Tuesday, June 21, 2022

Marital Criming Was Protected

The New Jersey Supreme Court has held that the marital communications privilege was not (as is the attorney-client privilege) subject to the crime-fraud exception prior to a legislative enactment

In this appeal of defendant Ashley D. Bailey’s conviction of two counts of second-degree official misconduct, we determine whether the crime-fraud exception to the marital communications privilege governed text messages that defendant exchanged with her husband on September 16, 2014 -- after the Court proposed the exception, but before the Legislature enacted it into law.

The trial court held that the crime-fraud exception properly applied to the text messages without raising ex post facto concerns and admitted the messages into evidence at defendant’s trial. The Appellate Division affirmed.

We disagree that the crime-fraud exception can be properly applied to marital communications that preceded the Legislature’s amendment of N.J.R.E. 509. We find no evidence that the Legislature intended that amendment to retroactively apply to otherwise privileged marital communications that occurred prior to that amendment. We therefore hold that the trial court’s admission of the text messages constituted error. However, we view that error to be harmless given the extensive evidence presented by the State in support of defendant’s official misconduct convictions.

Accordingly, we modify and affirm the Appellate Division’s judgment.

(Mike Frisch)

June 21, 2022 in Privilege | Permalink | Comments (0)

Tuesday, May 10, 2022

Privilege Not Waived

The North Carolina Supreme Court affirmed the conclusion of the Court of Appeals that it was reversible error to allow the client's former attorney to testify that it was his strategy to delay the case, offered in response to the client's motion to dismiss on speedy trial grounds

We affirm the Court of Appeals’ holding on the evidentiary question and conclude that the trial court improperly admitted the testimony of Mr. Farook’s prior attorney where there was no waiver of the attorney-client privilege. Because the trial court plainly erred in admitting the testimony of Mr. Farook’s former attorney as evidence against him without justification or waiver, the trial court’s order must be reversed. However, the State may have had alternative ways to put into evidence the same facts the attorney testified to if the improperly admitted testimony had not been admitted in the first place. The State may also have decided to rely on entirely different facts not elicited before the trial court if it had not been allowed to introduce the improperly admitted testimony. While the delay in this case is extraordinary and the facts in the record relied on by the Court of Appeals in concluding that Mr. Farook’s Sixth Amendment rights were violated appear largely uncontested, we nevertheless remand this case for a rehearing on Mr. Farook’s speedy trial claim rather than evaluate the evidence at this stage. Accordingly, we reverse the holding of the Court of Appeals to the extent that it allowed Mr. Farook’s motion to dismiss.

The client was represented by a succession of four attorneys, one of whom was the sole witness responding to the motion to dismiss

A hearing on Mr. Farook’s motion to dismiss was held on 24 September 2018. Mr. Farook’s former attorney, Mr. Davis, testified against him as the State’s sole witness. Importantly, Mr. Davis testified that it was his desire to delay the case once it became clear that Mr. Farook would possibly face a violent habitual felon indictment because in his experience delay would work to Mr. Farook’s advantage. He also testified generally to the backlog of cases that beset the Rowan County courts at the time and explained that he told Mr. Farook sometime during his representation that it was unlikely he would be available to represent him at a trial because of his other professional obligations.

The case moved on to trial, where the defendant was convicted and sentenced to life without parole. (Mike Frisch)

May 10, 2022 in Privilege | Permalink | Comments (0)

Monday, May 9, 2022

When Are Privileged Communications Placed "At Issue"?

The Massachusetts Supreme Judicial Court dealt with the "at issue" waiver of attorney-client privilege in addressing a host of related issues

This case comes to us after a judgment entered dismissing the plaintiffs' claims, with prejudice, as a sanction for failing to comply with a discovery order requiring them to produce communications they had withheld from discovery on the ground that the communications were subject to the attorney-client privilege.

Holding

We conclude that the plaintiffs were entitled to invite dismissal of their claims as a sanction in order to obtain appellate review of the discovery order, and that the single justice's interlocutory review of the discovery order did not foreclose this appeal. We also conclude that, although the plaintiffs did not put their privileged communications "at issue" by bringing their claims against the defendant, they did put the privilege "at issue" by relying on the discovery rule to toll the statute of limitations. However, this does not result in a blanket waiver of the privilege, and we therefore vacate the judgment and portions of the discovery order and remand the case so that a particularized assessment of the purportedly privileged communications may be made. As to the plaintiffs' reliance on the common interest doctrine, we agree with the motion judge that the plaintiffs failed to establish that they were entitled to the doctrine because they were not both represented by counsel when they shared privileged information with each other. Finally, we conclude that the plaintiffs failed to establish that their accountants were necessary agents of their attorney, and thus they failed to establish that communications with those accountants were entitled to protection as attorney-client communications. Accordingly, we affirm the judge's ruling that communications withheld on the basis of the common interest doctrine should be produced, as well as the judge's similar ruling with respect to communications with the accountants. However, we vacate the remainder of the discovery order and remand for further proceedings.

Reasoning

With these principles in mind, we turn to the case at hand. As we have already stated, the plaintiffs allege that Allen committed a breach of his responsibilities to their mother in his handling of her legal affairs while she was alive, and to them while he was acting as trustee after the mother's death. These professional liability claims against Allen do not depend on communications the plaintiffs had with attorneys they hired or consulted to look into and evaluate Allen's performance. The claims against Allen rise and fall on what he did, or did not, do; they do not depend on legal advice from the lawyers the plaintiffs hired to look into Allen's performance. This is not a situation like the one in Zabin, 73 Mass. App. Ct. at 157-158, where the lawyers had all been involved in handling the same underlying litigation. Accordingly, the plaintiffs did not place "at issue" their attorney-client communications with other lawyers simply by asserting claims against Allen.

By contrast, the plaintiffs' reliance on the discovery rule to toll the statute of limitations did place "at issue" privileged communications to the limited extent they bear on the question of when the plaintiffs discovered, or reasonably should have discovered, that they had been harmed or may have been harmed by Allen's conduct.

(Mike Frisch)

May 9, 2022 in Privilege | Permalink | Comments (0)

Wednesday, December 15, 2021

Predominant Purpose Was Business Advice

The Minnesota Supreme Court affirmed a district court's finding that a report prepared by outside counsel was not protected by attorney-client privilege.

The report had been provided inadvertently in discovery and a "claw back" motion had been filed

The underlying litigation in this case involves a product-liability lawsuit brought by respondent Colby Thompson against appellant Polaris Inc. Before this litigation began, Polaris was subject to a government safety investigation and potential enforcement action under federal consumer product safety laws. Polaris retained outside counsel to conduct an audit into its safety processes and policies. After completing the audit, the lawyers provided a 32-page report, which included recommendations to improve compliance performance. Polaris inadvertently disclosed the audit report during discovery in the product-liability litigation with Thompson. Polaris then sought to claw the document back, asserting that the report is protected by the attorney-client privilege. Finding that the predominant purpose of the report was business advice, not legal advice, the district court denied the claw-back request while permitting redactions of the legal advice in the report. Polaris then sought a writ of prohibition to prevent disclosure of the report. The court of appeals denied the writ of prohibition, and Polaris sought further review.

At issue here is whether the report in its entirety is protected by the attorney-client privilege. Because we conclude that the district court did not clearly err by finding that the predominant purpose of the report is business advice, we affirm the denial of the writ of prohibition. We also deny Thompson’s motion to dismiss the appeal for lack of jurisdiction.

Holding

we hold that, when a document contains both legal advice and business advice, for the attorney-client privilege to apply to the document in its entirety, the predominant purpose of the communication must be legal advice. The privilege does not protect the entirety of the document if legal advice is merely one purpose and not the primary purpose of the communication. See Harrington, 144 A.3d at 416 & n.7. We stress, however, that even when the predominant purpose of the communication is business advice, the attorney-client privilege will protect any portions of the document that contain legal advice.

Standard of review

The special master found that the predominant purpose of the audit report was “giving business advice,” reasoning that the report was distributed to Polaris management and the board of directors to “implement operational changes.” The report addresses the organizational culture of Polaris and discusses the areas of product design, engineering, and manufacturing practices, with the express goal of “improv[ing] the process Polaris uses to assess safety risks.” The special master essentially determined that the primary purpose of the report was setting corporate policy. We conclude that the special master did not clearly err in finding that these aspects of the report address business matters.

Justice Anderson dissented

I agree with the court’s reasoning regarding our jurisdiction, the predominant purpose test, and the standard of review. But I disagree with the court’s conclusion that the report drafted by Crowell & Moring LLP (the Report) provides predominantly business advice and therefore is not subject to the attorney-client privilege in its entirety.

