JOHN MOLAISON AND DANIELLE NO. 21-CA-585 MOLAISON FIFTH CIRCUIT VERSUS COURT OF APPEAL CUST-O-FAB SPECIALTY SERVICES, LLC; EXCEL MODULAR SCAFFOLD AND STATE OF LOUISIANA LEASING CORPORATION; TURNER INDUSTRIES GROUP, LLC; ABC INSURANCE CORPORATION; XYZ INSURANCE CORPORATION; AND 123 INSURANCE CORPORATION
ON APPEAL FROM THE FORTIETH JUDICIAL DISTRICT COURT PARISH OF ST. JOHN THE BAPTIST, STATE OF LOUISIANA NO. 72,83, DIVISION "B" HONORABLE KIRK A. VAUGHN, JUDGE PRO TEMPORE, PRESIDING
June 01, 2022
MARC E. JOHNSON JUDGE
Panel composed of Judges Marc E. Johnson, Stephen J. Windhorst, and Hans J. Liljeberg
VACATED, IN PART; AFFIRMED, IN PART; REMANDED WITH INSTRUCTIONS MEJ SJW HJL COUNSEL FOR INTERVENOR/APPELLANT, DENKA PERFORMANCE ELASTOMER, LLC Jerry L. Stovall, Jr. Christopher A. Mason Alexa Candelora
COUNSEL FOR DEFENDANT/APPELLEE, CUST-O-FAB SPECIALTY SERVICES, LLC John P. Wolff, III Chad A. Sullivan Tori S. Bowling Sydnee D. Menou Brandi A. Barze
COUNSEL FOR PLAINTIFF/APPELLEE, JOHN MOLAISON AND DANIELLE MOLAISON Andre' P. Gauthier Lee J. Amedee, III JOHNSON, J.
Appellant/Nonparty, Denka Performance Elastomer, LLC (hereinafter
referred to as “Denka”), appeals the trial court’s ruling that denied its motion for
summary protective order and motion to quash subpoenas duces tecum and for
corporate deposition in favor of Appellees/Defendants, Cust-O-Fab Specialty
Services, LLC (hereinafter referred to as Cust-O-Fab”) and Turner Industries
Group, L.L.C. (hereinafter referred to as “Turner Industries”), from the 40th
Judicial District Court, Division “B”. For the following reasons, vacate the
judgment, in part, affirm, in part, and remand the matter with instructions.
FACTS AND PROCEDURAL HISTORY
This matter arises from a pending litigation involving a petition for damages
filed by Plaintiffs, John Molaison and Danielle Molaison, against Cust-O-Fab,
Turner Industries, Excel Modular Scaffold and Leasing Corporation, and their
respective insurers on April 12, 2018. In their petition, Plaintiffs allege that on
July 27, 2017, Mr. Molaison was at an industrial, neoprene manufacturing facility
owned by Denka in LaPlace, Louisiana. Mr. Molaison was employed as an
operator by Denka at the facility and was assisting in the preparation of a recovery
column for entry by workers who would be performing repairs of the column. The
petition further alleges that Mr. Molaison fell 22 feet through an open hole while
inspecting the recovery column on the second floor in the area where a reboiler had
been removed. Cust-O-Fab and Turner Industries are alleged to be responsible for
the installation and verification that all scaffolding, barricades, gates, tags, and
warning tapes were in place, and ensuring that the area surrounding the recovery
column and reboiler posed no threat to the safety and welfare of persons in said
area. Cust-O-Fab and Turner Industries both filed answers to the petition and
asserted Plaintiff (Mr. Molaison) and third-party faults as affirmative defenses.
Cust-O-Fab, Turner Industries, and Plaintiffs issued subpoenas for
21-CA-585 1 documents and for La. C.C.P. art. 1442 corporate deposition to Denka, a nonparty,
nonresident of Louisiana, in August of 2019. The subpoenas contained 43 separate
document requests and 88 topics for requests, and depositions were scheduled to
take place on October 2 and 3, 2019 at Cust-O-Fab’s office in Baton Rouge,
Louisiana. In opposition, Denka filed a motion for summary protective order and
motion to quash subpoenas for documents and for 1442 corporation deposition.
Denka asserted that it was not subject to the subpoena power of the trial court, and
the subpoenas for documents and for 1442 corporation deposition had no relevance
to any claim asserted by Plaintiffs or affirmative defenses raised by Cust-O-Fab
and Turner Industries.
