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Full title: Objection to Other Document (RE: related document(s)1841 Motion (Other) filed by Debtor Bestwall LLC) filed by Felton Parrish on behalf of Sander Esserman. (Attachments: # 1 Exhibit 1 # 2 Exhibit 2 # 3 Exhibit 3 # 4 Exhibit 4 # 5 Exhibit 5 # 6 Exhibit 6 # 7 Exhibit 7 # 8 Exhibit 8 # 9 Exhibit 9 # 10 Exhibit 10) (Parrish, Felton) (Entered: 07/15/2021)
Document posted on Jul 14, 2021 in the bankruptcy, 22 pages and 0 tables.
Bankrupt11 Summary (Automatically Generated)
Faced with a lose/lose choice, the Claimants’ Representatives are very reluctantly amenable to a one time extension—moving the substantial production deadline for all discovery responsive to the requests formally served on April 15, 2021 (the “April 15 Requests”), including the claim files, to July 29, 2021, provided the Debtor supplies its privilege logs by the original due date (i.e. August 13, 2021—45 days 6 Among other things, the Claimants’ Representatives must be afforded sufficient time to review the documents produced in response to the April 15 Requests, to issue supplemental requests for documents and information, and to review documents and information produced in response to supplemental requests.Moreover, while the Debtor refused to agree to weekly rolling productions, it did agree to make rolling productions, to avoid a so-called data dump at the end.11 To further aid negotiation of the CMO and provide transparency into the documents the FCR deemed critical, the FCR informally provided draft document requests on March 19, 2021.12 Informed of what it would need to produce in response to the first document requests, the Debtor agreed to the following provision of the Discovery Plan that is incorporated in the CMO: Specifically, on March 19, 2021, the FCR’s counsel sent draft document requests stating that “[w]ith respect to claim files, Greg’s proposal, whereby the Debtor produces the claim files for the 2200 claims [the Bates Sample] it has already reviewed, or is in the process of reviewing, on a rolling basis over the next 4 weeks will address the near term need for claim files to be produced.The Debtor chose to ignore certain relevant documents when it selected documents to give Bates White a head start on estimation, but this choice does not excuse the Debtor from its discovery obligations—which required the production of full claim files to be substantially complete by June 29.To the extent the Debtor contends the claim file documents ignored by the Debtor and Dr. Bates are protected from disclosure under the work-product doctrine, that doctrine cannot shield those documents from discovery and is no basis to delay substantial completion of production.39 39 Even where portions of a document reflect privileged material, that does not justify wholesale withholding of documents.
List of Tables
Document ContentsUNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF NORTH CAROLINA CHARLOTTE DIVISION In re: Chapter 11 BESTWALL LLC,1 Case No. 17-31795 (LTB) Debtor. THE OFFICIAL COMMITTEE OF ASBESTOS CLAIMANTS’ AND THE FUTURE CLAIMANTS’ REPRESENTATIVE’S OBJECTION TO DEBTOR’S MOTION TO SET DATE FOR SUBSTANTIAL COMPLETION OF DOCUMENT PRODUCTION The Official Committee of Asbestos Claimants (the “ACC”) and Sander L. Esserman (the “Future Claimants’ Representative” or the “FCR”), as the legal representative for persons who have not yet asserted an asbestos-related personal-injury claim against the above-captioned debtor (the “Debtor”) but may in the future assert such a claim (the “Future Claimants”), hereby file this objection (the “Objection”) to the Debtor’s Motion to Set Date for Substantial Completion of Document Production [Docket No. 1841] (the “Motion”). In support of this Objection, the ACC and FCR (together, the “Claimants’ Representatives”) respectfully represent as follows: PRELIMINARY STATEMENT2 The Debtor’s Motion, styled as a “Motion to Set Date for Substantial Completion of Document Production,” is not what it frames itself to be. The Motion is an attempt to selectively 1 The last four digits of the Debtor’s taxpayer identification number are 5815. The Debtor’s address is 100 Peachtree Street, N.W., Atlanta, Georgia 30303. 2 Capitalized terms used in the Preliminary Statement, but not defined therein, shall have the meanings ascribed to them in the Motion or in the body of this Objection.
1extend the schedule, for the Debtor’s sole benefit. The Debtor’s proposed, manipulated schedule severely prejudices the Claimants’ Representatives’ ability to prepare for trial and to investigate the various matters the Debtor has long represented it intends to put “at issue” in this proceeding. From the outset, the Claimants’ Representatives warned that the Debtor’s requested estimation proceeding—which seeks to provide this Court with a one-sided revisionist history of Old GP and the Debtor’s 40-year history of resolving asbestos personal injury claims—would unduly delay this bankruptcy case, causing very real harm to claimants. Critically, the Debtor opposed all efforts to narrow the scope of estimation—including the ACC’s reasoned proposals to (i) remove group settlements (which represent the majority of the Debtor’s claim resolution history) as a subject of inquiry and (ii) limit the claim history at issue to a 5-year look-back period. Resisting these proposals, the Debtor repeatedly assured the Court, and the Claimants’ Representatives, that it was “prepared and ready” and would “be able to try estimation” within 14 months. 10/22/20 Hrg. Tr. 22:4-9; see also id. (“The Debtor and New GP are committed to doing everything we can to meet the December ‘21 trial date.”).3 Indeed, in granting the Debtor’s estimation motion, the Court relied on those assurances: In addition, Mr. Gordon forecast that if I granted the motion the parties could be ready for an estimation hearing in December of 2021. That strikes me as ambitious and Ms. Ramsey indicated that the schedule was aggressive, but I intend to hold Mr. Gordon to that . . . . So while I think an estimation hearing is appropriate, I intend to keep it on as short a leash as possible and that’s a balance that I must strike to ensure that estimation itself does not cause undue delay. 10/22/20 Hr’g Tr. 12:24-13:10.4 Despite the specific timetable laid out by the Debtor in seeking to have this Court grant its estimation motion, the Debtor has consistently fallen far short in 3 10/22/20 Hrg. Tr., attached hereto as Exhibit 10. 4 Id.