Appellant Polaris, Inc. (Polaris) sought professional assistance after receiving notice of an investigation from the Consumer Product Safety Commission (CPSC) regarding alleged violations of the Consumer Product Safety Act (CPSA). Polaris specifically desired legal advice regarding compliance weaknesses and how to successfully address those weaknesses. To that end, Polaris did not hire a business consultant; nor did it retain an engineer, a public relations expert, or an operations analyst. The company hired an attorney; specifically, Polaris retained the former general counsel of the very government agency investigating it—the CPSC. That attorney, Cheryl Falvey, along with her law firm, Crowell & Moring, investigated Polaris for CPSA compliance issues and, in a 32-page Report, provided recommendations on how to address those issues. Polaris did not ask Falvey for her input on better engine design. And Polaris did not ask for—nor does the Report provide—advice on how to run its business more profitably.

Despite Falvey’s expertise in CPSA compliance, the Report’s findings and recommendations regarding the regulatory environment for CPSA compliance, and its dearth of advice on how to increase the profitability of Polaris, the court concludes that the predominant purpose of the Report is business advice and, therefore, the Report is not entirely privileged. Not only is the court’s conclusion wrong, but it will also frustrate
attorney-client relations, discourage businesses from seeking legal advice, and require lawyers to pepper client communications with legalese and superfluous citations.

I respectfully dissent.

Chief Justice Gildea joined the dissent. (Mike Frisch)

December 15, 2021 in Privilege | Permalink | Comments (0)

Wednesday, March 24, 2021

Remand In Facebook Privilege Litigation

An opinion of the Massachusetts Supreme Judicial Court

In this case we address the applicability of the attorney-client privilege and the work product doctrine to an internal investigation conducted by the respondent, Facebook, Inc. (Facebook). After public reporting revealed potential widespread misuse of Facebook user data by third-party applications (apps), Facebook hired a law firm, Gibson, Dunn & Crutcher LLP (Gibson Dunn), to conduct a far-reaching investigation to identify the extent to which apps had misused user data and advise Facebook on potential resulting legal liabilities. This investigation is known as the app developer investigation (ADI). Around the same time, the Attorney General opened an investigation into Facebook under G. L. c. 93A, focusing on whether Facebook misrepresented the extent to which it protected or misused user data.

As part of that investigation, the Attorney General served Facebook with several civil investigative demands (demands). At issue are six requests contained within these demands that sought the identities of the apps and developers that Facebook reviewed at various stages of the ADI, other information associated with the review of the identified apps, and internal  communications about those apps. Facebook asserted that both the attorney-client privilege and the work product doctrine protected this information. The Attorney General filed a petition in the Superior Court seeking an order compelling Facebook to comply with the disputed requests. A judge concluded that most of the information is neither privileged nor work product, as it was not prepared in anticipation of litigation, and that even if it was prepared in anticipation of litigation, it is all factual information.

We conclude that the Attorney General's targeted requests allow Facebook to tailor its responses to the first five of the six requests to avoid disclosure of communications protected by the attorney-client privilege. We also conclude, however, that the documents sought by the first five requests were prepared in anticipation of litigation and therefore are covered by the work product doctrine. We further conclude that a remand is required to separate "opinion" work product from "fact" work product for at least some of these documents. To the extent the work product is fact work product, we conclude that the Attorney General has satisfied the heavy burden of demonstrating a substantial need for the information. Finally, as for the sixth request, seeking internal communications about the apps, we have determined that this request encompasses both privileged and nonprivileged communications, and therefore requires preparation of a privilege log and further review as determined by the judge.

The investigation arose from the Cambridge Analytica reportage

The 2018 reporting of this incident sparked a wave of litigation against and investigations into Facebook. By the end of 2018, Facebook faced at least five securities class actions, eight derivative actions, three books and records actions, and thirty-nine consumer-based suits, most of which also were class  actions. This number swelled to at least sixty-five litigations before the end of 2019. Facebook is also being investigated by a number of State, Federal, and foreign regulators.

Gibson Dunn led an app developer investigation ("ADI") team

Shortly after the media coverage of the Cambridge Analytica incident in March 2018, the Attorney General began investigating Facebook under G. L. c. 93A, § 6. The purpose of the investigation is to identify any other apps that misused user data and assess whether Facebook followed its policies and commitments to its users regarding user data. Over the course of the investigation, the Attorney General has issued three demands.

The first demand was issued in April 2018. The second demand, issued in June 2018, sought information on the apps that Facebook had suspended and information on Facebook's internal policies and procedures surrounding apps. As part of its response, Facebook provided the Attorney General with detailed information on how it has conducted the ADI.

The third demand, issued on November 5, 2018, is the subject of this dispute. In this demand, the Attorney General sought the identities of and information regarding the apps and developers that Facebook identified and reviewed as part of the ADI. Specifically, the Attorney General took the detailed descriptions of the ADI that Facebook provided and used that language in her requests. In response, Facebook provided updated information on suspended apps but refused to comply with several of the requests.

The court noted Facebook's extensive voluntary production and public statements concerning the ADI.

The first five requests do not require the production of any communications between Facebook and counsel during the ADI process.13 Rather, these requests only seek documents "sufficient to identify" the apps that fall within the five categories of requested documents identified  supra or lists of the apps themselves, and other information associated with those apps. While this certainly requires the production of factual information relevant to the Attorney General's investigation, and such factual information has almost certainly been contained in attorney-client communications, it does not require the production of the attorney-client communications themselves. This is a crucial distinction...

The sixth request broadly seeks "[a]ll of Facebook's internal communications and internal correspondence concerning" several categories of apps sought in the other requests. Facebook refused to comply with this request and asserted that it called for the production of privileged communications. The judge below ordered Facebook to produce a detailed privilege log identifying any documents it was withholding on the basis of the privilege. While this case proceeded on appeal, Facebook provided the Attorney General with at least two privilege logs responsive to this request.

...We...agree with the judge below that the appropriate course of action is for Facebook to prepare a detailed privilege log so that the Attorney General can challenge any assertions of privilege.

Work product

we conclude that the app information required to be produced is clearly covered by the work product doctrine. We also conclude that if this app information is not opinion work product, Facebook must disclose that information, because the Attorney General has demonstrated a substantial need for the information and could not obtain it without undue hardship. The difficult issue is separating fact from opinion work product in the first five requests. We set out the mode of analysis here but remand to the judge its application to the specific requests.

....In sum, we conclude the Attorney General has demonstrated both substantial need and undue hardship for the fact work product about the apps.

(Mike Frisch)

March 24, 2021 in Privilege | Permalink | Comments (0)

Thursday, October 29, 2020

Flagpoles And Privilege Waiver

The Mississippi Supreme Court has held that an insurer had waived attorney-client privilege in communications with in-house counsel. 

This is an interlocutory appeal of a bad-faith failure-to-pay claim. The trial court found that the insurance company waived the attorney-client privilege and was required to produce written communications between its in-house counsel and its claims handler and to produce its in-house counsel for a deposition. We agree and affirm.

The claim involved damage over $2,000 caused to a flagpole by an unidentified driver

Travelers denied Renaissance’s claim. Travelers’ claims handler, Charlene Duncan, determined there was no coverage under the UM policy because the flagpole was not a covered “auto.”

Editor's note: This position makes a certain amount of intuitive sense, as the dissent notes. 

Renaissance's counsel made an argument for coverage

On February 19, 2016, Renaissance’s attorney, Rick Wise, sent an email to Duncan that set forth Renaissance’s legal arguments as to why coverage should be afforded under Mississippi’s UM statute.

...Before responding, Duncan sought legal advice from Travelers’ then in-house counsel, Jim Harris. Duncan is not an attorney. Duncan sent a letter, dated March 2, 2016, that again advised Renaissance that its claim was denied under its UM policy because the policy required damage to a covered auto.

In the ensuing litigation

Renaissance took Duncan’s deposition and asked that she explain both the denial letter and the reasons Travelers denied the claim.

That litigation

Renaissance commenced this claim on August 25, 2016. In the complaint, Renaissance asserted a claim for coverage under the UM policy and a claim for bad-faith denial of the claim. In an effort to resolve the matter, Travelers paid the full amount for damage to the flagpole. Renaissance, however, continued to litigate its bad-faith claim.

As to the advice

After in camera review, the trial court found that “Travelers ha[d] waived the attorney-client privilege as it relates to attorney Jim Harris.” The trial court ordered Travelers to produce the emails and to produce Harris for a deposition. Travelers filed a petition for interlocutory appeal, which this Court granted.

Here

Travelers sent the denial letter to Renaissance in an effort to explain its arguable and legitimate basis to deny the claim. The letter was signed by Duncan; but based on her deposition testimony, it clearly was prepared by someone other than
Duncan, most likely Harris. If so, Harris did not act as legal counsel and give advice to Duncan to include in the denial letter. Instead, the denial letter contained Harris’s reasons to deny the claim. Duncan’s signature was simply an effort to hide the fact that Harris, not Duncan, had the personal knowledge of Travelers’ reasons to deny the claim and to use the attorney-client privilege as a sword to prevent Renaissance from discovering the reasons from the person who had personal knowledge of the basis to deny the claim.

