Troubadour Oil & Gas v. Rustad , 2022 ND 191 ( 2022 )

FILED
IN THE OFFICE OF THE
CLERK OF SUPREME COURT
NOVEMBER 10, 2022
STATE OF NORTH DAKOTA
IN THE SUPREME COURT
STATE OF NORTH DAKOTA
2022 ND 191Troubadour Oil and Gas, LLC, Petitioner
v.
The Honorable Joshua B. Rustad, Judge of the District
Court, Northwest Judicial District, Williams County and
Northern Oil and Gas, Inc., Respondents
No. 20220196
Petition for Supervisory Writ.
PETITION FOR SUPERVISORY WRIT GRANTED.
Opinion of the Court by Crothers, Justice.
Lisa M. Hettich, Williston, ND, for petitioner.
Nick A. Swartzendruber, Denver, CO, for respondent Northern Oil and Gas,
Inc.
Troubadour Oil & Gas v. Rustad, et al.
No. 20220196
Crothers, Justice.
[¶1] Troubadour Oil and Gas, LLC, petitions this Court for a supervisory writ
after the district court issued a discovery order requiring Troubadour to
disclose all communications between Troubadour’s counsel and Troubadour’s
owner who also is identified as an expert witness. Troubadour argues the court
erroneously required the disclosure of confidential communications protected
by the attorney-client privilege and the work product doctrine. We grant the
petition and direct the district court to vacate the portion of its March 10, 2022
discovery order requiring disclosure of all communications between
Troubadour’s counsel and Troubadour’s owner because the court abused its
discretion and misapplied the law by relying on federal rules and case law not
applicable in this state court proceeding. We also vacate the court’s award of
attorney’s fees and remand for reconsideration.
I
[¶2] In June 2020, Northern Oil and Gas, Inc. sued Troubadour for breach of
contract, alleging the parties agreed via email to the purchase and sale of an
oil and gas lease. Troubadour denied the allegations.
[¶3] The parties stipulated to a scheduling order agreeing Northern Oil would
disclose any expert witnesses by February 26, 2021, and Troubadour would
disclose any experts by March 26, 2021. Troubadour designated Keria
Robertson, its president and sole member, as its expert witness. Troubadour’s
discovery disclosure stated Robertson “may testify as both a fact witness and
expert witness at the trial.”
[¶4] During discovery, Northern Oil requested “all documents in Keria
Robertson’s expert file,” including “all communications with Troubadour’s legal
counsel.” Troubadour objected, claiming the request was overbroad and sought
privileged information protected as attorney-client privileged communications
and attorney work product. After a hearing on Northern Oil’s motion to compel,
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the district court ordered Troubadour to disclose all communications between
Troubadour’s counsel and Robertson:
“The Court is troubled by Troubadour’s objections to this
Request because, counsel for the parties had stipulated to the
exchange of expert files. On the agreed date, Northern served its
experts’ files consistent with the parties’ stipulation but
Troubadour did not serve anything. Troubadour objected to
Northern’s formal Request in its May 3, 2021 Responses to
Northern’s Second Discovery and again produced nothing.
“Northern’s request for Ms. Robertson’s expert file is
relevant, as the parties have recognized in their stipulations.
Further, this Request conforms to the widely recognized rule that
permits discovery into ‘the facts or data considered by the witness
in forming’ his or her opinions. Fed.R.Civ.P. 26(a)(2)(B)(ii); Polum
v. North Dakota Dist. Court, Southwest Judicial Dist., 450 N.W.2d
761, 763 (N.D. 1990). Troubadour is ordered to respond to this
Request.
“The Court denies Troubadour’s attempts to assert attorney-
client privilege and the work product doctrine. The cases speaking
on non-retained experts hold that a party may not simultaneously
designate a client’s employee or principal as an expert witness, and
also assert the attorney-client privilege and work product
protections to shield communications with counsel. See, e.g., U.S.
v. Sierra Pac. Indus., 2011 U.S. Dist. LEXIS 60372 (E.D. Ca. May
26, 2011); Davies v. United States EPA, No. CV 17-115-H-BMM-
JTJ, 2020 U.S. Dist. LEXIS 92611, at *5 (D. Mont. May 26, 2020);
Cooper v. Meritor, Inc., 2018 U.S. Dist. LEXIS 20103, 2018 WL
10467776, *5 (N.D. Miss. Feb. 7, 2018); Garcia v. Patton, Civil
Action No. 14-cv-01568-RM-MJW, 2015 U.S. Dist. LEXIS 192861,
at *9 (D. Colo. July 9, 2015); PacifiCorp v. Northwest Pipeline GP,
879 F. Supp. 2d 1171, 1211-1214 (D. Ore. July 16, 2012). Both
Northern and this Court are entitled to review any and all
communications between Troubadour’s counsel and Ms. Robertson
in order to understand potential influence on her opinions.
