When human beings go up, they must come down. Sometimes, however, the return trip ends with a hard landing. On August 14, 2001, Lowell Burris of Ham Lake, Minnesota fell from a ladder while painting his garage trim. He alleges that the ladder collapsed underneath him without warning. In 2007, he and his wife, Joyce, filed a products liability lawsuit against the ladder manufacturer and the distributor in Minnesota state court.
Any lawyers reading this will know without being told that people rarely if ever manufacture, sell, or distribute products like ladders in the United States without products liability insurance. (Actually, my bet is that it is mandated by state and federal legislation and those pesky regulators at the Consumer Products Safety Commission.) But for an accident in 2001 and a lawsuit filed in 2007, presumably the insurer for the policy period from March 2003-March 2004 would be off the hook, right?
Wrong. The Gulf Underwriters Insurance (“GUI”) Policy for that policy period was a “claims made” policy, meaning that it covered claims made during the policy period and there was evidence that, in fact, plaintiff alleged he made his claim during this time.
And so 12 years after the accident, 5 years after filing suit, the wrangling continues, not only as to whether and how the ladder collapsed, whether and how Mr. Burris was injured, but also the parties have the threshold issue of whether GUI is on the hook for Mr. Burris’ damages. (And insurance is the whole ball of wax in this case, as in many, because the defendants (or one of them, anyhow) is apparently out of business.)
The recent order of U.S. Mag. Judge Jeffrey J. Keyes (D. Minn.) on plaintiffs’ motion to compel sheds some light on the kind of costly squabbles that civil litigators find themselves mired in all too often.
First, Plaintiffs seek an Order requiring [GUI] to remove redactions [(that is, “blacked out” text)] it placed in fifty-one pages of documents produced in response to Plaintiffs’ Rule 34 requests for production. Second, Plaintiffs seek an order requiring Versa to provide more complete responses to the Plaintiffs’ interrogatories and document requests. And finally, Plaintiffs seek an order requiring Versa to produce its former President, David Lambert, for a deposition.
On the first issue, Judge Keyes ruled:
Although [GUI] claims that many of the redactions were necessary to avoid disclosure of trade secrets, “there is no absolute privilege [against disclosure] for trade secrets and similar confidential information.” See Fed. Open Mkt. Comm. of Fed. Reserve Sys. v. Merrill, 443 U.S. 340, 362 (1979) (alteration in original). Nor has [GUI] established that any of the redacted information actually qualifies as a legitimate trade secret. To support its trade secret claim, [GUI] offered only the conclusory assertion that it considers the information “proprietary trade secrets.”
[GUI] next argues that it properly redacted the information because the undisclosed information is not relevant. However, [GUI] offers no support for the proposition that a party may properly redact portions of a document on grounds that some, but not all, of the document is relevant or responsive. Just as [GUI] did not obtain permission to redact alleged trade secrets from its discoverable documents, [GUI] neither sought nor obtained permission to redact discoverable documents on the grounds that portions of those documents are irrelevant or nonresponsive. The practice of redacting for nonresponsiveness or irrelevance finds no explicit support in the Federal Rules of Civil Procedure, and the only bases for prohibiting a party from seeing a portion of a document in the Rules are claims of privilege or work-product protection. Fed. R. Civ. P. 26(b)(5); see Steven J. Purcell, Document Production in Federal Litigation: Can You Redact for Nonresponsiveness?, 59-Dec. Fed. Law. 22 (Dec. 2012) (discussing lack of support for nonresponsiveness redactions in the Federal Rules of Civil Procedure). In addition, redacting allegedly nonresponsive or irrelevant portions of discoverable documents “breed[s] suspicions.” In re State Street Bank and Trust Co. Fixed Income Funds Inv. Litig., Nos. 08-md-1945 (RJH)(DFE), 08-Civ.-0333 (RJH)(DFE), 2009 WL 1026013, at *1 (S.D.N.Y. Apr. 8, 2009).
Finally, as to GUI’s attorney-client privilege claim over one set of redactions, Judge Keyes overruled GUI’s objections in part and ordered some of these redactions removed.
As to Versa’s discovery position (which I will paraphrase, as “We are a dissolved Wisconsin corporation and, as such, we barely exist as an entity, and we therefore cannot respond to discovery”), Judge Keyes explained:
Versa’s position is that it has not, cannot, and does not have to provide a substantive response to Plaintiffs’ discovery requests. But Versa has cited no law to support the proposition that a party to a lawsuit has no duty to respond substantively to discovery requests simply because it is a dissolved corporation. Versa is a party to this action—it has answered the Complaint and denied liability—and Wisconsin law provides that a dissolved corporation “continues its corporate existence . . . to wind up and liquidate its business and affairs,” and that “[d]issolution of a corporation does not . . . [p]revent the commencement of a civil, criminal, administrative or investigatory proceeding by or against the corporation in it its corporate name.” Wis. Stats. § 180.1405. If a dissolved Wisconsin corporation may still be a party in a civil lawsuit, which Versa has not disputed here, then it has a duty under the Federal Rules of Civil Procedure to respond to discovery that is properly served on it.
What Versa cannot do, free of consequences, is tell Plaintiffs that they are just out of luck. In the event Versa persists in its position that it will not provide substantive answers to interrogatories or document requests, those consequences may include preventing Versa from contesting issues addressed in the discovery or defending itself using documents or other pieces of information that have not been produced. See Fed. R. Civ. P. 37(d)(1)(A)(ii)(providing for sanctions for failure to answer interrogatories or requests for inspection); Fed. R. Civ. P. 37(d)(3) (providing that the Court may impose sanctions under Rule 37(b)(2)(A)(i)–(vi)). It may also be subject to other more dispositive sanctions, including the entry of judgment against it. Fed. R. Civ. P. 37(b)(2)(A)(v)–(vi).
But, on the last point raised by plaintiffs in their motion — the deposition of a former Versa executive — the plaintiffs’ counsel erred by moving to compel the deposition before formally “noticing” or seeking to compel his deposition through means at their disposal (i.e., a federal subpoena). “One step at a time,” the Court had to suggest to the plaintiffs’ ladder lawyers on this point.
Where does this long ladder lore get us?
First, noting the issues regarding discovery — redactions, dissolved corporations, and noticing depositions before moving to compel them — might save some time and money for clients of Minnesota civil litigators whose lawyers hear of this decision and take it to heart.
Second, if we hypothesize that Mr. Burris’ products liability claim has and has had merit from “day one,” at what point does the duration of the litigation — now going on six years — become conclusive proof that our justice system is broken? We’re talking here about the cause and effect of one man’s fall from a ladder. We are not talking about overhauling health care or solving global warming. How long should it take? How much should it cost?