United States District Court, D. South Dakota, Western Division
STEPHEN M. GOWAN, Plaintiff,
MID CENTURY INSURANCE COMPANY, A DIVISION OF FARMERS INSURANCE GROUP, Defendant.
ORDER ON PLAINTIFF'S MOTIONS TO COMPEL
[DOCKET NOS. 21, 30, & 43]
VERONICA L. DUFFY, Magistrate Judge.
This matter is pending before the court on plaintiff Stephen M. Gowan's amended complaint alleging defendant Mid Century Insurance Company denied his worker's compensation claim in bad faith. See Docket No. 49. Jurisdiction is premised on diverse citizenship of the parties and an amount in controversy in excess of $75, 000. Id .; see also 28 U.S.C. § 1332. Mr. Gowan has filed three separate motions to compel discovery, all of which have been referred to this magistrate judge for decision pursuant to 28 U.S.C. § 636(b)(1)(A). See Docket No. 47.
Because one of the issues raised in the motions to compel is the relevancy of various items of discovery, some background facts are necessary to provide context. These facts are drawn from the parties' briefs and Mr. Gowan's amended complaint. The court's recitation of the facts thus gleaned does not represent any imprimatur of the court as to their veracity.
Stephen Gowan injured his right knee at work in 2000. His employer had a worker's compensation insurance policy with Mid Century. Mr. Gowan and Mid Century settled Mr. Gowan's worker's compensation claim under terms that did not impact Mr. Gowan's right to future medical treatment for his work related injury. Mid Century continued to provide medical treatment for Mr. Gowan until such time as his treating physician recommended he undergo knee replacement surgery. At this time, Mid Century denied coverage for the knee replacement surgery as well as for injections to Mr. Gowan's right knee that he had previously been receiving to help control his pain.
Mid Century hired Richard Farnham, M.D. to conduct an independent medical exam (IME) on Mr. Gowan. Mid Century had previously hired Dr. Farnham on 11 occasions between 2000 and 2012 to provide it with IMEs on various Mid Century claimants. Mr. Gowan alleges that Mid Century hired Dr. Farnham because he was "notoriously biased in favor of insurance companies." Mr. Gowan alleges it was Mid Century's expectation in hiring Dr. Farnham that he would render an opinion that would support Mid Century denying or limiting medical treatment to Mr. Gowan.
Dr. Farnham issued an opinion that Mr. Gowan did indeed need a total knee replacement of his right knee and that the surgery was related to Mr. Gowan's 2000 work-related injury. However, Dr. Farnham opined the portion of the knee replacement surgery occasioned by the work injury was only 25%, while 75% was non-work related. Accordingly, Mid Century agreed only to shoulder 25% of the cost of the anticipated surgery. Mr. Gowan's doctor refused to perform the surgery because Mid Century was not agreeing to pay for it. Mid Century discontinued payments for Mr. Gowan's knee injections. Dr. Farnham's opinion did not touch on the matter of these injections.
On February 10, 2009, a file note in Mid Century's file regarding Mr. Gowan states, "FILE STRATEGY** **GOAL** DENY FURTHER." Discovery in this matter uncovered facts showing that the author of this file note was Janet Estes, the supervisor of Michael Shoback, the claims handler assigned by Mid Century to handle Mr. Gowan's claim.
Mr. Gowan consulted the attorney who represented him in his 2000 worker's compensation injury, but the attorney declined to represent Mr. Gowan in the matter related to his knee surgery. Mr. Gowan was able to find another attorney to represent him. This attorney filed a petition for a hearing with the South Dakota Department of Labor. Mid Century answered the petition by denying Mr. Gowan was entitled to knee replacement surgery or knee injections and asking that Mr. Gowan's petition be dismissed with prejudice.
At some point while the petition was pending, Mid Century reversed course and granted Mr. Gowan's request for payment of the knee replacement surgery. The surgery was performed in February, 2014. Mr. Gowan filed the instant lawsuit before this court two months later. Now pending are three separate motions to compel discovery filed by Mr. Gowan. See Docket Nos. 21, 30 and 43. Mid Century resists these motions. See Docket Nos. 26, 34, and 51.
