A recent decision from the U.S. District Court for the Eastern District of California, Timmerman Startlite Tracking, Inc. v. Ingredion Inc., provides an example of how the effort to limit claims and defenses may fail. In Timmerman, the defendant had alleged that its performance under certain contracts was excused by economic conditions. As a result of those affirmative defenses, the plaintiff served the defendant with several requests for production of the defendant's financial information. The defendant then attempted to protect its financial information from disclosure by offering to waive its defenses of economic impossibility and impracticability. The plaintiff rejected the offer.
When the discovery dispute came before the court, the defendant argued that, because it offered to waive its defenses, the plaintiff's requests for production were irrelevant and its motion to compel was moot. However, the plaintiff argued that because the discovery at issue was relevant to its claim, it did not moot the discovery at issue in the motion to compel. The court found that the plaintiff was indeed entitled to discovery relevant to its claims, and the defendant could not avoid discovery into its financial information. The court ordered the defendant to turn over all communications and documents relating to the defendant's contentions that economic conditions excused its performance under the parties’ contracts.
Timmerman is a lesson that attorneys should be wary when raising certain claims and defenses and consider the possibility of opening the door to the production of sensitive information. This can be avoided by being proactive and contemplating the consequences of raising such claims and defenses beforehand. If such claims and defenses are raised and the attorney later decides to withdraw them, the attempt to correct the error may fail in court. This will ultimately result in the necessary production of documents that may be harmful to a defendant's case.