United States District Court, D. Nevada
PEGGY A. LEEN, Magistrate Judge.
Before the court is the Federal Deposit Insurance Corporation as Receiver for Silver State Bank's Motion to Enforce this Court's Discovery Order, Agreed ESI Protocol, and Motion to Compel the Production of Documents (Dkt. ##130, 132, 134). The court has considered the moving and responsive papers (Dkt. ##138, 134) and the arguments of counsel. At the hearing conducted February 25, 2014, the court directed counsel for the parties to submit proposed orders articulating their respective views on how the court should dispose of these motions. Counsel complied and the court has reviewed and considered the parties' competing Proposed Orders (Dkt. #143, 144).
The nature of this action and procedural history are described in detail in the court's November 1, 2013 Order (Dkt. #112) deciding the parties' multiple discovery disputes, and will not be repeated here. Briefly, this is declaratory judgment action in which Progressive Insurance Company ("Progressive") seeks a judicial declaration that a Directors & Officers Company Liability Insurance Policy for Financial Institutions ("D&O Policy") issued to Silver State Bank ("Silver State"), and other named insureds does not provide coverage for a lawsuit brought by the Federal Deposit Insurance Corporation as Receiver ("FDIC-R") against four former directors, officers and/or employees of Silver State. Progressive's complaint asserts, inter alia, that the Insured versus Insured ("IvI") exclusion bars coverage for the FDIC-R action, and that a carve-out from the definition of Loss (the "loan loss carveout") also bars coverage for damages the FDIC-R seeks to recover from the directors and officers. The district judge denied a motion for summary judgment filed by Progressive in an Order (Dkt. #73) entered November 2, 2012, finding that the issues raised by Progressive could not be fairly determined without discovery. The motion was denied as premature "so that the parties can proceed with discovery in this case." Id.
In a series of hearings, this court heard argument and reviewed briefing on a motion for protective order filed by Progressive and a motion to compel filed by the FDIC-R. (Dkt. ##79, 86, 91, 94, 107, 108). An order resolving those motions was entered November 1, 2013 (Dkt. #112) which denied Progressive's motion for protective order as moot. The order also granted in part and denied in part the FDIC-R's motion to compel. Neither party requested clarification or reconsideration of the court's order. However, the parties' current disputes involve their competing understandings of the court's order and/or Progressive's compliance with that order.
I. The Parties' Disputes.
The current motions address seven issues: (1) Progressive's compliance with the court's November 1, 2013 discovery order requiring Progressive to produce claim files and reinsurance documents; (2) Progressive's review and production of electronically stored information ("ESI") and compliance with the stipulation and order governing ESI protocol; (3) Progressive's search for and production of documents responsive to the FDIC-R's discovery requests beyond the searches of documents in ABAIS' possession; (4) the FDIC-R's concerns that Progressive has withheld or redacted documents responsive to its discovery requests based on Progressive's own relevance analysis; (5) the adequacy of Progressive's privilege logs; (6) whether Progressive should be required to produce nonprivileged portions of its Silver State claims file regarding the FDIC-R action; and (7) whether Progressive should be required to certify that it has produced all non-privileged documents responsive to the FDIC-R's discovery requests, notwithstanding its multiple objections, and that it has identified all privileged documents withheld notwithstanding its objections, on a privileged document log.
At the February 25, 2014 hearing, the FDIC withdrew its motion to compel regarding Progressive's production of ESI and compliance with the ESI protocol. The FDIC withdrew its motion because the court entered an order in the related matter of Progressive Casualty Insurance Co. v. Delaney, et al., Case No. 2:11-cv-0678-LRH-PAL, that Progressive and the FDIC as Receiver for Sun West Bank confer regarding ESI production and protocol. Counsel for both sides are engaged in ESI discussions, and the court has ordered that the parties submit a modification to the agreed upon ESI proposals or their competing ESI proposals for the court's consideration. A hearing is scheduled for March 25, 2014, in the event the parties are unable to agree on a common resolution of their ESI disputes and competing proposals for resolving those disputes. A resolution of the parties' ESI disputes in the related case would also resolve the parties' ESI disputes in this case.
Additionally, the FDIC withdrew that portion of its motion requesting an order compelling additional reinsurance documents because Progressive produced documents after the FDIC filed its motion.
A. The Court's November 1, 2013 Order Regarding Other Claims Discovery.
The order required Progressive to review each of the six categories of Progress Documents identified in the parties' supplemental briefs and attachments to identify which of 526 claims files opened since January 1, 2004, were likely to involve claim and litigation issues involved in this case. It gave Progressive until November 14, 2013, to review the Progress Documents in each of the 526 files and until November 21, 2013, to produce the Progress Documents for potentially responsive claims files to counsel for the FDIC-R.
Counsel for Progressive represented to the court that the Progress Documents had been reviewed for each of the 526 claims by November 14, 2013, as ordered. Counsel also represented that its review identified: (1) 20 failed bank matters arising from the recent global financial crises in which Progressive and the FDIC are involved; and (2) 89 non-failed bank matters. Progressive produced the Progress Documents for these 109 claims files to the FDIC along with a privileged document log for any documents withheld or redacted on November 21, 2013, as ordered. Progressive produced the claims files for 11 of the 109 claims.
Progressive did not believe that the FDIC-R was seeking the claims files in the 20 failed bank matters because it was involved in those matters and had access to this information. The FDIC-R's motion to compel asks the court to order Progressive to review and produce the claims files in the 20 failed bank ...