Court: District Court, D. Massachusetts; June 22, 2015; Federal District Court
Plaintiff Karen L. Bacchi's motion to enforce a waiver of the attorney-client privilege by defendant MassMutual or to preclude MassMutual from introducing evidence related to advice of counsel has been denied by the court. This case arises from a class action suit initiated in 2012 by MassMutual policyholders who allege that the company improperly retained surplus funds instead of distributing them as required by Massachusetts law. The plaintiffs argue that MassMutual inflated its safety fund calculations to retain funds that should have been distributed. In its defense, MassMutual asserts that its actions were in good faith and compliant with regulatory agency guidelines.
The case is in the late stages of discovery, with fact discovery having begun in late 2013. The plaintiff filed motions in February 2015 to compel the production of documents and deposition testimony withheld by the defendant under claims of attorney-client privilege. The plaintiff contends that MassMutual has waived this privilege by providing an inadequate privilege log and by alleging affirmative defenses that invoke legal advice. The court found that the privilege log was adequate and did not support the plaintiff's claims of waiver. Consequently, the plaintiff's requests for document production and testimony were denied. The defendant has produced documents in a rolling manner since October 2013, confirming an agreed format for document production with the plaintiff.
Documents were produced by the defendant in TIF format, along with metadata, in compliance with an agreement. The defendant did not withhold any documents but redacted portions it claimed were privileged. For documents deemed entirely privileged, the defendant only disclosed the date, author, and recipient. A Bates-stamped production accompanied a privilege log detailing Bates ranges, privilege claims, and brief explanations for each claim. However, the privilege log lacked specific dates, authors, or recipients for each document, which were available in the documents or accompanying metadata.
Concerns about the adequacy of the privilege logs were first raised by the plaintiff in May 2014, leading to discussions through late summer and early fall. Despite a period of relative quiet until February 2015, the plaintiff later requested the Court to deem the privilege log inadequate, arguing it should be self-contained for assessing privilege claims without needing to reference the documents, that the redaction log resembled a blanket privilege assertion, and that the descriptions were too vague.
The defendant carries the burden of establishing the privilege claim and should provide a detailed privilege log according to established standards. The court noted it would have been ideal for the defendant to create a fully self-sufficient log to facilitate the plaintiff’s review. Nonetheless, the court found the privilege log adequate when considered with the documents, allowing the plaintiff to ascertain essential details about each communication, thus satisfying the requirements of Rule 26(b)(5) for adequate privilege claim assessment.
The plaintiff has failed to reference any case law that mandates a specific format for privilege logs or prohibits the format utilized by the defendant. The cited cases are distinguishable; they involve either a complete failure to log documents or a failure to log them individually rather than categorically. Examples include Neelon v. Krueger, where a categorical privilege log lacked essential details, and Thelen Reid, Priest LLP v. Marland, where privilege was waived due to documents not being logged at all. Other cases, such as Anaya v. CBS Broadcasting, Inc. and In re Chevron Corp., illustrate that document production was ordered based on the content of documents rather than log insufficiencies. The court is reluctant to compel the defendant to create a more comprehensive log, noting that doing so would delay discovery and that the plaintiff's delay in raising the issue has complicated the matter unnecessarily.
Regarding the defendant's affirmative defenses of good faith and regulatory approval, the plaintiff argues these defenses waive attorney-client privilege by implicating the legal advice the defendant received. The plaintiff claims that the defendant's reliance on advice from in-house counsel regarding safety fund practices makes those communications discoverable. She requests the court to compel the production of privileged documents or to prevent the defendant from using evidence related to its in-house counsel's advice. The concept of "at issue" waiver allows for discovery of attorney communications when a party claims reliance on counsel's advice as a defense. However, the timing and parameters of such a waiver are complex and not fully settled in case law, as noted by the First Circuit.
Implied waiver of attorney-client privilege is a complex and fact-specific issue, with various courts applying different standards. Merely asserting a good faith defense does not constitute a waiver of privilege. Specific tests, such as the three-factor test from Hearn v. Rhay, assess: (1) whether the privilege holder took affirmative action, (2) whether that action made the privileged information relevant, and (3) whether maintaining the privilege would prevent the opposing party from accessing critical information. More recent rulings, particularly from the Second Circuit in In re County of Erie, have refined this approach by requiring that the privileged information not only be relevant but also relied upon by the privilege holder to support their claims or defenses. The Erie decision emphasizes that the reliance element does not necessitate a formal intent to present privileged evidence at trial; it suffices if a defense relies on facts that can only be challenged with access to privileged communications. For example, a defendant claiming a good faith belief in the legality of their actions may meet the reliance requirement, as the plaintiff would need to examine whether legal advice was received that contradicted this belief. The case of McLaughlin v. Lunde Truck Sales, Inc. exemplifies this principle within a labor dispute context, where the defendant's good faith reliance on Department of Labor opinions was a central defense. The Court adopts the Erie approach to balance the need for relevant information discovery with the protection of privileged communications.
The defendant submitted an affidavit from its attorney to support its defense, summarizing the guidance received from the Department of Labor (DOL). The plaintiff sought to depose the attorney, but the defendant moved to quash the subpoena, claiming attorney-client privilege, arguing that its defense did not hinge on legal advice but on DOL guidance. The court disagreed, stating that the affidavit implied the attorney’s interpretations of DOL actions were relevant, and thus the defendant could not selectively determine which interpretations were discoverable. However, the court noted that privilege is not waived if the defendant aims to prove its good faith defense based on objective facts rather than reliance on counsel's opinions. In a cited case, Banco do Brasil, the court found no waiver because the bank's defense rested on the factual steps taken to obtain regulatory approval, not on reliance on legal advice. In this case, the defendant’s in-house counsel was involved in preparing filings and received guidance from the DOL. The defendant asserts it does not intend to rely on counsel's advice for its good faith defense, instead claiming it followed DOL guidance and inferred compliance from the DOL's response. Consequently, the court concluded that the defendant did not waive any privilege or protection by asserting its good faith and regulatory approval defenses.
The plaintiff does not need to inquire into the counsel's advice to interpret the DOI's guidance on safety fund calculations or to evaluate the defendant's good faith in following that guidance. The defendant has produced the DOI's facsimile and asserts that its actions aligned with that guidance and were consistent with standard practices. The plaintiff possesses the same DOI information as the defendant and can effectively challenge the defendant's claims without accessing privileged communications. The court denied the plaintiff's motion to enforce a waiver of attorney-client privilege or to bar the defendant from using evidence related to counsel's advice. A status conference will be scheduled to set discovery deadlines. The plaintiff's request to exclude evidence implicating in-house counsel is considered premature since the defendant has stated it does not intend to present such evidence. Decisions on evidence exclusion will be made closer to trial by the presiding judge.
