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McQuay v. Tennessee Valley Authority

United States District Court, W.D. Kentucky, Owensboro Division

September 10, 2018





         This discovery dispute between Defendants Tennessee Valley Authority (“TVA”) and Inland Marine Service, Inc. (“IMS”) concerns recorded crewmember statements taken by IMS's outside counsel following the accident that occurred on September 23, 2014. TVA seeks an order directing IMS to produce the recorded statements. This matter is ripe for determination. For the reasons set forth below, the undersigned concludes that the recorded statements are subject to the attorney-client privilege and, therefore, not discoverable.


         The accident at issue occurred on September 23, 2014. (DN 7, Amended Complaint, ¶8). Plaintiff Timothy McQuay was working for IMS as a deckhand on the M/V Betty Feagin (Id.). The M/V Betty Feagin was delivering a loaded coal barge to the off loader at the TVA Paradise Fossil Plant on the Green River (Id.). During that process, the TVA operator lowered the haul wire and McQuay placed the eye of the haul wire over a timberhead on the starboard stern of the barge (Id.). McQuay then turned and moved toward the port side of the barge to remove the port face wire that connected the barge to the towboat (DN 7, Amended Complaint, ¶8; DN1-1, McQuay depo. at 72-73). Within seconds, however, the haul wire suddenly became taught and the eye of the haul wire broke apart in a whipping action, striking McQuay's left lower leg (Id.). Emergency medical services took McQuay to a hospital where he underwent surgery to repair his severely injured left lower leg (Id.). On the evening of September 24, 2014, Jay D. Patton, an attorney with the law firm Schroeder Maundrell Barbiere & Powers (“SMB&P”) boarded the M/V Betty Feagin after informing the crewmembers that he represented IMS. Mr. Patton recorded the crewmembers' statements regarding the incident. TVA sought these recorded statements through discovery, IMS objected.

         At the request of counsel, the undersigned conducted a telephonic conference on June 26, 2018, to discuss this discovery dispute (DN 87). Counsel for Plaintiff, TVA, and IMS participated (Id.). Prior to the telephonic conference, counsel for TVA and IMS submitted emails expressing their positions on whether the work product doctrine applied to the recorded statements and, if so, whether the recordings were nevertheless discoverable. See Fed.R.Civ.P. 26(b)(3)(A). As a result of discussion during the telephonic conference, the undersigned directed IMS to submit the recorded statements directly to the undersigned for an in camera review (Id.). IMS submitted transcripts of the recorded statements by email (Id.).

         On July 10, 2018, the undersigned conducted an in-person hearing at the United States Courthouse in Bowling Green, Kentucky (DN 88). Participating in the conference were attorneys Lane E. McCarty and Jill E. McCook for TVA and attorneys Todd M. Powers and Jay D. Patton for IMS (Id.). During the hearing counsel for IMS explained that they are also asserting the attorney-client privilege applies the recorded statements (Id.). At the close of the hearing, the undersigned directed counsel for TVA and IMS to simultaneously file briefs on July 24th and responses 21 days later (Id.). A transcript of the hearing is filed in the record (DN 89). Counsel for TVA and IMS have filed their briefs and responses (DN 91, 93, 94, 95).

         During the July 10, 2018 in-person conference, Todd M. Powers, lead trial counsel for IMS in this case, reported that he has represented IMS for over 30 years and is the direct contact between his law firm, SMB&P, and IMS (DN 89 Hearing Transcript at PageID # 486-88, 493-95, 497, 501). Mr. Powers advised that shortly after the September 23, 2014 accident, IMS's President, David Hammond, Jr., called Mr. Powers and described the location of the vessel and generally what he understood might have happened (Id.). This information included the apparent severity of the incident, including the fact that McQuay had been taken for surgery by helicopter with a serious leg injury (Id.). The call included a discussion of whether it would be appropriate for one of the attorneys in Mr. Powers' firm to travel to the boat to investigate the incident and take statements from the crewmembers (Id.). Following that discussion, Mr. Hammond directed Mr. Powers to send an attorney to the vessel for those purposes (Id.). Specifically, Mr. Hammond requested that SMB&P, following the investigation, provide IMS with direction as to (1) whether a limitation of liability action pursuant to 46 U.S.C. § 30505 would be appropriate, (2) whether IMS could recover medical expenses paid on behalf of Plaintiff from the landing owner (TVA); and (3) whether IMS would likely be sued in connection with the incident, and the extent of IMS's liability exposure, if any (Id.).

