United States District Court, E.D. Pennsylvania
STATE FARM MUT. AUTO. INS. CO., ET AL., Plaintiffs,
LEONARD STAVROPOLSKIY, ET AL., Defendants. EASTERN APPROACH REHABILITATION, LLC, ET AL., Plaintiffs,
STATE FARM MUT. AUTO. INS. CO., ET AL., Defendants.
the Court are Defendants' Motion to Compel the
Depositions of Richard Castagna, Esquire, Matthew Moroney,
Esquire, and Warren Holland, Esquire (Doc. No. 55) and
Plaintiffs' Response in Opposition thereto, and Motion
for Protective Order (Doc. No. 67), along with various
replies and supplemental briefing (Doc. Nos. 68, 72, and 74).
For the following reasons, we will deny Defendants'
Motion to Compel and grant Plaintiffs' Motion for a
Background and Applicable Law
seek to compel the depositions of Plaintiffs' attorneys
of record in this case in order to discover information
regarding the nature of any investigations into Defendants
that Plaintiffs conducted prior to November 2013. (Doc. No.
55, at ¶¶ 1-28, 64). Because Plaintiffs filed their
lawsuit on October 30, 2015, such information may be relevant
to Defendants' argument that Plaintiffs' fraud claims
are barred by Pennsylvania's two-year statute of
limitations. See 42 Pa.C.S.A. § 5524(7); Doc.
No. 55, at ¶ 67. Plaintiffs, meanwhile, seek a
protective order precluding Defendants from seeking
depositions of their counsel.
speaking, “material that is relevant to the subject
matter involved in the action is discoverable as long as it
is not privileged.” Premium Payment Plan v. Shannon
Cab Co., 268 F.R.D. 203, 204 (E.D. Pa. 2010); see
also Fed.R.Civ.P. 26(b)(1). Although depositions of
opposing counsel are “generally disfavored in federal
courts, ” Guantanamera Cigar Co. v. Corporacion
Habanos, S.A., 263 F.R.D. 1, 8 (D.D.C. 2009) (citing
Hickman v. Taylor, 329 U.S. 495, 513 (1947)), it is
nevertheless clear that opposing counsel will sometimes
possesses relevant non-privileged information. Accordingly,
opposing counsel are not automatically immune from deposition
parties disagree on the applicable law for determining
whether to allow a party to depose opposing counsel, and
courts in this district have applied various tests. See
Cambs v. Am. Express Co., Inc., No. CV 15-428, 2016 WL
4735022, at *2-3 (E.D. Pa. Sept. 12, 2016) (collecting
cases). Defendants ask us to follow Frazier v. Se. Pa.
Transp. Auth., in which this Court held that a party may
shield its counsel from deposition only by showing an
“undue burden or oppression measured by (1) the extent
to which the proposed deposition promises to focus on central
factual issues, rather than peripheral concerns; (2) the
availability of the information from other sources, viewed
with an eye toward avoiding cumulative or duplicative
discovery; and (3) the harm to the party's
representational rights resulting from the attorney's
deposition.” 161 F.R.D. 309, 313 (E.D. Pa. 1995);
see also Premium Payment Plan, 268 F.R.D. at 204
meanwhile, contend that the controlling standard is the
“Shelton rule, ” named for the Eighth
Circuit's opinion in Shelton v. Am. Motors
Corp., 805 F.2d 1323 (8th Cir. 1986). Under the
Shelton line of cases, “depositions of
opposing counsel are permissible only if: ‘(1) no other
means exist to obtain the information; (2) the information
sought is relevant and non-privileged; and (3) the
information sought is crucial to the preparation of the
case.'” In re Linerboard Antitrust Litig.,
237 F.R.D. 373, 385 (E.D. Pa. 2006) (alteration omitted).
agree with Plaintiffs that the Shelton rule provides
the appropriate framework for analysis in these cases. By
placing the burden on the party seeking to depose opposing
counsel, the Shelton rule better safeguards the
considerable policy concerns that arise when a litigant
attempts to depose its opponent's counsel of record.
See Shelton, 805 F.2d at 1327 (“Taking the
deposition of opposing counsel not only disrupts the
adversarial system and lowers the standards of the
profession, but it also adds to the already burdensome time
and costs of litigation.”); Sterne Kessler
Goldstein & Fox, PLLC v. Eastman Kodak Co., 276
F.R.D. 376, 380-81 (D.D.C. 2011) (“Allowing depositions
of opposing counsel, even if these depositions were limited
to relevant and non-privileged information, may disrupt the
effective operation of the adversarial system by chilling the
free and truthful exchange of information between attorneys
and their clients.”). And unlike Frazier, the
Shelton rule has been endorsed by three Courts of
Appeals. See Nationwide Mut. Ins. Co. v. Home Ins.
