United States District Court, D. Maryland
RICHARD DICKMAN, et al. Plaintiffs,
BANNER LIFE INSURANCE COMPANY Defendant.
Copperthnte United States Magistrate Judge.
case was referred to me for all discovery (ECF 75) on May 16,
2017. On August 28, 2017, Plaintiff filed a motion to compel
discovery (ECF 92). On August 29, 2017, Defendant filed a
motion to compel discovery (ECF 108). On September 5. 2017,
Plaintiff requested a hearing on the combined motions (ECF
111). Those motions are now ripe for review. The matter has
been fully briefed and no hearing is necessary. Local Rule
105.6. Therefore, the Plaintiffs' motion for a hearing is
parties have each spent a considerable amount of time and
expense in this discovery dispute. There is. however, a
consistent underlying theme to each objection set forth in
the opposing Motions to Compel. Plaintiffs allege Defendant
has not provided information beyond the subject policies
which Plaintiffs believe is discoverable. Defendant responds
that not only is that information not relevant and overly
burdensome to produce, but specific requests are also
protected by a Maryland statutory privilege. Flipping to the
other side. Defendant alleges Plaintiffs have failed to
respond to both interrogatories and document production,
alleging Plaintiffs have given pro forma responses and relied
improperly on other sources to provide inadequate responses
to Defendant's requests. Fortunately for both parties.
Judge Bennett has suspended the discovery deadlines upon
resolution of these disputes.
of the Case
are represented in their individual capacity and as potential
class representatives in the remaining contracts and fraud
claim against Defendant (ECF 1. 55, 56, 57, 59, 73).
Plaintiffs purchased universal life insurance policies from
Defendant in 2002 (Complaint at p. 4). The policies purchased
provided a $300, 000.00 death benefit and no lapse guarantee,
provided the policyholder continued to pay the monthly
premium. Banner is a Maryland life insurance company located
in Frederick, Maryland (Id. at 5). A detailed
allegation of facts is contained at pp. 5- 9 of the
Complaint. In a nutshell. Plaintiffs allege that Banner was
engaged in an elaborate scheme in order to pay their
stockholders and corporate officers huge dividends over a
period of years. The scheme consisted of shifting debt to a
number of alleged reinsurers located either offshore or in
states with weak state oversight, thus showing the Maryland
Insurance Agency ("MIA") a surplus of Banner funds
with which to pay the huge dividends. Plaintiffs further
allege that Banner consistently raised the cost of insurance
("COI") to its policy holders to force them to
surrender their policies. Plaintiffs allege that this
"hide the ball" game was designed and carried out
to pay its shareholders huge dividends and to hide
Banner's questionable solvency.
general rule. Federal Rule 26(b) provides general provisions
regarding the scope of discovery:
Parties may obtain discovery regarding any nonprivileged
matter that is relevant to any party's claim or defense
and proportional to the needs of the case, considering the
importance of the issues at stake in the action, the amount
in controversy, the parties' relative access to relevant
information, the parties' resources, the importance of
the discovery in resolving the issues, and whether the burden
or expense of the proposed discovery outweighs its likely
benefit. Information within this scope of discovery need not
be admissible in evidence to be discoverable. Fed.R.Civ.P.
rules are to be accorded broad and liberal construction.
See Herbert v. Lando, 441 U.S. 153, 177 (1979);
Hickman v. Taylor, 329 U.S. 495, 507 (1947).
Nevertheless, a court may "issue an order to protect a
party or person from annoyance, embarrassment, oppression, or
undue burden or expense ...."Fed. R. Civ. P. 26(c)(1).
Protective orders pursuant to Rule 26(c) "should be
sparingly used and cautiously granted." Medlin v.
Andrew, 113 F.R.D. 650, 652 (M.D. N.C. 1987).
"Normally, in determining good cause, a court will
balance the interest of a party in obtaining the information
versus the interest of his opponent in keeping the
information confidential or in not requiring its
production." UAI Tech., Inc. v. Valulech, Inc.,
122 F.R.D. 188, 191 (M.D. N.C. 1988) (citation omitted).
balancing discovery disputes, the Court is guided by
Fed.R.Civ.P. 26(b)(1) and pursuant to Appendix A, Guideline 1
of the Local Rules, the requirement "to facilitate the
just, speedy and inexpensive conduct of discovery, in light
of what is relevant to any party's claim or defense;
proportional to what is at issue in a case and not
excessively burdensome or expensive compared to the likely
benefit of obtaining the discovery being sought." Local
Rules, Appendix A, Guideline 1. The Court agrees with
Defendant in its response that Plaintiffs cite to the prior
Fed.R.Civ.P. 26 incorrectly in their argument. It is no
longer valid to argue a party is entitled to discovery that
may lead to discoverable information. Importantly here, the
2015 Amendment restores proportionality as an express
component of discovery and deletes the former provision
authorizing the Court to order discovery of any matter
relevant to the subject matter involved in the action.
to resolving any discovery dispute is determining whether the
information sought is within the permissible scope of
discovery, as stated in Fed.R.Civ.P. 26(b)(1). Lynn v.
Monarch Recovery Management. Inc.,285 F.R.D. 350, 355
(D.Md. 2012). Federal Rule of Civil Procedure 26(b)(2)(C)
"cautions that all permissible discovery must be
measured against the yardstick of proportionality."
Victor Stanley, Inc. v. Creative Pipe, Inc., 269
F.R.D. 497, 523 (D.Md.2010). Under that rule, the court,
acting sua sponte or at a party's request,
"must limit the frequency or extent of discovery"
if: (i) "the discovery sought is unreasonably cumulative
or duplicative, or can be obtained from some other source
that is more convenient, less burdensome, or less
expensive"; (ii) "the party seeking discovery has
had ample opportunity to obtain the information by discovery
in the action"; or (iii) "the burden or expense of
the proposed discovery outweighs its likely benefit,
considering the needs of ...