United States District Court, D. New Jersey
HONORABLE TONIANNE J. BONGIOVANNI UNITED STATES MAGISTRATE
matter has been opened to the Court upon Motion (Docket Entry
No. 24) by Defendant IEW Construction, Inc.
(“Defendant”) seeking an Order compelling
discovery from Plaintiff Danella Rental Systems
(“Plaintiff”). Plaintiff opposes Defendant's
motion (Docket Entry No. 25). The Court has fully reviewed
the submissions in support of an in opposition to
Defendant's motion and considers same without oral
argument pursuant to Fed.R.Civ.P. 78. For the following
reasons, Defendant's Motion to Compel is GRANTED, in
part, and DENIED without PREJUDICE, in part.
BACKGROUND AND PROCEDURAL HISTORY
matter arises out of a contract dispute in which Plaintiff
alleges that Defendant wrongfully refused to indemnify
Plaintiff for costs incurred in a personal injury action
brought against Plaintiff by Defendant's employee Joaquim
Resende in the Superior Court of New Jersey (“Resende
Action”). (Pl.'s Compl, ¶ 9).
filed the instant motion on November 27, 2017 seeking the
production of an unredacted copy of Plaintiff's claims
file, including confidential communications regarding
Plaintiff's evaluation and eventual voluntary settlement
of the Resende Action. (Docket Entry No. 24).
argues that by bringing a claim of indemnity for
reimbursement of the voluntary settlement of the Resende
Action, Plaintiff has waived the attorney client privilege.
(Def's Br. in Supp. of Mot. at 4). Defendant states that
since this case is brought under the Court's diversity
jurisdiction alleging breach of a contract that contains a
Pennsylvania choice of law provision, the Court should apply
Pennsylvania law regarding the attorney-client privilege.
(Id. citing Montgomery County v. Microvote
Corp., 175 F.3d 296, 301 (3d Cir. 1999)). Defendant
asserts that Plaintiff has the burden of proving the
applicability of the attorney-client privilege and maintains
that Plaintiff cannot establish that the privilege was waived
by the client. (Id. at 6). However, Defendant argues
that even if Plaintiff could establish that the
attorney-client privilege applies, an exception exists due to
Plaintiff's claim for indemnification. (Id.)
argues that the information it is seeking is relevant because
the privileged communications contained in the redacted
portions of the claims file are the very proofs needed to
establish that the damages sought in this case are
unreasonable and are the direct result of Plaintiff's
ineffective defense in the Resende Action. (Id.).
Defendant argues that Plaintiff intentionally did not implead
Defendant in the Resende Action, deciding instead to settle
the matter for an unreasonable amount and now seeks
reimbursement from IEW for the full settlement.
(Id.). Defendant argues that it has been prejudiced
by its inability to participate in the defense of the Resende
Action. (Id.). Defendant states that “[t]he
very essence of Plaintiff's claim for reimbursement of
the settlement amount implicates that underlying settlement
negotiations, particularly with respect to Plaintiff's
position on the issue of seeking indemnification from
Defendant. The evidence contained in those communications
will establish that Plaintiff intentionally chose to not
implead Defendant in the underlying action and instead
brought a separate action for indemnification after the
matter had been settled.” (Id. at 7).
states that if the Court is not inclined to require Plaintiff
to produce the unredacted claims file, the Court should
require Plaintiff to provide summaries of the privileged
information contained in the file. (Id. at 8).
argues that New Jersey law governs the attorney-client
privilege analysis in this case. (Pl.'s Opp'n Br. at
4). Plaintiff states that in cases such as this one, where
the district court is exercising diversity jurisdiction, the
law of privilege which controls is that which would be
applied by the courts of the state in which it sits.
(Id. citing Samuelson v. Susen, 576 F.2d
546, 549 (3d Cir. 1978)). Plaintiff states that New Jersey
courts utilize the governmental-interest test for choice of
law questions in both contract and tort actions.
(Id. citing Veazey v. Doremus, 103 N.J.