Co., 278 F.3d 621, 628 (6th Cir. 2002); Boughton v.
Cotter Corp., 65 F.3d 823, 830 (10th Cir. 1995) (holding
that a trial court “has the discretion to issue a
protective order against the deposition of opposing counsel
when any one or more of the three Shelton criteria
for deposition . . . are not met”) (emphasis deleted);
Shelton, 805 F.2d 1323; see also Chao v. Aurora
Loan Servs., LLC, No. C 10-3118 SBA LB, 2012 WL 5988617,
at *3 (N.D. Cal. Nov. 26, 2012) (“District courts in
this district and elsewhere in the Ninth Circuit recognize
Shelton as the leading case on attorney
depositions.”); but see In re Subpoena Issued to
Dennis Friedman, 350 F.3d 65, 72 (2d Cir.
analysis begins and ends with the first Shelton
prong-that is, whether other means exist to obtain the
information than to depose opposing counsel. Defendants argue
that State Farm's attorneys of record are the only
persons capable of testifying as to what State Farm knew and
did regarding its investigations into the Defendants'
alleged fraud prior to November 2013. (Doc. No. 55, at
¶¶ 2-18). In principle, there is no reason State
Farm's counsel of record would be uniquely qualified to
testify as to what their clients knew and did. But,
pointing to State Farm's “astounding lack of recall
and extraordinary lack of documentation, ” id.
at ¶ 71, Defendants contend that the information they
seek cannot be obtained from State Farm directly. Because of
that, Defendants contend that outside counsel must be deposed
because they are the only available fact witnesses.
initially offered two arguments in response. First, they
asserted that they had already disclosed substantial
information regarding their pre-2013 investigative efforts.
And, indeed, Defendants' Motion outlines in detail
various investigative efforts undertaken throughout the
relevant time period. Id. at pp. 6-12. Second,
Plaintiffs argued that the Defendants' Motion to Compel
was premature since Defendants had not yet explored their
questions about State Farm's pre-2013 investigative
efforts with State Farm's corporate designee. Because
that avenue could be an alternative means to obtaining the
requested information, Plaintiffs asked us to deny
Defendants' Motion on that basis alone. (Doc. No. 67). In
a reply, Defendants requested that the Court withhold ruling
on the present Motion until after the deposition of
Plaintiffs' corporate designee was complete. (Doc. No.
68). That deposition has now occurred, and Defendants have
since filed under seal a Supplement to its Motion to Compel,
with a transcript of the deposition testimony attached
thereto. (Doc. No. 72).
transcript of that deposition shows that Plaintiffs'
opposition was well-founded. State Farm's corporate
designee testified, inter alia, that around
September 2011, Warren Holland, Esquire, one of the attorneys
in this case who Defendants wish to depose, identified a
potential issue in Defendant Eastern Approach's medical
records while defending a personal injury lawsuit on behalf
of one of State Farm's insureds. (Doc. No. 72, Ex. A, at
pp. 198-210). In particular, that patient's medical
records noted the same unique range of motion findings on
each physical examination over the course of treatment.
Id. That was concerning, State Farm's corporate
designee testified, because it may indicate the range of
motion findings were simply cut and pasted across different
visits and could be an indicator of fraud. Id. State
Farm then requested that Mr. Holland's law firm review
other Eastern Approach medical records to determine whether
that phenomenon existed elsewhere. Id. In or around
January 2012, State Farm independently reviewed three or four
claims and found that the range of motion issue identified by
Mr. Holland was not present in those claims. Id. At
or around that point, early in 2012, State Farm “moved
on” from its investigation. Id.
have failed to demonstrate any additional relevant
non-privileged information that outside counsel could provide
that it did not learn (or could not have learned) from State
Farm's corporate designee. In their supplemental briefing
filed after the deposition was complete, Defendants now
indicate that they wish to depose outside counsel for
purposes of determining to what extent they worked on their
own to generate more information which they could use to
convince State Farm to target the Defendants with a fraud
accusation. Although Defendants are correct that such
independent work performed by outside counsel would not be
privileged, it is also irrelevant to any issues in this case.
Defendants have failed to carry their burden under the first
Shelton prong, it is unnecessary for the Court to
determine whether the information sought from outside counsel
is both non-privileged and crucial to ...