Duke Energy Carolinas, LLC v. AG Ins. SA/NV, 2018 NCBC 38.
STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION MECKLENBURG COUNTY 17 CVS 5594
DUKE ENERGY CAROLINAS, LLC and DUKE ENERGY PROGRESS, LLC,
Plaintiffs,
v. ORDER AND OPINION ON DUKE’S MOTION FOR PROTECTIVE ORDER AG INSURANCE SA/NV (f/k/a L’Etoile S.A. Belge d’Assurances); et REGARDING DISCOVERY OF al., CERTAIN CONFIDENTIAL SETTLEMENT DOCUMENTS AND Defendants. PROTECTIVE ORDER
1. THIS MATTER is before the Court on Plaintiffs Duke Energy Carolinas,
LLC and Duke Energy Progress, LLC’s (together, “Duke”) Motion for Protective Order
Regarding Discovery of Certain Confidential Settlement Documents (the “Motion”) in
the above-captioned case.
2. For the reasons stated herein, the Court GRANTS the Motion in part and
DENIES the Motion in part.
Hunton & Williams LLP, by Frank E. Emory, Jr., Ryan G. Rich, and Patrick M. McDermott, and Pillsbury Winthrop Shaw Pittman LLP, by Mark. J. Plumer, Matthew G. Jeweler, Aaron D. Coombs, Latosha M. Ellis, and William C. Miller, for Plaintiffs Duke Energy Carolinas, LLC and Duke Energy Progress, LLC.
Goldberg Segalla, by David L. Brown and David G. Harris, and Rivkin Radler LLP, by Alan S. Rutkin, George D. Kappus, Steven Zuckermann, and Robert Tugander, for Defendant Associated Electric & Gas Insurance Services Ltd.
McAngus Goudelock & Courie, by John T. Jeffries, John Barringer, and Jeffrey Kuykendal, and Karbal Cohen Economou Silk Dunne LLC, by Roderick Dunne and Jocelyn F. Cornbleet, for Defendants Allianz Global Risks US Insurance Co., Alllianz Underwriters Insurance Co., Fireman’s Fund Insurance Co., and Assurances Generales de France.
Fitzgerald Litigation, by Andrew L. Fitzgerald, and Cohn Baughman & Martin, by William M. Cohn, Frank Slepicka, and Christopher P. Hemphill, for Defendants Century Indemnity Co., Federal Insurance Co., and Pacific Employers Insurance Co.
Bradley Arant Boult Cummings LLP, by Corby Cochran Anderson and Matthew S. DeAntonio, and Freeborn & Peters LLP, by Bruce Engel, Patrick Frye, and Ryan Rudich, for Defendant Arrowood Indemnity Co.
McAngus Goudelock & Courie, by John T. Jeffries, John Barringer, and Jeffrey Kuykendal, and Budd Larner P.C., by Michael Balch and David I. Satine, for Defendant General Reinsurance Corp.
Brooks, Pierce, McLendon, Humphrey & Leonard, LLP, by D.J. O’Brien, III, and Karbal Cohen Economou Silk Dunne LLC, by Dena Economou and Gerald Ziebell, for Defendants First State Insurance Co. and Twin City Fire Insurance Co.
Bledsoe, Judge.
I.
BACKGROUND
3. Duke initiated its request for a protective order on January 25, 2018 under
Business Court Rule (“BCR”) 10.9. Defendant Associated Electric & Gas Insurance
Services Limited (“AEGIS”) and Defendants Allianz Global Risks US Insurance
Company, Allianz Underwriters Insurance Company, Fireman’s Fund Insurance
Company, and Assurances Generales De France (collectively, “AGF”) submitted BCR
10.9 statements in opposition to Duke’s request. Pursuant to BCR 10.9(b)(1), the
Court thereafter ordered Duke to file the Motion and the parties to submit briefs on the Motion. Duke, AEGIS, and AGF submitted briefs in connection with the Motion.
