Phillips v. Vesuvius USA Corp. , 2020 Ohio 3285 ( 2020 )

[Cite as Phillips v. Vesuvius USA Corp., 2020-Ohio-3285.]
COURT OF APPEALS OF OHIO
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
ROYSTON PHILLIPS, ;
Plaintiff-Appellee, :
No. 108888
v. :
VESUVIUS USA CORPORATION, :
ET AL.,
Defendants-Appellants. :
JOURNAL ENTRY AND OPINION
JUDGMENT: AFFIRMED IN PART, MODIFIED IN PART,
AND REMANDED
RELEASED AND JOURNALIZED: June 11, 2020
Civil Appeal from the Cuyahoga County Court of Common Pleas
Case No. CV-18-904574
Appearances:
McCarthy, Lebit, Crystal & Liffman Co., L.P.A., Ann-
Marie Ahern, and John E. Moran, for appellee.
Jackson Lewis, P.C., Marla N. Presley, and Sabrina
Brown; Kirkpatrick, Townsend & Stockton, L.L.P., and
Adam H. Charnes, for appellants.
KATHLEEN ANN KEOUGH, J.:
Defendants-appellants, Vesuvius U.S.A. Corporation (“Vesuvius”)
and Christopher Young (collectively “appellants”), appeal from the trial court’s
decision that granted the motion to compel discovery filed by plaintiff-appellee,
Royston Phillips (“Phillips”). For the reasons that follow, we affirm, but modify the
trial court’s decision by ordering that the trial court conduct an in camera inspection
of the personnel files and redact those documents contained therein that would be
deemed irrelevant or confidential under the law.
Phillips worked for Vesuvius and its predecessor entity for nearly 40
years before he was terminated. In 2018, Phillips filed a complaint against
appellants alleging various causes of action including claims of age discrimination
and retaliation. In December 2018, Phillips served appellants with his first set of
interrogatories, requests for production of documents, and requests for admissions.
Relevant to this appeal, those requests sought the personnel records of seven
individuals purportedly relevant to the Phillips’s claims. See Request for Production
of Documents No. 10.
In May 2019, Phillips filed a motion to compel discovery after
appellants objected to the requested discovery information. Specific to the issue on
appeal, appellants objected because (1) the personnel files are not relevant nor likely
to lead to the discovery of admissible evidence; (2) appellants do not have
possession, custody, or control over the requested personnel files; and (3) the
European Union’s (“EU”) General Data Protection Regulation (“GDPR”) and other
foreign laws preclude the production of these files. See Phillips’s Motion to Compel,
filed May 16, 2019.
In their brief in opposition, appellants contended that the production
of the requested documents and information is prohibited by the GDPR and cannot
be produced without the consent of the individuals whose personnel files were
requested. Appellants maintained that they were willing to provide relevant
information regarding the requested employees, but only if Phillips “agree[d] to a
protective order regarding the use and dissemination of said information and
agree[d] to indemnify [appellants] should any levies or fines be assessed against
them for producing the information.” See Appellants’ Brief in Opposition to the
Motion to Compel, filed May 23, 2019. Phillips agreed to a protective order, but not
indemnification.
The trial court granted Phillips’s motion to compel, ordering
Plaintiff’s motion to compel discovery * * * is granted. Defendants shall
provide responses to all outstanding discovery requests by 8/12/2019.
Court declines to award attorneys [sic] fees at this time.
Appellants now appeal, raising two assignments
I. Final Appealable Order
As an initial matter, Phillips contends that the order from which
appellants appeal is not final or appealable and thus, this court does not have
jurisdiction to consider the appeal.
Appellate courts can only “review and affirm, modify, or reverse
judgments or final orders.” Ohio Constitution, Article IV, Section 3(B)(2). Before
this court can exercise jurisdiction over an appeal, the order of the lower court must
meet the finality requirements of R.C. 2505.02. CitiMortgage, Inc. v. Roznowski,
139 Ohio St. 3d 299, 2014-Ohio-1984, 11 N.E.3d 1140, ¶ 10. Appellants contend that
the order in this case is final under R.C. 2505.02(B)(4).
Pursuant to R.C. 2505.02(B)(4), an order that grants or denies a
provisional remedy is a final order if (a) “[t]he order in effect determines the action
with respect to the provisional remedy and prevents a judgment in the action in
favor of the appealing party with respect to the provisional remedy,” and (b) “[t]he
appealing party would not be afforded a meaningful or effective remedy by an appeal
following final judgment as to all proceedings, issues, claims, and parties in the
action.”
Discovery orders are generally interlocutory orders that are neither
final nor appealable. Walters v. Enrichment Ctr. of Wishing Well, Inc., 78 Ohio
St.3d 118, 120-121, 676 N.E.2d 890 (1997). But a proceeding for discovery of a
privileged matter is a “provisional remedy” within the meaning of R.C.
