Opinion
No. C 99-02506 SI.
June 22, 2005
ORDER RE: ATTORNEY-CLIENT PRIVILEGE
By letter briefs, the parties have submitted a dispute regarding attorney-client privilege claims relating to an investigation of potential destruction of evidence. Plaintiffs request that the Court find that defendants' privilege claims are improper and that defendants must answer deposition questions and produce documents on this topic.
Plaintiffs filed their letter brief on April 27, 2005; defendants filed their opposition on May 11, 2005; plaintiffs filed a reply on May 18, 2005.
This dispute began with a series of photographs taken by Max Boredelon, a CNL warehouse employee. Bordelon was asked by his employer to take pictures of two corpses from the Parabe incident. Bordelon downloaded the photographs to his computer in the warehouse and deleted some pictures that were out of focus or off-center. Bordelon later delivered the remaining photographs to medical personnel. Dave Connor, the logistics manager, told Dave Kitchin, Bordelon's direct supervisor, to have the photographs removed from the warehouse computer.
Kitchin passed this information along to Jeff Cagle, Bordelon's rotational counterpart. Cagle responded by writing an email to Bordelon that said Bordelon should delete the pictures "because of the pending civil rights violation law suit against Chevron Oil Company and Chevron Nigeria Limited." Pls.' Ex. A. Cagle also stated that "Dave Connor told Dave Kitchin to instruct me to send you this note." After Cagle sent the email, Chevron retained outside counsel, David Heilbron, who conducted an investigation of the incident.
1. Heilbron's interview of Connor
Heilbron conducted an interview of Connor during his investigation. Connor, in his deposition for this case, asserted the attorney-client privilege for his communications with Heilbron. Plaintiffs argue that the conversation is not privileged because there was an enquiry conducted by an ombudsman, which is not protected. However, defendants do not claim a privilege for any communications with the ombudsman. The communications at hand involve direct communications between an employee and an attorney without an ombudsman present.
Plaintiffs also argue that the privilege is unavailable because Heilbron is an attorney for the defendants, not CNL. However, communications between a subsidiary corporation and counsel for the parent corporation are privileged if "the employee possesses information critical to the representation of the parent company and the communications concern matters within the scope of employment." Admiral Insurance Company. v. United States District Court for District of Arizona, 881 F.2d 1486, 1493 n. 6 (9th Cir. 1988). Heilbron was retained by Chevron Corporation, not CNL. Duck Decl. at ¶ 2. Plaintiff argues that the claims in Cagle's email do not involve the parent company; however, this is incorrect given its relevance in this action involving the parent company. Connor's instruction to Kitchin to remove the photographs from the warehouse computer clearly falls within the scope of his employment. Therefore, the communications with Connor satisfy the requirements of Admiral Insurance Company.
Finally, plaintiffs argue that the communications are not protected by the privilege because Connor was being represented by his own counsel and investigated by the client. However, if the employee has representation as an individual, the attorney-client privilege for the corporate client is not automatically waived. See In Re Grand Jury Subpoena Dated July 13, 1979, 478 F.Supp. (E.D. Wisc. 1979) (finding attorney-client privilege for communications between corporation's lawyers and employees, who were represented by separate counsel).
Plaintiffs rely on Sequa Corporation v. Gelmin, 1993 WL 276081 (S.D.N.Y. 1993) in support of their argument. Sequa involved three employees who were suspected of fraudulent activities against their employer. The corporation approached one of the suspected employees in an attempt to gain his cooperation. The court found that affidavits from the employee produced as a result of meetings between the corporation's counsel, the employee, and the employee's counsel were not subject to protection under the attorney-client privilege. However, Sequa recognizes that conversations with an employee represented by separate counsel can be protected under attorney-client privilege: "We may fairly infer that at some point in time, whether contemporaneously with the preparation of the affidavits or prior thereto, corporate counsel interviewed [the employee] to determine whether he or others had engaged in misconduct. If so, his responses to their inquiries might be privileged. . . ." 1993 WL 276081 at * 2.
Sequa also involved affidavits, while the current case deals with oral communications between Connor and Heilbron. The fact that affidavits were at issue was particularly important to the court: "Affidavits serve no evident purpose . . . if they remain concealed in an attorney's file cabinet. Thus the logical assumption is that [the corporation] intended or expected to disclose them either to the insurers or in the context of a lawsuit, as needed." Id. at * 3. The purpose of the communications at issue in this case differs substantially from the situation in Sequa. Connor spoke with Heilbron as part of an investigation conducted on behalf of defendants in anticipation of litigation. No affidavits were produced and there is nothing to suggest that the parties intended to reveal the content of the conversation in court. Additionally, defendants have presented evidence that the investigation was confidential. Heilbron Decl. at ¶ 8. Therefore, the Court finds that the conversation is privileged and DENIES plaintiffs' request for a Court Order instructing Connor to answer deposition questions surrounding his interview with Heilbron.
