# Travelers Property Casualty Company of America v. Bobrick Washroom Equipment, Inc.

> District Court, M.D. Pennsylvania · April 13, 2021

URL: https://www.frixlaw.com/law-library/cases/10410131

## Case

- **Court:** District Court, M.D. Pennsylvania
- **Decided:** April 13, 2021
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10410131

## How later opinions describe it (automated extraction)

- explaining that when there is no doubt about relevance a court should tend toward permitting discovery

## Opinion text

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF PENNSYLVANIA
TRAVELERS PROPERTY CASUALTY
COMPANY OF AMERICA,
CIVIL ACTION NO. 3:18-CV-00094
Plaintiff,

v. (MANNION, J.)
(MEHALCHICK, M.J.)
BOBRICK WASHROOM EQUIPMENT,
INC.,

Defendant.

MEMORANDUM
This matter has been referred to the undersigned for purposes of resolving the parties’
discovery dispute regarding the production of certain documents. (Doc. 94). Plaintiff
Travelers Property Casualty Company of America (“Travelers”) has filed a Motion to
Compel, asking the Court to compel Defendant Bobrick Washroom Equipment, Inc.
(“Bobrick”) to provide substantive responses to Travelers’ Interrogatories, Requests for
Production of Documents, and Requests for Admissions. (Doc. 100). Travelers also moves
the Court to dismiss Bobrick’s objections to its subpoena of records issued to third-party
witness Scranton Products, Inc. (“SP”). (Doc. 100). Bobrick opposes Travelers’ Motion on
grounds that Travelers fails to carry its burden to show that the requested material is relevant
and discoverable. (Doc. 109, at 21-25). Additionally, Bobrick opposes the Motion for
Requests for Admission and interrogatories due to prematurity and other issues as to the form
of the requests. (Doc. 109, at 29-37). Finally, Bobrick asserts that an applicable Protective
Order, as well as the Federal Rules of Evidence, prohibit Travelers from receiving what it
demands. (Doc. 109, at 38-49). Third-party witness SP opposes Travelers’ Motion insofar as
it is directed towards SP on grounds that it should not be compelled to produce the discovery
available from a party. (Doc. 110, at 1-2). Both sides have fully briefed this Motion. (Doc.
101; Doc. 109; Doc. 110; Doc. 114). The parties appeared before the Court on April 1, 2021,
for Oral Argument. (Doc. 133). At that time, Travelers suggested that to simplify the process

it would proceed with fewer issues “with the explicit understanding that in doing so Travelers
is not waiving any rights [b]ut preserving rights to perhaps at a later date argue every one of
Bobrick’s purported objections to every discovery request which are contained in the motion
to compel.” (Doc. 133, at 7). Travelers stated that “it would be appropriate at this point to
prioritize, simply prioritize, the issue before the Court and deal with that issue now and if the
Court rules in Travelers favor then proceed with that type of discovery.” (Doc. 133, at 7). As
such, the Court now rules upon Travelers’ Motion to Compel as to document requests seven
and eleven, as to interrogatories one, four, and eight, and as to the subpoena addressed to SP.
(Doc. 100; Doc. 100-16; Doc. 100-19); (see Doc. 133, at 8).
I. BACKGROUND

This matter concerns the allocation of the proceeds of a settlement agreement entered
into between Bobrick and SP, with Travelers claiming that it is entitled to a portion of the
proceeds. (Doc. 100-1, at 4; Doc. 109, at 9). SP sued Bobrick on May 2, 2014, claiming false
advertising under the Lanham Act,1 deceptive and misleading advertising under the Lanham
Act, common-law unfair competition, commercial disparagement, and tortious interference
with existing or prospective business relations. (Doc. 100, at 3; Doc. 109, at 11; Doc. 109-2,
at 10). As Bobrick’s insurer, Travelers agreed to provide for Bobrick’s defense through

1 15 U.S.C. § 1125(a).
2
independent counsel and allegedly paid $7,388,017.19 in attorney’s fees and costs for this
defense. (Doc. 100, at 3). Bobrick adds that despite participating in the defense of the claim,
Travelers reserved all rights under its policies including the right to decline coverage. (Doc.
109, at 12; Doc. 109-2, at 57). Citing Pennsylvania law, Travelers refused to relinquish control

over the selection of counsel. (Doc. 109, at 12; Doc. 109-2, at 73-74). An arbitrator in the case
later determined that Travelers’ reservation of rights created a conflict of interest which
entitled Bobrick to select independent counsel. (Doc. 109, at 12; Doc. 109-2, at 73-74). When
Bobrick demanded arbitration in May 2015, Travelers agreed to allow independent counsel.
(Doc. 109, at 12; Doc. 109-2, at 76). Bobrick asserts that the costs it incurred in defending
SP’s claims were much higher than the reimbursement it received from Travelers. (Doc. 109,
at 13).
On November 10, 2016, Bobrick moved to amend its Answer to assert counterclaims
against SP, alleging that SP falsely marketed its toilet partition products and had sued Bobrick
for anticompetitive purposes. (Doc. 100, at 3; Doc. 109, at 14; Doc. 109-2, at 27). On

