In an age where the vast majority of cases settle before trial, the real battleground in civil litigation is discovery. Discovery disputes are more frequent and more contentious these days. In New Hampshire’s federal district court, the task of resolving the majority of those discovery dispute falls upon United States Magistrate Judge James Muirhead. Whether you represent a plaintiff or a defendant in federal court you can rest assured that Judge Muirhead will demand strict compliance with the rules of civil procedure and that, above all else, he will ensure that relevant information is not hidden.
II. A Recent Example:
In a previous article, we wrote about the tragic case of James Whitley, a young man who was horrifically injured in an industrial accident.1 Mr. Whitley had his face and scalp torn off when his hair got caught on an unguarded spinning bar, leaving him paralyzed from the neck down and horribly disfigured. The suit in that case was originally filed in Strafford County Superior Court, but it was removed to federal court by the defendants. A variety of discovery disputes quickly arose.
In response to the plaintiff’s interrogatories, the defendants objected to questions asking for the identity of each person who had ducked under the spinning bar that injured Mr. Whitley and asking whether any other similar accidents had occurred previously. In addition, the defendants objected to many of the plaintiff’s document requests but they did not provide a privilege log as required by Rule 26(b)(5). The parties also disagreed as to which individual employees were within the defendants’ “control group” and therefore able to raise the corporations’ attorney-client privilege.
Shortly after receiving the parties’ pleadings, Judge Muirhead took an extraordinary step. He ordered defense counsel to produce virtually their entire file in this matter for in camera review. The only documents that he did not review were letters from the defense attorneys to the insurance representatives. Over the course of the next seven months, Judge Muirhead spent “hundreds of hours checking, rereading and cross-checking” the defendants’ file documents and interrogatory answers.2 Despite possessing the clear authority to do so, he declined to order production of the defendants’ entire file as a consequence of their failure to produce a privilege log.3 Instead, he carefully reviewed each document and ordered production of only those that were necessary to provide the plaintiff with the factual discovery that he was entitled to in the first place.
III. The Control Group:
Judge Muirhead began his discovery order by defining the defendants’ corporate control group. This was important because it established which communications were protected by the attorney-client privilege. The plaintiff had conceded that corporate executive officers were within the control group and that their communications with the corporations’ attorneys were privileged. However, the parties disagreed about communications from lower level managers and supervisors to the corporations’ attorneys.
Under New Hampshire law, the defendant corporations had the burden of proving that the individuals at issue were within the corporations’ control group.4 There is no New Hampshire case law applying the control group test, but the Reporters’ Notes to the governing rule cite a Harvard Law Review article.5 As a result, Judge Muirhead applied the legal principles set forth in that article.
The defendants produced signed affidavits from each of the individuals alleged to be part of the control group. However, as Judge Muirhead noted, “The affidavits are strikingly similar and miss the real point of the ‘control group’ test.”6 Accordingly, he concluded that only the local plant manager qualified for the defendants’ control group. Notably, Judge Muirhead made the following observations in denying control group status to the certain corporate managers:
The Human Resources Director was not “a decision maker, one whose opinion on a matter is necessary to a corporate decision or one who needs access to legal advice.
The New Product Development Manager did not have “any authority to obtain legal services or act upon legal advice.”
The Office Manager/Claims Manager’s “role is to ferret out facts and/or documents as needed in this litigation. While she is more than a file clerk there is no credible evidence that she is within the control group.”
The defendants argued, in the alternative, that even if certain individual employees were not within the control group, they had established attorney-client relationships of their own with the corporations’ attorneys. Thus, the corporations sought to raise the attorney-client privilege on behalf of those individuals. Judge Muirhead ruled that the corporations had no standing to assert these individuals’ privilege.7 However, he indicated a willingness to address the individuals’ privilege claims if the individuals wished to raise them.8 They never did.
