Burlington Nort. & Santa Fe Ry. v. Dist. Court, Mt

• Decision Date: 19 May 2005
• Docket Number: No. 04-72134.,04-72134.
• Citation: 408 F.3d 1142
• Parties: BURLINGTON NORTHERN & SANTA FE RAILWAY COMPANY, Petitioner, v. UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MONTANA, Respondent, Brian Kapsner and Ryann Kapsner, Real Parties in Interest.
• Court: U.S. Court of Appeals — Ninth Circuit

408 F.3d 1142

BURLINGTON NORTHERN & SANTA FE RAILWAY COMPANY, Petitioner, v. UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MONTANA, Respondent, Brian Kapsner and Ryann Kapsner, Real Parties in Interest.

No. 04-72134.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted January 12, 2005.

Filed March 31, 2005.

Amended May 19, 2005.

John C. Berghoff, Jr. (Argued), Mayer, Brown, Rowe & Maw LLP, Chicago, IL; Oliver Goe (On the Briefs), Browning, Kaleczyc, Berry & Hoven, P.C., Helena, MT, for the petitioner.

Julieann G. McGarry (Argued), Cok, Wheat, Brown & McGarry PLLP, Bozeman, MT; D. Anthony West (On the Briefs), Morrison & Foerster LLP, San Francisco, CA, for the real parties in interest.

Appeal from the United States District Court for the District of Montana (Billings); Richard F. Cebull, District Judge, Presiding. D.C. No. CV-02-00116-RFC.

Before: MARY M. SCHROEDER, Chief Judge, ALFRED T. GOODWIN and SUSAN P. GRABER, Circuit Judges.

ORDER AND AMENDED OPINION ORDER

The opinion filed March 31, 2005, slip op. 3893, and appearing at 403 F.3d 1042 (9th Cir.2005), is amended as follows:

At 403 F.3d 1047 (slip op. 3903, 3rd line from the bottom of the page), delete the text after ". . . the following factors:" to just before "(where providing particulars. . .") and replace with the following:

. . . the degree to which the objection or assertion of privilege enables the litigant seeking discovery and the court to evaluate whether each of the withheld documents is privileged . . .

At 403 F.3d 1047 (slip op. 3904, at the end of the first continuation paragraph), after the word "format.", add the following:

Finally, the application of these factors shall be subject to any applicable local rules, agreements or stipulations among the litigants, and discovery or protective orders.^FN

^FN We are well aware that, particularly in discovery-intensive litigation, compiling a privilege log within 30 days may be exceedingly difficult, even for counsel who are sophisticated, experienced, well-funded, and acting in good faith. Further, we are aware (and take this opportunity to make district courts aware) that litigants seeking discovery may attempt to abuse the rule we announce today by propounding exhaustive and simultaneous discovery requests. In these circumstances, litigants are not without recourse. Rather, at the outset of discovery or, at the latest, before Rule 34's 30-day time limit has expired, they may either secure an appropriate agreement or stipulation from the relevant litigants or, failing that, apply for a discovery or protective order.

With these amendments, the panel has voted unanimously to deny the petition for rehearing. Chief Judge Schroeder and Judge Graber have voted to deny the petition for rehearing en banc, and Judge Goodwin recommended denial.

The full court has been advised of the petition for rehearing en banc and no active judge has requested a vote on whether to rehear the matter en banc. Fed. R.App. P. 35.

The petition for rehearing is DENIED and the petition for rehearing en banc is DENIED.

No further petitions for rehearing or rehearing en banc shall be entertained.

OPINION

GOODWIN, Circuit Judge.

Burlington Northern & Santa Fe Railway Company ("Burlington") petitions this court for a writ of mandamus to overturn the District Court of Montana's discovery ruling, which orders Burlington to produce documents to plaintiffs Brian and Ryann Kapsner ("the Kapsners") in underlying environmental litigation in which Burlington is the defendant. The writ is denied.

I. FACTS AND PROCEDURAL HISTORY

The Kapsners brought an action on July 12, 2002, against Burlington in the District Court of Montana for the Sixth Judicial District (Park County) for Burlington's alleged intentional dumping of diesel oil and toxic solvents, resulting in contamination of the Kapsners' land, and for Burlington's intentional failure to contain and remediate this damage. Burlington removed to the United States District Court for the District of Montana on diversity grounds. The amended complaint seeks recovery for nuisance, negligence, strict liability, trespass, wrongful occupation, violations of the Montana Constitution, unjust enrichment, and misconduct warranting punitive damages.

