United States District Court, M.D. Tennessee, Nashville Division
JACQUELYN D. AJOSE, et al., Plaintiffs,
INTERLINE BRANDS, INC., Defendant.
Brown United States Magistrate Judge
matter is before the Court on the Plaintiffs' motion to
compel production of four categories of documents withheld by
the Defendant on claims of attorney-client privilege and the
work-product doctrine. (Doc. 145). The Plaintiffs' motion
to compel is GRANTED IN PART and DENIED IN PART.
a class action complaint, the Plaintiffs seek relief for
damages caused by allegedly defective DuraPro brand toilet
connectors distributed by Defendant Interline Brands, Inc.
(“Interline”) beginning in 2002. (Docs. 1, 81).
The toilet connectors were allegedly supplied to Interline by
Linx, Ltd (“Linx”) and MTD (USA) Corp.
(“MTD”). (Doc. 81, pp. 11-12 ¶¶ 33,
38). The original complaint was filed on August 20, 2014.
(Doc. 1). During discovery, Interline produced nearly 14, 000
documents and withheld over 4, 700 relevant documents. (Doc.
146, p. 1). The Plaintiffs take issue with the large number
of documents withheld and seek an order compelling production
of four categories of documents. (Doc. 145). The documents
are identified by two privilege logs. (Docs. 151-1, 151-2).
Interline later gave the Plaintiffs a chart identifying the
name and title of individuals in the privilege logs (Doc.
149-4) and a declaration from Interline's
Quality Assurance Manager, Joseph Cangelosi III
(“Cangelosi declaration”) (Doc. 149-7). The
adequacy of Interline's privilege log (Doc. 151-1) was
first addressed by the parties in June 2016. (Doc. 134, p.
3). The issue was again raised in a telephone conference with
the Magistrate Judge in October 2016. (Doc. 141, p. 2). To
resolve this issue, the Magistrate Judge granted the parties
leave to brief the issue and requested that the challenged
items be submitted for in camera review. (Doc. 141,
p. 2). The parties have submitted their respective briefs
(Docs. 145, 146, 150), and Interline has submitted materials
for this Court's in camera review. The matter is
ripe for decision.
may be compelled by a court order upon motion and notice to
the parties and affected persons. Fed.R.Civ.P. 37(a)(1),
(a)(3)(B); Local Rule 37.01. Where a party seeks to withhold
otherwise discoverable information under a claim of privilege
or the work-product doctrine, the withholding party must
expressly assert the claim and “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.” Fed.R.Civ.P.
26(b)(5)(A). The withholding party may present this
information in the form of a privilege log, but Rule
26(b)(5)(A)(ii) does not explicitly require a privilege log
so long as the necessary information is conveyed.
Genesco, Inc. v. Visa U.S.A., Inc., 302 F.R.D. 168,
191 (M.D. Tenn. 2014). The party withholding items under a
claim of privilege or the work-product doctrine bears the
burden of establishing the item should be withheld.
United States v. Roxworthy, 457 F.3d 590, 593 (6th
Cir. 2006) (citations omitted); Ross v. City of
Memphis, 423 F.3d 596, 606 (6th Cir. 2005) (citation
information has been withheld under claims of privilege in a
federal question case, the presiding court applies federal
common law to determine whether privilege applies.
Fed.R.Evid. 501. The Sixth Circuit Court of Appeals set forth
the following elements of the attorney-client privilege:
(1) Where legal advice of any kind is sought (2) from a
professional legal adviser in his capacity as such, (3) the
communications relating to that purpose, (4) made in
confidence (5) by the client, (6) are at his instance
permanently protected (7) from disclosure by himself or by
the legal adviser, (8) unless the protection is waived.
