Folb v. Motion Picture Industry Pension & Health

• Decision Date: 08 July 1998
• Docket Number: No. CV 97-1663 RAP (CWx).,CV 97-1663 RAP (CWx).
• Court: U.S. District Court — Central District of California
• Parties: Scott FOLB, Plaintiff, v. MOTION PICTURE INDUSTRY PENSION & HEALTH PLANS, et al., Defendants.

16 F.Supp.2d 1164

Scott FOLB, Plaintiff, v. MOTION PICTURE INDUSTRY PENSION & HEALTH PLANS, et al., Defendants.

No. CV 97-1663 RAP (CWx).

United States District Court, C.D. California.

July 8, 1998.

COPYRIGHT MATERIAL OMITTED

John C. Taylor, Timothy J. Wheeler, Mark T. Quigley, Greene Broillet Taylor Wheeler & Panish, Santa Monica, CA, Douglas J. Rovens, Rovens Lamb & Yocca, Los Angeles, CA, for Plaintiff.

Gordon E. Krischer, Catherine B. Hagen, Larry A. Walraven, Brent J. North, Andrea Restivo, O'Melveny & Myers, Los Angeles, CA, for Defendants.

ORDER ON PLAINTIFF'S OBJECTIONS TO ORDER AFTER HEARING OF MAGISTRATE JUDGE ON MOTION TO COMPEL PRODUCTION OF DOCUMENTS BY DEBORAH SAXE, ESQ. AND BY HADSELL & STORMER PURSUANT TO SUBPOENAS

PAEZ, District Judge.

I. Introduction and Factual Background

Plaintiff Scott Folb contends that defendants discriminated against him on the basis of gender and retaliated against him because he objected when Directors of the Motion Picture Industry Pension & Health Plans (the "Plans") violated fiduciary duties under the Employee Retirement Income Security Act of 1974 ("ERISA"). Defendants allegedly relied on a complaint that Folb had sexually harassed another employee, Vivian Vasquez, as a pretext to discharge him for his whistle-blowing activities.

The Plans allegedly promoted Folb several times while he worked for them. Folb became the Administrative Director in January 1996. After Folb took certain actions regarding Vasquez' access to the new computer software system, Vasquez allegedly filed a complaint about his management action. Folb claims Vasquez filed her sexual harassment complaint only after she was told plaintiff had discretion to make the managerial decision about which she had initially complained. Folb's complaint describes in detail the events leading to defendants' decision to terminate Folb's employment, including the Plans' allegedly anomalous decision to hire Deborah Saxe, an outside attorney, to investigate Vasquez' sexual harassment claim.

With respect to his alleged whistle-blowing activities, Folb claims he objected to and reported, among other things: (1) use of Clinicorp Managed Health Care (and its successor, Alignis, Inc.), as the Plans' exclusive chiropractic service provider when defendant Frank Dickenson's wife was an officer of Clinicorp and then Alignis; (2) improper payments to Clinicorp and Alignis; (3) failure to conduct a bidding process and payment of non-competitive rates; (4) exposure of the Plans to taxes, fees and unnecessary expenditure by continued use of Alignis despite its violation of California's Knox-Keene Health Care Services Act; (5) unsolicited 85% increase in the composite rate paid to Alignis on HMO contracts; (6) demands from the Plans' directors that companies in which they had an interest or with which they were affiliated be given preferential treatment; (7) use of Plan assets to pay for personal expenses; and (8) retention of counsel with a conflict of interest, refusal to accept insurer's defense, and engagement of separate counsel at excessive rates.

The Court previously denied plaintiff's motion to remand this action to state court because plaintiff's first claim for relief relates to and is preempted by ERISA. In addition, the Court denied plaintiff's motion to remand his supplemental state law claims because to do so would require unnecessary duplication of effort and waste judicial resources.

Pending before the Court are Plaintiff's Objections to Order after Hearing of Magistrate Judge on Motion to Compel Production of Documents by Deborah Saxe, Esq. and by Hadsell & Stormer pursuant to Subpoenas ("Objections"). Magistrate Judge Woehrle denied plaintiff's motion to compel production of a mediation brief and related correspondence regarding settlement negotiations between the Plans and Vivian Vasquez, the employee who accused Folb of sexual harassment.

In approximately February 1997, Vasquez and the Plans attended a formal mediation with a neutral in an attempt to settle Vasquez' potential claims against defendants arising out of the alleged sexual harassment. Vasquez and the Plans signed a contract agreeing to maintain the confidentiality of the mediation and all statements made in it. Vasquez' counsel prepared a mediation brief and provided copies to opposing counsel and to the mediator. The parties apparently did not reach an agreement during the mediation. After the mediation, counsel presumably engaged in further settlement negotiations and the parties ultimately settled Vasquez' potential claims against the Plans. At some point, counsel for the Plans, Lawrence Michaels of Mitchell, Silberberg & Knupp provided Saxe with a copy of the mediation brief. Neither Vasquez nor her attorneys, Hadsell & Stormer, authorized the Plans to provide a copy of the mediation brief to Saxe.

