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In re Fluidmaster, Inc., Water Connector Components Products Liability Litigation

United States District Court, N.D. Illinois, Eastern Division

November 8, 2016



          Jeffrey T. Gilbert United States Magistrate Judge

         Defendant Fluidmaster, Inc., (“Fluidmaster”) maintains that approximately 10, 000 documents requested by the purported plaintiff class in this case (“Plaintiffs”) are protected from production by the attorney-client privilege and the work product doctrine. [ECF No. 328-3], ¶ 4. According to Fluidmaster, the small number of documents being withheld-at least in comparison to the roughly 180, 000 documents it has produced, which total over 600, 000 pages, id. ¶ 2-shows that the company has “maintained a conservative and valid approach to privilege.” [ECF No. 328], at 1. Plaintiffs have a different perspective, claiming that Fluidmaster has asserted privileges on a “sweeping basis” and provided seriously deficient privilege logs that do not support its assertions. [ECF No. 343], at 1. After months of meeting and conferring that narrowed but did not completely resolve the privilege dispute, Fluidmaster filed a Motion for Protective Order Preventing Disclosure of Its Attorney-Client Privileged and/or Protected Work Product Documents. [ECF No. 328].

         Before considering the merits of Fluidmaster's motion, the Court first must address what documents are encompassed by that motion. Plaintiffs say Fluidmaster is seeking “a protective order over approximately 10, 000 documents”-i.e., all of the documents that Fluidmaster has withheld as privileged. [ECF No. 343], at 1. Fluidmaster says it is seeking “a protective order preventing disclosure of privileged documents Plaintiffs claim should be produced.” [ECF No. 328], at 1 (emphasis added). In its opening brief filed in support of its motion, Fluidmaster identifies by Bates-number 112 documents that it says Plaintiffs are seeking and it is withholding. Id. at 4. In addition, Fluidmaster has provided the Court with excerpts from its privilege log that include the 112 documents identified by Bates-number in its opening brief and just a handful of other documents. [ECF No. 328-18]. The Court interprets this to mean that, after the meet and confer process, Plaintiffs are not disputing Fluidmaster's invocation of the attorney-client privilege or work product doctrine as to the vast majority of the documents Fluidmaster is withholding from production on those grounds. If a dispute does exist as to these other documents, neither party has asked the Court to resolve it. There is nothing in the record before the Court on Fluidmaster's motion that indicates Plaintiffs are claiming, or ever have claimed, that Fluidmaster should produce every single document it is withholding.

         For these reasons, the Court will address the request for relief in the motion Fluidmaster actually filed. The Court cannot address privilege issues with respect to documents not among the 112 listed on Fluidmaster's excerpted privilege log provided to the Court. In other words, the Court will confine itself to the dispute presented by Fluidmaster's Motion for Protective Order and not weigh into the hint of a larger dispute without an adequate record upon which to do so.


         A. Protective Order

         Federal Rule of Civil Procedure 26(c) permits a party to move for a protective order forbidding disclosure or discovery of certain materials. Fed.R.Civ.P. 26(c). The court, in turn, may grant such a motion where there is “good cause” to enter the protective order. Clark v. City of Chicago, 2010 WL 9941375, at *1 (N.D. Ill. Oct. 13, 2010) (quoting Fed.R.Civ.P. 26(c)). The movant bears a heavy burden to prove, through specific facts, that good cause exists. Glob. Material Techs., Inc. v. Dazheng Metal Fibre Co., 133 F.Supp.3d 1079, 1084 (N.D. Ill. 2015); Chicago Mercantile Exch., Inc. v. Tech. Research Grp., LLC, 276 F.R.D. 237, 241 (N.D. Ill. 2011). Ultimately, the court must exercise its sound discretion to determine whether a protective order should be entered and, if so, what degree of protection is appropriate. Nieves v. OPA, Inc., 948 F.Supp.2d 887, 891 (N.D. Ill. 2013); State Farm Fire & Cas. Co. v. Nokes, 263 F.R.D. 518, 521 (N.D. Ind. 2009); Felling v. Knight, 211 F.R.D. 552, 554 (S.D. Ind. 2003).

