McGovern arose out of a companion case in which the Hospital Service Association, which did business as Blue Cross of Northeastern Pennsylvania, was also a defendant. That case settled in 1997.
But a class action was filed that same year in which Harold McGovern and others who solicited applications for insurance on Blue Cross’ behalf accused Blue Cross of breach of contract. On May 31, 2000, McGovern served Blue Cross with its first set of interrogatories and a discovery request.
Blue Cross had 30 days to respond, and it made no requests for time extensions. Thirty five days later, the insurer sent a letter to McGovern stating that the discovery responses would be forthcoming, according to the opinion.
McGovern responded in writing, telling Blue Cross that it had waived the right to object to any discovery requests in the future because it missed the 30-day deadline outlined in Pennsylvania Rules of Civil Procedure 4006 and 4009.12.
Blue Cross responded with its discovery responses approximately 14 days after the deadline, on July 13. The response contained a “stipulation and protective order of confidentiality” that Blue Cross requested McGovern to sign and return before it would produce documents.
Blue Cross said it could not turn over information that was covered by attorney-client privilege. McGovern and the other plaintiffs took the position that all objections to discovery had been waived, and they filed a motion to compel production.
In November 2000, after briefs were submitted and a hearing was conducted, the trial court ordered Blue Cross to answer all interrogatories and to submit all discovery documents requested by McGovern. Blue Cross appealed.
Waiver and Sanctions
The Superior Court majority said it found only one case on point, a 1969 plurality decision from the state Supreme Court. Hester said Nissley v. Pennsylvania Railroad Co., 259 A.2d 451 (Pa. 1969), “appeared to stand for the proposition” that a failure to file objections within deadlines set by the Rules of Civil Procedure would waive any right to object in the future, even to privileged materials.
Hester pointed out that several common pleas decisions on the issue of waiver have had inconsistent results.
Why the trial court ordered Blue Cross to submit to an unfettered discovery request by the plaintiffs was a puzzle to the Superior Court panel, which was “unable to discern” the lower court’s rationale, even after “a careful and thorough review of the record,” said Hester.
According to Pennsylvania Rule of Civil Procedure 4019, a court may “make an appropriate order” if a party “fails to make discovery or to obey an order of court respecting discovery.” Just how the court fashions that order is left to its discretion.
Here, it was clear the trial court had abused that discretion, the court said.
“The imposition of sanctions always is subject to a balancing test and a weighing of various factors,” wrote Hester. “As we stated [previously], it is clear that in the exercise of judicial discretion … the court is required to select a punishment which fits the crime.”
Most sanctions are imposed after one or more court orders have been violated, the majority said. “As a general rule, we will not consider a discovery delay of 14 days to warrant a severe sanction.”
The panel said that consideration of sanctions should always include the nature and severity of the discovery violation, the defaulting party’s willfulness or bad faith, prejudice to the opposing party and the ability to cure the prejudice.
Although some cases have used the “draconian” sanction of dismissal, the majority said there are sanctions available to a court that are less severe than compelling discovery, such as issuing a court order setting a new fixed deadline, imposing fines or awarding attorney fees to the inconvenienced party.
“There is no indication that the [trial] court herein considered these less restrictive sanctions, since, as noted, it didn’t submit an opinion,” Hester wrote.
In the end, the court agreed with Blue Cross that a moderate approach should be taken.
“[Blue Cross argues'] that instead of ordering a carte blanche turnover of all requested documents and requested information, including privileged material, the court instead should have considered and focused on a variety of factors such as the nature of the violation, the length of the delay and its reasons, any prejudice that may have resulted from the delay, and whether the prejudice can be cured. We find merit in this approach,” Hester wrote.
“One of the reasons this approach is advisable is because the materials being sought herein allegedly are protected by the attorney-client relationship.”
In applying these factors, the panel concluded the length of delay in filing objections here was “minimal” and that there was no prejudice to the opposing party.
“While it remains to be seen if indeed the underlying materials fall under the protection of the attorney-client privilege, the trial court must at the very least conduct an in camera inspection of the documents to determine this contention,” the court said.
The court reversed the trial court’s order and remanded the case “to consider the proper test in light of this adjudication and to determine what sanctions, if any, may be appropriate.”
