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Exxon Mobil Corp. v. Northwestern Corp.

United States District Court, D. Montana, Billings Division

September 27, 2017

EXXON MOBIL CORPORATION, a New Jersey Corporation, Plaintiff,



         I. BACKGROUND

         Plaintiff Exxon Mobil Corporation ("XOM") is a New Jersey Corporation that operates a refinery in Billings, Montana. XOM receives power for its refinery through Defendant Northwestern Corporation dba Northwestern Energy ("NWE"). In January of 2014 and January of 2016, XOM's Billings refinery suffered a power outages. As a result, XOM claims it suffered damages based on the loss of power and alleges that the outages were directly caused by NWE's negligent design, installation, and maintenance of its equipment and systems.

         II. STATUS

         On August 30, 2017, the Court held a hearing in relation to the parties' cross motions to compel discovery. (Docs. 121, 134). After hearing argument, the Court granted XOM's motion to compel and took NWE's motion to compel under advisement.

         The Court ordered XOM to produce to the Court the documents indicated on its privilege log (Doc. 142-1), the redacted page XOM00274064 (Doc. 135-2), and a redacted page from Joaquim Demagalhaes's presentation (XOM00284176), for an in camera review. (Doc. 143). The documents XOM claimed were privileged were generally related to a "hindsight investigation, " which it claimed was instigated in anticipation of litigation and is therefore not discoverable under Fed.R.Civ.P. 26(b)(3). XOM also withheld certain documents under the attorney-client privilege based on communications between several employees and corporate counsel. XOM fully complied with the Court's order on September 6, 2017. (Doc. 144).


         In general, a litigant is entitled to "obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense [.]" Fed.R.Civ.P. 26(b)(1). Also, "[Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence." Id.

         Upon a party's failure to disclose requested information the requesting party may move to compel the opposing party to produce the requested discovery materials. Fed.R.Civ.P. 37(a)(1). Specifically, a party's failure to answer an interrogatory, or to respond to a request for production are grounds for obtaining an order compelling disclosure. Fed.R.Civ.P. 37(a)(3)(B).

         Based on the liberal discovery policies of the Federal Rules of Civil Procedure, a party opposing discovery carries a "heavy burden" of showing why discovery should not be allowed. Blankenship v. Hearst Corp., 519 F.2d 418, 429 (9th Cir. 1975). "The party who resists discovery has the burden to show that discovery should not be allowed, and has the burden of clarifying, explaining, and supporting its objections." DIRECT TV, Inc. v. Trone, 209 F.R.D. 455, 458 (C.D.Cal. 2002) (citing Blankenship, 519 F.2d at 429).

         In ruling on a motion to compel, "[b]road discretion is vested in the trial court to permit or deny discovery[.]" Hallett v. Morgan, 296 F.3d 732, 751 (9th Cir. 2002).

         A. Privilege Log

         The hallmark of the work product doctrine is that the document sought to be protected was "prepared in anticipation of litigation." Fed.R.Civ.P. 26(b)(3). "It is well established that documents prepared in the ordinary course of business are not protected by the work-product doctrine because they would have been created regardless of the litigation." Parrick v. FedEx Grounds Package Sys., 2010 WL 2854314, *10 (D. Mont. July 19, 2010) (citing Heath v. F/VZOLOTOI, 221 F.R.D. 545, 549-50 (W.D. Wash. 2004) (quoting Advisory Committee Notes to Fed.R.Civ.P. 26(b)(3)). Furthermore, "even if documents prepared in the ordinary course of business might also be helpful in preparation for litigation, they do not qualify for protection" under the work product doctrine. Heath at 550 (citing United States v. Adlman, 134 F.3d 1194, 1202 (2nd Cir. 1998). Also, attempting to delegate a business activity to legal counsel does not shield an investigation from discovery. Lumber v. PPG Industries, Inc., 168 F.R.D. 641, 646 (D. Minn. 1996). In determining whether a document was prepared for an ordinary business purpose or in anticipation of litigation, "[t]he circumstances surrounding the document's preparation must also be considered." In re Grand Jury Subpoena, 357 F.3d 900, 908 (9th Cir. 2004).

         According to the privilege log, XOM had submitted a draft of the outline for the hindsight investigation by at least February 22, 2014. (Doc. 144-2 at 1). In this document, XOM listed its "objectives" for the hindsight investigation which did not include a section on legal recourse or reference potential litigation. This evidences to the Court that the hindsight investigation was conducted for business reasons unrelated to future litigation. Moreover, XOM states in a letter to the Court: "[i]n late February, it was unclear whether the hindsight investigation would be conducted in an open, non-privileged format, or in a closed, privileged and work product context." (Doc. 144-1 at 2). As of February 23, 2017, XOM's corporate counsel had still ...

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