2. Letter from Matzke to Connor
After the Heilbron interview, Connor received a letter from Matzke, the president of defendant COPI. Defendants claim that the letter is privileged. Defendants argue that Matzke, in his letter, relayed legal advice and work product that he received from Chevron's lawyers to Connor. Matzke Decl. at ¶ 3. The attorney-client privilege protects communications between nonlegal employees when the employees discuss or transmit legal advice given by counsel. United States v. Chevron, 241 F.Supp.2d 1065, 1071 (N.D. Cal. 2002).
Plaintiffs argue that the letter did not transmit legal advice; instead, it informed Connor of the results of the investigation into the Cagle email. This is supported by Connor's deposition testimony, in which he stated that he believed the letter from Matzke to be a "letter of commendation." Pls.' Ex. 2 at 385. Plaintiffs also argue that defendants have not demonstrated that the document was not "disseminated beyond those who need to know." Kintera, Inc. v. Convio, Inc., 219 F.R.D. 503, 514 (S.D. Cal. 2003). Defendants present testimony from Matzke, who stated that "[e]ach of the individuals to whom I sent a letter as described in paragraph 3 was involved in the underlying events and who had reason to need to know the legal advice and work product attorney information I was conveying." Matzke Decl. at ¶ 4.
The Court finds that there is a discrepancy between Connor's testimony that the letter was a "commendation" and Matzke's testimony that the letter relayed legal advice obtained from counsel. The Court finds that in camera review is the proper method to resolve this dispute. Additionally, the Court finds that a single conclusory sentence in Matzke's Declaration is not sufficient to demonstrate that all 12 individuals needed to know the legal advice included in the Matzke letters. Defendants, when they submit the document for in camera review, should also submit evidence describing the company positions of the 12 recipients of the Matzke letters and their relevance to the information. Therefore, the Court ORDERS defendants to submit the Matzke letter to Connor for in camera review and ORDERS defendants to provide further information regarding the 12 employees who received the Matzke letter, all no later than June 30, 2005.
3. Letter from Matzke to Cagle
Plaintiffs argue that the March 30, 1999 letter from Matzke to Cagle is not privileged because Cagle was represented by counsel and he denies participating in the investigation. See Pls.' Ex. 3 at 74. Plaintiffs assert that the letter could not convey legal advice upon which Cagle was to act on behalf of Chevron because Cagle was on leave and was negotiating a severance package at the time, which would create an adversarial relationship between Cagle and defendants.
Defendants argue that Cagle was still an employee of Chevron at the time of the letter and he was cooperating with the investigation. Even though Cagle was on leave at the time of the letter, defendants can still assert attorney-client privilege because the privilege can even apply to post-employment communications between a former employee and corporate counsel. Admiral Insurance Co. v. United States District Court for District of Arizona, 881 F.2d 1486, 1493 (9th Cir. 1989). As was the case with the Connor letter, the Court finds that in camera review is the appropriate manner to resolve this dispute. Therefore, the Court ORDERS defendants to produce the March 30, 1999 letter from Matzke to Cagle for in camera review, no later than June 30, 2005.
4. Privilege log
Plaintiffs argue that defendants' privilege log is not sufficient because it "has not demonstrated that each employee possesses information critical to the representatives of the parent company." A privilege log must identify: 1) the attorney and client involved; 2) the nature of the document; 3) all persons or entities shown on the document to have received or sent the document; and 4) the date the document was generated.In re Grand Jury Investigation, 974 F.2d 1068, 1071 (9th Cir. 1992). Defendants clearly met these requirements in their privilege log. See Kollios Decl., Ex. D. Defendants also went "beyond" the requirements by providing the subject matter of each document in the privilege log. In re Grand Jury Investigation, 974 F.2d at 1071. Therefore, the Court finds that the privilege log is appropriate.
5. Summary
The Court DENIES plaintiffs' request with respect to Heilbron's interview of Connor and defendants' privilege log. The Court finds that in camera review is necessary to resolve the dispute over the Matzke letters to Connor and Cagle. The Court ORDERS defendants to submit the letters for in camera review and ORDERS defendants to submit additional information regarding the other 10 individuals who received a letter from Matzke. See Matzke Decl. at ¶ 3. Defendants must produce these documents by June 30, 2005.
IT IS SO ORDERED.