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v. CIVIL ACTION NO. 251-04-642
Before the Court is the Defendants' /Counter-Plaintiffs' Motion to Conduct Limited
Discovery as to Ex Parte Communications with Judge DeLaughter in Light of Belated
Production ofDocuments and Request for Expedited Consideration. After full consideration of
all of the facts and circumstances known at this time, the Court finds that more information is
required before it issues a full ruling on Frisby's Motion to Conduct Discovery. Accordingly,
the Court finds that the procedure herein will be utilized initially, and the Court will reserve
further ruling on Frisby's Motion until it considers the documents submitted by Eaton, as
On April 17, 2012, the Eaton Plaintiffs/Counter-Defendants submitted to the Court, in
camera, four pages of newly discovered documents that Eaton admitted were responsive to
earlier discovery requests and related proceedings before this Court. See April 18, 2012 Hearing
Transcript, pg. 5,6 (Mr. Corlew for Eaton: "We feel those documents are very much like issues
that you've already considered. We don't desire to argue the status of those documents.")
(Court: "[P]roduction of these [documents] is consistent with prior rulings of the Court?" Mr.
Corlew for Eaton: "Yes."). The new documents accompanied Eaton's Motion for Continuance
regarding the previously scheduled hearing, for April 18, 2012, with the December 13, 2011
Report and Recommendation of the Special Master scheduled to be heard. The new documents
included communications from Ed Peters about conversations and/or communications with
Judge DeLaughter. At the hearing, after an in camera inspection, the Court ordered the new
documents to be produced to Frisby. Eaton immediately complied, and both parties jointly
moved for a continuance of the hearing, due to the impact the documents have on pending issues.
Now, Eaton objects to the Frisby Defendants/Counter-Plaintiffs' attempt to find out more
information about the documents and the circumstances of previous withholding of the same by
On Friday, April 27, 2012, Frisby filed the Motion ofFrisby Related Parties to Conduct
Limited Discovery as to Ex Parte Communications with Judge DeLaughter in Light of Belated
Production ofDocuments and Request for Expedited Consideration. That same day, the Court
entered an Order requiring expedited briefing on the Motion, with Eaton's response deadline of
Wednesday, May 2, 2012, and Frisby's Reply deadline of Friday, May 4, 2012. The Frisby
Counter-Plaintiffs and the Eaton Counter-Defendants proposed very different avenues for
seeking and providing, respectively, further information about the belatedly produced
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Frisby's Proposal:
In Frisby's Motion, Frisby requested that discovery be conducted as follows, with it all to
be completed by May 30,2012:
1) Frisby first requests an Order that requires Eaton to provide sworn affidavits
within five days that detail why the documents were just produced, how they were
found, who takes responsibility, and any electronic identifYing details;
2) After reviewing the Affidavits, Frisby requests permission to propound
Interrogatories and document discovery requests as to the matters described in the
affidavits and as to other information relevant to the inquiry, to be answered by
Eaton within five days;
3) Finally, Frisby requests to take the depositions of the following Eaton
employees and out-of-state outside counsel: Vic Leo, Sharon O'Flaherty, Mark
McGuire, Taras Szmagala, Greg Everts, and Michael Schaalman, only concerning
the newly produced documents. In addition, Frisby requests a M.R.C.P. 30(b)(6)
deposition, if necessary, and the deposition(s) of any other Eaton related
employee whose testimony would relate to the newly produced documents and
whether any additional documents were concealed. Frisby requests that the
depositions be attended by Special Master Dogan.
Frisby's April 27, 2012 Motionfor Discovery, pg. 15-17. Frisby also requests the Court to order
full production of certain documents previously reviewed in camera by the Court in 2009. Id.
Frisby contends that the newly discovered documents may change the context of documents
previously held to remain privileged.
Eaton's Proposal
Eaton filed a timely response, which contained its own procedural suggestion. In vast
difference from Eaton's earlier position at the April 18, 2012 hearing, Eaton now asserts that the
newly produced documents do not relate to the statute of limitations issue, but only relate, if at
all, to the previous Motion to Dismiss, which has been granted a 54(b) Final Judgment and is
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currently pending on appeal. 1 Eaton provides for the following proposal regarding the newly
discovered documents:
1) Within 30 days, Eaton will complete its "investigation" into the
circumstances of the documents.
2) After the 30 days, Eaton requests permission to report to the Court, in camera,
of its findings and answer any of the Court's questions.
Eaton's May 2,2012 Response, pg. 2.
