Oregon’s Sword & Shield

In a personal-injury case, the plaintiff generally waives any privilege protecting communications with her health-care providers regarding the injuries for which she seeks damages. Privilege Waiver 101, right?

Not in Oregon. The state’s supreme court ruled that the physician–patient privilege precludes discovery of the plaintiff’s communications with her physician even where her medical treatment is at issue.  The court’s opinion is so draconian that it prohibits a defense lawyer from asking deposition questions as routine as “what injury did you receive?”

The court’s decision offered a potential—but unanswered—waiver argument (discussed below), but otherwise allows Oregon plaintiffs to use the physician–patient privilege as a sword and a shield in personal-injury cases. Hodges v. Oak Tree Realtors, Inc., 426 P.3d 82 (Ore. 2018).  You may read the decision here.

Oregon’s Physician–Patient Privilege

Oregon Evid. Code 40.325, or Rule 504-1, provides a patient, in a civil action, a privilege to refuse to disclose confidential communications with her physician.  The rule contains a “nonexclusive list” (remember this phrase) of three exceptions for communications made to a physician during a:

(1) commitment-related examination (Rule 504-1(4)(c))

(2) court-ordered physical examination (Rule 504-1(4)(a); and

(3) court-ordered examination “performed under” Ore. R. Civ. P. 44 (Rule 504-1(4)(b)).

Do the last two exceptions sound redundant to you?

Issues and Ruling

More…

Court Rejects Discovery of Common−Interest Agreement

Issues of relevance and privilege arise in answering the question whether common−interest agreements are discoverable.  One federal court recently rejected discovery of three defendants’ common−interest agreement, and did so even though the three defendants had adverse interests that “may lead to future litigation between them.”  Wausau Underwriters Ins. Co. v. Reliable Transp. Specialists, Inc., 2018 WL 4235077 (ED MI Sept. 6, 2018).  You may read the Magistrate Judge’s opinion here, and the District Judge’s affirmance here.

The Issue

Wausau Underwriters sued Reliable Transportation Specialists, Amarillo Ushe, and Burt Holt seeking a declaration that it did not have to pay a judgment arising from Holt’s lawsuit and ultimate $8.7M judgment against Reliable and Ushe. The three defendants entered into a “Common Interest Confidentiality Agreement” that contained “boilerplate terms” so that they could “safely share information.”

Wausau thought that the CIA contained provisions regarding tolling, settlement, indemnification, and related financial provisions.  Wausau asked for the CIA, the defendants politely declined, and Wausau filed a motion to compel.  The Court, without much explanation, required the defendants to submit the CIA for in camera review.

Are CIAs Privileged?

This is an interesting question, and one I will address in a future post.  At oral argument, the defendants “insisted” that the “joint defense privilege” renders the CIA non-discoverable.  The court sidestepped the inquiry, noting that “cases addressing the question of whether JDAs are privileged fall, quite frankly, all over the lot.” (Quoting Steuben Foods, Inc. v. GEA Process Eng’g, Inc., 2016 WL 1238785 (WDNY Mar. 30, 2016)).

Relevance?

The Court did not have to decide the privilege issue because the discovery of a CIA turned on relevance. More…

Well, That Backfired. A Privilege-Waiver Tale for Internal Investigations and In-House Counsel

We know that typically a company waives the privilege covering an internal-investigation memo if it discloses that memo to a government agency.  One company nevertheless wanted it both ways, so it created a second memo summarizing (the favorable) part of an in-house lawyer’s privileged internal-investigation memo, and disclosed the second memo to the feds.  Did this circumnavigation attempt avoid privilege waiver for the internal-investigation memo?

A Missouri federal court found that disclosing the second memo waived the privilege over the in-house lawyer’s memo, and ordered partial disclosure.  Sherman v. Berkadia Commercial Mortgage, LLC, 2018 WL 4300322 (E.D. Mo. Sept. 10, 2018).  You may read the opinion here.

Read This One, Not That One

When an allegation arose that Berkadia falsely certified to HUD that it complied with all HUD regulations, Berkadia retained outside counsel to conduct an internal investigation.  Based on outside counsel’s employee interviews, Berkadia’s in-house counsel drafted a memo about the investigation and underlying events.

Berkadia then prepared a second memo that summarized outside counsel’s investigation. This second memo discusssed some—but not all—details of the investigation findings, and Berkadia decided to disclose this second memo to HUD.

But I Want to Read That One

In an employee’s anti-retaliation lawsuit under the False Claims Act, the employee claimed that Berkadia’s disclosure of the second memo actually waived the privilege over the in-house lawyer’s memo summarizing the internal investigation.  He wanted the privileged memorandum to show that Berkadia had information contradicting its HUD disclosures.

Ruling—The Fairness Doctrine

The court read the in-house lawyer’s memo in camera, and agreed that it met the privilege elements: it contained communications between Berkadia’s in-house lawyer and employees, and was marked “confidential” and “subject to attorney-client privilege.”

The court referenced the at-issue waiver doctrine, which holds that one waives the privilege when it places the subject matter of the privileged communications at issue in the lawsuit.  A “closely related” concept is the fairness doctrine, which states that “a party should not be able to make use of privileged information as a sword when it is advantageous for the privilege holder[,] and then as a shield.”

The court applied this fairness doctrine to thwart Berkadia’s attempt to use the HUD-produced memo but withhold the in-house lawyer’s memo—from which the HUD memo derived—from the employee.  The court found that Berkadia waived the privilege over the in-house lawyer’s memo, and ordered the company to produce the sections that disclosed interviews with Berkadia’s employees.

PoP Analysis

While the company appropriately handled the in-house lawyer’s memo from a privilege perspective, its attempt to “disclose the memo without disclosing it” backfired.  The moral of the story is that disclosing privileged information to government entities typically waives the privilege.

While there are some instances of companies avoiding privilege waiver by entering into a NDA with the governmental entity, as discussed here and here, those situations are rare and companies must proceed with caution.  The “memo about the memo” idea was apparently not cautious enough.