State Farm has secrets – but not for long!

Coast attorney Deborah Trotter is at it again – and this time she’s challenging “secrets” by number in her Response to the whisper-in-your-ear Motion for Protective Order the great nuzzler Scot Spragins filed  Lizana v State Farm!

Defendant identifies 46 documents in its privilege log that it claims qualifies for protection as trade secrets. However, the description of those 46 documents is vague and general. Defendant cannot meet its burden to make a “specific showing” that the document or information withheld qualifies for protection by beginning each description with the word “Specific.”

The Privilege Log from State Farms motion and excerpts from Lizana’s Opposition citing igascullen1specific items by number with reference to related Rules and/or Code Sections cited in the Response (also by number!) follows — all supporting Trotter’s contentions:

The Uniform Local Rule 26.1(A)(1)(c) requires that “a party withholding information claimed privileged or otherwise protected shall submit a privilege log that contains at least the following information: name of the document; description of the document; date; author(s); recipient(s); and nature of the privilege. To withhold materials without such notice subjects the withholding party to sanctions under FED. R. CIV. P. 37 and may be viewed as a waiver of the privilege or protection.”

Defendant lists only three of those categories in its privilege log: 1) Document, 2) Description, and 3) Privilege. Defendant identifies 46 documents in its privilege log that it claims qualifies for protection as trade secrets. However, the description of those 46 documents is vague and general. Defendant cannot meet its burden to make a “specific showing” that the document or information withheld qualifies for protection by beginning each description with the word “Specific.”

Pages from Lizana sf motion for protective order

Pages from Lizana sf motion for protective order-2

Pages from Lizana sf motion for protective order-3

Pages from Lizana sf motion for protective order-4

The Mississippi Code Annotated sets forth the elements to determine whether information, including a formula, pattern, compilation, program, device, method, technique or process is considered a “trade secret” under Mississippi law. As used in this chapter, unless the context requires otherwise: (Miss. Code Ann. 75-26-3 Definitions)

(d) “Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique or process, that:

(i) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and

(ii) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

Trotter begins with item number listed third on the Privilege Log:

Defendant seeks to obtain a blanket protective order for 46 documents allegedly containing trade secret information. Defendant lists these 46 documents which it believes are responsive to Plaintiff’s requests in its privileged log1 accompanied by non-specific, vague and general descriptions.

entry number three on Defendant’s privilege log lists the document “Catastrophe Certification Flood Study Guides.” The description for this entry is “Specific Instructions/Training Related to Handling of Flood Claims.” The privilege claimed is “Trade Secret.” Without the other Local Rule 26.1(A)(1)(c) required categories of date, author, and recipient, it cannot be determined whether the alleged claim of trade secret is legitimate. If the author of the document is FEMA and this is a document disseminated through the National Flood Insurance Program, then Defendant has no claim of privilege based upon trade secret. Without the required information, neither the Court, nor Plaintiff can determine whether there is a legitimate claim for protection of trade secret.

Also, entry number 44, lists the document “Depreciation Guide, Printed 01/12/2006.” The description of this document is “Specific Materials Related to Adjuster Training.” The privilege claimed is “Trade Secret.” Here too, without the authorship and recipients, it is unknown whether this is a guide created by Defendant for its sole use or wide dissemination, or a guide created by an entity in the construction or insurance industry. Without this required information, neither the Court, nor Plaintiff can determine whether there is a legitimate claim for protection of trade secret.

Further, entry number 45 lists “Lansing Vargo’s Working File Related to Hurricane Katrina.” The description is “Specific Issues Related to Handling of Hurricane Claims.” Again, Plaintiff, or the Court for that matter, is left without sufficient information to determine whether the alleged document(s) withheld qualify as trade secret information, which should be protected. Further, it is unclear whether these “Issues” contain more than one document, or whether Defendant’s blanket proposed protective order would also possibly seal information, such as reports, files, communications, and other relevant, discoverable, non-privileged, and non-protected material, as having been derived from, or possibly containing information from within these “Issues.”

Before citing the relevant section of the Mississippi Code, Trotter acknowledged the governing Rule:

The Federal Rules of Civil Procedure 26 (c) governs the Protective Orders in this case and states in pertinent part that “upon a motion by a party or by the person from whom discovery is sought….and for good cause shown….the court….may make any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including one or more of the following: ….

(G) that a trade secret or other confidential research, development, or commercial information not be revealed or be revealed only in a designated way….”