2meeting its obligations and deadlines necessary for a prompt and fair resolution of this action for the ultimate benefit of the only creditors of the Debtor’s estate—asbestos personal injury claimants. By its Motion, the Debtor asks to be relieved of the Court-ordered CMO5 deadlines that it earlier pledged it could meet. But the Motion fails to establish good cause for overriding those deadlines—which were deliberately synchronized to ensure that the Debtor and the Claimants’ Representatives had reciprocal time to prepare their cases for trial. The Motion makes much of the Debtor’s efforts to date, but ignores that those efforts have yielded little information for the Claimants’ Representatives. The Motion simply confirms what the Claimants’ Representatives have asserted all along: an estimation proceeding that attempts to revisit and re-litigate Old GP’s previously resolved mesothelioma claims will further harm the asbestos creditors by unduly delaying the final resolution of this action, and is unlikely to result in a consensual Section 524(g) plan. The Debtor proposes a modified schedule with deadlines that are both illusory and unworkable. The Debtor proposes to set interim deadlines for particular categories of responsive documents that it has unilaterally selected, while setting no deadlines, whatsoever, for other categories that are critical to rebutting the Debtor’s litigation narrative. The Debtor fails to address when it will substantially complete its production of all documents responsive to the Claimants’ Representatives’ requests and when it will produce its privilege logs (which it has represented will be voluminous). Crucially, the claim files that lie at the heart of the Debtor’s 5 The term “CMO” refers to the Case Management Order for Estimation of the Debtor’s Liability for Mesothelioma Claims [Docket No. 1685], which incorporates the Joint Discovery Plan and Report (ESI Protocol) (the “Discovery Plan”) as Exhibit 1 thereto.
3analysis, and which are critical for a fair evaluation of the Debtor’s assertions, are unaddressed by the Debtor’s piecemeal proposal. The Debtor therefore places the Claimants’ Representatives in a Catch-22. Either the Claimants’ Representatives proceed with estimation on a schedule that places them at an extreme disadvantage in responding to the Debtor’s allegations, or the Claimants’ Representatives agree to delay the Estimation Proceeding, to the claimants’ detriment. Adjustments to the schedule cannot be made in isolation. Unilaterally pushing out particular deadlines, while indefinitely postponing other deadlines, impedes the Claimants’ Representatives’ ability to prepare for fact witness depositions (to be concluded by September 2021 under the CMO), commence expert reports and discovery (to be concluded by January 2022 under the CMO), and proceed to trial in May 2022 (already five months later than the Debtor originally represented was achievable). Any substantial completion deadline must provide finality for production of all documents and ensure that the schedule is not compressed to the detriment of the Claimants’ Representatives.6 By its Motion, the Debtor seeks an inequitable result that is at odds with its assurances from the outset of this proceeding. The claims file discovery that is excluded from the Debtor’s Motion was due to be substantially produced by June 29, 2021. Faced with a lose/lose choice, the Claimants’ Representatives are very reluctantly amenable to a one time extension—moving the substantial production deadline for all discovery responsive to the requests formally served on April 15, 2021 (the “April 15 Requests”), including the claim files, to July 29, 2021, provided the Debtor supplies its privilege logs by the original due date (i.e. August 13, 2021—45 days 6 Among other things, the Claimants’ Representatives must be afforded sufficient time to review the documents produced in response to the April 15 Requests, to issue supplemental requests for documents and information, and to review documents and information produced in response to supplemental requests.
4from June 29).7 In the alternative, the Claimants’ Representatives are willing to forego privilege logs and accept production of all documents, including privileged documents, by July 29, subject to entry of an order pursuant to Rule 502(d) of the Federal Rules of Evidence (a “Rule 502(d) Order”). If, however, it develops that the Debtor continues to be unable to meet the newly established deadlines, the Claimants’ Representatives reserve the right to seek further relief, including, but not limited to, the preclusion of certain expert testimony that is the source of the need for much of the discovery that has yet to be provided and that is, therefore, the source of the current and anticipated future delays. OBJECTION A. The Claimants’ Representatives Object to the Debtor’s Request to Modify Dates for Substantial Completion of the Production of Less than All Responsive Documents. If the Debtor had proposed substantial completion deadlines of July 12, 2021 for all ESI and July 29 for all other documents responsive to the April 15 Requests, and committed to produce all privilege logs by the original due date of August 13, 2021, or eliminated the need for privilege logs by stipulating to a Rule 502(d) Order, it is likely that the Claimants’ Representatives would have agreed, and the Debtor’s Motion may have been unnecessary. Instead, the Debtor proposed new deadlines for only two types of responsive documents—certain ESI and hard-copy documents.8 The deadline for production of the majority of the Debtor’s documents responsive to the April 15 Requests, and central to the estimation proceeding in this 7 See CMO, Discovery Plan, at ¶ 7 (“Within 45 days of each production, the Responding Party shall provide a privilege log identifying each responsive document withheld in whole or in part (i.e., redacted) on the basis of privilege.”). 8 Motion, at p. 2 (“The Debtor now moves this Court to set these dates for substantial completion of production: July 12, 2021, for electronically stored information (“ESI”) of identified custodians; and July 29, 2021, for hardcopy documents collected from those custodians.”).