A hearing on Denka’s motions was held on October 18, 2019. The trial
court took the matter under advisement. On March 3, 2020, after multiple delays
due to COVID-19, the trial court rendered its judgment that denied Denka’s
motions. The judgment also limited the discovery requests to one corporate
representative and two fact witnesses to the accident, Boyd Detillier and Brett
Steib. In its reasons for judgment, the trial court found that Cust-O-Fab and
Turner Industries were entitled to discover as much relevant factual information
pertinent to the current litigation, provided that the requested information is not
privileged. However, the court also agreed with Denka that the scope of the
discovery requests was onerous, particularly for a nonparty to the litigation. Thus,
in an effort to satisfy the parties’ concerns, the court ordered that Denka appoint
one corporate representative and the two fact witnesses to the accident.
Denka filed a supervisory writ with this Court, seeking review of the March
3, 2020 judgment. This Court found that the judgment was a final, appealable
judgment, and remanded the matter to the trial court for preparation of an appeal.
Molaison v. Cust-O-Fab Specialty Services, LLC, 20-136 (La. App. 5 Cir.
6/1/20)(unpublished writ disposition). The instant appeal followed.
21-CA-585 2 ASSIGNMENTS OF ERROR
On appeal, Denka alleges the trial court erred in: 1) ruling that Denka, a
nonresident, nonparty corporation, is subject to the subpoena power of a Louisiana
trial court; 2) ruling that Defendants were allowed to demand “pre-suit”
depositions from Denka for the purpose of searching for evidence to prove
Denka’s fault; 3) failing to conduct an analysis of whether Defendants showed
good cause to issue subpoenas to Denka, proving that the demands were relevant
and for non-privileged information; and 4) failing to provide guidance to the
parties of the topics and testimony of the employees, if any, that were found to be
relevant and non-privileged.
LAW AND ANALYSIS1
General Principles of Law
In Centanni v. Centanni, 21-30, p. 4 (La. App. 5 Cir. 10/19/21); --- So.3d ---,
2021WL4852145, writ denied, 21-1851 (La. 2/15/22); 332 So.3d 1184, this Court
provided the following discussion concerning discovery:
The basic objectives of the Louisiana discovery process are to: 1) afford all parties a fair opportunity to obtain facts pertinent to the litigation; 2) discover the true facts and compel disclosure of these facts wherever they may be found; 3) assist litigants in preparing their cases for trial; 4) narrow and clarify the basic issues between the parties; and, 5) facilitate and expedite the legal process by encouraging settlement or abandonment of less than meritorious claims. The discovery statutes are to be liberally and broadly construed to achieve their intended objectives. A party generally may obtain discovery of any information, not privileged, which is relevant to the subject matter involved in the pending action. The test of discoverability is not the admissibility of the particular information sought, but whether the information appears reasonably calculated to lead to the discovery of admissible evidence.
There are limitations to these rules, however, when justice requires that a party or other person be protected from annoyance, embarrassment, oppression, or undue burden or expense. When seeking to subpoena documents and information from a non-party, Louisiana courts require a showing of relevancy and good cause.
1 Turner Industries did not file a brief in this matter.
21-CA-585 3 (Internal citations omitted).
Upon motion by a party or by the person from whom discovery is sought,
and for good cause shown, the court in which the action is pending may make any
order which justice requires to protect a party or person from annoyance,
embarrassment, oppression, or undue burden or expense, including one or more of
the following: 1) that discovery not be had; 2) that the discovery may be had only
on specified terms and conditions, including a designation of the time or place; 3)
that the discovery may be had only by a method of discovery other than that
selected by the party seeking discovery; 4) that certain matters not be inquired into,
or that the scope of the discovery be limited to certain matters; 5) that discovery be
conducted with no one present except persons designated by the court; 6) that a
deposition after being sealed be opened only by order of the court; 7) that a trade
secret or other confidential research, development, or commercial information not
be disclosed or be disclosed only in a designated way; and 8) that the parties
simultaneously file specified documents or information enclosed in sealed
envelopes to be opened as directed by the courts. La. C.C.P. art. 1426(A). 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. La. C.C.P. art. 1423(B).