2505.02(A)(3). Smith v. Chen, 141 Ohio St. 3d 1461, 2015-Ohio-370, 24 N.E.3d 1180,
¶ 5. The protection against discovery of matters identified as “privileged” in Civ.R.
26(B)(1) is limited to privileges derived from a specific constitutional or statutory
provision. State ex rel. Grandview Hosp. & Med. Ctr. v. Gorman, 51 Ohio St. 3d 94,
95, 554 N.E.2d 1297 (1990), citing In re Story, 159 Ohio St. 144, 147, 111 N.E.2d 385
(1953). The Ohio Supreme Court has recognized, however, that “other discovery
protections that do not involve common-law, constitutional, or statutory guarantees
of confidentiality * * * may require a showing under R.C. 2505.02(B)(4)(b) beyond
the mere statement that the matter is privileged.” Burnham v. Cleveland Clinic, 151
Ohio St. 3d 356, 2016-Ohio-8000, 89 N.E.3d 536. ¶ 2.
Phillips contends that appellants have failed to withstand their
burden of demonstrating that the personnel files are privileged, thus satisfying R.C.
2505.02(B)(4)(a) that the order involves a provisional remedy. Phillips relies on
appellants’ praecipe, claiming that it is a “mere statement” and does not provide any
information or evidence to support a finding that the requested discovery falls under
the GDPR or that the production of such information violates the GDPR. Appellants’
praecipe provides:
This case falls under R.C. 2505.02(B)(4) as the trial court’s granting of
[Phillips’s] motion to compel in effect determines the action with
respect to the production of the personnel files at issue and prevents a
judgment in Appellants’ favor on this issue. Appellants would not be
afforded a meaningful or effective remedy by an appeal following final
judgment as Appellants’ production of these files violates European law
and carries high potential fines against [Appellants] for unlawful
production.
However, a party is not required to conclusively prove the existence
of privileged matters as a precondition to appellate review under R.C.
2505.02(B)(4). Byrd v. U.S. Xpress, Inc., 2014-Ohio-5733, 26 N.E.3d 858, ¶ 12 (1st
Dist.). “To impose such a requirement would force an appellate court ‘to decide the
merits of an appeal in order to decide whether it has the power to hear and decide
the merits of an appeal.’” Id., quoting Bennett v. Martin, 186 Ohio App. 3d 412,
2009-Ohio-6195, 928 N.E.2d 763, ¶ 35 (10th Dist.). Instead, a party need only make
a “colorable claim” that materials subject to discovery are privileged in order to
qualify as a provisional remedy. Id.; see also Burnham at ¶ 3, 29 (defendant
“plausibly alleged” and made a “colorable claim” that the incident report was
governed by the attorney-client privilege thus satisfying its burden that the report
contains privilege information).
In this case, we find that because appellants make a colorable claim
that at least some of the information for which they seek protection is privileged or
contains confidential information, the order qualifies as a provisional remedy.
Next, we must consider whether the order determines the action with
respect to the provisional remedy and prevents a judgment in favor of appellants
regarding the provisional remedy. See R.C. 2505.02(B)(4)(a). In its response to
Phillips’s motion to compel, appellants claimed that they should not be ordered to
produce personnel files of European citizens because the files contained confidential
information whose release would violate the GDPR. Because the effect of the trial
court’s order is that confidential or protected information will be disclosed, the order
has determined the action with respect to the provisional remedy. “Any order
compelling the production of privileged or protected materials certainly satisfies
R.C. 2505.02(B)(4)(a) because it would be impossible to later obtain a judgment
denying the motion to compel disclosure if the party has already disclosed the
materials.” Burnham, 151 Ohio St. 3d 356, 2016-Ohio-8000, 89 N.E.3d 536, at ¶ 21.
Although we recognize that the trial court did not explain why it was
granting the motion to compel or why the documents were not privileged, we can
glean from the record that the asserted protections under the GDPR were rejected
because this was the only discovery privilege protection appellants sought. See
Burnham at ¶ 27 (recognizing that although the trial court’s order did not
specifically state why it was compelling the production of the report, the Supreme
Court was able to determine from the briefing “that the attorney-client privilege had
been rejected and that it was the only remaining discovery protection being
sought”). Ideally, “a trial court should explain why a motion to compel production
has been granted. In that way, a reviewing court can determine the pertinent issues
and whether the requirements of R.C. 2505.02(B)(4)(a) and (b) are satisfied.” Id. at
¶ 28.
Finally, we must consider whether appellants would be able to obtain
meaningful relief by an appeal following the entry of final judgment. See R.C.
