Keolis Transit Servs. v. The Eighth Judicial Dist. Court of State

1

138 Nev.Adv.Op. 8

KEOLIS TRANSIT SERVICES, LLC, Petitioner, v. THE EIGHTH JUDICIAL DISTRICT COURT OF THE STATE OF NEVADA, IN AND FOR THE COUNTY OFCLARK; AND THE HONORABLE RICHARD SCOTTI, DISTRICT JUDGE, Respondents, and SHAY TOTH, Real Party in Interest.

No. 81637-COA

Supreme Court of Nevada

February 24, 2022

Original petition for a writ of prohibition challenging a district court order compelling disclosure of an insurer's surveillance videos and related reports in a tort action.

Petition granted in part and denied in part.

Muehlbauer Law Office, Ltd., and Andrew R. Muehlbauer and Sean P. Connell, Las Vegas, for Petitioner.

Cliff W. Marcek, P.C., and Cliff W. Marcek, Las Vegas; Moss Berg Injury Lawyers and Boyd B. Moss, Las Vegas, for Real Party in Interest.

Claggett & Sykes Law Firm and Micah S. Echols, Las Vegas Sharp Law Center and A.J. Sharp, Las Vegas, for Amicus Curiae Nevada Justice Association.

BEFORE THE COURT OF APPEALS, GIBBONS, C.J., TAO and BULLA, JJ.

OPINION

TAO, J.

This interlocutory writ petition arises from a personal injury action in which the petitioner asserts that the district court improperly ordered that three surveillance videos and two related reports created by its insurance company's investigators were subject to discovery and not protected from disclosure as "work product" under NRCP 26(b)(3). Based on the record, we can only reach a decision as to the first two videos and the report related to those videos. We conclude that the first two videos and related report are not protected work product because their production was not directed by Keolis's counsel. We cannot, however, reach a conclusion as to the ultimate discoverability of the third video and accompanying report because, while they were created at the direction of Keolis's counsel after the suit was commenced and thus constitute work product, the district court did not analyze whether they may nonetheless be discoverable upon a showing of substantial need and undue hardship. Because the district court ordered the disclosure of all the videos and reports at issue without conducting the required analysis, we take this opportunity to clarify the appropriate framework as it pertains to an insurer's surveillance materials. Accordingly, we grant the petition in part and direct further proceedings.

FACTUAL BACKGROUND

While driving a vehicle on behalf of petitioner Keolis Transit Services, LLC (Keolis), employee Andre Petway rear-ended a vehicle driven by real party in interest Shay Toth, allegedly causing serious injuries to Toth, who subsequently retained counsel. A few days after the collision, in July 2017, Toth's counsel sent a letter notifying Keolis's third-party insurer of Toth's representation and that she was claiming damages for personal injuries in connection with the collision.

Days after receiving this letter, the insurer obtained an Insurance Services Office (ISO) report to ascertain whether Toth had filed other insurance claims. A little over a year later, in August 2018, the insurer initiated an investigation to assess Toth's injuries and the truthfulness of her claims. As part of this investigation, an investigator recorded video surveillance of Toth publicly engaged in daily activities. Outside of representations Keolis's counsel made to the discovery commissioner below that a claims adjuster directed this surveillance, the record does not reveal who participated in the decision to conduct this additional investigation or what specifically prompted it. The investigator generated two surveillance videos of Toth, both dated August 2018 in Keolis's privilege log. The investigator also produced a written report associated with these two videos, likewise dated August 2018.

In June 2019, Toth filed the instant suit for negligence against both Petway and Keolis. Thereafter, Keolis's counsel directed further investigation, culminating in a third surveillance video of Toth engaged in public activities and an accompanying written report.^[1] During discovery, in response to requests for production of documents, Keolis disclosed the existence of these videos and reports without disclosing their contents. Toth then specifically requested copies of, or access to, the videos and reports, but Keolis refused, asserting that the surveillance videos and reports are protected work product.

Toth filed a motion to compel pursuant to NRCP 16.1(a)(1)(A)(ii), arguing that Keolis was required to disclose the videos and reports with its initial disclosures. The discovery commissioner determined that the ISO report should be disclosed, as it was prepared in the ordinary course of business. However, the discovery commissioner concluded that the videos and related reports are protected from discovery as work product, but that Keolis would need to disclose the materials within 30 days of Toth's deposition if Keolis intended to use them at trial.