Certain other defendants (the “Joining Defendants”) joined AGF’s brief.1
4. This action focuses on whether AEGIS, AGF, the Joining Defendants
(collectively, the “Objecting Defendants”), and other insurers (together, “Defendants”)
are obligated to compensate Duke for insurance claims resulting from liabilities
linked to coal combustion residuals (“CCRs”)—commonly known as coal ash—at
certain Duke-owned power plants in North and South Carolina. (Am. Compl. ¶ 2,
ECF No. 232.)
5. Since 1996, Duke and AEGIS have engaged in multiple rounds of settlement
negotiations concerning Duke’s liabilities or potential liabilities for certain
environmental matters under various AEGIS insurance policies.2 (Duke’s Mem. Law
Supp. Mot. Protective Order Regarding Disc. Certain Confidential Settlement Docs.
2–3 [hereinafter “Duke’s Br.”], ECF No. 242.; AEGIS’s Mem. Resp. Duke’s Mot.
Protective Order Regarding Disc. Certain Settlement Docs. 1 [hereinafter “AEGIS’s
Br.”], ECF No. 247.) As a result of these previous settlement negotiations, Duke and
AEGIS entered into several standstill and confidentiality agreements (the “Standstill
1 The Joining Defendants were Defendants Century Indemnity Company, Federal Insurance
Company, Pacific Employers Insurance Company, Arrowood Indemnity Company, General Reinsurance Corporation, First State Insurance Company, and Twin City Fire Insurance Company.
2 According to Duke, the settlement negotiations with AEGIS focused on asbestos and manufactured gas plant liabilities faced by Duke Power Company, predecessor to Plaintiff Duke Energy Carolinas, LLC, and Carolina Power & Light Company, predecessor to Plaintiff Duke Energy Progress, LLC. Duke has represented that it “provided formal notice in 1996 of actual claims and requested coverage” as to these liabilities. (Duke’s Br. 2.) For convenience, the Court will refer to Duke and its predecessors as “Duke.” Agreements”) and settlement agreements. (Duke’s Br. 2–3; e.g., AEGIS’s Br. Ex. A.
¶ 2.) The terms of these agreements required the parties to keep certain documents
prepared for the settlement negotiations confidential. (Duke’s Br. 2–3; AEGIS’s Br.
Ex. A ¶¶ 7–12.)
6. Certain discovery requests served by a number of defendants in this action
seek the production of documents related to the previous settlement negotiations
between Duke and AEGIS. (Duke’s Br. Ex. J, at 5–12, ECF. No. 242.10.) In response,
AEGIS, with Duke’s consent, produced over 6,000 pages of responsive documents that
include (i) notice letters from the 1996 time period identifying claims and
circumstances that might give rise to claims—including circumstances relating to
potential CCR liability—(ii) the Standstill Agreements, and (iii) the settlement
agreements between Duke and AEGIS. (Duke’s Br. 4.) Duke also represents that
factual documents traded in connection with the settlement negotiations that were
not created for the purposes of settlement have been produced. (Duke’s Br. 4.)
7. AEGIS withheld approximately 168 documents from production because it
concluded that these documents either fell within the confidentiality restrictions in
the Standstill Agreements or should be withheld due to an applicable legal privilege.
(AEGIS’s Br. 4.) AEGIS redacted portions of 92 more documents based on privilege,
relevance, or the Standstill Agreements. (AEGIS’s Br. 4.)
8. Duke was permitted by AEGIS to review AEGIS’s intended production prior
to AEGIS turning over the documents to other parties in this litigation. (AEGIS’s Br.
3.) As a result of that review, Duke requested that AEGIS redact or withhold specific additional documents pursuant to the Standstill Agreements. (Duke’s Br. 4.) AEGIS
disagrees that these documents are covered by the Standstill Agreements but, in
response to Duke’s request, agreed to withhold an additional 39 documents and
redact portions of a further 68 documents until the Court determines AEGIS’s
discovery obligations concerning these documents. (AEGIS’s Br. 4.)