Appellate courts review a trial court’s rulings on motions to quash and for
protective orders concerning subpoenas duces tecum under an abuse of discretion
standard. In re Subpoena Duces Tecum by Inspector General of City of New
Orleans to Duplantier, Hrapman, Hogan & Maher, 21-10 (La. App. 4 Cir. 8/4/21);
326 So.3d 1265, 1273.
Right to Subpoena
Denka alleges that the trial court erred in ruling that Denka is subject to the
subpoena power of a Louisiana court. It argues that, as a nonresident, nonparty
21-CA-585 4 corporation, the trial court simply does not have any authority to order Denka to
appear and produce documents in Louisiana, even though it would otherwise be
subject to personal jurisdiction of the court. It contends that Phillips Petroleum
Co. v. OKC Ltd. Partnership, 93-1629 (La. 4/11/94); 634 So.2d 1186, supports its
position.
Cust-O-Fab argues that the trial court’s ruling was correct and appropriate
under Louisiana law and the facts of this case because Phillips, supra, does not
control in this matter. It asserts that Phillips is distinguishable from the particular
facts of this case because Denka has specific connections to this litigation, and
Denka’s non-resident status is a legal fiction. It alleges that Denka’s corporate
headquarters is located in LaPlace, Louisiana, and Denka maintains the chemical
plant facility where the accident occurred in Louisiana. Cust-O-Fab further asserts
that the plaintiff, Mr. Molaison, claims no memory of the accident, and Denka
performed an investigation of the accident but refused to allow the subcontractors
to participate; thus, all of the information about the cause, mechanism, or other
circumstances surrounding the accident lie solely within the knowledge of Denka
and its employees. It maintains that Denka has effectively prohibited access to
relevant, non-privileged information and has delayed discovery essential to this
matter.
In Phillips, supra, the Louisiana Supreme Court considered the issue of
whether the issuance of a subpoena duces tecum to an out-of-state nonparty
corporation, which required that nonparty to appear and produce documents at a
deposition being held in Louisiana, was sanctioned by Louisiana law. In that
matter, a petroleum company (Phillips Petroleum Company) brought suit against a
corporation (Box Energy Corporation) for an alleged failure to properly account
for Phillips’ share of profits for a federal offshore mineral lease. Phillips issued a
subpoena duces tecum to CKB Petroleum, a nonparty to the litigation, which was a
21-CA-585 5 Texas corporation with its principal office in Dallas, Texas. Although CKB was
qualified to do business in Louisiana and had a Louisiana agent for service of
process, CKB did not maintain an office in Louisiana. CKB’s only activity in
Louisiana was the maintenance of a pipeline. CKB moved to quash the subpoena,
which was denied by the trial court and affirmed by the appellate court. Id. at
1187.
Upon review, the supreme court rejected the argument that, because CKB
qualified to do business in Louisiana and had a designated agent for service of
process, CKB could be subjected to the subpoena power of a Louisiana court. The
court found that CKB’s only “presence” in Louisiana was designating an agent for
service of process, which facilitated its being sued in a Louisiana court and
exposed to personal jurisdiction. Id. at 1188. The supreme court concluded that—
because there was no statutory or other authority for a Louisiana court to compel a
nonresident, nonparty witness to attend and/or produce documents at a deposition
to be held in Louisiana and La. C.C.P. art. 1435 specifically provided that the
deposition of a nonresident witness shall be governed by the compulsory process
of the state in which the witness resides—a Louisiana court could not order a
nonresident, nonparty witness to appear and/or produce documents at a deposition
in Louisiana, even if that nonresident, nonparty is subject in another context to the
personal jurisdiction of the court. Id. at 1188-89.
In this matter, Denka maintains a facility in Louisiana, which is the facility
where the accident occurred. Denka also employs workers, like John Molaison, in
Louisiana. Thus, under these circumstances, we find that this case is
distinguishable from Phillips. Because the set of facts in this matter are
distinguishable from those in Phillips, we hold that Phillips does not control the
21-CA-585 6 instant discovery issue presented. Therefore, we find the discovery rules control2,
and the trial court did not err in ruling that Denka is subject to the subpoena power
of a Louisiana court. (See, Bernard v. State Farm Mut. Auto. Ins. Co., 98-2509
(La. App. 4 Cir. 6/30/99); 742 So.2d 609, 612, where the Louisiana Fourth Circuit
found that Phillips did not control when the subpoenaed nonparty witness was a
former Louisiana resident who moved out of state but continued to practice
medicine and treat patients in Louisiana.)
