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Sometimes, it’s about making the most of a second chance.  The SD of Ohio found that Proctor & Gamble completely failed to prove that the attorney–client privilege or work-product doctrine protected certain documents from discovery.

Yet, the Court gave P&G a mulligan. And in its second chance, P&G submitted “competent evidence” to prove privilege protection—including over emails that did not include attorneys. McCall v. The Proctor & Gamble Co., 2019 WL 3997375 (SD Ohio Aug. 22, 2019). You may read the opinion here.

You Lose, but ….

World-renowed photographer, Annette Navarro and her LLC sued P&G and Wal-Mart for copyright infringement over their alleged improper use of Navarro’s images on Olay products. You may read the news story in this Cincinnati Business Courier article.

P&G withheld a variety of communications from discovery on privilege grounds, including several emails “in which an attorney does not appear in the ‘to,’ from,’ or ‘cc’ fields.” When Navarro moved to compel them for lack of privilege protection, P&G filed a response, available here, arguing the privilege applied but without any evidence to support the argument.

The Court, in its opinion available here, noted that Keep Reading this POP Post

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It’s a memorable scene. In Hamilton: An American Musical (and in real life), General George Washington, “outgunned, outmanned, outnumbered, outplanned,” recognized that he was “gonna need a right-hand man.” He chose Alexander Hamilton as his aide-de-camp and, as they say, the rest is history.

But if General Washington needed to communicate with his personal lawyer, would the attorney–client privilege apply if Hamilton talked to the lawyer on the General’s behalf?

We know that communicating with a lawyer in the presence of a third-party lacks the requisite confidentiality to secure privilege protection. A familiar retort is that the privilege applies when the so-called third-party is the client’s agent or someone needed to facilitate communications between the attorney and the actual client. But how far does that argument go?

The DNJ federal court faced this question and refused to apply the attorney–client privilege where a company’s owner used a company employee to communicate with his personal attorneys. The Court held that, even though the employee was the owner’s “right-hand man,” he was not a “necessary intermediary” as required to apply the privilege. Symetra Life Ins. v. JJK 2016 Insurance Trust, 2019 WL 4931231 (DNJ Oct. 7, 2019). You may read the decision here.

Death on the Horizon

Joseph Krivulka, owner of Akrimax Pharmaceuticals, LLC, had a previously scheduled comprehensive medical examination set for August 9, 2016. There, physicians diagnosed him with metastic lung disease. He was later diagnosed with Hodgkin’s Lymphoma and died.

But on August 5, 2016—four days before the appointment—Krivulka signed two life insurance policies for $10M and $15M with Symetra Life Insurance, naming the JJK 2016 Insurance Trust as beneficiary. During that process, Krivulka retained counsel to set up the trust documents, but primarily delegated the lawyer-communication task to Timothy Soule, Akrimax’s VP of Operations and Human Resources and Krivulka’s “right-hand man.”

Krivulka’s counsel engaged in back-and-forth communications with the right-hand man (and other employees), and Symetra sought production of those communications in a lawsuit seeking to void the policies for Krivulka’s alleged false representations about this health.

What’s the Law?

The case law is not always crystal clear on the client–agent issue in the privilege context, with many decisions assuming that the agent’s presence does not invalidate the privilege. The Symetra Court breaks from conclusory assumptions and provides a nice overview of privilege law in this fact-specific area.

Applying New Jersey law (because this was a diversity-jurisdiction case), the Court cited NJRE 504 and case law for the rule that the privilege covers communications between a client and his lawyer and a “client’s communications made through necessary intermediaries and agents.” But the Court also looked to Section 70 of the Restatement of the Law Governing Lawyers.

The Restatement provides that the privilege applies to the client’s communications to her lawyer, but that the client “may appoint a third person to do so as the client’s agent.” The Restatement’s comments explain that the privilege applies only when the putative agent “is reasonably necessary to facilitate the client’s communication with a lawyer.”

The Restatement’s examples reveal the limiting nature of this agency theory. They include a friend of a client–prisoner, a translator, and a client’s secretary “regularly employed to record and transcribe business letters.”

Ruling

Employing the maxim that courts should strictly construe the privilege’s scope, the Court found that Soule—the right-hand man—was not Krivulka’s agent for privilege purposes. While Soule’s role with Krivulka was “significant” and “convenient,” it was not necessary in facilitating the lawyer’s creation of the trust.

As the Court concluded, Soule’s communications with Krivulka’s lawyer was “one of convenience rather than necessity,” and the Trust was asking the Court “to read ‘necessary’ so broadly as to eliminate it.”

POP Analysis

In an earlier post, Momma Mia! Don’t Take Your Parents to a Lawyer Meeting, I reviewed a decision rejecting the privilege when a young adult brought her parents to an initial meeting with a personal-injury lawyer. The Symetra decision poses a similar inquiry: is the third-party’s presence or use reasonably necessary to facilitate communications?

Given the work pressures of the Revolutionary War, I suspect a hypothetical Colonial court would find that Hamilton was Washington’s “necessary intermediary” and uphold the privilege for Hamilton’s communications with Washington’s lawyer.  So, when a third-party enters the client-communication picture, perhaps lawyers should ask this question:

Is this person a Hamilton?

And while thinking about it, enjoy “Right Hand Man” from Lin-Manuel Miranda’s Hamilton.

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In a decision brimming with privilege nuggets, the SDNY ruled that the attorney–client privilege protected Barnes & Noble’s General Counsel’s internal investigation into sexual-harassment accusations against B&N’s now-former CEO. The Court upheld the privilege even though counsel provided the CEO no Upjohn warning and B&N’s Employee Handbook—a business document—required the investigation. Parneros v. Barnes & Noble, Inc., 2019 WL 4891213 (SDNY Oct. 4, 2019).

You may read this informative decision, which contains other privilege nuggets discussed below, at this link.

Accusations, Termination, and a “Curious” Lawsuit

In May 2018, B&N’s General Counsel received notice that a company Executive Assistant reported that B&N’s CEO, Demos Parneros, sexually harassed her. Following a short investigation and a failed meeting with a “Potential Acquirer,” B&N terminated Parneros and refused to pay him a severance under the employment contract. It also issued this press release, which upset Parneros.

Parneros filed breach-of-contract and defamation claims, and B&N counterclaimed for breach of fiduciary duties. You may read more about the case in the ABC News story, The Curious Case of the Fired Barnes & Noble CEO Demos Parneros.

GC’s Internal Investigation

Upon learning of the EA’s sexual-harassment allegation, the GC began an internal investigation that included meeting with the EA, delegating other interviews to other senior executives (but not the HR Director), and retaining outside counsel. One of the delegees was Leonard Riggio, B&N’s Founder and Board Chair.

The GC took notes during his meetings and instructed his delegees to do so as well. Parneros later moved to compel the GC’s notes and other documents prepared in the course of his investigation. He claimed that the GC’s investigation was for business, not legal, purposes.

The Privilege and Internal Investigations

The Court provided an excellent privilege overview that lawyers should review.Keep Reading this POP Post