4 UNITED STATES DISTRICT COURT 5 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 6 7 SWINOMISH INDIAN TRIBAL Cause No. C15-0543RSL 8 COMMUNITY, ORDER REGARDING THE 9 Plaintiff, SCOPE OF THE PROPOSED 10 v. WAIVER AND LEAVE TO DISCLOSE EXPERT 11 BNSF RAILWAY COMPANY, WITNESS 12 Defendant. 13
14 This matter comes before the Court on “Defendant BNSF Railway Company’s Motion 15 (1) Regarding Scope of Proposed Waiver of Privilege and (2) For Leave to Disclose Expert 16 17 Witness.” Dkt. # 181. In the context of determining whether either party was entitled to 18 summary judgment regarding plaintiff’s claim that BNSF’s intentional trespass was willful, the 19 Court stated: 20 21 There is still, however, a question of fact regarding BNSF’s consciousness of wrongdoing. If, as it repeatedly asserts, BNSF had a good faith belief that its role 22 as a common carrier compelled it to exceed the limitations of the Easement 23 Agreement, BNSF may not have been conscious of wrongdoing. Outside counsel 24 for BNSF asserts that, throughout the negotiations between the parties, “BNSF 25 believed that it was obligated to serve Marathon’s cargo needs as required by its federal common carrier obligation.” Dkt. # 148 at 3. BNSF made similar 26 assertions in its 2015 correspondence with the Tribe. The basis for the purported 27 belief is unclear, however. We now know that BNSF’s common carrier obligations 28 1 do not, in fact, trump the promises it made to the Tribe in order to gain a right of access across the Reservation in the first place. There is also reason to suspect that 2 common carrier obligations are inapplicable to cargo transported under a contract 3 and/or where the limitation on carriage arises from the nature of the cargo or 4 restrictions in capacity (as opposed to discrimination among shippers). The lack of 5 evidence regarding BNSF’s evaluation of its common carrier obligations combined with the significant income associated with the transportation of Bakken 6 crude oil for Tesoro/Marathon creates a fact issue regarding BNSF’s 7 consciousness that the Court declines to resolve in the context of a motion for 8 summary judgment. Thus, whether disgorgement is an available remedy for the trespass at issue here will have to be decided at trial. 9
10 Dkt. # 174 at 26. In order to address the evidentiary gap, BNSF seeks to have its outside 11 counsel, Stephen DiJulio, testify at trial regarding his communications with BNSF regarding its 12 13 common carrier obligations and would like to disclose a new expert, John Scheib, to testify 14 regarding the railroad industry’s understanding of the common carrier obligation during the 15 relevant time period. 16 17 A. Proposed Waiver of the Attorney-Client Privilege 18 Pursuant to Federal Rule of Evidence 502(a), when a party voluntarily waives the 19 attorney-client privilege with regards to a particular communication or document, the waiver 20 21 extends to other undisclosed communications only if “(1) the waiver is intentional; (2) the 22 disclosed material and the undisclosed communications or information concern the same subject 23 matter; and (3) they ought in fairness to be considered together.” The waiver of privilege “is 24 25 reserved for those unusual situations in which fairness requires a further disclosure of related, 26 protected information, in order to prevent a selective and misleading presentation of evidence to 27 the disadvantage of the adversary.” Fed. R. Evid. 502(a) advisory committee’s note. BNSF 28 1 requests that the Court establish the scope of the waiver that would occur if Mr. DiJulio were 2 called to testify as to BNSF’s understanding and consideration of its common carrier obligations 3 and its impact on the Easement Agreement, arguing that the waiver should reach only the 4 5 universe of communications that (1) Mr. DiJulio sent or received and (2) which involved a 6 discussion of either common carrier obligations or preemption issues. Neither limitation is 7 appropriate. The issue is not whether Mr. DiJulio believed or was told that BNSF’s role as a 8 9 common carrier compelled it to exceed the limitations of the Easement Agreement,1 but rather 10 whether BNSF actually held that belief based on a reasonable investigation and evaluation of the 11 competing obligations imposed by the Easement Agreement, the Indian Right of Way Act, and 12 13 BNSF’s common carrier status. This inquiry must be asked and answered at various points in 14 time, particularly in the year before BNSF began running unit trains over the Reservation in 15 September 2012, when BNSF first raised the common carrier argument in its discussions with 16 17 the Tribe, and throughout the trespass as more and more information came to light. 18 BNSF wants Mr. DiJulio to testify that BNSF mistakenly, but honestly, believed that its 19 common carrier obligations trumped its obligations under the Easement Agreement. It is willing 20 21 to waive the privilege as to conversations to which Mr. DiJulio was a party and which 22 specifically mention common carrier or preemption issues. But there were undoubtedly 23 conversations regarding the pros and cons of running unit trains that did not involve Mr. DiJulio, 24 25