December 9, 2016, after Bobrick asserted these counterclaims, SP moved to voluntarily
dismiss its claims against Bobrick with prejudice. (Doc. 100, at 4; Doc. 109, at 13; Doc. 109-
2, at 29). The Court then granted Bobrick’s motion to add counterclaims to its answer on
December 16, 2016, and granted SP’s motion to voluntarily dismiss its claims against Bobrick
on February 10, 2017. (Doc. 109-2, at 29, 32). The Court allowed Bobrick to pursue claims
for attorney’s fees under the Lanham Act as a prevailing party after the voluntary dismissal.
(Doc. 100, at 4; Doc. 109, at 14-15).
Bobrick and SP proceeded to engage in negotiations which resulted in a settlement
agreement which was filed with the Court on September 8, 2017. (Doc. 100, at 5; Doc. 109,
3
at 16-17). This settlement agreement was negotiated by Bobrick without Travelers’ knowledge
or consent. (Doc. 100, at 5; Doc. 109, at 16-17). Pursuant to the settlement agreement, SP
paid Bobrick approximately $7.5 million in exchange for Bobrick releasing its counterclaims
against SP, including its request for attorney’s fees. (Doc. 100, at 5; Doc. 109, at 9). The

settlement agreement was approved by the Court on March 6, 2018. (Doc. 109, at 17; Doc.
109-2, at 44). Bobrick adds that minimal discovery occurred in the matter after SP withdrew
its claims against Bobrick and Bobrick asserted its amended counterclaim against SP. (Doc.
109, at 17). “[W]hen the [u]nderlying [l]itigation settled, fact discovery on Bobrick’s
counterclaim and potential fee-shifting motion had barely commenced and expert discovery
had never begun.” (Doc. 109, at 19).
After Bobrick and SP settled, Travelers demanded that Bobrick reimburse Travelers
for all defense costs it received from the settlement amount.2 (Doc. 100, at 5). Bobrick has
rejected this demand. (Doc. 100, at 5). Bobrick states that Travelers had paid less than half of
the defense costs Bobrick had incurred in defending itself against SP’s original claims. (Doc.

109, at 19). Due to the dispute over defense fees, Bobrick demanded that it and Travelers go
to arbitration which gave rise to a ruling that all of the hourly rates paid by Bobrick to
independent counsel were reasonable and that these rates should have been paid by Travelers.

2 The insurance contract between Bobrick and Travelers states:

8. Transfer of Rights of Recovery Against Others To Us

If the insured has rights to recover all or part of any payment we have made
under this Coverage Part, those rights are transferred to us. The insured must
do nothing after loss to impair them. At our request, the insured will bring
“suit” or transfer those rights to us and help us enforce them.

(Doc. 100, at 5).
4
(Doc. 109, at 19; Doc. 109-2, at 81). On September 20, 2017, the arbitrator ruled that if the
amount of hours billed was reasonable, Travelers would owe Bobrick $4,181,681.05 – the
difference between the amount Travelers should have paid Bobrick and the amount it actually
paid. (Doc. 109, at 20; Doc. 109-2, at 81-83). Travelers paid the majority of the money owed

to Bobrick after Bobrick had already reached its settlement agreement with SP subject to the
Court’s approval and agreement to retain jurisdiction over the settlement. (Doc. 109, at 20;
Doc. 109-2, at 42, 81-83).
In attempting to recover defense costs from Bobrick, Travelers commenced this case
in the United States District Court for the Central District of California and also filed a
Motion to Intervene and to Order Interpleader in the underlying action between SP and
Bobrick. (Doc. 100, at 6; Doc. 109, at 20-21; Doc. 109-2, at 43). On January 11, 2018, this
case was transferred from the United States District Court for the Central District of California
to this Court. (Doc. 26). On March 6, 2018, the Court denied Travelers’ Motion to Intervene
in the underlying action between Bobrick and SP. (Doc. 100, at 6; Doc. 109, at 21).

On July 17, 2018, Travelers served Interrogatories, Requests for Production of
Documents, and Requests for Admissions on Bobrick. (Doc. 100, at 8; Doc. 109, at 23).
Bobrick objected to these Interrogatories and Requests. (Doc. 100, at 8; Doc. 109, at 24).
Furthermore, SP informed Bobrick that it expected Bobrick to abide by the Protective Order
implemented in the underlying litigation between it and Bobrick, forbidding Bobrick from
producing any SP material designated as Confidential or Attorneys’ Eyes Only (“AEO”).
(Doc. 109, at 24; Doc. 109-2, at 194-95). Bobrick states that it did produce its own documents
which were not designated AEO or Confidential. (Doc. 109, at 24).

