RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 09a0306p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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In re: PROFESSIONALS DIRECT INSURANCE
Petitioner. --
COMPANY,
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No. 08-4440
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On Petition for Writ of Mandamus.
No. 06-00240—George C. Smith, District Judge.
Argued: April 30, 2009
Decided and Filed: August 24, 2009
Before: MARTIN, SUHRHEINRICH, and WHITE, Circuit Judges.
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COUNSEL
ARGUED: Kevin Robert McDermott, SCHOTTENSTEIN, ZOX & DUNN, Columbus,
Ohio, for Petitioner. James E. Arnold, JAMES E. ARNOLD & ASSOCIATES, Columbus,
Ohio, for Respondent.
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OPINION
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BOYCE F. MARTIN, JR., Circuit Judge. Professionals Direct Insurance Company
petitions this Court for a writ of mandamus to vacate a discovery order issued by the district
court. Professionals Direct contends that the order erroneously compels it to produce
documents protected by the federal work-product doctrine and by Ohio’s attorney-client
privilege. Because we find that Professionals Direct has not met the heavy burden required
to justify a writ of mandamus, we DENY its petition.
1
No. 08-4440 In re Professionals Direct Insurance Co. Page 2
I.
Professionals Direct is the malpractice insurer for Wiles, Boyle, Burkholder &
Bringardner Co., a Columbus, Ohio law firm specializing in insurance defense. In 2001,
Wiles was retained by Illinois National Insurance Company to defend a suit against an
employee of one of Illinois National’s insureds. The defense was not successful and the
plaintiffs obtained a large jury verdict, leaving Illinois National responsible for
$8,531,488.68 in damages. The trial court entered judgment December 30, 2002. Wiles
filed a motion for judgment not withstanding the verdict or, alternatively, for a new trial on
January 15, 2003. The trial court denied the motion as untimely, concluding that it had been
filed outside of the 14-day period provided in the Ohio rules of civil procedure. Wiles
appealed this decision to the Ohio Court of Appeals, and then to the Ohio Supreme Court.
In late 2003, while the Ohio Supreme Court’s decision was pending, Wiles applied
to renew its malpractice insurance policy with Professionals Direct. In its application for
renewal Wiles indicated that it was not aware of any circumstances, acts, or omissions during
the prior twelve months that “could reasonably be expected to result in a claim to
Professionals Direct.”
The Ohio Supreme Court unanimously affirmed the trial court’s ruling on August
18, 2004. On September 1, Wiles notified Professionals Direct that Illinois National had a
potential malpractice claim against it. Professionals Direct acknowledged Wiles’s notice of
a potential malpractice claim, but reserved the right to deny the claim pending an
investigation into the circumstances under which it arose. At this time, Professionals Direct
retained outside counsel to advise it on potential defenses to coverage and to explore the
possibility of seeking a declaratory judgment that Wiles was not covered by the plan. In
October 2004, Illinois National settled the underlying claim and offered to settle its potential
malpractice action for $5 million. Professionals Direct represented Wiles in settlement
negotiations and executed an agreement tolling the statute of limitations to facilitate
1
settlement discussions.
1
These discussions proved fruitless. Illinois National later raised its demand to $10 million, and,
on May 19, 2006, Illinois National sued Wiles for malpractice in the Franklin County Court of Common
Pleas.
No. 08-4440 In re Professionals Direct Insurance Co. Page 3
On August 19, 2005, Professionals Direct sent a second letter to Wiles regarding
its notice of a potential malpractice claim. This letter again reserved Professionals
Direct’s right to exclude the claim from coverage and asked that Wiles provide a written
explanation for the delay in reporting Illinois National’s potential claim and its failure
to disclose this potential claim in its application for renewal. Attorneys representing the
parties attended a mediation in November, but failed to resolve the dispute, and in
December Professionals Direct’s attorney informed Wiles’s attorney that Professionals
Direct was planning to file a declaratory judgment action in the near future. On March
23, 2006, Professionals Direct informed Wiles that it interpreted the malpractice policy
to exclude coverage because Wiles failed to give notice of Illinois National’s potential
claim either before the expiration of the 2002-03 policy or in its application for renewal.