5case (the “Estimation Proceeding”), remains unaddressed with the Debtor offering no forecast for completion and no proposal for a deadline, much less offering any proposal to address the impact of the production delays on the other deadlines in the CMO. Regardless of the “diligence” the Debtor recites,9 the efforts have not resulted in substantial provision of information to the Claimants’ Representatives. The only avenue available for the Claimants’ Representatives to obtain the information necessary to address the claims and defenses that the Debtor has represented it intends to assert in the Estimation Proceeding is through discovery from the Debtor and New GP. The Debtor and New GP are the only parties to the Estimation Proceeding with full transparency into Old GP’s claims resolution history, including, for example, what information Old GP sought from individual claimants, if any, why Old GP resolved claims at the values it did, and other factors and risks considered in settling the thousands of resolved mesothelioma claims. Neither the ACC nor the FCR was involved in the negotiation or litigation that led to the resolution of any resolved mesothelioma claim. This Court appointed the Claimants’ Representatives;10 they did not exist prior to this bankruptcy case. Accordingly, neither the FCR nor the ACC will have the information necessary to prepare for the Estimation Proceeding if the Debtor fails to produce it in a timely manner. Given this complete asymmetry of information, the Claimants’ Representatives negotiated a 75-day deadline for substantial completion of all documents responsive to issued document requests. As raised with the Debtor throughout the negotiation of the CMO, the entire schedule for getting to estimation in May 2022 hinges on the Debtor’s timely production of 9 Motion, at ¶¶ 9–17. 10 See Order Appointing Official Committee of Asbestos Claimants [Docket No. 97]; Order Appointing Sander L. Esserman as Legal Representative for Future Asbestos Claimants [Docket No. 278].
6requested discovery, which along with taking fact witness depositions are threshold items for the Claimants’ Representatives’ ability to prepare for the Estimation Proceeding. Moreover, while the Debtor refused to agree to weekly rolling productions, it did agree to make rolling productions, to avoid a so-called data dump at the end.11 To further aid negotiation of the CMO and provide transparency into the documents the FCR deemed critical, the FCR informally provided draft document requests on March 19, 2021.12 Informed of what it would need to produce in response to the first document requests, the Debtor agreed to the following provision of the Discovery Plan that is incorporated in the CMO: Productions of documents shall commence within 30 days of service of the Requests to the Party responding to the Requests (the “Responding Party”), be made on a rolling basis and, subject to the following sentence, be substantially completed within 75 days of service of the Requests. Within 14 days of service of Requests, the parties shall meet and confer regarding the propriety of the 75-day deadline for substantial completion of production in response to such Requests. If the Parties agree to a modification of the deadline, the deadline shall be changed in accordance with the Parties’ agreement. If the Parties are unable to reach an agreement, the Party requesting a change may ask the Court, by motion, to set the substantial completion deadline.13 During negotiation of the CMO, it also came to light that well before the Court determined an Estimation Proceeding was appropriate in this case, and notwithstanding the fact that the Debtor sought discovery from asbestos trusts under Rule 2004 of the Federal Rules of 11 See CMO, Discovery Plan, at ¶ 2. Despite agreeing to a rolling production, the Debtor produced only 790 ESI documents from its custodians’ files by the substantial completion deadline of June 29, dumping the vast majority of the ESI documents on the Claimants’ Representatives on July 7 and July 12. 12 See Email from S. Zieg to S. Pratt et al., dated March 19, 2021 re: Bestwall Estimation CMO Meet & Confer, attached hereto as Exhibit 1. 13 CMO, Discovery Plan, at ¶ 2.
7Bankruptcy for 15,000 resolved mesothelioma claims, the Debtor’s expert, Bates White, had already selected a sample of 2,407 resolved mesothelioma claims (the “Bates Sample”) that the Debtor and its experts would focus on for purposes of estimation.14 For years, since at least late 2017, the Debtor has been collecting and reviewing documents related to the Bates Sample in preparation for an estimation proceeding the Debtor clearly filed this case to obtain.15 Accordingly, when the Claimants’ Representatives agreed to the CMO, they understood that the Debtor would begin producing all non-privileged documents related to the Bates Sample on April 15, 2021, and conclude on April 30, 2021, in accordance with paragraph 3(e) of the CMO. Instead, the Debtor produced only a self-selected subset of non-privileged documents related to the Bates Sample. 14 The CMO, at paragraph 3(e), refers to “reliance materials for approximately 2,200 resolved mesothelioma claims against the Debtor requested by Bates White as of the date of this Order.” CMO, at ¶ 3(e). Claimants’ Representatives later learned in meet and confers that Bates White requested materials for 2,407 claims but the Debtor was unable to locate any documents related to 200 of the 2,407 claims. 15 See, e.g., First Interim Application of Schachter Harris, LLP for Allowance of Compensation and Reimbursement of Expenses for Professional Services Rendered as Special Litigation Counsel for Debtor for the Period from November 2, 2017 through February 28, 2018, at Exhibit A-1 [Docket No. 353] (November 30, 2017 time entry described as “Exchange correspondence with Worf regarding data needed for potential estimation”); First Interim Application of Robinson, Bradshaw & Hinson, P.A. for Allowance of Compensation and Reimbursement of Expenses for Professional Services Rendered as Special Counsel for Asbestos Claims Estimation Matters and Local Bankruptcy Counsel for the Debtor for the Period From November, at Exhibit A-3 [Docket No. 351] (November 2, 2017 time entry described as “develop itemized list of potential offensive and defensive discovery items for estimation case”); id. at Exhibit A-3 (January 12, 2018 time entry described as “review and analysis of historical asbestos claims files”); id. at Exhibit A-3 (January 12, 2018 time entry described as “organize and process asbestos-related files”). As of February 2021, Bates White, alone, had charged the estate well over $12 million in fees associated with work in this case. See Tenth Interim Application of Bates White LLC for Allowance of Compensation for Services Rendered and for Reimbursement of Expenses as Asbestos Consultants to the Debtor for the Period from November 1, 2020 through February 28, 2021 [Docket No. 1695] (requesting $911,480.84 in fees and stating $11,835,214.50 in fees has been approved to date).
