Schlumberger Technology Corporation v. First Mercury Insurance Co.

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
SCHLUMBERGER TECHNOLOGY
CORPORATION, as assignee of
CHESAPEAKE OPERATING, INC.,
Plaintiff,
v.
FIRST MERCURY INSURANCE CO.,
Defendant.
No. 4:22-CV-01465
(Chief Judge Brann)
MEMORANDUM OPINION & ORDER
J ANUARY 30, 2026
Plaintiff Schlumberger Technology Corporation (“Plaintiff”) sued Defendant
First Mercury Insurance Co. (“Defendant”) for denying coverage of a personal injury
lawsuit filed against Schlumberger. 1 Specifically, Plaintiff claims that Defendant acted
in bad faith in denying Plaintiff’s insurance claim.2
Plaintiff previously filed a motion to compel documents that Defendant withheld
as purportedly protected by the attorney client privilege.3 The difficulty of this case is
that several persons involved in the insurance adjusting process were attorneys,
rendering the attorney client privilege murky in the abstract. After a long analysis, the
Court ordered Defendant to produce specific documents or parts of documents related
to the insurance adjusting process, given that “‘[a]n insurance company cannot
1 	See Doc. 15 (Amend. Compl.).
2 	Id. at ¶¶ 28, 45.
3 	Doc. 54 (Mot. to Compel);
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reasonably argue that the entirety of its claims files are accumulated in anticipation of
litigation when it has a duty to investigate, evaluate, and make a decision with respect
to claims made . . . by its insureds.’”4 In the Memorandum Opinion ordering Defendant
to produce any such documents, the Court stated that Defendant was to “conduct a
thorough review” of the disputed documents and could, if necessary, submit documents
that it “truly believes” were covered by the attorney-client privilege.5
Now, Defendant submits the instant motion for in camera review of documents,
asking for the Court to review of all of the same, previously disputed documents.6
Defendant cannot claim in good faith that no parts of the previously withheld
documents should be provided to Plaintiff under the Court’s reasoning in the prior
4 	Doc. 68 (Memo.) (quoting Shaffer v. State Farm Mut. Auto. Ins. Co., No. 1:13-CV-01837,
2014 WL 931101, at *2 (M.D. Pa. Mar. 10, 2024).
5 	Doc. 68 at 11 n.50. In support of the instant motion, Defendant characterizes this as invitation
to submit the same documents that were contested in the earlier dispute. Doc. 71 (Br. in Supp.)
at 2. Not so. The Court clearly limited any such “invitation” to good faith disputes. Doc. 68 at
11 n. 50.
Defendant seemingly has not even attempted to apply the guidance from the Court’s
Memorandum Opinion, see Doc. 71 at 7, 8, 9, 10, as Defendant’s brief amazingly regurgitates
the same arguments previously analyzed and addressed at length by this Court. Doc. 71 at 10
(“There can be no credible dispute by Plaintiff that communications and documents between a
party and its counsel in the course of active litigation are protected from disclosure.”). The
Court’s Memorandum Opinion resolved this very dispute and clarified when communications
to a party’s counsel are protected and when they must be disclosed. See Doc. 68 at 7, 9 (“To
the extent that these attorneys served a dual role in representing Defendant, the attorney-client
privilege would extend to communications prepared while they acted as legal counsel, but not
to their work in processing and denying Plaintiff’s claim.”) (internal quotation omitted).
6 	Doc. 70 (Mot.); Doc. 71 at 6 (“FMIC submits to the Court that it has already produced all
relevant, non-privileged documents that fall within this description.”).
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Memorandum Opinion. Additionally, “[t]o the extent possible, documents should be
redacted to remove privileged information, rather than clawed back in their entireties.”7
Accordingly, IT IS HEREBY ORDERED that Defendant’s motion for an in
camera review, Doc. 70. is DENIED as written. Defendant should refile the motion
after genuinely attempting to apply the Court’s previous Order. The Court will grant
Defendant’s motion for review of documents once it is clear to the Court that Defendant
has made a good faith effort to disclose non-privileged documents, or at the very least
documents with privilege redactions, to Plaintiff that fall within the scope of the Court’s
previous Order.
Should Defendant continue to fail to comply with the Court’s Order, for instance
resubmitting the same documents without making a genuine effort to redact or withhold
genuinely privileged documents using the Court’s clear analysis as a guide, the Court
will require Defendant to turn over all documents at issue to Plaintiff.8
BY THE COURT:
s/ Matthew W. Brann
Matthew W. Brann
Chief United States District Judge
7 	Arconic Inc. v. Novelis Inc., No. 17-1434, 2019 WL 911417, at *2 (W.D. Pa. Feb 26, 2019).
8 	This is a permissible sanction under Federal Rule of Civil Procedure 37. See FED. R. CIV. P.
37(c)(1)(C); Dietz & Watson, Inc. v. Liberty Mut. Ins. Co., No. 14-4082, 2015 WL 2069280
(E.D. Pa May 5, 2015) (Reuter, M.J.) (citing In re Teleglobe Commc’ns Corp., 493 F.3d 345,
386 (3d Cir. 2007) (“[P]reventing a party from asserting the attorney-client privilege is a
legitimate sanction for abusing the discovery process.”) and In re 400 Walnut Assocs., L.P,
475 B.R. 217, 231–32 (E.D. Pa. 2012) (court found waiver of attorney-client privilege as to a
non-party as a sanction for abuse of the discovery process)).
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