..Renaissance is entitled to depose the individual with personal knowledge of the basis for the denial of coverage as set forth in the denial letter. That person is Harris.

There is a dissent from Justice Ishee joined by Justice Coleman 

The majority concludes that the legal arguments contained in Duncan’s denial letter were probably the product of her consultation with Harris. That is almost certainly the case, but the majority then goes on to conclude that since Duncan, the claims handler, could not explain the legal arguments, the letter “clearly was prepared by someone other than Duncan, most likely Harris” and that “Duncan’s signature was simply an effort to hide the fact that Harris, not Duncan, had personal knowledge of Travelers’ reasons to deny the claim.” Maj. Op. ¶ 18. Thus, the majority reasons, Travelers has waived the attorney-client privilege, and Renaissance is entitled to depose the attorney, Harris, and to discovery of the correspondences between the claims handler and the attorney.

With all due respect to the majority, I disagree with its underlying premise. Duncan clearly understood the reason for denying the claim, which was the same reason stated in her initial denial letter: the express language of the policy precluded coverage. Duncan faltered only when asked to respond to Renaissance’s legal arguments concerning questions of statutory interpretation that might have overridden the express policy language. The majority thus appears to impose a requirement that in order to preserve the privilege, a claims handler must be able to explain legal arguments at her deposition—the same legal issues for which she sought advice in the first place. I can find no authority to support this proposition, and I fear it is an unreasonable standard that will have deleterious and chilling effects on the exercise of the attorney-client relationship. “[A]n insurance company should be free to seek legal advice in cases where coverage is unclear without fearing that the communications necessary to obtain that advice will later become available to an insured who is dissatisfied with a decision to deny coverage.” Aetna Cas. & Sur. Co. v. Superior Ct., 200 Cal. Rptr. 471, 475 (Cal. Ct. App. 1984).

Dissent concludes

The underlying facts of the claim here were not disputed: an unidentified motorist struck and damaged Renaissance’s flagpole. Travelers’ attorney’s participation was limited to evaluating legal arguments presented by Renaissance’s attorney in a demand letter after the initial denial of coverage. The communications between Travelers’ claim handler and its attorney are protected by the attorney-client privilege, and I cannot find the privilege to have been waived by the mere involvement of the attorney in evaluating the legal arguments  presented in Renaissance’s demand letter. I respectfully dissent.

October 29, 2020 in Privilege | Permalink | Comments (0)

Thursday, August 13, 2020

It Happened At The World Bank

The District of Columbia Court of Appeals applied absolute immunity under the judicial proceedings privilege to affirm the dismissal of a defamation action.

The facts

Appellant Shinok Park worked under appellee Milan Brahmbhatt at the World Bank (the Bank). Ms. Park reported Mr. Brahmbhatt to the Bank’s Office of Ethics and Business Conduct (the EBC), alleging that he sexually assaulted and harassed her. The EBC investigated her allegations and, when doing so, afforded Mr. Brahmbhatt multiple opportunities to respond. Mr. Brahmbhatt retained appellee Peter Hansen as counsel during the Bank’s investigation. Through counsel, Mr. Brahmbhatt submitted two memoranda to the EBC, in which he claimed he had a consensual sexual relationship with Ms. Park and accused her of blackmailing and extorting him for employment opportunities at the Bank. According to Ms. Park, the memoranda also implied that she was a prostitute. The EBC sent a report to the Bank’s Vice President of Human Resources, attaching the two memoranda. In the report, the EBC recommended that the Vice President sanction Mr. Brahmbhatt for violating Bank rules by failing to resolve a de facto conflict of interest, but not to sanction him for sexual assault or harassment. The Vice President adopted the EBC’s  recommendation. Mr. Brahmbhatt appealed his sanction to the World Bank Administrative Tribunal (the WBAT), which affirmed the Vice President’s decision.

Ms. Park later was terminated from her employment at the Bank. She sued Mr. Brahmbhatt and Mr. Hansen in Superior Court for defamation, claiming the two memoranda they submitted to the EBC defamed her and resulted in her termination.

The memoranda were uncovered through discovery in a parallel proceeding.

The privilege on these facts

we have applied the judicial-proceedings privilege to statements made preliminary to judicial proceedings so long as “an attorney [made the statements] while performing his function as such,” there is “a reasonable nexus between the publication in question and the litigation under consideration,” and the statements had a genuine “relationship to potential litigation” and were not made as a “mere afterthought or [with a] sham rationale.” These requirements have been met in instances where an attorney solicited shareholders of a corporation to participate in a class action lawsuit against the corporation; an attorney questioned an adversary’s competency in the English language while waiting in a hearing room of the Rental Accommodations Office prior to commencement of a proceeding;  and an attorney responded to a threat of a lawsuit against the attorney’s client. 

In this case, Mr. Hansen submitted the memoranda to the EBC on behalf of Mr. Brahmbhatt as preliminary submissions to the WBAT. First, Mr. Hansen submitted the memoranda is his capacity as an attorney. Both memoranda bore his law firm’s letterhead in the top center, “LAW OFFICES OF PETER C. HANSEN, LLC,” and specified that he was “[c]ounsel to Mr. Brahmbhatt.” Second, the memoranda had a “reasonable nexus” to future WBAT proceedings. Both memoranda contested facts and cited WBAT case law to argue that Ms. Park’s allegations did not meet the requisite standard of proof because other evidence indicated she was lying, and that the EBC’s findings of  fact and conclusions of “law” in its draft report were erroneous based on WBAT precedent. Third, Mr. Hansen’s submissions indicate that he intended, in part, to establish a record for future WBAT proceedings; those proceedings, in other words, were not a mere afterthought. It was crucial that Mr. Hansen establish a record early on, as the WBAT historically has not heard oral arguments or held evidentiary hearings.

The statements

 The allegedly defamatory statements in this case were relevant to future WBAT proceedings. Ms. Park claimed Mr. Brahmbhatt sexually harassed and assaulted her, and Mr. Brahmbhatt defended himself on factual grounds, specifically, that he was the victim, not Ms. Park, something that if true would certainly have aided Mr. Brahmbhatt’s defense. The question is not whether Mr.  Hansen executed a sound or sensible argument, but whether a reasonable person might construe the statements he made as relevant.

Other safeguards exist

And although the specific requirements of the privilege have been met here, “the consequent immunity from a defamation suit does not mean that the attorney may not be sanctioned for misconduct."  An overly “bumptious and unrestrained” attorney who makes defamatory statements without regard for their truth or relevance, we predict, will render service counterproductive to his client’s interests and may be liable for malpractice in a given case. That attorney, too, may be subject to professional discipline.

It is worth noting that the Bank seeks to account for the interests of the complainant—here, Ms. Park—by imposing a duty on the EBC, witnesses, and staff members to keep confidential all information related to an investigation of a complaint. The WBAT, as well, sought to protect Ms. Park’s identity by referring to her as “Ms. R.” Although Ms. Park claims that the statements in the memoranda were somehow leaked and led to her termination, she has offered us no evidence that leaks are a general problem at the Bank. And we presume that the Bank does its best to honor its rules regarding confidentiality, a presumption Ms. Park has not rebutted.

Associate Judge Glickman authored the opinion joined by Associate Judges Fisher and Thompson. (Mike Frisch)

August 13, 2020 in Privilege | Permalink | Comments (0)

Tuesday, June 30, 2020

Third Party Presence Waives Privilege

The Tennessee Court of Appeals affirmed a finding that the presence of a third party in communications with a client's divorce attorney waived the attorney-client privilege.

The client had been advised that the situation would waive privilege but nonetheless proceeded. 

[The client] filed a complaint for divorce against Timothy J. Pagliara (“Husband”). At that time, Wife was represented by an attorney, Marlene Moses. While the divorce action was pending, Wife consulted with her attorney, Ms. Moses, in the presence of Wife’s friend, Adela Ferrell, concerning, in part, whether Wife should report to law enforcement certain actions by Husband. Ms. Moses correctly had informed Wife that their communications would not be protected by attorney-client privilege with Ms. Ferrell present, but Wife insisted Ms. Ferrell remain in the room. Husband’s counter complaint alleged that upon Wife’s request for legal advice as to whether she should report Husband’s actions to law enforcement, Ms. Moses responded to Wife that reporting his conduct was the only way for Wife to gain an advantage in the divorce proceeding.

Ms. Moses then referred Wife to her son-in-law, Ben Russ, an attorney practicing criminal law. Ms. Ferrell drove Wife to her meeting with Mr. Russ and was present during this meeting. Mr. Russ also informed Wife that their conversations would not be privileged with Ms. Ferrell present in the meeting, but Wife insisted that Ms. Ferrell be present. Ms. Ferrell, therefore, was present for this meeting with Mr. Russ wherein they discussed reporting Husband’s actions to law enforcement.