There are numerous cases interpreting this language of the Federal Rules of Civil Procedure. Uniformly, courts hold that protective orders should be granted only if the moving party first establishes that specific information to be covered by the order falls within protected categories and then demonstrates that disclosure will be harmful…(citations omitted by SLABBED)

Last, the powerful summary moves from legal rules to legal scholars:

A number of legal scholars have recognized that the true motivation behind the tactics utilized by large defendants, in seeking to cloak information with the robe of secrecy, is to deny the plaintiff the benefit of coordinating discovery efforts, and to otherwise prevent the disclosure of potentially embarrassing internal information:

“Frivolous claims of confidentiality have been asserted to cause delay and disruption, to drive up discovery expenses, and make it difficult for opposing counsels to simply understand the information being sought.” Martin I. Kaminsky, Proposed Federal Discovery Rules for Complex Civil Litigation, 48 Fordham L. Rev. 907, 929 (1990).

Many courts, therefore, favor access to discovery conducted by other parties in collateral or similarly situated litigation. It makes the administration of justice more efficient. Any other result would require that “each litigant who wishes to ride a taxi to court must undertake the expense of inventing the wheel.” Ward v. Ford Motor Co., 93 F.R.D. 579, 580 (D. Colo. 1982). See also Wauchop v. Domino’s Pizza, Inc., 138 F.R.D.539, 546-47 (D. Ind. 1991) (Federal Rules of Civil Procedure should be construed to foster the just, speedy, and inexpensive determination of every civil action ….collaborative use of discovery material fosters that purpose.); Baker v. Ligett Group, Inc., 132 F.R.D. 123, 126 (D. Mass 1990)(To routinely require every plaintiff to go through a comparable, prolonged and expensive discovery process would be inappropriate.); Patterson v. Ford Motor Co., 85 F.R.D. 152, 154 (W.D. Tex. 1980)(The sharing of discovery information
between plaintiffs may reduce time and money which must be expended in similar proceedings, and allows for effective, speedy, and efficient representation.); Cipollone v.Liggett Group, Inc., 113 F.R.D. 86, 87 (D. N.J. 1986)(Maintaining a high cost of litigation for future advisories is not a proper purpose under Rules 1 or 26.); Wilk v.American Medical Ass’n, 635 F.2d 1295, 1301 (7th Cir. 1980) (That the expense of litigation deters many from exercising that right is no reason to erect gratuitous road blocks in the path of a litigant who finds a trail blazed by another.); U.S. v. Hooker Chemicals & Plastics Corp., 90 F.R.D. 421, 426 (W.D. N.Y. 1981) (Use of discovery fruits disclosed in one lawsuit in connection with other litigation and even in collaboration among plaintiffs attorneys, comes squarely within the purposes of Federal Rules of Civil Procedure.); Foltz v. State Farm Mut. Ins. Co., 331 F.3d 1122, 1131)(9th Circ. 2003) (This court strongly favors access to discovery materials to meet the needs of parties in collateral litigation.”)

For the above stated reasons, Plaintiff maintains the position that a “blanket” protective order such as the one sought by Defendant would be premature, overly broad and unreasonably restrictive of material that is relevant, discoverable, non-privileged, and non-protected and would be to the detriment of Plaintiff’s case and the public’s access to information , as well as, to the detriment of this court, other courts and other plaintiffs similarly situated.

A big SLABBED thank you to Plaintiff Raymond Lizana and Counsel Deborah Trotter for a job well done!

26 thoughts on “State Farm has secrets – but not for long!”

  1. It certainly is obvious that the Plaintiff, Raymond Lizana, is represented by brillant counsel (i.e., Deborah Trotter) in his case….every client should be so fortunate/lucky.

    It’s also obvious that State Farm hasn’t changed their litigation tactics either. They act the same way in litigation here in Florida as well.

    I wonder if their bad faith behavior is a “trade secret” as well….uhmmmm……


  2. I looked at that list of “protected” documents and thought about a quote I used in “the scheme” series:

    the best place to hide a needle is in a haystack of needles.

    Wonder what the needles are in that haystack of documents they’re protecting, Shirley.

    And, yes, it was a brilliant piece of work and very difficult to summarize as I didn’t want to leave anything out.

  3. Welcome to slabbed Amy. This topic as you know has been the subject of great contraversy not only here in Mississippi with State Farm but across the country with several different insurers.

    None of us want to see SF’s customer personal information compromised but a fair look at that docket indicates that is not the subject of the dispute. The procedures SF used to adjust Katrina claims for example protects nothing more than the manifest bad faith in the summary denial of wind claims on slabs without the benefit of adjustment.