Professionals Direct filed an action for a declaratory judgment in the United States
District Court for the Southern District of Ohio six days later.
After the district court denied Wiles’s motion to dismiss, Wiles filed a
counterclaim against Professionals Direct, alleging breach of contract and bad faith in
processing the Illinois National claim, seeking “damages measured by any amounts
ultimately owed to Illinois National for the Illinois National claims, without regard to
policy limits,” as well as punitive damages, and attorneys’ fees. The district court
denied Professionals Direct’s motion to dismiss the counterclaims and its subsequent
motion for reconsideration. During discovery Wiles requested that Professionals Direct
produce all documents relating to its bad faith claim. However, Professionals Direct
refused to produce a number of documents from its coverage file, claiming that they
were protected by the work-product doctrine and attorney-client privilege. After an in
camera examination of the documents, the magistrate judge overseeing discovery
ordered that Professionals Direct disclose many of the documents it claimed to be
privileged.2
2
Professionals Direct claims that most of the documents are covered by both theories. However,
privilege log pages 003648-003649 are claimed only as work product, and pages 000075, 000899, 000904
and 000905-000906, 000909 and 003564, and 003635 are claimed only under attorney-client privilege.
No. 08-4440 In re Professionals Direct Insurance Co. Page 4
Professionals Direct filed objections to this discovery order, claiming that it
wrongly required the disclosure of nondiscoverable information in violation of the
attorney-client privilege and the work-product doctrine. It also filed a motion to certify
questions relating to the discovery order to the Ohio Supreme Court, a motion to
bifurcate proceedings for the declaratory judgment and the counterclaim, and a motion
to stay production of the documents. The district court denied all of Professionals
Direct’s motions. Of the magistrate’s discovery order, it stated simply: “The Court has
reviewed the Magistrate Judge’s Discovery Order in light of Plaintiff’s Objections, and
finds that the Magistrate Judge’s Discovery Order is neither clearly erroneous, nor
contrary to law.”3 Professionals Direct then filed a petition for a writ of mandamus from
this Court to vacate the discovery order. Finding that it was not appropriate to deny the
petition without an answer, a panel of this Court directed that Wiles respond as required
by Federal Rule of Appellate Procedure 21(b)(1), and stayed production of the
documents pending a decision on the merits of Professionals Direct’s petition.
II.
This Court has authority to issue a writ of mandamus under 28 U.S.C. § 1651 and
Federal Rule of Appellate Procedure 21. However, a writ of mandamus is an
extraordinary remedy that we will not issue absent a compelling justification.
Traditionally, writs of mandamus were used “only to confine an inferior court to a lawful
exercise of its prescribed jurisdiction or to compel it to exercise its authority when it is
its duty to do so.” Kerr v. U.S. Dist. Court for the N. Dist. of Cal., 426 U.S. 394, 402
(1976). Accordingly, “[t]he writ of mandamus is not to be used when the most that
could be claimed is that the district courts have erred in ruling on matters within their
jurisdiction.” Schlagenhauf v. Holder, 379 U.S. 104, 112 (1964). Rather, “only
exceptional circumstances amounting to a judicial usurpation of power will justify the
invocation of this extraordinary remedy.” Will v. United States, 389 U.S. 90, 95 (1967).
And, because mandamus is a discretionary remedy, a Court may decline to issue the writ
if it finds that it would not be “appropriate under the circumstances” even if the
3
Because the district court adopted the magistrate’s order without discussion, we will refer to the
magistrate’s order directly in our analysis.
No. 08-4440 In re Professionals Direct Insurance Co. Page 5
petitioner has shown he is “clear[ly] and indisputabl[y]” entitled to it. Cheney v. U.S.
Dist. Court, 542 U.S. 367, 381 (2004).