2505.02(B)(4)(b). Appellants seek to prevent the disclosure of alleged privileged
and protected information. Because the trial court’s order compels the production
of material allegedly protected under a foreign law that may contain confidential and
otherwise undiscoverable information, the order satisfies R.C. 2505.02(B)(4)(b)
because there is no effective remedy other than an immediate appeal. Burnham at
¶ 25.
Accordingly, we find the trial court’s order is final and appealable but
only insofar as it implicitly determined that the personnel files were not privileged
or that they did not breach a protected interest in confidentiality. We decline to
address appellants’ argument that this court should exercise pendent jurisdiction
over its additional objection that it does not have “possession, custody or control”
over the requested documents. That justification would not be grounds to make an
otherwise interlocutory appeal immediately appealable under R.C. 2505.02(B)(4).
Accordingly, we summarily disregard appellants’ first assignment of error, which
contends that the trial court improperly granted Phillips’s motion to compel because
the information “is not within Vesuvius’s custody and control.” This appeal is
limited to the privileged nature of those personnel files.
II. Motion to Compel
In their second assignment of error, appellants contend that “the trial
court’s decision improperly granted Phillips’s motion to compel the production of
six European citizens’ personnel files and residential addresses without any
safeguards in place.” They frame the issue as:
The trial court granted Phillips’ motion to compel the production of six
European citizens’ personnel files and residential addresses without
any safeguards in place, despite the fact that the discovery requests are
overbroad, seek largely irrelevant information, and would require
[appellants] and members of its group to violate the European citizens’
privacy rights, the European Union’s (“EU’s”) General Data Protection
Regulation (“GDPR”), and national legislation in the EU countries at
issue, exposing them to high fines, other enforcement measures,
and/or civil litigation, notwithstanding the availability of alternative
methods for requesting European documents and information in
discovery under Chapter II of the Hague Convention.
Ordinarily, a discovery dispute is reviewed under an abuse-of-
discretion standard. Tracy v. Merrell Dow Pharmaceuticals, Inc., 58 Ohio St. 3d
147, 151-152, 569 N.E.2d 875 (1991). However, whether the information sought in
discovery is confidential and privileged “is a question of law that is reviewed de
novo.” Burnham v. Cleveland Clinic, 2017-Ohio-1277, 88 N.E.3d 523, ¶ 8 (8th
Dist.), citing Castlebrook, Ltd. v. Dayton Properties Ltd. Partnership, 78 Ohio
App.3d 340, 604 N.E.2d 808 (2d Dist.1992); Med. Mut. of Ohio v. Schlotterer, 122
Ohio St. 3d 181, 2009-Ohio-2496, 909 N.E.2d 1237, ¶ 13.
The GDPR concerns the data protection and privacy of all EU citizens
and regulates the transfer of EU citizens’ personal data outside of EU member states,
such as the transfer to the U.S. In re Mercedes-Benz Emissions Litigation, D.N.J.
Civil Action No. 16-cv-881 (KM) (ESK), 2020 U.S. Dist. LEXIS 15967, 5 (Jan. 30,
2020). The GDPR broadly defines personal data as “any information relating to an
identified or identifiable natural person.” Id., quoting GDPR Article 4(1). “This
broad definition of personal data inherently includes information like an
individual’s name and job title, information that is generally considered benign in
U.S. litigation and * * * produced in discovery pursuant to the [rules of civil
procedure].” Id.
In a recent decision in the Northern District of California, the court
concluded that the GDRP will not act as an absolute bar to domestic discovery.
Finjan, Inc. v. Zscaler, Inc., N.D.Cal. No. 17-cv-06946-JST (KAW), 2019 U.S. Dist.
LEXIS 24570, (Feb. 14, 2019). “In general, a foreign country’s statute precluding
disclosure of evidence ‘do[es] not deprive an American court of the power to order a
party subject to its jurisdiction to produce evidence even though the act of
production may violate that statute.’” Finjan at 3, quoting Societe Nationale
Industrielle Aerospatiale v. United States Dist. Court for S. Dist., 482 U.S. 522, 544,
107 S. Ct. 2542, 96 L. Ed. 2d 461 (1987), fn. 29. Aerospatiale endorsed the balancing
test contained in the Restatement of the Law 3d, Foreign Relations Law, Section
442(1)(c)(1987) in determining whether the foreign statute excuses noncompliance
with the discovery order. Richmark Corp. v. Timber Falling Consultants, 959 F.2d
1468, 1475 (9th Cir.1992); see also EnQuip Technologies Group, Inc. v. Tycon
Technoglass, S.R.L., 2d Dist. Greene Nos. 2009 CA 42 and 2009 CA 47, 2010-Ohio-
28, ¶ 88. Courts should consider:
(1) the importance of the documents or other information requested to
the litigation; (2) the degree of specificity of the request; (3) whether
the information originated in the United States; (4) the availability of
alternative means of securing the information; and (5) the extent to
which noncompliance would undermine important interests of the
United States.