IV. Waiver Of Privileges Due To The Absence Of A Privilege Log:
Judge Muirhead cited the defendants failure to produce a privilege log as a basis for ordering the defendants to produce certain documents for which they claimed a privilege. Support for this conclusion came from the First Circuit’s decision one month earlier in In re Grand Jury Subpoena holding that “A party that fails to submit a privilege log is deemed to waive the underlying privilege claim.”9
In Grand Jury Subpoena, the First Circuit construed Rule 45(d)(2), the rule governing the assertion of privileges in response to a subpoena. However, that rule is identical in all material respects to Rule 26(b)(5), the rule governing civil discovery. The fact that there is no meaningful distinction between the two rules is demonstrated by the First Circuit’s citation to Bregman v. District of Columbia10, a case construing Rule 26(b)(5), in support of its statement that Rule 45(d)(2) requires the production of a document index or privilege log.11 Other courts have also recognized the fact that the two rules are essentially interchangeable.12
In the Whitley case, the defendants conceded that they did not produce a privilege log and that their attorneys discussed this obligation with their corporate counsel prior to serving their discovery responses, however they claimed that they decided not to produce a privilege log because they were unclear as to whether certain items needed to be listed. However, as the court explained in Horton v. United States13, “the plain language of Rule 26(b)(5) extends to all documents withheld from production on a claim of privilege.”14 This appears to be the only sensible rule since to hold otherwise would permit the party withholding discovery to make unilateral decisions regarding the application of a privilege. The privilege log requirement is specifically intended to prevent such unilateral determinations.
In Horton, the party withholding documents argued that communications between a client and its attorneys subsequent to the initiation of litigation should not have to be listed on the privilege log.15 The court rejected this approach noting that “the cases that impose the requirement of a privilege log do not carve out of the requirement documents between a lawyer and client created after the initiation of litigation.”16 Furthermore, the court observed that
common sense dictates that even post-filing correspondence and materials exchanged between lawyer and client must be listed on the privilege log. It is certainly possible that such a document might be copied to a third party, thus destroying any privilege that otherwise would attach.17
In Whitley, Judge Muirhead rejected the defendants’ claims that items such as attorney interview notes need not even be listed on a privilege log. In fact, he ordered the defendants to produce those very documents just as the First Circuit had done in Grand Jury Subpoena.18
V. Waiver Of Privilege By Providing Inaccurate Interrogatory Answers:
Judge Muirhead’s alternative basis for ordering the defendants to produce documents was that they had waived their privileges by failing to disclose the factual information within those documents in response to the plaintiff’s interrogatories and had engaged in other related discovery abuse that made the production of these documents necessary. Therefore, he limited his production order to those documents that were necessary to provide the plaintiffs with the factual information they should have received in response to their discovery requests.
Judge Muirhead’s ruling in this respect was clearly supported by the law. Neither the New Hampshire attorney-client privilege, nor the federal work product protection are absolute.19 As a result, privileges are held to be waived when the privilege holder’s conduct makes it unfair to allow their assertion.20
The defendants’ argued that they had not committed discovery abuse, but Judge Muirhead pointed out several entries in the file that supported his conclusion:
One of the defendants’ attorneys asked a paralegal to scour the statements the defendants had taken for “harmful” information so the defendants could attempt to avoid producing it to the plaintiffs.
The defendants did not produce a privilege log with their discovery responses despite the fact that their lead counsel and their in-house corporate counsel discussed this requirement prior to serving the discovery responses and concluded that items created by attorneys would not be listed while items created by others would be.
Despite the fact that at least two separate interrogatories clearly requested this information, the defendants initially decided not to disclose the fact that another worker had been involved in a nearly identical accident with the same machine two years before Mr. Whitley’s accident. Then, after the plaintiffs complained to them about their failure to answer these questions, the defendants’ lead counsel and in-house counsel agreed to “give up the information regarding Keefe . . . [because] Plaintiff’s counsel most likely is already aware of it…”
The defendants changed an employee’s job title after their lead counsel suggested to in-house counsel that this would assist in supporting the claim that she was within the corporate control group and thereby diminish plaintiffs’ counsel’s opportunity to “get a shot at her.”
