United States District Court, District of South Carolina, Florence Division
R. Bryan Harwell, United States District Judge.
This matter is before the court on Defendant WFOI, LLC d/b/a Blue Marlin Yacht & Fishing Club a/k/a Captain Poo’s Bar & Grill’s (“Defendant” or “WFOI”) Motion to Compel, filed February 19, 2015. See Def.’s Mot., ECF No. 53. Defendant seeks an order compelling Plaintiff to respond to Defendant’s Third Supplemental Request for Production No. 5 (“Request No. 5”), which requested that the Plaintiff produce “any and all settlement agreements, memoranda of settlement, releases, or mediation agreements in relation to the settlement of Paul Wilshire’s claims against BOAC Marine, Inc.” See ECF No. 53 at 1; ECF No. 53-2 at 7. BOAC Marine, Inc. (“BOAC”) was formerly a party to this lawsuit, but Plaintiff and WFOI entered into a dismissal with prejudice of both Plaintiff’s claims against BOAC and all crossclaims between BOAC and WFOI on January 9, 2015. See ECF No. 45. Plaintiff timely filed a response in opposition to Defendant’s motion on March 9, 2015. See Pl.’s Resp., ECF No. 54.
“Discovery under the Federal Rules of Civil Procedure is broad in scope and freely permitted.” Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 402 (4th Cir. 2003) (citation omitted). As with any discovery dispute, Rule 26(b)(1) provides the general rule:
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 or other tangible things and the identity and location of persons who know of any discoverable matter. For good cause, the court may order discovery of any matter relevant to the subject matter involved in the action. Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence. All discovery is subject to the limitations imposed by Rule 26(b)(2)(C).
Fed. R. Civ. P. 26(b)(1). Relevant information is a broader concept than admissible evidence. To be relevant, information need only be calculated to lead to the discovery of admissible evidence, it need not be admissible itself. “Relevant evidence” is defined to mean evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence. Fed.R.Evid. 401.
“On relevancy matters, the trial court has broad discretion.” Watson v. Lowcountry Red Cross, 974 F.2d 482, 489 (4th Cir. 1992). The court may restrict the discovery of otherwise allowable information if it determines that “the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive.” Fed.R.Civ.P. 26(b)(2)(C)(i). The Court may also restrict discovery where “the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties’ resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues.” Fed.R.Civ.P. 26(b)(2)(C)(iii). Broad discretion is afforded a district court’s decision to grant or deny a motion to compel. Erdmann v. Preferred Research Inc. of Ga., 852 F.2d 788, 792 (4th Cir. 1988) (citation omitted).
I. Parties’ Arguments
Defendant asserts that Plaintiff should have to respond to Request No. 5 and produce the settlement agreement between Plaintiff and BOAC. In support of this argument, Defendant contends that the settlement agreement is within the scope of allowable discovery. See ECF No.53-3 at 3. Defendant notes that the Fourth Circuit has not recognized a settlement privilege, and thus the Court’s analysis should simply focus on whether the agreement is relevant and not unduly burdensome to produce. See Id. Defendant then argues that because this case involves joint and several liability, the settlement information is relevant to the issue of set-off. See Id. at 3–4. Moreover, Defendant asserts that the settlement information will allow it to better assess its liability and evaluate its risks in continuing the litigation. See Id. 4–5. Finally, Defendant claims it is relevant to assist in determining whether the release was given in good faith. See Id. at 6. Defendant then shifts gears and asserts that, because BOAC representatives may be called as witnesses at trial, it is also necessary to evaluate and determine any bias or prejudice that any BOAC witness may have. See Id. Defendant concludes by noting that producing of the settlement documents would not be unduly burdensome and the fact that they are purported to be confidential does not shield them from disclosure. See Id. at 7. WFOI notes that it will consent to a protective order in the event the Court does order disclosure. See id.
Plaintiff responded, asserting that it should not be compelled to provide the settlement information. Plaintiff’s primary argument is that Request No. 5 is not reasonably calculated to lead to the discovery of admissible evidence. Plaintiff notes that the settlement information would not be admissible at trial under Rule 408 to support a claim by WFOI that BOAC was partially or entirely responsible for Plaintiff’s injuries. See ECF No. 54 at 3–4. Plaintiff notes that, while the information may relate to valuation of a set-off under S.C. Code Ann. § 15-38-50, it would only become relevant after a verdict was entered against WFOI. See Id. at 4–6. Plaintiff states that § 15-38-50 provides the Court with no discretion, as any set-off would be automatic. See Id. at 5. Nevertheless, Plaintiff does concede that the agreement would have to be provided to the Court in the event Plaintiff receives a verdict against WFOI. See Id. at 6. However, he argues that prior to any verdict, disclosure is simply not proper. See Id. at 6–8. Plaintiff then contends that WFOI cannot show any legal interest in bringing a contribution claim, as this is not a bad faith, “Mary Carter” situation where the settlement agreement did not fully release Defendant BOAC while purporting to do so. See Id. at 8–11. Plaintiff also notes that, in any event, WFOI would not be able to recover for contribution until a verdict was entered against it in Plaintiff’s favor. See id.
Plaintiff also objects to Defendant’s policy argument. Plaintiff notes that the potential for settlement alone is in no way reasonably calculated to lead to the discovery of admissible evidence. See Id. at 11–15. Finally, Plaintiff argues that WFOI’s witness bias argument also fails. Plaintiff asserts that he does not plan to call any representatives of BOAC and that the agreement contains no provisions which would contemplate testimony by a witness associated with BOAC. See Id. at ...