South Carolina Recognizes Trade-Secrets Privilege

Answering the 4th Circuit’s certified question, the South Carolina Supreme Court, in a 4–1 decision, adopted a trade-secrets privilege—even though the state’s trade-secrets statute never mentions “privilege.”  The new privilege is qualified, meaning a party may obtain otherwise privileged trade secrets by proving a substantial need for the information.  Hartsock v. Goodyear Dunlop Tires N. Am., Ltd, 2018 WL 1938540 (S.C. Apr. 25, 2018).  You may read the opinion here.

Tragic Accident

While traveling on I–26 in Calhoun County, S.C., a Monaco RV’s tire “blew out,” allegedly causing the RV to cross the median and strike head-on a car in which Sarah Mills Hartsock was a passenger.  Mrs. Hartsock died as a result, and her husband sued Goodyear in federal court under diversity jurisdiction alleging that Goodyear’s tire was defective.

Federal Discovery Rules or State Privilege Law?

Goodyear sought a protective order to preclude plaintiff from obtaining “the design and chemical composition of the allegedly defective tire,” and specifically the tire liner’s butyl content.  The magistrate judge applied a federal-law balancing test, rather than state law, and denied the protective-order request. You may read the magistrate judge’s opinion here.

The district judge adopted the magistrate judge’s ruling without substantive comments, but granted an interlocutory appeal.  The issue before the 4th Circuit is whether federal discovery rules or South Carolina privilege law governs the trade-secrets-disclosure issue.  This issue begs the question that the federal appellate court certified to the South Carolina Supreme Court:

Does South Carolina recognize an evidentiary privilege for trade secrets?


Monthly Privilege Roundup: Legal Invoices, Money Laundering, and the Monster of Muskegon

We see privilege issues discussed in judicial decisions, legal commentary, and mainstream news.  Here is a roundup of interesting privilege issues for January 2017.

  • The California Supreme Court issued a significant ruling on the issue of whether the privilege protects the disclosure of lawyers’ invoices.  Andrew Downs of San Franciso’s Bullivant firm authored an excellent analysis of the opinion, which you can review here.
  • Jeffrey Willis, the alleged serial killer and so-called “Monster of Muskegon” who is awaiting trial for the murders of Jessica Heeringa and Rebekah Bletsch, claims that police and prosecutors took his attorney-client privileged notes from his jail jumpsuit.  Willis’ attorney claims that a “first-year law student could figure that out” and is seeking a dismissal.  Law professor Curt Benson disagrees, calling a dismissal “quite a stretch.”  Story here.
  • A Wall Street Journal report claims that “[t]ens of billions of dollars every  year move through opaque law-firm bank accounts that create a gap in U.S. money-laundering defenses.”  Law firms place clients’  money in their pooled, escrow or trust accounts, and claim that the attorney-client privilege protects client confidentiality.  Story here.
  • Daniel Altchek of Baltimore’s Miles & Stockbridge firm published an excellent article in InsideCounsel titled “Keeping Your Investigations Privileged May Get You in Hot Water with the NLRB.”  Check it out here.

Monthly Privilege Roundup: Aaron Hernandez, a Christmas Party Memo, and Privileged Pillow Talk?

We see privilege issues discussed in judicial decisions, legal commentary, and mainstream news.  Here is a roundup of interesting privilege issues for December 2016.

  • The Camarillo Acorn, a newspaper, filed a public-records request seeking old voicemails between the Camarillo Health Care District’s former CEO, Jane Rozanski, and CHCD’s attorney, Ralph Ferguson.  Allegations abound that Rozanski was dating Ferguson and helped him overbill CHCD by $425K.  A court stopped the production after Rozanski asserted the attorney-client privilege.  The Acorn responded in this editorial claiming it was interested in the truth, not privileged pillow talk.