Summary
In Empire Box Corporation of Stroudsburg v. Illinois Cereal Mills, 8 Terry 283, 90 A.2d 672, 673, it is stated as a general rule that an adequate demonstration of good cause under Rule 34 requires a showing that "other avenues of discovery" are closed to the moving party.
Summary of this case from Jones v. Westinghouse Elec. Supp. Co.Opinion
July 9, 1952.
TERRY, J., sitting.
Edwin D. Steel, Jr., (of the firm of Morris, Steel, Nichols and Arsht) for plaintiff.
Henry van der Goes (of the firm of Young and Wood) for defendant.
Motion for the production of documents under S.C. Rule 34.
Superior Court for New Castle County, No. 591, Civil Action, 1 1951.
This action involves an alleged breach of warranty arising out of the sale on November 15, 1948 by the defendant, a Delaware corporation doing business in Illinois, to the plaintiff, a Delaware corporation doing business in Pennsylvania, of thirty tons of White Hi-Starch Beater Flour to be used in the manufacture of paperboard at the plaintiff's factory at Stroudsburg, Pennsylvania.
The complaint alleges, inter alia, that the defendant sent one ton of the flour to the plaintiff on or about the 21st day of October, 1948, so that the plaintiff could test it to determine if it could be used as a satisfactory substitute for pearl starch, at that time being used by the plaintiff at Stroudsburg in the manufacture of paperboard.
The complaint alleges that the one ton of flour aforesaid delivered by the defendant to the plaintiff in October proved to be satisfactory in the manufacturing of paperboard, and on November 15, 1948, the plaintiff ordered thirty tons of the flour, which was delivered to it by the defendant.
It is alleged that the paperboard manufactured from the shipment of the thirty tons did not equal in quality the paperboard manufactured from the one ton shipment in October; nor did it equal in quality that paperboard previously manufactured with pearl starch as used by plaintiff; and that, as a consequence of defendant's breach of warranty, the plaintiff was forced to refund to its customers, to whom it had sold the paperboard manufactured with the flour from the shipment of thirty tons, the full purchase price of the paperboard, together with damages sustained by its customers in attempting to print the paperbound. The alleged damages being, to-wit: $22,815.19.
The defendant now moves for the production by the plaintiff of certain documents under S.C. Rule 34. The motion recites as follows:
"Defendant, Illinois Cereal Mills, Inc., moves the Court for an order requiring the plaintiff, Empire Box Corporation of Stroudsburg, to produce and to permit the defendant to inspect and copy the following documents:
"(a) The report of Foster D. Snell of Brooklyn, New York, regarding a test made of a sample of the starch furnished by the defendant to the plaintiff in connection with the transactions which are the subject matter of this suit;
"(b) The report of Hercules Powder Company, Wilmington, Delaware, on a test made of a sample of the starch which was furnished by the defendant to the plaintiff as aforesaid.
"The plaintiff has the possession, custody or control of the foregoing documents. They constitute or contain evidence which is highly relevant and material to the issues in this case, and it is essential that the defendant be permitted to inspect them in order to prepare properly for the trial."S.C. Rule 34 is as follows:
"Discovery And Production Of Documents, And Things For Inspection, Copying, Or Photographing. Upon motion of any party showing good cause therefor and upon notice to all other parties, and subject to the provision of Rule 30(b), the court in which an action is pending may (1) order any party to produce and permit the inspection and copying or photographing, by or on behalf of the moving party, of any designated documents, papers, books, accounts, letters, photographs, objects, or tangible things, not privileged, which constitute or contain evidence relating to any of the matters within the scope of the examination permitted by Rule 26(b) and which are in his possession, custody, or control; * * *."
S.C. Rule 26(b). "Scope Of Examination. Unless otherwise ordered by the court as provided by Rule 30(b) or (d), the deponent may be examined regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action, whether it relates to the claim or defense of the examining party or to the claim or defense of any other party, including the existence, description, nature, custody, condition and location of any books, documents, or other tangible things and the identity and location of persons having knowledge of relevant facts. It is not ground for objection that the testimony will be inadmissible at the trial if the testimony sought appears reasonably calculated to lead to the discovery of admissible evidence."
