In re Teleglobe Communications Corp., Case No. 02-11518, Adv. No. A-04-53733 (D. Del. Bankr. Ct. August 7, 2008)

This is a case where the court went against much of prevailing thought over production of drafts of expert opinions and comments to the experts from retaining counsel. This is an important decision, particularly for its treatment of electronic drafts, which are basically all drafts nowadays.

Rule 26(a)(2)(B) provides in relevant part that “a party must disclose the identity of any testifying expert and "this disclosure must be accompanied by a written report--prepared and signed by the witness.... The report must contain: (i) a complete statement of all opinions the witness will express and the basis and reasons for them; (ii) the data or other information considered by the witness in forming them....” (Emphasis added). Prior to the 1993 amendment, the Rule had required production only of information on which the expert “relied.” A number of courts have ruled that “considered” is much broader, including “information that a testifying expert generated, reviewed, reflected upon, read, and/or used in connection with the formulation of his opinions, even if the testifying expert ultimately rejected the information. A necessary corollary to those rulings is that the information must be preserved.

Bankruptcy Judge Mary F. Walrath determined that the Rule did not require production either of drafts of expert reports or of core attorney work product provided to the testifying experts. The court observed that a number of cases have required production of draft expert reports, among them Trigon Ins. Co. v. United States, 204 F.R.D. 277, 282 (E. D. Va. 2001). The court noted that the Trigon court had acknowledged that there are “cogent reasons” why an expert may not be required to preserve and produce “the drafts prepared solely by that expert while formulating the proper language in which to articulate that experts' [sic] own, ultimate opinion arrived at by the expert's own work or those working at the expert's personal direction.” Slip Opinion at 10 (quoting Trigon, 204 F.R.D. at 283 n.8).

The court also pointed to the opinion in Univ. of Pittsburgh v. Townsend, Case No. 3:04-cv-291, 2007 WL 1002317, at *3 (E. D. Tenn. Mar. 30, 2007), which concluded that Rule 26(a)(2) did not impose an affirmative duty upon an expert to preserve all documents, particularly report drafts, as well as the ABA Recommendation and Report adopting a policy that draft reports should not be required to be produced to an opposing party. The court noted that the Rule does not expressly require production of draft reports and observed that it was impractical to require an expert to produce a separate draft every time he added or subtracted a section, paragraph sentence, or even a word.

The court concluded that draft reports are not “considered” by the expert and thus do not have to be produced. They are merely preliminary iterations of the opinion.

The defendants in the case had argued that the draft reports are particularly important here because they would show what information the experts had considered from their meetings with the plaintiffs’ attorneys. The court noted that this brought into play the work product doctrine and that many courts had ruled that Rule 26(a)(2)(B) requires production of any document provided by an attorney to his or her expert. The courts so ruling rely on the advisory committee notes, which state that "[g]iven this obligation of disclosure, litigants should no longer be able to argue that materials furnished to their experts to be used in forming their opinion--whether or not ultimately relied upon by the expert--are privileged or otherwise protected from disclosure when such persons are testifying or being deposed." Slip Opinion at 18.

The court noted that this quote is truncated by the Courts which rely upon it. The beginning of the note in which the quote appears clarifies that the expert “is to disclose the data and other information considered by the expert and any exhibits or charts that summarized or support the expert’s opinions.” Slip Opinion at 18 (quoting Fed. R. Civ. P. 26 advisory committee's notes (1993) (emphasis by the Court). From this, the court inferred that only factual data and information must be produced, not the legal theories or other attorney work product. As a result, the court noted, many other courts have concluded that information protected by the work product doctrine need not be disclosed even if it has been provided to the testifying expert. One of those courts was the Third Circuit. End of analysis.

