Phillips v. Vesuvius USA Corp.

2020 Ohio 3285

• Court: Ohio Court of Appeals
• Decided: June 11, 2020
• Docket: 108888
• Status: Published

Opinion

[Cite as Phillips v. Vesuvius USA Corp., 2020-Ohio-3285.]

COURT OF APPEALS OF OHIO

EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

ROYSTON PHILLIPS, ;

Plaintiff-Appellee, : No. 108888 v. :

VESUVIUS USA CORPORATION, : ET AL.,

Defendants-Appellants. :

JOURNAL ENTRY AND OPINION

JUDGMENT: AFFIRMED IN PART, MODIFIED IN PART, AND REMANDED RELEASED AND JOURNALIZED: June 11, 2020

Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-18-904574

Appearances:

McCarthy, Lebit, Crystal & Liffman Co., L.P.A., Ann- Marie Ahern, and John E. Moran, for appellee.

Jackson Lewis, P.C., Marla N. Presley, and Sabrina Brown; Kirkpatrick, Townsend & Stockton, L.L.P., and Adam H. Charnes, for appellants.

KATHLEEN ANN KEOUGH, J.: Defendants-appellants, Vesuvius U.S.A. Corporation (“Vesuvius”)

and Christopher Young (collectively “appellants”), appeal from the trial court’s

decision that granted the motion to compel discovery filed by plaintiff-appellee,

Royston Phillips (“Phillips”). For the reasons that follow, we affirm, but modify the

trial court’s decision by ordering that the trial court conduct an in camera inspection

of the personnel files and redact those documents contained therein that would be

deemed irrelevant or confidential under the law.

Phillips worked for Vesuvius and its predecessor entity for nearly 40

years before he was terminated. In 2018, Phillips filed a complaint against

appellants alleging various causes of action including claims of age discrimination

and retaliation. In December 2018, Phillips served appellants with his first set of

interrogatories, requests for production of documents, and requests for admissions.

Relevant to this appeal, those requests sought the personnel records of seven

individuals purportedly relevant to the Phillips’s claims. See Request for Production

of Documents No. 10.

In May 2019, Phillips filed a motion to compel discovery after

appellants objected to the requested discovery information. Specific to the issue on

appeal, appellants objected because (1) the personnel files are not relevant nor likely

to lead to the discovery of admissible evidence; (2) appellants do not have

possession, custody, or control over the requested personnel files; and (3) the

European Union’s (“EU”) General Data Protection Regulation (“GDPR”) and other foreign laws preclude the production of these files. See Phillips’s Motion to Compel,

filed May 16, 2019.

In their brief in opposition, appellants contended that the production

of the requested documents and information is prohibited by the GDPR and cannot

be produced without the consent of the individuals whose personnel files were

requested. Appellants maintained that they were willing to provide relevant

information regarding the requested employees, but only if Phillips “agree[d] to a

protective order regarding the use and dissemination of said information and

agree[d] to indemnify [appellants] should any levies or fines be assessed against

them for producing the information.” See Appellants’ Brief in Opposition to the

Motion to Compel, filed May 23, 2019. Phillips agreed to a protective order, but not

indemnification.

The trial court granted Phillips’s motion to compel, ordering

Plaintiff’s motion to compel discovery * * * is granted. Defendants shall provide responses to all outstanding discovery requests by 8/12/2019. Court declines to award attorneys [sic] fees at this time.

Appellants now appeal, raising two assignments

I. Final Appealable Order

As an initial matter, Phillips contends that the order from which

appellants appeal is not final or appealable and thus, this court does not have

jurisdiction to consider the appeal.

Appellate courts can only “review and affirm, modify, or reverse

judgments or final orders.” Ohio Constitution, Article IV, Section 3(B)(2). Before this court can exercise jurisdiction over an appeal, the order of the lower court must

meet the finality requirements of R.C. 2505.02. CitiMortgage, Inc. v. Roznowski,

139 Ohio St.3d 299, 2014-Ohio-1984, 11 N.E.3d 1140, ¶ 10. Appellants contend that

the order in this case is final under R.C. 2505.02(B)(4).

Pursuant to R.C. 2505.02(B)(4), an order that grants or denies a

provisional remedy is a final order if (a) “[t]he order in effect determines the action

with respect to the provisional remedy and prevents a judgment in the action in

favor of the appealing party with respect to the provisional remedy,” and (b) “[t]he

appealing party would not be afforded a meaningful or effective remedy by an appeal

following final judgment as to all proceedings, issues, claims, and parties in the

action.”

Discovery orders are generally interlocutory orders that are neither

final nor appealable. Walters v. Enrichment Ctr. of Wishing Well, Inc., 78 Ohio

St.3d 118, 120-121, 676 N.E.2d 890 (1997). But a proceeding for discovery of a

privileged matter is a “provisional remedy” within the meaning of R.C.

