Williams v. Duke Energy International, Inc, 1:08-cv-00046

Background

Plaintiffs (Williams and others) allege Duke Energy funneled unlawful rebates to favored large customers via Cinergy Retail Services/option agreements and seek discovery of 105 documents Duke withheld as attorney-client privileged or work product.
Withheld documents relate to three proceedings: CG&E PUCO RSP (2003–2008), the Deeds whistleblower litigation (2006–2008), and this Williams litigation (filed 2008).
Duke submitted a declaration from in-house lawyer Ariane Johnson asserting privilege/work-product over the documents, grouped into categories; plaintiffs challenge adequacy of factual predicates and invoke the crime‑fraud exception.
The Magistrate Judge reviewed privilege standards (including corporate Upjohn principles), the burden to make document‑by‑document showings, work‑product rules, and the Zolin standard for in camera review under the crime‑fraud exception.
Court granted plaintiffs’ motion in part and denied in part: it found many categories insufficiently supported by factual declarations and ordered Duke to: (a) produce targeted affidavits from identified authors/recipients establishing the factual predicates for privilege/work product for specified documents, or (b) submit those documents for in camera review; it denied plaintiffs’ request to compel production of all withheld documents and denied the crime‑fraud showing for in camera review.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Adequacy of privilege assertions/document‑by‑document factual predicate	Plaintiffs: Johnson’s declaration is insufficiently specific; many emails likely business not legal communications	Duke: Upjohn does not require subjective awareness by lower‑level employees; Johnson has department knowledge and grouped documents appropriately	Court: Corporate privilege uses an objective Upjohn test; but Johnson’s descriptions were often too skeletal—court ordered targeted affidavits or in camera submission for many documents and sustained privilege for some discrete categories/documents
Whether in‑house declarations may authenticate privilege over many documents	Plaintiffs: Declarant lacked participation/knowledge to assert predicates for many emails	Duke: Declarant’s role and familiarity with authors/recipients suffice to support assertions	Held: Declarant’s general statements insufficient in many instances; court required more specific affidavits from document authors/recipients where necessary
Crime‑fraud exception / need for in camera review	Plaintiffs: Sixth Circuit decisions and certain evidence (use of term "rebate", Colbert’s oral statements) support a prima facie showing that counsel communications furthered fraud/crime, justifying in camera review	Duke: Plaintiffs haven’t tied withheld communications to alleged crimes; evidence cited is scant and speculative; Zolin limits fishing expeditions	Held: Plaintiffs failed to make the required prima facie showing; court denied crime‑fraud exception and declined routine in camera review (but allowed in camera review if Duke submits documents after ordered affidavits are insufficient)
Motion to strike affidavits attached to plaintiffs’ reply	Duke: Affidavits submitted with reply violate local rule and could have been included earlier; inadmissible legal opinions	Plaintiffs: Affidavits respond to arguments raised in opposition	Held: Motion to strike denied as to consideration for crime‑fraud inquiry, but court noted rules; affidavits were considered only for that limited purpose

Key Cases Cited

Upjohn Co. v. United States, 449 U.S. 383 (U.S. 1981) (corporate privilege applies to communications by employees made at direction of corporate superiors to secure legal advice; control‑group test rejected)
Fausek v. White, 965 F.2d 126 (6th Cir. 1992) (elements of attorney‑client privilege under Sixth Circuit)
Reed v. Baxter, 134 F.3d 351 (6th Cir. 1998) (attorney‑client privilege treated as mixed question of law and fact)
Zolin v. United States, 491 U.S. 554 (U.S. 1989) (standards for in camera review under crime‑fraud exception; require a factual showing to avoid fishing)
Hickman v. Taylor, 329 U.S. 495 (U.S. 1947) (work‑product doctrine protects materials prepared in anticipation of litigation)
Swidler & Berlin v. United States, 524 U.S. 399 (U.S. 1998) (policy rationale for attorney‑client privilege)
Clark v. United States, 289 U.S. 1 (U.S. 1933) (mere allegation of illegality insufficient to defeat privilege)