         B. The California Attorney-Client Privilege

         The parties agree that California law governs the attorney-client privilege issues now before the Court. See Fed. R. Evid. 501. Under California law, the attorney-client privilege is a product of statute. Fay Ave. Properties, LLC v. Travelers Prop. Cas. Co. of Am., 2014 WL 2738682, at *5 (S.D. Cal. June 17, 2014). Specifically, § 954 of the California Evidence Code “confers a privilege on the client ‘to refuse to disclose, and to prevent another from disclosing, a confidential communication between client and lawyer.'” Ivy Hotel San Diego, LLC v. Houston Cas. Co., 2011 WL 4914941, at *3 (S.D. Cal. Oct. 17, 2011) (quoting Cal. Evid. Code § 954).

         In determining whether the attorney-client privilege applies, California law employs a shifting burden approach. Initially, the party claiming the privilege must establish “‘the preliminary facts necessary to support its exercise, i.e., a communication made in the course of an attorney-client relationship.'” DP Pham, LLC v. Cheadle, 200 Cal.Rptr.3d 937, 946 (Cal.Ct.App. 2016) (quoting Costco Wholesale Corp. v. Superior Court, 219 P.3d 736, 741 (Cal. 2009)); see also Fay, 2014 WL 2738682, at *5. “To evaluate whether the party claiming the privilege has made a prima facie showing, the focus is on the purpose of the relationship between the parties to a communication.” League of California Cities v. Superior Court, 194 Cal.Rptr.3d 444, 453 (Cal.Ct.App. 2015). “‘[I]t is not the dominant purpose of a particular communication that dictates whether the attorney-client privilege is applicable; rather the issue is what was the dominant purpose of the relationship.'” McAdam v. State Nat. Ins. Co., 15 F.Supp.3d 1009, 1015 (S.D. Cal. 2014) (quoting Cason v. Federated Life Ins. Co., 2011 WL 1807427, at *2 (N.D. Cal. Oct. 17, 2011)); see also Fay, 2014 WL 2738682, at *7. Thus, where a party makes the requisite showing as to the relationship, “then all documents and communications are protected by the privilege without the necessity of having to make individualized showings as to each communication or document.” Fay Ave. Properties, LLC v. Travelers Prop. & Cas. Co. of Am., 2014 WL 1333669, at *11 (S.D. Cal. Apr. 2, 2014), objections overruled sub nom. Fay, 2014 WL 2738682.

         Once the party claiming the attorney-client privilege makes the prima facie showing described above, “‘the communication is presumed to have been made in confidence.'” Fay, 2014 WL 2738682, at *5 (quoting Costco, 219 P.3d at 741); see also DP Pham, 200 Cal.Rptr.3d at 946. Then, “‘the opponent of the claim of privilege has the burden of proof to establish the communication was not confidential or that the privilege does not for other reasons apply.'” Fay, 2014 WL 2738682, at *5 (quoting Costco, 219 P.3d at 741); see also DP Pham, 200 Cal.Rptr.3d at 946.

         C. The Federal Work Product Doctrine

         The federal work product doctrine, which finds its origins in Hickman v. Taylor, 329 U.S. 495 (1947), is codified in Federal Rule of Civil Procedure 26(b)(3). Abbott Labs. v. Alpha Therapeutic Corp., 200 F.R.D. 401, 405 (N.D. Ill. 2001); Pyramid Controls, Inc. v. Siemens Indus. Automations, Inc., 176 F.R.D. 269, 276 (N.D. Ill. 1997). Rule 26 “protects all ‘documents and tangible things that are prepared in anticipation of litigation'” by or for a party or its representative for the purpose of analyzing or preparing the party's case. Appleton Papers, Inc. v. EPA, 702 F.3d 1018, 1025 (7th Cir. 2012) (quoting Fed.R.Civ.P. 26(b)(3)(A)); see also The Manitowoc Co., Inc. v. Kachmer, 2016 WL 2644857, at *4 (N.D. Ill. May 10, 2016); Patrick v. City of Chicago, 111 F.Supp.3d 909, 915 (N.D. Ill. 2015); Miller UK Ltd. v. Caterpillar, Inc., 17 F.Supp.3d 711, 734 (N.D. Ill. 2014).