8The Claimants’ Representatives formally served their document requests on April 15, 2021 making June 29, 2021 the deadline for substantial completion of all documents responsive to the April 15 Requests under the Discovery Plan. With rolling productions and a June 29 deadline for substantial completion of all documents responsive to the April 15 Requests, the Claimants’ Representatives were hopeful that they could complete all fact discovery—including review of all documents produced in response to the April 15 Requests and any supplemental requests and depositions of up to 20 fact witnesses—by the agreed deadline of September 30, 2021.16 Instead, as of June 29, the Claimants’ Representatives had very little of the information they requested on April 15. Other than the cherry picked documents from the claim files related to the Bates Sample, as of June 29, 2021, the Debtor had made only three productions with a total of 27,112 documents, which included only 790 ESI documents. The vast majority of the three productions consisted of 26,322 documents responsive to two requests, Request Nos. 22 and 2317—which sought material, among other things, that Old GP has already gathered and produced in 2011 and 2012 in In re N.Y.C. Asbestos Litig. (NYCAL), No. 40000/88 (N.Y.C.) (the “NYCAL Litigation”)—including the underlying documents produced in the NYCAL Litigation, the privilege logs and cover letters associated with those productions, and transcripts and exhibits of a deposition taken in the NYCAL Litigation. Even the productions for those two requests were 16 CMO, at ¶ 9. 17 Request Nos. 22 and 23 call for the production of “[a]ll Documents relating to the eight published research studies funded by Old GP in 2005 concerning the health effects of its joint compound that were the subject of the opinion [in the NYCAL Litigation], including but not limited to, the data, protocols, process, conduct, discussion, and analyses underlying these studies” and “[a]ll Documents that evidence Old GP’s employment relationship with Steward Holm as an expert consultant with respect to the eight published research studies funded by Old GP in 2005 concerning the health effects of its joint compound.”
9far from complete. The Debtor informed the Claimants’ Representatives that it was still in the process of gathering the trial court and appellate pleadings in the NYCAL Litigation related to the reformulated joint compound science articles.18 Based on meet and confer discussions with counsel for the Debtor, the Claimants’ Representatives further understand that the Debtor has yet to search for or review any other documents related to Request Nos. 22 and 23. On July 7 and July 12, the Debtor produced an additional 868 documents and 27,855 documents, for a total production of fewer than 30,000 ESI documents produced in response to the April 15 Requests. This purportedly represents the substantial completion of the ESI gathered for 14 of 15 custodians collected.19 The Claimants’ Representatives are still reviewing, but the productions do not appear to include documents from the undoubtedly voluminous and critically important files of the late Sara Turnipseed, who was counsel for Old GP from 1983 to 2013, or the remaining documents responsive to Request Nos. 22 and 23. The Debtor expressly excluded Ms. Turnipseed’s documents from its Motion20 and failed to mention the remaining documents responsive to Request Nos. 22 and 23. The Debtor may not simply leave these documents in limbo, to be produced at some “anticipated”21 later date that the Debtor unilaterally determines to be “as promptly as practicable.”22 18 See Email from G. Antine to S. Zieg et al., dated June 29, 2021 re: Bestwall: Debtor’s Rolling Production, attached hereto as Exhibit 2. 19 See Email from J. Kaplan to S. Zieg et al., dated July 12, 2021 re: Bestwall: Debtor’s 7/12/21 Rolling Production, attached hereto as Exhibit 3; Email from J. Jones to S. Zieg et al., dated July 13, 2021 re: Bestwall: Production of Custodial ESI, attached hereto as Exhibit 4. 20 Motion, at ¶ 15. 21 Email from J. Jones to S. Zieg et al., dated July 13, 2021 re: Bestwall: Production of Custodial ESI, attached hereto as Exhibit 4. 22 Motion, at ¶ 15.
