the pause that refreshes – all but five “confidential exhibits” declassified in Schafer v State Farm

SLABBED readers were introduce to Schafer v State Farm in the scheme,  fourth chapter – the blame game:

This is a case about State Farm’s uniform, corporate-wide practice of undervaluing Louisiana insured’s property damage after Hurricane Katrina and Xactware’s active and intentional collusion. State Farm required its adjusters to use the computer program Xactimate to compute the replacement value of damaged property for as much as 60% below the actual market place value.

In the year plus since the scheme was published, the case was denied class status but, alone, Schafer v State Farm is moving toward trial set to begin on the 28th of June before Judge Africk – reportedly the most likable pro-insurance judge on the bench.  Perhaps the best background on the case published on SLABBED is found in the January 2010 post State Farm’s Protective Orders are Dispositive Motions in disguise.

Now for the Order released on PACER today – one I’ve been waiting for since September 3, 2009 when the Schafer’s filed a Motion to Declassify Exhibits“:

The Court has completed the in camera inspection of documents furnished by State Farm in the above captioned matter in connection with the plaintiffs’ motion to declassify and the defendants’ joint motion for return of certain confidential documents…

In essence, plaintiffs have contended the documents exchanged in discovery were wrongfully classified under the existing protective order and should be considered public in nature. Defendants, on the other hand, argue that they are confidential or highly confidential as defined in the protective order and should be returned.

The documents reviewed were furnished to the Court on a compact disc (“CD”) and reviewed electronically by the Court. Two discs were furnished, one dated September 3, 2009, containing exhibits A through H, and one dated September 29, 2009, containing a powerpoint presentation compiled by plaintiffs.

First referencing the disc dated September 3, 2009:

As to Exhibit A, same consists of six exhibits, i.e., 32 through 37. Each may be considered price list printouts or break outs. All contain fact based information which is currently quite stale. Portions, if not all, of this information have been furnished to various State Farm policyholders in connection with the adjustment of their respective claims. There is no basis for considering factual information as to the cost of repairing damaged items to be considered confidential…

Exhibit B is an Xactware document or white paper… The document contains very generalized information regarding Xactware software. Because of the generalized nature of the factual information contained therein, it is not readily obvious why this document should be considered confidential. Nor has Xactware made that clear in its memoranda.

According to the Order, “Exhibit C contains various e-mails which have been marked confidential by the defense”.  It’s not clear how many email messages were marked “confidential”.  However, of those reviewed, eleven were found to contain “nothing of a confidential nature” and State Farm acknowledged three additional emails were incorrectly claimed as “confidential”. After covering Katrina litigation for over two years, I take that to mean the cases that this information could have impacted have now settled.

Magistrate Judge Chasez doesn’t have a high-speed camera but she clearly examined every detail.  Two depositions she examined, for example, had portions she retained as confidential and the excluded portions were listed in line number detail!  One was “Exhibit D is the deposition of James Carlyle Burt taken onOctober 28, 2008”:

Mr. Burt is the director of IS architecture and integration for Xactware and the information to which he testified appears technical and possibly capable of compromising the integrity of computer processes.

The other was “Exhibit E … the deposition of Dan Kuntz dated November 12, 2008. Mr. Kuntz is a State Farm employee who provides system support to claim representatives who use the Xactimate application. Mr. Kuntz works in the home office of State Farm.”

Two additional depositions were examined and “the entire deposition…released from confidentiality”: Exhibit F…the deposition of Michael Alan Fulton…General Manager of pricing data services at Xactware…dated February 12, 2009; and Exhibit G… the deposition of Harris Economou…a fire “estimatics” consultant for State Farm…dated February 13, 2009.

In the cases of both Mr. Fulton and Mr. Economou the Court has paid particular attention to those portions of the depositions which counsel have identified with specificity as examples of information which should remain classified. In all instances, the information is generic rather than specific in nature. In short, the information contained in the depositions hardly provides readers with the proverbial “formula for Coca-Cola.” At worst, it provides only generic information which one could expect to find on Coke’s product label. As such, it can hardly be considered in need of protection.

“Exhibit H contains multiple sub-parts” and, in the interest of making this post as brief as possible and still complete, the following documents were not considered confidential: State Farm Homeowner’s policy; Schafer SF Xactimate Report; State Farm OG 75-01, claims procedures; Xactware white paper re: pricing; Deposition of Mr. Adrian; Responses by State Farm; Affidavit of Jon Luther; Websites; Adjuster’s letter transmitting settlement; Excerpt of Lapinski deposition; State Farm Management Manual; Xactanalysis user guide; Affidavit of Anne Gron dated February 26, 2009; two additional emails, 21 items identified by Bates number, the Cover of CD, and the Sample Size Calculation.

The Court maintains confidentiality over only five documents: State Farm OG-135, Operation Guide; State Farm Operations Guide; Kuntz affidavit; Xactimate Operation Guide and Xactimate 24 Operations Guide.

As to the PowerPoint presentation dated September 29, 2009, to the extent that items thereon are dealt with hereinabove, the ruling of the Court as to confidentiality is the same. If the
Court has not dealt with a portion of the CD above, then it will be considered non-confidential.

Well done, Magistrate Chasez!  Could you please come to Mississippi and teach Magistrate Walker the Coca-Cola test?

Related SLABBED posts:

If you can’t trust anti-trust, what can you trust?

Buck up Buddy, it’s time to sink or swim – Foti’s insurance antitrust suit dismissed

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