Opinion
Case No. 1:12-cv-611
08-19-2013
JOHN YARBERRY, Plaintiff, v. GREGG APPLIANCES, INC., Defendant.
Weber, J.
Bowman, M.J.
MEMORANDUM ORDER
This civil action came before the Court for an informal discovery dispute conference on July 24, 2013 relating to the alleged waiver of attorney client privilege by Defendant hhgregg. Upon hearing the arguments of counsel, the parties were instructed to provide the court with briefing as to their respective positions relating to the dispute and file the relevant deposition testimony under seal by July 28, 2013. The parties timely complied. (See Docs. 23-25). After careful consideration of the arguments of counsel and review of the supporting briefs, the undersigned finds that hhgregg did not waive the attorney client privilege.
I. Background and Facts
According to the complaint, Plaintiff began his employment with hhgregg on October 25, 2010, as a sales associate in Cincinnati, Ohio. In July 2011, hhgregg promoted Plaintiff to the position of Appliance Sales Manager at its new retail location in Cranberry, Pennsylvania, and his first day at that location was August 1, 2011. Plaintiff left the store around 9:00 p.m. on August 1, 2011, but he returned to the store around 2:00 a.m. on August 2, 2011. Plaintiff disarmed the alarm, entered the store, walked to the manager's office, and placed an unidentified object inside the safe.
Plaintiff then used the computers on the sales floor for a couple of hours, stopping occasionally to get up and wander around the store. Plaintiff also spun around rapidly in a chair while shining a light into the air and entered the mattress section of the store to lie down on a Tempur-Pedic mattress. While in the store, he sent a number of bizarre text messages and emails to various hhgregg employees. He then left the store at approximately 6:00 a.m., and did not report for work that day. hhgregg's loss prevention manager called Plaintiff on August 2, 2011 to question him about his behavior the previous night, but Plaintiff did not provide sensible answers to the questions.
That same day, Plaintiff was involuntarily committed to a psychiatric facility where he underwent treatment for bipolar disorder. Plaintiff and his family informed hhgregg that he had been hospitalized. Thereafter, on August 4, 2011, hhgregg sent Plaintiff a letter terminating his employment. Plaintiff then filed the instant action alleging that hhgregg discriminated against him based on a disability when it terminated his employment in August 2011. (Doc. 1, ¶¶ 25, 27).
On January 18, 2013, hhgregg produced an email from Associate Relations Manager, Cynthia Bush to Brett Edgar, another hhgregg employee. (Doc. 25, marked as Ex. 27). The email appears to be a working draft of Plaintiff's termination letter from hhgregg. The email also contains Ms. Bush's handwritten notes relating to her communication with hhgregg's outside counsel, Stuart Buttrick.
On May 7, 2013, Plaintiff's counsel introduced this email as an exhibit during Bush's deposition. Ms. Bush testified that Exhibit 27, a printout of emails between various hhgregg employees included in hhgregg's January 2013 document production also contains her handwritten notes, and that two of those notes are related to Ms. Bush's communications with Mr. Buttrick around the time that she decided to terminate Plaintiff's employment. (Doc. 25, Bush Dep. 42:23-:43:10, 44:10-45:18, Ex. 27). Ms. Bush testified that Mr. Buttrick assisted her in drafting Plaintiff's termination letter. (Doc. 25, Bush Dep. 43:8-10; 69:23-25). When questioned about her hand written notes and the substance of her communications with Mr. Buttrick defense counsel Edward Hollis consistently objected and asserted the attorney-client privilege. Id. at 44:24-45:7, 64:5-16, 86:4-87:10, 101:22-102:24.
On July 15, 2013, Plaintiff wrote to hhgregg contending that he is entitled to depose Mr. Buttrick and enclosed a subpoena for that deposition as well as a subpoena purporting to require defense counsel's firm to produce its files regarding any advice given to hhgregg regarding Plaintiff's employment. Defendants object to Plaintiff's subpoena, asserting that it has not waived the attorney client privilege and thus, Mr. Buttrick's testimony remains privileged.
