Railcar Management LLC v. Cedar AI, Inc
2:21-cv-00437
| W.D. Wash. | Jul 10, 2023Background
- Plaintiff Railcar Management, LLC withheld or redacted documents listed on a 103-item privilege log after a CrowdStrike cybersecurity investigation; defendant Cedar AI moved to compel production of selected entries.
- Court allowed Cedar to designate up to 20 log entries for in camera review; Railcar conceded 8 were not privileged and produced them, and produced redacted versions of 4 others.
- The Court conducted an in camera review of the remaining items designated by Cedar and other disputed documents.
- The Court found multiple entries contained purely factual information or business documents (e.g., a Statement of Work, factual spreadsheets, security recommendations) not protected by attorney-client privilege or work product.
- The Court granted Cedar’s motion as to several entries, denied as to others (including some redacted materials and privileged drafts), awarded Cedar $7,500 in fees for prevailing on the motion so far, and set a procedure and schedule for further designations, in camera submissions, and potential cumulative fee sanctions for additional improperly withheld items.
Issues
| Issue | Plaintiff's Argument (Railcar) | Defendant's Argument (Cedar) | Held |
|---|---|---|---|
| Whether communications containing purely factual matter are protected by attorney-client privilege | Communications are privileged because exchanged in course of investigation and labeled privileged | Factual content is not privileged merely because routed through counsel or labeled privileged | Court: Factual material is not protected; several entries ordered produced (privilege label alone insufficient) |
| Whether CrowdStrike investigative materials are protected by work-product doctrine | Investigation and resulting reports were prepared at counsel’s direction and for litigation, so protected | Reports were factual/operational and not created because of anticipated litigation | Court: Work-product not shown; dual-purpose/foreseeable litigation standard unmet; several investigative items ordered produced |
| Whether redactions and selective withholding (e.g., drafts, attorney comments, emails copied to counsel) must be produced unredacted | Redacted versions protect privileged substance; some drafts/comments are privileged | Redactions overbroad; some withheld material is factual or not privileged | Court: Denied compel for some items already properly redacted (e.g., privileged drafts and attorney-copied emails); granted compel for others where redaction not justified |
| Award of fees and process for remaining log entries | Railcar opposed fee shifting; argued some items distinguishable (e.g., Experian) | Cedar sought fees and broader review/special master, and disclosure of additional items | Court awarded $7,500 to Cedar now; set schedule for Cedar to designate up to 15 more entries, required in camera submissions, and established incremental monetary sanctions for future improperly withheld items plus potential further fees and production consequences |
Key Cases Cited
- In re Premera Blue Cross Customer Data Sec. Breach Litig., 329 F.R.D. 656 (D. Or. 2019) (factual material not protected by attorney-client privilege; guidance on investigator reports and work product)
- Newman v. Highland Sch. Dist. No. 203, 381 P.3d 1188 (Wash. 2016) (privilege requires confidential communication in context of attorney-client relationship)
- Youngs v. PeaceHealth, 316 P.3d 1035 (Wash. 2014) (attorney-client privilege protects communications, not underlying facts)
- Evans v. Raines, 800 F.2d 884 (9th Cir. 1986) (attorney-client privilege governed by state law)
- Baird v. Koerner, 279 F.2d 623 (9th Cir. 1960) (privilege scope determined under state law)
- Mechling v. City of Monroe, 222 P.3d 808 (Wash. Ct. App. 2009) (business documents and contracts prepared for nonlegal purposes are not privileged)