Reed v. Baxter, 134 F.3d 351, 355-56 (6th Cir. 1998)
federal work-product doctrine, codified at Rule 26(b)(3) of
the Federal Rules of Civil Procedure, protects from discovery
“(1) documents and tangible things; (2) prepared in
anticipation of litigation or for trial; (3) by or for
another party or its representative.” In re
Professionals Direct Ins. Co., 578 F.3d 432, 438 (6th
Cir. 2009) (internal quotations omitted) (quoting
Fed.R.Civ.P. 26(b)(3)). As this Court has recognized, the
work-product doctrine “does not intend to bar discovery
of facts, but rather ‘the work product of the
lawyer' where disclosure of the documents reveals
counsel's ‘mental impressions, personal beliefs,
' and reflections of what counsel believes to be
important.” John B. v. Goetz, 879 F.Supp.2d
787, 896 (M.D. Tenn. 2010) (quoting Hickman v.
Taylor, 329 U.S. 495, 510-11 (1947)).
court determines whether a document or tangible item was
prepared in anticipation of litigation or for trial by
considering two factors: (1) whether the anticipated
litigation or trial was the “driving force” for
preparing the item as opposed to creating the item for an
ordinary business purpose and (2) whether the party's
subjective anticipation was objectively reasonable. In re
Professionals Direct Ins. Co., 578 F.3d at 439 (quoting
Roxworthy, 457 F.3d at 595). To establish the party
anticipated litigation, the party seeking to withhold the
materials may submit proof “such as affidavits made on
personal knowledge, depositions, or answers to
interrogatories.” Roxworthy, 457 F.3d at 597
(citations omitted). Conclusory statements will not satisfy
this burden. Id. (citations omitted). Materials
protected by the work-product doctrine may nevertheless be
ordered disclosed where the requesting party establishes it
has a substantial need for the materials and cannot obtain
equivalent information through other means without undue
hardship. Fed.R.Civ.P. 26(b)(3)(A). Even where disclosure is
ordered, however, the court must protect against disclosure
of opinion work product. Id. 26(b)(3)(B).
privilege is generally waived by disclosure of a privileged
communication to a third party, exceptions to this rule exist
where: (1) multiple clients are represented by the same
attorney in the same matter; (2) defendants share a common
defense and share information to effect this defense (the
“joint-defense” privilege); or (3) two or more
clients share a common interest and exchange legal advice in
support of this interest (the “common-interest”
privilege). Reed, 134 F.3d at 357 (describing the
common-interest privilege); Goetz, 879 F.Supp.2d at
897-98 (explaining the joint-defense privilege and
common-interest privilege); Jones v. Nissan N. Am.,
Inc., No. 3:07-0645, 2008 WL 5114652, at *3 (M.D. Tenn.
Dec. 2, 2008) (citations omitted) (explaining that an
employer and its worker's compensation carrier shared a
common interest in relation to worker's compensation
claim); Broessel v. Triad Guar. Ins. Corp., 238
F.R.D. 215, 219-20 (W.D. Ky. 2006) (citations omitted).
Plaintiffs challenge Interline's assertion of privilege
as to the following categories of documents: “(1)
documents related to Interline's adjusting of claims for
property damage; (2) non-privileged communications between
non-legal Interline employees and agents; (3) spreadsheets
compiling factual data; and (4) drawings related to the
design of the defective connectors.” (Doc. 145).
Several documents from each category were provided for in
camera review. The categories and the documents
submitted in camera are addressed in turn.
Plaintiffs first argue that Interline has improperly invoked
the work-product doctrine and attorney-client privilege to
withhold documents related to Interline's adjusting of
claims for property damage. (Doc. 146, pp. 1, 6). Claims
received by Interline are divided into three categories: (1)
direct claims from customers, (2) subrogation demands, and
(3) notices of litigation. (Doc. 149-1, p. 4 of 7).
Importantly for purposes of this analysis, the Plaintiffs
only seek production of documents related to direct claims
and subrogation demands, not notices of litigation. (Doc.