Troubadour is ordered to produce the documents sought in Request
for Production (Set 2) No. 2.”
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[¶5] The district court awarded Northern Oil its attorney’s fees and costs
incurred in connection with Troubadour’s failure to comply with discovery.
Troubadour claims it has timely complied with the district court’s orders on
discovery except for disclosure of “any and all communications between
Troubadour’s counsel and Ms. Robertson,” which is the subject of this petition.
II
[¶6] Troubadour requests a supervisory writ. This Court’s authority to issue
supervisory writs derives from N.D. Const. art. VI, § 2. “The power to issue
such a writ is discretionary and is used only to rectify errors and prevent
injustice in extraordinary cases where no adequate alternative remedy exists.”
St. Alexius Med. Ctr. v. Nesvig, 2022 ND 65, ¶ 6, 971 N.W.2d 878. Troubadour
argues a supervisory writ is appropriate and necessary because the district
court’s order to produce privileged communications is not appealable, leaving
Troubadour with the untenable choice of disclosing privileged information or
be held in contempt for failure to follow a court order. See N.D.R.Civ.P. 37(b).
We agree and conclude this case is appropriate for exercising our supervisory
jurisdiction.
III
[¶7] Troubadour asserts the communications compelled by the district court
are privileged. Troubadour contends it did not waive the attorney-client
privilege by disclosing Robertson as its expert witness. Troubadour also claims
the communications between its attorney and Robertson are limited by the
discovery provisions relating to work product and testifying experts.
[¶8] We review orders compelling discovery under the abuse of discretion
standard. PHI Fin. Servs., Inc. v. Johnston Law Office, P.C., 2016 ND 114, ¶ 9,
881 N.W.2d 216. A district court abuses its discretion when it acts in an
unreasonable, arbitrary, or unconscionable manner, when it misinterprets or
misapplies the law or when its decision is not the product of a rational mental
process leading to a reasoned decision. Id.3
A
[¶9] Rule 26(b)(1)(A), N.D.R.Civ.P., provides the general scope of discovery.
Under N.D.R.Civ.P. 26(b)(1)(A), “Parties may obtain discovery regarding any
nonprivileged matter that is relevant to any party’s claim or defense, including
the existence, description, nature, custody, condition, and location of any
documents, electronically stored information, or other tangible things and the
identity and location of persons who know of any discoverable matter.”
[¶10] The attorney-client privilege is governed by N.D.R.Ev. 502. “A client has
a privilege to refuse to disclose and to prevent any other person from disclosing
a confidential communication made for the purpose of facilitating the rendition
of professional legal services to the client.” N.D.R.Ev. 502(b). A “representative
of the client” is a person having authority to act on legal advice rendered for a
client and is able to make or receive a confidential communication while acting
in the scope of employment for the client. N.D.R.Ev. 502(a)(4). The general rule
of privilege under N.D.R.Ev. 502(b) “is intended to encompass all
communications necessarily made in the performance of legal services, not just
those made between a client and his attorney.” N.D.R.Ev. 502, Explanatory
Note.
[¶11] Under N.D.R.Ev. 510(a), a holder of the privilege may waive the privilege
if the person “voluntarily discloses or consents to disclosure of any significant
part of the privileged matter.” Whether the attorney-client privilege is waived
depends on the circumstances of each case. Farm Credit Bank of St. Paul v.
Huether, 454 N.W.2d 710, 722-23 (N.D. 1990).
B
[¶12] Troubadour asserts that in addition to being privileged, the
communications between its attorney and Robertson are limited by the work
product discovery provisions in N.D.R.Civ.P. 26(b)(3)(A) and constraints on
discovery from testifying experts under N.D.R.Civ.P. 26(b)(4)(A). The work
product privilege in N.D.R.Civ.P. 26(b)(3)(A) provides:
“(3) Trial Preparation Materials.
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(A) Documents and Tangible Objects. Ordinarily, a party may not
discover documents and tangible things that are prepared in
anticipation of litigation or for trial by or for another party or its
representative (including the other party’s attorney, consultant,
surety, indemnitor, insurer, or agent). But, subject to Rule 26(b)(5),
these materials may be discovered if:
(i) they are otherwise discoverable under Rule 26(b)(1); and
(ii) the party shows that it has substantial need of the materials to
prepare its case and cannot, without undue hardship, obtain their
substantial equivalent by other means.”