Saxe refused to produce the mediation brief in response to Folb's subpoena, asserting that the confidentiality of the brief is protected under FED. R. EVID. 408 and CAL. EVID. CODE § 1119. Likewise, Hadsell & Stormer refused to produce either the mediation brief or documents relating to settlement negotiations with the Plans on behalf of Vasquez. Folb sought to compel production of (1) Vasquez' mediation brief; (2) correspondence between Vasquez' counsel and counsel for the Plans regarding mediation or other settlement discussions; and (3) notes to the file prepared by Vasquez' counsel regarding settlement communications. Folb argues that the Plans are trying to take a position in this litigation that is inconsistent with the position he believes they took in settlement negotiations with Vasquez. Folb suggests that the Plans will argue that he was properly terminated for sexually harassing Vasquez, despite the fact that they may have argued in mediation or settlement negotiations with Vasquez that she was never sexually harassed at all. Magistrate Judge Woehrle denied Folb's motion to compel production, and Folb filed the pending Objections.

Upon consideration of the parties' moving, opposition, reply and supplemental papers, Hadsell & Stormer and Saxe's separate oppositions to plaintiff's objections and supplemental papers, and the oral arguments of counsel, the Court considers Folb's Objections and modifies the magistrate judge's order in accordance with FED. R. CIV. P. 72. While the Court concludes that the magistrate judge did not err in ruling that the motion to compel production of the mediation brief should be denied, the legal foundation for that ruling must comport with the analysis set forth in the Supreme Court's decision in Jaffee v. Redmond, 518 U.S. 1, 116 S.Ct. 1923, 135 L.Ed.2d 337 (1996) (recognizing psychotherapist-patient privilege under FED. R. EVID. 501). In addition, the Court finds that Folb is entitled to discover information relating to any settlement negotiations conducted after the conclusion of the formal mediation session.

II. Discussion

A. Standard of Review

Under 28 U.S.C. § 636(b)(1)(A), a district court may reconsider a magistrate judge's determination of non-dispositive, pretrial matters if the magistrate's order is "clearly erroneous or contrary to law." Similarly, FED. R. CIV. P. 72(a) provides that "the district court judge to whom the case is assigned shall consider [timely] objections and shall modify or set aside any portion of the magistrate judge's order found to be clearly erroneous or contrary to law." FED. R. CIV. P. 72(a).¹ To conclude that a magistrate judge's decision is clearly erroneous, the district court must arrive at a "definite and firm conviction that a mistake has been committed." Federal Sav. & Loan Ins. Corp. v. Commonwealth Land Title Ins. Co., 130 F.R.D. 507 (D.D.C.1990).²

FED. R. CIV. P. 72 requires the objecting party to file and serve objections within 10 days after being served with the magistrate judge's order. A party who fails to file timely objections to a magistrate judge's ruling on a nondispositive motion within ten days forfeits the right to challenge the ruling. Simpson v. Lear Astronics Corp., 77 F.3d 1170, 1174 n. 1 (9th Cir.1996).

B. Application

1. Timeliness of Plaintiff's Objections

Under FED. R. CIV. P. 6(e), where service of an order is by mail, "3 days shall be added to the prescribed period." Here, the magistrate judge's order was served by mail, so plaintiff had thirteen days to file and serve objections. In addition, "[w]hen the period of time prescribed is less than 11 days, intermediate Saturdays, Sundays, and legal holidays shall be excluded in the computation." FED. R. CIV. P. 6(a) (including Thanksgiving Day as "legal holiday"). Magistrate Judge Woehrle's order was served on November 20, 1997. Excluding weekends and Thanksgiving Day, the last day to file and serve objections was December 10, 1997. Consequently, plaintiff's Objections filed and served on December 10, 1997 were timely.

2. Applicable Law

Because the parties have not fully briefed the issue of ERISA preemption, the Court assumes, without deciding, that plaintiff's state law claims are not preempted by ERISA.³ All of plaintiff's claims are premised on his contentions that he never sexually harassed Ms. Vasquez and that he was wrongfully terminated. Plaintiff's motion to compel seeks information relating to the mediation and settlement negotiations between the Plans and Vasquez. Plaintiff hypothesizes that the Plans asserted in settlement negotiations with Vasquez that Folb did not sexually harass her at all. Such information would be relevant here because it would tend to make it more likely that the Plans terminated Folb for some reason other than that he had sexually harassed Vasquez. Because the mediation brief and the communications relating to settlement negotiations between the Plans and Vasquez are arguably relevant to both plaintiff's federal and state law claims, the Court must determine whether state or federal law controls disclosure.

Federal Rule of...