146, p. 8). The parties have not disputed the relevance of
APPLICATION OF THE WORK-PRODUCT DOCTRINE TO CLAIM FILES
first issue presented is whether files created in response to
direct claims and subrogation demands may be withheld as work
product. The answer to this question turns on whether the
files were prepared in anticipation of litigation. See In
re Professionals Direct Ins. Co., 578 F.3d at 439
(citation omitted) (“Making coverage decisions is part
of the ordinary business of insurance and if the
‘driving force' behind the preparation of these
documents was to assist Professionals Direct in deciding
coverage, then they are not protected by the work-product
cites Young v. Chapman, No. 3:14-CV-666-JHM-CHL,
2016 WL 1717226 (W.D. Ky. Apr. 28, 2016) for the proposition
that insurance claim files are discoverable where the
withholding party has not established that they were prepared
in anticipation of litigation. At issue in Young was
the production of a statement made by a driver to his
insurance provider after an automobile accident. Id.
at *4, 6-7. As the Young court observed, the Sixth
Circuit has rejected the assumption that every investigation
into an insurance claim is done “in anticipation of
litigation” because making coverage decisions is an
ordinary business matter for insurers. Id. at *6
(citing In re Professionals Direct Ins. Co., 578
F.3d at 439). The Young court found the driver's
statement to the insurer was not made in anticipation of
litigation even though (1) four cars and multiple individuals
were involved in the accident; (2) the accident received
media coverage; and (3) the insurance representative gave
sworn testimony that at the time the statement was taken the
insurance company believed litigation may ensue. Id.
at *7. The following statement supplied by the insurance
representative was deemed conclusory: “[b]ased on the
facts of the accident, apparently involving multiple
collisions between several vehicles, Amerisure retained
Specialty Claims . . . and obtained the recorded statement .
. . due to its belief that the accident may result in
litigation.” Id. (alterations in original).
The court additionally noted that the claim was treated like
other claims and found that a police report supported a
finding that another driver was at fault which suggested
litigation was less likely. Id.
Plaintiffs note, the Young decision is supported by
other district court decisions within this circuit. See
Cardinal Aluminum Co. v. Cont'l Cas. Co., No.
3:14-CV-857-TBR-LLK, 2015 WL 4483991, at *4 (W.D. Ky. July
22, 2015) (finding that the plaintiff had not established
that documents prepared by an insurance broker in the
ordinary course of business qualified as work product);
Cowie v. State Farm Fire & Cas. Co., No.
1:07-CV-63, 2007 WL 2077619, at *2 (E.D. Tenn. July 17, 2007)
(explaining that insurance investigatory materials may be
work product if they were primarily created in anticipation
of litigation and the fact-intensive inquiry should focus on
who prepared the documents, the nature of the documents, and
when the documents were created); Flagstar Bank v. Fed.
Ins. Co., No. 05-CV-70950-DT, 2006 WL 6651780, at *5-6
(E.D. Mich. Aug. 21, 2006) (explaining that claims materials
were not privileged where they were prepared by attorneys
because a claims investigation was required in the ordinary
course of business).
Plaintiffs contend that Interline is self-insured because it
is responsible for a $75, 000 claim deductible and adjusts
claims in the ordinary course of business. (Doc. 146, p. 7).
Interline rejects the label “self-insured”
because it maintains insurance through third-party carriers.
(Doc. 150, p. 8 & n.4). Interestingly, both sides cite
Interline's second amended complaint in another lawsuit
for their competing definitions. See Amended
Complaint for Declaratory Relief and Damages, Interline
Brands, Inc. v. AIG Specialty Ins. Co., No.
3:14-cv-00426 (M.D. Fla. filed April 14, 2014) (Doc. No. 40).
In the unrelated amended complaint, Interline alleged it
maintained various liability policies with third-party
insurers. Id. at 3-8. Having taken out insurance
policies with other entities, Interline is not
“self-insured.” See Self-Insurance,
Black's Law Dictionary (10th ed. 2014) (defining
self-insurance as “A plan under which a business
maintains its own special fund to cover any loss. Unlike
other forms of insurance, there is no contract with an
insurance company.”). Like a self-insured company,
however, Interline has internal procedures for resolving
it is not self-insured, Interline distinguishes this case
from an order on a motion to compel in Trabakoolas v.