After Toth filed an objection, the district court partly modified the discovery commissioner's report and recommendation and, in a one-sentence footnote containing no analysis or findings, ordered Keolis to immediately produce all three videos and both related reports. Keolis filed this petition seeking a writ of prohibition challenging the district court's discovery order with respect to the surveillance materials, but not the ISO report.

ANALYSIS

Standard for writ relief

"Generally extraordinary relief is unavailable to review discovery orders." Diaz v. Eighth Judicial Dist. Court, 116 Nev. 88, 93, 993 P.2d 50, 54 (2000), A court may nevertheless consider a writ petition raising a discovery issue if "an important issue of law needs clarification and public policy is served by the court's invocation of its original jurisdiction." Id. (quoting Bus. Comput. Rentals v. State Treasurer, 114 Nev. 63, 67, 953 P.2d 13, 15 (1998)). A writ of prohibition is appropriate to prevent improper discovery. 373-74, 399 P.3d 334, 341 (2017); Venetian Casino Resort, LLC v. Eighth Judicial Dist. Court, 136 Nev. 221, 223 n.3, 467 P.3d 1, 4 n.3 (Ct. App. 2020).

Here, we elect to entertain the petition to clarify the legal analysis a district court must apply when determining whether an insurer's surveillance materials are protected as work product and, if surveillance videos qualify for work-product protection, whether they are nevertheless subject to discovery, which is an important issue that may arise in numerous similarly situated cases. Moreover, without our intervention, the district court's order compelling disclosure of the videos and related reports may result in the unjust compromise of potentially protected work product that an appeal could not fully rectify after a final judgment. Accordingly, we deem our intervention appropriate. Standard of review

This court will not disturb the district court's ruling on discovery matters absent a clear abuse of discretion. Canarelli v. Eighth Judicial Dist. Court, 136 Nev. 247, 251, 464 P.3d 114, 119 (2020). To receive this deference, however, "the district court must apply the correct legal standard in reaching its decision, and we owe no deference to legal error." See In re Guardianship of B.A.A.R., 136 Nev. 494, 496, 474 P.3d 838, 841 (Ct. App. 2020).

Surveillance videos and the work-product doctrine

The work-product doctrine originated at common law but currently stands codified in NRCP 26(b)(3), which states the following:

(A) Documents and Tangible Things. Ordinarily, a party may not discover documents and tangible things that are prepared in anticipation of litigation or for trial by or for another party or its representative (including the other party's attorney, consultant, surety, indemnitor, insurer, or agent). But, subject to Rule 26(b)(4), those materials may be discovered if:

(i) they are otherwise discoverable under Rule 26(b)(1); and

(ii) the party shows that it has substantial need for the materials to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by other means.

Thus, the preliminary inquiry when considering a work-product question is whether the material was created in anticipation of litigation or for trial.

As the Nevada Supreme Court explained in Wynn Resorts, Ltd. v. Eighth Judicial District Court, a party prepares a document in anticipation of litigation when, "in light of the nature of the document and the factual situation in the particular case, the document can fairly be said to have been prepared or obtained because of the prospect of litigation." 133 Nev. at 384, 399 P.3d at 348 (quoting Restatement (Third) of the Law Governing Lawyers § 87 cmt. i (Am. Law Inst. 2000)). This test, commonly referred to as the "because of test, asks whether a party prepared or obtained a document because of the prospect of litigation and whether the anticipation of litigation was essential for the creation of the document.^[2] Id. "The anticipation of litigation must be the sine qua non for the creation of the document-*but for the prospect of that litigation,' the document would not exist." Id. (quoting In re Grand Jury Subpoena (Mark Torf/ Torf Envtl. Mgmt.), 357 F.3d 900, 907 (9th Cir. 2004)). Thus, the "because of test does not protect "documents that are prepared in the ordinary course of business or that would have been created in essentially similar form irrespective of the litigation." Id. (quoting United States v. Adlman, 134 F.3d 1194, 1202 (2d Cir. 1998)). In general, to determine whether a document satisfies the "because of test, the district court must consider the totality of the circumstances. Id.

Here the third video and related report were created at the express direction of Keolis's counsel after Toth filed suit. However, the first two videos and related report...