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CPC International Inc. v. Hartford Accident and Indemnity Co.

Decided: July 17, 1992.

CPC INTERNATIONAL, INC. AND BRODSON PROPERTIES, INC., PLAINTIFFS,
v.
HARTFORD ACCIDENT AND INDEMNITY COMPANY, ET AL., DEFENDANTS



Moses, J.s.c.

Moses

CPC seeks coverage under more than 250 comprehensive general liability insurance policies for damages and defense costs that CPC has incurred, and will continue to incur, in connection with environmental cleanup of six toxic waste sites. The insurers have denied coverage.

In pursuit of discovery, defendants served their first set of document requests on the plaintiff in February, 1990. Approximately 98,000 documents have been produced to date, but five hundred and eighty-one documents have been withheld on the basis of a plaintiff's claim of "self-critical analysis" privilege.*fn1

Defendant, Travelers Indemnity Company, filed this motion on behalf of itself and other defendants to determine the applicability of the doctrine of self-critical analysis to these documents.*fn2

Defendants contend that the doctrine of self-critical analysis does not apply to the withheld documents; (1) because the inspections and audits contained therein were conducted in the ordinary course of business; (2) because there is no public need for confidentiality regarding the documents; and (3) because the documents are absolutely necessary in order to determine coverage since the information contained therein cannot be obtained from other sources.

Plaintiff contends that the documents are covered by the privilege of self-critical analysis; (1) because the corporate documents are products of internal evaluations; (2) because confidentiality of these documents promotes internal availability of such information; and (3) because such evaluations would terminate in the future if the results were disclosed.

The doctrine of self-critical analysis has never been addressed by New Jersey courts in the context of an environmental case.

The concept of privilege, which allows a party to withhold otherwise relevant information from discovery, is a judicially created exception to the general discovery rule that all relevant evidence should be produced. See R. 4:10-2(a) "The doctrine of privilege is dynamic in nature, not static. A privilege develops when the public need for disclosure is outweighed by the public need for confidentiality of information." Wylie v. Mills, 195 N.J. Super. 332, 337, 478 A.2d 1273 (Law Div.1984). Even though privileges ". . . are not lightly created nor expansively construed," United States v. Nixon, 418 U.S. 683, 710, 94 S. Ct. 3090, 3108, 41 L. Ed. 2d 1039, 1065 (1974), there are instances when protection of the public need for confidentiality must be acknowledged and developed. Wylie, 195 N.J. Super. at 337, 478 A.2d 1273. This "public need for confidentiality" must be weighed against the public policy which favors access to all information in the litigation process and thus restricts the

use of new privileges. See Dixon v. Rutgers, 110 N.J. 432, 446, 541 A.2d 1046 (1988) ("since privileges conceal the truth rather than advancing its ascertainment, courts have traditionally tended to restrict rather than create or expand them").

The judicially created privilege of self-critical analysis prevents disclosure of confidential, critical, evaluative and/or deliberative material whenever the public interest in confidentiality outweighs an individual's need for full discovery. Wylie, supra, 195 N.J. Super. at 338, 478 A.2d 1273, citing Roberts v. National Detroit Corp., 87 F.R.D. 30 (E.D.Mich.1980); See also, Gillman v. United States, 53 F.R.D. 316 (S.D.N.Y.1971) (Note that all three cases stress that factual information should not be protected by this qualified privilege.)

The doctrine was first articulated in Bredice v. Doctors Hospital, Inc., 50 F.R.D. 249 (D.D.C.1970), aff'd. on rehearing, 51 F.R.D. 187 (D.D.C.1970), aff'd, 479 F. 2d 920 (D.C.Cir 1973), a medical malpractice action. The court held that minutes and reports of a hospital staff meeting, held to review and analyze clinical work done in the hospital, should not be produced since the sole objective of the meeting was to improve available care and treatment of patients in the hospital. The court held that confidentiality is essential to effective functioning of these meetings, and if these Discussions were discoverable such meetings would not take place. The court held that there is an "overwhelming public interest" in having staff meetings held on a confidential basis so that the flow of ideas can continue unimpeded. 50 F.R.D. at 251.

The first New Jersey case to address the application of the doctrine of self-critical analysis was Wylie v. Mills, supra, which involved discovery of corporate (PSE & G) accident reports in connection with an automobile accident in which an employee was injured. PSE & G asserted that the documents were protected from discovery by the attorney-client privilege, the work-product privilege and the self-critical analysis privilege. The court quickly disposed of the attorney-client and

work-product assertions, finding that the information at issue was not in the form of confidential communications between corporate employees and corporate counsel. 195 N.J. Super. at 336, 478 A.2d 1273, citing Upjohn Co. v. United States, 449 U.S. 383, 101 S. Ct. 677, 66 L. Ed. 2d 584 (1981); see also, Reardon v. Marlayne, Inc., 83 N.J. 460, 416 A.2d 852 (1980).

However, the Wylie court found the self-critical analysis argument meritorious. The court relied on federal cases which acknowledged the existence of a qualified privilege of self-critical analysis, citing Bredice v. Doctors Hospital, Inc., supra, 50 F.R.D. at 249; Banks v. Lockheed-Georgia Co., 53 F.R.D. 283 (N.D.Ga.1971); Rosario v. New York Times Co., 84 F.R.D. 626 (S.D.N.Y.1979). The Judge reasoned that the privilege ". . . prevented disclosure of confidential critical, evaluative and/or deliberative material whenever the public interest in confidentiality outweighs an individual's need for full discovery." Wylie, supra, 195 N.J. Super. at 338, 478 A.2d 1273. (cites omitted) The Wylie court emphasized the public policy of encouraging safety improvements in practice and procedure. If such improvements are to be made, the court must protect confidentiality because ". . . such confidentiality will encourage open and frank criticism." Id. at 339, 478 A.2d 1273.

The court then laid out three criteria for the application of the privilege of self-critical analysis:

(1) the information which is the subject of a production request must be the criticisms or evaluations or the product of an evaluation or critique conducted by ...


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