26 1 BNSF is not relying on an advice-of-counsel defense, but is rather intending to use Mr. DiJulio as a conduit for expressing how BNSF itself assessed its common carrier obligations. Dkt. # 185 at 8 27 n.4. 28 1 and the Tribe is not unreasonable in thinking that there may be communications and documents 2 suggesting that something other than the imperatives of its common carrier status motivated 3 BNSF’s decision. BNSF cannot rely on communications with counsel to prove its intent or 4 5 motivation while depriving the opposing party of other privileged materials that may contradict 6 its claim. Bittaker v. Woodford, 331 F.3d 715, 719 (9th Cir. 2003). 7 If BNSF chooses to waive the attorney-client privilege with regards to its conversations 8 9 with Mr. DiJulio related to common carrier and/or preemption issues, the waiver will extend to 10 all communications regarding its decision to run unit trains over the Reservation from 2011 to 11 the present, regardless whether Mr. DiJulio were a participant in the communications and 12 13 regardless the justification, analysis, or reasoning for the decision that is reflected in the 14 communication. 15 B. Extension of Time in Which to Disclose Expert 16 17 BNSF hopes to have Mr. Scheib testify regarding industry standards related to common 18 carrier obligations and how a reasonable railroad executive would have understood and 19 prioritized the competing obligations presented in this case. The deadline for disclosing expert 20 21 witnesses was April 2021. The parties agree on the factors to be considered when a party seeks 22 to reopen discovery under Federal Rule of Civil Procedure 16: 23 1) whether trial is imminent, 2) whether the request is opposed, 3) whether the 24 non-moving party would be prejudiced, 4) whether the moving party was diligent 25 in obtaining discovery within the guidelines established by the court, 5) the 26 foreseeability of the need for additional discovery in light of the time allowed for discovery by the district court, and 6) the likelihood that the discovery will lead to 27 relevant evidence. 28 1 City of Pomona v. SQM N. Am. Corp., 866 F.3d 1060, 1066 (9th Cir. 2017).
Free access — add to your briefcase to read the full text and ask questions with AI
4 UNITED STATES DISTRICT COURT 5 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 6 7 SWINOMISH INDIAN TRIBAL Cause No. C15-0543RSL 8 COMMUNITY, ORDER REGARDING THE 9 Plaintiff, SCOPE OF THE PROPOSED 10 v. WAIVER AND LEAVE TO DISCLOSE EXPERT 11 BNSF RAILWAY COMPANY, WITNESS 12 Defendant. 13
14 This matter comes before the Court on “Defendant BNSF Railway Company’s Motion 15 (1) Regarding Scope of Proposed Waiver of Privilege and (2) For Leave to Disclose Expert 16 17 Witness.” Dkt. # 181. In the context of determining whether either party was entitled to 18 summary judgment regarding plaintiff’s claim that BNSF’s intentional trespass was willful, the 19 Court stated: 20 21 There is still, however, a question of fact regarding BNSF’s consciousness of wrongdoing. If, as it repeatedly asserts, BNSF had a good faith belief that its role 22 as a common carrier compelled it to exceed the limitations of the Easement 23 Agreement, BNSF may not have been conscious of wrongdoing. Outside counsel 24 for BNSF asserts that, throughout the negotiations between the parties, “BNSF 25 believed that it was obligated to serve Marathon’s cargo needs as required by its federal common carrier obligation.” Dkt. # 148 at 3. BNSF made similar 26 assertions in its 2015 correspondence with the Tribe. The basis for the purported 27 belief is unclear, however. We now know that BNSF’s common carrier obligations 28 1 do not, in fact, trump the promises it made to the Tribe in order to gain a right of access across the Reservation in the first place. There is also reason to suspect that 2 common carrier obligations are inapplicable to cargo transported under a contract 3 and/or where the limitation on carriage arises from the nature of the cargo or 4 restrictions in capacity (as opposed to discrimination among shippers). The lack of 5 evidence regarding BNSF’s evaluation of its common carrier obligations combined with the significant income associated with the transportation of Bakken 6 crude oil for Tesoro/Marathon creates a fact issue regarding BNSF’s 7 consciousness that the Court declines to resolve in the context of a motion for 8 summary judgment. Thus, whether disgorgement is an available remedy for the trespass at issue here will have to be decided at trial. 9
