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United States of America v. Sierra Pacific Industries

May 26, 2011

UNITED STATES OF AMERICA, PLAINTIFF,
v.
SIERRA PACIFIC INDUSTRIES, ET AL., DEFENDANTS.



ORDER

Defendant Sierra Pacific Industries, W.M. Beaty/ Landowner defendants, and Howells defendants move to compel the United States to produce testimony and documents relating to communications between two of the United States' designated expert witnesses, Joshua White and Dave Reynolds, and attorneys for the United States and the California Department of Forestry and Fire Protection ("CDF"). The parties appeared at a hearing before the undersigned on April 28, 2011, and the matter was submitted.*fn1 For the reasons given below, the motion to compel is granted.

I. BACKGROUND

This lawsuit concerns damages caused by the Moonlight Fire in September 2007. At the time of the fire, White was a CDF employee and Reynolds was an employee of the United States Forest Service. Dckt. No. 178-1 at 1. They investigated the fire and prepared an Origin and Cause Report documenting their findings. Id. at 2. In 2010, the United States disclosed them as testifying expert witnesses. Id. White and Reynolds were not retained experts, and they did not prepare expert reports for this litigation for the purposes of Rule 26(a)(2)(B) of the Federal Rules of Civil Procedure ("Fed. R. Civ. P."). Id.

The United States claims that communications between White and Reynolds and the United States Attorneys' Office ("USAO") and the California Attorney General's Office ("AGO") are work product and protected by the attorney-client privilege.*fn2 Therefore, the United States instructed White and Reynolds not to answer deposition questions regarding conversations that they had with attorneys from the USAO or the AGO, and refused to produce documents reflecting communications between the experts and counsel.

Defendants do not dispute that the communications and documents in question were initially privileged. Rather, they argue that by designating White and Reynolds as testifying expert witnesses, the United States waived otherwise applicable privilege and work-product protection for those communications and documents.

II. ANALYSIS

A. The Applicable Federal Rule Was Recently Amended

The Federal Rule governing expert witness disclosures was amended on December 1, 2010. The relevant changes here pertain to whether certain communications by counsel to an expert witness who has been designated to testify at trial results in a waiver of any privilege or work product protections as to the information communicated. Although perhaps an oversimplification of the matter, and as explained in greater detail below, the rule amendments effected a change as to the protection of communications with counsel and retained expert witnesses. Under the old rule, there was little or no protection for what counsel said or provided to a designated expert and such communications were generally discoverable. Under the new rule, some communications can occur without waiving work product protection, but the rule differentiates between experts who are required to provide reports and experts who are not. As seen below, that distinction has relevance here.

The former version of the rule required an expert witness who was "retained or specially employed to provide expert testimony in the case or one whose duties as the party's employee regularly involve giving expert testimony" to provide a written report, containing, inter alia, the "data or other information" considered by the witness in forming his or her opinion. See Fed. R. Civ. P. 26(a)(2)(B) (effective until December 1, 2010). It did not discuss expert witnesses who did not fall into these categories.

The new rule explicitly sets out different requirements for reporting experts and non-reporting experts. Reporting experts (i.e., experts who are retained, specially employed, or whose duties as a party employee include regularly giving testimony) must now reveal in their reports only the "facts or data" they considered in forming their opinion, rather than "data or other information." See Fed. R. Civ. P. 26(a)(2)(B) (effective December 1, 2010). Non-reporting experts must disclose the subject matter of their testimony and a summary of the facts and opinions they will testify to. Fed. R. Civ. P. 26(a)(2)(C). The new rule provides that draft reports and disclosures for both reporting and non-reporting experts are protected and not discoverable, and, significantly, it explicitly protects communications between a party's attorney and reporting experts. Fed. R. Civ. P. 26(b)(4)(B), (C).

B. The New Rule Governs this Dispute

Defendants contend that the old rule applies to this dispute, whereas the United States contends that the new rule applies.*fn3 The rule was amended on December 1, 2010.

The scheduling order in this case required the parties to disclose their experts by April 22, 2011. Dckt. No. 38. The United States disclosed White and Reynolds as expert witnesses early on August 30, 2010, and amended their disclosures on September 14, 2010. Dckt. No. 171, Ex. B, C. White and Reynolds' depositions were taken in March 2011. Id. at 4, Ex. F-H. Thus, the United States disclosed its experts before the amended rule took effect, but the depositions of the experts did not take place until after the amended rule took effect.

In its April 28, 2010 order adopting the amendments to the Federal Rules, the United States Supreme Court ordered that the changes "shall take effect on December 1, 2010, and shall govern all proceedings thereafter commenced, and, insofar as just and practicable, all proceedings then pending." This proceeding was already pending on December 1, 2010; therefore, the new rule applies to this dispute unless the result would be either unjust or impracticable.

Defendants argue that the "just and practicable" language has been interpreted by the Seventh Circuit to mean that a newly amended rule does not change the consequences of actions taken prior to the effective date. See Diaz v. Shallbetter, 984 F.2d 850, 853 (7th Cir. 1993) ("Amendments may or may not govern 'further proceedings' in pending cases. Neither the statute nor the Court's implementing language implies using an amendment to change the consequences of actions completed before [the effective date of the amended rule] . . . only . . . new acts in cases already on the docket ordinarily should conform to the new rules.") (emphasis in original). Defendants argue that the United States chose to disclose their expert witnesses before the effective date of the amended rule, and that the amended rule should not be applied to change the consequences of this action--that is, that privileges have been waived.