Deposition Testimony
Denka alleges the trial court erred in allowing the subpoenas for documents
and depositions because they constitute an impermissible violation of Denka’s due
process rights and improper pre-suit discovery. It argues that Cust-O-Fab and
Turner Industries’ purposes of their pre-litigation discovery demands are to
conduct a fishing expedition to attribute some quantum of fault or liability against
Denka without first pleading the factual allegations and theories of liability. Denka
contends that the subpoenas are a calculated attempt to deny it the fundamental
right of due process of law to meet the accuser and be able to mount a defense after
accusations of material facts and law have been made in the petition, answer, or
incidental demand.
Cust-O-Fab argues that the scope of the requested discovery is appropriately
tailored to discovery of information critical to the contractors’ defense of Mr.
Molaison’s claims. It asserts that, under Louisiana’s pure comparative fault
system, Denka may still be allocated fault on the verdict form, even if it is not
obligated to pay in tort by operation of workers’ compensation immunity. It
maintains that it is entitled to develop its defense on fault. It contends that the trial
court’s ruling balanced the parties’ interests and honored the spirit of the law, such
2 After the commencement of an action, any party may take the testimony of any person, including a party, by deposition upon oral examination. La. C.C.P. art. 1437.
21-CA-585 7 that it should not be reversed.
Discovery is not to be used as a fishing expedition. Petch v. Humble, 41,301
(La. App. 2 Cir. 8/23/06); 939 So.2d 499, 506, writ denied, 06-2482 (La.
12/15/06); 945 So.2d 692. A party generally may obtain discovery of any
information, not privileged, which is relevant to the subject matter involved in the
pending action. Centanni, supra. The test of discoverability is not the
admissibility of the particular information sought, but whether the information
appears reasonably calculated to lead to the discovery of admissible evidence. Id.
Discovery should be allowed where such discovery “relates to the claim or defense
of the party seeking discovery or to the claim or defense of any other party,
including the existence, description, nature, custody, condition, and location of any
books, documents, or other tangible things and the identity and location of persons
having knowledge of any discoverable matter.” State ex rel. Ieyoub v. Racetrac
Petroleum, Inc., 01-458 (La. App. 3 Cir. 6/20/01); 790 So.2d 673, 685, quoting La.
C.C. P. art. 1422.
Here, both Cust-O-Fab and Turner Industries have pleaded the fault of a
third party as an affirmative defense. Cust-O-Fab argues that documents produced
by Denka in response to a previous subpoena duces tecum reflect Denka
considered ultimate questions central to a determination of liability in this matter,
and testimony is needed to develop central facts for trial. Pursuant to La. C.C.P.
art. 1442, Cust-O-Fab and Turner Industries are not required to plead their
affirmative defense with particularity prior to seeking discovery from Denka.
Accordingly, we do not find that the trial court erred in allowing Cust-O-Fab and
Turner Industries to discover information relevant to their defenses.
Analysis of Good Cause
Denka alleges the trial court erred in allowing the subpoenas for documents
and depositions because Cust-O-Fab and Turner Industries failed to show that the
21-CA-585 8 onerous subpoena demands are relevant to any pleaded claim or defense and are
needed for good cause. Denka argues that all or nearly all of the demands for
corporate testimony and documents from it are based upon deposition topics and
document requests attempting to fish for evidence of alleged fault against it. It
contends that subjecting it to the overbroad discovery and deposition demands is
an undue hardship, and the ruling should have been resolved by granting Denka’s
motion in toto and issuing permanent protective orders. Denka further argues that
many of the demands for topics and depositions are for privileged documentation
and testimony—e.g., documentation prepared by Denka or its attorneys, surety,
indemnitor, expert, or agent; any financial information or insurance of Denka;
confidential information regarding vendors used by Denka to procure equipment
and materials; post-accident investigations and/or subsequent remedial measures;
confidential medical records and compensation earnings records concerning
specific Denka employees, namely Brett Steib and Boyd Detillier; and, attorney-
client privileged work product—and would be non-discoverable, even if Denka
were a named party to the lawsuit.
