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St. Bernard Port v. Violet Dock Port, Inc., LLC

Court of Appeals of Louisiana, Fourth Circuit

April 18, 2018

ST. BERNARD PORT, HARBOR & TERMINAL DISTRICT
v.
VIOLET DOCK PORT, INC., LLC ST. BERNARD PORT, HARBOR & TERMINAL DISTRICT
v.
VIOLET DOCK PORT, INC., L.L.C.

          APPEAL FROM ST. BERNARD 34TH JUDICIAL DISTRICT COURT NO. 116-860, DIVISION "E" Honorable Jacques A. Sanborn, Judge

          Val P. Exnicios LISKA EXNICIOS & NUNGESSER Randall A. Smith SMITH & FAWER, L.L.C. Harry T. Lemmon THE LEMMON LAW FIRM W. Scott Hastings LOCKE LORD, LLP COUNSEL FOR APPELLANT.

          James M. Garner Peter L. Hilbert, Jr. Joshua S. Force Ashley G. Coker SHER GARNER CAHILL RICHTER KLEIN & HILBERT, L.L.C. COUNSEL FOR APPELLEE/RESPONDENT.

          Monique M. Lafontaine MLaw - Monique Lafontaine, APLC COUNSEL FOR RELATOR.

          Court composed of Judge Terri F. Love, Judge Joy Cossich Lobrano, Judge Sandra Cabrina Jenkins, Judge Regina Bartholomew Woods, and Judge Tiffany G. Chase

          SANDRA CABRINA JENKINS, JUDGE

         This matter is a discovery dispute arising in an expropriation action. Defendant/appellant Violet Dock Port, Inc., LLC ("Violet Dock") appeals the trial court's May 31, 2016 judgment, which partially granted a Motion to Compel filed by appellee/plaintiff St. Bernard Port, Harbor & Terminal District ("St. Bernard Port"), and ordered the production of communications between Violet Dock and non-parties Joseph P. Ruppel and Chaffe & Associates, Inc. ("Chaffe") (collectively, "Ruppel/Chaffe"). Violet Dock also appeals the trial court's December 27, 2016 judgment granting St. Bernard Port's Motion for Partial New Trial on its Motion to Compel, and denying Ruppel/Chaffe's Motion for New Trial. Violet Dock's appeal was consolidated with an Application for Supervisory Writs filed by Ruppel/Chaffe, which also seeks review of the trial court's May 31, 2016 and December 27, 2016 judgments, and requests attorney's fees and costs. For the reasons that follow, we reverse the trial court's May 31, 2016 and December 27, 2016 judgments, grant the writ application, [1] and remand with instructions.

         FACTUAL AND PROCEDURAL BACKGROUND

         Since the early 1980s, Violet Dock had owned and operated a 75-acre private industrial port on the Mississippi River in St. Bernard Parish (the "Property"). Until 2009, Mr. Ruppel was a shareholder/member of Violet Dock. At that time, Mr. Ruppel was nearing 90 years old, and he divested himself of his minority interest in Violet Dock.

         In December 2010, St. Bernard Port filed a Petition for Expropriation of the Property. Violet Dock challenged the constitutionality of the taking and, in the alternative, the amount that St. Bernard Port deposited as the purported fair market value of the Property.

         During the 2013 just compensation trial, St. Bernard Port learned that on September 15, 2009, Mr. Ruppel had sold his minority interest in the Property (approximately 34%) to his child and grandchildren. Several months before, Mr. Ruppel had retained Chaffe, which provided investment banking and consulting services, to value his membership interest in the Property for tax and estate planning purposes. The report valuing Mr. Ruppel's interest in the Property was issued by Chaffe on May 31, 2009 (the "Chaffe Report").

         In the middle of the just compensation trial, St. Bernard Port issued subpoenas and subpoenas duces tecum to Mr. Ruppel and Chaffe, who were not parties to the expropriation. St. Bernard Port specifically sought production of the Chaffe Report.[2] Ruppel/Chaffe objected, and filed Motions to Quash, for Protective Order and for Costs, contending that the Chaffe Report was privileged and contained confidential information, and that St. Bernard Port failed to meet its burden of proving both good cause and relevance to justify the production of documents from non-parties. St. Bernard Port responded with a Motion to Compel. The trial court granted the Motion to Compel, denied the Motions to Quash, and ordered Ruppel/Chaffe to produce the Chaffe Report.