Watts Water Technologies, Inc., No. 3:12-cv-01172 (N.D.
Cal. dismissed Aug. 5, 2014) (Doc. No. 210). While Interline
is correct that the withholding party in Trabakoolas
was described as self-insured, the court's order
compelling production of documents was based on the fact that
the party used an in-house team to investigate and adjust
claims concerning failed toilet connectors in the ordinary
course of business. Id. The court found it
inconsequential that a risk management department be required
to report to an attorney. Id. at 2. To establish an
anticipation of litigation, the court explained, the
withholding party “must identify a trigger event,
” which “could include the involvement of legal
counsel on behalf of the claimant, or the denial of a
claim.” Id. Because the withholding party had
not identified a specific reason for anticipating litigation
when claims were reviewed, the work-product doctrine did not
apply. Id. at 2-3.
Interline is self-insured is not dispositive. The overall
question is whether Interline created the withheld claims
files in the ordinary course of business or whether these
files were created “because of” an objectively
reasonable subjective anticipation of litigation. As already
stated, Interline divides its claims into three categories:
(1) direct claims from customers, (2) subrogation demands,
and (3) notices of litigation. (Doc. 149-1, p. 4 of 7).
Ordinarily Interline account representatives handle direct
customer claims and act as agents or brokers between
customers and suppliers. (Doc. 149-1, p. 4 of 7). In this
case, the supplier would be either Linx or MTD. (Doc. 149-1,
p. 4 of 7). Subrogation demands and notices of litigation are
directed to the legal department after Mr. Cangelosi makes
product identifications. (Doc. 149-1, p. 4 of 7).
establish that this procedure changed due to a reasonable
anticipation of litigation, Interline submitted the Cangelosi
declaration. (Doc. 149-7). Mr. Cangelosi explained that
before 2007 or 2008, Interline had only received a few claims
regarding DuraPro brand toilet connectors and those claims
were handled by Interline's Quality Assurance Team. (Doc.
149-7 ¶ 6). Interline noticed an increasing number of
DuraPro brand toilet connector claims in 2007 or 2008. (Doc.
149-7 ¶ 7). Based on the “slight increase in the
number of claims” and the filing of an individual
lawsuit, Interline and its General Counsel's office were
alerted to a potential threat of litigation. (Doc. 149-7
¶ 8). Interline's General Counsel's office
directed that DuraPro brand toilet connector claims be
handled by the legal department which solicited Mr.
Cangelosi's input. (Doc. 149-7 ¶ 9). The legal
department continued to handle these claims as the threat of
litigation grew in the following years. (Doc. 149-7 ¶
10). Mr. Cangelosi stated that the “‘driving
force' behind Interline's General Counsel's
office's unique preparation of claims documents regarding
the DuraPro Brand Toilet Connectors between around 2007 and
2012 was the threat of litigation.” (Doc. 149-7 ¶
the parties' representations, the Magistrate Judge finds
that in the ordinary course of business claim files would be
created by Interline quality assurance employees or in-house
counsel upon receipt of direct claims and subrogation
demands. The fact that direct claim files were prepared by
in-house counsel once Interline was alerted to a potential
threat of litigation does not detract from the fact that this
was standard practice. To the extent that Interline's
in-house attorneys went beyond the investigative and
negotiation functions formerly performed by the quality
assurance employees upon receipt of direct claims, those
efforts may constitute work product. Additionally, if the
in-house attorneys' treatment of subrogation demands
changed based on an anticipation of litigation, that factor
may lead to a finding of work-product protection. The
information submitted to the Court is not enough to reach
asserting that in-house counsel had a “unique”
method of preparing claim documents and that the threat
litigation was the “driving force” for these
unidentified methods, the Cangelosi declaration does not
provide specific or detailed information required for the
undersigned to determine that the direct claim and
subrogation demand files were prepared outside the ordinary
course of business. Additionally, Interline claims it
subjectively anticipated litigation upon a “slight
increase in the number of claims” and the filing of an
individual lawsuit. (Doc. 149-7 ¶ 8). Receipt of summons
may reasonably trigger an anticipation of litigation for
related claims. As of the date of this order, Interline has
not provided the requisite details to evaluate the
“individual lawsuit, ” such as the date of
service. Interline has not met its burden of establishing
that the withheld direct claim files and subrogation demand
files were prepared in anticipation of litigation. Until this
is established, the Magistrate Judge cannot conclude,
categorically, that the direct claim files and subrogation
demand files constitute protected work product.