9. Duke now seeks a protective order limiting discovery of the 367 confidential
documents currently withheld or redacted by AEGIS that relate to the previous
settlement negotiations between AEGIS and Duke (the “Withheld Documents”).
Duke also asks the Court to limit discovery of oral communications that took place
during the previous settlement negotiations.
10. The Objecting Defendants oppose Duke’s Motion and argue that the
Withheld Documents and oral communications that took place during the settlement
negotiations should be discoverable because the documents or communications may
contain information about Duke’s previous knowledge of liabilities connected to
CCRs. That knowledge, the Objecting Defendants argue, may prove relevant to the
Objecting Defendants’ defenses, including, among others, that Duke did not bring its
claims within the applicable statute of limitations and that Duke failed to properly
mitigate its claimed damages after learning of potential liabilities arising from CCRs.
11. The Court held a hearing on Duke’s Motion on March 19, 2018. During
argument on the Motion, the Court and the parties discussed the possibility of in
camera review of the Withheld Documents. No party objected to this proposal. 12. After reviewing and considering the materials provided by the parties in
connection with the Motion and the arguments advanced by counsel at the March 19,
2018 hearing, the Court ordered AEGIS to provide copies of the Withheld Documents
to the Court for in camera inspection, subject to work-product or attorney-client
privilege redactions that were not disputed by the parties. AEGIS provided the
Withheld Documents to the Court on April 5, 2018.
13. The Court has reviewed the Withheld Documents in camera.
14. The Motion is now ripe for resolution.
II.
LEGAL STANDARD
15. The Supreme Court of North Carolina has recently reiterated that “[t]he
primary purpose of the discovery rules is to facilitate the disclosure prior to trial of
any unprivileged information that is relevant and material to the lawsuit so as to
permit the narrowing and sharpening of the basic issues and facts that will require
trial.” Friday Invs., LLC v. Bally Total Fitness of the Mid-Atl., Inc., 805 S.E.2d 664,
667 (N.C. 2017) (quoting Bumgarner v. Reneau, 332 N.C. 624, 628, 422 S.E.2d 686,
688–89 (1992)). Rule 26 furthers this important process by allowing “[p]arties [to]
obtain discovery regarding any matter, not privileged, which is relevant to the subject
matter involved in the pending action.” N.C. R. Civ. P. 26(b)(1). Our courts have long
recognized that “[t]he relevancy test for discovery is not the same as the relevancy
test for admissibility into evidence. To be relevant for purposes of discovery, the
information [sought] need only be ‘reasonably calculated’ to lead to the discovery of admissible evidence.” Shellhorn v. Brad Ragan, Inc., 38 N.C. App. 310, 314, 248
S.E.2d 103, 106 (1978); see also N.C. R. Civ. P. 26(b)(1); Lowd v. Reynolds, 205 N.C.
App. 208, 214, 695 S.E.2d 479, 483 (2010). If this test is met, a party may not object
to a discovery request merely because “the information sought will be inadmissible at
the trial.” N.C. R. Civ. P. 26(b)(1). The fact that “the examining party has knowledge
of the information as to which discovery is sought” is likewise immaterial. Id.
16. A party’s ability to obtain discovery may, however, be subject to certain
restraints. “Upon motion by a party or by the person from whom discovery is sought,
and for good cause shown,” a trial court may issue an order limiting discovery “to
protect a party or person from unreasonable annoyance, embarrassment, oppression,
or undue burden or expense.” N.C. R. Civ. P. 26(c). “One party’s need for information
must be balanced against the likelihood of an undue burden imposed upon the other.”
Willis v. Duke Power Co., 291 N.C. 19, 34, 229 S.E.2d 191, 200 (1976). “If the motion
for a protective order is denied in whole or in part, the court may, on such terms and
conditions as are just, order that any party or person provide or permit discovery.”