         Ruppel/Chaffe appealed the trial court's December 11, 2013 judgment denying their Motions to Quash the subpoenas and subpoenas duces tecum. On August 27, 2014, this court reversed the trial court, finding that it had abused its discretion in denying Ruppel/Chaffe's Motions to Quash. St. Bernard Port, Harbor & Terminal Dist. v. Violet Dock, Inc., 14-0286, p. 9 (La.App. 4 Cir. 8/27/14), 147 So.3d 1266, 1270. Specifically, this court found that the discovery sought by St. Bernard Port was not relevant to the issue of just compensation and that St. Bernard Port had not established good cause. After reversing the trial court's judgment, this court stated:

Because the judgment appealed from is silent as to the issue of costs, we are remanding this matter to the trial court for consideration as to whether costs should be awarded to Mr. Ruppel and Chaffe & Associates in light of our conclusion that the trial court abused its discretion in denying the non-party appellants' motions to quash.

         In the trial court, Ruppel/Chaffe filed a Motion for Costs, seeking attorney's fees and costs incurred in quashing the subpoenas, pursuant to La. C.C.P. arts. 1426(B) ("Protective orders"), 1469(4) ("Motion for order compelling discovery"), and 1420(D) ("Signing of discovery requests, responses, or objections"), which authorize an award of "reasonable expenses, . . . including attorney's fees." In the Motion for Costs, Ruppel/Chaffe requested more than $376, 000.00 in attorney's fees and other expenses incurred by Ruppel/Chaffe through July 31, 2015. In response, St. Bernard Port propounded Interrogatories and Requests for Production of Documents ("Discovery Requests") on Ruppel/Chaffe, seeking: (1) all correspondence between Mr. Ruppel and Violet Dock, including their attorneys, concerning the subpoenas referenced in the Motion for Costs; and (2) all correspondence between Chaffe and Violet Dock, including their attorneys, concerning the subpoenas referenced in the Motion for Costs. Ruppel/Chaffe objected to the Discovery Requests on the grounds that they were vague, overbroad, unduly burdensome, not reasonably calculated to lead to the discovery of admissible evidence, and sought documents that were irrelevant and were protected by the attorney-client, common interest, and other related privileges.

         Thereafter, Ruppel/Chaffe produced unredacted billing statements from its attorneys documenting the time spent in quashing the subpoenas issued in the expropriation trial. Ruppel/Chaffe and St. Bernard Port also exchanged expert reports regarding the reasonableness of the requested attorney's fees and costs.

         On April 8, 2016, St. Bernard Port filed a Motion to Compel, asserting that, in addition to the unredacted attorney invoices, it was entitled to discover all of the underlying documents described in the invoices. St. Bernard Port argued that its requests for the underlying communications were "aimed at determining whether all the costs asserted by Ruppel/Chaffe in their motion [for costs] are related to work regarding those efforts to quash the subpoenas." St. Bernard Port insisted it "[could] not ascertain with certainty whether the charges by Ruppel/Chaffe [were] relevant to the subpoena[s] without the underlying communications."

         Ruppel/Chaffe and Violet Dock filed an opposition to the Motion to Compel and a Motion for a Protective Order, arguing that the communications sought by St. Bernard Port were protected by the attorney-client privilege, common-interest privilege, and the work-product doctrine. They also argued that these underlying documents were irrelevant and that the Discovery Requests were unduly burdensome.

         After a hearing, the trial court rendered a judgment on May 31, 2016, partially granting the Motion to Compel as follows:

• Ruppel/Chaffe was ordered to produce all communications sent to Violet Dock after the sale of Mr. Ruppel's interest in the Property that specifically pertained to the defense of the subpoenas issued to Ruppel/Chaffe;
• Neither Ruppel/Chaffe nor Violet Dock were required to turn over any communications from Violet Dock to Mr. Ruppel or Chaffe in connection with the issuance of the subpoenas.

         On June 7, 2016, St. Bernard Port filed a Motion for Partial New Trial. St. Bernard Port challenged not only the trial court's failure to require production of communications from Violet Dock to Ruppel/Chaffe, but also asked the court to order production of "[a]ll communications between Violet Dock or its lawyers and Ruppel/Chaffe or its lawyers" contained in the billing entries submitted as part of Ruppel/Chaffe's Motion for Costs. St. Bernard Port asserted that these communications were relevant because it was entitled to ensure that the work included in the billing invoices pertained only to Ruppel/Chaffe's efforts to quash the subpoenas issued in the expropriation trial.

         On June 10, 2016, Ruppel/Chaffe also filed a Motion for New Trial in which it agreed to withdraw all claims for attorney's fees and costs associated with the communications over which Ruppel/Chaffe and Violet Dock had asserted a privilege. According to Ruppel/Chaffe, this withdrawal would eliminate any concerns that the trial court or St. Bernard Port might have regarding the amount of time spent on the challenged communications, as compared to other items identified in the same time entry. St. Bernard Port opposed the Motion for New Trial, arguing that Ruppel/Chaffe had not produced a complete list of the "withdrawn" communications and that, in any event, such a list could not be generated without St. Bernard Port's review of these communications.

         After a hearing, the trial court rendered a judgment on December 27, 2016 granting St. Bernard Port's Motion for Partial New Trial, ...


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