A. Meet and Confer Requirement
Rule 37(a)(1) requires the parties to meet and confer to attempt to resolve discovery disputes prior to filing a motion to compel. See FED. R. CIV. P. 37(a)(1). In addition, this court's local rules impose a similar requirement. See DSD LR 37.1. The parties discussed the discovery dispute in this matter thoroughly and on multiple occasions over the course of several weeks. See Docket Nos. 22, 31, & 45. Mid Century does not dispute that Mr. Gowan has satisfied the meet and confer requirement. The court finds this prerequisite satisfied.
B. General Principles Applicable to Discovery in Federal Court
Federal Rule of Civil Procedure 26(b)(1) sets forth the scope of discovery in civil cases pending in federal court:
Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense - including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter. For good cause, the court may order discovery of any matter relevant to the subject matter involved in the action. Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence. All discovery is subject to the limitations imposed by Rule 26(b)(2)(C).
See FED. R. CIV. P. 26(b)(1). Rule 26 contains specific limitations relative to electronic discovery and other objections to providing discovery:
(B) Specific Limitations on Electronically Stored Information. A party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost. On motion to compel discovery or for a protective order, the party from whom discovery is sought must show that the information is not reasonably accessible because of undue burden or cost. If that showing is made, the court may nonetheless order discovery from such sources if the requesting party shows good cause, considering the limitations of Rule 26(b)(2)(C). The court may specify the conditions for the discovery.
(C) When Required. On motion or on its own, the court must limit the frequency or extent of discovery otherwise allowed by these rules or by local rule if it determines that:
(i) the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive;
(ii) the party seeking discovery has had ample opportunity to obtain the information by discovery in the action; or
(iii) the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues.
See FED. R. CIV. P. 26(b)(2)(B) and (C). A party claiming a privilege as to requested discovery has the burden of proving the basis for the application of the privilege:
When a party withholds information otherwise discoverable by claiming that the information is privileged or subject to protection as trial-preparation material, the party must:
(i) expressly make the claim; and
(ii) describe the nature of the documents, communications, or tangible things not produced or disclosed - and do so in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the claim.
See FED. R. CIV. P. 26(b)(5)(A). If a party fails to respond to a proper request for discovery, or if an evasive or incomplete response is made, the party requesting the discovery is entitled to move for a motion compelling disclosure after having made a good faith effort to resolve the dispute by conferring first with the other party. See FED. R. CIV. P. 37(a).
The scope of discovery under Rule 26(b) is extremely broad. See 8 Charles A. Wright & Arthur R. Miller, Federal Practice & Procedure § 2007, 36-37 (1970) (hereinafter "Wright & Miller"). The reason for the broad scope of discovery is that "[m]utual knowledge of all the relevant facts gathered by both parties is essential to proper litigation. To that end, either party may compel the other to disgorge whatever facts he has in his possession." 8 Wright & Miller, § 2007, 39 (quoting Hickman v. Taylor, 329 U.S. 495, 507-08, 67 S.Ct. 385, 392, 91 L.Ed.2d 451 (1947)). The Federal Rules distinguish between discoverability and admissibility of evidence. FED. R. CIV. P. 26(b)(1), 32, and 33(a)(2). Therefore, the rules of evidence assume the task of keeping out incompetent, unreliable, or prejudicial evidence at trial. These considerations are not inherent barriers to discovery, however.
The advisory committee's note to the 2000 amendments to Rule 26(b)(1) provide guidance on how courts should define the scope of discovery in a particular case:
Under the amended provisions, if there is an objection that discovery goes beyond material relevant to the parties' claims or defenses, the court would become involved to determine whether the discovery is relevant to the claims or defenses and, if not, whether good cause exists for authorizing it so long as it is relevant to the subject matter of the action. The good-cause standard warranting broader discovery is meant to be flexible. The Committee intends that the parties and the court focus on the actual claims and defenses involved in the action. The dividing line between information relevant to the claims and defenses and that relevant only to the subject matter of the action cannot be defined with precision. A variety of types of information not directly pertinent to the incident in suit could be relevant to the claims or defenses raised in a given action. For example, other incidents of the same type, or involving the same ...