Schaeffer v. Gregory Village Partners, L.P.
78 F. Supp. 3d 1198
N.D. Cal.2015Background
- Plaintiffs sued multiple defendants in 2011 over contamination allegedly originating from property now owned by Gregory Village; Gregory Village includes VPI, Inc.
- Mary Haber, VPI’s Vice President, also serves as Gregory Village’s in-house counsel; Tracy Craig was retained as a public-relations consultant to do outreach, gather neighbor information, secure access, attend regulatory and public meetings, and coordinate mitigation efforts.
- Plaintiffs served discovery in 2012; Gregory Village produced a privilege log (over 1,100 entries) asserting attorney-client privilege and work-product protection for many documents; plaintiffs challenged many entries, especially communications involving Craig and Haber.
- The Court ordered targeted production, in camera review of selected documents, and required Gregory Village to recertify and correct its privilege log; Gregory Village submitted a ‘‘Further Submission’’ withdrawing privilege as to some items but leaving many contested.
- After in camera review the Court concluded Craig qualified as a "functional employee" under Upjohn for privilege purposes but found many Craig and Haber entries either privileged or not privileged on document-by-document review; certain documents were ordered produced and some Haber notes were protected as work product.
- The Court found Gregory Village’s privilege-log review deficient, ordered it to show cause why sanctions should not be imposed, and required a sworn declaration that counsel personally reviewed every log entry.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether communications with PR consultant Tracy Craig are privileged | Craig was a third party and communications with her destroyed confidentiality; PR firm communications are routine and not for legal advice | Craig was a functional employee/agent; communications were made to assist counsel and thus fall within corporate privilege under Upjohn | Craig was a functional employee; many communications privileged, but court ordered production of specific Craig documents that were nonlegal (scheduling, babysitters, gift cards) |
| Whether communications involving Mary Haber (in-house counsel) were made in her legal role | Haber often acted as VPI VP; Gregory Village must show Haber communicated in capacity as counsel and for legal advice | Haber is in-house counsel and communications were for legal/regulatory advice | Court found many Haber documents privileged as legal communications; some were not privileged and must be produced; certain notes are protected work product |
| Whether work-product protection covers Haber’s notes and research | Plaintiffs asserted need for materials | Gregory Village asserted work-product and mental impressions protection | Court held specific documents (1119,1121,1124,1127) are attorney work product and not producible without a showing of substantial need (which plaintiffs did not make) |
| Whether Gregory Village complied with Court order to review and correct privilege log and whether sanctions are warranted | Plaintiffs argued the log remained inaccurate and asserted bad faith/noncompliance warranting sanctions | Gregory Village revised some entries but plaintiffs say review was cursory | Court found Gregory Village likely failed to adequately review the log, expressed lack of confidence, ordered Gregory Village to show cause why sanctions should not be imposed, and required a sworn attorney declaration of complete review |
Key Cases Cited
- United States v. Ruehle, 583 F.3d 600 (9th Cir.) (federal common law governs privilege in federal question cases and confidentiality is required for privilege)
- United States v. Graf, 610 F.3d 1148 (9th Cir.) (adopts Upjohn functional-employee analysis for corporate privilege)
- Upjohn Co. v. United States, 449 U.S. 383 (Sup. Ct.) (corporate attorney-client privilege covers communications from employees/agents who possess information needed for legal advice)
- United States v. Schwimmer, 892 F.2d 237 (2d Cir.) (communications to third parties destroy privilege unless those parties are agents/functional employees)
- In re Bieter Co., 16 F.3d 929 (8th Cir.) (consultant held to be functional equivalent of employee; privilege applied)
- In re Copper Mkt. Antitrust Litig., 200 F.R.D. 213 (S.D.N.Y.) (public relations firm communications protected where firm was integrated into corporate team for litigation/regulatory response)
- U.S. v. ChevronTexaco Corp., 241 F. Supp. 2d 1065 (N.D. Cal.) (when in-house counsel is involved, party must clearly show communications were for obtaining or providing legal advice)
- Calvin Klein Trademark Trust v. Wachner, 198 F.R.D. 53 (S.D.N.Y.) (PR materials that are routine publicity advice are generally not privileged)