S.C. Rule 30(b). "Orders For The Protection Of Parties And Deponents. After notice is served for taking a deposition by oral examination, upon motion seasonably made by any party or by the person to be examined and upon notice and for good cause shown, the court in which the action is pending may make an order that the deposition shall not be taken, or that it may be taken only at some designated place other than that stated in the notice, or that it may be taken only on written interrogatories, or that certain matters shall not be inquired into, or that the scope of the examination shall be limited to certain matters, or that the examination shall be held with no one present except the parties to the action and their officers or counsel, or that after being sealed the deposition shall be opened only by order of the court, or that secret processes, developments, or research need not be disclosed, or that the parties shall simultaneously file specified documents or information enclosed in sealed envelopes to be opened as directed by the court; or the court may make any other order which justice requires to protect the party or witness from annoyance, embarrassment or oppression."
It is necessary to note that our S.C. Rule 34 in terms and language is identical with Rule 34 of the Federal Rules of Civil Procedure, 28 U.S.C.A.
The defendant resists the plaintiff's motion for production of the foregoing reports upon several grounds, and has filed the following affidavits in connection therewith:
"Charles W. Stiefel, Jr., being first duly sworn on oath, deposes and says that;
"(1) He is an attorney at law, duly licensed to practice in the State of Illinois;
"(2) On November 23, 1949, there was forwarded to him by plaintiff's New York counsel, plaintiff's file relating to its controversy with defendant herein;
"(3) After an examination of such file, affiant was unable to determine therefrom whether sufficient proof existed as to the causal connection between the defects in the paperboard manufactured by plaintiff and the nature and properties of the beater flour claimed by plaintiff to be the cause of such defects. In order to establish such causal connection in any litigation instituted by affiant on plaintiff's behalf, affiant deemed it necessary to obtain independent, expert testimony as to the components and properties of the beater flour, such testimony to be based upon actual tests and analyses of such beater flour. Affiant did, therefore, on March 2, 1950, request plaintiff to have an analysis made by a testing laboratory of the beater flour sold by defendant to plaintiff, to determine from such analysis what, if any, component or property of such beater flour caused, or could have caused the defects in the paperboard manufactured therefrom;
"(4) Pursuant to such instructions of affiant, plaintiff caused such tests and analyses to be made of such beater flour by Foster D. Snell, Inc., of New York, New York;
"(5) The results thereof were delivered to affiant and retained by him for use in preparation of the pleadings and for trial of the above cause by him on plaintiff's behalf, and for no other purpose whatsoever;
"(6) Affiant and plaintiff at all times stood ready and willing, if request therefor had been made by defendant, to deliver to defendant samples of the same kind and quality as were delivered by the plaintiff to said Foster D. Snell, Inc., but no such request was ever made by defendant.
"Further Affiant Sayeth Not. /s/ Charles W. Stiefel, Jr. Affiant"
"Samuel L. Neidorf, being first duly sworn on oath, deposes and says that he is Vice President of Empire Box Corporation of Stroudsburg, a Delaware corporation, the plaintiff in this action;
"Affiant further says:
"(1) That from approximately June, 1947 to January, 1949 he was Manager of plaintiff's paperboard mill at Stroudsburg, Pennsylvania;
"(2) That on approximately April 17, 1949 he requested one of plaintiff's suppliers, viz., Hercules Powder Company, to test samples of paperboard and beater flour, the latter of which was purchased by plaintiff from Illinois Cereal Mills, Inc. to determine, if possible, the cause of spots in such paperboard which did not print;
"(3) That Hercules Powder Company made certain tests and communicated the results thereof to affiant upon condition that the contents of such report would not be used as evidence in any claim made against the supplier of the beater flour, to which condition affiant, on behalf of plaintiff, agreed;
"(4) That affiant's deposition was heretofore taken in this cause at Wilmington, Delaware by defendant's attorney, during the course of which deposition or immediately following the close of affiant's testimony, plaintiff's attorney exhibited to defendant's attorney, at the latter's request, a copy of such report for visual examination thereof, and defendant's attorney was informed by plaintiff's attorney that a copy thereof would not be furnished to him nor would the contents of such report be offered in evidence in the trial of this cause, as evidence relating to the condition of the said beater flour, because of the condition upon which it was obtained, but that said report, on the date of receipt thereof, would be offered in evidence or referred to only as fixing the date on which plaintiff first received notice that said beater flour was the cause of the said spots.
