McGrath v. Nassau County Health Care Corp.

Citations: 204 F.R.D. 240; 2001 U.S. Dist. LEXIS 19817; 2001 WL 1549260Docket: No. 00-CV-6454 (TCP)(WDW)

Court: District Court, E.D. New York; November 29, 2001; Federal District Court

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Defendant Nassau Health Care Corporation (NHCC) filed an objection under Rule 72(a) to a September 28, 2001, order by Magistrate Judge Wall, which required NHCC to produce documents related to an internal investigation of sexual harassment allegations made by employee Sally Pistorio McGrath against former board chairman Eric Rosenblum. Plaintiffs allege a hostile work environment, negligence, and emotional distress, among other claims, stemming from Rosenblum's alleged harassment of McGrath, which began shortly after her employment started in September 1999. After McGrath reported the harassment to NHCC’s senior management in July 2000, NHCC initiated an internal investigation, which concluded with Rosenblum's removal as chairman. Plaintiffs sought documents related to this investigation on August 3, 2001. Magistrate Judge Wall ordered NHCC to produce these documents, but NHCC objected, claiming privilege and asserting that the documents were prepared in anticipation of litigation, supported by an affidavit from the investigator, Amy Ventry. The court overruled NHCC’s objection.

A District Court reviewing a Magistrate Judge's non-dispositive pretrial order may only modify or set aside that order if it is found to be clearly erroneous or contrary to law. The objecting party bears a heavy burden to demonstrate such errors, and reversal is only permitted if the Magistrate Judge abused discretion. Orders involving the production of potentially privileged materials fall under this category and must be assessed using the clearly erroneous standard.

The attorney-client privilege protects confidential communications made for obtaining legal advice, extending to interactions between clients and their representatives or attorneys. This privilege is strictly interpreted and can be waived if a party relies on privileged communications to support a legal claim, as determined by the fairness doctrine.

The work product doctrine safeguards materials created in anticipation of litigation, allowing attorneys to maintain a confidential space for developing legal strategies. There are two classifications: ordinary fact work product, which can be disclosed if there is substantial need and inability to obtain equivalent information without undue hardship, and core work product, which is highly protected and can only be disclosed upon a strong showing of need.

In the context of Title VII, McGrath's hostile work environment claim requires proof of objectively severe or pervasive discriminatory conduct that alters employment conditions, along with the plaintiff's subjective perception of hostility linked to their protected class status. Employers may be vicariously liable for harassment by supervisors unless they can prove, through the Faragher-Ellerth defense, that they took reasonable steps to prevent and address harassment and that the employee unreasonably failed to utilize available corrective measures.

NHCC's investigation and the implications of the "at issue" waiver are central to the Court's findings. The Court disagrees with the September 28th Order's suggestion that employers automatically place their post-harassment investigations at issue by invoking the Faragher-Ellerth defense, as this would conflict with Second Circuit law and undermine the attorney-client privilege and work product doctrine. However, the Court upheld Magistrate Judge Wall's conclusion that NHCC indeed placed the adequacy of its investigation into question. NHCC's claim that its remedial measures were limited to reassigning McGrath is deemed questionable, especially since the investigation continued for months thereafter, and it was revealed that Rosenblum faced consequences for his behavior towards McGrath later on. The Court finds NHCC's effort to separate its investigation from its remedial actions artificial, particularly given that intimidation may have persisted after McGrath’s transfer.

Following the determination that NHCC placed the sufficiency of its investigation at issue, the Court must now evaluate the scope of the waiver of both attorney-client and work product privileges. The attorney-client privilege waiver is assessed on a case-by-case basis, factoring in the waiver's context and the potential prejudice to the opposing party from partial disclosures. The Second Circuit identifies criteria for broad subject matter waivers, including the extent of substantive information revealed and the risk of misleading the court. In contrast, limited waivers are appropriate when disclosures do not significantly prejudice the non-disclosing party, with considerations such as the disclosure's timing and context.

