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The Charter Oak Fire Insurance Company, et al v. American Capital

November 19, 2012

THE CHARTER OAK FIRE INSURANCE COMPANY, ET AL.,
PLAINTIFFS
v.
AMERICAN CAPITAL, LTD., ET AL., DEFENDANTS



The opinion of the court was delivered by: Judge Sylvia H. Rambo

MEMORANDUM

Presently before the court are two motions related to litigation ongoing in the United States District Court for the District of Maryland, docketed at Case Number 2009-CV-00100-DKC ("underlying action"). The first motion, filed jointly by non-parties to the underlying action, Christopher Wasko and Marian Rohm,*fn1 seeks to quash subpoenas directing them each to appear for a deposition ("Motion To Quash"). (Doc. 1.) The second motion, a motion to compel filed by Plaintiffs, seeks a court order requiring Mr. Wasko and Ms. Rohm to comply with the subpoenas and submit to a deposition no later than November 21, 2012 ("Motion To Compel"). (Doc. 4.) Each motion has been briefed and is ripe for disposition. For the following reasons, the Motion To Quash will be denied in its entirety, and the Motion To Compel will be granted in part and denied in part.

I. Background*fn2

For the purposes of resolving the motions sub judice, it is sufficient to state the following background. This matter involves an insurance coverage dispute arising out of insurance contracts issued by Plaintiffs, The Charter Oak Fire Insurance Company and Travelers Property Casualty Company of America (collectively "Plaintiffs"), to Defendant American Capital, Ltd. ("Defendant American Capital"), wherein Plaintiffs allege that Defendant American Capital intentionally concealed, misrepresented, omitted, or otherwise falsely represented information material to its liability exposure and the scope of insurance. Both Mr. Wasko and Ms. Rohm (collectively "Movants") are former employees of Marsh, Inc. ("Marsh"), a corporation retained by Defendant American Capital to broker certain insurance policies, and were involved in the procurement of the policies at issue in the underlying action.*fn3 Marsh, through Mr. Wasko and Ms. Rohm, allegedly made representations and provided or omitted certain factual information to Plaintiffs in connection with the placement of insurance. Specifically, it is alleged that Movants falsely represented to Plaintiffs that Defendant American Capital had no subsidiaries. In short, Plaintiffs assert that the representations of Mr. Wasko and Ms. Rohm are at the core of the underlying action.

At issue here are subpoenas for depositions that were served upon Movants.*fn4 Mr. Wasko was served on August 16, 2012,*fn5 and was directed to appear for his deposition within the Middle District of Pennsylvania on October 17, 2012. Ms. Rohm was served on August 16, 2012, and was directed to appear for her deposition within the Middle District of Pennsylvania on October 18, 2012. Relevant to the instant dispute, Defendant American Capital asserted a privilege over certain communications between Mr. Wasko, Ms. Rohm, and Defendant American Capital ("Privileged Communications").*fn6 That privilege, the validity of which Plaintiffs dispute, is the subject of a motion to compel currently pending in the United States District Court for the District of Maryland ("Maryland District Court").

Despite the pending motion, Plaintiffs seek to depose both Mr. Wasko and Ms. Rohm no later than November 21, 2012, which will be, presumably, before the Maryland District Court's disposition of the motion. Although Plaintiffs had previously made scheduling accommodations, Plaintiffs now appear to be firm in their position that discovery must proceed without the benefit of the Maryland District Court's decision on the Privileged Communications in light of upcoming discovery deadlines, particularly a November 30, 2012, deadline for expert disclosures.*fn7 Plaintiffs' position is based upon the assertion that Mr. Wasko and Ms. Rohm's involvement is central to the underlying action, and is therefore "necessary to assist Plaintiffs' decisionmaking with respect to additional fact discovery," regardless of the Maryland District Court's ruling. (Doc. 4, ¶ 27.)

Mr. Wasko and Ms. Rohm are concerned that, by agreeing to be deposed prior to the Maryland District Court's decision regarding the Privileged Communications, they may be subpoenaed for a second deposition should the Maryland District Court rule that the communications are not privileged. Movants reason that, if forced to attend a deposition prior to the Maryland District Court's ruling, Plaintiffs would be unable to elicit testimony regarding the Privileged Communications. If the Maryland District Court subsequently rules in Plaintiffs favor and holds that no privilege applies to the communications at issue, Plaintiffs may request a second deposition to examine the Movants on the newly-discoverable communications. Movants believe such a scenario would present an undue burden and force them to miss several days of work, and adversely affect their professional and personal lives. (Doc. 1, ¶¶ 18, 21.)

II. Discussion

A. Statement of Law

The Federal Rules of Civil Procedure allow the discovery of "any non-privileged matter that is relevant to any party's claim or defense." Fed.R.Civ.P. 26(b)(1). Relevant evidence need not be admissible at trial so long as it "appears reasonably calculated to lead to the discovery of admissible evidence." Id. Rule 45 sets forth the procedures through which a party may seek discovery from a nonparty.

Federal Rule of Civil Procedure 45 governs when a court may quash or modify a subpoena. Specifically, Rule 45(c)(3)*fn8 requires a court to quash a subpoena if it is unduly burdensome. Moreover, Rule 26(c)*fn9 permits a court, for good cause, to issue a protective order to prevent a person from annoyance or undue burden. In examining motions to quash or for a protective order, "courts weigh the need of the party seeking discovery against any undue hardships created by permitting it." Young v. Pleasant Valley Sch. Dist., 2007-CV-854, 2011 WL 3651796, *1 (M.D. Pa. Aug. 18, 2011). When analyzing whether a subpoena places an undue burden on a nonparty, the court considers issues such as relevance, the requesting party's need, the breadth of the request, and the burden imposed. Grider v. Keystone Health Plan Cent., Inc., 2005-MC-40, 2005 WL 2030456, *7 (M.D. Pa. July 28, 2005).

The party seeking to quash the subpoena bears the heavy burden of demonstrating that the requirements of Rule 45 are satisfied. See City of St. Petersburg v. Total Containment, Inc., 2007-MC-191, 2008 WL 1995298, *2 (E.D. Pa. May 5, 2008); Dexter v. Cosan Chem. Corp., 1991-CV-5436, 2000 U.S. Dist. LEXIS 22134, *7 (D.N.J. Oct. 24, 2000). Specifically, the moving party must show a "clearly defined and serious injury." Total Containment, 2008 WL 1995298 at *2 (citing Transcor, Inc. v. Furney Charters, Inc., 212 F.R.D. 588, 592-93 (D. Kan. 2003) (holding that general assertions are insufficient to show undue burden for the purpose of a motion to quash)).

B. Application of Law

1. Motion To Quash ...


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