II. Analysis
Plaintiff contends that hhgregg voluntarily disclosed its attorney's advice when it produced the email with Ms. Bush's notes written on it in discovery, allowed it to be marked as an exhibit during Bush's deposition, permitted Bush to answer questions about it, and failed to promptly request that it be returned. Plaintiff further asserts that it should be permitted to depose Mr. Buttrick because his advice to Ms. Bush may serve as a defense to punitive damage because it places the decision to terminate on counsel rather than on hhgregg. As such, Plaintiff asserts hhgregg has waived the attorney client privilege and therefore he is entitled to depose Mr. Buttrick and subpoena his files relating to his communication with Ms. Bush.
hhgregg, however, contends that Plaintiff's subpoenas are unenforceable because Ms. Bush's testimony on which Plaintiff bases his attempted discovery of privileged information is not itself privileged and thus cannot support any claim of waiver. hhgregg further contends that even if such testimony was itself privileged, it was inadvertently produced and the inadvertently produced information does not support waiver as to any other undisclosed information. Upon close inspection, the undersigned finds that hhgregg has not waived the attorney client privilege.
A. Applicable Law and Standard of Review
Where a client seeks legal advice from a professional legal advisor, the communications relating to that purpose made in confidence are protected by the attorney-client privilege. See Reed v. Baxter, 134 F.3d 351, 355-56 (6th Cir.1998); In re OM Sec. Litig., 226 F.R.D. 579, 587 (N.D. Ohio 2005). In the Sixth Circuit, the essential elements of the attorney-client privilege are:
(1) Where legal advice of any kind is sought (2) from a professional legal adviser in his capacity as such, (3) the communications relating to that purpose, (4) made in confidence (5) by the client (6) are at his instance permanently protected (7) from disclosure by himself or by the legal adviser (8) except the protection be waived.Humphreys, Hutcheson and Moseley v. Donovan, 755 F.2d 1211, 1219 (6th Cir.1985) (quoting United States v. Goldfarb, 328 F.2d 280, 281 (6th Cir.), cert. denied, 377 U.S. 976, 84 S.Ct. 1883, 12 L.Ed.2d 746 (1964)). A claim of attorney-client privilege will be narrowly construed because it "reduces the amount of information discoverable during the course of a lawsuit." Id. The privilege is applied "where necessary to achieve its purpose and protects only those communications necessary to obtain legal advice." Id.
The attorney-client privilege will be "waived by voluntary disclosure of private communications ... to third parties." Id. The client also waives the privilege "by conduct which implies a waiver of the privilege or a consent to disclosure." Id. Once the privilege is waived, it is waived in its entirety. Id.; In re Columbia/HCA Healthcare Corp. Billing Practices Litigation, 293 F.3d at 294.
Under Federal Rule of Evidence 502, if a privilege is waived by a disclosure, that waiver extends to undisclosed materials if: (1) the waiver is intentional; (2) the disclosed and undisclosed communications or information concern the same subject matter; and (3) they ought in fairness be considered together. The Sixth Circuit has noted that the phrase "same subject matter" for purposes of Rule 502 can be defined narrowly or broadly and approves "the line of cases that try to make prudential distinctions between what was revealed and what remains privileged." In re Grand Jury Proceedings Oct. 12, 1995, 78 F.3d 251, 255-56 (6th Cir. 1996).
Subject matter waiver under Rule 502 "exists only in cases where a party deliberately discloses privileged information in an attempt to gain a tactical advantage." GATX Corp. v. Appalachian Fuels, LLC, No. 09—41-DLB, 2010 WL 5067688, at *6 (E.D. Ky. Dec. 7, 2010); Fed.R.Civ.P. Rule 502(a) Advisory Committee Notes (waiver is reserved "for those unusual situations in which fairness requires a further disclosure of related, protected information, in order to prevent a selective and misleading presentation of evidence to the disadvantage of the adversary.").
Courts examine whether there has been a disclosure of a "significant part" of a privileged communication to determine if the privilege, in fact, has been waived. See In re Perrigo Co., 128 F.3d 430, 438 (6th Cir.1997); Grand Jury Proceedings, 78 F.3d at 254-5. If the court concludes the privilege has been waived, it must then determine the scope of the waiver. The waiver applies to the rest of the communications on the same subject matter. Grand Jury Proceedings, 78 F.3d at 255. The subject matter of the waiver can be defined broadly or narrowly. Id. Ultimately, the scope of the waiver must be based upon the facts of each case; and the court must be guided by fairness concerns.
