Construction defect cases invariably require the use of experts and other third-parties with specialized knowledge who can assist attorneys and clients in numerous ways, namely in the determination of causation and damages. These third-party experts often generate written reports in which the expert uses specialized knowledge to offer conclusions and opinions on points of controversy in order to support one side’s claim. When producing a final report, an expert might generate several draft reports that shed light on the expert’s thought process in reaching a conclusion. In addition, the expert will likely generate notes and other documents that assist in the creation of a report.
Prior to 2010, the work product generated by third-party experts was subject to discovery by adverse litigants based on the 1993 amendment to Federal Rule 26, which required the expert to disclose all of his or her communications with the hiring attorney, including all drafts of the expert’s report. As a result, attorneys and experts would go to great lengths to sidestep the disclosure rule by finding ways to avoid the creation of a draft report. One such measure was to hire two sets of experts, one for consulting and one for testifying, with only the latter expert’s file being discoverable.
In response to these evasive and costly steps taken by parties to shield the disclosure of draft reports (which had resulted in a landslide of discovery disputes) the federal rule governing expert witness disclosures was amended on December 1, 2010 in order to limit the amount of information an expert witness is required to disclose. Among the changes were subparagraphs that were inserted at Rule 26(b)(4)(B) and (C) which respectively protect as work product draft reports and certain communications between the expert and counsel.
Although the 2010 amendments to Rule 26 have fostered a more open and dispute-free manner in which attorneys interact with their experts, a growing body of disputes now centers around the purpose for which that expert was retained. The mere act of retaining an expert who subsequently produces a report does not automatically entitle the draft report to protection under the 2010 amendments. Rather, the draft reports still must qualify for work-product protection; namely the document must: (1) be prepared in anticipation of litigation or for trial and (2) be prepared by or for another party or by or for that other party’s representative. FED R. CIV. P. 26(b)(3). The Ninth Circuit has referred to documents prepared exclusively in anticipation of litigation as “single purpose documents.” In re Grand Jury Subpoena, Mark Torf/Torf Envtl. Mgmt., 357 F.3d 900, 907 (9th Cir. 2004).
Single purpose documents are always afforded work product protection. On the other hand, a “dual purpose document” – one that is prepared both in anticipation of litigation and for another purpose – receives more scrutiny.
In order to draw a distinction between documents created in anticipation of litigation and those simply created in the ordinary course of business, Court’s employ a “because of” test which examines the purpose for which the document was created. Id.
Under this standard, dual purpose documents are deemed prepared because of litigation if “in light of the nature of the document and the factual situation in the particular case, the document can be fairly said to have been prepared or obtained because of the prospect of litigation.” Id. “When there is a true independent purpose for creating a document, work product protection is less likely, but when two purposes are profoundly interconnected, the analysis is more complicated.” Id.
In the construction context, this analysis was recently performed in Municipality of Anchorage v. ICRC, et al., No. 3:13-cv- 00063, Docket No. 184 (D. Alaska, Feb. 24, 2015) which arises out of the defective design and construction of a major infrastructure project at the Port of Anchorage. Nearly three weeks after filing the lawsuit in March 2013, the Municipality of Anchorage retained an expert to assess the damage done to the project in connection with the litigation and to assist the Municipality in the determination of remedial measures and designs to replace the defective project. A few months later, the expert produced a preliminary report containing its findings. The Municipality repeatedly stated its intention to rely upon the expert opinions contained in the report to support its case in the pending lawsuit.
One defendant in the lawsuit, PND Engineers, Inc., filed a motion to compel seeking, among other things, all drafts of the expert report. Part of PND’s argument for compelling production was that the preliminary report was a “dual purpose document” because it was used not only to assess the damage already done to the project but also to advise the Municipality in determining a new structure to be built. In other words, PND argued that there was an independent, nonlitigation purpose for the preliminary report that could be separated from the litigation purpose.
Although the Court found that the preliminary report was a “dual purpose document” on the basis that it was commissioned both for purposes of the litigation and for use in further port construction, the Court also determined that the report was afforded work-product protection. The Court held that the two purposes were not independent of each other, but were “profoundly interconnected,” in that the determination as to the design of future construction of the port was directly dependent on the construction that had occurred to date. Furthermore, the primary purpose of the preliminary report was for use in the litigation in that it was retrospectively focused on review and assessment of the damage already done, rather than forward looking at future construction.
Practitioners in the construction field should carefully assess the manner in which they deal and communicate with experts. Thought should be given to what type of work product an expert is expected to produce and what type of protections from disclosure that work product will receive. Merely retaining an expert, even after litigation commences, does not guarantee that the documents created by that expert are shielded from disclosure. If the document serves a dual purpose, i.e. a business purpose and a litigation purpose, it will be at greater risk of disclosure depending on the facts and circumstances surrounding the document’s creation. The more intertwined it is with anticipated litigation, the more likely a dual purpose document is to receive work product protection.
In addition, clients in the construction industry, whether owners, contractors, insurers or sureties, should understand the consequences of creating internal documents that evaluate risk in the ordinary course of business. Such documents are potentially discoverable and could thus be used against them in litigation unless it can be proven that the document was created in anticipation of litigation and would otherwise not be created in the absence of litigation.