Terra Intern., Inc., In re

Citation134 F.3d 302
Decision Date26 January 1998
Docket NumberNo. 97-60834,97-60834
PartiesIn re: TERRA INTERNATIONAL, INC., Petitioner.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

Javier H. Rubinstein, Mayer, Brown & Platt, Chicago, IL, William N. Reed, Baker, Donelson, Bearman & Caldwell, Jackson, MS, for Petitioner.

David C. Bramlette, U.S. District Judge, Biloxi, MS, pro se.

R. David Kaufman, Jackson, MS, for Mississippi Chemical Corp.

On Petition for Writ of Mandamus to the United States District Court for the Southern District of Mississippi.

Before KING, HIGGINBOTHAM and DAVIS, Circuit Judges.

PER CURIAM:

Petitioner Terra International, Inc. seeks a writ of mandamus compelling the district court to vacate certain discovery orders entered by the magistrate judge (and affirmed by the district court) in a civil suit between Terra International, Inc. and Mississippi Chemical Corporation. We grant the petition for writ of mandamus in part and deny it in part.

I. FACTUAL AND PROCEDURAL BACKGROUND
A. The Underlying Litigation

On December 13, 1994, an explosion occurred at Terra International's ("Terra") ammonium nitrate facility in Port Neal, Iowa, killing four people, injuring eighteen others, and causing substantial property damage. Shortly thereafter, Terra formed an "Incident Investigation Committee" (the "Committee") to investigate the cause of the accident. The Committee's membership consisted of Terra employees, outside consulting experts, Terra's general counsel, and an outside attorney.

On June 8, 1995, Terra released a report (the "Report") prepared by the Committee containing its conclusion that the explosion was principally caused by the faulty design of a "sparger," an apparatus used to feed nitric acid into a closed vessel known as a neutralizer in which Terra processed liquid ammonium nitrate. Mississippi Chemical Corporation ("MCC") had designed the sparger and licensed the design to Terra. Terra released the report to interested parties as required by OSHA regulations, as well as to others in the fertilizer industry. Terra employees also conducted press conferences at which they reiterated the Report's conclusion that a defect in the sparger's design caused the explosion. 1

On August 31, 1995, Terra filed a products liability suit against MCC in federal district court in the Northern District of Iowa, alleging that MCC's defective sparger design proximately caused the explosion at Terra's plant. Shortly thereafter, MCC filed suit in federal district court in the Southern District of Mississippi, asserting a claim of defamation based upon Terra's dissemination of the Report and its conclusion that MCC's sparger design caused the explosion as well as a claim for a declaratory judgment that MCC-designed equipment did not cause the explosion. Terra's products liability action was subsequently transferred to the Mississippi district court.

This petition for writ of mandamus arises out of the district court's affirmation of certain discovery orders entered by the magistrate judge in the underlying litigation. These include (1) orders requiring Terra to produce certain categories of documents that Terra alleges are undiscoverable (the "Production Orders") and (2) an order granting MCC's motion for a protective order sequestering fact witnesses prior to their depositions and barring fact witnesses from attending the depositions of other witnesses (the "Sequestration Order").

B. The Production Orders

On August 10, 1996, MCC filed a motion to compel the production of a number of categories of documents relating to the Committee's preparation of the Report. Terra responded with a motion for protective order, asserting that a number of categories of documents that were responsive to MCC's motion to compel were protected from discovery by the attorney-client privilege, the work product rule, and Rule 26(b)(4)(B) of the Federal Rules of Civil Procedure, the rule that limits discovery of facts known or opinions held by a party's nontestifying expert. On December 4, 1996, the magistrate judge entered the first Production Order, which granted in part and denied in part MCC's motion to compel and Terra's motion for protective order. In the first Production Order, the magistrate judge concluded that the following categories of documents for which Terra asserted privilege or other protection from discovery were discoverable:

(1) Terra's counsel's notes of confidential employee interviews;

(2) documents prepared by Terra employees at the request of Terra's counsel or counsel's experts;

(3) documents prepared by Terra's counsel's experts containing test results and analyses; and

(4) certain scientific and engineering literature used by Terra's counsel's experts.

The parties each objected to the first Production Order, and, in a July 16, 1997 order, the district court remanded the case to the magistrate judge for further fact-finding and clarification of certain portions of the first Protective Order.

On July 27, 1997, the magistrate judge issued the second Production Order, in which he made a number of clarifications as to the legal bases for his conclusion that the four categories of documents enumerated above were discoverable. First, the magistrate judge concluded that the attorney-client privilege never applied to the first and second categories because the employees about whom Terra's counsel made notes and who prepared documents at the request of counsel or counsel's experts were not clients. Second, he concluded that, with respect to these two categories of documents, MCC had made the requisite showing of substantial need and undue hardship necessary to overcome the protection afforded them by the work product doctrine. Third, he concluded that the third and fourth categories of documents were discoverable under Rule 26(b)(4)(B) because, although they constituted the work of nontestifying experts, MCC had made the requisite showing of exceptional circumstances necessary to render them discoverable in light of the fact that (1) the condition of the explosion site had changed through the passage of time and (2) the documents contained in these two categories were necessary to support MCC's defamation claim. On October 30, 1997, the district court entered an order affirming the magistrate judge's Production Orders.

C. The Sequestration Order

On February 19, 1997, MCC moved for a protective order under Rule 26(c)(5), seeking to prohibit all fact witnesses from attending the depositions of other fact witnesses and to prevent counsel from disclosing any prior deposition testimony to any prospective fact witness. MCC's motion was not supported by affidavits or other evidence, but merely alleged that Terra employees might feel a sense of camaraderie or feel pressure from Terra that might taint their testimony and preclude counsel from obtaining the witness's "raw reactions." MCC contended that these factors constituted the "good cause" necessary to justify sequestration during discovery under Rule 26(c)(5). On April 14, 1997, the magistrate judge issued the Sequestration Order, which granted MCC's motion and directed that (1) when preparing witnesses for their depositions, attorneys may not refer "directly or indirectly by innuendo, to what other witnesses say about the facts;" (2) attorneys and officers of any party may not reveal prior deposition testimony to any witness prior to that witness's deposition; and (3) a party may not designate more than two corporate representatives to attend depositions before the representatives themselves have been deposed and may have only six corporate representatives overall, two of whom will not be deposed. In support of his decision to grant MCC's motion, the magistrate judge stated:

[T]he court finds validity in the contentions of MCC that most fact witnesses are subject to substantial influence and even perhaps subtle pressures from their relationships with Terra. The court further finds that MCC has made a substantial showing of exceptional circumstances that make it appropriate for the court to fashion a reasonable protective order.

On October 30, 1997, the district court issued an order affirming the Sequestration Order.

Terra seeks a writ of mandamus to compel the district court to vacate its orders of October 30, 1997 affirming the magistrate judge's Production Orders and Sequestration Order.

II. ANALYSIS

"[T]he writ of mandamus is an extraordinary remedy reserved for extraordinary situations" and "is not to be used as a substitute for appeal." In re American Marine Holding Co., 14 F.3d 276, 277 (5th Cir.1994). "Mandamus is appropriate 'when the trial court has exceeded its jurisdiction or has...

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