In evaluating whether to issue a writ of mandamus, we consider five factors:
(1) whether the party seeking the writ has no other adequate means, such
as direct appeal, to attain the relief desired; (2) whether the petitioner will
be damaged or prejudiced in a way not correctable on appeal after a final
judgment; (3) whether the district court’s order is clearly erroneous as a
matter of law; (4) whether the district court’s order contains an
oft-repeated error, or manifests a persistent disregard of the federal rules;
(5) whether the district court’s order raises new and important problems,
or legal issues of first impression.
John B. v. Goetz, 531 F.3d 448, 457 (6th Cir. 2008). Not every factor need apply (four
and five tend to point in opposite directions, for example), but together they must present
extraordinary circumstances to justify issuance of the writ. In re Perrigo, 128 F.3d 430,
435 (6th Cir. 1997).
III.
With narrow exceptions, a party has no right of appeal until after a final judgment
on the merits, and mandamus is not intended to substitute for appeal after a final
judgment. Thus, a court may only exercise its mandamus jurisdiction when a party is
in danger of harm that cannot be adequately corrected on appeal and has no other
adequate means of relief. The first two factors in the five-factor test are aimed at
preventing the end-run around the final judgment rule that might otherwise occur. And,
as a result, courts generally ask whether the first two prongs of the test have been
satisfied before addressing the merits of the errors alleged in the petition. See, e.g., In
re Gregory Lott, 424 F.3d 446, 449-52 (6th Cir. 2005). Here, Professionals Direct has
shown both that it is in danger of irreparable harm and that it has no other adequate
means of relief.
No. 08-4440 In re Professionals Direct Insurance Co. Page 6
1. Whether PDIC has no Other Adequate Means of Relief
First, Professionals Direct has no other adequate means of relief. Discovery
orders are not reviewable on an interlocutory basis under 28 U.S.C. § 1292 or under the
collateral order doctrine. John B., 531 F.3d at 458. And Professionals Direct cannot
necessarily obtain review by withholding the documents and seeking review of a
contempt sanction. Nonparties can appeal any contempt order, but parties cannot appeal
civil contempt orders and thus do not have a clear alternative means of relief. See
Admiral Ins. Co. v. U.S. Dist. Court, 881 F.3d 1486, 1491 (9th Cir. 1989) (“Typically,
a nonparty aggrieved by a discovery order must subject himself to civil contempt to gain
appellate review. Civil contempt of a party, however, generally is not immediately
appealable. Thus, a party to litigation normally must await final judgment to seek
review of a discovery order. Accordingly, mandamus is the only method available . . .
to obtain review.”). Because Professionals Direct is a party to this suit,4 mandamus is
an appropriate means of review.
2. Whether PDIC Will Suffer Irreparable Harm
Second, an erroneous forced disclosure of confidential information could not be
adequately remedied on direct appeal because a court cannot restore confidentiality to
documents after they are disclosed. Lott, 424 F.3d at 451-52 (“If the district court’s
discovery order is in error and Lott’s counsel is wrongfully forced to disclose privileged
communications, there is no way to cure the harm done to Lott or to the privilege
itself.”); see generally 16 WRIGHT & MILLER, FEDERAL PRACTICE & PROCEDURE
§ 3935.3 (“Writ review is rather frequently provided in more general terms because of
the desire to protect against discovery of information that is claimed to be protected by
the Constitution, privilege, or more general interests in privacy.”). Accordingly, we
proceed to the merits of Professionals Direct’s petition.
4
This distinguishes United States ex rel. Pogue v. Diabetes Treatment Ctrs. of Am., Inc., 444 F.3d
462, 474 n.7 (6th Cir. 2006), which declined to exercise mandamus jurisdiction to review a discovery order
compelling production of documents held by a nonparty.
No. 08-4440 In re Professionals Direct Insurance Co. Page 7
IV.
The third factor in the five factor test is whether the district court’s order is
“clearly erroneous as a matter of law.” Professionals Direct contends that the district
court committed clear error in its application of both the federal work-product doctrine
and Ohio’s attorney-client privilege. We do not agree.