B. hhgregg has not waived the attorney client privilege
1. Exhibit 27 - Bush Email
As detailed above, hhgregg asserts that the Ms. Bush's notes are not privileged information and, thus, cannot support Plaintiff's waiver argument. The notes contained on the email concerning Plaintiff's proposed termination letter state, in toto: "advised 2 proceed w/term but HR will send revised verbiage" and "TT Stuart...proceed w/term." hhgregg contends that Ms. Bush's notes indicate only that: (1) she communicated with counsel regarding Plaintiff's termination; and (2) the conclusion or outcome - in Ms. Bush's words - of those communications. Thus, hhgregg contends that neither the notes themselves purport to be nor is there any other evidentiary basis for treating them as a transcript or quotes of the actual conversation between Ms. Bush and Mr. Buttrick. They are, at most, Ms. Bush's own interpretation of (or an "opaque reference" to) Mr. Buttrick's advice and do not in any sense "illuminate the facts [or] analysis underlying that advice." See Libbey Glass, Inc. v. Oneida Ltd., 197 F.R.D. 342. 346 (N.D. Ohio 1999); In re Dayco Corp. Derivative Sec. Litig., 102 F.R.D. at 635-36 (two-page press release summarizing defense firm's findings and conclusions did not include the facts which led to those conclusions and thus could not support plaintiff's insistence on production of the underlying privileged report).
In In re Dayco Corporation Derivative Securities Litigation, 99 F.R.D. 616 (S.D.Ohio 1983), certain of the plaintiffs moved to compel production of a document entitled "Report of Counsel to the Special Review Committee of the Board of Directors of the Dayco Corporation" as well as other related documents. Id. at 618. In August of 1983, Dayco had issued a two-page press release "which summarized the establishment of the Committee ... and the 'findings' and 'conclusions' of the Committee...." Id. at 619. The district court found the release of the findings, but not the substance of the report, did not constitute a waiver of the attorney-client privilege. Id. The district court noted that in the press release "Dayco did not release a 'significant part' of the special committee report. It merely released the findings of the report ... the press release did not summarize evidence found in the report...." Id. (emphasis in original).
Citing In re Grand Jury Proceedings Oct. 12, 1995, 78 F.3d 251, 254 (6th Cir. 1996), however, Plaintiff contends that Ms. Bush revealed both Mr. Buttrick's conclusions with respect to the termination of Plaintiff, and the facts hhgregg provided to him, including that Plaintiff had been involuntarily committed to a psychiatric hospital. Notably, in In re Grand Jury Proceedings October 12, 1995, the government was investigating whether a private medical laboratory improperly induced nursing homes to give it business for which it sought Medicare reimbursement. The medical laboratory had prepared a twenty-four-point marketing plan with the advice of an attorney who specialized in Medicare law. Laboratory representatives revealed to government investigators certain details about two points of that marketing plan. Based on this disclosure, the government argued that the laboratory had waived the attorney-client privilege for its entire marketing plan. The court held that the laboratory had waived its attorney-client privilege only to the extent that it had divulged to government investigators the "substance of the attorney's advice." Grand Jury Proceedings October 12, 1995, 78 F.3d at 254. The court concluded that the laboratory had revealed the "subject matter" of an otherwise privileged communication when it revealed to the investigator the facts upon which its attorney based her conclusion; the attorney's reasoning behind her conclusion; and the attorney's legal conclusions. Id. The court ultimately determined that the laboratory had partially waived its privilege to the two marketing plan points for which the substance of the attorney's advice, i.e. the "subject matter," had been divulged. The other twenty-two marketing points, about which the laboratory had not divulged the attorney's advice, remained privileged. Id. at 255.