5
On November 13, 2018, Travelers issued a subpoena of records to SP seeking
information related to Bobrick’s recovery and “the nature and scope of damages that Bobrick
claimed were owed by [SP] in the counterclaims Bobrick asserted” against SP. (Doc. 100, at
6; Doc. 100-5). Bobrick submits that this subpoena included demands for documents which

were identical to those demands already requested from Bobrick. (Doc. 109, at 25). Pursuant
to a negotiated agreement between Travelers and SP, SP was permitted to produce documents
designated “Confidential” in the underlying action between SP and Bobrick but no
documents designated “AEO.” (Doc. 100, at 6-7; Doc. 100-7). This agreement, however, was
conditioned on Bobrick’s concurrence, which Bobrick refused to provide. (Doc. 100, at 6-7;
Doc. 100-8; Doc. 109, at 25). On November 27, 2018, SP refused to provide documents in
response to Travelers’ subpoena. (Doc. 100, at 7; Doc. 100-9; Doc. 109). On December 3,
2018, Bobrick provided its objections to Travelers’ subpoena to SP. (Doc. 100, at 7; Doc. 100-
10; Doc. 109, at 25).
On November 14, 2018, Travelers asked the Court to compel Bobrick to respond to its

Document Requests and Interrogatories. (Doc. 57). The action was subsequently transferred
to another judge in this Court who was apprised of the pending Motion to Compel on May
15, 2020. (Doc. 89). On June 18, 2020, Bobrick filed motions in the action between it and SP,
seeking to enforce the protective order in the underlying litigation, as well as a motion seeking
modification or clarification of the decision and order filed on February 28, 2020. (Doc. 109,
at 27; Doc. 109-2, at 49). The Court declined to extend the protective order from the
Bobrick/SP litigation to the action filed by Travelers. (Doc. 109, at 27). Travelers filed the
instant Motion on November 23, 2020. (Doc. 100).

6
II. DISCOVERY STANDARD
The general scope of discovery is outlined by Federal Rule of Civil Procedure 26(b)(1):
Parties may obtain discovery regarding any nonprivileged matter that is
relevant to any party's claim or defense and proportional to the needs of the
case, considering the importance of the issues at stake in the action, the amount
in controversy, the parties’ relative access to relevant information, the parties’
resources, the importance of the discovery in resolving the issues, and whether
the burden or expense of the proposed discovery outweighs its likely benefit.
Information within this scope of discovery need not be admissible in evidence
to be discoverable.

Fed. R. Civ. P. 26(b)(1).
Issues relating to the scope of discovery permitted under Rule 26 rest in the sound discretion
of the court. Wisniewski v. Johns–Manville Corp., 812 F.2d 81, 90 (3d Cir. 1987). Thus, a Court's
decisions regarding the conduct of discovery, and whether to compel disclosure of certain
information, will be disturbed only upon a showing of an abuse of discretion. Marroquin–
Manriquez v. I.N.S., 699 F.2d 129, 134 (3d Cir. 1983).
Rule 26 establishes a liberal discovery policy. Clemens v. N.Y. Cent. Mut. Fire Ins. Co.,
300 F.R.D. 225, 226-27 (M.D. Pa. 2014); Great West Life Assurance Co. v. Levithan, 152 F.R.D.
494, 497 (E.D. Pa. 1994). Discovery is generally permitted of any items that are relevant or
may lead to the discovery of relevant information. Hicks v. Big Brothers/Big Sisters of Am., 168
F.R.D. 528, 529 (E.D. Pa. 1996); Stabilus v. Haynsworth, Baldwin, Johnson, & Greaves, P.A., 144
F.R.D. 258, 265–66 (E.D. Pa. 1992) (explaining that when there is no doubt about relevance
a court should tend toward permitting discovery). Moreover, discovery need not be confined
to items of admissible evidence but may encompass that which appears reasonably calculated
to lead to the discovery of admissible evidence. Callahan v. A.E.V., Inc., 947 F. Supp. 175, 177
(W.D. Pa. 1996); Momah v. Albert Einstein Medical Ctr., 164 F.R.D. 412, 417 (E.D. Pa. 1996).
7
Although “the scope of relevance in discovery is far broader than that allowed for evidentiary
purposes, it is not without its limits.” Stabilus, 144 F.R.D. at 265. The Court will not permit
discovery where a request is made in bad faith, unduly burdensome, irrelevant to the general
subject matter of the action, or relating to confidential or privileged information. S.S. Fretz,

