Shelton v. American Motors Corp.

Decision Date30 January 1987
Docket NumberNo. 85-2442,85-2442
Citation805 F.2d 1323
Parties, 6 Fed.R.Serv.3d 568, 22 Fed. R. Evid. Serv. 125 James R. SHELTON and Elizabeth Ann Shelton, Co-administrators of the Estate of Coletta K. Shelton, Appellees, v. AMERICAN MOTORS CORPORATION, American Motors Sales Corporation, and Jeep Corporation, Appellants.
CourtU.S. Court of Appeals — Eighth Circuit

Gary E. Crawford, New York City, for appellants.

E.C. Gilbreath, Fort Smith, Ark., for appellees.

Before HEANEY, Circuit Judge, FLOYD R. GIBSON, Senior Circuit Judge, and BATTEY, * District Judge.

FLOYD R. GIBSON, Senior Circuit Judge.

The defendants, American Motors Corporation, American Motors Sales Corporation, and Jeep Corporation, appeal from the district court's order granting the plaintiffs' motion for default judgment. The district court entered default judgment against the defendants as a sanction for their in-house counsel's repeated refusal to answer deposition questions concerning the existence of certain documents. The district court held that the information sought by the plaintiffs is not protected by the work-product doctrine or the attorney-client privilege, and that counsel's repeated refusals to respond warranted default judgment on the issue of liability, 106 FRD 490. For the reasons discussed below, we reverse.

I. BACKGROUND

Coletta Shelton died as a result of an accident that occurred when the Jeep CJ-5 she was driving overturned on a roadway in Sebastian County, Arkansas. The Jeep CJ-5 was designed, manufactured, and sold by the defendants (hereinafter referred to collectively as AMC). Coletta's parents filed this product liability action against AMC, alleging various theories of recovery, including strict liability, negligence, and failure to warn. Since its inception, the case has been plagued by discovery disputes.

Shortly after initiating the action, the plaintiffs filed notices to take depositions, specifically naming twenty-one deponents and describing ten "Rule 30(b)(6) categories." 1 AMC moved to quash the depositions, and sought a protective order in which it offered to produce six individuals who possessed the information sought by the plaintiffs. The court ordered AMC to produce for deposition those six individuals and, if necessary, any additional persons with knowledge of the ten Rule 30(b)(6) categories. Following the depositions of the persons produced by AMC, the plaintiffs moved for sanctions, including default judgment, alleging that AMC falsely represented to the court that the six individuals possessed the same information as the twenty-one individuals initially named by the plaintiffs, and that AMC specifically instructed the individuals with knowledge of the ten described categories not to answer certain questions. The district court referred all discovery matters to the magistrate, who denied the plaintiffs' motion for sanctions.

The plaintiffs then filed notice to take the depositions of several more individuals, including Rita Burns. Burns is employed by AMC as an attorney in its Litigation Department, and she was assigned specifically to the case at bar as AMC's supervising "in-house counsel." AMC sought a protective order and moved to quash the depositions. The magistrate granted the protective order with respect to certain Rule 30(b)(6) categories, but denied AMC's motion to quash. The plaintiffs deposed Burns, but she refused to answer several questions on the basis that the information sought by the plaintiffs was protected by the work-product doctrine or by the attorney-client privilege. The questions which Burns refused to answer primarily concern the existence or nonexistence of various documents regarding the Jeep CJ. The plaintiffs again moved for sanctions, including default judgment, on the basis of Burns' refusal to answer those questions. The magistrate denied the motion, but ordered AMC to make Burns available to give her deposition before the magistrate so that he could rule on any objections made by AMC concerning the work-product doctrine or the attorney-client privilege.

Burns appeared before the magistrate and again refused to respond to questions concerning her knowledge of the existence or nonexistence of certain documents. 2 Burns' typical response to these questions was, "Any information I have concerning documents which might possibly be responsive to your question, I've acquired solely through my capacity as an attorney for American Motors in my efforts to find information which would assist me in defending the company in litigation, and therefore, I decline to respond to the question." Despite the magistrate's order to respond, AMC's trial counsel instructed Burns not to answer, and attempted to clarify that AMC and Burns were relying on the attorney-client privilege or the work-product doctrine, or both, depending on the specific question. The magistrate overruled most of AMC's objections, ruling that the responses sought by the plaintiffs were not protected under either the privilege or the doctrine.

