Federal judge limits discovery in AIG defamation suit

EAST ST. LOUIS – U.S. District Judge William Stiehl has sharply limited attorney Brian Wendler's access to records of AIG, an insurer that mostly belongs to taxpayers.

On Jan. 6, Stiehl discarded most of a discovery order that Magistrate Clifford Proud entered last May in a defamation suit Wendler filed in 2003.

Wendler seeks damages from three AIG companies over an Internet posting on a Teamster website that reported his arrest on a domestic battery charge.

Wendler, who represents Teamsters in personal injury suits, admits he was arrested but claims the posting harmed him professionally.

Proud's order would have raised a mountain of research, starting with personal details on 25,000 individuals that AIG employed on the date of the posting.

Wendler has not pinpointed the source of the posting. He claims Teamster webmaster Phillip Ybarrolaza told him it came from AIG.

Proud ruled that Wendler could depose Ybarrolaza, but Stiehl ruled that he can't.

"The Court previously quashed a similar deposition notice for him, finding that the deposition request was untimely," Stiehl wrote.

Stiehl attempted in 2006 to dispense with the case, granting summary judgment to AIG on all claims.

He found no credible evidence linking AIG to the post.

He rejected an affidavit from Ybarrolaza as "less than trustworthy."

Stiehl declared it "devoid of any specificity as to the manner in which the information was retrieved, the software used, or the method of preparation."

Wendler appealed to the Seventh Circuit in Chicago, challenging several points and losing on all but one.

The appeals court held that Stiehl shouldn't have entered judgment without first deciding a pending discovery motion from Wendler.

On remand, Proud interpreted the decision as a mandate to grant Wendler's motion.

Federal judges seldom reverse magistrates on discovery orders, but AIG attorney Eric Mattson asked Stiehl to grant an exception.

"It is impossible to produce information that does not exist," Mattson wrote.

He argued that the Seventh Circuit opinion applied only to the source of the posting and the names of persons who knew about it.

Stiehl agreed, picking out four questions that AIG must answer and trashing the rest.

"The Court sustains defendants' objections to that part of the magistrate judge's order which directed defendants to individually answer all of plaintiff's interrogatories," Stiehl wrote.

"The limited discovery as set forth above shall be completed on or before January 30," he wrote,

Stiehl plans to hold trial in June.

U.S. taxpayers loaned AIG $85 billion last year and took 80 percent ownership.