10It appears that the Debtor has not yet made a single production from the “200 boxes of hard-copy documents” that it has collected in response to the April 15 Requests, but it seeks a substantial completion deadline of July 29, 2021 to produce those documents.23 Assuming a production on July 29, 2021, under the current CMO the privilege log would then be due by September 13, 45 days after the production24 and just 17 days before the current “close of fact discovery deadline.”25 As discussed further in section C below, the Debtor offers no modification to this aspect of the schedule, preferring to force the Claimants’ Representatives to address privilege challenges simultaneously with fact depositions. Most critically, as discussed in detail in section B below, the Debtor expressly excluded from its Motion documents at the core of the Debtor’s estimation—the full claim files. The Debtor’s failure to produce, or to commit a date certain to substantially complete, its production of all documents responsive to the April 15 Requests, and its failure to modify the privilege log deadlines to avoid prejudice to claimants and the Claimants’ Representatives requires denial of the Debtor’s request to partially reset the June 29 substantial completion deadline. B. The Debtor’s Complaints of “Burden” Do Not Permit the Debtor to Prejudice Claimants by Delaying the Production of Its Claim files. Documents reflecting what information was sought by, and available to, Old GP or the Debtor when resolving claims in the tort system are central to the Debtor’s claims and defenses in the Estimation Proceeding. To support its estimation analysis, the Debtor and its expert, Dr. 23 Motion, at p. 2 & ¶ 13. 24 CMO, Discovery Plan, at ¶ 7. Privilege log deadlines running from the dates of the rolling productions (id. ¶ 2), if the Debtor were actually making rolling productions in accordance with the CMO, would have avoided production of one voluminous privilege log on the latest possible date, August 13, 2021, i.e., 45 days after the June 29 substantial completion deadline. 25 CMO, at ¶ 9.
11Bates, selected the Bates Sample of 2,407 resolved mesothelioma claims, and Dr. Bates requested certain documents from those files to perform his estimation work. The Debtor has represented that it intends to argue, based on those sample claims, that certain prior claimants withheld evidence of exposures to asbestos products sold by companies other than the Debtor or Old GP. Despite the centrality of the information in the claim files to the Estimation Proceeding, the Debtor has not said when it will produce, in full, the documents concerning the 2,407 claims in the Bates Sample that the Debtor already collected, reviewed, and selectively produced at the direction of its own expert.26 There is no basis for the Debtor’s refusal to produce all responsive non-privileged documents concerning the claims in the Bates Sample by June 29,27 or its refusal to say when it will produce these highly relevant documents. The Debtor also fails to commit to a deadline by which it will produce documents related to the 500 additional resolved mesothelioma claims selected by the Claimants’ Representatives’ experts, which together with the Bates Sample constitute the Sample Resolved Mesothelioma Claims that are the subject of numerous requests in the April 15 Requests. All non-privileged documents in the claim files relating to the Bates Sample are indisputably discoverable and responsive to the April 15 Requests; thus, substantial completion of those documents was due on June 29, not August 10 as the Debtor contends.28 The Debtor’s delay in producing these core documents, which the Debtor and its counsel have spent years 26 Motion, at ¶ 15, n.3. 27 In fact, it was the Claimants’ Representatives’ understanding, when they agreed to the terms of the CMO, that the documents concerning the claims in the Bates Sample would be produced even earlier—by April 30, 2021. 28 Motion, at ¶ 15, n.3.
12reviewing and analyzing, clearly prejudices the Claimants’ Representatives. The Debtor should not be permitted to unilaterally extend the substantial completion deadline to August 10 by feigning confusion over the meaning of the April 15 Requests. As the Debtor admits, the Debtor and Claimants’ Representatives have long been in discussions regarding the claim files.29 The Debtor may extend its deadline to produce the claim files only with agreement from the Claimants’ Representatives or an order of the Court, neither of which has been requested. The Debtor has been on notice as early as September 2020 that the FCR would be seeking production of complete claim files.30 Moreover, given the ambitious estimation timeline, the Claimants’ Representatives made clear during negotiation of the CMO that they are seeking files for all resolved mesothelioma claims. Specifically, on March 19, 2021, the FCR’s counsel sent draft document requests stating that “[w]ith respect to claim files, Greg’s proposal, whereby the Debtor produces the claim files for the 2200 claims [the Bates Sample] it has already reviewed, or is in the process of reviewing, on a rolling basis over the next 4 weeks will address the near term need for claim files to be produced.”31 The Debtor referred to these claim files as the “Bates Reliance Materials”; the CMO explicitly included deadlines for their 29 Id. (“[T]he Debtor has already engaged the Claimants’ Representatives on the disproportionate burden imposed by these Requests, ways that burden may be mitigated, and substantial completion of any response.”). 30 The FCR first sought production of the complete claim files, in September 2020, in connection with the FCR’s opposition to the Debtor’s PIQ and Trust Motions. See The Official Committee of Asbestos Claimants’ and Future Claimants’ Representative’s Discovery Requests to Bestwall LLC Regarding Plaintiff Case Files, dated September 29, 2020, attached hereto as Exhibit 5. And the FCR again sought production of the claim files in connection with the FCR’s Motion in Limine of Official Committee of Asbestos Claimants and the Future Claimants’ Representative to Exclude Improper Evidence Related to the Debtor’s Trust Discovery Motion or, Alternatively, to Compel the Debtor to Produce Case Files, filed in November 2020. See Docket No. 1481. 31 Email from S. Zieg to S. Pratt et al., dated March 19, 2021 re: Bestwall Estimation CMO Meet & Confer, attached hereto as Exhibit 1.