    We appreciate your insight and thank you for being the first SF rep to stop in and comment with us.


  4. What’s sad about the Katrina litigation is that in the end, State Farm was found not at fault. However, the media didn’t latch onto the positive story like they latched onto the scandalous one that pinned State Farm as deceptive and unfair. In fact, the sisters that pressed charges against State Farm in the popular 20/20 investigation following Katrina are in their own legal trouble now

  5. Amy this would not be the first time an insurer went after a whistleblower or professional with trumped up criminal charges. Just ask Lewis O’Leary The Farm also sometimes goes after it’s own policyholders but that did not work out too well either, just ask Jennie Hampton.

    Time will talk about “fault” and State Farm.


  6. Amy (if,in fact, that is your real name):

    You clearly have no idea about what’s been transpiring in Katrina litigation. If you have been litigating these cases, please let me know your real name, and I’m sure I’ll know who you are. I would be extremely surprised if you are not on State Farm’s payroll in some fashion.

    “State Farm never unlawfully withholds any information.” You should never say “never,” unless you’re sure of what you speak. The links below show the opposite of your contention.

    These requests by plaintiffs have nothing to do with the personal information of other insureds, aside from their names, addresses and phone numbers. These people are potential witnesses and their claims files are potential evidence, plain and simple. But with all of its money, resources and influence, the Farm continues to claim privilege on those things that clearly are discoverable. Some judges and magistrates are starting to catch on.

  7. Also great post by Nowdy.

    One more point. You noted, “Customers trust that their personal information

  8. Yep Steve, Ye ole “neighborhood canvas”. State Farm on occasion acts about like a crackhead seeking a fix when a policyholder dares to take them on and interfer with Ed Rust and his BoD cronies multi million dollar year end bonuses.

    Rick, Amy is the real deal. I suspect the Rigsbys feel slightly different but if the Farm is going after them a la Jennie Hampton they’ve created a public relations disaster that is frankly music to my ears. George W Bush and his band of idiots is no longer in DC protecting State Farm. Such corporate arrogance will be their downfall.


  9. I fear the former senator from Illinois might not be much better when it comes to addressing/regulating this greedy industry. Remember, he was second (among all elected Federal officials) in taking industry-generated contributions in 2008. The nomination of Sotomayor indicates the current administration is not very concerned with a so-called “liberal” whose insurance-related rulings are almost always favorable to the insurance companies.

    By the way, “neighborhood canvases”are fairly innocuous compared to some of the other “investigative” tactics.

  10. Obama is not known for burying his head up his ass like the W and his BOI and that in and of itself is an improvement. I also don’t think he has much to gain politically by protecting reprehensible corporate conduct even if companies from his home state in Illinois try to buy him off.

    Sotomayor was appointed because she was a minority and a woman though I agree her decisions in certain insurance cases seem very curious and contrary to established case law.


  11. TX Supreme Court just made a ruling, eliminating much of the current defense against allowing Appraisals. LA made a similar ruling in the Spring of Last year. If there is no conscience effort to overhaul the ability to access Appraisal IN ITS ORIGINAL FORM, a certain amount of abuse will continue.

    Many don’t know this but the Appraisal Process is at least 3 centuries old. In its origin format in this country, the 2 appraisers “readjusted” the loss to see if the original adjuster got it right (copies of a 1793 Appraisal Clause is available upon request). During the entire period of its existance in this country, most of the nationally recognized forms created to govern the protocol and conduct of Appraisals have consistently set out the peril for the appraisal panel to consider, and instructs them to set out the amount of the loss as the result of that peril and that one alone. Some of the Defense Firms have come up with the notion that this is not what the Appraisers are to do because it involves the appraisers considering
    “causation questions”.

    I have collected a mountain of materials over the last 40 years that demonstrates that most of the nation subscribes to the use of a “conventional” Appraisal where the Appraisers are allowed to consider
    “causation issues” to estimate the amount of the loss as the result of a particular peril.

    One way to improve the conduct in Insurance Litigation is to return the most valuable ADR to those who would otherwise be forced to litigate their losses. The current readings of MUNN seem flawed and stand as an obstacle to Appraisal ever being of value in MS again.

  12. Lewis, I’m certain you are correct but not everyone wants to “improve the conduct in insurance litigation”

    The industry’s customers would like to see improvements – particularly those who have had to fight for coverage they purchased.

