United States District Court, D. South Carolina, Columbia Division
Companion Property and Casualty Insurance Company n/k/a Sussex Insurance Company, Plaintiff,
U.S. Bank National Association, Defendant and Third-Party Plaintiff,
Redwood Reinsurance Spc. Ltd., Southport Lane Advisors, Southport Specialty Finance Administrative Agency Services, and Alexander Chatfield Burns, Third-Party Defendants,
matter is before the court pursuant to a motion by Plaintiff
Companion Property and Casualty Insurance Company
(“Plaintiff”) for an order to quash, or in the
alternative, for an order to modify a subpoena issued by
Defendant U.S. Bank National Association
(“Defendant”) to non-party South Carolina
Department of Insurance (“SC DOI”).
February 21, 2017, Plaintiff moved to quash the subpoena
issued by Defendant upon non-party S.C. DOI. (ECF No. 342).
Specifically, Plaintiff seeks an order pursuant to
Fed.R.Civ.P. 45 quashing the subpoena, or in the alternative,
modifying the subpoena to grant Plaintiff reasonable time to
review all documents that S.C. DOI identifies as responsive
and raise document specific objections as grounds to further
modify the subpoena. (ECF No. 392 at 4.)
subpoena, Defendant commanded in nine different requests,
that S.C. DOI produce “all documents and
communications” related to information about
Plaintiff's finances that Plaintiff reported to S.C. DOI.
In its Motion to Quash, Plaintiff requests that the court
quash or modify the subpoena because Defendant seeks 1)
confidential information that is protected by statute, 2)
production of documents and materials that were previously
produced, and 3) production of documents and materials that
are overly broad and not relevant to this matter. (ECF No.
342 at 1.)
March 7, 2017, Defendant opposed Plaintiff's Motion,
arguing that 1) the statutory privileges invoked by
Plaintiff's Motion to Quash do not protect all relevant
documents and information in S.C. DOI's possession, 2)
relevant documents maintained and created by S.C. DOI have
not been previously produced, and 3) the documents that
Defendant requests are narrowly tailored to obtain relevant
information. (ECF No. 381 at 3.) Furthermore, Defendant
argues that Plaintiff's concern about the statutory
privilege associated with the requested documents has already
been addressed because S.C. DOI has promised to review the
documents prior to production and ensure that privileged
documents are not produced.
replied to Defendant's opposition on March 14, 2017,
arguing that S.C. DOI's review of the documents is
insufficient, and further requesting that the court quash or
modify the subpoena.
STANDARD OF REVIEW
reaching the merits of a motion to quash, the court must
first determine whether the moving party has standing to
challenge the subpoena. HDSherer LLC v. Natural
Molecular Testing Corp., 292 F.R.D. 305, 307
(D.S.C. 2013) (citation omitted). Specifically, “a
party does not have standing to challenge a subpoena issued
to a nonparty unless the party claims some personal right or
privilege in the information sought by the subpoena.”
Id. (citing United States v. Idema, 118 F.
App'x 740, 744 (4th Cir. 2005)). If the court determines
that a party has standing, the court must, on motion,
“quash or modify the subpoena if it requires disclosure
of privileged or other protected matter […].”
Fed.R.Civ.P. 45(d)(2)(3)(iii). In addition, the court may, on
motion, “quash or modify the subpoena if it
requires…disclosing a trade secret or other
confidential research, development, or commercial
information.” Fed.R.Civ.P. 45(d)(3)(b)(i).
general, the court has broad discretion in fashioning and
limiting discovery requests. See generally Tiedman v. Am.
Pigment Corp., 253 F.2d 803, 808 (4th Cir. 1958).
Nevertheless, the scope of discovery under a subpoena is the
same as the scope of discovery under Fed.R.Civ.P. 26. See
Singletary v. Sterling Trans. Co., Inc., 289 F.R.D. 237,
240 (E.D. Va. 2012)(citing Cook v. Howard, No.