Jr., Inc. v. White Consol. Indus., Inc., No. 90–1731, 1991 WL 21655, at *2 (E.D. Pa. Feb. 15,
1991).
It is well-established that “[t]he party opposing discovery has the burden to raise an
objection, then the party seeking discovery must demonstrate the relevancy of the requested
information.” Romero v. Allstate Ins. Co., 271 F.R.D. 96, 101 (E.D. Pa. 2010) (quoting Corrigan
v. Methodist Hosp., 158 F.R.D. 54, 57 (E.D.Pa.1994)). “Once this showing is made, the burden
switches again to the party opposing discovery to show why discovery should not be
permitted.” Romero, 271 F.R.D. at 101.
III. THE SETTLEMENT NEGOTIATIONS ARE NOT PROTECTED BY RULE 408.
Bobrick asserts that Federal Rule of Evidence 408 precludes Travelers from accessing

the settlement communications between Bobrick and SP. (Doc. 109, at 45-53). According to
Bobrick, “Travelers is, in fact, trying to obtain the same discovery for the very purpose FRE
408 forbids, to ‘prove or disprove the validity or amount of a disputed claim’ – here the validity
and amount of its claim against Bobrick.” (Doc. 109, at 51). Travelers is attempting to
apportion the settlement proceeds paid to Bobrick by SP so that it can collect any attorneys’
fees it paid as Bobrick’s insurer. (Doc. 109, at 51). As such, per Bobrick, the settlement
communications would be used by Travelers to prove the validity and amount of its claim
against Bobrick. (Doc. 109, at 51). Conversely, Travelers submits that Rule 408 limits the
admissibility and not the discoverability of settlement offers. (Doc. 100-1, at 12). Travelers
8
also asserts that it does not intend to use the evidence to prove or disprove the validity or
amount of a disputed claim. (Doc. 100-1, at 12).
Evidence of settlement negotiations may not be offered to prove or disprove the
validity or amount of a disputed claim. Fed. R. Evid. 408(a). When the purpose of the

statements “is really an issue that bears ultimately on an element of liability, then the rule of
exclusion will apply.” Stephen A. Saltzburg, et al., Federal Rules of Evidence Manual, §
408.02[3](2) (11th ed. 2015). “However, statements made during settlement negotiations are
admissible ‘when offered for another purpose,’ Fed. R. Evid. 408(b), such as to establish ‘an
independent violation (here, retaliation) unrelated to the underlying claim which was the
subject of the correspondence.’” Spence v. Foxx, 159 F. Supp. 3d 483, 501 n.9 (D.N.J. 2014)
(quoting Carney v. Am. Univ., 151 F.3d 1090, 1095 (D.C. Cir. 1998)). Writing for the United
States Court of Appeals for the Seventh Circuit, Judge Posner explained:
Rule 408 excludes evidence of compromises and offers to compromise, and of
“statements made in compromise negotiations.” Although this language is
broad enough to cover Haack's testimony, the purpose of the rule must be
considered. It is to encourage settlements. The fear is that settlement
negotiations will be inhibited if the parties know that their statements may later
be used as admissions of liability. But Haack's testimony was not offered for
the purpose of demonstrating that Central Soya was or was not liable to
Aquarium Farms for breach of its contract to supply a complete catfish feed.
The purpose was to demonstrate what the terms of the settlement of Aquarium
Farms' claim were. “Where the settlement negotiations and terms explain and
are a part of another dispute they must often be admitted if the trier is to
understand the case.” 2 Weinstein & Berger, Weinstein's Evidence P 408(5), at
27 (1981).

Central Soya Co. Inc. v. Epstein Fisheries, Inc., 676 F.2d 939, 944 (7th Cir. 1982).

In a prior case which also involved a lawsuit arising out of a separate matter which
had been resolved by a settlement agreement, the United States District Court for the Eastern
District of Pennsylvania held that the settlement agreement in the separate matter was
9
admissible to establish the circumstances of the settlement. B & B Inv. Club v. Kleinert’s, Inc.,
472 F.Supp. 787, 791 (E.D. Pa. 1979). In B & B Inv. Club, a class of plaintiffs sued a diversified
manufacturer (Kleinert’s), as well as two accounting firms, an investment banking firm, and
eleven individuals for making “material misrepresentations to the investing public concerning

the financial condition and prospects of Kleinert’s business and operations.” B & B Inv. Club,
472 F.Supp. at 789. One of the individual defendants (Brubaker) was the treasurer at
Kleinert’s during the period at issue. B & B Inv. Club, 472 F.Supp. at 789.
Brubaker filed a cross-claim against Kleinert’s alleging he was entitled to
indemnification for the expenses he incurred in defending the action and for his share of any
settlement. B & B Inv. Club, 472 F.Supp. at 788-89. Kleinert’s filed a countercross-claim against
Brubaker to collect for any liability potentially incurred by Kleinert’s. B & B Inv. Club, 472
F.Supp. at 789. These cross-claims were subsequently severed from the main action and it
was agreed that they would be tried without a jury after the main claims were resolved. B &

