United States v. Dobco Inc.

Background

Dobco Inc. and Liberty Mutual Insurance Company moved under Southern District of New York Local Civil Rule 6.3 to reconsider a December 22, 2023 discovery ruling. They also cited Federal Rule of Civil Procedure 54(b), but the court held that Rule 54(b) did not apply because the earlier discovery ruling did not decide any claim or the rights or liabilities of any party.

The earlier ruling addressed whether certain communications and documents were protected from discovery. It held that communications between M. Frank Higgins & Co., Inc. and Partner Engineering, and between Merchants National Bonding, Inc. and J.S. Held, were protected by the consulting-expert privilege. It also held that Dobco was not entitled to discovery from the International Masonry Institute because it was a non-discoverable informal consultant.

Reconsideration standard

The court explained that reconsideration is an extraordinary remedy generally available only when a party identifies an intervening change in controlling law, newly available evidence, or a need to correct clear error or prevent manifest injustice. A party may not use reconsideration simply to repeat arguments previously considered or to present evidence that was already available.

The court found that Dobco and Liberty had not shown clear error, an overlooked controlling decision, an intervening change in law, or manifest injustice. The exhibits they submitted appeared to have been in their possession before the earlier ruling. The court nevertheless agreed to reconsider the earlier decision to avoid any possibility that its initial ruling had unfairly limited the evidence considered.

Rulings after reconsideration

J.S. Held. The additional exhibits reinforced the conclusion that J.S. Held had been retained in anticipation of litigation rather than in the ordinary course of business. The court noted counsel’s involvement in directing J.S. Held’s work and communications. It held that documents and communications exchanged between Merchants National Bonding and J.S. Held remained protected under the consulting-expert privilege. The court also stated that protection could apply even if J.S. Held had a dual role involving both litigation preparation and a non-litigation purpose.

Partner Engineering. The additional exhibits showed that Partner Engineering had been copied on emails and letters, but did not show that it had actively participated in remediating allegedly defective work or resolving project issues. The court therefore adhered to its holding that communications between Higgins and Partner Engineering were protected under the consulting-expert privilege.

International Masonry Institute. The court rejected the argument that the International Masonry Institute had played more than an informal consulting role. The earlier ruling had credited Higgins’s statement that it never formally retained or hired the institute and did not pay it for its work. The new evidence did not undermine those statements. The court therefore adhered to its holding that the institute was an informal consultant whose information was not discoverable on this record.

Initial disclosures and waiver. Dobco and Liberty argued that Higgins and Merchants had waived protection by identifying J.S. Held, Partner Engineering, and the International Masonry Institute in their initial disclosures as entities likely to have discoverable information. The court rejected that argument. It explained that initial disclosures are preliminary, good-faith identifications that may be corrected or supplemented as the case develops. Higgins had informed Dobco about one month after its initial disclosures that the three entities were consulting experts. The court held that the initial disclosures did not waive the privilege and that Higgins had timely corrected them.

Disposition

Judge Victoria Reznik denied Dobco and Liberty’s motion for reconsideration. The court adhered to its original holdings that the Higgins–Partner Engineering and Merchants–J.S. Held communications were protected under the consulting-expert privilege and that the International Masonry Institute was a non-discoverable informal consultant. The Clerk of Court was directed to terminate the pending motions at ECF Nos. 72 and 73. The court also noted that discovery of protected material may be available in exceptional circumstances or upon a showing of substantial need and inability to obtain equivalent information by other means, as provided by the cited federal rules.