Similar fairness principles apply to the waiver of work product privilege, which hinges on whether a party has selectively used privileged documents. Core work product is afforded heightened protection when evaluating the scope of any waiver.

The September 28th Order mandates NHCC to produce Ventry’s incomplete report, her handwritten notes, and any deleted or redacted sections of her reports. The Court determined that Magistrate Judge Wall did not abuse his discretion in this ruling. Subject matter waiver of the attorney-client privilege is justified since NHCC’s invocation of the Faragher-Ellerth defense, without disclosing substantive information, would prejudice McGrath’s ability to evaluate NHCC’s response to her claims. Allowing NHCC to assert this defense while withholding relevant documents is deemed unfair and misleading. Although the Court finds it challenging to waive some core work product protections, NHCC’s reliance on the Faragher-Ellerth defense effectively waives its work product privilege in this context. The Court prioritizes fairness over the work product privilege, concluding that it would be unjust for NHCC to protect documents while claiming its response was adequate based on its investigation. Consequently, NHCC's objection to the production order is overruled, and compliance with the September 28th Order is required. The case involves sexual harassment claims by plaintiff Sally McGrath against Eric Rosenblum, with allegations of NHCC’s negligence in addressing the harassment.

In September 2000, the plaintiff sought to file an Amended Complaint, which was granted by District Judge Platt on August 30, 2001. No Answers to the Amended Complaint were recorded in the court’s docketing system. Under Federal Rule of Civil Procedure 26(b)(1), discovery is permitted for any relevant, non-privileged matter. The plaintiffs argue that the information they seek is relevant, while NHCC claims it is protected by attorney-client and work product privileges. However, these privileges are not absolute, and the plaintiffs contend that NHCC has implicitly waived any applicable privilege due to the at-issue waiver doctrine. This doctrine applies when a litigant's claims necessitate examination of privileged communications, particularly if the litigant asserts an affirmative defense that makes the privileged communication relevant.

The plaintiffs assert that NHCC placed its internal investigation into the case by claiming it took appropriate remedial action in response to allegations of sexual harassment. Specifically, NHCC’s Fourth Affirmative Defense states it exercised reasonable care to prevent and correct such behavior. The plaintiffs argue that NHCC's internal investigation was part of its mandated remedial action according to its written policy, which requires that any supervisor report possible harassment to the Hospital Legal Counsel or Human Resources for investigation.

Conversely, NHCC contends that its investigation was initiated only after Mrs. McGrath filed her discrimination charge and was done in anticipation of litigation. NHCC claims it implemented corrective measures agreed upon by Mrs. McGrath before conducting any investigation. However, this assertion is challenged by evidence indicating that the investigation began on July 24, 2000, a day prior to the filing of the EEOC charge, contradicting NHCC’s claims. The court finds that the timing of the investigation’s commencement, whether before or after the EEOC charge, is not determinative in this matter.

The reasonableness of NHCC's corrective actions in response to an investigation into alleged sexual harassment is under scrutiny. The Fourth Affirmative Defense implies, though not explicitly, that NHCC's investigation and subsequent remedial actions were adequate, as it claims to have exercised reasonable care to prevent and address such behavior. The adequacy of the investigation is critical to determining the employer's liability. Full disclosure of the investigation's contents is necessary for the plaintiff or fact-finder to assess its reasonableness. NHCC's choice to involve its attorney does not justify withholding information. The timing of McGrath's EEOC claim does not diminish the need for disclosure. The court references a similar case, emphasizing that NHCC's ongoing assertion of effective remedial action necessitates the release of the full internal investigation report. Consequently, the court orders NHCC to produce the report and notes within ten days, including previously deleted sections from Ms. Ventry’s report. The court granted the plaintiff leave to file an Amended Complaint on August 30, 2001, and notes that NHCC has not claimed the adequacy of the outside counsel's investigation as a defense regarding its corrective measures, yet this adequacy remains a pertinent issue in the case.