N.C. R. Civ. P. 26(c); Lovendahl v. Wicker, 208 N.C. App. 193, 200, 702 S.E.2d 529,
534 (2010) (“A motion for a protective order under Rule 26(c) that is denied . . . may
end in the same result as a motion to compel discovery . . . an order compelling
discovery.”).
17. The decision to enter a protective order regarding discovery and to protect
specific documents from disclosure is “within the discretion of the trial court and will
not be upset on appeal absent a showing of abuse of discretion.” Powers v. Parisher, 104 N.C. App. 400, 409, 409 S.E.2d 725, 730 (1991). Duke’s Motion presents the Court
with such a decision.
III.
ANALYSIS
18. Duke argues that the Court should grant Duke’s Motion and protect the
Withheld Documents from disclosure because of public policy concerns and the
importance of keeping settlement negotiations confidential and because the
documents sought are not relevant under Rule 26. The Court examines each of
Duke’s arguments in turn.
19. Duke first asks the Court to enter the requested protective order because of
public policy concerns favoring settlement. Duke argues that the reasons supporting
a protective order under Rule 26(c) “should include limiting discovery into settlement-
related communications where allowing such discovery would discourage settlement
among the parties to an ongoing litigation.” (Duke’s Br. 4.) While asserting that its
position does not require the Court to create a heretofore unrecognized “settlement
privilege” in North Carolina, Duke urges the Court to require that a “heightened
standard of relevance” be met before documents prepared for and communications
made during settlement negotiations can be discovered. (Duke’s Br. 6.) The Court
should impose this heightened standard, Duke contends, to foster settlement
negotiations and protect parties who have entered into a “highly structured
settlement process [like] Duke and AEGIS[.]” (Duke’s Br. 8.) 20. Citing case law from other jurisdictions, Duke warns that “[p]arties are
unlikely to propose the types of compromises that most effectively lead to settlement
unless they are confident that their proposed solutions” will not be used for some
purpose in later litigation “by some future third party.” (Duke’s Br. 7 (quoting
Goodyear Tire & Rubber Co. v. Chiles Power Supply, Inc., 332 F.3d 976, 980 (6th Cir.
2003).) Duke also points to North Carolina statutes that are premised on similar
considerations to support its request. See, e.g., N.C. Gen. Stat. § 7A-38.1(l); N.C. R.
Evid. 408.
21. Although Duke denies it is encouraging the Court to adopt a full-fledged
settlement privilege for application in this case, the reasoning Duke advances for its
heightened standard is nearly identical to that used by courts that recognize such a
privilege. See Goodyear, 332 F.3d at 980 (“Without a privilege, parties would more
often forego negotiations for the relative formality of trial. Then, the entire
negotiation process collapses upon itself, and the judicial efficiency it fosters is lost.”).
22. The practice of affording special discovery protections to settlement
negotiations merely because they are settlement negotiations has been widely
criticized and rejected by the majority of federal courts that have considered the
issue.3 See, e.g., In re Gen. Motors Corp. Engine Interchange Litig., 594 F.2d 1106,
1124 n.20 (7th Cir. 1979) (“Inquiry into the conduct of [settlement] negotiations
3 The North Carolina appellate courts have recognized that “[w]ith the exception of the United States Supreme Court, federal appellate decisions are not binding upon either the appellate or trial courts of this State.” Shepard v. Ocwen Fed. Bank, FSB, 172 N.C. App. 475, 479, 617 S.E.2d 61, 64 (2005). North Carolina state courts may, however, consider federal courts’ analysis and holdings as persuasive authority. Id. is . . . consistent with the letter and the spirit of Rule 408 of the Federal Rules of
Evidence. That rule only governs admissibility.”); Graves v. United States, No. 13-cv-
22501-MOORE/MCALILEY, 2014 U.S. Dist. LEXIS 192715, at *5 (S.D. Fla. Oct. 30,
2014) (“Neither the Supreme Court nor this Circuit has recognized a settlement
privilege as a matter of federal common law.”); Nat’l Union Fire Ins. Co. v. Porter
Hayden Co., No. CCB-03-3408, 2012 U.S Dist. LEXIS 23716, at *12 (D. Md. Feb. 24,
2012) (“[T]he Fourth Circuit has not imposed a settlement privilege with respect to
discovery. To the contrary, courts in this circuit have found that
‘relevance not admissibility, is the appropriate inquiry with regard to whether or not
the information sought . . . is discoverable.’” (quoting Herchenroeder v. Johns Hopkins
Univ. Applied Physics Lab., 171 F.R.D. 179, 181 (D. Md. 1997))); Two-Way Media LLC
v. AT&T Inc., No. SA-09-CA-476-OG, 2011 U.S. Dist. LEXIS 160122, at *6 (W.D. Tex.