11-1601, 2012 WL 3634451, at *6 (4th Cir. Aug. 24, 2012).
Pursuant to Fed.R.Civ.P. 26, “[p]arties may obtain
discovery regarding any nonprivileged matter that is relevant
to any party's claim or defense […].”
Furthermore, “[T]he burden of proof is with the party
objecting to the discovery to establish that the challenged
production should not be permitted.” HDSherer LLC
v. Nat. Molecular Testing Corp., 292 F.R.D. 305, 308
review, the court finds that Plaintiff has privilege in the
information sought and standing to challenge the subpoena
pursuant to the South Carolina Insurance Holding Company
Regulatory Act (“the Act”). The Act prevents
certain information provided by an insurer to S.C. DOI from
disclosure to third parties. Specifically, the Act protects
any documents or information that Plaintiff provided to S.C.
DOI as a result of an examination by the director to
determine Plaintiff's financial condition pursuant to
S.C. Code Ann. § 38-21-280 (2015), or in compliance with
S.C. Code Ann. § 38-21-70(A)(13) and (14) (2015), and
S.C. Code Ann. §§ 38-21-130 through 38-21-270
(2015). Notably, the Act states that documents provided in
compliance with S.C. Code Ann. § 38-21-70(A)(13) and
(14) (2015), and S.C. Code Ann. § 38-21-130 through
38-21-270 (2015), “must be confidential by law and
privileged, shall not be subject to disclosure, may not be
subject to subpoena, […] and may not be subject to
discovery or admissible in evidence in any private civil
action.” Defendant's subpoena, requesting
“all documents and communications” related to
Plaintiffs financial information, broadly commands that S.C.
DOI provide information that is confidential and privileged
under the Act. Therefore, Plaintiff has a statutory privilege
in the information sought and standing to challenge
thorough and careful review of the subpoena, Motion to Quash,
and record in this case, the court declines to quash the
subpoena issued by Defendant upon S.C. DOI. Although
Defendant requests the production of information that may be
confidential and protected by statute, these statutory
privileges do not protect all of the relevant and responsive
information that Defendant seeks. Pursuant to Fed.R.Civ.P.
26, the court finds that Defendant may obtain all information
from S.C. DOI regarding non-privileged documents that are
relevant to Defendant's claims and defenses. Notably,
both parties have conceded that several documents requested
by the subpoena are non-privileged and relevant to the
matter. Therefore, the court finds that the
documents and information sought by the subpoena are not
overly broad or irrelevant. Additionally, the court finds no
evidence indicating that the documents and information sought
by the subpoena have been previously produced. For these
reasons, the court declines to quash the subpoena issued by
Defendant upon S.C. DOI.
the court finds that S.C. DOI's promise to review the
documents subject to privilege under the Act is insufficient
to adequately address Plaintiffs concern about the statutory
privilege associated with the documents. Plaintiff has
standing to challenge the production of documents that are
privileged under the Act. Furthermore, as the party objecting
to discovery, Plaintiff bears the burden to establish that
the production of privileged documents should not be
permitted. See HDSherer LLC v. Nat. Molecular Testing
Corp., 292 F.R.D. 305, 308 (D.S.C. 2013). Consequently,
the court finds that Plaintiff must be accorded reasonable
time to review the documents that S.C. DOI identifies as
responsive to the subpoena, and raise document-specific
objections to the production of documents that it determines
are privileged under the Act.
the court GRANTS IN PART Plaintiff's Motion such that
S.C. DOI shall not be required to produce documents that are
privileged under the South Carolina Insurance Holding Company
Regulatory Act, and DENIES IN PART Plaintiffs Motion to the
extent that it seeks to prevent the production of
non-privileged and relevant information. Accordingly,
Plaintiff is permitted to review any potentially privileged
document that S.C. DOI has identified as relevant and
responsive for production, and submit document-specific
objections to the court on or before May 5, 2017.
Furthermore, SC DOI shall produce all potentially privileged
documents to Plaintiff for review on or before ...