Thus, the fact that an attorney has examined a matter or a release of the findings of a special report does not result in waiver of the privilege. As such, a mere acknowledgment that an attorney has looked into a particular question which does not divulge the subject matter of the attorney's whole line of inquiry does not waive attorney-client privilege. See Grand Jury Proceedings October 12, 1995, 78 F.3d at 254 (citing and distinguishing United States v. White, 887 F.2d 267 (D.C.Cir.1989)). Likewise, a release of a report's findings, without revealing the facts that led to the findings does, not divulge the subject matter of that report and does not waive attorney-client privilege. See id. (citing and distinguishing In re Dayco Corp. Derivative Securities Litigation, 99 F.R.D. 616 (S.D.Ohio 1983).
Under the standards set forth in Grand Jury Proceedings October 12, 1995, the undersigned finds that Ms. Bush's handwritten notes on the email chain do not operate to waive hhgregg's attorney-client privilege. Ms. Bush's notes do not reveal the substance of Mr. Buttrick's advice, any facts upon which Mr. Buttrick's based his advice upon, nor his reasoning behind his advice.
2. Bush's testimony did not waive attorney client privilege
Plaintiff further contends that Ms. Bush's testimony relating to her communications with Mr. Buttrick waived the attorney client privilege. Due to her repeatedly answering questions about her actions and thought processes when she learned information related to Plaintiff's behaviors and hospitalization by stating that she "partnered with legal counsel." Plaintiff asserts that by claiming she "partnered with legal counsel," Ms. Bush would be using her communications with counsel as a sword by suggesting to a jury that her actions were somehow legally justified. hhgregg, however, asserts that it has not placed any of Mr. Buttrick's legal advice at issue. To the contrary, hhgregg's position is that Ms. Bush exercised her own independent authority to discharge Plaintiff, without reference to any legal advice she may have considered in reaching her ultimate decision. (See Doc. 23, Ex. A, p. 3; Doc. 25, Bush Dep. 60:6-8, 62:19-22). In this regard, Ms. Bush testified that Plaintiff was terminated for; inter alia, inappropriate behavior, failure to cooperate during the investigation of the incident and for violating hhgreggs' safety policy. (Doc. 25 at 61).
Plaintiff further contends that Mr. Buttrick's advice to terminate Plaintiff constituted business advice rather than legal advice and therefore such advice is not protected by the attorney client privilege. See Boca Investerings Partnership v. U.S., 31 F. Supp.2d 9 (D. D.C. 1998) (citing United States v. Rowe, 96 F.3d 1294, 1297 (9th Cir. 1996)); Marc Rich & Co., A.G. v. U.S., 731 F.2d 1032, 1036-37 (2nd Cir. 1984). Plaintiff cites several cases in which the Court found that communication between counsel and the defendant employer relating to a Plaintiff's termination were not privileged. See Marten v. Yellow Freight System, Inc., No. CIV. A. 96-2013-GTV, 1998 WL 13244 (D. Kan. Jan. 6, 1998); Neuder v. Battelle Pacific Northwest Nat. Laboratory, 194 F.R.D. 289 (D. D.C. 2000); Leazure v. Apria Healthcare Inc., No. 1:09-cv-224, 2010 WL 3895727 (E.D. Tenn. Sept. 30, 2010). In all of those cases, however, legal counsel was directly involved in the decision to terminate the Plaintiff.
In this case, however, the current record indicates only that Mr. Buttrick provided legal counsel to Ms. Bush and there is no evidence that Mr. Buttrick was involved in the decision to terminate Plaintiff. As detailed above, the evidence reflects that Ms. Bush made the decision to terminate Plaintiff. (Doc. 25 at 62). If there is an advice of counsel defense raised at trial, or if privileged information relating to Mr. Buttrick's legal advice is presented or otherwise disclosed at trial, Plaintiff may revisit the waiver of privilege issue at that time. See Lincoln Elec. Co. v. Nat'l Standard, LLC, 1:09 CV 1886, 2012 WL 1424777 (N.D. Ohio Apr. 24, 2012).
III. Conclusion
Accordingly, based on the record before the Court at this time, the undersigned finds that hhgregg has not waived the attorney client privilege. Plaintiff's subpoena for Mr. Buttrick's deposition and any files regarding any legal advice given to hhgregg regarding Plaintiff's employment is herein QUASHED.
IT IS SO ORDERED.
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Stephanie K. Bowman
United States Magistrate Judge