13production.32 On April 15 and 30, the Debtor produced Bates Reliance Materials consisting of 102,702 documents. Almost one-fourth (24,747 documents) were slip-sheets reflecting documents withheld from production entirely. The Debtor has not produced a privilege log for these documents.33 In fact, the Debtor disputed that it is required to produce a privilege log related to the Bates Reliance Materials because “the reliance materials did not include any privileged information because ‘Bates White did not request, and will not receive, any privileged documents.’”34 The Claimants’ Representatives immediately made clear that the Bates Reliance Materials were part of the Sample Resolved Mesothelioma Files to be produced in response to the April 15 Request, and that the Debtor was obligated to log any documents related to the Sample Resolved Mesothelioma Claim Files that it was withholding: To be clear, as reflected in the attached, the Bates Reliance Materials were a starting point for the claim files that would be the subject of Request No. 1. It was also our understanding from our discussions related to the Bates Reliance Materials that the Debtor was reviewing the “claim files” and logging all documents that were being withheld on privilege or work product grounds. Consistent with these discussions, the ACC/FCR’s First Set of Document Requests served on the Debtor on 4/15/21 revised the “all Resolved Mesothelioma Claims” related requests to a Sample of Resolved Mesothelioma Claims. Further, the ACC and FCR agreed to include the claimants identified in the Bates’ sample into our definition of Sample of Resolved Claims, and, thereby, reduce the burden on the Debtor. Accordingly, it is the ACC’s and FCR’s position that the Debtor is obligated to provide a privilege log identifying each of the Documents withheld from and redactions made to the claim files, litigation files, or 32 CMO, at ¶ 3(e). 33 The Debtor has produced no privilege logs to date. 34 Email from G. Cassada to S. Zieg et al., dated May 24, 2021 re: Bestwall Follow-Up on Meet and Confer Concerning Document Collection/Review/Production, attached hereto as Exhibit 6 (emphasis in original).
14similar files of the sample of claims included in the Bates White Reliance Materials.35 Whether the Claimants’ Representatives were going to need to identify and conduct discovery on an additional and entirely new sample group of claimants selected by their experts was subject to numerous discussions and requests for information about the specifics of selection methods for the Bates Sample throughout April and May. After receiving sufficient data from the Debtor on May 12, 2021, the Claimants’ Representatives identified 500 additional claimants that could be used to supplement the Bates Sample and account for underrepresented claims in certain stratification sets within the Bates Sample. On May 27, 2021, more than a month before the substantial completion deadline of June 29, these additional 500 claimants were added to the full claim files for Sample Resolved Mesothelioma Claims to be produced in response to the April 15 Requests.36 During the May 2021 meet and confer sessions, it also became clear that only certain types of the non-privileged documents related to the Bates Sample had been produced to either Bates White or the Claimants’ Representatives.37 As a result, despite it being very clear that the Claimants’ Representatives were seeking all documents in the claim files, the Debtor did not intend to produce any documents for the Bates Sample claims other than the cherry-picked documents that it has spent years reviewing and selectively chose to provide to Bates White. 35 Email from S. Zieg to G. Cassada et al., dated May 25, 2021 re: Bestwall Follow-Up on Meet and Confer Concerning Document Collection/Review/Production, attached hereto as Exhibit 7. 36 See Email from S. Zieg to J. Jones et al., dated May 27, 2021 re: Bestwall: Yesterday Afternoon’s Meet-and-Confer regarding Document Review, Bates White Reliance Materials, and Rule 502, attached hereto as Exhibit 8. 37 Id.
15The Debtor’s Motion expressly excludes these documents from its request that the Court set a date for substantial completion. The Claimants’ Representatives have already agreed to narrow their document requests from full files of all resolved mesothelioma claims to only the documents contained in the claim files of the Bates Sample and the additional 500 claims. In doing so, the Claimants’ Representatives already reduced the claim file discovery as much as possible without prejudicing their ability to conduct discovery on matters the Debtor itself put at issue in the Estimation Proceeding. Yet, without regard for the parties’ extensive negotiations about discovery of claim files or the expired June 29 production deadline, the Debtor attempts to artificially limit production of its claim files to only those documents requested and received by Dr. Bates, declining to commit to produce the remaining documents.38 This limitation would hinder the Claimants’ Representatives’ ability to address the estimation claims and theories that Debtor has represented it intends to raise and assert in the Estimation Proceeding and would thus prejudice the rights and interests of pending and future asbestos claimants to respond to the issues that the Debtor has repeatedly indicated it will put at issue. Specifically, this limitation would hinder the Claimants’ Representatives ability to investigate, understand, and test Dr. Bates’ estimation methodology, assumptions, and conclusions, which will be the basis for the Debtor’s positions at trial. Dr. Bates’ choice to request and review certain documents (but ignore others) is itself a part of Dr. Bates’ methodology, as it reflects Dr. Bates’ professional judgment regarding the documents that are relevant to the opinion he has been asked to provide and the issues the Debtor itself has inserted into this proceeding. 38 Motion, at ¶ 15, n.3 (refusing to commit to production and observing “the Debtor already has engaged the Claimants’ Representatives on the disproportionate burden imposed by these Requests”).
