Employee Purloins In-House Lawyer’s Privileged Emails. Now What? Reply

Attorney-Client Privilege, Waiver • Tags: , , ,

We often hear of an employee downloading trade secrets and other proprietary information when he leaves a company, but what happens when the employee downloads privileged emails between himself and in-house counsel?  Can the pilfering employee keep his communications even though it is the company’s privilege? Should the court disqualify the employee’s counsel for reading and not returning the privileged emails?  The court’s opinion in Sanchez v. Maquet Getinge Group, 2018 WL 2324679 (N.J. Super. Ct. App. Div. May 23, 2018), provides lessons on these issues.  You may read it here, and I discuss it below.

What Happened?

Oscar Sanchez worked as a compliance officer (yes, compliance officer) for Maquet, a pharmaceutical company that designs, manufactures, and distributes medical devices. Sanchez received a disciplinary warning, and then downloaded two Maquet executives’ hard drives and a “binder full of emails” that included emails between him and Maquet’s in-house lawyer regarding FDA compliance issues.

Sanchez took the privileged emails even though he signed a “Confidential Information, Invention Assignment, and Non-Compete Agreement” with Maquet prohibiting him from disclosing confidential information and requiring him to return company documents upon termination.  Maquet learned of Sanchez’s possession of its privileged communications when he produced them in discovery, and immediately demanded their return.

Privilege is Threshold Issue

Sanchez first argued that the privilege did not apply because the in-house lawyer was only copied on emails or did not respond to the emails and, consequently, did not provide legal advice.  The appellate court upheld the trial court’s privilege finding, noting that Sanchez labeled the emails “ATTORNEY CLIENT PRIVILEGE.”  Looks like an easy call there. More…

Gimme Back My (Privileged) Mediation Statement! Reply

Mediation or Settlement Privilege, Waiver • Tags: , ,

Now this is interesting.  A plaintiff sues a product distributor in California claiming product-related injuries.  She learns of a different plaintiff with a similar claim in New Jersey against the same distributor.  She subpoenas the distributor’s New Jersey mediation statement and, guess what—they produced it.  Yes, really.

So what happened?  The distributor sought to claw-back the mediation statement claiming the mediation privilege protected it.  And the court agreed, essentially blocking any waiver argument and chastising the plaintiff for even trying!  Lakes v. Bath & Body Works LLC, 2018 WL 2318106 (E.D. Cal. May 22, 2018).  You may read it here.

Yes, Really

Crystal Lakes sued Bath & Body Works alleging that she suffered burns when one of BBW’s candles “flared” and “exploded.”   Lakes learned of similar flaring litigation in New Jersey, and subpoenaed the “litigation records” from the NJ plaintiff’s counsel and BBW’s NJ counsel.  Both lawyers produced BBW’s “brief submitted in the mediation or settlement proceedings.”

BBW then filed a motion to claw-back its mediation statement from Lakes’ clutched hands, and Lakes countered with a motion to compel.  BBW argued that the mediation privilege required the statement’s return, but Lakes countered that BBW waived the privilege by producing it or, alternatively, that the court should impose a crime–fraud exception to the privilege. More…

Hole-in-One Leads to GC’s Deposition. Here’s How.

Attorney-Client Privilege, Conflict of Laws, In-House Counsel • Tags: , ,

The Greenbrier Classic, the annual PGA Tour event in West Virginia, operated by Old White Charities, Inc., has a unique fan experience.  Each spectator receives $100 if a Tour player sinks a hole-in-one on the course’s par-3 18th hole, $500 if a second player aces the hole, and $1,000 if a third accomplishes the feat.

During the 2015 tournament, Greg McNeill sank a hole-in-one, providing the spectators with an instant $18,900 in cash.  Later that day, Justin Thomas used his pitching wedge to ace the 137 yard hole, giving the spectators another $173,500!  Alas, there was no third ace, but the spectators left the tournament with a collective payout of $192,400.  Read the ESPN article chronicling the feat here.

Insurance Coverage?

Surely the Classic’s operator, Old White, had insurance for such an unlikely yet expensive accomplishment?  Well, it thought so, but the insurance company denied coverage because the policy contained a hole-length-limitation clause requiring the shot to be at least 150 yards for coverage to apply.  With the PGA’s pin placement that day, the length from tee box to hole was only 137 yards—13 yards shy of the insurance company’s mandate.

No Way!

Old White sued its insurance agency, Bankers Insurance, alleging negligence for failing to procure coverage without a hole-length limitation.  During discovery, Old White moved to compel the deposition of Melvin Tull, Bankers Insurance’s General Counsel.  Bankers, which did not have the opportunity to file a written response, argued that, because Tull is a GC, “there is no way [a deposition] would not violate the attorney–client privilege.”

Yes, Way!

The court ruled that, regardless of the attorney–client privilege, Old White could depose the General Counsel.  The court noted that More…