Farmers Ins. Co., Inc. v. Peterson

• Decision Date: 25 November 2003
• Docket Number: No. 99,836.,99,836.
• Citation: 2003 OK 99,81 P.3d 659
• Parties: FARMERS INSURANCE COMPANY, INC., and Farmers Insurance Exchange, Petitioners, v. The Honorable David L. PETERSON, District Judge for the Fourteenth Judicial District, Tulsa County, Oklahoma, Respondent, and Joseph L. Dallape and Deborah Dallape, Real Parties in Interest.
• Court: Oklahoma Supreme Court

81 P.3d 659

2003 OK 99

FARMERS INSURANCE COMPANY, INC., and Farmers Insurance Exchange, Petitioners, v.The Honorable David L. PETERSON, District Judge for the Fourteenth Judicial District, Tulsa County, Oklahoma, Respondent, andJoseph L. Dallape and Deborah Dallape, Real Parties in Interest.

No. 99,836.

Supreme Court of Oklahoma.

November 25, 2003.

Dennis King, Ashley M. Bibb, King Taylor & Ryan, P.C., Tulsa, OK, for Petitioners.

Timothy G. Best, Catherine L. Campbell, Matthew B. Free, Best & Sharp, Tulsa, OK, for Real parties in interest.

MEMORANDUM OPINION

SUMMERS, J.

¶ 1Original jurisdiction is assumed.Okla. Const. Art. 7 § 4.Real Parties in Interest (Third-PartyPlaintiffs or Plaintiffs) were granted, in part, a motion to compel discovery.The order of the District Court requires Defendant and Petitioner(Farmers Insurance Co.) to search claim files for the years 2000, 2001 and 2002 to determine those that contain complaints from Oklahoma insureds on med-pay claims.Farmers seeks to prohibit enforcement of that order.

¶ 2 Evidence submitted by Farmers shows that compliance with the order would require Farmers to manually examine approximately 600,000 closed files located in a Kansas storage facility.Farmers estimated that it would take a staff of thirty people working two months to review these files.Farmers currently employs a retrieval staff of six people for all of the retrieval needs of its business.After October 2001 Farmers used an electronic method for storing files, and provided to Plaintiffs a list of approximately 3300-3400 claims (approximately 70 pages with approximately 48 claims per page) that arose from accidents occurring in Oklahoma prior to January 1, 2003.The evidence shows that compliance with the order requires an employee to examine all 3300-3400 electronic files, and this task may take thirty minutes for each file.

¶ 3 Discovery may be limited or denied when discoverable material is sought in an excessively burdensome manner.YWCA of Oklahoma City v. Melson,1997 OK 81, ¶ 25, 944 P.2d 304, 312.We agree that requiring an examination of all paper and electronic files for the three-year period would be unduly burdensome.However, we also agree with Plaintiffs that Farmers' unilateral decision on how it stores information cannot, by itself, be a sufficient reason for placing discoverable matter outside the scope of discovery.See, e.g., Fagan v. District of Columbia,136 F.R.D. 5, 7(D.D.C.1991), ("Plaintiffs should not suffer if the information is not easily accessible because defendants have an inefficient filing system.");Kozlowski v. Sears, Roebuck & Co.,73 F.R.D. 73, 76(D.Mass.1976), ("defendant may not excuse itself from compliance with Rule 34, Fed.R.Civ.P., by utilizing a system of record-keeping which conceals rather than discloses relevant records, or makes it unduly difficult to identify or locate them, thus rendering the production of the documents an excessively burdensome and costly expedition").

¶ 4Plaintiffs asserts that the material is sought for the purpose of their theory that Farmers engaged in a pattern of conduct that was wrongful as it relates to med-pay claims.Statistical sampling is a common technique used to determine a pattern of conduct.

Statistical protocols represent standards for determining whether and under what circumstances it is reasonable to extrapolate from a known universe to an unknown one.See Kaye & Freedman, Reference Guide on Statistics, Federal Judicial Center's Reference Manual on Scientific Evidence 332 (1994).They draw on probability theory to determine whether the observed variations likely depend upon chance, or whether they likely represent a pattern of intentional conduct.

U.S. v. Skodnek,933 F.Supp. 1108, 1117(D.Mass.1996), (emphasis added).See also Federal Judicial Center, Reference Manual on Scientific Evidence, 83-178 (2d ed.2000), (Reference Guide on Statistics).

For example, in the context of the federal government seeking recoupment of Medicare overpayments involving a large number of patient files, one court said that "courts have routinely permitted the use of statistical sampling to determine whether there has been a pattern of overpayments spanning a large number of claims where case-by-case review would be too costly."Chaves County Home Health Service, Inc. v. Sullivan,289 U.S.App.D.C. 276, 931 F.2d 914, 919, (D.C.Cir.1991), cert. denied,502 U.S. 1091, 112 S.Ct. 1160, 117 L.Ed.2d 408(1992).Statistical sampling as discovery is not novel in the courts of law.SeeRosado v. Wyman,322 F.Supp. 1173, 1180(E.D.N.Y.), aff'd, 437 F.2d 619(2d Cir.1970), aff'd,402 U.S. 991, 91 S.Ct. 2169, 29 L.Ed.2d 157(1971): "Sampling has long been considered an acceptable method of determining the characteristics of a large universe. ...Such mathematical and statistical methods are well recognized by the courts as reliable and acceptable in determining adjudicative facts."

¶ 5 Permissible inferences from particular statistical methods depend upon the appropriateness of a particular statistical method in a given set of circumstances.For example, the High Court has said that: "We caution only that statistics are not irrefutable; they come in infinite variety and, like any other kind of evidence, they may be rebutted.In short, their-usefulness depends on all of the surrounding facts and circumstances."International Broth. of Teamsters v. U.S.,431 U.S. 324, 340, 97 S.Ct. 1843, 52 L.Ed.2d 396(1977).A particular statistical method selected by one party may be challenged as either factually or legally deficient by the opposing party.Watson v. Fort Worth...