Sessions v. SloaneÂ
789 S.E.2d 844
| N.C. Ct. App. | 2016Background
- Defendants (Cruise Connections entities and partners) hired Sessions to provide a $5,057,500 letter of credit so they could bid on a government contract; Sessions was to receive contingent partnership/warrant rights if the bid succeeded.
- Defendants obtained the letter of credit; they later sued the Canadian government and recovered settlement proceeds; Sessions then sued Defendants in NC state court claiming breach and sought attachment/escrow relief to preserve funds.
- Defendants produced a privilege log asserting attorney-client privilege, work-product protection, and joint-defense (common-interest) privilege over numerous emails and documents; plaintiffs moved to compel production (or at least metadata/subject lines and in camera review).
- Trial court ordered production of communications among defendants without counsel (i.e., non‑privileged) and ordered production of email headers/subject lines for documents claimed as attorney‑client privileged; Defendants appealed the discovery order.
- The Court of Appeals considered (1) whether the discovery order was immediately appealable and (2) whether the trial court abused its discretion in compelling production of the withheld materials.
Issues
| Issue | Plaintiff's Argument (Sessions) | Defendant's Argument (Sloane/Cruise) | Held |
|---|---|---|---|
| Appealability: whether interlocutory discovery order is immediately appealable | Challenged order affects substantial rights because it compels disclosure of asserted privileges | Order is interlocutory but privilege assertions are nonfrivolous so appeal is proper | Order was immediately appealable because defendants asserted statutory privileges with a document‑by‑document log (substantial right affected) |
| Sufficiency of privilege proof / findings of fact | Court may and should order production where privilege claims are inadequately supported; plaintiff urged production/in camera review | Defendants argued trial court failed to make required Hall-style findings and should have accepted affidavit/privilege log as sufficient before ordering production | Court held defendants bore the burden to prove privilege; they did not request findings and the court was not required to make formal findings; presumption that sufficient findings exist; production order not an abuse of discretion |
| Work product / joint defense protection for internal emails | Plaintiff argued many emails were ordinary business communications, not prepared because of anticipated litigation, so not protected | Defendants contended work product can attach even without attorney involvement and that litigation was anticipated when emails were created | Court held work product requires documents ‘‘prepared because of the prospect of litigation’’; defendants showed litigation was anticipated but failed to show the specific emails were created for litigation rather than in the ordinary course of business; production order affirmed |
| Attorney-client privilege and email headers/subject lines | Plaintiff sought headers/subject lines to assess privilege claims; those fields are discoverable absent a specific showing | Defendants argued even header/subject lines can reveal privileged content and must be withheld | Court applied the usual five‑part privilege test and held defendants failed to meet burden to show subject lines were privileged; trial court did not abuse discretion in ordering those headers produced |
Key Cases Cited
- Hall v. Cumberland Cnty. Hosp. Sys., 121 N.C. App. 425 (N.C. Ct. App. 1996) (discusses procedures for asserting privilege and in camera review)
- Sharpe v. Worland, 351 N.C. 159 (N.C. 1999) (interlocutory discovery order affecting asserted privilege may be immediately appealable when a substantial right is implicated)
- K2 Asia Ventures v. Trota, 215 N.C. App. 443 (N.C. Ct. App. 2011) (document-by-document privilege assertions defeat characterization as frivolous)
- Evans v. United Servs. Auto. Ass'n, 142 N.C. App. 18 (N.C. Ct. App. 2001) (work product doctrine standard and narrow construction; party asserting privilege bears burden)
- Cook v. Wake Cnty. Hosp. Sys., 125 N.C. App. 618 (N.C. Ct. App. 1997) (distinguishes materials prepared in anticipation of litigation from ordinary business records)
- In re Ernst & Young, 191 N.C. App. 668 (N.C. Ct. App. 2008) (work product protects materials prepared because of litigation prospects)
- In re Miller, 357 N.C. 316 (N.C. 2003) (sets out five‑part test for attorney‑client privilege)