A Party Must Specify Basis for Objection Or Risk Compelled Discovery

September 28, 2016

This case (Heller’s Gas, Inc. v. Int’l Ins. Co. of Hannover Ltd., 2016 U.S. Dist. LEXIS 71069 [M.D. Pa. June 1, 2016]), arises from an insurance claim filed by Heller’s Gas Inc. (“Heller”).  Heller was issued a commercial output insurance program property insurance policy by defendants International Insurance Company of Hannover LTD and International Insurance Company of Hannover  SE (“Defendants”). Heller’s used this policy to insure property that housed six 30,000 gallon tanks filled with approximately 136,800 gallons of liquid propane. On October 11, 2013, Plaintiffs found evidence of a sinkhole beneath the tanks, which allegedly damaged the tanks. Heller removed the liquid propane from the tanks, transported the liquid propane to other facilities, disassembled the tanks, and moved the tanks to stable ground at considerable expense. Defendants denied coverage for the loss, aside from $5,000 under emergency removal expense coverage. Heller’s subsequently filed a lawsuit alleging breach of contract and statutory bad faith.

During discovery, Defendants received information from various third parties through subpoenas.  After receipt of that information, Defendants discovered that Heller failed to produce relevant and discoverable information. For example, Defendants received an email from a records custodian who admitted in the email that there was no physical damage to the propane tanks. This email was discovered, not through documents produced by Plaintiff, but from documents produced from a third party. Thus, Defendants brought a motion to compel Heller to produce more complete responses to discovery.

The Court, in granting Defendants’ motion noted that recently amended Federal Rule of Civil Procedure 26(b)(1) provides that “[p]arties may obtain discovery regarding any non-privileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case . . .” And, evidence is relevant if it has “any tendency to make a fact more or less probable than it would be without the evidence” and if it “is of consequence in determining the action.” The Court then noted that the party objecting to discovery must state the grounds for the objection with specificity and the party requesting the discovery then bears the burden to prove that the requested discovery falls within the bounds of Rule 26.  Finally, the Court noted that if this burden is met, the objecting party must then “convince the court why discovery should not be had.”

Applying these discovery principles to the motion at hand, the Court determined that Heller failed to put forth specific objections to the requested discovery.  Rather, Heller objected to the motion on the grounds that it already produced four hundred and thirty-one pages of documents at Defendants’ request and that Defendants have suffered no prejudice, as they received the disputed documents, albeit from third parties. Heller’s counsel also stated that he was “amenable to revisiting the issue with Plaintiff and issuing an appropriate discovery certification.”  Latching on to Plaintiff’s counsel’s good intentions, the Court found “the Plaintiff offers no objection to ‘revisiting the issue,’ ” and granted Defendants’ motion to compel.

The lesson here is that any discovery objections interposed must be done with specificity especially where, as in Heller, the requested discovery falls within the bounds of Rule 26.