Hands Off My Files: An Update On Defending Against Discovery Requests for Claim Files in Alabama
By: Blakely Lloyd
An insurer’s claim file is a highly sought after prize in many liability discovery disputes. While files often contain innocuous notations, some include mental impressions and litigation strategy developed by in-house attorneys and adjusters. A case recently considered by the Alabama Supreme Court offers support for the protection of litigation-focused claim files. In Ex parte CSX Transportation, Inc., No. SC-2022-0518, 2022 WL 5320067 (Ala. Oct. 7, 2022), the court contemplated the discoverability of a company’s risk-management work product and the opinions of claims investigators included therein. While the case involved the risk-management department of CSX Transportation, a large railroad company, the language employed by the court could have broader implications for insurers facing discovery requests for their claim files and materials prepared in anticipation of litigation.
CSX Transportation arose from an on-the-job fall and subsequent injuries sustained by a foreman at CSX’s Montgomery, Alabama, railyard. Three days after the accident occurred, an attorney for the foreman sent CSX a letter advising that he represented the foreman regarding his “claim for any and all injuries and damages arising from his on-the-job injury.” Id. at *6.
Eight months later, the foreman filed suit against CSX asserting claims under the Federal Employers’ Liability Act and the Safety Appliance Act. He propounded 25 interrogatories and 62 requests for production on CSX with his complaint. Id. at *1. One of the requests for production sought “[a]ny and all files relating to personal injuries and/or on-duty injuries pertaining to [the foreman] and kept by [CSX] in the ordinary course of [CSX’s] business.” Id. at *4. The request was later clarified to include the foreman’s “entire personal-injury file, including ‘claim search results, claim information, claim value, injury/illness info, property damage claim(s), lost days, notes, and settlement/structure information.’” Id. This information was created and held by CSX’s risk-management department. Id. at *2.
CSX objected to production of this information on the basis that it contained the “mental impressions, conclusions, opinions and legal theories relating to [CSX’s] investigation, analysis and evaluation of [the foreman’s] claims and [CSX’s] defenses.” Id. After a breakdown in the discovery process, the foreman filed a motion to compel the documents related to CSX’s investigation of his claim. The trial court granted the motion to compel without holding a hearing. Id. at *3. CSX filed a petition for writ of mandamus with the Alabama Supreme Court seeking to vacate the order on the motion to compel, arguing that the trial court exceeded its discretion in ordering the production of risk-management files in violation of the work-product doctrine. Id.
In a nearly unanimous opinion (Justice Stewart concurred in part and in the result), the Alabama Supreme Court relied on Alabama Rules of Civil Procedure, Rule 26(b)(4) to guide its analysis of the discovery issue. Id. at *4. Rule 26(b)(4) provides that “a party may obtain discovery of documents . . . prepared in anticipation of litigation or for trial by or for another party or by or for that party’s representative . . . only upon a showing” of substantial need and undue hardship in obtaining equivalent materials. Should such documents be produced, efforts must be taken to “protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation.” Ala. R. Civ. P. 26(b)(4).
In support of its objection to production, CSX presented the letter it received from the foreman’s attorney within three days of the accident and an affidavit from CSX’s senior director of risk management. Id. at *6. The affidavit said CSX’s risk management department is a part of its legal department and reports directly to CSX’s general counsel. Id. The risk-management department investigates and evaluates potential and actual claims asserted by CSX employees “in anticipation of litigation and in consultation with CSX’s counsel.” Id. The claim files contain information regarding the potential value of a claim, its factual background, the employee’s medical history, and potential past and future lost wages. Additionally, the file contains the risk management department personnel’s “mental impressions, conclusions, opinions, and theories regarding the merits of the claim, the value of the claim, and CSX’s possible defenses, which are formed in collaboration with CSX’s counsel.” Id. at *7.
Based on this evidence, the court concluded the claim file was prepared in anticipation of litigation due to its contents and partly because the foreman’s lawyer notified CSX so soon after the accident that he intended to file suit. Id. The foreman failed to show the claim file was not protected or that he had a substantial need for it, arguing only that some of the materials in the file were not privileged. Id. at *8.
Given the similarities between the risk management file considered in CSX Transportation and an insurer’s claim file, this opinion can be used to bolster an insurer’s argument that the mental impressions and opinions contained in its claim file are protected as work product prepared in anticipation of litigation. Lessons for insurers from this case include the importance of determining early on if a claim is headed towards litigation. If so, take care to document when and why the claim is lawsuit-bound and involve in-house or outside counsel in a review of its merits and defenses. Doing so will provide a strong argument that most, if not all, of the claim file is protected from discovery under CSX Transportation’s holding.
Attorney Contact Info
Blakely Lloyd
blakely.lloyd@swiftcurrie.com
205.314.2410