Frisby filed its reply, making changes to its earlier proposal. Frisby initially requested to
only take limited discovery related to the new documents, reserving the right to take additional
discovery later related to its Counterclaims. After complaints by Eaton of the potential for
duplicative discovery, Frisby moves to take all of its discovery, related to the new documents
and to the ex parte communications, now, both as described in its Motion and generally as
related to the Counterclaims. Frisby May 4, 2012 Rep/y, pg. 8.
The Court finds that the newly produced documents clearly relate to the issues currently
pending before this Court: The Counter-claims of the Frisby Defendants and more specifically,
the December 13, 2011 Report and Recommendation of the Special Master, and all pleadings
related thereto. 2 Eaton, in its briefing concerning the statute of limitations issue with respect to
I At the April IS, 2012 hearing, Mr. Corlew, on behalf of Eaton stated: [The Court's ruling on the newly produced
documents] impacts very seriously our arguments [on the December 13,2011 Report and Recommendation]. For
instance, in the Frisby opposition to our objections, they prominently discuss other documents of a like character,
and I think they would probably want to have the opportunity to address those, and certainly we [Eaton] need to as
well ... " See April 18,2012 Hearing Transcript, pg. 5 (emphasis added). Conversely, in Eaton's May 2,2012
Response to Frisby's Motion, Eaton states that "recently produced documents have no bearing on the partial
summary judgment motion." Eaton Response, pg. 5-6.
2 The Counter-claims filed by Frisby and the Engineers, respectively, and the Answers filed by Eaton contain many
references to the Peters inquiry, thus making the related proceedings (other than the Complaint's dismissal) very
much at issue. In fact, an affIrmative defense pled by Eaton is "Counter-Defendants were denied due process oflaw
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the Counter-claims, emphatically states that "Eaton's production of documents [in 2008 and
2009] precisely followed the orderly process laid out by this Court," and many other similar
statements. See Eaton's February 15, 2012 Reply to Frisby IS Objections, pg. 4 (emphasis
added). The newly produced documents clearly indicate otherwise. Eaton wants the Court to
deny Frisby the opportunity to further discover the circumstances of Eaton's discovery failures
(which Eaton originally conceded relate to the counter-claims' statutes of limitations), but Eaton
also wants the opportunity to "correct" its briefings on the counterclaims issues to reconcile what
are now known to be clear misstatements, like the one cited above. 3
The Court has outlined the following procedure to: I) prevent any additional instances of
"newly discovered" documents, which are years overdue for production; 2) prevent any
unnecessary delay, as previously experienced in this case; and 3) prevent any unnecessary
expense to any party. Accordingly, the Court orders that the following procedure will be utilized
to ascertain preliminary information regarding Eaton's discovery failures and the existence of
other responsive document(s) that Eaton failed to produce.
1) Eaton shall, within seven (7) days
of this Order produce to the Court and to the Special
Master, in camera, each and every document that is responsive to any previous discovery
request or court proceeding, related to the PeterslDeLaughter inquiry, that has not been
produced (either at all or in its entirety) for in camera inspection previously. If the
document mentions or refers (in any manner) to communications with either Judge
in the resolution of the motion to dismiss the complaint." PLDGS 1367,1368, Eaton Answers to Counter-claims,
April 5, 2011, pgs. 8, 19. Another is "Eaton's statements and communications were true." /d. at 7, 16.
J Despite its earlier assertion, it is unclear if Eaton now intends to correct its briefings on the counter-claims issues,
after all. Eaton's latest filing indicates that it does not intend to correct any "arguments" but is not specific as to
Eaton's intent to correct misstatements, one of which is cited above. See Eaton's Response to Frisby's Motion for
Discovery, pg. 5.
4 Requests for additional time will not be considered, barring extraordinary emergencies, especially in light of the
fact that the newly discovered documents apparently reference a print date of March 13, 2012, some eight (8) weeks
prior, giving all involved ample time to investigate the relevant circumstances.
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DeLaughter or Ed Peters, or both, regardless of content, it must be produced. Any
document memorializing any communication with, by or from Ed Peters must be
produced. Any document that follows after a reference of any communication with, by or
from Peters or DeLaughter that contains any recognition of the same must also be
produced. 5 This production shall further include any document in the possession of any
Eaton outside counsel. The documents produced shall be accompanied with a sworn
affidavit from Alexander M. Cutler, Eaton's Chairman and Chief Executive Officer,
personally certifying that any and all responsive documents have been produced and
acknowledging that additional instances of non-production will result in very serious, sua
sponte, sanctions. The documents required shall not include any document that is
"of record" as being received by the Frisby Defendants.