         The work product doctrine provides different degrees of protection for so-called “fact” and “opinion” work product. Appleton Papers, 702 F.3d at 1025. Fact work product “‘consists of factual material'” while opinion work product “‘comprises the mental impressions, conclusions, opinions, or legal theories of an attorney or a party's representative.'” Timmermann's Ranch & Saddle Shop, Inc. v. Pace, 2016 WL 1181792, at *2 (N.D. Ill. Mar. 28, 2016) (quoting United States ex. Rel. Yannacopolous v. Gen'l Dynamics, 231 F.R.D. 387, 385 (N.D. Ill. 2005)). Fact work product is discoverable “in the rare case” where a party demonstrates that he has a substantial need for the materials and that it would be exceedingly difficult to obtain the information through other means. Appleton Papers, 702 F.3d at 1022, 1025; see also Grochocinski v. Mayer Brown Rowe & Maw LLP, 251 F.R.D. 316, 321 (N.D. Ill. 2008). But opinion work product remains protected even where a party makes such a showing. Appleton Papers, 702 F.3d at 1023; Beverly v. Watson, 2015 WL 5117043, at *2 (N.D. Ill. Aug. 28, 2015). In either case, the party asserting that some document or tangible thing is protected by the work product doctrine bears the burden of showing that the doctrine applies. Appleton Papers, 702 F.3d at 1023; Hamdan v. Indiana Univ. Health N., LLC, 2014 WL 2881551, at *2 (S.D. Ind. June 24, 2014).


         Fluidmaster identifies six categories of documents in dispute and provides the Bates-numbers for the documents it groups into these categories. [ECF No. 328], at 4. It asserts that almost all of the documents in these categories are protected by the attorney-client privilege and that many are protected by the work product doctrine. With varying degrees of specificity, the parties confine their arguments to these six categories of documents. The Court will address each category of documents in turn as best that it can based upon the parties' arguments.

         A. FMPRIV00002-00005: The Lichtman Reports[1]

         The first category of documents identified by Fluidmaster consists of reports regarding two witness interviews. Id. Joanne Lichtman, a litigation attorney at the Howrey law firm, worked as one of Fluidmaster's outside counsel on various product liability lawsuits, and she interviewed some of Fluidmaster's employees. [ECF No. 328-2], ¶ 11. The subject matter covered during these interviews is not clear from the record now before the Court. Regardless, after Lichtman's interviews with Ken Wogomon (Fluidmaster's Manager of Quality) and Chris Coppock (Fluidmaster's R&D Manager), “counsel” prepared “report[s]” about them. [ECF No. 328-18], at 2, entries FMPRIV00002-00005. It is not clear from the privilege log whether Lichtman or some other attorney prepared the reports. Fluidmaster argues these reports, which will be referred to as “the Lichtman Reports, ” are protected by the attorney-client privilege. Fluidmaster's vague description of these documents as “information prepared by counsel re: interview by Joanne Lichtman (Outside Counsel) of [Fluidmaster employees]” appears to bring the documents within the attorney-client privilege under California law at least in terms of how they were created and the purpose of the communications.

         The dominant purpose of Lichtman's relationship with Fluidmaster appears to have been attorney-client. There is no indication that her relationship had any other purpose. And Plaintiffs do not contend otherwise. Also, Plaintiffs do not contest the proposition that Lichtman's communications with Wogomon and Coppock constitute communications with Lichtman's “client.” See Zurich Am. Ins. Co. v. Superior Court, 66 Cal.Rptr.3d 833, 841 (Cal.Ct.App. 2007) (“[T]he attorney-client privilege may extend to communications involving middle- and lower-level employees.”); see also Kandel v. Brother Int'l Corp., 683 F.Supp.2d 1076, 1083 (C.D. Cal. 2010).

