A company cannot be compelled to turn over its risk management work product that may include attorney-client information and claims investigators’ opinions, the Alabama Supreme Court decided.
The case involved the Federal Employers’ Liability Act (FELA), which applies mostly to injured railroad workers. But the Oct. 7 decision in Christopher Ellis vs. CSX Transportation Inc. could have wider implications for self-insurers and for insurers who face requests for proprietary information during the discovery process in lawsuits.
“This doesn’t establish new rules, really, but it is very helpful for companies and insurance companies when they investigate claims,” said Wade Richardson, the Birmingham-based attorney for CSX in the case. “The court reaffirmed that a risk management department’s or legal department’s mental impressions are very protected.”
The case began in 2020 when Christopher Ellis, a foreman for CSX in Alabama, was riding on the ladder of a railcar when he was struck by the broken door handle on another railcar on an adjacent track. He suffered significant injuries and sued the self-insured CSX under the FELA law.
FELA was adopted in 1908 and predates most states’ workers’ compensation laws. It provides medical benefits and lost wages, but also recognizes that railroad work is more dangerous than many other professions. Unlike in workers’ comp, injured rail employees may sue their employer for negligence and may seek damages – a way to encourage rail companies to maintain safe working conditions, according to the Morrow & Sheppard law firm, which was not associated with the Ellis case.
Ellis’ attorney filed suit just three days after the accident, then made extensive requests in discovery – 25 interrogatories and 62 requests for documents from CSX. He asked for previous injury files and claims documents, along with information from CSX’s internal risk-management database. The rail company, the third-largest in the U.S., would not provide everything requested, noting that some of the information was proprietary, contained opinions by investigators, including legal theories and defenses, and was protected by attorney-client privilege, as described by the Alabama Rules of Civil Procedure.
The trial court in Montgomery granted the injured worker’s motion to compel discovery of the information. It had not ruled on a motion to reconsider when CSX asked the high court to order the circuit judge to vacate his decision.
The Supreme Court opinion, written by Justice Michael Bolin, quoted CSX lawyers who argued that Ellis’ side had inadvertently obtained a treasure trove of privileged documents in a similar case in Georgia, and were hoping for another windfall in their broad discovery request in the Ellis matter.
In the end, the justices found that the risk management documents are, in fact, protected, partly because Ellis’ lawyer had notified the employer so soon after the incident that he planned to filed to suit.
“We conclude that CSX established that the materials contained in the RMS (risk management system) were prepared in anticipation of litigation,” putting them off-limits per the attorney-client privilege rule, the Supreme Court opinion noted.
A CSX director had testified that the rail company’s risk management department was part of the legal department and answered to the general counsel.
“CSX has established that the materials contained in the RMS are protected under the work product doctrine because they are privileged materials that were prepared in anticipation of litigation by RMD personnel in consultation with CSX’s counsel,” the court wrote.
The files also contained the risk department’s mental impressions, conclusions and opinions, which are almost absolutely immune from discovery, except in very rare circumstances. The burden was on Ellis to show an extraordinary need for the privileged information, which he failed to provide, the justices said.
The court granted CSX’s request for a writ of mandamus on the privileged information. But on separate issues, on whether the trial court allowed discovery of irrelevant documents and exceeded the scope of the discovery request, the court denied CSX’s petition. Some of the documents could show negligence by the company or operational deficiencies that may have contributed to the accident, the court held.
“We grant the petition for a writ of mandamus in part and direct the trial court to vacate its order to the extent that it requires the production of materials contained in the RMS, in violation of the work-product doctrine,” the court wrote. “We deny the petition for a writ of mandamus in all other regards.”
Still, Richardson, the CSX attorney, said it was a good opinion and a win for self-insurers and insurance carriers.
“For insurance companies that have adjusters investigating claims, this is a big deal. Their work product is still protected,” he said Monday.
The case will now proceed in Montgomery County Circuit Court, but without some of the privileged information that Ellis had demanded. Ellis’ attorney in the case, Chip Nix, of Montgomery, could not be reached for comment.
Photo: A CSX train in 2022. (AP Photo/Gene J. Puskar)
Topics Carriers Legislation Claims Alabama
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