A. Work-product doctrine
The work-product doctrine protects an attorney’s trial preparation materials from
discovery to preserve the integrity of the adversarial process. See Hickman v. Taylor,
329 U.S. 495, 510-14 (1947). The work-product doctrine is a procedural rule of federal
law; thus, Federal Rule of Civil Procedure 26 governs this diversity case. In re
Powerline Licensing, LLC, 441 F.3d 467, 472 (6th Cir. 2006). Rule 26(b)(3) protects
(1) “documents and tangible things”; (2) “prepared in anticipation of litigation or for
trial”; (3) “by or for another party or its representative.” Id. The lone issue is whether
the disputed documents were prepared in anticipation of litigation.
To determine whether a document has been prepared “in anticipation of
litigation,” and is thus protected work product, we ask two questions: (1) whether that
document was prepared “because of” a party’s subjective anticipation of litigation, as
contrasted with ordinary business purpose; and (2) whether that subjective anticipation
was objectively reasonable. United States v. Roxworthy, 457 F.3d 590, 594 (6th Cir.
2006). If a document is prepared in anticipation of litigation, the fact that it also serves
an ordinary business purpose does not deprive it of protection, id. at 598-99, but the
burden is on the party claiming protection to show that anticipated litigation was the
“driving force behind the preparation of each requested document.” Roxworthy, 457
F.3d at 595 (quoting Nat’l Union Fire Ins. Co. of Pittsburgh v. Murray Sheet Metal Co.,
967 F.2d 980, 984 (4th Cir. 1992)).
The magistrate found that the earliest litigation could reasonably have been
anticipated was August 2005—when Professionals Direct sent its second reservation of
rights letter, asked Wiles to explain its failure to disclose the Illinois National claim in
No. 08-4440 In re Professionals Direct Insurance Co. Page 8
its renewal application, and retained counsel in Ohio. At this time, the magistrate found,
Professionals Direct was “seriously evaluating a declaratory judgment action,” and that
from this point on, Professionals Direct’s attorneys “had dual functions. They were
advising [Professionals Direct] on the business decision of whether to deny coverage,
and they were doing legal work in anticipation of litigation.”5
Professionals Direct does not contest these findings; rather, it contests the
magistrate’s application of the work-product doctrine to them. In essence, its position
is that the documents prepared by its attorneys while having “dual function” necessarily
have a dual purpose and are thus immune from discovery. But that does not follow. The
fact that Professionals Direct reasonably anticipated litigation at this point does not
answer whether it prepared the disputed documents “because of” litigation or not.
Making coverage decisions is part of the ordinary business of insurance and if the
“driving force” behind the preparation of these documents was to assist Professionals
Direct in deciding coverage, then they are not protected by the work-product doctrine.
Roxworthy, 457 F.3d at 595. As the magistrate recognized, whether the documents at
issue here were in fact prepared in anticipation of litigation can only be determined from
an examination of the documents themselves and the context in which they were
prepared. Id.
Here, after examining the disputed documents in camera, the magistrate refused
to compel production of a number of them, either because he found they were prepared
in anticipation of litigation or were not relevant to Wiles’s claim. The magistrate also
ordered a number of documents produced. Based on the descriptions in the magistrate’s
order and Professionals Direct’s privilege log, it appears these documents fall into three
categories: (1) legal memoranda prepared before late August; (2) emails between
Professionals Direct and outside counsel concerning the coverage decision; and
(3) correspondence between employees of Professionals Direct or between Professionals
Direct and its reinsurers regarding the coverage decision.
5
This is consistent with the affidavit Professionals Direct attached to its objections to the
discovery order, which stated that it obtained outside counsel “to provide legal advice and services in
regards to insurance coverage issues and coverage litigation related to the Wiles malpractice claim.”