2505.02(A)(3). Smith v. Chen, 141 Ohio St.3d 1461, 2015-Ohio-370, 24 N.E.3d 1180,

¶ 5. The protection against discovery of matters identified as “privileged” in Civ.R.

26(B)(1) is limited to privileges derived from a specific constitutional or statutory

provision. State ex rel. Grandview Hosp. & Med. Ctr. v. Gorman, 51 Ohio St.3d 94,

95, 554 N.E.2d 1297 (1990), citing In re Story, 159 Ohio St. 144, 147, 111 N.E.2d 385

(1953). The Ohio Supreme Court has recognized, however, that “other discovery

protections that do not involve common-law, constitutional, or statutory guarantees of confidentiality * * * may require a showing under R.C. 2505.02(B)(4)(b) beyond

the mere statement that the matter is privileged.” Burnham v. Cleveland Clinic, 151

Ohio St.3d 356, 2016-Ohio-8000, 89 N.E.3d 536. ¶ 2.

Phillips contends that appellants have failed to withstand their

burden of demonstrating that the personnel files are privileged, thus satisfying R.C.

2505.02(B)(4)(a) that the order involves a provisional remedy. Phillips relies on

appellants’ praecipe, claiming that it is a “mere statement” and does not provide any

information or evidence to support a finding that the requested discovery falls under

the GDPR or that the production of such information violates the GDPR. Appellants’

praecipe provides:

This case falls under R.C. 2505.02(B)(4) as the trial court’s granting of [Phillips’s] motion to compel in effect determines the action with respect to the production of the personnel files at issue and prevents a judgment in Appellants’ favor on this issue. Appellants would not be afforded a meaningful or effective remedy by an appeal following final judgment as Appellants’ production of these files violates European law and carries high potential fines against [Appellants] for unlawful production.

However, a party is not required to conclusively prove the existence

of privileged matters as a precondition to appellate review under R.C.

2505.02(B)(4). Byrd v. U.S. Xpress, Inc., 2014-Ohio-5733, 26 N.E.3d 858, ¶ 12 (1st

Dist.). “To impose such a requirement would force an appellate court ‘to decide the

merits of an appeal in order to decide whether it has the power to hear and decide

the merits of an appeal.’” Id., quoting Bennett v. Martin, 186 Ohio App.3d 412,

2009-Ohio-6195, 928 N.E.2d 763, ¶ 35 (10th Dist.). Instead, a party need only make a “colorable claim” that materials subject to discovery are privileged in order to

qualify as a provisional remedy. Id.; see also Burnham at ¶ 3, 29 (defendant

“plausibly alleged” and made a “colorable claim” that the incident report was

governed by the attorney-client privilege thus satisfying its burden that the report

contains privilege information).

In this case, we find that because appellants make a colorable claim

that at least some of the information for which they seek protection is privileged or

contains confidential information, the order qualifies as a provisional remedy.

Next, we must consider whether the order determines the action with

respect to the provisional remedy and prevents a judgment in favor of appellants

regarding the provisional remedy. See R.C. 2505.02(B)(4)(a). In its response to

Phillips’s motion to compel, appellants claimed that they should not be ordered to

produce personnel files of European citizens because the files contained confidential

information whose release would violate the GDPR. Because the effect of the trial

court’s order is that confidential or protected information will be disclosed, the order

has determined the action with respect to the provisional remedy. “Any order

compelling the production of privileged or protected materials certainly satisfies

R.C. 2505.02(B)(4)(a) because it would be impossible to later obtain a judgment

denying the motion to compel disclosure if the party has already disclosed the

materials.” Burnham, 151 Ohio St.3d 356, 2016-Ohio-8000, 89 N.E.3d 536, at ¶ 21.

Although we recognize that the trial court did not explain why it was

granting the motion to compel or why the documents were not privileged, we can glean from the record that the asserted protections under the GDPR were rejected

because this was the only discovery privilege protection appellants sought. See

Burnham at ¶ 27 (recognizing that although the trial court’s order did not

specifically state why it was compelling the production of the report, the Supreme

Court was able to determine from the briefing “that the attorney-client privilege had

been rejected and that it was the only remaining discovery protection being

sought”). Ideally, “a trial court should explain why a motion to compel production

has been granted. In that way, a reviewing court can determine the pertinent issues

and whether the requirements of R.C. 2505.02(B)(4)(a) and (b) are satisfied.” Id. at

¶ 28.

Finally, we must consider whether appellants would be able to obtain

meaningful relief by an appeal following the entry of final judgment. See R.C.