Discovery has been underway since November 6, 2002, when the Kapsners served their first set of document requests pursuant to Federal Rule of Civil Procedure 34 ("Rule 34"). The discovery process has been characterized by delay, misunderstandings, and increasing acrimony between the parties. Burlington responded to the Kapsners' first set of document requests on December 9, 2002. However, this response was not accompanied by a privilege log. The record suggests that both parties intended and expected from the outset that a privilege log would in fact be produced. Thus, while Burlington accuses the Kapsners of gamesmanship in failing to assert the argument that the privilege was waived in their original motion to compel, Burlington does not seriously dispute that a privilege log was expected.

The Kapsners objected to the form of Burlington's original response, which was not accompanied by documents but recited an invitation to inspect documents on Burlington premises. The Kapsners complained to Burlington as early as January 2003 that the production was neither organized according to the categories in the discovery requests nor kept in "the usual course of business," as required by Rule 34, and instead was simply produced in boxes "with no rhyme or reason." Underlying these disagreements about form was the Kapsners' belief that responsive documents were being improperly withheld. On April 7, 2003, the Kapsners filed a motion to compel, arguing that in addition to producing documents in an impermissible form, Burlington was withholding responsive documents, and had made no assurance that its production exhausted the universe of responsive documents.

Before the magistrate judge ruled on the motion, Burlington produced a privilege log. The Kapsners continued to suspect that Burlington was withholding unprivileged responsive documents, and were apparently unsatisfied with this log, which they allege "made it difficult . . . to determine whether [Burlington] was complying with its discovery obligations or asserting its privileges in good faith." The magistrate judge ordered Burlington to organize its entire production to correspond to discovery requests, and to produce documents responsive to the Kapsners' requests as stated rather than as unilaterally limited by Burlington.

The parties continued to wrangle over the privilege issue during the next fourteen months, as the Kapsners issued additional discovery requests insisting that responsive documents continued to be withheld. During this time, Burlington modified its privilege log several times, removing entirely some documents that were previously marked as responsive but privileged. In a letter to Burlington, the Kapsners again articulated their position that unprivileged responsive documents were being withheld, demanded voluntary production, and declared their intention to file another motion to compel if the documents were not produced. After Burlington refused to produce the contested documents, the Kapsners filed a second motion to compel, this time demanding all responsive documents withheld from production on privilege grounds. The magistrate judge granted the motion, and upon appeal to the district judge, his order was upheld.¹ Burlington then brought this petition for a writ of mandamus to overturn the district court's order.

II. DISCUSSION

Standard of Review

The writ of mandamus is an "extraordinary" remedy limited to "extraordinary" causes. Cheney v. U.S. Dist. Court, 542 U.S. 367, ___, 124 S.Ct. 2576, 2586, 159 L.Ed.2d 459 (2004). In order to gain the benefit of the writ, the party must have no other recourse; the right to the writ must be "clear and indisputable"; and the appellate court must be satisfied that the writ is appropriate under the circumstances. Id. at 2587. Distilling the Court's mandamus caselaw, the Ninth Circuit has articulated this standard in terms of a five-factor test, asking whether: 1) there are no other adequate means, such as direct appeal, to secure relief; 2) failure to grant the writ would result in damage to petitioner that is "not correctable on appeal"; 3) the district court's order is "clearly erroneous as a matter of law"; 4) the order represents an "oft-repeated" error or patent "disregard of the federal rules"; and 5) the order raises "new and important problems" or legal issues of first impression. Bauman v. U.S. Dist. Court, 557 F.2d 650, 654-55 (9th Cir.1977); see also Admiral Ins. Co. v. U.S. Dist. Court, 881 F.2d 1486, 1490-91 (9th Cir.1989) (applying the Bauman factors). Not every factor need be present at once; indeed, the fourth and fifth will rarely be present at the same time. Id. at 1491. However, the absence of the third factor, clear error, is dispositive. See, e.g., Gallo v. U.S. Dist. Court, 349 F.3d 1169, 1177 (9th Cir.2003), cert. denied, 541 U.S. 1073, 124 S.Ct. 2420, 158 L.Ed.2d 982 (2004).

Thus, we review the district court's order for clear error as a matter of law. In the present case, this standard is informed by the general principle, not unique to the mandamus context, that "[d]istrict courts have wide latitude in controlling discovery." United States ex rel. Aflatooni v. Kitsap Physicians Serv., 314 F.3d 995, 1000 (9th Cir.2002) (internal quotation marks omitted). Because we hold that there was no clear error, we do not reach the remaining Bauman factors.

Proper Assertion of Privilege

Burlington argues that the district court erred as a matter of law by reading into Federal Rule of Civil Procedure 26(b)(5) ("Rule 26(b)(5)") and Rule 34 a per se rule that failure to produce a privilege log in a timely manner triggers waiver of privileges. While we reject the per se waiver rule, we...