Lawyers are increasingly seeking depositions of companies’ in-house lawyers, and this phenomenon likely corresponds with in-house counsel increasingly assuming business-related roles or tasks within the company. In Sand Storage, LLC v. Trican Well Serv., L.P., 2015 WL 1527608 (S.D. Tex. Apr. 2, 2015), the court ordered an in-house lawyer’s deposition—albeit with privilege protections—and provided a good overview of the law on this subject. You may read the decision here.
Sand Storage and Trican entered into a sand-storage contract. Trican later sent Sand Storage formal notice of its failure to perform its contractual obligations. Trican’s in-house lawyer signed the letter, a copy of which you may read here.
Sand Storage sought the in-house lawyer’s deposition, arguing that it is entitled to discover the bases for the alleged failed performance from the person who authored the letter identifying the performance issues, regardless whether he is a lawyer.
Trican’s in-house lawyer filed an affidavit, available here, stating that he did not make the decision to terminate the contract. Although he consulted with a Trican businessperson “for the purpose of facilitating the rendition of professional legal services” regarding the Sand Storage agreement, he did not expressly identify the decision-maker.
And after this consultation, he determined that Trican needed to notify Sand Storage of the deficiencies and then drafted the notice letter. He disavowed any personal knowledge of the statements in the notice letter.
The court noted that depositions of opposing counsel are “disfavored” and that it should permit these depositions in “limited circumstances.” Relying upon Nguyen v. Excel Corp., 197 F3d 200 (CTA5 1999) and Shelton v. American Motors Corp., 805 F2d 1323 (CTA8 1986), the court required Sand Storage to prove these three factors in order to depose Trican’s in-house lawyer:
- No other means exist to obtain the information than to depose opposing counsel;
- The information sought is relevant and non-privileged; and
- The information is crucial to the preparation of the case.
Based on the facts before it, the court found that the source of the notice letter’s statements regarding Sand Storage’s alleged non-performance was crucial and relevant to the case, and that Sand Storage had no other means to determine Trican’s decision-maker without deposing the in-house lawyer. The court therefore allowed the in-house lawyer’s deposition.
The court, however, implemented privilege-protection measures. Although ruling that the source of information contained in the notice letter and Trican’s decision-maker were facts and not privileged, it also ruled that Sand Storage’s counsel could not inquire into communications between Trican’s in-house lawyer and Trican employees, which are privileged.
The court therefore limited the deposition’s scope to factual matters underlying the notice letter and instructed Sand Storage’s counsel to “not intentionally solicit information that is privileged.” And the court ruled that the in-house lawyer’s deposition did not constitute waiver of the privilege on any other matter.
One wonders whether this issue ever arises if Trican’s in-house lawyer had not authored the letter and simply provided legal advice to Trican businesspersons regarding the contractual issues. If a Trican businessperson signed and sent the letter, then the in-house lawyer’s deposition likely never becomes an issue.
Even so, Trican successfully limited the deposition’s scope and preserved its privilege, a navigation that provides guidance for other in-house lawyers faced with this issue. And for a detailed review of the legal issues surrounding in-house lawyers’ depositions, see my article titled Protecting the Attorney-Client Privilege–Depositions of In-House Counsel, available here. You may also find my post, Tips for Preventing or Limiting In-House Counsel Depositions, helpful.