Mar. 7, 2011) (“Federal district courts are split, but clearly, the majority of courts do
not recognize an absolute privilege for settlement agreements and negotiations.”); In
re Subpoena Issued to CFTC, 370 F. Supp. 2d 201, 212 (D.D.C. 2005) (declining to
recognize “a federal settlement privilege” after engaging in a detailed analysis of
federal jurisprudence on the recognition of new privileges).
23. Likewise, the North Carolina appellate courts have not heretofore
recognized a discovery privilege linked to settlement or compromise negotiations. See
Media Network, Inc. v. Mullen Advert., Inc., 2006 NCBC LEXIS 6, at *6 (N.C. Super.
Ct. Apr. 21, 2006); see also Federated Fin. Corp. of Am. v. Jenkins, No. COA11-654,
2012 N.C. App. LEXIS 19, at *8–9 (N.C. Ct. App. Jan. 17, 2012) (“Defendant does not cite any authority that states that confidential settlements are never discoverable,
nor does he explain why any of these particular settlements are not
discoverable. This argument is without merit.” (citation omitted)).
24. Duke’s proposed “heighted standard of relevance” basis for a protective
order also lacks support under North Carolina law. Although “the public policy of
this State encourages settlement agreements,” Bromhal v. Stott, 341 N.C. 702, 705,
462 S.E.2d 219, 221 (1995), that general principle does not give the Court leave to use
Rule 26(c) to invent a new standard for the discovery of settlement documents and
communications. Duke’s invocation of specific circumstances in which North
Carolina law protects settlement negotiations only highlights our General Assembly’s
decision to forgo a blanket protection for communications or documents linked to
settlement negotiations. The Court will not second-guess that decision. Rhyne v. K-
Mart Corp., 149 N.C. App. 672, 680, 562 S.E.2d 82, 89 (2002) (“The General Assembly
is where public policy is better debated.”)
25. For these reasons, the Court will not enter a protective order preventing
production of the 367 documents solely because the information Defendants seek is
related to settlement negotiations. Consequently, the Court turns to whether the
Withheld Documents and oral communications during Duke and AEGIS’s settlement
negotiations are relevant to the subject matter of this litigation under Rule 26. The
Court examines the Withheld Documents first.
26. Duke contends that the Withheld Documents are not relevant because they
were compiled for the purpose of advancing the settlement positions of AEGIS and Duke and thus have minimal probative value. Duke also argues against the Withheld
Documents’ relevance by pointing out that evidence of statements and conduct in
compromise negotiations is inadmissible under North Carolina Rule of Evidence 408.
Duke appears to conclude that any evidence discovered from information contained
within the Withheld Documents will necessarily also be inadmissible under Rule of
Evidence 408. The Court does not find these arguments persuasive.