10 Dkt. # 174 at 26. In order to address the evidentiary gap, BNSF seeks to have its outside 11 counsel, Stephen DiJulio, testify at trial regarding his communications with BNSF regarding its 12 13 common carrier obligations and would like to disclose a new expert, John Scheib, to testify 14 regarding the railroad industry’s understanding of the common carrier obligation during the 15 relevant time period. 16 17 A. Proposed Waiver of the Attorney-Client Privilege 18 Pursuant to Federal Rule of Evidence 502(a), when a party voluntarily waives the 19 attorney-client privilege with regards to a particular communication or document, the waiver 20 21 extends to other undisclosed communications only if “(1) the waiver is intentional; (2) the 22 disclosed material and the undisclosed communications or information concern the same subject 23 matter; and (3) they ought in fairness to be considered together.” The waiver of privilege “is 24 25 reserved for those unusual situations in which fairness requires a further disclosure of related, 26 protected information, in order to prevent a selective and misleading presentation of evidence to 27 the disadvantage of the adversary.” Fed. R. Evid. 502(a) advisory committee’s note. BNSF 28 1 requests that the Court establish the scope of the waiver that would occur if Mr. DiJulio were 2 called to testify as to BNSF’s understanding and consideration of its common carrier obligations 3 and its impact on the Easement Agreement, arguing that the waiver should reach only the 4 5 universe of communications that (1) Mr. DiJulio sent or received and (2) which involved a 6 discussion of either common carrier obligations or preemption issues. Neither limitation is 7 appropriate. The issue is not whether Mr. DiJulio believed or was told that BNSF’s role as a 8 9 common carrier compelled it to exceed the limitations of the Easement Agreement,1 but rather 10 whether BNSF actually held that belief based on a reasonable investigation and evaluation of the 11 competing obligations imposed by the Easement Agreement, the Indian Right of Way Act, and 12 13 BNSF’s common carrier status. This inquiry must be asked and answered at various points in 14 time, particularly in the year before BNSF began running unit trains over the Reservation in 15 September 2012, when BNSF first raised the common carrier argument in its discussions with 16 17 the Tribe, and throughout the trespass as more and more information came to light. 18 BNSF wants Mr. DiJulio to testify that BNSF mistakenly, but honestly, believed that its 19 common carrier obligations trumped its obligations under the Easement Agreement. It is willing 20 21 to waive the privilege as to conversations to which Mr. DiJulio was a party and which 22 specifically mention common carrier or preemption issues. But there were undoubtedly 23 conversations regarding the pros and cons of running unit trains that did not involve Mr. DiJulio, 24 25
26 1 BNSF is not relying on an advice-of-counsel defense, but is rather intending to use Mr. DiJulio as a conduit for expressing how BNSF itself assessed its common carrier obligations. Dkt. # 185 at 8 27 n.4. 28 1 and the Tribe is not unreasonable in thinking that there may be communications and documents 2 suggesting that something other than the imperatives of its common carrier status motivated 3 BNSF’s decision. BNSF cannot rely on communications with counsel to prove its intent or 4 5 motivation while depriving the opposing party of other privileged materials that may contradict 6 its claim. Bittaker v. Woodford, 331 F.3d 715, 719 (9th Cir. 2003). 7 If BNSF chooses to waive the attorney-client privilege with regards to its conversations 8 9 with Mr. DiJulio related to common carrier and/or preemption issues, the waiver will extend to 10 all communications regarding its decision to run unit trains over the Reservation from 2011 to 11 the present, regardless whether Mr. DiJulio were a participant in the communications and 12 13 regardless the justification, analysis, or reasoning for the decision that is reflected in the 14 communication. 