Carolyn Barge sued State Farm for uninsured/underinsured (U.M./U.I.M.) benefits. She also alleged claims for bad faith, breach of contract, statutory bad faith violations of the Washington Insurance Fair Conduct Act (IFCA), bad faith violations of the Washington Administrative Code claims handling regulations, violations of the Washington Consumer Protection Act, and negligence. During discovery she served State Farm with a request to produce its claims file. State Farm responded to the request by producing a "redacted" (lawyers' made-up word for "blacked out") claim file.
Ms. Barge filed a motion to compel production of "six sets of documents that State Farm withheld entirely or redacted in part on the basis of attorney-client privilege or the work product doctrine." Barge v. State Farm Mut. Auto. Ins. Co., No. C16-0249JLR, 2016 WL 6601643, at *1 (W.D. Wash. November 8, 2016). The District Judge granted the motion in part, denied it in part, and withheld ruling on the rest of it requiring an in camera inspection of certain withheld documents on the Judge's own motion.
This article addresses the issue of public knowledge of the contents of an insurance company's claim file during discovery, as exemplified in this case by the Judge's ruling on in camera inspection.
The documents as to which the Judge denied production and compelled production all concern reserves evaluations. In Washington, reserves evaluations are treated as work product for the most part and so they are generally privileged from discovery.
There were three sets of documents which look like they total nine (9) pages collectively, which the District Judge ordered State Farm to provide for in camera inspection. At no place in the opinion does this Judge say that State Farm requested an in camera inspection. Apparently what State Farm did was withhold and redact some documents, and oppose the plaintiff's motion to compel them. The in camera inspection was clearly the Judge's own idea.
The Judge required in camera inspection of certain documents because "the court has no way to determine at this time if the documents constitute work product and were created in anticipation of litigation," unless the Court could look at the documents. State Farm's privilege log and materials opposing the motion to compel including a declaration containing testimony about the documents did not, said the Court, disclose what was in the documents aside from saying that one "'is a comprehensive summary of State Farm's claims personnel's analysis'" of liability and damages, and another "contains 'pages from State Farm's "Injury Evaluation format'[.]" Barge v. State Farm Mut. Auto. Ins. Co., No. C16-0249JLR, 2016 WL 6601643, at *7 (W.D. Wash. November 8, 2016).
The Court recognized that "[t]he party claiming work product protection bears the burden of establishing that the work product doctrine applies." Barge v. State Farm Mut. Auto. Ins. Co., No. C16-0249JLR, 2016 WL 6601643, at *5 (W.D. Wash. November 8, 2016).
Clearly, State Farm did not meet its burden of establishing that the work product doctrine applies to the documents which the Court ordered State Farm to produce for in camera inspection. The only reason the Court made the in camera inspection ruling, and on its own motion to say again, is because the Court could not tell from State Farm's pleadings and proofs whether the documents were protected work product. The Court followed settled law (which it apparently did not need to cite in this regard) that disclosure during discovery is based on a document-by-document review, but that applies first of all to the parties who claim immunity from discovery, so that the law requires that the parties present their claim to a court as to each document they withhold or redact. At this point, the Court could have simply ruled that State Farm did not meet its burden of nondisclosure.
But of course the Court did not rule that the documents should be disclosed when State Farm did not meet its burden of proving work product after it withheld or redacted the documents. Instead the Court in this case required in camera inspection of the documents, with the Court apparently intending to inspect them each, one by one. A way to look at the Court's in camera inspection ruling is that State Farm caught a break, that the Court was bending over backward to give State Farm the benefit of doubt here.
Perhaps. But that would not explain the reasoning behind this ruling which seemed to indulge a presumption that the documents were protected from disclosure because a party said so, and that this presumption of nondisclosure is so strong that when it occurs as it did in this case, that the Court in this case would have to see the documents for itself to withhold them, or to disclose them.
But there is another way to look at the same ruling. In this case, the Court obviously gave no weight to, and did not even mention, any interest of the public including of other policyholders in having documents disclosed that might evidence statutory or common law or other bad faith conduct. What interest is that?
One answer might be found in the interest reflected in the Federal Rules and applicable law including the requirement that a party claiming immunity from discovery by raising work product as the reason has the burden to actually prove that work product applies.
More than one view is available of this ruling, perhaps.
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