         Plaintiffs instead argue that Fluidmaster has not made the requisite preliminary showing as to privilege because the Lichtman Reports discuss only factual issues. [ECF No. 343], at 12-13 (citing [ECF No. 328-12], at 2, a letter that Fluidmaster filed in support of its motion in which one of Fluidmaster's attorneys characterizes Lichtman's interviews of Fluidmaster employees as “factual investigation[s]”). According to Plaintiffs, the attorney-client privilege under California law only applies to communications that include a legal opinion formed and the advice given by a lawyer. Therefore, reports about factual investigations, Plaintiffs assert, are not covered.

         Plaintiffs' argument is premised on a misreading of § 952 of the California Code of Evidence, which defines “confidential communication.” That provision provides as follows: “‘confidential communication between client and lawyer' means information transmitted between a client and his or her lawyer in the course of that relationship and in confidence . . ., and includes a legal opinion formed and the advice given by the lawyer in the course of that relationship.” Cal. Evid. Code § 952 (emphasis added). Because of the use of the conjunctive “and, ” the last clause is not a restrictive modifier of “information transmitted.” If the last clause of this definition started with “that” instead of “and, ” then perhaps Plaintiffs' reading could be correct. But that is not how the statute is written. Instead, “confidential communication” is defined to mean information transmitted, whether or not that information is a legal opinion or advice. Then, the last clause merely “uses ‘legal opinion' to specify one type of information protected.” People v. Bolden, 160 Cal.Rptr. 268, 268 (Cal.Ct.App. 1979).

         This reading of § 952 is confirmed by California courts' interpretation of “confidential communication, ” a term which they have explained should be “broadly construed.” Palmer v. Superior Court, 180 Cal.Rptr.3d 620, 628 (Cal.Ct.App. 2014). California's attorney-client privilege simply does not differentiate “between ‘factual' and ‘legal' information.” DP Pham, 200 Cal.Rptr.3d at 945.[2] The “privilege equally attaches to both ‘legal' and ‘factual' information or advice exchanged between the attorney and client.” Larsen v. Coldwell Banker Real Estate Corp., 2012 WL 359466, at *5 (C.D. Cal. Feb. 2, 2012). In fact, the privilege may extend to “communications that merely transmit documents, ” even if those documents are publically available. In re Superior Nat. Ins. Gr., 518 B.R. 562, 569 (Bankr. C.D. Cal. 2014); DP Pham, 200 Cal.Rptr.3d at 945. All of this means that the privilege protects the transmission of information “regardless of their content.” DP Pham, 200 Cal.Rptr.3d at 948; see also Id. at 947 (noting that the attorney-client analysis does not involve an inquiry into “the nature of the communications”).

         In attempting to rebut this case law, Plaintiffs hang their hat on a concurrence in Costco Wholesale Corporation v. Superior Court, 219 P.3d 736 (Cal. 2009). In that case, the concurring judge stated that, under § 952, “the information transmitted between the lawyer and the client must be similar in nature to the enumerated examples-namely, the lawyer's legal opinion or advice.” Id. at 748 (George, J., concurring). This statement, however, is inconsistent with how the controlling opinion characterized the privilege. The majority described one of the California Supreme Court's previous holdings in which the court found that certain materials were protected even though they “might be described as factual matter rather than legal advice.” Id. at 742 (majority opinion). The majority then quoted that earlier opinion for the proposition that “[n] either the statutes articulating the attorney-client privilege nor the cases which have interpreted it make any differentiation between ‘factual' and ‘legal' information.” Id. Therefore, Plaintiffs' reliance on the concurring opinion in Costco is misplaced.

         Plaintiffs also argue that Fluidmaster has waived the attorney-client privilege with respect to the Lichtman Reports. This argument is based on the fact that Fluidmaster did not assert the attorney-client privilege with respect to these documents in its August 26, 2015 privilege log. Instead, Fluidmaster relied solely on the work product doctrine in that privilege log for these documents. [ECF No. 343-4], at 4.