Cust-O-Fab asserts that Denka intentionally interposed its counsel and
excluded the defendant contractors from the post-incident investigation in a
preemptive effort to limit access to its findings. It maintains that Denka seeks
application of the attorney-client privilege and work product doctrine far beyond
the scope of those protections, and Denka should not be allowed to shield
information from discovery simply by stamping its attorney’s name to the
investigation and information. It argues that cursory statements of privilege are
insufficient to meet Denka’s burden on this issue, especially where the information
sought is plainly factual and generally unsuitable to a privilege claim. Cust-O-Fab
further asserts that the requested discovery is appropriately tailored to obtain
needed information, and the fact that Denka possesses a large volume of the
21-CA-585 9 information needed to determine this case does not render the request for the
information improper.
Here, the trial court denied Denka’s motion for protective order and motion
to quash subpoenas for documents and for 1442 corporate deposition. The court
limited the discovery requests for Denka to one corporate and two fact witnesses to
the accident, Boyd Detillier and Brett Steib. In its written reasons for judgment,
the court found that Cust-O-Fab and Turner Industries were entitled to discover as
much relevant information that is pertinent to the instant litigation, provided that
the requested information is not privileged. However, the court agreed with Denka
that the scope of the 43 separate document requests and 88 topic and issue requests
were onerous, particularly for a nonparty to the litigation, and limited the number
of witnesses in an attempt to satisfy the concerns of the parties. Nevertheless, the
court did not determine which requests were onerous or specify the scope of the
requests Cust-O-Fab and Turner Industries were entitled to discover. Therefore,
we find that the trial court erred in failing to limit the scope of the requests.
Accordingly, we vacate the judgment, in part, and remand to the trial court
with the instruction to render a ruling that determines all of the issues set forth
before it, which includes the limitations applicable, if any, to the specific discovery
requests.
Guidance for Relevant and Non-Privileged Information
Alternatively, Denka argues that the matter should be remanded to the trial
court to determine the specific scope, nature, and extent of the allowable topics for
the corporate representative deposition and depositions of Denka employees. It
argues that the trial court’s judgment is incapable of being reasonably complied
with in its current form.
Because of our finding in the previous assignment of error, this issue is
21-CA-585 10 moot.
DECREE
For the foregoing reasons, we vacate the March 3, 2020 trial court judgment,
in part, affirm, in part, and remand the matter with the instructions provided within
this opinion. In all other respects, the judgment is affirm. Each party is to bear
their own costs of this appeal.
VACATED, IN PART; AFFIRMED, IN PART; REMANDED WITH INSTRUCTIONS
21-CA-585 11 SUSAN M. CHEHARDY CURTIS B. PURSELL
CHIEF JUDGE CLERK OF COURT
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21-CA-585 E-NOTIFIED 40TH DISTRICT COURT (CLERK) HONORABLE KIRK A. VAUGHN, JUDGE PRO TEMPORE (DISTRICT JUDGE) ALEXA CANDELORA (APPELLANT) CHRISTOPHER A. MASON (APPELLANT) JERRY L. STOVALL, JR. (APPELLANT) CHAD A. SULLIVAN (APPELLEE) TORI S. BOWLING (APPELLEE) RYAN R. BROWN (APPELLEE) THOMAS E. BALHOFF (APPELLEE) ANDRE' P. GAUTHIER (APPELLEE) DANIEL E. BECNEL, III (APPELLEE)
MAILED LEE J. AMEDEE, III (APPELLEE) KATHRYN W. BECNEL (APPELLEE) BRANDI A. BARZE (APPELLEE) ATTORNEY AT LAW ATTORNEY AT LAW ATTORNEY AT LAW 2111 SOUTH BURNSIDE AVENUE 425 WEST AIRLINE HIGHWAY 701 MAIN STREET GONZALES, LA 70737 SUITE B BATON ROUGE, LA 70802 LAPLACE, LA 70068 JUDITH R. ATKINSON (APPELLEE) MARK D. CHIASSON (APPELLEE) ATTORNEY AT LAW GEORGE A. WRIGHT (APPELLEE) ATTORNEY AT LAW 8440 JEFFERSON HIGHWAY JOHN P. WOLFF, III (APPELLEE) POST OFFICE BOX 12 SUITE 301 RICHARD W. WOLFF (APPELLEE) THIBODAUX, LA 70302 BATON ROUGE, LA 70809 SYDNEE D. MENOU (APPELLEE) ATTORNEYS AT LAW POST OFFICE BOX 1151 BATON ROUGE, LA 70821