    However, the market demand matters not as long as there are laws and/or regulations requiring the purchase of insurance ( re: insurance required to finance/operate automobile, finance home or other property)

    Glad to have you stop by!

  13. Amy (or, shame on you if you’re faking even your name), I know some people in Jackson who had to be de-programmed cause of a religious cult they fell in with; my advice to you . . . no kidding . . . is find a good de-programmer, pay careful attention and go in (if you can) with an “open mind;” honest to God, it’s your only hope;

  14. Great reading, Mr. Trahant! I read your 3 pleadings in the Weatherly and Frught cases (v. State Farm) and it appears you were in Court seeking discovery from State Farm on 5/28/09, 6/4/09 and 7/13/09. That, coupled with returning phone calls, taking care of your other cases and filing more motions aginst State Farm, makes for a very busy Attorney! Good to see Plaintiffs in your area have great counsel.

    Greetings from Tampa, FL.


  15. I cannot take credit for those, although I was co-counsel in Weatherly. I was not counsel in Frught. The lead counsel on those cases gets the credit for dogged determination in those discovery matters.

    However, I have been heavily involved in dealing with the Farm’s discovery tactics. I know them all too well.

  16. Oh, ok, I assumed you were counsel (though I noted there weren’t any Attorney’s names on the Orders)…but you know what they say when one ASSUMES something. In Fla., we put the attys. name on the Orders.

    My compliment still stands. 🙂


  17. Everyone,

    I am sorry that you all jump to shut down my point of view without inquiring why I stand behind State Farm. State Farm is an ethical, honest company, regardless of size, outside perceptions, etc. Time and facts will expose the truth of the cases you all talk about. I will not be writing any additional posts because I do not feel my comments were taken seriously or treated with respect.

  18. Amy (again, if that is your real name):

    The moon is made of green cheese and if you jump high enough, you can take a bite out of it. Putting aside that bit of sarcasm, your comments were taken seriously. I realize how difficult it is to objectively assess a mega-corporation that likely provides a living for you; loyal workers at ENRON initially thought like you do.

    In the many years I practiced law and tried cases before Katrina, I did not have nearly the negative impression I have of the Farm now, based on its conduct in the wake of Katrina. Quite simply, the Farm’s catastrophe team operates under its own set of rules, just like it was busted for doing in Watkins v. State Farm.

    Like you, and I’m sure you are aware of this, there are judges and magistrates who think State Farm is a great company, and regardless of the evidence they are shown to the contrary, will continue to believe this . . . no matter what. Indeed, on occasion my colleagues and I have essentially been scolded for offering Watkins-type proof to the contrary in Katrina cases.

    For decades companies like State Farm and Allstate have attached the word “good” to their names and probably spent billions on this PR. If you hear thousands of times over decades how “good” a company is from the company itself, how can anyone think the company could possibly do something bad? But juries somehow have found otherwise.

  19. It’s so expected that I would never have thought to ask why a State Farm employee would stand behind the company – and that I find that a compliment and Amy finds it insulting is probably as good a way as any to point out the different thinking of those of those in the industry and consumers.

    I followed the link Amy provided, looked at the impressive recognition awarded the company and have no doubt it was all deserved. It certainly is consistent with the many times both Sop and I have commented about the positive feelings we have about the State Farm agents/employees we know.

    However, we also know the dark side – up close and personal – the loyal customers who have been denied coverage due because some in the company were convinced it was more important to protect the company from its customers than serve them.

    That many employees and customers have been hurt by the actions of a few is regrettable but true. The future of the company, in my opinion, is a matter of whether the company’s leadership will step up and demonstrate the integrity that employees and customers alike deserve by holding those accountable who came up with claims handling practices that dishonored the trust all placed in “the good neighbor”.

  20. Amy, to Nowdy’s excellent reply I’ll add that we’ve never run anyone off this blog despite the email we often get encouraging us to do just that. Simply put, all are welcome to join the fray here at slabbed.

    But when you join the “battle” of ideas, fluff doesn’t win out over substance here at Slabbed. After all this isn’t the Wall Street Journal Editorial Board (chasing ad dollars) you’re dealing with here.

    So while the decision to continue commenting with us rests entirely with the people that gave you the authorization to post with us to begin with and is beyond our control, we’ll continue on secure in the fact that we must be one of the most popular blogs in Bloomington Illinois bar none.


  21. I did have questions for Amy that I’m sorry that she didn’t stay to answer.

    She wrote:


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