16It is well known that experts can and do disagree on the appropriate methodology to employ, as well as the assumptions and calculations made. Those are precisely the types of issues that will be addressed in this Estimation Proceeding. The Claimants’ Representatives and their professionals’ efforts to fully and fairly evaluate, or critique, the Debtor’s experts’ assumptions and conclusions, including those of Dr. Bates, will be obstructed without access to the complete files for the Sample Resolved Mesothelioma Claims—that is, the information that the Debtor and Old GP relied on when settling a particular claim at a particular value. There may be, for example, certain information available that, had Dr. Bates considered it, would dramatically change his methodology, assumptions, and/or conclusions. In other words, the Claimants’ Representatives and their experts cannot fully test the Debtor’s theory if they are forced to rely on the Debtor’s hand-picked data. Similarly, forcing the Claimants’ Representatives and their experts to confine their analysis to a subset of the resolved mesothelioma claims, particularly a subset chosen by the Debtor and Bates White, will limit the Claimants’ Representatives’ ability to independently investigate the issues central to the Estimation Proceeding. The Debtor chose to ignore certain relevant documents when it selected documents to give Bates White a head start on estimation, but this choice does not excuse the Debtor from its discovery obligations—which required the production of full claim files to be substantially complete by June 29. To the extent the Debtor contends the claim file documents ignored by the Debtor and Dr. Bates are protected from disclosure under the work-product doctrine, that doctrine cannot shield those documents from discovery and is no basis to delay substantial completion of production.39 39 Even where portions of a document reflect privileged material, that does not justify wholesale withholding of documents. See, e.g., Khoshmukhamedov v. Potomac Elec. Power Co., 2012 WL 1357705, at *6 (D. Md. Apr. 17, 2012) (“Plaintiffs are required to redact portions of
17It is well-established that work-product protection is “not absolute.”40 Federal Rule of Civil Procedure 26(b)(3) provides that a party may obtain non-opinion work product where the party “has substantial need of the materials in the preparation of the party’s case and that the party is unable without undue hardship to obtain the substantial equivalent of the materials by other means.”41 Here, the Claimants’ Representatives’ need to evaluate, analyze, and test the Debtor’s expert’s estimation methodologies, assumptions, and calculations, and to test the veracity of the Debtor’s witnesses, constitutes a “substantial need” that warrants the production of work-product information.42 Because these claim files are solely within the possession of the Debtor, the Claimants’ Representatives cannot obtain these materials elsewhere. Absent an opportunity to independently probe the veracity of the Debtor’s witnesses and the reliability of the Debtor’s the e-mail that are privileged, log those redacted portions, and produce any non-privileged portions and attachments.”); see also LendingTree, LLC v. Zillow, Inc., 2013 WL 6385297, at *9 (W.D.N.C. Dec. 6, 2013) (granting motion to compel with the condition that plaintiff may redact privileged information as necessary); Byard v. Verizon W. Virginia, Inc., 2013 WL 30068, at *20 (N.D.W. Va. Jan. 2, 2013) (same). 40 Nutramax Lab’ys, Inc. v. Twin Lab’ys Inc., 183 F.R.D. 458, 462–66 (D. Md. 1998) (explaining division between fact and opinion work product); see also Washington v. Follin, 2016 WL 1614166, at *13 (D.S.C. Apr. 22, 2016) (explaining that fact work product enjoys only qualified immunity, but even opinion work product can be discoverable under special circumstances). 41 Parkdale Am., LLC v. Travelers Cas. & Sur. Co. of Am., 2007 WL 4165247, at *10, *13 (W.D.N.C. Nov. 19, 2007), accord Nutramax, 183 F.R.D. at 462. 42 The Claimants’ Representatives also have a substantial need for any work product within the Claim Files, because the Debtor seeks to use supposed deficiencies regarding claimants’ exposures within the Files to attack the Claimants’ Representatives’ anticipated estimation methodologies and calculations. See Informational Brief of Bestwall LLC, at pp. 1–2, 20–23 [Docket No. 12] (asserting that settlement values do not reflect claim values because “asbestos exposures attributable to defendants who have filed for bankruptcy are not being appropriately taken into account in  litigation” against remaining asbestos defendants); Declaration of Charles E. Bates, PHD, at ¶ 21 [Docket No. 1207] (contending that information on claimants’ “exposure to other companies’ asbestos-containing products” . . . “is central to liability apportionment and for the estimation of the likelihood of plaintiff’s success against Bestwall,” but claims that information “is unavailable in the Debtor’s database”). The Claimants’ Representatives require the complete claim files to test the Debtor’s representations.
18experts’ work, this Court will be left with a one-sided, manipulated record, prejudicial to the interests of claimants. To enable the Debtor to make a timely production of the full claim files, the Claimants’ Representatives offered a solution that would alleviate the Debtor’s burden and accelerate the outstanding claim file production to prevent further delays: the parties can enter into and seek Court approval of a Rule 502(d) Order to allow the immediate production of the entirety of the claim files without a privilege review, redaction or logging. A production pursuant to a Rule 502(d) Order will not result in a waiver of privilege as to any outside parties or litigations.43 Whether the Debtor agrees to use a Rule 502(d) Order or continues a document-by-document review resulting in a privilege log (served no later than August 13), the Claimants’ Representatives cannot agree to a production of the full claim files any later than July 29, a full month after the already expired deadline for substantial completion of the production. C. The Debtor’s Request for Piecemeal Relief from the CMO Unfairly Compresses the Schedule, to the Claimants’ Sole Detriment. The aggressive schedule in this Estimation Proceeding was deliberate. It was intended to protect the claimants, who are the ultimate beneficiaries of this proceeding, by avoiding further undue delay. The schedule was also staged with careful deliberation to ensure, to the extent possible, that the Claimants’ Representatives have the ability to obtain discovery and adequately prepare for the Estimation Proceeding. As reflected in the CMO, each deadline in the schedule is keyed off of the deadline that precedes it. The substantial completion of document discovery, within the specific time allotted, sets the stage for the commencement of fact depositions. The completion of fact discovery (by the agreed-upon September 30, 2021 deadline), in turn, sets the 43 See Email from D. Wright to J. Jones dated July 6, 2021 re: Bestwall Sampling Meet and Confer, attached hereto as Exhibit 9.