Rule 26(b)(4)(A), N.D.R.Civ.P., on discovery from testifying experts provides:
“(4) Trial Preparation Experts.
(A) Expert Who May Testify. Discovery of facts known and opinions
held by experts, otherwise discoverable under Rule 26(b)(1) and
acquired or developed in anticipation of litigation or for trial, may
be obtained only as follows:
(i) a party may through interrogatories require any other
party to identify each person whom the other party expects
to call as an expert witness at trial; to state:
• the subject matter on which the expert is expected to
testify;
• the substance of the facts and opinions to which the
expert is expected to testify; and
• a summary of the grounds for each opinion;
(ii) a party may depose any person who has been identified
as an expert witness whose opinions may be presented at
trial unless the court finds, on motion, that the deposition is
unnecessary, overly burdensome, or unfairly oppressive.”
[¶13] In Polum v. N.D. Dist. Ct., Stark Cty., S.W. Jud. Dist., 450 N.W.2d 761,
763 (N.D. 1990), this Court addressed discovery of expert information and the
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work product doctrine under N.D.R.Civ.P. 26(b)(3). In looking at federal case
law for guidance because at that time the North Dakota rule was similar to the
federal rule, this Court concluded the work product doctrine does not apply to
the discovery of expert information. Id. “[D]iscovery of expert information is
governed by Rule 26(b)(4), not the work-product provisions of Rule 26(b)(3).”
Id. (citing Bogosian v. Gulf Oil Corp., 738 F.2d 587, 594 (3d Cir. 1984); USM
Corp. v. American Aerosols, Inc., 631 F.2d 420, 424 (6th Cir. 1980)).
[¶14] This state’s discovery rules relating to the work product doctrine and
discovery of expert information discussed in Polum have remained relatively
unchanged. In general, our current rules on the work product doctrine and
expert information were part of the 1970 amendments to Fed.R.Civ.P. 26.
Polum, 450 N.W.2d at 763. Apart from allowing testifying experts to be
deposed, the North Dakota Joint Procedure Committee has recommended
against the wholesale adoption of the 1993 and 2010 amendments to
Fed.R.Civ.P. 26 relating to expert disclosures and discovery of expert
information. See Minutes of Joint Procedure Committee 21-22 (September 29-
30, 1994); Minutes of Joint Procedure Committee 10-12 (January 26-27, 1995);
Minutes of Joint Procedure Committee 10-14 (May 12-13, 2016); Fed.R.Civ.P.
26(a)(2); Fed.R.Civ.P. 26(b)(4)(B) and (C).
[¶15] Some federal courts construed the expert disclosure requirements in the
1993 amendments to Fed.R.Civ.P. 26 as “[authorizing] discovery of all
communications between counsel and expert witnesses and all draft reports.”
Fed.R.Civ.P. 26, Advisory Committee Notes to 2010 Amendments. The 2010
amendments addressed that issue by “[providing] work-product protection
against discovery regarding draft expert disclosures or reports and—with
three specific exceptions—communications between expert witnesses and
counsel.” Id.
[¶16] Robertson serves dual roles in this action. First, she is a representative
of the client, Troubadour, under N.D.R.Ev. 502(a)(4). As the client
representative, Robertson is capable of asserting the attorney-client privilege,
can send and receive confidential communications from Troubadour’s attorney,
and can receive work product from counsel. Communications from
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Troubadour’s attorney to Robertson as Troubadour’s representative that
include the attorney’s “mental impressions, conclusions, opinions, or legal
theories . . . concerning the litigation” are protected work product under
N.D.R.Civ.P. 26(b)(3)(B). Unless waived, the attorney-client privilege and work
product doctrine apply to Troubadour’s attorney and Robertson as
Troubadour’s representative.
[¶17] Second, Robertson was disclosed as a testifying expert under
N.D.R.Civ.P. 26(b)(4)(A). To discover information from Robertson in her role as
an expert witness, Northern Oil must comply with N.D.R.Civ.P. 26(b)(4)
because the work product provisions of N.D.R.Civ.P. 26(b)(3) do not apply to
the discovery of expert information. Polum, 450 N.W.2d at 763. Under
N.D.R.Civ.P. 26(b)(4)(A), “[d]iscovery of facts known and opinions held by
experts . . . may be obtained only” through interrogatories and depositions.
