defendant. (Doc. 30-1, ¶ 4.) Plaintiff's counsel-without informing Defendant's counsel-attended and took notes at the two-hour meeting. (Doc. 30-1, ¶ 4; Doc. 30-2, ¶¶ 6-7.) Defendant's employees attended without the benefit of counsel and were not informed that they were entitled to counsel. (Doc. 30-2, ¶¶ 6-7, 9.) Defendant has filed a Motion to Preclude Plaintiff from introducing testimony from the May 3, 2011 meeting.
Under the Pennsylvania Rules of Professional Conduct, a lawyer "shall not communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized by law or the court to do so." 42 PA. RULES OF PROF'L CONDUCT R. 4.2 The purpose of this rule is to forbid ex parte communications with employees whose statements could be used to "impute liability to the company." See McCarthy v. Southeastern Pennsylvania Transp. Auth., 772 A.2d 987, 993 (Pa. Super 2001). Under the Federal Rules of Evidence, such statements could otherwise be introduced into the litigation as admissions. SeeFED. R. EVID. 801(d)(2)(D).
To give Rule 4.2 teeth, the proper remedy is to preclude such testimony. SeeUniversity Patents, Inc. v. Kligman, 737 F. Supp. 325, 329-30 (E.D. Pa. 1990). Otherwise, the rule is without remedy. Accordingly, this Court will grant Defendant's Motion to Preclude Plaintiff from introducing any testimony relating to, and all information obtained from, the May 3, 2011 ex parte meeting where Defendant's employees were without the benefit of counsel. Plaintiff's concern that such a ruling is essentially an order for sanctions is noted, but should be assuaged by the non-precedential nature of this order; this court makes no comment as to the ...