B Inv. Club, 472 F.Supp. at 789.
Brubaker negotiated with the plaintiffs which resulted in them dismissing all claims
against him with prejudice. B & B Inv. Club, 472 F.Supp. at 789. As part of this agreement,
Brubaker was not obligated to make any monetary payment. B & B Inv. Club, 472 F.Supp. at
789. Plaintiffs’ claims against Kleinert’s were also settled. B & B Inv. Club, 472 F.Supp. at 789.
Brubaker subsequently attempted to collect from Kleinert’s under the Pennsylvania
Business Corporation Code, which provides “that an officer ‘shall be indemnified against
reasonable expenses and attorneys’ fees to the extent he ‘has been successful on the merits or
otherwise’ in a proceeding where his actions as an officer allegedly violated the law.” B & B

Inv. Club, 472 F.Supp. at 789-90 (quoting Pennsylvania Business Corporation Code, 15 Pa.
10
Stat. Const. § 410 C). Brubaker argued that he met the statutory test of “success on the merits
or otherwise” because he negotiated a dismissal with prejudice without making any monetary
payments to the plaintiff class. B & B Inv. Club, 472 F.Supp. at 790. As such, he averred that
he was entitled to indemnification from Kleinert’s. B & B Inv. Club, 472 F.Supp. at 790.

Kleinert’s asserted that Brubaker was not “successful on the merits or otherwise”
because the settlement did not vindicate him. B & B Inv. Club, 472 F.Supp. at 790. In support
of its position, Kleinert’s filed the affidavit of an attorney for the plaintiff class “for the
purported purpose of establishing that Brubaker was not ‘successful.’” B & B Inv. Club, 472
F.Supp. at 791. Brubaker objected to the use of this affidavit, asserting that it was precluded
by Rule 408 because it was related to compromise negotiations. B & B Inv. Club, 472 F.Supp.
at 791. The court allowed the use of the affidavit, concluding that the compromise
negotiations were being offered for “another purpose,” so were not covered by Rule 408. B &
B Inv. Club, 472 F.Supp. at 791.

Bobrick cites Ciolli v. Irvani, 625 F. Supp. 2d 276, 287 (E.D. Pa. 2009) in support of its
position that the settlement agreement should be covered by Rule 408. (Doc. 109, at 53). The
purpose of Rule 408, however, is more applicable in Ciolli than to the case at hand. In Ciolli,
there also was underlying litigation from which the case arose. Ciolli, 625 F. Supp. 2d 276,
281-82 (E.D. Pa. 2009). The underlying lawsuit was filed by a two female students at Yale
Law School who had been included on an internet discussion board and “a website designed
to rate the attractiveness of women from the top fourteen law schools in the country.” Ciolli,
625 F. Supp. 2d at 282. The students sued 29 pseudonymous individuals for comments they
had made in posts to the website and discussion board. Ciolli, 625 F. Supp. 2d at 282. One of

the individual defendants in the underlying litigation, Ciolli, was dismissed and subsequently
11
brought suit against the two female students for wrongful initiation of civil proceedings, abuse
of process, libel, slander, and other claims. Ciolli, 625 F. Supp. 2d at 282.
In his complaint, Ciolli discussed three sets of settlement communications that had
taken place in the underlying litigation. Ciolli, 625 F. Supp. 2d at 284. The communications

allegedly involved conversations about how Ciolli should not have been part of the lawsuit,
that the plaintiffs would dismiss Ciolli from the suit in exchange for certain concessions, and
that it was admitted that Ciolli had been sued in error. Ciolli, 625 F. Supp. 2d at 284-85. The
defendants sought to strike evidence of these settlement discussions, asserting that they were
inadmissible under Rule 408. Ciolli, 625 F. Supp. 2d at 285.
The court in Ciolli looked to the purpose of Rule 408 in determining whether evidence
of the settlement discussions from the underlying litigation should be struck despite the
“action raising a claim different from the one that was the subject of the negotiations.” Ciolli,
625 F. Supp. 2d at 287. The court determined that

Ciolli’s wrongful initiation of civil proceedings and abuse of process claims are
sufficiently related to the [underlying litigation] as to require the inadmissibility
of settlement evidence from that suit. Part of an effective settlement process is
a frank discussion of the relative merits of each party’s case. If parties were
permitted to take the content of these negotiations and use them in subsequent
litigation for wrongful initiation of civil proceedings or abuse of process, then
counsel would put themselves and their clients at risk of suit in every settlement
conference in which they participate, resulting in either less effective or even
non-existent negotiations. This is precisely the situation that FRE 408 is
designed to avoid.

Ciolli, 625 F. Supp. 2d at 287-88.