2) Also within seven (7) days, the following Eaton employees or outside counsel shall
provide sworn affidavits to the Court, the Frisby Defendants and the Special Master:
Alexander Cutler, Vic Leo, Sharon O'Flaherty, Mark McGuire, Taras Szmagala, and
Michael Schaalman. 7 Each affiant shall provide full and detailed explanations as to: the
withholding of the newly discovered documents, the withholding of any other responsive
documents as required in number one above, the reasons for the withholding, the
responsibility for the withholding, exactly how the documents were discovered and
exactly why the documents were not previously discovered. Each affidavit from any
above-listed employee who is a licensed attorney shall also contain each affiant's
proposed sanction for Eaton's most recent failure to comply with the Court's previous
discovery orders, pursuant to M.R.C.P. 37(b) and the Mississippi Litigation
Accountability Act, Miss. Code Ann. 11-55-1 (et.seq.).8 Each sanction proposal should
5 A clear example of such recognition can be found in the October 16,2007 Eaton e-mail chain, and the herein
required production shall also include the October 16, 2007 e-mail at 10:56 from Vic Leo to Taras Szmagala (Cc:
Sharon O'Flaherty), which was omitted from the documents recently produced or previously produced to the Court.
This document shall be produced.
6 The Eaton Counter-Defendants shall not take this instruction as an invitation to "flood the Court" with paper,
because as the parties know, this discovery failure relates to issues, both adjudicated and currently pending, that
have required an extraordinary amount of this Court's time. Eaton's document review should be very specific and I
should include only documents as specifically outlined above. On the morning of deadline stated herein, counsel for
Eaton shall e-mail this Court with the approximate number of pages to be produced. The Court will respond with
the procedure for delivery and whether additional copies of the documents will be necessary.
7 If any of these persons are no longer employed by Eaton, a detailed affidavit of the circumstances leading to
unemployment shall be completed by Alexander Cutler, as well as a current known address of any such person.
S The Court acknowledges the Frisby Defendants/Counter-Plaintiffs' stated intentions to file additional motions,
including a Motion for Sanctions, and the Court will consider the same, if filed. See Frisby's May 4, 20J2 Reply,
pg. 3-4. However, the Court is considering sanctions, on its own motion, as the present circumstances warrant the
Court to "make such orders in regard to the failure as are just." M.R.C.P. 37(b )(2); See also M.R.C.P. 11 (b);
U.C.C.C.R. 1.03; Tricon Metals & Services, Inc. v. Topp, 537 So.2d 1331, 1335 (Miss. 1989) (holding "Our trial
courts have authority to act sua sponte under Rule 11 and ought exercise that authority against the backdrop of their
inherent authority to impose sanctions upon those who abuse the judicial process."). ,
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address its effectiveness to deter similar conduct by Eaton, especially in view of the
previous sanctions already issued in this matter. 9 Mr. Cutler, upon being advised of the
possible sanctions available for the subject violations by his corporate legal
representatives, shall also include his proposal regarding appropriate sanctions, under the
circumstances. Should any affiant not provide full and detailed explanations of Eaton's
clear discovery violations, severe additional sanctions will result.
3) The Court (and the Special Master, if necessary) 10 will consider and rule on the
applicability of the "crime-fraud" exception regarding any documents produced, as
required and as expediently as possible, and in consideration of this Court's previous
rulings regarding similar documents, as acknowledged by Eaton. The Court will set forth
the procedure going forward at that time.
Eaton to submit additional documents, in camera, and sworn affidavits as detailed herein.
Further, the Court reserves its rulings on Frisby's Motion to Conduct Limited Discovery until it
considers Eaton's submissions, as ordered herein.
SO ORDERED AND ADJUDGED this the __day of May, 2012.

9 All of the following factors should be considered in each affiants' proposal, as set forth in Pierce v. Heritage
Props., Inc., 688 So.2d 1385, 1389 (Miss.l997), and reaffirmed in Scoggins v. Ellzey Beverages, Inc., 743 So.2d
990 (Miss.1999), and most recently in the not yet published decision of City ofJackson v. Rhaly, 2009-CT -00350
SCT, 2012 WL 1432549 (Miss. 2012):
(1) Whether the discovery violations were the result of willfulness or bad faith;
(2) Whether the deterrent value of Rule 37 may be achieved by lesser sanctions;
(3) Whether the wronged party has suffered prejudice as a result of the discovery violation; and
(4) Whether the discovery abuse is attributable solely to trial counsel instead of a blameless client.
10 The Court will determine whether any referral to the Special Master is necessary, pursuant to M.R.C.P. 53(c) and
pursuant to April 15, 2008 Order Appointing Special Master. If a referral is made, the Court will enter a subsequent
Order detailing the parameters and the necessity of the same.
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