Troubadour Oil & Gas, LLC v. Rustad

Decision Date10 November 2022
Docket Number20220196
Citation981 N.W.2d 918
Parties TROUBADOUR OIL AND GAS, LLC, Petitioner v. The Honorable Joshua B. RUSTAD, Judge of the District Court, Northwest Judicial District, Williams County and Northern Oil and Gas, Inc., Respondents
CourtNorth Dakota Supreme Court

Lisa M. Hettich, Williston, ND, for petitioner.

Nick A. Swartzendruber, Denver, CO, for respondent Northern Oil and Gas, Inc.

Crothers, Justice.

[¶1] Troubadour Oil and Gas, LLC, petitions this Court for a supervisory writ after the district court issued a discovery order requiring Troubadour to disclose all communications between Troubadour's counsel and Troubadour's owner who also is identified as an expert witness. Troubadour argues the court erroneously required the disclosure of confidential communications protected by the attorney-client privilege and the work product doctrine. We grant the petition and direct the district court to vacate the portion of its March 10, 2022 discovery order requiring disclosure of all communications between Troubadour's counsel and Troubadour's owner because the court abused its discretion and misapplied the law by relying on federal rules and case law not applicable in this state court proceeding. We also vacate the court's award of attorney's fees and remand for reconsideration.

I

[¶2] In June 2020, Northern Oil and Gas, Inc. sued Troubadour for breach of contract, alleging the parties agreed via email to the purchase and sale of an oil and gas lease. Troubadour denied the allegations.

[¶3] The parties stipulated to a scheduling order agreeing Northern Oil would disclose any expert witnesses by February 26, 2021, and Troubadour would disclose any experts by March 26, 2021. Troubadour designated Keria Robertson, its president and sole member, as its expert witness. Troubadour's discovery disclosure stated Robertson "may testify as both a fact witness and expert witness at the trial."

[¶4] During discovery, Northern Oil requested "all documents in Keria Robertson's expert file," including "all communications with Troubadour's legal counsel." Troubadour objected, claiming the request was overbroad and sought privileged information protected as attorney-client privileged communications and attorney work product. After a hearing on Northern Oil's motion to compel, the district court ordered Troubadour to disclose all communications between Troubadour's counsel and Robertson:

"The Court is troubled by Troubadour's objections to this Request because, counsel for the parties had stipulated to the exchange of expert files. On the agreed date, Northern served its experts’ files consistent with the parties’ stipulation but Troubadour did not serve anything. Troubadour objected to Northern's formal Request in its May 3, 2021 Responses to Northern's Second Discovery and again produced nothing.
"Northern's request for Ms. Robertson's expert file is relevant, as the parties have recognized in their stipulations.
Further, this Request conforms to the widely recognized rule that permits discovery into ‘the facts or data considered by the witness in forming’ his or her opinions. Fed.R.Civ.P. 26(a)(2)(B)(ii) ; Polum v. North Dakota Dist. Court, Southwest Judicial Dist. , 450 N.W.2d 761, 763 (N.D. 1990). Troubadour is ordered to respond to this Request.
"The Court denies Troubadour's attempts to assert attorney-client privilege and the work product doctrine. The cases speaking on non-retained experts hold that a party may not simultaneously designate a client's employee or principal as an expert witness, and also assert the attorney-client privilege and work product protections to shield communications with counsel. See, e.g.,U.S. v. Sierra Pac. Indus. , 2011 U.S. Dist. LEXIS 60372 (E.D. Ca. May 26, 2011) ; Davies v. United States EPA , No. CV 17-115-H-BMM-JTJ , 2020 U.S. Dist. LEXIS 92611 at *5 (D. Mont. May 26, 2020) ; Cooper v. Meritor, Inc. , 2018 U.S. Dist. LEXIS 20103, 2018 WL 10467776, *5 (N.D. Miss. Feb. 7, 2018) ; Garcia v. Patton , Civil Action No. 14-cv-01568-RM-MJW [2015 WL 13613521, at *] 2015 U.S. Dist. LEXIS 192861, at *9 (D. Colo. July 9, 2015) ; PacifiCorp v. Northwest Pipeline GP , 879 F. Supp. 2d 1171, 1211-1214 (D. Ore. 2012). Both Northern and this Court are entitled to review any and all communications between Troubadour's counsel and Ms. Robertson in order to understand potential influence on her opinions. Troubadour is ordered to produce the documents sought in Request for Production (Set 2) No. 2."

[¶5] The district court awarded Northern Oil its attorney's fees and costs incurred in connection with Troubadour's failure to comply with discovery. Troubadour claims it has timely complied with the district court's orders on discovery except for disclosure of "any and all communications between Troubadour's counsel and Ms. Robertson," which is the subject of this petition.

