Court Orders Production of Documents Shared with Litigation-Financing Firm 1

Companies searching for capital to fund litigation pursuits must first persuade a potential investment firm of the claim’s merits.  These persuasion efforts often include the company’s counsel sharing legal analyses and other work-product documents with a putative financier.  But this sharing leads defendants to later claim privilege waiver and seek production of the shared information.

While some courts, such as the one profiled here, have rejected these waiver claims, the Delaware federal court bucked this trend.   The court rejected the work-product and common–interest doctrines and ordered a company to produce its emails and documents shared with a potential litigation-financing firm.  Acceleration Bay LLC v. Activision Blizzard, Inc., 2018 WL 798731 (D. Del. Feb. 9, 2018).  You may read the opinion here.

Background

Before pursuing a patent-infringement action, Acceleration Bay LLC and its counsel communicated with Hamilton Capital about financing the litigation effort.  Acceleration also provided documents so that Hamilton Capital could conduct due diligence before deciding whether to provide capital.  This information exchange occurred before Acceleration and Hamilton Capital entered an agreement or filed litigation which, as we’ll see, is apparently a big deal. More…

Mardi Gras is Over: NOLA Court Rejects Privilege for GC’s Post-Accident Form

Mardi Gras ended early for one New Orleans agency.  Just days before Fat Tuesday, the USDC for EDLA ruled that the attorney–client privilege did not protect a public entity’s “Executive Summary” of a post-accident review.  The Court issued the ruling even though the entity’s GC created the Executive Summary form and the summary contained information to put the GC “on notice of a potential lawsuit and so that [she could] assess legal liability.”  O’Malley v. Public Belt RR Comm’n for the City of New Orleans, 2018 WL 814190 (ED LA Feb. 9, 2018).  You may read the decision here.

I [Can’t] Hear that Train a Comin’

Unlike the Folsom Prison inmate, Bryan O’Malley could not hear a moving locomotive and suffered injuries when it struck him while he was working for NOLA’s Public Belt Railroad Commission.  The Commission conducted a post-incident meeting and created an Executive Summary that included sections discussing the incident’s “primary cause” and “contributing cause.”

In a subsequent lawsuit, the Commission produced the Executive Summary with the “cause” sections redacted. O’Malley wanted an unredacted version, and moved to compel it.

A Good Deposition

O’Malley’s lawyer deposed the Commission’s Safety Manager, and gained valuable admissions.  Under direct questioning, the Manager effectively testified that the Commission managers’ “general procedure” is to meet after every accident and prepare an Executive Summary.  The Safety Manager never testified that the managers prepared the Summary so that lawyers can render legal advice to the Commission.  You may read the Manager’s testimony here.

GC Saves the Day?

Perhaps sensing trouble, the Commission’s General Counsel submitted a declaration stating that she prepared the Executive Summary form after becoming GC in 2014.  More…

“Pardon Me, Boy,” Does Release of Atty’s Investigation Report Waive the Privilege?

Chattanooga—home to beautiful scenery, Civil War battlefields, the Jimmy Hoffa trial, and the “Track 29” train’s destination in (“Pardon me, boy, is that the”) Chattanooga Choo Choo—is the setting for the latest judicial opinion on internal investigations and privilege waiver.

Chattanooga Choo Choo Station Platform

In a case involving a lawyer’s investigation into sexual-assault allegations involving a high-school basketball team, the USDC for EDTN held that the local school board’s publication of the lawyer’s report waived privilege and work-product protections for the lawyer’s underlying interviews and communications, including emails with another Board attorney.  Doe v. Hamilton County Board of Education, 2018 WL 542971 (ED Tenn. Jan. 24, 2018).  You may read the decision here.

The Investigation Report

Upon learning of sexual-assault allegations involving Ooltewah High School boys’ basketball team (Washington Post story available here), the Hamilton County (Chattanooga) Dep’t of Education retained Chattanooga attorney Courtney Bullard to independently investigate the OHS issue and provide legal advice to HCDE.  You may read the HCDE–Bullard engagement letter here.

HCDE, presumably for public-relations purposes, later released Bullard’s report for public consumption.  You may read the actual report here.

The alleged sexual-assault victims sued HCDE and moved to compel 130 of Bullard’s emails, including emails with another Board attorney, Scott Bennett.  HCDE claimed that the attorney–client privilege and work-product doctrine protected these communications from disclosure (privilege log available here).

Ruling

Magistrate Judge Chris Steger, correctly applying federal common law, held that parties may waive the attorney–client privilege upon disclosure of privileged information to third-parties, and that the waiver may extend “to all privileged communications on the same subject matter.”

But HCDE only released the report—not communications related to the report—so did waiver apply?  Finding the USDC’s decision in Doe v. Baylor Univ., 320 FRD 430 (W.D. Tex. 2017), “directly on point, well-reasoned and persuasive,” Judge Steger ruled that, when the Board released Bullard’s report, “it waived the attorney–client privilege as to the entire scope of the investigation, … and all materials, communications, and information” provided to Bullard during her investigation. More…