16-CIV-03076 RODNEY RYCE, et al. vs. EAST PALO ALTO SANITARY

DISTRICT, et al.

STEPHANIE GRIFFIN Charles J. Katz

KAREN MAXEY STEVEN D. WERTH

defendant’S motion to quash SUBPOENA FOR PRODUCTION OF BUSINESS RECORDS

TENTATIVE RULING:

Defendant East Palo Alto Sanitary District et. al.’s (the District) Motion to Quash (or Modify) Subpoena for Production of Business Records, served on third party the Special District Risk Management Authority (SDRMA), is GRANTED-IN-PART and DENIED-IN-PART. The District’s request that the subpoena be quashed in its entirety is DENIED. The request that the subpoena be modified is GRANTED-IN-PART, as set forth below.

To the extent the subpoena seeks insurance agreements/contracts between the District and the SDRMA providing that the SDRMA will defend, indemnify, and/or provide insurance or “insurance-like coverage” to the District (see Subpoena, Topic No. 1), the motion is DENIED. Such insurance agreements are generally discoverable. See Code Civ. Proc. Sect. 2017.210. It appears that after initially refusing to produce it, the District has agreed to produce its “Memorandum of Coverage” (an insurance agreement between the District and the SDRAM), pursuant to a Protective Order. (2-27-18 Reply brief).

To the extent the subpoena seeks “communications” between the District (including the District’s employees, such as Mr. Scherzer) and the SDRMA relating to the potential impropriety/illegality of the reorganization, the elimination of Plaintiffs’ position(s), the District’s employment of Ms. Maxey, and/or other documents referring or relating to such communications or actions (see Subpoena, Topic No. 2), the motion to modify the subpoena is GRANTED, on grounds such communications are attorney-client privileged. See Travelers Ins. Companies v. Superior Court (1983) 143 Cal.App.3d 436; Soltani-Rastegar v. Superior Court (1989) 208 Cal.App.3d 424, 256. Plaintiff’s 2-21-18 declaration states that after the 9-8-16 reorganization vote that eliminated Plaintiff’s job, District employees, including Mr. Scherzer, engaged in communications with the SDRMA, an entity that Plaintiff states “provides insurance coverage for the District” (Ryce Decl., ¶4), for the purpose of discussing and raising concerns about the propriety/legality of the reorganization. Thus, the subpoena here essentially seeks communications between an insured and its insurer regarding the District’s potential liability in this case, or more generally, potentially liability arising from the reorganization vote and the lay-off of employees. These communications appear to fall within the privilege. The fact that no litigation was pending, and that no attorney had been retained yet, does not change the result. Nor does it matter that the SDRMA is not a traditional insurance company, as the parties note. For this reason, the subpoena is modified to exclude, and the SDRMA shall not produce, documents constituting communications between the District and the SDRMA concerning coverage, indemnification, benefits relating to and/or potential liability arising from these consolidated lawsuits in particular, or more generally, the legality of or potential liability to the District arising from the reorganization vote, the elimination of Plaintiff’s position, and/or the District’s decision to employ Ms. Maxey, including Mr. Scherzer’s contact(s) with the SDRMA in Sept. 2016.

Plaintiff notes that the District previously refused to produce its insurance agreement with the SDRAM on grounds the SDRMA is not an insurance company. While the Court agrees the District’s two positions (initially arguing the SDRMA is not an insurance company, but now invoking case law applicable to insurance companies) is inconsistent and probably disingenuous. The Court does not find, however, that such inconsistency is grounds to find a waiver or disclaimer of the privilege.

To the extent the subpoena seeks documents pertaining to SDRMA’s provision of classes and/or certification programs provided to the District and advising on risk-reduction activities and best-practices protocols, the District’s relevance objection is OVERRULED and the motion is DENIED. In general, discovery rights are broad. “[A]ny party may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter involved in the pending action … if the matter either is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence.” Code Civ. Proc. Sect. 2017.010; Williams v. Superior Court (2017) 20173 Cal.5th 531, 541.

Plaintiff Rodney Ryce’s Request for Judicial Notice of documents previously filed with the Court in this case is GRANTED. Evid. Code Sect. 452(d).