27. First, the Court’s inquiry here is focused on the Withheld Documents’
relevance in the context of Rule 26, not their probative value or admissibility at a
later trial. Second, Rule 26 applies the same test for relevance regardless of a
document’s origins—the information sought is relevant if it is “‘reasonably calculated’
to lead to the discovery of admissible evidence.” Shellhorn, 38 N.C. App. at 314, 248
S.E.2d at 106. Thus, if the Withheld Documents contain information that meets this
test—for example, information reasonably calculated to lead to the discovery of the
underlying facts or data known to Duke that prompted Duke to assert its claims
linked to CCR liabilities—that information is relevant.
28. Indeed, after reviewing the Withheld Documents in camera, the Court
concludes that a significant portion contain relevant information. In particular,
many of the Withheld Documents provided to the Court report expert findings
concerning environmental risks at power plants that are the subject matter of this
case, evaluate the potential costs of different solutions to these environmental risks,
or discuss applicable regulations that control or controlled Duke’s potential liability
resulting from CCRs. Other documents contain notes and correspondence related to purported claims by Duke that were linked to CCRs at the plants and facilities that
are the subject matter of this dispute.
29. The Court concludes that this information is reasonably calculated to lead
to the discovery of admissible evidence related to Duke’s claims or the Objecting
Defendants’ defenses. Neither Duke nor AEGIS has argued that the production of
this information will cause either of them “unreasonable annoyance, embarrassment,
oppression, or undue burden or expense” under Rule 26, and thus the Court concludes
that the Objecting Defendants’ need for this information outweighs any undue burden
or hardship imposed on Duke or AEGIS by production. The Court, in its discretion,
will therefore deny Duke’s Motion as to the Withheld Documents to the extent the
documents contain facts—or legal positions exchanged between Duke and AEGIS
based on stated facts—that concern CCRs and the power plants that are the subject
matter of this case. Willis, 291 N.C. at 36, 229 S.E.2d at 201 (“In the interests of
justice, the trial judge may require in camera inspection and may allow discovery of
only parts of some documents.”); see Next Advisor Continued, Inc. v. LendingTree,
Inc., 2016 NCBC LEXIS 72, at *12 (N.C. Super. Ct. Sept. 16, 2016) (denying
defendant’s motion for protective order after concluding that plaintiff’s need for
relevant information outweighed the burden on defendant’s witness).
30. At the same time, the Withheld Documents also contain a great deal of
irrelevant information. As Duke has represented to the Court, many of the pages
provided by AEGIS deal with asbestos litigation or power plants that are not at issue
in this case. Other documents contain AEGIS’s or Duke’s opinions concerning settlement figures, specific settlement amounts offered or demanded, and proposals
for settlement terms. This information is not linked to Duke’s claims, the Objecting
Defendants’ defenses, or other disputed matters in this litigation and is therefore not
reasonably calculated to lead to the discovery of admissible evidence under Rule 26.
Accordingly, the Court concludes that good cause exists to grant Duke’s Motion in
part and exclude this irrelevant information from discovery. See Powers, 104 N.C.
App. at 409, 409 S.E.2d at 730–31 (“We hold that it was an abuse of discretion not to
have granted defendant some relief under Rule 26(c) . . . on the ground that plaintiff’s
requests for discovery . . . far exceed the scope of . . . documents relevant to plaintiff’s
action and are, therefore, unduly burdensome.”); Brown v. Secor, 2017 NCBC LEXIS
65, at *38–39 (N.C. Super. Ct. July 28, 2017) (granting motion for protective order as
to records that were highly likely to contain vast amounts of irrelevant, personal
information); Le Bleu Corp. v. B. Kelley Enters., Inc., 2014 NCBC LEXIS 62, at *9–10
(N.C. Super. Ct. Nov. 21, 2014) (entering a protective order to preclude certain topics
from discovery in Rule 30(b)(6) depositions after concluding that the information
sought was irrelevant to the success or failure of the parties’ claims or defenses).
31. Having concluded that Duke’s Motion should be granted in part and denied
in part, the Court will order AEGIS to produce specific Withheld Documents, or
portions of specific Withheld Documents with redactions, as identified herein.
