Opinion
Case No. 1:12-cv-966
06-23-2014
TIMOTHY L. PEARSON, Plaintiff, v. UNITED AUTOMOBILE WORKERS INT'L UNION, et al., Defendants.
Beckwith, J.
Litkovitz, M.J.
ORDER
This matter is before the Court following a June 18, 2014, informal discovery conference on the discoverability of a settlement agreement entered into between plaintiff and his former employer, Ford Motor Company (Ford), a non-party to this lawsuit. Defendants the United Automobile Workers International Union and United Automobile Workers International Union Local No. 863 (UAW collectively) assert the settlement agreement is relevant as to plaintiff's asserted damages and to UAW's defenses and therefore discoverable. Plaintiff and Ford maintain that the settlement agreement is not discoverable as it is not relevant and contains a confidentiality provision. During the conference, the undersigned requested that the settlement agreement be submitted to the Court for in camera review to determine its relevance and discoverability. Ford subsequently provided an electronic copy of the "Confidential Settlement Agreement and Release" between Ford and plaintiff. The Court's determination is as follows.
By way of background, plaintiff began working for Ford in 1978 and was terminated in April 2006, shortly before he would have become eligible for retirement benefits. (Doc. 1, ¶¶ 5-7). After plaintiff was terminated, UAW filed a grievance on his behalf alleging that Ford violated a collective bargaining agreement by firing plaintiff without just cause. (Id., ¶ 8). Plaintiff alleges that during the course of the arbitration with Ford, his UAW representatives failed to inform him of two settlement offers by Ford. (Id., ¶¶ 11-17). Unaware of Ford's willingness to settle, plaintiff proceeded with the arbitration and the arbitrator denied plaintiff's grievance. (Id., ¶¶ 18, 20). Plaintiff then filed a lawsuit against Ford (the Ford Lawsuit) and discovered UAW's alleged failure to communicate Ford's prior offers to settle the arbitration matter during a deposition of a UAW representative taken in connection with the Ford Lawsuit. (Id., ¶ 21). As a result of UAW's alleged failure to communicate these offers, plaintiff filed the instant lawsuit against UAW raising a claim of breach of fiduciary duty of fair representation under Section 301 of the Labor Management Relations Act of 1947, 29 U.S.C. § 185. (Id., ¶¶ 4, 25-26).
As stated above, UAW seeks to discover the terms of the settlement agreement between plaintiff and Ford. UAW maintains that its request is reasonably calculated to lead to the discovery of admissible evidence as the Ford Lawsuit and the instant litigation both arise from the same event - plaintiff's termination by Ford. UAW also represents that the settlement agreement may contain language that is relevant to plaintiff's claims and to UAW's defenses. Further, UAW asserts they are entitled to the settlement agreement and its terms because the money plaintiff received from Ford pursuant to the agreement is relevant and necessary to permit a proper calculation of plaintiff's damages in this case. UAW notes that plaintiff's lawsuit seeks damages for, inter alia, lost wages, retirement income, and medical benefits (Doc. 1, ¶ 27); consequently, UAW asserts that it is entitled to offset any money plaintiff received from Ford pursuant to the settlement agreement for lost wages, retirement income, and medical benefits from any potential damages for which UAW may be held liable.
Ford argues that the settlement agreement is not discoverable because it is confidential and irrelevant. Ford maintains that the settlement agreement's confidentiality provisions are material terms and that it should be maintained as confidential as Ford and plaintiff intended. As to relevancy, Ford asserts that UAW has failed to demonstrate that its request for the settlement agreement is likely to lead to discovery of admissible information because the relevant facts here are wholly distinct from those forming the basis of the Ford Lawsuit. Ford also argues that the settlement amount is not relevant to plaintiff's damages in this matter because Ohio state law provides that plaintiff is entitled to full recovery for his damages resulting from UAW's alleged misconduct regardless of any monies received by plaintiff. Plaintiff joins Ford's arguments. For the following reasons, the Court finds that the settlement agreement between plaintiff and Ford is discoverable.