Judge Muirhead saw through the defendants’ transparent effort to avoid answering harmful interrogatories by objecting to the wording of the questions. For instance, the plaintiff asked the defendants to list all of the people “you are aware of” who had ducked under the spinning bar either before or after Mr. Whitley’s accident. In response, the defendants objected to the use of the term, “you,” and listed only two individuals, one being James Whitley. As Judge Muirhead noted, however, when the defendants answered this question they were actually aware of many more people who had ducked under. By taking the time to review every piece of paper in the defendants’ file, he was able to note this inaccuracy and ensure that the plaintiff received the information they were entitled to.
The defendants were also asked in an interrogatory whether there had been any previous accidents involving the machine that injured Mr. Whitley. They responded by objecting to the use of the term, “accident.” The plaintiff did not know it at the time, but there had been a nearly identical incident only two years earlier.
Judge Muirhead found a memo in the defendants’ file in which defense counsel recounted a discussion with the defendants’ in-house corporate counsel stating that corporate counsel “agreed that we should give up the information regarding [the prior accident]. Plaintiff’s counsel most likely is already aware of it…”21 The information was subsequently disclosed in a supplemental interrogatory answer.
When they were called upon to explain why they did not disclose the prior incident in their initial interrogatory answers, the defendants claimed that they did not understand what the plaintiff meant when he asked about prior “accidents.” They went so far as to claim that it would be “a stretch of the term” to consider the earlier incident to have been an “accident.” However, as Judge Muirhead noted, the defendants’ own file documents indicated that they were aware that the victim of the earlier incident had ducked under the spinning tube and “caught his hair and pulled off a portion of his scalp.”22 Based on this information, Judge Muirhead easily rejected the defendants’ contention that the plaintiff’s interrogatory was unclear.
As Judge Muirhead pointed out, the defendants in the Whitley case improperly withheld critical factual information that was not disclosed in their interrogatory answers. If he had not taken the extraordinary step of ordering the defendants to produce their entire file for in camera review they would have gotten away with it. This one example demonstrates both the fact that discovery is taken very seriously in our federal court and the fact that such vigilance is an unfortunate necessity.
See “Temporary Employees and the Borrowed Servant Rule: A Case Study,” 24 TBN 115 (Summer, 2002).
See December 24, 2001 Discovery Order at 19.
See In re Grand Jury Subpoena, 274 F.3d 563, 576 (1st Cir. 2001).
See N.H.Evid.R. 502(a)(2) Reporter’s Notes.
“Note, Attorney Client Privilege for Corporate Clients: The Control Group Test,” 84 Harv. L. Rev. 424, 430 (1970).
See December 24, 2001 Discovery Order at 15, n. 5.
See December 24, 2001 Order at 8-9.
See id. at 8.
In re Grand Jury Subpoena, 274 F.3d at 576.
182 F.R.D. 352, 363 (D.D.C. 1998).
See In re Grand Jury Subpoena, 274 F.3d at 575.
See John LaBatt. Ltd. v. Molson Breweries, 1995 WL 23603 (S.D.N.Y. 1995), affirmed sub nom, Dorf & Stanton Communications, Inc. v. Molson Breweries, 100 F.3d 919 (Fed.Cir. 1996); Go Medical Industries PTY, Ltd. v. C.R.Baird, Inc., 1995 WL 605802 (N.D.Ga. 1995); Massachusetts School of Law at Andover, Inc. v. American Bar Associationz, 914 F.Supp. 1172, 1178, n. 10 (E.D.Pa. 1996); In re Stern Walters Partners, Inc., 1996 WL 115290 (N.D.Ill. 1996); Avery Dennison Corporation v. Four Pillars, 190 F.R.D. 1 (D.D.C. 1999).
Horton v. United States, 204 F.R.D. 670 (D.Colo. 2002) (emphasis added).
Id., 204 F.R.D. at 673.
See In re Grand Jury Subpoena, 274 F.3d at 574.
See In re Dean, 142 N.H. 889, 890 (1998) (attorney-client); U.S. v. Massachusetts Institute of Technology, 129 F.3d 681, 687 (1st Cir. 1997) (work product).
See United States v. Yerardi, 192 F.3d 14, 18 (1st Cir. 1999).
December 24, 2001 Discovery Order at 22 (quoting Privilege Log Document No. 166).
December 24, 2001 Discovery Order at 21 (quoting Privilege Log Document No. 5).
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