         Due to Mr. Powers' unavailability, he contacted his law partner, Mr. Patton, and instructed him to proceed to the vessel, on the Green River in Kentucky, to begin the investigation and take the statements (DN 89 PageID # 493-495). On the way, Mr. Patton spoke by phone to IMS vice-president Craig Burrus (Id.). During that conversation, proposed areas of questioning of the crew members were developed and refined (Id.). IMS informed the Captain or Pilot of the M/V Betty Feagin that a lawyer for IMS would be boarding the vessel to conduct an investigation and take statements (Id.). On the evening of September 24, 2014, Mr. Patton arrived aboard the M/V Betty Feagin (Id.). Upon meeting each of the crew members aboard the vessel, Mr. Patton explained that he represented IMS before taking their statements (Id.). Mr. Patton understood the purpose of recording the statements was to assess whether someone, other than IMS, was potentially responsible for McQuay's injury (Id.).

         Mr. Powers advised that the recorded statements were intended to discover facts necessary to advise IMS as to whether any entity other than IMS bore any legal liability for McQuay's injury, whether IMS faced liability for the incident, and whether a limitation defense may be appropriate (DN 89 PageID # 493-95, 497, 499, 501). Following the taking of the statements, the facts were summarized in a letter to IMS along with an evaluation of potential exposure and recommendations as to future legal handling (Id.). As a further result of the investigation, SMB&P had additional communications with IMS, which included further legal advice (Id.). The recorded statements were transcribed by SMB&P support staff (Id.). They have been stored in SMB&P's legal file at SMB&P's law office (Id.). The statements have not been transmitted to IMS or given, in any form, to the crewmembers themselves or the Coast Guard (Id. at PageID # 497, 499, 504-05).

         Mr. Powers advised that IMS does not have a policy of having an attorney investigate and take crew statements every time there is a crewmember injury (DN 89 PageID # 488-93, 497-98). In fact, when McQuay, sustained his second injury on November 20, 2015, no attorneys were involved (Id.). Mr. Powers indicated that IMS does have a policy that its employees fill out an incident report for every injury that occurs on its vessels and complete a CG-2692 Report of Marine Casualty when required (Id.). In connection with the September 23, 2014 and November 20, 2015 incidents, IMS employees, without the participation of attorneys, took a statement from McQuay and completed the CG-2692 reports (Id. PageID # 488-89). Copies of both incident reports and both CG-2692 reports have been produced to McQuay and TVA in discovery (Id.). Mr. Powers indicated that IMS's practice is to involve attorneys only in a very low percentage of cases where IMS decides the incident is likely to result in litigation or IMS needs legal advice regarding how best to respond to the incident (Id.).

         After Mr. Patton completed his investigation, he talked with Mr. Powers and they talked with IMS (DN 89 PageID # 489). Mr. Powers sent a letter[1] to TVA on September 25, 2014 (Id. and DN 93-2 Copy of Letter). The letter put TVA on notice that IMS was holding it responsible for the September 23, 2014 incident and asked TVA to preserve evidence (Id.).

         On September 25, 2014, SMB&P notified the Coast Guard by email that it would be representing IMS and the crew of the Betty Feagin (except for McQuay) in connection with the Coast Guard's investigation (DN 91-1). Additionally, SMB&P advised the Coast Guard that IMS requested it be designated a party in interest and that its attorneys be permitted to attend any interviews conducted and to review any evidence gathered by the Coast Guard in its investigation (Id.). Finally, SMB&P acknowledged the Coast Guard's desire to interview the Captain, the pilot, and the other deckhand (Id.). SMB&P indicated it would produce these crewmembers by telephone and insisted that the Coast Guard not record the interviews (Id.). The Coast Guard did not record the crewmembers' statements during those interviews (DN 89 PageID # 491-92).

         During the July 10, 2018 in-person conference, Mr. Powers pointed out that TVA elected not to participate, as a party in interest, in the Coast Guard's investigation (DN 89 PageID # 490). Mr. Powers explained that if TVA had elected to participate, as a party in interest, it could have been present for and asked questions during the Coast Guard's interviews of the crewmembers (Id.).

         Mr. Powers explained that the focus of a Coast Guard investigation is whether there has been a violation of any Coast Guard regulations, whether any procedural recommendations should be made, and whether to take action against a vessel company's license (Id. PageID # 492-93). Sometimes IMS attorneys have arrived at a vessel while the Coast Guard is conducting its investigation (Id.). When this happens, the attorney might facilitate the Coast Guard's request for a written ...

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