244, 247 (1986); State Farm Mut. Auto Ins. Co. v. Estate
of Simmons, 84 N.J. 28, 417 A.2d 488
(1980)). Plaintiff notes that the first step
in the governmental interest test is to determine whether a
conflict exists between the laws of the interested states.
(Id. citing Haggerty v. Cedeno, 279
N.J.Super. 607, 611, 653 A.2d 1166, 1168 (Superior Ct. App.
Div. 1995)). Plaintiff further notes that if no conflict
exists, the law of the forum state applies. (Id. at
5 citing Rowe v. Hoffman-LaRoche, 189 N.J. 615, 621,
917 A.2d 767, 771 (2007)). Finally, Plaintiff notes that this
Court has held that the attorney-client privilege laws of
Pennsylvania and New Jersey “do not differ in any
material way.” (Id. citing In re Human
Tissue Prods. Liab. Litig., 255 F.R.D. 151, 156 (D.N.J.
argues that it did not waive the attorney-client privilege by
filing the indemnification lawsuit. (Pl's Opp'n Br.
at 6). Plaintiff states that the information that it seeks to
protect are communications between Plaintiff, Plaintiff's
insurers and Plaintiff's counsel in the course of the
attorney-client relationship and defense of the Resende
Action. (Id.). Plaintiff further states that these
communications involve “reporting on case status,
evaluating fact discovery and documentation in the Resende
Action, discussing litigation strategy and evaluating expert
discovery.” (Id.). Plaintiff notes that
although the majority of the redactions in its claim file
were made pursuant to the work product doctrine, Defendant
has not stated any objection to the redactions under the work
product doctrine. (Id.). Plaintiff states that all
of the redacted documents in the claim file for which the
work product doctrine was invoked were prepared specifically
for and as part of Plaintiff's defense of the Resende
Action. (Id. at 9). Plaintiff argues that Defendant
has not shown a substantial need for the documents and has
not shown that it cannot obtain the substantial equivalent of
the materials by other means without undue hardship.
(Id.). Plaintiff further argues that Defendant has
not explained why the information it seeks is relevant.
(Id.) Plaintiff asserts that Defendant has not
explained why it matters whether Plaintiff purposely or
accidentally did not implead Defendant in the Resende Action.
(Id.). Additionally, Plaintiff argues that Defendant
can pursue its defense that the settlement was unreasonable
using publicly available information and/or expert testimony.
(Id.). Finally, Plaintiff argues that Defendant has
not offered any precedent to suggest that an expert reviewing
the reasonableness of a settlement must be permitted to
review the privileged communications between the indemnitee
and its attorneys. (Id. at 16).
states that it is willing to produce summaries of the
redacted portions of the claim file. (Id.).
Plaintiff also asserts that an in camera review of the
documents by the Court would address Defendant's concerns
and preserve Plaintiff's privilege. (Id. at 15).
Court has broad discretion in deciding discovery issues such
as that raised by the parties here. See Gerald Chamles
Corp. v. Oki Data Americas, Inc., Civ. No.
07-1947 (JEI), 2007 WL 4789040, at *1 (D.N.J. Dec. 11, 2007)
(stating that it is “well-settled that Magistrate
Judges have broad discretion to manage their docket and to
decide discovery issues[.]”) Indeed, it is well settled
that the appropriate scope of discovery and the management of
requests for discovery are left to the sound discretion of
the Court. See Salamone v. Carter's Retail,
Inc., Civil Action No. 09-5856 (GEB) 2011 WL 310701, *5
(D.N.J. Jan. 28, 2011); In re Fine Paper Antitrust
Litig., 685 F.2d 810, 817 (3d Cir. 1982) (finding that
conduct of discovery is committed to sound discretion of
request for production of the unredacted claims file is
DENIED without PREJUDICE. As noted herein, Defendant has
requested, in the alternative, that the Plaintiff produce
summaries of the privileged information contained in the
file. The Plaintiff has agreed to do so. Defendant's
motion for summaries of the redactions is therefore GRANTED.
As such, the Court shall not address the issues regarding
choice of law or waiver of the asserted privilege. Those