No. 08-4440 In re Professionals Direct Insurance Co. Page 9
Professionals Direct has not identified any legal error in the magistrate’s
discussion of the federal work-product doctrine. Nor has it shown clear error in the
magistrate’s application of the work-product doctrine to the documents at issue or in the
factual findings on which that application was premised. The magistrate only ordered
Professionals Direct to produce documents he found that were prepared “because of” the
coverage decision rather than anticipated litigation or were prepared prior to the time
Professionals Direct could reasonably anticipate litigation. On its face, this is a
reasonable application of the work-product doctrine, and Professionals Direct has not
produced evidence to make us conclude otherwise. Applying the work-product doctrine
in this context is a difficult, fact-intensive task, and, while aspects of the magistrate’s
order may not be beyond question, Professionals Direct has failed to show that it is
“clearly erroneous as a matter of law.” John B., 531 F.3d at 457.
B. Attorney-Client Privilege
Ohio’s attorney-client privilege is governed by both common law and statute.
Here, the magistrate overseeing discovery held that Ohio’s testimonial privilege statute,
Ohio Rev. Code § 2317.02(A), did not apply, and that the disputed documents were
discoverable under a common law exception to attorney-client privilege for claims
involving allegations of bad faith. Professionals Direct argues that the magistrate
committed clear error in failing to apply Ohio’s testimonial privilege statute, and,
alternatively, that the magistrate committed clear error in its application of Ohio’s
common law of attorney-client privilege. We reject both arguments.
1. Statutory Privilege
Professionals Direct advances two theories why the magistrate committed clear
error in holding that Ohio’s testimonial privilege statute does not apply. First,
Professionals Direct argues that the magistrate clearly erred in holding that § 2317.02(A)
does not apply to documents sought from a party during discovery but to attempts to
compel an attorney to testify either at a deposition or at trial. Second, it argues that the
magistrate ignored the effect of an amendment to § 2317.02(A) that made Ohio’s
testimonial privilege statute applicable to this case.
No. 08-4440 In re Professionals Direct Insurance Co. Page 10
We reject Professionals Direct’s first theory. As the magistrate here recognized,
by its terms § 2317.02(A) applies to attorney testimony, not documents held by
defendants. State ex rel Leslie v. Ohio Hous. Fin. Agency, 824 N.E.2d 990, 996 (Ohio
2005) (“R.C. 2317.02(A), by its very terms, is a mere testimonial privilege precluding
an attorney from testifying about confidential communications.”); Grace v. Mastruserio,
2007 WL 2216080 at *3 (Ohio Ct. App. 2007) (“A plain reading of the statute clearly
limits the statute’s application to cases in which a party is seeking to compel testimony
of an attorney for trial or at a deposition—as opposed to cases where a party is seeking
to compel production of nontestimonial documents.”).6 Because Wiles does not seek to
compel attorney testimony, § 2317.02(A) does not apply.
We also reject Professionals Direct’s claim that the magistrate committed clear
error in disregarding an amendment to § 2317.02.7 This amendment did not become
effective until October 31, 2007, after this suit was filed. Under Ohio law, statutes are
presumed to be prospective in application—i.e. inapplicable to pending cases—absent
express legislative instructions to the contrary. Ohio Rev. Code § 1.48; Bd. of Comm’rs
of Warren County v. City of Lebanon, 540 N.E.2d 242, 244 (Ohio 1989); Van Fossen v.
Babcock & Wilcox Co., 522 N.E.2d 489, 495 (Ohio 1988). Professionals Direct argues
that the amendment to § 2317.02(A) was procedural and thus not subject to Ohio’s clear
statement rule. But under Ohio law, if a statute is not expressly made retroactive in
application, a court “need not, and may not” consider whether it is “procedural” or
6
Jackson v. Greger, 462 N.E.2d 381 (Ohio 2006), which Professionals Direct relies upon, is not
to the contrary. Jackson was a privilege waiver case interpreting the scope of § 2317.02(A). It did not
involve the common law exception to the applicability of § 2317.02(A) that was established in Boone v.
Vanliner, 744 N.E.2d 154 (Ohio 2001). Because § 2317.02 does not apply to Boone claims, Jackson is
not relevant here. Cf. Boone, 744 N.E.2d at 157 (“The flaw in Vanliner’s argument is that McDermott
addresses client waiver of the privilege, whereas Moskovitz sets forth an exception to the privilege and is
therefore unaffected by our holding in McDermott.”).