The court took particular notice of the opinion in Krisa v. Equitable Life Assurance Soc'y, 196 F.R.D. 254, 256 (M. D. Pa. 2000):

An interpretation of Rule 26 that holds that a party must produce documents containing work product that are disclosed to its expert ignores the language of Fed.R.Civ.P. 26(b)(3), which requires the production of documents containing work product only when the requesting party shows necessity and undue hardship to obtain the substantial equivalent of such documents by other means. An interpretation of Rule 26 that mandates the production of core work product disclosed to an expert would render the language in Rule 26(b)(3) superfluous. It is a canon of construction that "statutes should be read so far as possible to give independent effect to all their provisions."

Thus, the court found that “any comments received by the Plaintiffs' experts from Plaintiffs' counsel or non-testifying expert are protected by the attorney work product doctrine and did not have to be produced.”

Of particular interest in this opinion is the court’s treatment of defendants’ request to exclude the experts’ testimony. The court concluded that even if there were some discoverable information in the draft reports, such a drastic remedy was not warranted.

In their argument, the defendants relied upon Rule 37(c)(1) which states: “A party that without substantial justification fails to disclose information required by Rule 26(a) … is not, unless such failure is harmless, permitted to use as evidence at trial, [or] at a hearing … information not so disclosed.” The court felt that was a particularly harsh sanction that should only be imposed in rare situations. In determining whether such an extreme sanction is warranted, the court turned to the Third Circuit’s test:

[T]he key considerations in determining whether such a sanction is appropriate should be: (1) the degree of fault of the party who altered or destroyed the evidence; (2) the degree of prejudice suffered by the opposing party; and (3) whether there is a lesser sanction that will avoid substantial unfairness to the opposing party and, where the offending party is seriously at fault, will serve to deter such conduct by others in the future.

Slip Opinion at 28 (quoting Schmid v. Milwaukee Elec. Tool Corp., 13 F.3d 76, 79 (3d Cir. 1994)). The court went on to treat the three factors.

The court found that the degree of fault was de minimis. The experts did not take physical documents or other evidence and destroy them.

Rather, the Plaintiffs' experts simply made corrections to their reports on their computers and failed to save prior drafts. It appears that the Defendants' experts did the same. It would be impossible for the Court to require that all "drafts" of expert reports be produced because it might require that an expert retain and print his report every time a single change was made to it. This is not required to understand the basis for an expert's opinion and would impede rather than aid cross-examination of the expert.

Slip Opinion at 29. The court also quoted the esteemed Judge Richard Posner of the Seventh Circuit who noted that an expert is not required to be a pack rat.

The court also fond that prejudice to defendants was limited. Defendants were able to cross examine the experts at deposition and at a hearing. The only data defendants did not have were comments to their draft reports provided by plaintiffs’ counsel. The court quoted the Third Circuit:

[C]ross-examination of the expert can be comprehensive and effective on the relevant issue of the basis for an expert's opinion without an inquiry into the lawyer's role in assisting with the formulation of the theory.... [T]he marginal value in the revelation on cross-examination that the expert's view may have originated with an attorney's opinion or theory does not warrant overriding the strong policy against disclosure of documents consisting of core attorney's work product.

Slip Opinion at 32 (quoting Bogosian v. Gulf Oil Corp., 738 F.2d 587, 595 (3d Cir. 1984)). The court also pointed to a number of cases that placed limits on the circumstances under which a more effective cross examination would be promoted. That “is not the type of circumstance the Supreme Court contemplated would overcome the strong policy against disclosing an attorney's opinion work product.” Moreover, as the court noted, both experts testified that comments from the attorneys and other experts did not change their opinions. That testimony was substantiated by a draft report produced by one of the experts from her laptop computer, which predated the meeting with counsel and the other experts. That draft did not differ substantially from the final report.

Finally, the court concluded that the availability of every draft of the report would have been useful in understanding the experts’ opinions or in cross examining them. Thus, the extreme sanction sought by defendants was not warranted. Instead, the court ordered production of additional notes and documents still held by plaintiffs and their counsel.

Read the Opinion