The court went on to explain that the settlement communications are actually being “offered
as proof of liability for, invalidity of, or amount of the negotiated claims” because “Ciolli’s
claims for wrongful initiation of civil proceedings and abuse of process are essentially causes
12
of action asserting the invalidity of the claims in the [underlying litigation].” Ciolli, 625 F.
Supp. 2d at 288. Ciolli’s claim in the instant case was bolstered by the invalidity of the
negotiated claim. Ciolli, 625 F. Supp. 2d at 288.
Here, Travelers’ use of the settlement agreement between Bobrick and SP is more

similar to B & B Inv. Club than Ciolli. Rule 408 serves to give parties the security to
communicate openly about their conduct and ensuing consequences without those
communications being used against them. See Central Soya Co. Inc., 676 F.2d at 944. In Ciolli,
the settlement negotiations were to be used to demonstrate the conduct of the parties as
discussed in those negotiations. See Ciolli, 625 F. Supp. 2d at 284-85. Travelers does not intend
to use the settlement agreement to establish that Bobrick or SP deceptively advertised or
committed other conduct that could have been disclosed in settlement negotiations. Rather,
Travelers’ purpose of using the settlement agreement, as stated by Bobrick, is to determine
whether the parties apportioned proceeds to attorneys’ fees. (Doc. 109, at 51). As in B & B

Inv. Club, Travelers’ purpose in using the settlement agreement is not to determine the
underlying conduct of the settling parties, but rather to determine the terms of the parties’
agreement. See B & B Inv. Club, 472 F.Supp. at 791 (allowing a third party to use settlement
communications to establish that a party was not ‘successful’ in the litigation so as to avoid
indemnifying that party).
It is unclear how a chilling effect could occur by allowing settlement discussions to be
subsequently examined to determine whether and how funds were apportioned. See Central
Soya Co. Inc., 676 F.2d at 944. As in Central Soya Co. Inc., the terms of the agreement rather
than the conduct of the parties is at issue. See Central Soya Co. Inc., 676 F.2d at 944. These

13
precedents establish that the settlement agreement between Bobrick and SP is not covered by
Rule 408 if used for the purpose of showing whether proceeds were apportioned.3
Bobrick’s remaining objections to Document Request 11 are overruled in part and
sustained in part. (Doc. 100-19, at 20-21). The information sought is relevant because it has a

tendency to make a consequential fact more or less probable. See In re Schaefer, 331 F.R.D.
603, 607 (W.D. Pa. 2019). Bobrick has not established that the request is overly broad, unduly
burdensome, vague, ambiguous, or confusing. A party’s representative is any individual
representing Bobrick or SP at the time the communication was made. Bobrick’s objections
are sustained to the extent that the request seeks protected attorney work product or
documents protected by the attorney-client privilege.
IV. BOBRICK IS RESPONSIBLE FOR PRODUCING ANY DOCUMENTS BEARING NO AEO
DESIGNATION.
In the underlying litigation between Bobrick and SP, a protective order was
implemented on March 26, 2015, which limited the production of material designated as
Confidential or AEO. (Doc. 109-2, at 16). Bobrick contends that “Travelers’ overbroad
demands would require Bobrick and SP to violate the Protective Order in the Underlying
Litigation, which remains in full force and effect.” (Doc. 109, at 53). Bobrick submits that if
materials from the underlying litigation are ordered to be produced, that SP should be
responsible for producing its own discovery documents and responses. (Doc. 109, at 53). SP’s

document designations have been inconsistent and confusing, so Bobrick should not bear the

3 The contours of Rule 408 still apply notwithstanding Travelers’ status as a nonparty
to the settlement agreement between Bobrick and SP. See Baptiste v. Rohn, No. 2013-0104,
2016 WL 1273887 (D.V.I. Mar. 29, 2016) (citing Kennon v. Slipstreamer, Inc., 794 F.2d 1067,
1069 (5th Cir. 1986)).
14
risk of inadvertent production of documents that should not be produced. (Doc. 109, at 53-
54).
SP contends that it should not be forced to produce any materials because production
should not be compelled by a non-party when the discovery is available from a party, such as

Bobrick. (Doc. 110, at 6). SP states that Bobrick is in possession of any documents designated
“Confidential” and that the protective order in the underlying litigation allows for Bobrick to
produce them. (Doc. 110, at 7-8). Bobrick needs only to withhold documents which are
stamped AEO by SP; its only obligation is to follow SP’s designations, according to SP. (Doc.
110, at 8 n.1). SP asserts that at the very least, the motion to compel as to SP should not be
ruled upon until Bobrick has produced all documents ordered to be produced. (Doc. 110, at
10).
Travelers’ position is that the protective order in the underlying litigation does not
preclude SP and Bobrick from producing documents to Travelers. (Doc. 100-1, at 11).
Scranton and Travelers have stipulated to producing documents previously marked