2505.02(B)(4)(b). Appellants seek to prevent the disclosure of alleged privileged

and protected information. Because the trial court’s order compels the production

of material allegedly protected under a foreign law that may contain confidential and

otherwise undiscoverable information, the order satisfies R.C. 2505.02(B)(4)(b)

because there is no effective remedy other than an immediate appeal. Burnham at

¶ 25.

Accordingly, we find the trial court’s order is final and appealable but

only insofar as it implicitly determined that the personnel files were not privileged

or that they did not breach a protected interest in confidentiality. We decline to

address appellants’ argument that this court should exercise pendent jurisdiction over its additional objection that it does not have “possession, custody or control”

over the requested documents. That justification would not be grounds to make an

otherwise interlocutory appeal immediately appealable under R.C. 2505.02(B)(4).

Accordingly, we summarily disregard appellants’ first assignment of error, which

contends that the trial court improperly granted Phillips’s motion to compel because

the information “is not within Vesuvius’s custody and control.” This appeal is

limited to the privileged nature of those personnel files.

II. Motion to Compel

In their second assignment of error, appellants contend that “the trial

court’s decision improperly granted Phillips’s motion to compel the production of

six European citizens’ personnel files and residential addresses without any

safeguards in place.” They frame the issue as:

The trial court granted Phillips’ motion to compel the production of six European citizens’ personnel files and residential addresses without any safeguards in place, despite the fact that the discovery requests are overbroad, seek largely irrelevant information, and would require [appellants] and members of its group to violate the European citizens’ privacy rights, the European Union’s (“EU’s”) General Data Protection Regulation (“GDPR”), and national legislation in the EU countries at issue, exposing them to high fines, other enforcement measures, and/or civil litigation, notwithstanding the availability of alternative methods for requesting European documents and information in discovery under Chapter II of the Hague Convention.

Ordinarily, a discovery dispute is reviewed under an abuse-of-

discretion standard. Tracy v. Merrell Dow Pharmaceuticals, Inc., 58 Ohio St.3d

147, 151-152, 569 N.E.2d 875 (1991). However, whether the information sought in

discovery is confidential and privileged “is a question of law that is reviewed de novo.” Burnham v. Cleveland Clinic, 2017-Ohio-1277, 88 N.E.3d 523, ¶ 8 (8th

Dist.), citing Castlebrook, Ltd. v. Dayton Properties Ltd. Partnership, 78 Ohio

App.3d 340, 604 N.E.2d 808 (2d Dist.1992); Med. Mut. of Ohio v. Schlotterer, 122

Ohio St.3d 181, 2009-Ohio-2496, 909 N.E.2d 1237, ¶ 13.

The GDPR concerns the data protection and privacy of all EU citizens

and regulates the transfer of EU citizens’ personal data outside of EU member states,

such as the transfer to the U.S. In re Mercedes-Benz Emissions Litigation, D.N.J.

Civil Action No. 16-cv-881 (KM) (ESK), 2020 U.S. Dist. LEXIS 15967, 5 (Jan. 30,

2020). The GDPR broadly defines personal data as “any information relating to an

identified or identifiable natural person.” Id., quoting GDPR Article 4(1). “This

broad definition of personal data inherently includes information like an

individual’s name and job title, information that is generally considered benign in

U.S. litigation and * * * produced in discovery pursuant to the [rules of civil

procedure].” Id.

In a recent decision in the Northern District of California, the court

concluded that the GDRP will not act as an absolute bar to domestic discovery.

Finjan, Inc. v. Zscaler, Inc., N.D.Cal. No. 17-cv-06946-JST (KAW), 2019 U.S. Dist.

LEXIS 24570, (Feb. 14, 2019). “In general, a foreign country’s statute precluding

disclosure of evidence ‘do[es] not deprive an American court of the power to order a

party subject to its jurisdiction to produce evidence even though the act of

production may violate that statute.’” Finjan at 3, quoting Societe Nationale

Industrielle Aerospatiale v. United States Dist. Court for S. Dist., 482 U.S. 522, 544, 107 S.Ct. 2542, 96 L.Ed.2d 461 (1987), fn. 29. Aerospatiale endorsed the balancing

test contained in the Restatement of the Law 3d, Foreign Relations Law, Section

442(1)(c)(1987) in determining whether the foreign statute excuses noncompliance

with the discovery order. Richmark Corp. v. Timber Falling Consultants, 959 F.2d

1468, 1475 (9th Cir.1992); see also EnQuip Technologies Group, Inc. v. Tycon

Technoglass, S.R.L., 2d Dist. Greene Nos. 2009 CA 42 and 2009 CA 47, 2010-Ohio-

28, ¶ 88. Courts should consider:

(1) the importance of the documents or other information requested to the litigation; (2) the degree of specificity of the request; (3) whether the information originated in the United States; (4) the availability of alternative means of securing the information; and (5) the extent to which noncompliance would undermine important interests of the United States.