"Further Affiant Sayeth Not. /s/ Samuel L. Neidorf Affiant".
The plaintiff maintains (1) that the Snell report (1950) was prepared and submitted to the plaintiff at Steifel's (attorney for plaintiff) request in order that he might ascertain whether plaintiff had a valid cause of action against the defendant, and, if it was so determined that such cause of action did exist, it was proposed that the report should be used in preparing plaintiff's pleadings and in the trial of the action. Thus, predicated upon the foregoing purposes, the plaintiff contends that the subject matter as stated in said report is privileged and as such is not subject to an order for production under S.C. Rule 34. Citing Wise v. Western Union Tel. Co., 6 W.W. Harr. 456, 178 A. 640; Reeves v. Pennsylvania R.R. Co., D.C. Del. 1949, 8 F.R.D. 616; Winter v. Pennsylvania R.R. Co., 6 Terry 108, 68 A.2d 513. (2) The Hercules report (1949) was prepared and submitted to the plaintiff at the request of Neidorf, Vice-President of plaintiff. The reason for having this test made and a report thereon was to determine the cause of spots appearing in the paperboard. The plaintiff contends that this report was later turned over to Steifel (plaintiff's attorney) to aid him in determining whether a valid cause of action existed against the defendant, and, thus, by reason thereof became privileged and not subject to an order for production under S.C. Rule 34. Citing cases supra. (3) The cloak of privilege surrounds each report because they were prepared by experts. Citing Lewis v. United Airlines, D.C., 32 F. Supp. 21 . (4) The Hercules report was submitted upon the condition that it would be kept confidential by the plaintiff and not be used by it as evidence in any action which it might bring against the defendant; therefore, at the trial of the issue the plaintiff intends to offer this report only to show the date on which the plaintiff first received notice that the beater flour as furnished to it by the defendant was the cause of the spots appearing in the paperboard. (5) An order for production concerning each or both reports should be denied because the defendant has failed to show good cause therefor, and in this connection the plaintiff asserts that it has offered to deliver to the defendant samples of the flour from which the respective tests were made by Snell and Hercules in order that the defendant could have tests made by chemists or experts of its own selection, and that such offer on its part has been rejected by the defendant.
The defendant concedes (1) that in this State under the Law-Privilege Doctrine, which relates to documents prepared in connection with intended or pending action whether at the request of an attorney or not and whether ultimately laid before the attorney or not, such documents are privilege if prepared with a bona fide intention of being laid before the attorney for the purposes of taking his advice concerning such intended action and as such are not subject to an order for production under S.C. Rule 34. But the defendant contends that even if the Snell report was so obtained, the decisions in this State constituting the Law-Privilege Doctrine under Rule 34 are erroneous and the principles as laid down therein should be re-examined and overruled in the light of the decision of Hickman v. Taylor, 329 U.S. 495, 67 S. Ct. 385, 91 L. Ed. 451 . (2) If there was a confidential understanding between Hercules and the plaintiff relating to the plaintiff's promise not to use the Hercules report in litigation against the defendant, such an understanding is of no import and does not of itself make the report privileged. Citing 28 R.C.L. 517. (3) Conceding that each report was prepared by an expert, it does not follow from this fact alone that the cloak of privilege surrounds either or both reports. Citing Sachs v. Aluminum Co. of America, 6 Cir., 167 F.2d 570. (4) The information sought from the reports is material and relevant and goes to the very heart of the issue between the parties and that a proper defense to said action cannot be prepared without knowledge on the part of the defendant of the matters therein contained, and that the plaintiff's offer to produce a portion of the flour as tested by Snell and Hercules in order that the defendant can have tests made for itself by experts of its own selection does not furnish a basis for the denial of production thereof, because even though such tests, if made by the defendant, might indicate entirely different results from the tests made by Snell and Hercules, still without the plaintiff's reports for comparison the defendant could not have the opportunity before trial to be apprised of such differences or the opportunity to investigate and determine the reasons why any such differences should exist.