“Confidential,” as long as they retain such treatment under the protective order filed with the
Court on June 11, 2018. (Doc. 100-1, at 11; Doc. 50, at 4-16). Travelers cites an order from
the underlying litigation in support of its averment that production of the material, if “relevant
and subject to disclosure in another case,” would not violate the terms of the stipulated
protective order. (Doc. 100-1, at 11-12).
The protective order which Bobrick submits would be violated if it were forced to
produce the requested documents is Doc. 60 in the underlying litigation. (Doc. 109, at 27;
Doc. 109-2, at 16). “‘[I]t may readily be agreed that discovery in one lawsuit that is subject to
a protective order may not necessarily, or even often, preclude discovery in a subsequent
15
lawsuit (with or without a protective order issued by the new court).’” In re Biomet Orthopaedics
Switzerland GmBh, 742 F. App’x 690, 699 (3d Cir. 2018) (quoting Four Pillars Enters. Co., Ltd.
v. Avery Dennison Corp., 308 F.3d 1075, 1078 (9th Cir. 2002)). Indeed, the protective order at
issue states, “By entering this Order and limiting the disclosure of information in this case,

the Court does not intend to preclude another court from finding that information may be
relevant and subject to disclosure in another case.” Bobrick Washroom Equipment, Inc. v.
Scranton Products, Inc., No. 3:14-CV-00853 (M.D. Pa. Mar. 26, 2015), ECF No. 60. In Four
Pillars, two adhesive tape companies accused each other of stealing and misappropriating
trade secrets. Four Pillars Enters. Co., Ltd., 308 F.3d at 1076-77. In one of the cases, where
Avery Dennison sued Four Pillars for theft of trade secrets and violations of RICO, the parties
agreed to a protective order which stated that “confidential material produced by Avery
Dennison could be used by Four Pillars only in the civil suit or the criminal proceeding in the
Northern District of Ohio, and that Four Pillars could not remove any of the material from

the United States.” Four Pillars Enters. Co., Ltd., 308 F.3d at 1077. The District Court for the
Northern District of Ohio entered this protective order. Four Pillars Enters. Co., Ltd., 308 F.3d
at 1077.
After that suit had ended, Four Pillars filed a motion in the District Court for the
Central District of California to compel Avery Dennison to produce certain documents to be
used in Four Pillars’ suits against Avery Dennison. Four Pillars Enters. Co., Ltd., 308 F.3d at
1077. This request was denied by the district court on grounds that the documents produced
in the Ohio civil litigation were subject to that court’s protective order. Four Pillars Enters. Co.,
Ltd., 308 F.3d at 1077. “In deference to that order, and in the exercise of his discretion, the

magistrate judge denied the request.” Four Pillars Enters. Co., Ltd., 308 F.3d at 1077.
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Thereafter, Four Pillars moved the District Court for the Northern District of Ohio to modify
the protective order. Four Pillars Enters. Co., Ltd., 308 F.3d at 1077. This motion was denied,
with the court reasoning that “Four Pillars’ proven misconduct and Avery Dennison’s interest
in maintaining the confidentiality of the documents out-weighed Four Pillars’ interest in using

the documents in the foreign lawsuits.” Four Pillars Enters. Co., Ltd., 308 F.3d at 1077.
The United States Court of Appeals for the Ninth Circuit found that “[b]ecause the
documents and deposition testimony were produced in the Ohio litigation, and concern
confidential material, there is little question that they were subject to that court’s protective
order.” Four Pillars Enters. Co., Ltd., 308 F.3d at 1078. Four Pillars asserted that, even so, the
court’s protective order should have no effect outside of the litigation for which it was entered.
Four Pillars Enters. Co., Ltd., 308 F.3d at 1078. To this, the Ninth Circuit explained that though
“discovery in one lawsuit that is subject to a protective order may not necessarily, or even
often, preclude discovery in a subsequent lawsuit,” it was up to the district court’s broad

discretion to allow or disallow the requested material. Four Pillars Enters. Co., Ltd., 308 F.3d
at 1078-79. Given the purpose of the Ohio protective order – “to prevent misuse of the
confidential material” – it was not an abuse of discretion to deny “Four Pillars’ requests on
the ground that they would frustrate or violate the Ohio protective order.” Four Pillars Enters.
Co., Ltd., 308 F.3d at 1079.
The purpose of the protective order in the underlying litigation between Bobrick and
SP was also to prevent misuse of confidential material. The parties exchanged information
which was “comprised of technical, financial, customer, or other commercial information,”
which was not publicly known, and which was maintained in confidence. Bobrick Washroom

Equipment, Inc. v. Scranton Products, Inc., No. 3:14-CV-00853 (M.D. Pa. Mar. 26, 2015), ECF
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No. 60. Trade secrets and other technical information was also exchanged. Bobrick Washroom
Equipment, Inc. v. Scranton Products, Inc., No. 3:14-CV-00853 (M.D. Pa. Mar. 26, 2015), ECF
No. 60. Understandably, the parties sought to prevent this information from reaching the
public’s eye. Bobrick Washroom Equipment, Inc. v. Scranton Products, Inc., No. 3:14-CV-00853