32. Finally, as to Duke’s request that the Court protect oral communications
that took place during Duke and AEGIS’s negotiations, and until the Court is faced
with a dispute about specific oral communications, the Court concludes that a protective order similar to that now entered regarding the Withheld Documents is
appropriate. Subject to other limitations, such as the attorney-client privilege or the
work-product doctrine, Defendants may ask questions about the facts and legal
positions exchanged during negotiations between Duke and AEGIS concerning CCRs
and Duke’s coal-fired power plants involved in this case. Defendants are not entitled
to discover oral communications concerning the amount of specific settlement
demands or offers, opinions concerning settlement figures, or proposals for settlement
terms.
IV.
CONCLUSION
33. WHEREFORE, the Court, in the exercise of its discretion, hereby
GRANTS Duke’s Motion in part and DENIES Duke’s Motion in part and
ORDERS as follows:
a. AEGIS shall produce for discovery those documents or pages identified
below by Bates number, subject to the preexisting redactions4 and, to
the extent required, the further redactions specified herein.5
4 In addition to attorney-client and work-product redactions, the Withheld Documents provided to the Court also included several pages that were redacted as “Non Responsive – Irrelevant.” On April 19, 2018, the Court emailed AEGIS to request unredacted copies of these pages, and AEGIS promptly complied. All counsel were copied on the Court’s April 19 email, which included the specific pages on which the “Irrelevant” redactions were made. The Court has reviewed the unredacted copies of these pages and concludes—with one exception noted herein—that they are indeed irrelevant and that the redactions marked as “Irrelevant” shall remain in place.
5 The copies of the Withheld Documents provided to the Court contained a large number of
duplicates. The Court has not attempted to “de-duplicate” the documents. The parties are therefore advised that the production ordered herein contains numerous duplicate documents. i. 1;
ii. 2 (redacted to display only the text of section 1.0);
iii. 3 (reacted to display only section 1.1);
iv. 8–13 (redacted to display only section 1.3 and its subsections);
v. 15;
vi. 20 (redacted to display only section 1.4.3);
vii. 24 (redacted to display only the table’s title, the table’s top row
with column labels, the “Coal-Fired Power Plant Sites” row, and
the note at the bottom);
viii. 27;
ix. 440;
x. 465–70;
xi. 472–73 (redacted to exclude information after section 1.3.1);
xii. 477–78 (redacted to display only section 1.3.3);
xiii. 482 (redacted to display only the table’s title, the table’s top row
with column labels, the “Coal-Fired Power Plant Sites” row, and
xiv. 485;
xv. 858–935;
xvi. 1629;
xvii. 1652–58;
xviii. 1662–63 (redacted to display only section 1.3.2); xix. 1666 (redacted to display only the table’s title, the table’s top row
with column labels, and the “Ash Pond Sites” row);
xx. 1669;
xxi. 2044–141;
xxii. 2237 (with the monetary amount of demands redacted);
xxiii. 2379 (redacted to display only the title of the page, the top row of
the chart with column labels, the “Coal-Fired Power Plant Sites”
row, the note at the bottom, and the name of the preparer in the
bottom left corner);
xxiv. 2381;
xxv. 2425–71 (redacted to display only the following: the heading of
the document—including the “To,” “From,” “Date,” and “Re:”
lines—on 2425; the information leading up to and including
subheading “1. Asbestos-Related Bodily Injury Claims:” on 2425;
subheading “2. Property Damage Claims” and the paragraphs
between subheading two and heading “B” with the total cost
figures mentioned in these paragraphs redacted; subheading “2.