Finjan at 3, citing Richmark Corp, at 1475. These factors are not exclusive; courts

may also consider “the extent and the nature of the hardship that inconsistent

enforcement would impose upon the person,” as well as “the extent to which

enforcement by action of either state can reasonably be expected to achieve

compliance with the rule prescribed by the state.” Id.

As a threshold matter, in determining whether the compelled

discovery at issue is protected from disclosure under the GDPR, the party relying on

foreign law has the burden of showing such law bars production. Phoenix Process

Equip. Co. v. Capital Equip. & Trading Corp., W.D. Ky No. 16CV-00024, 2019 U.S.

Dist. LEXIS 44390, 30 (Mar. 18, 2019). Assuming without deciding that the personnel files and its contents

fall would under the GDPR, we find that the factors weigh in favor disclosure.1 The

first factor — the importance of the documents or other information requested to

the litigation — weighs in favor of discovery. Personnel records are basic discovery

in employment-related cases. Accordingly, they are relevant and pertain to

Phillips’s claims of age discrimination and retaliation.

The second factor, the degree of specificity of the request, also weighs

in favor of disclosure. Phillips’s request seeks the personnel records of only seven

individuals related to Phillips’s employment and termination with Vesuvius. This

request is not overbroad.

The third factor — whether the information originated in the United

States — is unclear from the record. Although Phillips contends that it is likely that

some of the information contained in the personnel files originated in the United

States, appellants claim that because the personnel files are those of current and

former executives of Vesuvius’s affiliates in the United Kingdom, Belgium, and the

Netherlands, the records originated and are maintained outside of the United States.

This factor does not weigh in any party’s favor because the record is insufficient for

this court to make such determination.

1We note that courts throughout the United States, including a state court in Ohio, have repeatedly balanced the Aerospatiale factors in favor of discovery production when deciding whether foreign laws inhibit discovery in cases originating in the United States. See, e.g., Finjan; Phoenix Process; EnQuip Techs. Group (discussing Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995). With respect to the fourth factor — the availability of alternative

means of securing the information — Phillips maintains that it has no other means

of obtaining this information whereas appellants claim that Phillips can seek

production through the procedures set forth under Chapter II of the Hague

Convention. Based on the record before this court, requiring Phillips to undergo

another avenue of seeking the requested documents, which have been requested for

over a year, is not a viable alternative to the liberal discovery rules of Civ.R. 26.

Accordingly, this factor weighs in favor of discovery.

Finally, the fifth factor — the extent to which noncompliance would

undermine important interests of the United States — weighs in favor of discovery.

Ohio has a clear public policy prohibiting age discrimination and unlawful

retaliation, and the information contained in the personnel files, e.g., location

information of witnesses, is essentially a mandated disclosure under Civ.R. 26.

Moreover, and much like in Finjan, appellants have failed to produce

evidence that the disclosure of the personnel files would lead to hardship or an

enforcement action from an EU data protection supervisory authority for breach of

the GDPR. See Finjan at 10. Accordingly, after reviewing the factors, we find they

weigh in favor of discovery production.

Notwithstanding our conclusion, this court recognizes that

documentation and information contained in the personnel files may exist that

would otherwise be undiscoverable as irrelevant or confidential. See Dubson v.

Montefiore Homes, 8th Dist. Cuyahoga No. 97104, 2012-Ohio-2384, ¶ 20-21; Howell v. Park E. Care & Rehab., 8th Dist. Cuyahoga No. 106041, 2018-Ohio-2054,

¶ 34-36 (personnel files may contain confidential information; redaction is the

proper remedy).

III. Conclusion

Accordingly, we find that the trial court did not abuse its discretion in

granting Phillips’s motion to compel. However, we find that the trial court should

have conducted an in camera inspection to review whether any of the information

contained in the files is irrelevant and confidential material that would be otherwise

undiscoverable. The assignment of error is therefore sustained, in part.

Judgment affirmed in part, modified in part, and remanded. The trial

court is ordered to conduct an in camera review of the personnel files and redact

those documents that would be deemed confidential or otherwise undiscoverable

under the law.

It is ordered that parties share equally in the costs herein taxed.

The court finds there were reasonable grounds for this appeal.

It is ordered that a special mandate be sent to said court to carry this judgment

into execution.

A certified copy of this entry shall constitute the mandate pursuant to Rule 27

of the Rules of Appellate Procedure.

KATHLEEN ANN KEOUGH, JUDGE

EILEEN T. GALLAGHER, A.J., and MARY EILEEN KILBANE, J., CONCUR