Finjan at 3, citing Richmark Corp, at 1475. These factors are not exclusive; courts
may also consider “the extent and the nature of the hardship that inconsistent
enforcement would impose upon the person,” as well as “the extent to which
enforcement by action of either state can reasonably be expected to achieve
compliance with the rule prescribed by the state.” Id.
As a threshold matter, in determining whether the compelled
discovery at issue is protected from disclosure under the GDPR, the party relying on
foreign law has the burden of showing such law bars production. Phoenix Process
Equip. Co. v. Capital Equip. & Trading Corp., W.D. Ky No. 16CV-00024, 2019 U.S.
Dist. LEXIS 44390, 30 (Mar. 18, 2019).
Assuming without deciding that the personnel files and its contents
fall would under the GDPR, we find that the factors weigh in favor disclosure.1 The
first factor — the importance of the documents or other information requested to
the litigation — weighs in favor of discovery. Personnel records are basic discovery
in employment-related cases. Accordingly, they are relevant and pertain to
Phillips’s claims of age discrimination and retaliation.
The second factor, the degree of specificity of the request, also weighs
in favor of disclosure. Phillips’s request seeks the personnel records of only seven
individuals related to Phillips’s employment and termination with Vesuvius. This
request is not overbroad.
The third factor — whether the information originated in the United
States — is unclear from the record. Although Phillips contends that it is likely that
some of the information contained in the personnel files originated in the United
States, appellants claim that because the personnel files are those of current and
former executives of Vesuvius’s affiliates in the United Kingdom, Belgium, and the
Netherlands, the records originated and are maintained outside of the United States.
This factor does not weigh in any party’s favor because the record is insufficient for
this court to make such determination.
1We note that courts throughout the United States, including a state court in Ohio, have
repeatedly balanced the Aerospatiale factors in favor of discovery production when
deciding whether foreign laws inhibit discovery in cases originating in the United States.
See, e.g., Finjan; Phoenix Process; EnQuip Techs. Group (discussing Directive 95/46/EC
of the European Parliament and of the Council of 24 October 1995).
With respect to the fourth factor — the availability of alternative
means of securing the information — Phillips maintains that it has no other means
of obtaining this information whereas appellants claim that Phillips can seek
production through the procedures set forth under Chapter II of the Hague
Convention. Based on the record before this court, requiring Phillips to undergo
another avenue of seeking the requested documents, which have been requested for
over a year, is not a viable alternative to the liberal discovery rules of Civ.R. 26.
Accordingly, this factor weighs in favor of discovery.
Finally, the fifth factor — the extent to which noncompliance would
undermine important interests of the United States — weighs in favor of discovery.
Ohio has a clear public policy prohibiting age discrimination and unlawful
retaliation, and the information contained in the personnel files, e.g., location
information of witnesses, is essentially a mandated disclosure under Civ.R. 26.
Moreover, and much like in Finjan, appellants have failed to produce
evidence that the disclosure of the personnel files would lead to hardship or an
enforcement action from an EU data protection supervisory authority for breach of
the GDPR. See Finjan at 10. Accordingly, after reviewing the factors, we find they
weigh in favor of discovery production.
Notwithstanding our conclusion, this court recognizes that
documentation and information contained in the personnel files may exist that
would otherwise be undiscoverable as irrelevant or confidential. See Dubson v.
Montefiore Homes, 8th Dist. Cuyahoga No. 97104, 2012-Ohio-2384, ¶ 20-21;
Howell v. Park E. Care & Rehab., 8th Dist. Cuyahoga No. 106041, 2018-Ohio-2054,
¶ 34-36 (personnel files may contain confidential information; redaction is the
proper remedy).
III. Conclusion
Accordingly, we find that the trial court did not abuse its discretion in
granting Phillips’s motion to compel. However, we find that the trial court should
have conducted an in camera inspection to review whether any of the information
contained in the files is irrelevant and confidential material that would be otherwise
undiscoverable. The assignment of error is therefore sustained, in part.
Judgment affirmed in part, modified in part, and remanded. The trial
court is ordered to conduct an in camera review of the personnel files and redact
those documents that would be deemed confidential or otherwise undiscoverable
under the law.
It is ordered that parties share equally in the costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to said court to carry this judgment
into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27
of the Rules of Appellate Procedure.
KATHLEEN ANN KEOUGH, JUDGE
EILEEN T. GALLAGHER, A.J., and
MARY EILEEN KILBANE, J., CONCUR