The magistrate recommended that the district court order AMC to show cause why Burns should not be held in contempt, and why sanctions, including default judgment, should not be entered against AMC. The district court issued the show cause order, and AMC responded that it would "stand on its position" as stated in the depositions. The district court granted the plaintiffs' motion for default judgment on the issue of liability. 3

The district court held that neither the attorney-client privilege nor the work-product doctrine protect the information sought by the plaintiffs: "neither objection can properly bar inquiry into Ms. Burns' mere knowledge of the existence of the documents." The court concluded that "the mere fact that the documents or knowledge of the documents came to the attorney while acting for the client is not sufficient to invoke the [attorney-client] privilege," relying on Arkansas National Bank v. Cleburne County Bank, 525 S.W.2d 82, 84-85 (Ark.1975) ("An attorney may be required to produce papers belonging to his client where the knowledge of their existence is accessible to others or to the public, or if, * * * the client may be compelled to produce them."). The court also concluded that the work-product doctrine does not protect discovery, by interrogatories or deposition, of the facts that an adverse party's lawyer has learned from documents assembled by the adverse party, or the existence or nonexistence of those documents, relying on Wright & Miller, Federal Practice and Procedure Sec. 2023 at 194 (1970). The district court reasoned that Burns' repeated refusal to comply with orders to respond made by both the magistrate and the court, and AMC's lack of legal authority for its position warranted default judgment as a sanction, 106 FRD 490. See Fed.R.Civ.P. 37(b)(2)(C). The district court certified its order pursuant to 28 U.S.C. Sec. 1292(b), and AMC filed this appeal. 4

The issue on appeal is whether a deponent's mere acknowledgment of the existence of corporate documents is protected by the work-product doctrine or the attorney-client privilege. We hold that where, as here, the deponent is opposing counsel and has engaged in a selective process of compiling documents from among voluminous files in preparation for litigation, the mere acknowledgment of the existence of those documents would reveal counsel's mental impressions, which are protected as work product.

II. DISCUSSION

The plaintiffs argue that AMC has taken the position that it was improper to depose Burns because she represents a party in this litigation. The plaintiffs contend, therefore, that the issues are whether the deposition of opposing counsel may be taken and, if so, whether counsel must respond to questions concerning the existence or nonexistence of certain documents possessed by counsel's client. Indeed, in addition to arguing that the information sought by the plaintiffs is protected by the work-product doctrine and the attorney-client privilege, AMC's position has been that in these circumstances deposing its in-house counsel is an inappropriate method of discovering the existence of documents in AMC's possession.

In recent years, the boundaries of discovery have steadily expanded, and it appears that the practice of taking the deposition of opposing counsel has become an increasingly popular vehicle of discovery. 5 To be sure, the Federal Rules of Civil Procedure do not specifically prohibit the taking of opposing counsel's deposition. See Fed.R.Civ.P. 30(a) (a party may take the deposition of "any person "). We view the increasing practice of taking opposing counsel's deposition as a negative development in the area of litigation, and one that should be employed only in limited circumstances.

Undoubtedly, counsel's task in preparing for trial would be much easier if he could dispense with interrogatories, document requests, and depositions of lay persons, and simply depose opposing counsel in an attempt to identify the information that opposing counsel has decided is relevant and important to his legal theories and strategy. The practice of forcing trial counsel to testify as a witness, however, has long been discouraged, see Hickman v. Taylor, 329 U.S. 495, 513, 67 S.Ct. 385, 394, 91 L.Ed. 451 (1947) (it causes "the standards of the profession [to] suffer"), and recognized as disrupting the adversarial nature of our judicial system, see id. at 516, 67 S.Ct. at 396 (Jackson, J., concurring) ("Discovery was hardly intended to enable a learned profession to perform its functions * * * on wits borrowed from the adversary."). Taking the deposition of opposing counsel not only disrupts the adversarial system and lowers the standards of the profession, but it also adds to the already burdensome time and costs of litigation. It is not hard to imagine additional pretrial...

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