15 B. Extension of Time in Which to Disclose Expert 16 17 BNSF hopes to have Mr. Scheib testify regarding industry standards related to common 18 carrier obligations and how a reasonable railroad executive would have understood and 19 prioritized the competing obligations presented in this case. The deadline for disclosing expert 20 21 witnesses was April 2021. The parties agree on the factors to be considered when a party seeks 22 to reopen discovery under Federal Rule of Civil Procedure 16: 23 1) whether trial is imminent, 2) whether the request is opposed, 3) whether the 24 non-moving party would be prejudiced, 4) whether the moving party was diligent 25 in obtaining discovery within the guidelines established by the court, 5) the 26 foreseeability of the need for additional discovery in light of the time allowed for discovery by the district court, and 6) the likelihood that the discovery will lead to 27 relevant evidence. 28 1 City of Pomona v. SQM N. Am. Corp., 866 F.3d 1060, 1066 (9th Cir. 2017). In analyzing these 2 3 factors, the primary consideration is the diligence of the party seeking to amend the case 4 management deadlines. Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609 (9th Cir. 5 6 1992). 7 The relevant factors are fairly evenly split. Although the trial date is more than two 8 months away, significant additional discovery will be necessary if a new expert is introduced at 9 this point in the litigation. The request is opposed, but plaintiff’s claim of prejudice is based 10 11 primarily on the timing of the disclosure. With regards to diligence and foreseeability, plaintiff 12 has the better of the argument. The deadline for expert disclosures was set after the Ninth Circuit 13 14 determined the preemption issue against BNSF, and BNSF had more than eight months to meet 15 plaintiff’s assertion that it was entitled to disgorgement of any and all profits garnered from 16 BNSF’s knowing exceedances of the Easement Agreement limitations. At that point, having lost 17 the argument that its common carrier obligations justified the breach of the Easement 18 19 Agreement and realizing that its state of mind was at issue, BNSF should have predicted that 20 merely asserting a belief in the debunked common carrier theory would not carry the day. 21 The Court finds that the balance of five out of six factors (including the most important of 22 23 the factors) counsels against allowing the late disclosure of a new expert. The last factor, 24 relevance, could even out the scales in favor of the late disclosure if BNSF were to offer 25 privileged communications tending to show that it did, in fact, believe that its common carrier 26 27 obligations compelled it to run unit trains over the Reservation despite the terms of the 28 1 Easement Agreement and the Tribe’s objections. In those circumstances, Mr. Scheib’s testimony 2 would support and bolster that evidence. If, on the other hand, BNSF declines to waive the 3 privilege and opts not to produce any evidence regarding its actual decision-making process, 4 5 motivations, and/or analysis during the relevant period, Mr. Scheib’s abstract testimony 6 regarding what a reasonable railroad executive would have understood about her competing 7 obligations – untethered to any evidence about what BNSF, in fact, understood – would have 8 9 almost no probative value and the balance of the factors would tilt decidedly against reopening 10 discovery. 11
12 13 For all of the foregoing reasons, BNSF’s motion for a determination of the scope of the 14 proposed waiver and for leave to disclose a new expert witness is conditionally GRANTED in 15 part. BNSF’s proposed waiver of the privilege would require the disclosure of all 16 17 communications regarding its decision to run unit trains over the Reservation from 2011 to the 18 present, regardless whether Mr. DiJulio were a participant in the communications and regardless 19 the justification, analysis, or reasoning for the decision that is reflected in the communication. If 20 21 22 // 23
24 25 // 26
27 28 1 BNSF elects to proceed with the waiver, it shall produce the expert report of Mr. Scheib within 2 three days of the date of this Order and shall produce the waived communications within 3 twenty-one days of the date of this Order. Failure to make both productions will be deemed an 4 5 election not to proceed with the waiver. 6
7 Dated this 9th day of January, 2023. 8
10 Robert S. Lasnik United States District Judge 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28