Wife subsequently reported Husband’s actions to the Franklin Police Department.

The husband sued for intentional and negligent infliction of emotional distress and sought discovery of these communications.

Because Wife was in the best place to have the knowledge necessary to prove the existence of attorney-client privilege, the burden of proof was with Wife to show that the communications between her and her lawyer were protected by attorney-client privilege. See Culbertson, 393 S.W.3d at 684; State ex rel. Flowers., 209 S.W.3d at 616. Wife did not present evidence demonstrating that the attorney-client privilege applied to any specific one or more of the meetings with her attorneys and agreed with the Trial Court’s finding that she could not identify which meetings Ms. Ferrell was present for. Our acceptance of Wife’s position would mean that because neither Wife nor Ms. Ferrell could identify which meetings Ms. Ferrell was present, the attorney-client privilege would apply whether Ms. Ferrell was present or not. That is not the law in Tennessee. Wife has not met her burden of proof to establish that the attorney-client privilege protected these communications. As such, we affirm the Trial Court’s ruling that the attorney-client privilege does not protect these communications between Wife and Ms. Moses and Wife and Mr. Russ because Wife has not met her burden of proof to establish that the privilege applies to any specific communication at issue.

(Mike Frisch)

June 30, 2020 in Privilege | Permalink | Comments (0)

Tuesday, June 16, 2020

Third Party Disclosure Waives Privilege

The Delaware Court of Chancery has held that a party waived its attorney-client privilege by submitting the documents at issue to the Federal Communication Commission.

The Plaintiffs seek thirty-one (31) documents previously produced by Defendant IDT Corporation (“IDT”) to the Federal Communications Commission (“FCC”) in 2016 in connection with an investigation pertinent to this Action.

The court distinguished an earlier decision

But here, I find, IDT did not have an analogous expectation of privacy because the documents were not produced to the FCC under a confidentiality agreement. Instead, IDT merely requested that the documents remain confidential. IDT had no non-disclosure agreements with the FCC, and the Requests cited by IDT are insufficient to show that IDT reasonably believed that the documents would not be revealed to other adversaries. In other words, IDT found it advantageous to disclose the privileged documents to a third party, the FCC, despite knowing that they could be disseminated. IDT did not have a commitment, let alone an enforceable agreement, with the FCC to keep the documents confidential. In that situation, IDT manifested its intent to waive any privilege by disclosing the documents to a third party. I assume that IDT desired that the thirty-one documents remain confidential, but such desire does not amount to the reasonable expectation required to avoid a waiver under Saito, which is an exception to the general rubric that outside disclosure vitiates the privilege.

IDT has also cited cases that decline to find a waiver of privilege where privileged documents were inadvertently produced. However, nothing in the record indicates that IDT inadvertently produced the documents, instead IDT has imply asserted that “[i]ts inclusion of a small number of privileged documents in its voluminous production to the FCC does not waive privilege.” I find the cases cited by IDT inapposite as to whether privilege was waived by IDT’s purposeful production.

(Mike Frisch)

June 16, 2020 in Privilege | Permalink | Comments (0)

Saturday, May 30, 2020

No Spousal Privilege In Alleged Crime Against Child

The Louisiana Supreme Court has held that the spousal privilege is trumped by statutes that protect children from abuse.

On January 30, 2018, the target of the grand jury investigation was charged by Bill of Information with one count of molestation of a juvenile, a violation of La. R.S. 14:81.2, arising from an incident in 2003 in which he allegedly molested his children’s babysitter. The target was subsequently arrested and pled not guilty. Following the District Attorney’s voluntary recusal, the Attorney General stepped in as District Attorney ad hoc and dismissed the charges, choosing to proceed by seeking a grand jury indictment. In conjunction with the grand jury proceeding, the state issued a subpoena to Jane Opperman, the target’s wife, to appear before the grand jury. Mrs. Opperman filed an “Affidavit of Spouse” wherein she asserted “her lawful privilege to refuse to give evidence in any criminal proceeding against her husband, pursuant to Louisiana Code of Evidence article 505.” The state subsequently filed a “Motion to Determine Applicability of Spousal Privileges,” arguing the privilege does not apply when a spouse is charged with a crime against the person of a child.

Holding

Because the spousal witness privilege was created solely by the legislature, it can also be modified or withdrawn. See Bellard, 533 So. 2d at 965 (citing State v. Smith, 489 So. 2d 255 (La. App. 5th Cir. 1986) and State v. Fuller, 454 So. 2d 119 (La. 1984)). The legislature has provided for such abrogation in La. R.S. 14:403(B). Based on the facts of this case, we hold that under La. R.S. 14:403(B), Mrs. Opperman is not entitled to assert the spousal witness privilege at a grand jury proceeding targeting her husband.

Background on the controversy is described by WBRZ 2 

Small town scandal became dirtier in the last few days when the ex-wife of the West Feliciana district attorney filed suit against her former divorce attorney in a fight over airing dirty laundry.

In court filings obtained by WBRZ, Kelly Ballard, the now ex-wife of District Attorney Sam D’Aquilla, wrote her lawyer broke her trust and attorney-client privilege. Ballard believes the divorce attorney, David Opperman, used her divorce as leverage.

Ballard said Opperman exposed her torrid relationship with her ex-husband when he discussed allegations of abuse, “sexual affairs and planting of evidence” by D’Aquilla.

Opperman accused D’Aquilla of having a sexual relationship with the former coroner, destroying evidence in other criminal cases and of being under investigation by federal authorities.

“The D’Aquillas are the gift that keeps on giving,” Opperman said in a statement to WBRZ’s Investigative Unit. Opperman said, “you just can’t escape these people.” In a phone call with Chief Investigator Chris Nakamoto Tuesday, Opperman denied the allegations in the lawsuit.

Ballard’s marital issues were revealed in court documents highlighted in a previous WBRZ report where Opperman asked that D’Aquilla be recused from prosecuting him in a separate criminal case.

D’Aquilla and Opperman, have been political adversaries – Opperman accusing the D.A. of wrongdoing as D’Aquilla attempted to prosecute a 15-year-old abuse case against Opperman.

Opperman was arrested in December 2017, accused of molesting a teenage girl in 2003. He has denied the allegations.

The Louisiana Attorney General dismissed the charges in November but said a grand jury will convene to hear evidence in the case presented by state attorneys.

The dismissed charges were from D’Aquilla’s attempt at prosecution. He recused himself from the case, moving it to the attorney general.

In the latest court wrinkle, Ballard, the D.A.’s ex-wife, also accused Opperman of malpractice.

Opperman ran for district attorney against D’Aquilla in 2014 and lost.

Baton Rouge attorney Jill Craft is representing Ballard, the ex-wife.

The alleged molestation took place in 2003. (Mike Frisch)

May 30, 2020 in Privilege | Permalink | Comments (0)

Sunday, March 1, 2020

Malpractice Suit Waives Attorney-Client Privilege For Third Party Counsel In Same Transaction

The Georgia Supreme Court holds that a malpractice suit implies waiver of the attorney-client privilege with respect to third-party attorneys involved in the representation

Under longstanding Georgia law, when a client sues his former attorney for legal malpractice, the client impliedly waives the attorney-client privilege with respect to the underlying matter or matters to the extent necessary for the attorney to defend against the legal malpractice claim. The issue presented in this appeal is whether the implied waiver extends to the client’s communications with other attorneys who represented the client with respect to the same underlying matter, but whom the client chose not to sue. The trial court held that the waiver does extend to such other counsel and therefore denied a motion for a protective order in this legal malpractice case. The Court of Appeals reversed, see Moody v. Hill, Kertscher & Wharton, LLP, 346 Ga. App. 129 (813 SE2d 790) (2018), and we granted certiorari to decide this issue of first impression. We hold that when a client sues his former attorney for legal malpractice, the implied waiver of the attorney-client privilege extends to the client’s communications with other attorneys who represented the client with respect to the same underlying transaction or litigation. For the reasons described below, we reverse in part and vacate in part the Court of Appeals’ judgment, and we remand the case with direction.

The client (Moody and two of his business entities) had invested in a California aerospace company. The law firm provided advice that included termination of the company president

Despite Moody’s specific requests, HKW failed to assert certain defenses properly, including that the California court lacked personal jurisdiction over Moody. HKW did not disclose or obtain written waivers of any potential or actual conflicts of interest resulting from prior or ongoing representation of Leucadia Group and Miller. Miller filed a motion in the Fulton County lawsuit to disqualify HKW, which was granted, and HKW then withdrew from the California lawsuit. The California court ultimately ruled that Moody’s appointment to Leucadia Group’s board of directors, Leucadia Group’s issuance of shares to LIH, and Miller’s termination as president of Leucadia Group were all void.

