Here is an interesting privilege issue for document-intensive cases with multiple and varied privilege calls. We are used to courts deciding privilege disputes on a document-by-document basis, or even a categorical basis. But may a court issue broad privilege-review guidelines to pilot a party’s document review and production?
One court—in a situation where a party’s privilege calls were overbroad—said yes. And the guidelines came with a stern warning. Chabot v. Walgreens Boots Alliance, Inc., 2020 WL 3410638 (M.D. Pa. June 11, 2020). You may read the opinion here.
A “Lawless Request”?
In a shareholders’ securities class action arising from the failed Walgreens/Rite-Aid merger, Walgreens withheld 17,000 documents citing privilege and work-product objections. The plaintiffs challenged the varied privilege claims in a motion to compel, but certainly did not want to submit each of those documents for the Court’s in camera review. Instead, the plaintiffs proposed a different, more global solution:
Plaintiffs are not simply dumping hundreds or thousands of documents on the Court’s chambers for an in camera review. Instead, Plaintiffs have identified concise proposed legal rulings that, if Defendants apply correctly, should work to rectify thousands of improper and unjustified privilege assertions.
Walgreens responded that plaintiffs’ request for court-issued guidelines to govern its privilege review was a “lawless request.” Walgreens, instead, wanted the Court to make privilege calls on a document-by-document basis.
May a Court Issue General Privilege-Review Guidelines?
As it turns out, the request was not so lawless. In fact, courts in the Third Circuit “have often dictated guidelines for parties to follow when determining whether documents are privileged.” Courts have the authority to guide parties in producing documents to lessen the burdens associated with in camera review.
Rather than doing a document-by-document in camera review of Walgreens’ privilege claims, the Court said it would “dictate its holding on contested issues, which the parties will then apply when determining whether its documents are privileged.”
Lawyers’ Communications with Third Parties
The Court ordered Walgreens to produce and un-redact its lawyers’ descriptions of FTC meetings, including correspondence to the client conveying the FTC’s comments. The privilege does not apply when an attorney merely conveys to his client the substance of a third party’s comments.
Walgreens may redact information in those documents if the primary purpose of the communication is to provide legal advice. Importantly, the lawyer’s “analysis or advice must be conveyed within the privileged document” for the privilege to apply.
The Court noted that a party waives the privilege over communications when it makes the privileged communications a “substantive issue in the litigation.” This particular rule is narrower than an advice-of-counsel defense. It holds that, “if the success of the client’s claim or defense turns on what was said during the confidential communication, then the communications are put at issue.”
Here, Walgreens repeatedly claimed as a defense that its executives expressed confidence in the ultimately failed Rite-Aid merger because—“based on what they knew”—FTC approval was obtainable. In short, Walgreens placed at issue “what they knew about the FTC review process.” So, the Court ordered Walgreens to produce and un-redact all documents containing information or analysis about the FTC review process—including its attorneys’ “reports and updates” of the FTC review process.
“The Attorney is the Master of His Communication”
The Court stressed the necessity of the privilege’s legal-advice component, noting that “for an entire document to be privileged, the attorney must be primarily rendering legal advice on the document as a whole.” But an attorney’s edits or notations on a non-privileged document made primarily for legal-advice purposes “may be segregated and redacted.”
But, as the Court recognized, “the attorney is the master of his communication.” Importantly, he or she “could choose to convey advice under separate cover.” A document does not become privileged “because an attorney chose to implant advice on the document itself.”
Here, Walgreens must produce draft press releases, call scripts, and media responses, including those involving a Walgreens’ attorney. It was clear that these communications’ primary purpose was “public relations advice.”
Re-Review and Certify
After reviewing eight documents to which the Court had access, it was not happy. The Court concluded that “it is clear the Defendants have overstepped the boundaries of attorney–client privilege.” In fact, two of the eight documents over which Walgreens claimed privilege “could easily be considered frivolous.”
The Court’s final mandate, therefore, was for Walgreens to—
- Re-review all previously withheld and redacted documents; and
- Issue a certification by a registered attorney in the case—under penalty of perjury—that each document meets the legal standards of privilege and work product.
And the review must be undertaken with these court-ordered guidelines at the forefront.