Neither plaintiff nor Ford has established that there is a recognizable privilege shielding the settlement agreement from disclosure. While Ford and plaintiff maintain that the confidentiality provisions of the settlement agreement protect it from disclosure, "litigants may not shield otherwise discoverable information from disclosure to others merely by agreeing to maintain its confidentiality." Oberthaler v. Ameristep Corp., No. 5:08-cv-1613, 2010 WL 1506908, at *1 (N.D. Ohio Apr. 13, 2010) (internal citations and quotations omitted). See also Goodyear Tire & Rubber Co. v. Chiles Power Supply, Inc., 332 F.3d 976, 981-82 (6th Cir. 2003) (citing cases) (acknowledging that the settlement privilege protects from disclosure of settlement communications, the privilege does not extend to formal settlement agreement documents). Thus, the confidential settlement agreement is not privileged and UAW is entitled to it if it is "relevant to the claim or defense of any party. . . ." Fed. R. Civ. P. 26(b)(1).
The Court's in camera review of the settlement agreement reveals that it contains information that is likely to lead to the discovery of admissible information such that it must be disclosed to UAW. First, the agreement may be relevant as to the issue of damages. See Oberthaler, 2010 WL 1506908, at *2 (granting motion to compel disclosure of settlement agreement due, in part, to its relevancy as to damages). UAW may be entitled to offset any settlement monies paid by Ford to plaintiff for lost wages and, therefore, this information is relevant to plaintiff's claims and UAW's defenses.
To the extent that Ford cites to the collateral-source rule to support its assertion that this information is not relevant to plaintiff's claim for damages, Ford's reliance on Ohio tort law is misplaced. Plaintiff's claim against UAW arises under a federal question. "In federal question cases, 'there is no apparent reason to consult state law. . . .'" Taveras v. Taveraz, 477 F.3d 767, 783 (6th Cir. 2007) (citing 18B Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure, § 4473 (2d ed. 2002 & Supp. 2004). Consequently, the collateral-source rule - an Ohio state law doctrine - does not apply here.
The Ohio collateral-source rule "is an exception to the general rule that in a tort action, the measure of damages is that which will compensate and make the plaintiff whole." Robinson v. Bates, 857 N.E.2d 1195, 1199 (Ohio 2006) (internal citations omitted). "[U]nder the collateral-source rule, the plaintiff's receipt of benefits from sources other than the wrongdoer is deemed irrelevant and immaterial on the issue of damages. The rule prevents the jury from learning about a plaintiff's income from a source other than the tortfeasor so that a tortfeasor is not given an advantage from third-party payments to the plaintiff." Id. (internal citations omitted).
Second, the settlement agreement may be relevant to UAW's defenses against plaintiff's claims. In the answer to plaintiff's complaint, UAW asserts as a defense that plaintiff's claim is barred by the applicable statute of limitations. Thus, UAW seeks the settlement agreement to determine, among other things, whether it contains any admissions regarding this lawsuit. The Court's review of the agreement establishes that the instant litigation is referenced throughout the document such that it may be relevant to UAW's statute of limitations defense. Because the settlement agreement is relevant and not protected by any recognized privilege, it must be disclosed to UAW.
The Court is mindful that plaintiff and Ford intended for the settlement agreement to be maintained in the strictest of confidence as it contains sensitive information. In consideration of these concerns and UAW's counsel's suggestions, the Court finds that, at this juncture, the settlement agreement shall be disclosed to UAW with an "Attorneys Eyes Only" designation. Following review of the settlement agreement, counsel for UAW shall notify plaintiff's counsel as to those portions of the agreement it seeks to designate as confidential under the Protective Order governing disclosure of confidential material in this matter. See Doc. 33. The parties shall attempt to extrajudicially resolve any potential future issues related to the settlement agreement.
Plaintiff is therefore ORDERED to submit the settlement agreement between plaintiff and Ford to counsel for UAW in its entirety and with an "Attorneys Eyes Only" designation within ten (10) days of the entry of this Order. Counsel for UAW shall not disclose any information contained within the settlement agreement with anyone other than counsel for UAW absent agreement by plaintiff or an order of the Court. Any failure by UAW's counsel to comply with this Order may result in sanctions.
IT IS SO ORDERED.
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Karen L. Litkovitz
United States Magistrate Judge