In the resulting legal malpractice suit, the law firm sought discovery

HKW requested, among other things: (1) Holland & Knight’s file for any corporate work performed for Plaintiffs regarding Leucadia Group, Miller, another named individual, and another named company; (2) Holland & Knight’s litigation file for the Fulton County lawsuit; (3) Holland & Knight’s litigation file for the California lawsuit; and (4) all correspondence related to that corporate work and the Fulton County and California lawsuits, including communications between Plaintiffs and Holland & Knight.

Both Plaintiff and Holland & Knight asserted privilege and sought a protective order

the trial court denied Plaintiffs’ motion for a protective order. The trial court found that it was undisputed that Holland & Knight together with HKW represented Moody in connection with the matters that are the subject of the legal malpractice complaint and held that Plaintiffs therefore had “waived the attorney-client privilege and work product protection concerning Holland & Knight . . . by asserting the present legal malpractice claims.”

The court here reviewed state law on attorney-client privilege and implied waiver

A similar rationale requires recognition that the implied waiver of the attorney-client privilege extends to other attorneys who represented the plaintiff-client in the same underlying matter. To succeed on a claim of legal malpractice, the plaintiff-client must prove three elements: “(1) employment of the defendant attorney, (2) failure of the attorney to exercise ordinary care, skill and diligence, and (3) that such negligence was the proximate cause of damage to the plaintiff.” Allen v. Lefkoff, Duncan, Grimes & Dermer, P.C., 265 Ga. 374, 375 (453 SE2d 719) (1995) (citation and punctuation omitted). Thus, by suing HKW for legal malpractice, Plaintiffs have put at issue questions of proximate causation, reliance, and damages, all of which may have been affected by other attorneys who represented Plaintiffs in the same matters underlying Plaintiffs’ malpractice complaint.

The Court of Appeals should have affirmed the trial court’s ruling that Plaintiffs  were not entitled to a protective order based on attorney-client privilege.

The Court of Appeals opinion is linked here. 

The court's remand recognized that the work-product doctrine must be considered. (Mike Frisch)

March 1, 2020 in Privilege | Permalink | Comments (0)

Saturday, August 31, 2019

No Privilege

The Kentucky Supreme Court affirmed and remanded in part in a matter of attorney-client privilege involving a denied promotion at the University of Louisville School of Medicine’s Division of Gynecologic Oncology.

On October 23, 2009, Dr. Helm initiated a faculty grievance procedure against two of his supervisors, Dr. Christine Cook and Dr. Lynn Parker. Appellant Ruby Fenton (Fenton) had served as an attorney for the University prior to the grievance proceedings, and she was retained to represent Dr. Cook and Dr. Parker in the grievance proceedings. Her attorney fees were paid by the University; fees for Dr. Helm’s attorney were not. Under the applicable personnel rules, the University was designated as a neutral arbiter in the faculty grievance process. Thus, Dr. Cook and Dr. Parker were represented by an attorney who had an ongoing attorney-client relationship with the University, the neutral arbiter in the process.

On May 17, 2010, the University’s grievance hearing panel unanimously found that Dr. Helm had been placed on leave in a manner totally contrary to the University’s written policies. The panel recommended that the University comply with Dr. Helm’s contract through its conclusion on July 31, 2010, and that Dr. Helm be allowed to re-submit his application for full professorship.

On June 18, 2010, Dean Halperin refused to accept the panel’s recommendation that Dr. Helm be allowed to re-submit his application, stating it was moot because Dr. Helm’s contract would expire on July 31, 2010. Dean Halperin had notified Dr. Helm in February of that year that his faculty appointment would not be renewed. As Dr. Helm had been advised, the University did not renew his faculty appointment, and his last day at the University was July 31, 2010.

Dr. Helm sued and sought discovery of extensive communications between the attorney and a host of University employees

During discovery, Dr. Helm served a subpoena upon Fenton seeking all written communications and notes reflecting communications between Fenton and any person associated with the University relating to the faculty grievance proceedings. The University and Fenton refused to produce the communications and asserted that the requested information was protected by the attorney-client privilege and the work-product privilege.

The trial court initially sided with the University but changed its view and ordered the discovery.

Here the University appealed and sought mandamus

if a trial court orders the production of communications protected by the attorney-client privilege, the aggrieved party is entitled to a writ halting the production of the such communications.

Reviewing the conclusion of the Court of Appeals

...apparently accepting in full the trial court’s findings of fact, the Court of Appeals denied the writ, stating that “[b]ased upon our review of the record, this Court cannot conclude that the trial court abused its discretion by finding that the University failed to carry its burden of demonstrating the applicability of the attorney client privilege.” This appeal by the University and Fenton followed.

The court here agreed that no attorney-client relationship was proven but remanded

The Court of Appeals, however, did not rule upon the University and Fenton’s request for protection of the subject communications based upon the work-product privilege. Thus, we remand to the Court of Appeals for its ruling on that issue.

(Mike Frisch)

August 31, 2019 in Privilege | Permalink | Comments (0)

Thursday, May 23, 2019

Work Product In Washington State

The Washington State Supreme Court affirmed a Court of Appeals remand for violation of the work product protection in connection with a PIP claim. 

Washington law extends work product protection to statements made by an insured to an insurer following an accident in light of the specific parties involved and the expectations of those parties. We must decide if that protection applies here, where the insured has gained the status of insured by statute, rather than by contract. We hold it does. We affirm the Court of Appeals and remand to the trial court for a new trial.

The case involves a child on a bicycle injured in an accident. The police report was not based on first-hand observations and contradicted the child's recollection. The child's mother adopted the report in seeking PIP benefits.

In the lawsuit

In addition to seeking PIP coverage, [mother] Diaz also sued Prieto on behalf of [child] Brayan. The significant difference between the PIP form and Brayan's testimony became a central issue at trial. Prieto's counsel stressed the differences between Diaz's and Brayan's testimony and the PIP form; Diaz's counsel stressed that the PIP form was based on accounts from people who did not see the accident.

The trial court rejected the claim of privilege with respect to the PIP form and allowed defense counsel to cross-examine with a redacted version of the form.

Erroneously

The jury returned a defense verdict. The Court of Appeals reversed, holding the PIP application was work product and its admission was prejudicial, requiring a new trial. Barriga Figueroa v. Prieto Mariscal, 3 Wn. App. 2d 139, 414 P.3d 590 (2018). We granted Prieto's petition for review and denied the issues raised by Diaz. Barriga Figueroa V. Prieto Mariscal, 191 Wn.2d 1004, 424 P.3d 1214 (2018). Washington State Association for Justice Foundation filed an amicus brief.

PIP and the claimant

We hold that an insurer owes a pedestrian PIP insured the same quasifiduciary duties that it owes a named insured who purchases a policy. Specifically, the '"insurer must deal fairly with an insured, giving equal consideration in all matters to the insured's interests.'" See Van Noy, 142 Wn.2d at 794-95 (emphasis omitted) (quoting Tank, 105 Wn.2d at 386). This approach is consistent with our common law and the plain language of RCW 48.01.030, which requires insurers to act in "good faith, abstain from deception, and practice honesty and equity in all insurance matters." (Emphasis added.) With this quasi-fiduciary relationship in mind, we turn to the work product issue.

...as Brayan's parent and natural guardian, Diaz went to a law firm for legal assistance. As part of providing that legal assistance, the law firm sent a PIP application form to the parties' shared insurance company. Diaz did not fill out the forms herself, and it cannot be seriously contended that she sought legal assistance merely to have help filling out forms—Prieto ran over her eight-year-old son's leg, seriously injuring him. That no lawsuit had been filed when Diaz prepared Brayan's PIP application is of no consequence; Diaz plainly signed the form in anticipation of litigation, in a lawyer's office, with assistance from the law firm ultimately suing Prieto. Indeed, in Heidebrink, we stated that had the statements been "made directly to the [insurance company's] selected attorney, it would obviously have been made in anticipation of litigation." 104 Wn.2d at 400. The statements were made in anticipation of litigation. Thus, we hold work product protections apply.

The court noted the extensive defense use of the document in evaluating prejudice

when Prieto's counsel used the PIP form, he almost always emphasized the fact that it was signed by Diaz, thereby attributing the statements to her. Diaz did not make these statements; the legal assistant filled out the PIP form based on the police report. Crucially, the speculative statements in the police report were hearsay and the police report was inadmissible at trial for this reason.