7
The amendment created § 2317.02(A)(2), which reads: “A person shall not testify in certain
respects: . . . An attorney, concerning a communication made to the attorney by a client in that relationship
or the attorney’s advice to a client, except that if the client is an insurance company, the attorney may be
compelled to testify, subject to an in camera inspection by a court, about communications made by the
client to the attorney or by the attorney to the client that are related to the attorney’s aiding or furthering
an ongoing or future commission of bad faith by the client, if the party seeking disclosure of the
communications has made a prima facie showing of bad faith, fraud, or criminal misconduct by the client.”
The explanatory note to this amendment states: “The common law established in Boone v. Vanliner Ins.
Co. (2001), 91 Ohio St.3d 209, Moskovitz v. Mt. Sinai Med. Ctr. (1994), 69 Ohio St.3d 638, and Peyko v.
Frederick (1986), 25 Ohio St.3d 164, is modified accordingly to provide for judicial review regarding the
privilege.” 2006 Ohio Laws File 198 (Am. Sub. S.B. 117, section 6).
No. 08-4440 In re Professionals Direct Insurance Co. Page 11
“substantive” in nature. Bd. of Comm’rs of Warren County, 540 N.E.2d at 244; see also
Erie Cty. Drug Task Force v. Essian, 610 N.E.2d 1181, 1182 n.2 (Ohio Ct. App. 1992)
(“We are aware of a line of cases which seems to exempt procedural and remedial
statutes from this presumption. Our view is that Van Fossen and Warren Cty. Bd. of
Comm’rs implicitly overrule those cases.”) (citations omitted).
Neither the text of the amendment nor the committee notes accompanying it
expressly makes § 2317.02(A) apply retroactively to pending cases. See S.B. 117, 126th
Gen. Assem., Reg. Sess. (Ohio 2006). Thus, it does not apply in this case and we need
not interpret its scope. Cf. Scotts Co. v. Liberty Mutual Ins. Co., 2007 WL 1500899 at
*3 (S.D. Ohio 2007) (observing that Ohio’s clear statement rule would bar retroactive
application of the amendments to § 2317.02); Amy Thomas, SB 117 Amendments to R.C.
2317.02 Regarding Disclosure of Attorney-Client Communications in Insurer Bad Faith
Litigation—Boone or Bust?, 2 OHIO TORT L.J. 119 (2008) (“Based on the plain
language of R.C. 2317.02(A)(2) as amended by SB 117, the SB 117 amendments will
only apply prospectively.”). Accordingly, we reject Professionals Direct’s claim that the
magistrate committed clear error in ruling that § 2317.02(A) does not apply.
2. Common Law Privilege
In Boone v. Vanliner, 744 N.E.2d 154 (Ohio 2001), the Ohio Supreme Court
established a common law exception to Ohio’s attorney-client privilege in cases
involving allegations that an insurer denied an insured’s claim in bad faith. Boone
involved a suit by a truck driver against his commercial vehicle liability insurer after the
insurer denied coverage for injuries he sustained in an accident. The plaintiff alleged
that his insurer had denied coverage in bad faith and sought to discover the contents of
his insurer’s claims file to support his claim. His insurer refused to turn over a number
of documents in the file, arguing they were either protected by attorney-client privilege
or were non-discoverable attorney work product. After an in camera inspection of the
documents, the trial court ordered the insurer to produce a number of them. Id. at 156.
Vanliner appealed to the Ohio Court of Appeals, which reversed in part, and then
appealed to the Ohio Supreme Court. Reasoning that “claims files materials that show
No. 08-4440 In re Professionals Direct Insurance Co. Page 12
an insurer’s lack of good faith in denying coverage are unworthy of protection,” the Ohio
Supreme Court held that the attorney-client privilege did not apply to documents
containing evidence of bad faith on the part of an insurer. Id. at 158. It then ordered
Vanliner to produce all claims file materials “related to the issue of coverage that were
created prior to the denial of coverage.” Id.