(M.D. Pa. Mar. 26, 2015), ECF No. 60.
Now, the Court must balance the confidentiality and sensitivity concerns expressed by
Bobrick and SP with the convenience and efficiency that would be gained by using documents
that have already been produced in previous litigation. Bobrick’s concerns are outweighed by
the benefits of compelling production. Bobrick contends that its “good-faith concern about
producing SP’s documents is rooted in SP’s history of failing to accurately and timely
designate AEO and Confidential documents in the Underlying Litigation.” (Doc. 109, at 54).
These concerns, however, should be minimal at this point. The documents sought by
Travelers are already labeled and in Bobrick’s possession, so any timeliness issues regarding

designation should not exist. (Doc. 109, at 54). The black and white nature of the document
designations should prevent any confusion over what Bobrick can and cannot produce.
Material either contains an AEO label, or it does not. Travelers’ submits that it is not
requesting documents designated “Attorneys’ Eyes Only,” or AEO, and SP does not object
to Bobrick producing SP’s documents which were designated Confidential in the underlying
litigation as long as they are protected as such. (Doc. 100-1, at 8-9; Doc. 110, at 8). Bobrick
takes issue with the criteria used by SP in designating documents and submits that “it would
be impossible for Bobrick to predict what information SP believes will cause it real harm if
disclosed to Travelers.” (Doc. 109, at 55). However, at this point Bobrick has no reason to
pull back the reasoning behind the document designations. SP has agreed to allow documents
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not labeled AEO to be produced, and Travelers is requesting nothing more. As such, the Court
will order Bobrick to produce all material responsive to Travelers’ Document Request 7 not
marked AEO or Attorneys’ Eyes Only, and the documents are to be treated in accordance
with the protective order entered into by the parties in this matter. (Doc. 50).

Given Bobrick’s concerns regarding only portions of documents, interrogatory
responses, and deposition testimony being labeled AEO, and the confusion that could cause,
material which bears AEO designation in part need not be produced by Bobrick at all. (Doc.
109, at 55). Bobrick’s remaining objections to Document Request 7 are overruled. (Doc. 100-
19, at 20-21). The information sought is relevant because it has a tendency to make a
consequential fact more or less probable. See In re Schaefer, 331 F.R.D. at 607.
Travelers’ subpoena of SP’s records is quashed without prejudice to Travelers
renewing the subpoena after Travelers has received production from Bobrick. (Doc. 100-5).
V. BOBRICK OBJECTIONS TO INTERROGATORIES ARE SUSTAINED.
The interrogatories at issue are numbers one, four, and eight. (Doc. 133, at 8).

Interrogatory number one asks Bobrick to “state the amount which you contend is attributable
to all sums sought in the counterclaim asserted by Bobrick against [SP].” (Doc. 100-16, at 4-
5). The answer to this interrogatory may be provided through the production of settlement
negotiations between Bobrick and SP in response to Document Request 11. As such,
Bobrick’s objections to this interrogatory are sustained without prejudice to the
interrogatory’s renewal after production is provided in response to Document Request 11.
Interrogatory number four asks Bobrick to provide “each portion of the $7.5 million
settlement payment which you received from [SP] in the settlement of the Underlying Action
which is attributable to a sum which you reasonably expected to receive as an award of
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attorneys’ fees, costs, and expenses for your successful defense of the Underlying Action.”
(Doc. 100-16, at 11). The answer to this interrogatory may also be provided through the
production of settlement negotiations between Bobrick and SP in response to Document
Request 11. As such, Bobrick’s objections to this interrogatory are sustained without prejudice

to the interrogatory’s renewal after production is provided in response to Document Request
11.
Finally, interrogatory number eight asks for “all amounts you contend that you were
entitled to recover against [SP] in the Underlying Action.” (Doc. 100-16, at 17). The answer
to this interrogatory may also be provided through the production of settlement negotiations
between Bobrick and SP in response to Document Request 11. As such, Bobrick’s objections
to this interrogatory are sustained without prejudice to the interrogatory’s renewal after
production is provided in response to Document Request 11.
VI. CONCLUSION
For the foregoing reasons, IT IS HEREBY ORDERED that Bobrick is to provide

Travelers with materials from the underlying litigation which are not labeled “Attorneys’ Eyes
Only,” or “AEO.” Additionally, the settlement negotiations between Bobrick and SP are not
precluded under Rule 408 of the Federal Rules of Evidence as long as they are used for the
purpose of determining whether and how funds were apportioned. Travelers’ subpoena of SP
records is quashed without prejudice to renewal. Bobrick’s objections to Travelers’
interrogatories are sustained without prejudice to Travelers renewing the interrogatories after
production is provided in response to Document Request 11.
In light of Travelers’ suggestion to the Court at oral argument to prioritize only part of
its Motion to Compel, the Court requests Travelers to advise the Court as to whether it wishes
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to withdraw the remaining portions of its motion, without prejudice, in light of this Order, or
whether it wishes the Court to address the remainder of its motion. (Doc. 100; Doc. 133, at
7-8). Travelers should make this request by email to the undersigned on or before close of
business on Friday, April 16, 2021.

An appropriate Order follows.

Dated: April 13, 2021 s/ Karoline Mehalchick
KAROLINE MEHALCHICK
United States Magistrate Judge

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10410131. Public record. Not legal advice.