JOHNSON, J. (dissenting)

The work product doctrine is meant to serve as a narrow exception to otherwise broad discovery and is confined to materials that are prepared in anticipation of litigation. Our cases have established that in the insurance context, a determination of whether this protection applies requires that the court conduct a fact-specific inquiry looking at the "specific parties involved and the expectations of those parties." Heidebrink v. Moriwaki, 104 Wn.2d 392, 400, 706 P.2d 212 (1985). We reiterated this factual analysis in Harris v. Drake, where the relationship between the insurer and insured was of particular importance, and we observed that the relationship "requires close examination, evaluating the specific positions of the insurer and insured in each instance." 152 Wn.2d 480, 489, 99 P.3d 872 (2004). The majority acknowledges the fact-specific nature of this inquiry but then ignores it and proceeds to apply work product protection to a personal injury protection (PIP) application form where no factual basis exists to support doing so. Furthermore, even assuming the trial court committed error by admitting the application form, the form was not material to the jury's determination or prejudicial to the plaintiff, and only by selectively mischaracterizing the record does the majority conclude otherwise...

The record simply does not indicate that Diaz anticipated litigation when she signed the PIP application; it indicates only that she employed an attorney who assisted her with filing a PIP claim. By extending work product protections to this application, the majority seemingly, but without expressly stating so, abandons our fact-specific analysis in favor of broad protection for any materials prepared in the insurance context. If we properly apply what our prior cases established and recognize the underlying policy of CR 26(b)(4) favoring broad discovery, work product protections do not apply here.

No prejudice per the dissent

Despite all of the evidence and testimony, the majority never explains, and cannot explain, how the de minimis use of the prior inconsistent statement in the PIP application form, made by a nonwitness to the accident, could have possibly had a material effect on the jury's decision.

(Mike Frisch)

May 23, 2019 in Privilege | Permalink | Comments (0)

Friday, January 25, 2019

Tennessee Extends Privilege

From the web page of the Tennessee Supreme Court

The Tennessee Supreme Court has held that the attorney-client privilege protects communications between a business’s attorneys and a third party when the third party acts as the functional equivalent of an employee and when the communications relate to the attorney’s representation of the business and were intended to be confidential.

The Supreme Court issued this ruling in a business dispute appealed from the Davidson County Circuit Court. In this case, Dialysis Clinic, Inc. sued to evict tenants from commercial properties in Nashville that the Dialysis Clinic had purchased. The tenants subpoenaed documents from XMi Commercial Real Estate, a property management company hired by Dialysis Clinic to manage the properties. Dialysis Clinic and XMi objected to producing emails between Dialysis Clinic’s attorneys and XMi, arguing that they were protected by attorney-client privilege.  The trial court ruled that XMi did not have to produce the emails because they were covered by attorney-client privilege. The Court of Appeals denied the tenants’ request for review of the trial court’s decision. The Supreme Court agreed to hear the case.

In a unanimous opinion, authored by Justice Sharon G. Lee, the Supreme Court noted that it is increasingly common for businesses to use outside consultants and other independent contractors. These third parties often operate in the same manner as employees of the business and have information needed by the business’s attorneys that no employee of the business has. For that reason, many courts across the country have extended the attorney-client privilege to cover communications between those third parties and the business’s attorneys, when certain conditions are met.

Here, based on existing Tennessee law and cases from other jurisdictions, the Supreme Court ruled that the attorney-client privilege applies to communications between a business’s attorneys and a third party when the third party acts as the functional equivalent of an employee and when the communications relate to the attorney’s representation of the business and were intended to be confidential. Applying this legal framework, the Supreme Court held that XMi was the functional equivalent of a Dialysis Clinic employee and that the emails between XMi and Dialysis Clinic’s attorneys were protected by attorney-client privilege. The Supreme Court affirmed the trial court’s decision and sent the case back to the trial court for further proceedings.

To read the unanimous opinion of the Supreme Court in Dialysis Clinic, Inc. v. Kevin Medley, authored by Justice Sharon G. Lee, please visit the Opinions section of tncourts.gov. Oral arguments for this case were video recorded and are available on tncourts.gov under Supreme Court and Oral Argument Videos.

(Mike Frisch)

January 25, 2019 in Privilege | Permalink | Comments (0)

Friday, December 14, 2018

A Question Of Privilege

The Tennessee Supreme Court has videos of oral arguments available on line.

A recent case

Dialysis Clinic, Inc. v. Kevin Medley, et al M2017-01352-SC-R11-CV 

This case considers whether the attorney-client privilege applies to communications between an attorney and a corporate client’s third-party agent.  The trial court in this case denied the defendant’s motion to compel the production of roughly 200 emails based on attorney-client privilege.  The defendants argue that the trial court denied them their procedural due process rights and that there is an absence of law regarding the standards for determining third-party agency privilege in Tennessee.  In response, the plaintiff argues that the trial court properly held that communications by and between plaintiff’s counsel and the third party were protected by the attorney-client privilege.  The plaintiff also argues that the Tennessee Supreme Court already has determined attorney-client privilege as it pertains to a third-party agent.

(Mike Frisch)

December 14, 2018 in Privilege | Permalink | Comments (0)

Wednesday, November 28, 2018

A Burning Issue Of Privilege

A fire that destroyed the historic Masonic Temple in Quincy has resulted in a privilege issue remanded by the Massachusetts Supreme Judicial Court.

WBZ4NBC covered the fire

A raging fire has destroyed an iconic Quincy landmark.

The Masonic Temple on Hancock street is now just a shell, after flames tore through the building Monday. Firefighters tried to get inside to douse the flames, but were driven back.

“It’s really sad,” said Jim Bennette, a local Mason, “because this building meant so much to so many people and not just because of the art-deco architecture. At its peak, it was home to 4,000 masons.”

The Masons had arranged to sell the building to a trust

Pursuant to a rider to the purchase and sale agreement, the agreement could not be assigned by the trustee without the prior written consent of the Masons. In a separate agreement executed in April 2013, the trustee assigned the rights to the property under the purchase and sale agreement to Jay Patel in return for $100,000; Patel intended to develop a hotel on the property.

The fire intervened.

Shortly thereafter, the Masons claimed that they had never consented to the assignment, refused to recognize it, and received over $6 million from an insurance claim arising from the fire.

Patel sued the trustees, claiming damages from the failure to secure the consent.

During the course of discovery, the developer plaintiffs noticed the deposition of David Levin, the attorney who represented the Masons with respect to the sale of the property and who had also routinely represented the trust defendants on real estate legal matters for over twenty years. The trust defendants moved for a protective order to bar Levin from disclosing his confidential attorney-client communications with them, claiming that Levin represented them as well as the Masons in the real estate transaction concerning the property, even though Levin took the position that he had represented only the Masons.

After an evidentiary hearing, the motion judge found that there was an attorney-client relationship between Levin and the trust defendants after the fire regarding insurance claims and third-party claims arising from the fire, but that, with respect to the purchase and sale of the property, Levin represented the Masons, not the trust defendants. He therefore ruled that communications between Levin and the trust defendants before the fire were not protected by the attorney-client privilege.

The trust defendants appealed. 

The court considered the matter a discovery dispute and unlike an order disqualifying counsel for appeal purposes

We...conclude that orders requiring the disclosure of privileged material, such as the order in this case, are not categorically irremediable, and therefore are not appealable under the doctrine of present execution...

Ultimately, the doctrine of present execution represents a balancing act that weighs the harm to cost-effective litigation arising from piecemeal interlocutory appeals against the harm that a litigant may suffer from a trial court order that is irremediable on post judgment appeal. We conclude that the sheer volume of potential appeals that would be permitted by including privilege-related discovery orders within the doctrine of present execution, and the inevitable adverse impact on judicial efficiency, outweighs the intrinsic harm that potentially might be suffered by an aggrieved party who is denied an immediate right to appeal.

The court nonetheless considered the merits

we conclude that the motion judge's order cannot stand based on the limited findings that he made. We therefore vacate his order and remand the matter to the motion judge for further factual findings and reconsideration of the motion in light of those additional findings. We express no view as to how the motion should ultimately be decided.

If and when the case returns

A judge's ultimate conclusion as to whether an attorney-client relationship existed is a mixed question of law and fact, which we review de novo.

While Levin represented the trustees in many real estate matters, here the Masons were is client but

The trust defendants and Levin agreed that, because he was representing the Masons as the sellers, the trust defendants would identify Miriam Marcus as their attorney of record in the agreement. Levin admitted that he never communicated with Miriam Marcus, and instead communicated directly with the trust defendants because he knew that Martin always negotiated real estate transactions personally. Levin sent draft documents to the trust defendants for review, prepared a power of attorney form for Martin so that he could sign the purchase and sale agreement on behalf of the Grossman Munroe Trust, and acknowledged having "many conversations" with Martin concerning the transaction after the agreement was signed in September 2012, particularly about deadlines in the agreement and seeking an extension to perform due diligence obligations.  Levin also testified that he discussed with the trust defendants their concerns about financing, construction, and permits related to the division of condominium units on the property; those issues were incorporated into a rider to the purchase and sale agreement. Levin billed the Masons and the trust defendants each one-half of his fee in connection with the purchase and sale transaction.