[¶18] Rule 26 provides three areas of discoverable information from an expert:
(1) the subject matter of the expert’s testimony; (2) the substance of the facts
and opinions on which the expert is expected to testify; and (3) a summary of
the grounds for each opinion. N.D.R.Civ.P. 26(b)(4)(A)(i). However, Rule 26 does
not address what is discoverable within those three areas. Therefore, all of an
expert’s information related to the three areas of N.D.R.Civ.P. 26(b)(4)(A)(i) is
discoverable through interrogatories and depositions if otherwise within the
scope of permissible discovery. In addition, because the work product
provisions of N.D.R.Civ.P. 26(b)(3) do not apply to an expert, information
related to N.D.R.Civ.P. 26(b)(4)(A)(i) is discoverable if provided to an expert by
a party’s attorney and not another source. See Knoff v. American Crystal Sugar
Co., 380 N.W.2d 313, 320 (N.D. 1986) (overruled on other grounds) (“The
attorney-client privilege should be applied only to protect communications, not
facts. Experts’ reports are communications which may fall within the scope of
the privilege. But the experts’ observations and conclusions themselves,
whether or not contained within a report, and even if based to some extent on
communications of the client, are facts which, if relevant, constitute evidence.”)
(quoting Friedenthal, Discovery and Use of an Adverse Party’s Expert
Information, 14 Stan.L.Rev. 455, 468-469 (1962)).
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[¶19] Northern Oil has not directed us to any North Dakota rule stating
Troubadour waived the attorney-client privilege or the work product doctrine
by simply disclosing Robertson as its expert witness. Nor has Northern Oil
pointed to any facts in the record, aside from Troubadour’s expert disclosure,
demonstrating the work product and attorney-client privileges were waived.
Robertson is Troubadour’s client representative, and we do not agree
Troubadour made a per se waiver of any privileges by also disclosing her as its
testifying expert.
[¶20] In its order denying Troubadour’s assertion of privilege and requiring
disclosure of all communications between Troubadour’s attorney and
Robertson, the district court did not analyze N.D.R.Civ.P. 26 or N.D.R.Ev. 502
and 510. Instead, the court relied on the current version of Fed.R.Civ.P.
26(a)(2)(B) and federal district court decisions. However, the version of the
federal rule relied on by the district court has not been adopted in North
Dakota. Rather, the federal rule cited and quoted by the court, Fed.R.Civ.P.
26(a)(2)(B), requires that experts submit a written report. The federal court
cases discuss the 2010 amendments to Fed.R.Civ.P. 26, which also have not
been adopted in this state. See Davies v. United States EPA, 2020 WL 2736576(D. Mont. 2020); Cooper v. Meritor, Inc., 2018 WL 10467776, *5 (N.D. Miss.
2018); Garcia v. Patton, 2015 WL 13613521, *3 (D. Colo. 2015); PacifiCorp v.
Northwest Pipeline GP, 879 F. Supp. 2d 1171, 1212-13 (D. Ore. 2012); U.S. v.
Sierra Pac. Indus., 2011 WL 2119078 (E.D. Cal. 2011). The court’s reliance on
Fed.R.Civ.P. 26(a)(2)(B) and federal cases construing discovery provisions not
adopted in this state is a misapplication of law and an abuse of discretion. We
therefore reverse that part of the district court’s March 10, 2022 discovery
order requiring Troubadour to disclose “all communications between
Troubadour’s counsel and Ms. Robertson.”
[¶21] The district court’s order compelling discovery mentions what the district
court described as the parties’ stipulation to exchange expert files. Other than
a stipulation for entry of a Rule 16 scheduling order containing the dates on
which the parties would disclose experts, a stipulation to exchange expert files
is not in the record. Neither the court’s order nor the parties’ briefs discussed
or defined “expert file” and we therefore have no basis for concluding the
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parties agreed to deviate from provisions of the North Dakota rules of evidence
and the rules of civil procedure.
[¶22] Troubadour also requests this Court vacate the district court’s award of
attorney’s fees to Northern Oil. We vacate the attorney’s fees award and
remand for reconsideration of the amount because the order compelling
discovery encompassed more than the communications between Troubadour’s
counsel and Robertson.
IV
[¶23] We grant Troubadour’s petition and vacate that portion of the district
court’s March 10, 2022 discovery order requiring disclosure of all
communications between Troubadour’s counsel and Robertson. We also vacate
the court’s award of attorney’s fees and remand for reconsideration.
[¶24] Jon J. Jensen, C.J.
Gerald W. VandeWalle
Daniel J. Crothers
Lisa Fair McEvers
Jerod E. Tufte
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