Finally the defendant contends that should the Snell report (1950) be considered privileged because obtained for the purpose of being laid before the plaintiff's attorney as an aid to him in relation to the present litigation, nevertheless the Hercules report cannot be placed in the same category for the reason that it was obtained in 1949 at which time legal action was not contemplated on the part of the plaintiff, and, thus, under the Delaware Decisions, would not be privileged but subject to production upon the showing of good cause under the rule.
In relation to the interpretation of privilege to be afforded under Rule 34 it should be said that no substantive right accrues to the parties to any litigation by reason of the adoption thereof. The aspects of the rule are entirely procedural. Thus, the question of policy becomes the dominating factor insofar as interpretation of the rule in relation to its application.
The rule in this State importing the Law-Privilege Doctrine to documents prepared with a bona fide intention of laying the same before an attorney for the purpose of taking his advice in relation to intended action, or as an aid to him in preparing and prosecuting litigation, is too well settled to afford any doubt. Prior to the adoption in 1948 of our new rules of civil procedure, Rodney, J., sitting in the Superior Court of this State in considering the question of law-privilege in the case of Wise v. Western Union Tel. Co., 1935, supra [6 W.W. Harr. 456, 178 A. 644] concluded that the plaintiff's petition in that case for production of writing in defendant's possession under Paragraph 4228 of the Revised Code of Delaware, 1915, fell within the sound legal discretion of the Court, and, in disposing of the motion for production, adopted the English Rule as the test for determining the privileged status of the writings before him. He concluded in respect thereto that "Documents prepared in relation to an intended action, whether at the request of a solicitor or not, and whether ultimately laid before the solicitor or not, are privileged if prepared with a bona fide intention of being laid before him for the purpose of taking his advice; and an inspection of such documents cannot be enforced."
In 1949 subsequent to the adoption of our new rules Rodney, J., then sitting in the U.S. District Court (Del.) in passing upon a motion for production under S.C. Rule 34 in the case of Reeves v. Pennsylvania R.R. Co., supra, commenced in our Superior Court and later transferred to U.S. District Court on the ground of diversity of citizenship, held that the adoption of our new rules for civil procedure in 1948 did not change or alter the rule relating to the law-privilege concerning the production of documents as previously laid down by him in the case of Wise v. Western Union Tel. Co., supra. Likewise, In the case of Winter v. Pennsylvania R.R. Co., supra [6 Terry 108, 68 A.2d 516], Pearson, J., sitting in the Superior Court of this State in dealing with the question of law-privilege in relation to certain interrogatories before him, stated, "I adopt Judge Rodney's reasoning in the Reeves case; namely, that the present Superior Court Rules, in excluding privileged matters, do not change the pre-existing law governing what matters are privileged as stated in the Wise case."
If the question of privilege relating to the production of the respective reports is to be determined in the light of our decisional law, then the Snell report (1950), obtained for the undisputed purposes as indicated in Steifel's (plaintiff's attorney) affidavit, becomes privileged and production thereof cannot be enforced. On the other hand, the Hercules report (1949) clearly was not so prepared, and, therefore, only if good cause be shown would be subject to an order for production.
The substance of the Supreme Court's opinion upon the question of privilege under F.R. 34, 28 U.S.C.A., in the case of Hickman v. Taylor, supra, is that all written materials obtained or prepared by an adversary's counsel with an eye toward litigation are not necessarily privileged, that is, the protective cloak of privilege does not extend to information which an attorney secures from witnesses while acting for his client in anticipation of litigation, nor does the privilege concern the memoranda, briefs, communications and other writings prepared by counsel for his own use in prosecuting his client's case; likewise, it is equally unrelated to writings which reflect an attorney's mental impressions, conclusions, opinions or legal theories. While the Supreme Court did not so state, nevertheless, I feel that their interpretation of privilege under the rule would be the same in the event a party obtained the written statements and later delivered the same to his attorney for advice.