While Levin denied he also represented the trustees

The trust defendants disputed Levin's testimony. Seymour Marcus testified that Levin had explicitly told him that Levin was going to represent both sides, and that Levin had represented opposing parties to a transaction with them before, in the context of lenders and borrowers and also buyers and sellers. Marcus stated that Levin offered particularized legal advice in meetings -- without the Masons present -- on permitting and construction issues regarding the property and on what "[his] liabilities are to the Masons." He said that Levin instructed them to list Miriam Marcus as their attorney solely as a formality.

No wonder Levin denied it.

the judge first found that there was an attorney-client relationship between Levin and the trust defendants after the fire. With respect to the matters involving the purchase and sale agreement before the fire, the judge found that the Masons and the trust defendants shared a common interest in the sale, transfer, and development of the property, but not a common interest in the sense "that their interests were aligned with regard to this transaction."

But

The judge...found that there was no attorney-client relationship between the trust defendants and Levin with respect to the purchase and sale transaction before the fire.

Conclusion

The judge's findings raise issues both of law and of fact, none of which can be resolved without remand to the motion judge for further findings. The issue of law is that the judge, after finding that the interests of the buyer and seller in this purchase and sale transaction were "antagonistic" to each other, stated that "in a transaction of this complexity, it seems  impossible that a single attorney could represent both sides in a very complex and sophisticated real estate transaction." It is not clear from the record precisely what the judge meant by this statement, especially where the judge found that Levin represented both the trust defendants and the Masons after the fire, when their interests remained adverse.

It is not ethically impossible for an attorney to represent clients with adverse interests.

...Where we cannot be sure what the motion judge meant by his finding that it seems "impossible" for Levin, who was already representing the Masons with respect to the sale of its property, also to represent the trust defendants with respect to that transaction, we believe it prudent to remand the matter to the judge for clarifying findings on this issue.

And

Importantly, the judge did not address the undisputed fact that Levin billed both the Masons and the trust defendants for his legal work regarding this transaction, splitting his fee equally between them. Where, as here, an attorney bills an existing client for legal services, and where the client pays for those services, it is reasonable to infer that they had an attorney-client relationship with regard to those services.

The court also noted that an attorney-client relationship can be implied. (Mike Frisch)

November 28, 2018 in Privilege | Permalink | Comments (0)

Tuesday, June 19, 2018

It's A Privilege

The United States Court of Appeals for the District of Columbia Circuit upheld a corporate attorney-client privilege claim

In 2008, a patent negotiation occurred between Boehringer (the name brand with the patent) and Barr (the generic seeking to challenge the patent). Ultimately, the parties reached a reverse payment settlement.

The Federal Trade Commission pays close attention to reverse payment settlements to ensure that they do not run afoul of antitrust law. In 2009, the Commission began investigating the Boehringer-Barr settlement. During the investigation, the Commission subpoenaed documents from Boehringer. Boehringer claimed that the subpoenaed documents were created by Boehringer employees for Boehringer’s general counsel, Marla Persky, at her request. The documents allowed Persky to analyze and navigate the treacherous antitrust issues surrounding reverse payment settlements. Other documents reflected communications between Persky and Boehringer executives regarding the possible settlement. Boehringer asserted attorney-client privilege over the documents.

The court analyzed the purpose of the communication

In this case, the question therefore is whether obtaining or providing legal advice was one of the significant purposes of the communications at issue. The answer is yes.

The relevant communications consist primarily of the transmission of factual information from Boehringer’s employees to the general counsel, at the general counsel’s request, for the purpose of assisting the general counsel in formulating her legal advice regarding a possible settlement. Other communications were between the general counsel and the corporation’s executives regarding the settlement. All of those communications are protected by the attorney-client privilege because one of the significant purposes of the communications was “obtaining or providing legal advice” – namely, settlement and antitrust advice.

As to business purpose

To be sure, the communications at issue here also served a business purpose. The decision whether and at what price to settle ultimately was a business decision as well as a legal
decision for Boehringer. But as we stated in Kellogg, what matters is whether obtaining or providing legal advice was one of the significant purposes of the attorney-client communications. Here, as the District Court correctly concluded, one of the significant purposes of these communications was to obtain or provide legal advice. It follows that Boehringer’s general counsel was acting as an attorney and that the communications are privileged.

Circuit Judge (and my former Georgetown neighbor) Pillard concurs with a warning

I agree with the opinion of the court as far as it goes. I write separately to emphasize why the spare elegance of the court’s opinion should not be mistaken for an expansion of the attorney-client privilege recognized in our prior precedents: In short, the district court engaged extensively with the disputed documents and the bases for the privilege claims, and followed certain truncated procedures only with the parties’ consent.

(Mike Frisch)

June 19, 2018 in Privilege | Permalink | Comments (0)

Thursday, April 26, 2018

Attorney Not Compelled To Give Evidence Against Bail Jumping Client

The Montana Supreme Court granted a writ to prevent an attorney from providing testimony in a bail jumping case

Petitioner seeks a writ of supervisory control concerning the Third Judicial District Court’s order granting the State’s motion in limine that compels Shannon Sweeney (Sweeney), an attorney, to testify against her client, Dakota James McClanahan (McClanahan), on a bail jumping charge.

The story

In May 2016, Sweeney was appointed to represent McClanahan, who was charged with possession of dangerous drugs with intent to distribute. McClanahan pled not guilty and was ultimately released after he signed the District Court’s Release Order and Conditions of Release. McClanahan did not show up to the final pretrial conference on November 16, 2016, and was subsequently charged with bail jumping.

Ed Sheehy was appointed to represent McClanahan on the bail jumping charge, and he moved to dismiss. Sheehy argued McClanahan did not have notice of the November 16, 2016 hearing. Knowledge of the final pretrial conference is a necessary element of the bail jumping charge. The District Court denied McClanahan’s motion to dismiss, concluding that the State should be allowed to introduce evidence at trial as to what, if anything, Sweeney told McClanahan about appearing at the final pretrial conference on November 16, 2016. Shortly thereafter, Sweeney sent a letter notifying the State that she would assert attorney-client privilege for any line of questioning about communications with McClanahan and the preparation of his defense.

The State filed a motion in limine and the District Court determined that Sweeney would have to testify as to whether she told McClanahan about the final pretrial conference. The State issued a subpoena directing Sweeney to appear and testify at trial. Sweeney made a motion to quash the subpoena, which was denied by the District Court.

The attorney appealed and the court held

Regardless of whether the subject statements from counsel to client in this case constituted “advice given” for purposes of § 26-1-803(1), MCA, compelling counsel to testify under these circumstances would violate her duty of undivided loyalty to McClanahan.

Given that advising a client of a hearing date in a criminal case is inseparably intertwined with the concept of legal advice and that compelled inquiry of counsel to distinguish between advice and non-advice would vitiate counsel’s duty of undivided loyalty to the client, we hold that the District Court erred when it denied the motion to quash the subpoena compelling Sweeney to submit to examination on whether she advised her client of the fate of his final pretrial conference. Furthermore, § 26-1-803(1), MCA, prohibits the District Court from compelling Sweeney to testify about communications made with McClanahan without his consent when her testimony would prove the elements of a new charge against McClanahan. We expressly limit this holding to the unique facts and circumstances of this case.

Concurring opinion

My concern in this case is the statute’s prohibition on examination of an attorney about “the advice given to the client.” During oral argument, the State indicated that it wanted to ask Sweeney two questions. The first question was whether she had communicated the date of the final pretrial conference to McClanahan. I do not believe this to be legal advice. Our judicial system requires lawyers, as part of their duty of representation, to convey notice of court proceedings to their clients. If courts could not depend on this, service of notice would be required to be made personally upon all clients for all matters in every case. Consequently, it would be appropriate to ask McClanahan whether she had fulfilled this judicial function. Thus, I disagree with the Court’s conclusion that all the “statements from counsel to client in this case constituted ‘advice given’ for purposes of § 26-1-803(1), MCA.” Opinion, ¶ 14. In my view, this was a permissible inquiry.

However, at oral argument the State indicated it wanted to go further, and ask a second question—whether Sweeney had told McClanahan that he needed to attend the final pre-trial conference. An attorney’s communication about a client’s attendance at a proceeding, including whether, for whatever reason, the client should risk violating a release condition, falls into the realm of legal advice. For that reason, I believe the State’s proposed inquiry here was prohibited by the statute.

And a dissent from Justice McKinnon

I agree with the rationale employed by those courts and would hold that an attorney conveying the date of a hearing to her client is not “advice” protected by the attorney-client privilege. It is common practice for the court to notify counsel of a hearing and expect counsel to, in turn, notify her client of the proceeding. The date of a hearing is publicly available information that the attorney receives from the court, a third party. The date of a hearing does not encompass a client’s confidential information or an attorney’s advice in response thereto. Prohibiting disclosure of such information by precluding an attorney from ever being “examined” is contrary to the plain language of § 26-1-803(1), MCA...