First, Diaz is not controlling authority. See G.F. Co. v. Pan Ocean Shipping Co., 23 F.3d 1498, 1502 (9th Cir. 1994) (reaching a different conclusion regarding the applicability of an amended rule in a factual context similar to the one in Diaz). Moreover, as discussed below, applying the new rule does not change the outcome of this dispute. Whether the new rule or the old rule is applied, by disclosing White and Reynolds as testifying expert witnesses, the United States waived the otherwise applicable privilege. Under the facts of this case, the consequences of the United States' expert witness designations are not changed by applying the amended rule.

Finally, even if applying the new rule changed the outcome of this dispute, the parties have had ample notice of the provisions that would take effect under the new rules and should have been able to prepare accordingly. As application of the new rule does not create unjust or impracticable results here, it applies to this dispute.

C. White and Reynolds are Non-Reporting Experts

Both parties have argued that White and Reynolds should be considered non-reporting expert witnesses, as the Federal Rules do not require them to prepare a written expert report. See Fed. R. Civ. P. 26(a)(2)(B) ("Witnesses who must provide a written report . . . [include those who are] retained or specially employed to provide expert testimony in the case or one whose duties as the party's employee regularly involve giving expert testimony."). Although White and Reynolds authored an investigative report on the cause and origin of the Moonlight Fire, the United States has not provided Rule 26 expert reports for them.

White and Reynolds' testimony in this case will be limited to the knowledge and opinions that they had formed at the time of their report. Pl.'s Br. at 2. Neither White nor Reynolds has been retained by the United States. Id. The United States writes, "While their opinions are contained in the Report of Investigation (which was attached to the expert disclosure), these experts did not and were not required to produce a separate report under Rule 26(a)(2)(b) . . . . Therefore, these witnesses are properly considered non-reporting witnesses . . ." Id. at 3. Later in its brief, the United States declares that if the court grants this motion to compel, it intends to "of course retain White and Reynolds for a nominal fee, thus making them reporting experts." Id. at 15. Defendants argue that the United States has repeatedly asserted that White and Reynolds are non-reporting experts, and that they should be estopped from adopting a contrary position. Defs' Reply at 14.*fn4

As noted above, White, a CDF employee, and Reynolds, a former USFS employee, jointly investigated the cause and origin of the Moonlight Fire. They were present at the fire scene on the day that the fire began and on multiple days thereafter. They are percipient witnesses as well as expert witnesses who will testify both as to their percipient observations as well as their opinions.

After the parties completed their briefing, and after the hearing on this motion, the Ninth Circuit issued a decision in Goodman v. Staples the Office Superstore. The Ninth Circuit held that when a treating physician is hired to render expert opinions that go beyond the usual scope of a treating doctor's testimony, he "morphs" into the type of expert witness for whom an expert report must be provided. 2011 WL 1651246, *1 (9th Cir. May 03, 2011). In Goodman, the plaintiff disclosed her treating physicians as experts, but originally did not provide expert reports for them. Id. at *2-3. Plaintiff had "specifically retained" the treating physicians to provide expert testimony beyond the scope of the treatment rendered. Id. at *8. Plaintiff's counsel had given the treating physicians information that they had not reviewed during the course of treatment to aid them in forming their expert opinions. Id. The trial court limited the treating physicians' testimony to opinions actually developed during the course of the doctors' treatment of the plaintiff. Id. at *3. The Ninth Circuit affirmed, holding that a treating physician is only a non-reporting witness to the extent that his expert opinions were formed during the course of treatment. Id. at *8. Thus, as to those opinions an expert report was not required as a prerequisite to the physician's opinion testimony at trial. However, plaintiff was required to provide expert reports for the treating physicians' opinions that were outside of this scope. Id. For opinions formed on the basis of information obtained by the physician other than in the course of the treatment, the same rule applies as for any other expert and a report is required setting forth the expert's opinions and the basis for those opinions. The distinguishing characteristic between expert opinions that require a report and those that do not is whether the opinion is based on information the expert witness acquired through percipient observations or whether, as in the case of retained experts, the opinion is based on information provided by others or in a manner other than by being a percipient witness to the events in issue.

Because the law regarding the "hybrid expert situation" was not settled in the Ninth Circuit, the court applied the newly clarified rule prospectively, and allowed plaintiff a chance to disclose expert reports for the treating physicians. Id.

Like the treating physicians in Goodman, White and Reynolds are hybrid percipient and expert witnesses. But the physicians reviewed documents after they treated plaintiff for the purpose of testifying regarding the causation of her injuries, and formed some of their expert opinions after they had concluded their treatment of plaintiff. According to the United States, White and Reynolds' testimony will be limited to the knowledge and opinions that they formed at the time they drafted their report on the cause and origin of the Moonlight Fire. They will not render any expert opinions save those that they had already formed at the time that they wrote their investigative report. Moreover, the treating physicians in Goodman were retained as expert witnesses, although they were apparently not paid until after the initial deadline for disclosing expert witnesses, when they were retained to write reports for settlement purposes and for rebuttal expert disclosures. Pl.'-Appellant's Opening Br., 2010 WL 3390207 *34-35. White and Reynolds have not been paid at any time for their expert opinions.

Both parties have consistently agreed, both in their briefing and at the pre-motion informal phone conference held with the undersigned, that White and Reynolds are non-reporting experts. White and Reynolds will not offer any opinions that were formed after they drafted their report summarizing their percipient investigation of the Moonlight Fire. The United States has not paid White and Reynolds for their role as expert witnesses at any time. Therefore, the recent holding in Goodman does not change White and Reynolds' categorization as non-reporting expert witnesses. As White and Reynolds are properly categorized as non-reporting expert witnesses, Goodman, which was published days after the parties had completed briefing and the hearing was held, does not alter the analysis applicable here.

D. The Amended Rule Does Not Change the Common Law Regarding Waiver of Privilege for Non-Reporting Expert Witnesses

As noted above, the newly amended Rule 26 explicitly protects communications between a party's attorney and reporting experts. See Fed. R. Civ. ...


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