19stage for expert reports and discovery (to commence promptly thereafter, and be completed by March 2022). These negotiated deadlines were premised on the understanding that the Debtor would meet its benchmark obligations—consistent with its assurances: “[We] are committed to doing everything we can to meet the December ’21 trial date.”44). The expedited schedule left no latitude for the Debtor to ignore the deadlines in the CMO. Those missed deadlines have already disadvantaged the Claimants’ Representatives. The Claimants’ Representatives cannot be further disadvantaged, and forced at the eleventh hour of fact discovery, to start in essence from square one, obtain and digest all necessary and relevant discovery, and then progress through expert discovery. With less than three months until the conclusion of fact discovery, the Debtor has not provided the Claimants’ Representatives with the discovery necessary to identify, prepare and take the fact depositions of up to 20 witnesses (all to be completed by September 30). Nor has the Debtor produced, or even committed to produce, by any particular date, the privilege logs required under the CMO.45 The Debtor’s delay in producing privilege logs is particularly problematic. Given the number of documents, including ESI from the 14 custodians identified by the Debtor that amounted to 200,000 documents after the application of search terms, and the Debtor’s representation that approximately 90% of these documents were tagged as responsive and privileged on first level review, the Claimants’ Representatives anticipate that the Debtor will 44 See 10/22/20 Hrg. Tr. 22:4-9, attached hereto as Exhibit 10. 45 As noted above, the CMO provides that the Debtor must produce a privilege log within 45 days of a production. See CMO, Discovery Plan, at ¶ 7. Instead of producing its last substantial privilege log on August 13, as provided in the CMO (i.e., 45 days from the date of substantial completion of production), the Debtor presumably seeks to produce substantial privilege logs on August 23 (for the July 7 production) and August 27 (for the July 12 production), and a final privilege log on September 13 (for a July 29 production).
20allege that a substantial number of responsive documents are protected from disclosure on grounds of attorney client privilege or work product. And, given the reach of the Debtor’s privilege assertions, disputes are inevitable. The Debtor’s delay severely compromises the Claimants’ Representatives’ ability to resolve these disputes within the limited time allotted. The Estimation Proceeding must conclude as soon as practically feasible. The Claimants’ Representatives do not want any further delay—but any modification of the Estimation Proceeding schedule cannot be made in isolation. Each of the Debtor’s benchmark discovery deliverables must be complete before the Claimants’ Representatives can move on to the next phase of discovery. By its Motion, the Debtor attempts to manipulate the schedule for its benefit, leaving the Claimants’ Representatives with inadequate time to prepare for an estimation trial on a complete record. The Debtor requests to be relieved of the negotiated deadlines in the CMO, despite its earlier assurances that it would meet those deadlines, in order to protect the intended beneficiaries of this proceeding. The Debtor’s request should be denied. CONCLUSION The Claimants’ Representatives have consistently sought to narrow discovery in this proceeding and explore creative solutions, with the goal of obtaining necessary discovery on an expedited timetable. The Debtor has consistently rebuffed those efforts. The June 29 deadline for the substantial completion of discovery has already passed. As a compromise, in good faith, the Claimants’ Representatives are amenable to moving that deadline to July 29, provided the Debtor serves its privilege logs by August 13, 2021. In the alternative, the Claimants’ Representatives are willing to forego privilege logs and enter into a Rule 502(d) Order.
21Dated: July 15, 2021 Respectfully submitted, HAMILTON STEPHENS STEELE ALEXANDER RICKS PLLC + MARTIN, PLLC /s/ Glenn C. Thompson /s/ Felton E. Parrish Glenn C. Thompson (NC Bar No. 37221) Felton E. Parrish (NC Bar No. 25448) 525 North Tyron Street, Suite 1400 1420 E. 7th Street, Suite 100 Charlotte, North Carolina 28202 Charlotte, NC 28204 Telephone: (704) 344-1117 Telephone: 704-365-3656 Facsimile: (704) 344-1483 Facsimile: 704-365-3676 Email: firstname.lastname@example.org Email: email@example.com -and- -and- Judy D. Thompson (Bar No. 15617) James L. Patton, Jr. (DE Bar No. 2202) Linda W. Simpson (Bar No. 12596) Edwin J. Harron (DE Bar No. 3396) JD THOMPSON LAW Sharon M. Zieg (NC Bar No. 29536) Post Office Box 33127 Travis G. Buchanan (Delaware Bar No. 5595) Charlotte, North Carolina 28233 YOUNG CONAWAY STARGATT & Telephone: (828) 489-6578 TAYLOR, LLP Email: firstname.lastname@example.org Rodney Square email@example.com 1000 North King Street Wilmington, Delaware 19801 -and - Telephone: (302) 571-6600 Facsimile: (302) 571-1253 Natalie D. Ramsey (DE Bar No. 5378) Email: firstname.lastname@example.org Davis Lee Wright (DE Bar No. 4324) email@example.com ROBINSON & COLE LLP firstname.lastname@example.org 1201 North Market Street, Suite 1406 email@example.com Wilmington, Delaware 19801 Telephone: (302) 516-1700 Counsel to the Future Claimants’ Email: firstname.lastname@example.org Representative email@example.com Counsel to the Official Committee of Asbestos Creditors