I am mindful of the Court’s concern that the State is utilizing Sweeney, McClanahan’s attorney in the drug charge, to prove an essential element of the bail-jumping charge. Opinion, ¶¶ 14-15. I do not commend the practice of calling a defendant’s prior counsel as a witness in a bail-jumping trial. The State should make all attempts to avoid the need for such testimony. However, I can find no authority supporting the Court’s conclusion that requiring Sweeney to testify would violate her duty of loyalty to her client, and therefore cannot agree.

There seems to be a problem with the link. The case is Sweeney v. 3rd Judicial District.  (Mike Frisch)

April 26, 2018 in Privilege | Permalink | Comments (0)

Monday, January 22, 2018

Privilege Resolved On Question- By-Question Basis

The Rhode Island Supreme Court remanded a matter  involving attorney-client privilege

Viner was a North Kingstown High School chemistry teacher. It is undisputed that, during the summer following the 2014-2015 school year, one of Viner’s female students complained to her mother, who informed the school administration, about alleged inappropriate behavior by Viner. In an affidavit submitted to the Superior Court, Attorney Mary Ann Carroll, as legal counsel to the school committee, explained, that upon learning of the allegations, her law firm launched an investigation. She further explained that Attorney Aubrey Lombardo assisted in the investigation by interviewing five high school students and preparing a report based on those interviews, which was submitted to the superintendent of the North Kingstown School Department and the principal of North Kingstown High School.

After a pre-suspension hearing

In response, Viner requested a full evidentiary hearing before the school committee, which took place on December 7, 2015. At the conclusion of the full evidentiary hearing, the school committee again voted to suspend Viner without pay for the remainder of the school year and then terminate his employment at the close of the year. In turn, Viner appealed the school committee’s decision to the commissioner of elementary and secondary education within the Rhode Island Department of Elementary and Secondary Education (RIDE). At Viner’s request, the RIDE hearing officer issued three subpoenas pursuant to G.L. 1956 § 16-39-8: witness subpoenas addressed to Attorneys Carroll and Lombardo and a subpoena duces tecum to the North Kingstown School Department.

On appeal

Based on the foregoing, therefore, we remand this case to the Superior Court to follow the procedure described above. At the discretion of the hearing justice, the two attorneys may either be deposed or testify at a hearing. The hearing justice may then make an attorney-client privilege determination on a question-by-question basis, bearing in mind that the burden of persuasion rests upon the party seeking to assert the privilege. See State v. von Bulow, 475 A.2d 995, 1005 (R.I. 1984). We expect that the council on elementary and secondary education will refrain from proceeding further on this matter until the issue is resolved by the hearing justice.  Following the hearing justice’s privilege determination, any party in interest may request the RIDE hearing officer to reopen the evidence to receive any testimony from the attorneys that has been deemed to be nonprivileged by the hearing justice. In the event that the administrative proceedings result in a final judgment under the APA, an aggrieved party may claim the hearing justice’s decision on the attorney-client privilege as error in a petition for a writ of certiorari under G.L. 1956 § 42-35-16.

A dissent would find the issue non-ripe.

I must respectfully dissent from the majority’s opinion because I believe that the issue before the Court is not ripe due to the fact that an appeal to the Council on Elementary and Secondary Education remains pending; and, if James Viner prevails in that appeal, it would render the instant case entirely moot. Indeed, the majority itself concedes that “the school committee’s petition to quash may not have been ripe for review” and that review of such interlocutory rulings of administrative agencies should be “sparingly exercise[d] * * *.” (Internal quotation marks omitted.) It is my definite belief that, in the instant case, this Court should follow “our usual policy of not opining with respect to issues about which we need not opine * * *.” Grady v. Narragansett Electric Co., 962 A.2d 34, 42 n.4 (R.I. 2009)

The decision of the Commissioner of Education is linked here. 

It may well be that, as the Principal told the School Committee, she and her “new administrative staff” had “erred on the side of caution” and “asked the attorneys to come in and make sure we were doing something that was totally hands off so it could be a very fair investigation.” See ¶ 30, supra. Yet, the evidentiary record indicates that this “totally hands off” approach was taken to an inappropriate extreme. Indeed, it appears from the record that everybody in charge – the private attorneys that were hired, the Principal and the Superintendent– just assumed that the various sometimes contradictory allegations made by the five students whose interviews were contained in the Viner Report were accurate, and failed to draw their own conclusions based upon competent evidence. Indeed, as noted, the author of the Report did not herself come to any of her own conclusions as to the credibility of those students who were interviewed, and did not even speak with many of the students who testified before the undersigned, or even to Mr. Viner.

Thus, as noted, the School Committee based its decision to suspend and dismiss a teacher who served without incident for twenty-two years without prior warning or gradual discipline based largely, if not entirely, upon the bare, contradictory allegations of five students, without the benefit of any meaningful evaluation as to their credibility or follow-up by the adults charged with doing so. By contrast, the undersigned did not find the students making the material allegations against Mr. Viner, i.e., R.J. and H.D., any more or less credible than the far greater number of students who testified that Mr. Viner was an “excellent teacher” who never used “vulgar language,” “sexual comments” or “sexual innuendo” in front of them. See ¶¶ 48-49 and notes 20-21, supra.

In addition, contrary to the School Committee’s inference that Mr. Viner’s decision not to testify at its December 7, 2015 evidentiary hearing should be held against him, see School Committee’s Supp. Mem. at 3-4, the decision, rather than evidencing any consciousness of guilt, was more likely a tactical response to the School Committee’s failure to more specifically identify the charges and evidence against him. And little time need be spent addressing the allegation in the Statement of Cause that Mr. Viner “encourage[d] students to cheat on exams,” see Petitioner’s Ex. 1 at 3, as: (a) Mr. Viner’s testimony flatly denying the allegation, see ¶ 52(b), supra, was not rebutted; and (b) the Principal made clear that there was “no link” between the alleged cheating on exams and the alleged sexual harassment. See June 10 Tr. at 119

The order suspending and terminating the teacher is attached at the beginning of the link. (Mike Frisch)

January 22, 2018 in Privilege | Permalink | Comments (0)

Tuesday, January 2, 2018

Implied Waiver Of Attorney-Client Privilege

The Tennessee Court of Appeals affirmed an order compelling disclosure of privileged communications on an implied waiver theory.

This interlocutory appeal arises out of an action in which two companies brought suit against their former attorney for legal malpractice. The attorney moved for summary judgment as to one client’s claim, contending that the claim was barred by the statute of limitations; the client responded that it learned of its cause of action within one year of the assertion of the claim. The attorney then sought through discovery to have the former client produce communications from the client’s new counsel; the client declined to produce the communications, taking the position that they were protected by the attorney client privilege. The attorney moved the trial court to compel the client to produce the communications, and the court granted the motion, holding that the client impliedly waived attorney-client privilege in asserting that the client discovered the cause of action within the year preceding the assertion of the claim. Discerning no error, we affirm the trial court’s holding.

On implied waiver

Relative to the three conditions for determining whether BNL impliedly waived the attorney-client privilege, the trial court held:

This Court concludes Plaintiffs’ assertion of the discovery rule ultimately led to Plaintiffs’ assertion that the relevant documents are protected by attorney-client privilege. Although statute of limitations is an affirmative defense under Tennessee law, and Defendants bear the burden of proof, it was Plaintiffs’ assertion of the discovery rule in response that ultimately put Plaintiffs’ knowledge, and thereby Plaintiffs’ privileged communications, at issue in the current dispute.

The Court concludes that Plaintiffs put their privileged information at issue by pleading the discovery rule. . . . by pleading ignorance of its cause of action against Defendants, Plaintiffs have made “what Plaintiffs knew and when Plaintiffs knew it” the dispositive issue of this case.

In addition, Defendants have no other way to obtain information vital to its defense. Defendants assert Plaintiffs claim was time-barred, because Plaintiffs complaint was filed more than one year after Plaintiffs became aware of Defendants behavior giving rise to the cause of action. Plaintiffs’ assertion of the discovery rule—Plaintiffs did not know and could not have reasonably known its cause of action against Defendants—makes Plaintiffs’ actual or constructive knowledge vital to Defendants’ argument that Plaintiffs did know of its claim more than a year in advance of Plaintiffs’ filing.

The court

Upon our review, we do not discern any error in the portion of trial court’s holding that “Plaintiffs’ actual or constructive knowledge [is] vital to Defendants’ argument that Plaintiffs did know of its claim more than a year in advance of Plaintiffs’ filing.”

(Mike Frisch)

January 2, 2018 in Clients, Privilege | Permalink | Comments (0)