By reason of the Hickman opinion the cloak of privilege under F.R. 34 no longer entirely surrounds the work product of the lawyer. Whether the opinion means that the Court intended to make an exception under the English Rule or to repudiate that rule with exceptions makes little difference. All that can be said is that the Court has defined privilege in merely a vague or remote fashion; thus, the dilemma remains. Where can the line be drawn? An indication of what I mean will be readily understood when certain federal opinions handed down since the Hickman opinion are studied in the light of the Hickman opinion and in relation to the status of reports or documents compiled by experts. The following cases seem to indicate that reports or documents so compiled by third persons at the request of counsel to aid him in giving legal advice and in the prosecution of pending litigation constitutes an exception to the rule laid down in the Hickman case and are privileged and the production thereof should not be enforced. Lewis v. United Airlines, D.C., 32 F. Supp. 21 ; U.S. v. 720 Bottles Labeled 2 Fl. Oz., etc., D.C., 3 F.R.D. 466 ; Lundberg v. Welles, D.C., 11 F.R.D. 136 ; Schuyler v. United Airlines, D.C., 10 F.R.D. 111 . To the contrary see Sachs v. Aluminum Co., 6 Cir., 167 F.2d 570.
If the primary purpose of justice is to elicit truth essential to correct adjudication, then the new rules provide many avenues to this end, provided their application be not shackled by strict or rigid interpretation. If the document sought (Hercules report) be said to be essential to a vital issue and is evidentiary in character and falls within the non-privilege field, its stamp as such should not be brightened by the cloak of privilege merely for the reason that it was compiled by an expert.
The procedural policy concerning privilege as it relates to production under S.C. Rule 34 has been passed upon by able jurists in this State whose opinions I feel obligated to honor, especially so in the light of the confusion that exists under the Federal Decisions upon the questions. The cloak of privilege in this State, therefore, must be said to surround the Snell report, and its production will not be enforced in this proceeding. On the other hand, since the Hercules report was not made at a time when litigation was anticipated or pending, or for the purpose of delivering the same to plaintiff's attorney for advice, it necessarily falls into the category of non-privileged matter, notwithstanding that it was rendered by an expert or delivered to the plaintiff with the understanding that it would not be used in litigation against the defendant, and its production will be enforced only upon a showing by the defendant of good cause.
In considering the question of "good cause", meaning adequate reasons why the Court should exercise its discretion under the rule and enter an order for production, we should not lose sight of the fact that a legal action remains, as always, an adversary proceeding. The underlying purpose of discovery in general is to reduce the element of surprise at trial by advancing the time at which disclosure can be ordered from the trial date to a date preceding that date. The relevancy or materiality of substance contained in documents is not the sole criterion for production under the rule. "Good cause" does not relate to the substance contained within the document, but, rather, the reason for producing the relevant or material matter therein contained. Thus, the enforcement of S.C. Rule 34 entails the exercise of a sound judicial discretion by the Court, and the burden is upon the moving party to demonstrate a need for the document sought beyond the relevancy or materiality relating to the substance therein contained. Reeves v. Pennsylvania R.R. Co., supra.
The defendant argues in the present case that to compel it to propound interrogatories to Hercules, or to proceed by way of deposition, in order to obtain the substance set out in the Hercules report, would entail (1) an unnecessary expense on the part of the defendant, and (2) an unnecessary delay to the defendant in preparing its defense.
I think the defendant's argument is without merit. Before it is allowed to open its adversary's files it must first show that other avenues of discovery are either closed to it, or that in pursuing them it was unable to obtain the matters desired. Otherwise, upon motion the operation of the rule becomes automatic, or, in effect a mere writ of right. Hercules is a Delaware corporation. Its principal office is located in this State. Certainly the necessary witnesses are available to inform the defendant of the matters it now seeks to discover. The defendant must exercise some degree of industry on its part. "Good cause", as it relates to the Hercules report, has not been shown to move me to exercise my discretion in favor of the defendant. The defendant's motion for production under S.C. Rule 34, as the same relates to both reports, is denied.
An order will be signed accordingly.