Property Damage Claims” on 2432; heading “D. Settlement
Negotiations Between Duke and AEGIS Relating to Property
Damage” on 2435; heading “E. AEGIS and Duke Agreed to Retain
Neutral Consultant” on 2436; all of 2437; and the title “List of Duke Sites” and the information relating to coal-fired power
plants on 2439);
xxvi. 2472–73;
xxvii. 2474–517 (with all specific amounts of settlement demands
redacted);
xxviii. 2518–19 (with the information preceding the paragraph
beginning with “CP&L required” redacted on 2518 and the
specific amount demanded on 2519 redacted);
xxix. 2520;
xxx. 2521–72 (with pages 2564–72 completely redacted);
xxxi. 2573–714 (with the specific amounts of all settlement demands
xxxii. 2719–70 (with 2762–70 completely redacted);
xxxiii. 2771–915 (with the specific amounts of all settlement demands
xxxiv. 2975–80 (with the specific amounts of settlement demands and
offers redacted);
xxxv. 2986–88;
xxxvi. 2991–94 (with the “Non Responsive – Irrelevant” redaction on
2991 altered so that the majority of the third paragraph on 2991
is shown, except that the sentences between “the discount rate
and the inflation rate” and “A comparison of cost estimates for six ash pond sites” shall remain redacted; and 2992 redacted to
display only the paragraph ending with “no monitoring is being
conducted at the site”);
xxxvii. 2997;
xxxviii. 3000–01 (with the amounts listed for “MGP Sites” and
“Miscellaneous” redacted from the bottom of 3000 and 3001
redacted to display only the paragraph ending with “sites
involved in the settlement discussions”);
xxxix. 3013–14;
xl. 3035–37;
xli. 3097–262;
xlii. 3263–70;
xliii. 3271–72;
xliv. 3329;
xlv. 3384–88 (with the paragraph between the paragraph ending with
“plans for the ash ponds” and the line “Good luck” redacted on
3384);
xlvi. 3389–448;
xlvii. 3449–519;
xlviii. 3520–89 (with the specific amounts of all settlement demands
xlix. 3642–705; l. 3706–10 (with the paragraph between the paragraph ending with
“plans for the ash ponds” and the line “Good luck” redacted on
3706);
li. 3716–67 (with 3759–67 completely redacted);
lii. 3911–12;
liii. 3914–30; and
liv. 3933–34.
b. With respect to all of the Withheld Documents, and to the extent not
otherwise specifically noted herein, the monetary amounts of all
demands and offers for settlement shall be redacted.
c. AEGIS may, or Duke may require AEGIS to, produce the above-
described materials pursuant to the terms of the Stipulated Protective
Order entered in this case.
d. Except as otherwise provided by this Order, Defendants shall not be
entitled to discovery regarding the Withheld Documents.
e. Defendants shall be entitled to discovery regarding oral communications
that took place during the prior Duke-AEGIS settlement negotiations to
the extent those communications (i) concern facts known to Duke’s or
AEGIS’s agents that related to Duke’s liability or potential liability
resulting from CCRs at the power plants that are the subject matter of
this case or (ii) concern the legal positions advanced by Duke or AEGIS
for the consideration of the opposing party based on such facts. f. Defendants shall not be entitled to discovery regarding oral
communications that took place during the prior Duke-AEGIS
settlement negotiations to the extent those communications: (i) concern
power plants not involved in this case or liabilities unrelated to CCRs;
(ii) concern proposed terms of settlement, specific monetary amounts
demanded as a part of settlement, specific monetary amounts offered as
part of an offer for settlement, opinions on settlement figures; or (iii) are
protected from discovery by application of the attorney-client privilege,
the work-product doctrine, or other applicable privilege.
g. AEGIS shall produce the documents ordered to be produced herein no
later than May 9, 2018.
h. The Court reserves the right to amend or rescind the protections of this
Order for good cause shown.6
SO ORDERED, this the 30th day of April, 2018.
/s/ Louis A. Bledsoe, III Louis A. Bledsoe, III Special Superior Court Judge for Complex Business Cases
6 The Court reviewed 367 documents, or almost 4,000 pages, in connection with Duke’s Motion. The Court does not intended to routinely conduct such reviews, and to the extent further discovery disputes involve such voluminous records, the Court advises the parties to consider Rule 53’s reference process.