following documents were submitted for in camera
• ESI-0000019 (Log Entry 18) - PRIVILEGED o This is an
email from Chuck Roche at Linx to Mark Allen and copied to
two Linx email accounts on August 5, 2014, titled “Re:
Watts Taizhou Shida Claims.” It is withheld as an
attorney-client communication and/or work product
“regarding indemnification/joint defense/common
interest for claims and/or litigation involving the DuraPro
brand toilet connectors.” (Doc. 151-2, p. 1).
o Mark Allen is a Global Sourcing Director at Interline.
(Doc. 149-4, p. 5).
o This document is properly withheld under the work-product
doctrine and attorney-client privilege. Legal strategies are
solicited through this email. Privilege is not waived by
disclosure to Linx employees pursuant to the common-interest
• ESI-0000080 (Log Entry 72) - NOT PRIVILEGED o This
document is described as “Wequp to MTD Comparison
Photos.pdf” created on June 28, 2013. It is withheld as
work product “regarding claims involving the DuraPro
brand toilet connectors.” (Doc. 151-2, p. 4).
o The Cangelosi declaration states this entry “contains
Interline's own photographs regarding a toilet connector
that was the subject of an active claim.” (Doc. 149-7
o This nine-page document consists of pictures of various
connectors. The privilege log explanation does not
distinguish between ordinary claims handling and preparing
materials in anticipation of litigation. Likewise, the
Cangelosi declaration explains these photographs were taken
in response to a claim, not in an anticipation of litigation.
Interline has not satisfied its burden of establishing
• ESI-0001420 (Log Entry 1164) - NOT PRIVILEGED o This
is an email from Vickie Coughlin to Joe Cangelosi on May 31,
2012, titled “Confidential: FW: State Farm a.s.o.
Castro (water claim).” It is withheld as an
attorney-client communication and work product
“regarding claims involving the DuraPro brand toilet
connectors.” (Doc. 151-2, p. 50).
o The Cangelosi declaration states this document is a
communication between legal personnel and himself involving
legal issues with the DuraPro brand toilet connectors. (Doc.
149-7 ¶ 11).
o Vickie Coughlin is a Senior Paralegal at Interline. (Doc.
149-4, p. 7).
o This one-page email is not privileged. The Rule 30(b)(6)
deposition of Interline revealed that Mr. Cangelosi makes
product identifications for complaints sent to
Interline's in-house counsel in the ordinary course of
business. (Doc. 149-1, p. 4 of 7). In this email, Ms.
Coughlin requests that Mr. Cangelosi identify a product and
review an expert report regarding a claim. The privilege log
description of the document, the Cangelosi declaration, and
the contents of this email do not suggest that an
anticipation of litigation as opposed to an ordinary business
purpose was the driving force behind Ms. Coughlin's
request. Additionally, the descriptions of this document do
not identify a basis for withholding this document under the
attorney-client privilege. Interline's in-house legal
department processed claims on Interline's behalf at the
time this email was sent. From the context of this email, it
appears that Ms. Coughlin seeks Mr. Cangelosi's input in
a business capacity.
• ESI-0004388 (Log Entry 3509) - NOT PRIVILEGED o This
is an email involving Joe Cangelosi dated May 11, 2010,
titled “E.L. Ross Claim.” It is withheld as an
attorney-client communication and work product
“regarding claims involving the DuraPro brand toilet
connectors.” (Doc. 151-2, p. 140).
o The Cangelosi declaration states this document is a
communication between legal personnel and himself involving
legal issues with the DuraPro brand toilet ...