Here, the magistrate took the position that under Boone his duty was simply to
identify when Professionals Direct denied coverage for the Illinois National claim, as
this would enable him to identify which documents “related to the issue of coverage that
were created prior to the denial of coverage.” Id. Because Professionals Direct elected
to defend Wiles under a reservation of rights and litigate the coverage issue instead of
simply deny coverage, there was no coverage denial date. The magistrate took a
practical approach to this issue, asking at what point Professionals Direct decided it
would not cover the Illinois National claim. He selected March 23, 2006 as his
“constructive denial date” because this was the day Professionals Direct informed Wiles
that it was going to seek a declaratory judgment that the Illinois National claim was not
covered. He then ordered Professionals Direct to produce all claims file documents that
were produced prior to that date.
Professionals Direct argues that the magistrate committed clear error by failing
to analyze each of the disputed documents individually to determine whether they
contained evidence of bad faith and were thus “unworthy of protection.” Boone, 744
N.E.2d at 158. But Ohio courts have read Boone more broadly than Professionals Direct
claims. The leading Ohio Court of Appeals case, Garg v. State Auto. Mut. Ins. Co., 800
N.E.2d 757 (Ohio Ct. App. 2003), read Boone to require the disclosure of all documents
that “may cast light” on whether the insurer acted in bad faith. Id. at 763 (emphasis
added); see also Boone, 744 N.E.2d at 156 (“The issue before us is whether, in an action
alleging bad faith denial of insurance coverage, the insured is entitled to obtain, through
discovery, claims file documents containing attorney-client communications and work
product that may cast light on whether the denial was made in bad faith.”) (emphasis
added).
No. 08-4440 In re Professionals Direct Insurance Co. Page 13
This, we believe, is a reasonable application of Boone. Indeed, Professionals
Direct’s objections to the magistrate’s discovery order echo those of the dissent in
Boone: “The majority’s holding is also startling for its practical effect. After today’s
decision, an insured need only allege the insurer’s bad faith in the complaint in order to
discover communications between the insurer and the insurer’s attorney.” Boone, 744
N.E.2d at 160 (Cook, J., dissenting) (emphasis in original). So, while Professionals
Direct is correct to point out that some Ohio courts have applied Boone more narrowly,
this is insufficient to show that the magistrate’s application of Boone was “clearly
erroneous as a matter of law.”8 John B., 531 F.3d at 457.
V.
As Professionals Direct appears to recognize, neither of the two remaining
factors in the five- factor test applies with much force here. This case involves the
application of two relatively well-developed areas of law to a discovery dispute between
private parties; it does not involve “new and important problems” or “legal issues of first
impression.” John B., 531 F.3d at 457. And, as discussed above, the discovery order
does not contain a clear error, let alone show a “persistent disregard of the federal rules.”
Id.
VI.
Having failed to show that any of the merits factors in the five-factor test weigh
in its favor, Professionals Direct has not demonstrated that it is “clear[ly] and
indisputabl[y]” entitled to a writ of mandamus, Cheney, 542 U.S. at 381, and we need
not address whether relief is “appropriate under the circumstances.” Id. Accordingly, we
DENY Professionals Direct’s petition for a writ of mandamus.
8
To the extent Professionals Direct challenges the magistrate’s use of a constructive denial date,
we do not think this was clear error. An outright denial of a claim is not required in order to obtain
discovery under Boone. See, e.g., Mundy v. Roy, 2006 WL 522380 at *4, *5 n.7 (Ohio Ct. App. 2006).
And the gravamen of Wiles’s complaint is that Professionals Direct injured it by refusing to pay its claim
in bad faith. It speaks, for example, of “Professionals Direct’s wrongful decision to deny coverage,” and
the relief it seeks is malpractice coverage for the Illinois National claim and all damages and costs relating
to Professionals Direct’s refusal to provide malpractice insurance. Accordingly, it was reasonable for the
magistrate to grant Wiles discovery up to the date upon which he found that Professionals Direct made its
coverage decision.