II

[¶6] Troubadour requests a supervisory writ. This Court's authority to issue supervisory writs derives from N.D. Const. art. VI, § 2. "The power to issue such a writ is discretionary and is used only to rectify errors and prevent injustice in extraordinary cases where no adequate alternative remedy exists." St. Alexius Med. Ctr. v. Nesvig , 2022 ND 65, ¶ 6, 971 N.W.2d 878. Troubadour argues a supervisory writ is appropriate and necessary because the district court's order to produce privileged communications is not appealable, leaving Troubadour with the untenable choice of disclosing privileged information or be held in contempt for failure to follow a court order. See N.D.R.Civ.P. 37(b). We agree and conclude this case is appropriate for exercising our supervisory jurisdiction.

III

[¶7] Troubadour asserts the communications compelled by the district court are privileged. Troubadour contends it did not waive the attorney-client privilege by disclosing Robertson as its expert witness. Troubadour also claims the communications between its attorney and Robertson are limited by the discovery provisions relating to work product and testifying experts.

[¶8] We review orders compelling discovery under the abuse of discretion standard. PHI Fin. Servs., Inc. v. Johnston Law Office, P.C. , 2016 ND 114, ¶ 9, 881 N.W.2d 216. A district court abuses its discretion when it acts in an unreasonable, arbitrary, or unconscionable manner, when it misinterprets or misapplies the law or when its decision is not the product of a rational mental process leading to a reasoned decision. Id.

A

[¶9] Rule 26(b)(1)(A), N.D.R.Civ.P., provides the general scope of discovery. Under N.D.R.Civ.P. 26(b)(1)(A), "Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense, including the existence, description, nature, custody, condition, and location of any documents, electronically stored information, or other tangible things and the identity and location of persons who know of any discoverable matter."

[¶10] The attorney-client privilege is governed by N.D.R.Ev. 502. "A client has a privilege to refuse to disclose and to prevent any other person from disclosing a confidential communication made for the purpose of facilitating the rendition of professional legal services to the client." N.D.R.Ev. 502(b). A "representative of the client" is a person having authority to act on legal advice rendered for a client and is able to make or receive a confidential communication while acting in the scope of employment for the client. N.D.R.Ev. 502(a)(4). The general rule of privilege under N.D.R.Ev. 502(b) "is intended to encompass all communications necessarily made in the performance of legal services, not just those made between a client and his attorney." N.D.R.Ev. 502, Explanatory Note.

[¶11] Under N.D.R.Ev. 510(a), a holder of the privilege may waive the privilege if the person "voluntarily discloses or consents to disclosure of any significant part of the privileged matter." Whether the attorney-client privilege is waived depends on the circumstances of each case. Farm Credit Bank of St. Paul v. Huether , 454 N.W.2d 710, 722-23 (N.D. 1990).

B

[¶12] Troubadour asserts that in addition to being privileged, the communications between its attorney and Robertson are limited by the work product discovery provisions in N.D.R.Civ.P. 26(b)(3)(A) and constraints on discovery from testifying experts under N.D.R.Civ.P. 26(b)(4)(A). The work product privilege in N.D.R.Civ.P. 26(b)(3)(A) provides:

"(3) Trial Preparation Materials.
(A) Documents and Tangible Objects. Ordinarily, a party may not discover documents and tangible things that are prepared in anticipation of litigation or for trial by or for another party or its representative (including the other party's attorney, consultant, surety, indemnitor, insurer, or agent). But, subject to Rule 26(b)(5), these materials may be discovered if:
(i) they are otherwise discoverable under Rule 26(b)(1) ; and
(ii) the party shows that it has substantial need of the materials to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by other means."

Rule 26(b)(4)(A), N.D.R.Civ.P., on discovery from testifying experts provides:

"(4) Trial Preparation Experts.
(A) Expert Who May Testify. Discovery of facts known and opinions held by experts, otherwise discoverable under Rule 26(b)(1) and acquired or developed in anticipation of litigation or for trial, may be obtained only as follows:
(i) a party may through interrogatories require any other party to identify each person whom the other party expects to call as an expert witness at trial; to state:
• the subject matter on which the expert is expected to testify;
• the substance of the facts and opinions to which the expert is expected to testify; and
• a summary of the grounds for each opinion;
(ii) a party may depose any person who has been identified as an expert witness whose opinions may be presented at trial unless the court finds, on motion, that the deposition is unnecessary, overly burdensome, or unfairly oppressive."

[¶13...

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