         Although California law governs the existence and the scope of the attorney-client privilege in this case, Plaintiffs contend that federal law governs “issues of waiver.” [ECF No. 343], at 11. The case cited by Plaintiffs for this proposition does not go so far, and the Court is not convinced that federal law governs all issues related to waiver in this context. Regardless, Plaintiffs' argument is not really about waiver in the first instance, and the Court doubts Plaintiffs, if pressed on the issue, could show Fluidmaster intentionally relinquished a known right with knowledge of the facts so as to constitute a waiver under California law. See F.D.I.C. v. Fid. & Deposit Co. of Maryland, 196 F.R.D. 375, 380 (S.D. Cal. 2000) (“Under California law, waiver of the attorney-client privilege depends entirely on whether the client provided knowing and voluntary consent to the disclosure.”). Instead, Plaintiffs really are contending that Fluidmaster violated Federal Rule of Civil Procedure 26 by not raising the attorney-client privilege objection earlier and that this failure justifies a sanction, which, according to Plaintiffs, should be Court-ordered waiver. Federal law clearly controls whether and what sanctions are appropriate when a party violates the Federal Rules of Civil Procedure.

         Under Federal Rule of Civil Procedure 26(b)(5), a party withholding a document on the basis of a privilege must “expressly make the claim.” Fed.R.Civ.P. 26(b)(5)(A)(i). “The failure to provide the requesting party with a sufficient and timely privilege log ‘may result in a waiver of any protection from discovery.'” Executive Mgmt. Servs., Inc. v. Fifth Third Bank, 309 F.R.D. 455, 464 (S.D. Ind. 2015) (quoting Miller v. City of Plymouth, 2011 WL 1740154, at *4 (N.D. Ind. May 5, 2011)). “An order that privileged documents be disclosed as a sanction is appropriate, however, only if the party that authored the log has displayed willfulness, bad faith or fault.” Muro v. Target Corp., 250 F.R.D. 350, 365 (N.D. Ill. 2007), aff'd, 580 F.3d 485 (7th Cir. 2009).

         The Court is not convinced that Fluidmaster did not act “timely” in asserting the attorney-client privilege. More importantly, however, on the record now before the Court, there is no basis for concluding that Fluidmaster acted willfully, in bad faith, or with fault by not raising the attorney-client privilege with respect to these documents in its August 2015 privilege log. Even if Fluidmaster changed its mind, that would not be enough to justify the sanction Plaintiffs seek at this relatively early stage of this litigation. Further, Fluidmaster asserted the attorney-client privilege with respect to the Lichtman Reports when responding to Plaintiffs' request for production of documents and asserted the privilege in its revised privilege log, which was served several months after the August 2015 privilege log. In other words, Fluidmaster was not tardy in correcting or supplementing the record and no prejudice resulted to Plaintiffs because of Fluidmaster's initial oversight or position. The mere fact that Fluidmaster listed the wrong or a different privilege in its first privilege log should not result in the drastic sanction of compelling the production of otherwise privileged material.

         Plaintiffs raise one final issue with Fluidmaster's privilege log with respect to the Lichtman Reports, however, that potentially has more traction. Plaintiffs correctly note that, while Fluidmaster listed Lichtman as “Legal Personnel in Communication” and described the documents at issue as having been “prepared by counsel, ” Fluidmaster did not put any information in the “From, ” “To, ” “CC, ” and “BCC” columns of its privilege log when describing documents FMPRIV00002-00005. Plaintiffs claim that this lack of information renders the privilege log deficient and impedes their ability to assess whether any privilege may have been waived. Technically, Plaintiffs are correct. Fluidmaster does not address this issue in its reply brief. Based on context, the Court speculates that Lichtman or someone working with her or under her direction prepared interview memos addressed to “the File” or something similar after they spoke with Fluidmaster's employees. But that is conjecture. And, as the Court noted earlier, Fluidmaster's description of these documents on its privilege log is a bit vague and only minimally sufficient to invoke the attorney-client privilege in the first place. Therefore, on the present record, Plaintiffs are correct that Fluidmaster has not met its burden to show these ...

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