United Investors Life Insurance v. Nationwide Life Insurance

Citations: 233 F.R.D. 483; 2006 U.S. Dist. LEXIS 4640Docket: Civ.A. No. 2:04CV12-B-A

Court: District Court, N.D. Mississippi; February 5, 2006; Federal District Court

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Plaintiff United Investors Life Insurance Company has requested the court to conduct an in camera review of selected documents, of which five have been withheld by the defendants based on common interest privilege. Additionally, twenty-one documents were inadvertently produced and previously the subject of motions, while ten others were also inadvertently produced and used by the plaintiff as exhibits to challenge the defendants’ inconsistent privilege claims. The defendants, including multiple Nationwide entities, have filed a motion for the return and protective order regarding the inadvertently produced documents.

The plaintiff asserts that the dispute over thirty-seven documents reflects a broader issue concerning Nationwide's privilege logs, having already produced 4,600 documents in this phase of discovery. The plaintiff argues that none of the documents listed in the logs are privileged and highlights instances where the defendants initially claimed privilege but later abandoned it. The court will first address the in camera review request and the requirements for privilege logs, followed by a discussion on attorney-client and common interest privileges, and work product protection. It will then analyze the privilege log entries in question and decide whether the inadvertently produced items should be disclosed to the plaintiff due to waiver or returned to the defendants.

The decision to grant or deny an in camera review is a procedural matter governed by federal law, allowing broad discretion in discovery. When asserting a privilege, a party must explicitly claim it and provide sufficient description without revealing privileged information to allow others to evaluate the claim. Blanket privilege assertions are not permissible, and the court and other parties must be able to assess the validity of any privilege claim.

A Kansas district court ruled that a party claiming a privilege must provide sufficient details in their privilege log to allow both the court and the requesting party to assess whether the log entries meet the criteria of the asserted privilege, as mandated by Rule 26. The court emphasized that vague descriptions do not satisfy this requirement. Although the Simmons Foods case is not binding in this district, its reasoning is deemed persuasive. The court will not conduct an in camera review of potentially numerous documents, as this would unnecessarily drain judicial resources. Defendants are ordered to revise their privilege log entries to include all elements of claimed privileges, enabling the court and plaintiff to evaluate their validity based solely on the log. This revision should not impose additional burdens beyond what defendants initially provided, as they must detail the date, creator, recipients, and a comprehensive description that encompasses all requisite privilege elements.

In civil diversity cases, state law governs privilege applicability, with Mississippi law applying here. Mississippi's attorney-client privilege, outlined in Rule 502(b) of the Mississippi Rules of Evidence, allows clients to refuse disclosure of confidential communications made for legal service purposes. To qualify for protection, communications must occur under specific conditions, including those between clients and their lawyers or representatives, and must not be intentionally disclosed to third parties unless necessary for legal service. The privilege protects communications facilitating legal services, regardless of whether they are solely legal advice.

The Mississippi Supreme Court interprets the attorney-client privilege broadly, encompassing all information received by an attorney concerning a client during representation. A client may be a corporation, with corporate employees acting as representatives if they possess the authority to obtain legal services or provide necessary information. The privilege applies more expansively than the traditional "control group" test indicates. However, the common interest privilege is more narrowly defined, requiring co-party status in pending litigation, which differs from federal interpretations that allow broader applications to potential co-defendants. Consequently, assertions of common interest privilege by defendants in Mississippi are deemed invalid.

The work product doctrine is governed by Rule 26(b)(3) of the Federal Rules of Civil Procedure and protects documents prepared in anticipation of litigation, including those created by a party’s representatives. It does not protect materials prepared during ordinary business operations, nor does it extend to underlying facts. The Fifth Circuit uses a less stringent standard to determine if a document was created in anticipation of litigation, focusing on the primary purpose behind its creation rather than the immediacy of litigation.

In preparing privilege logs, parties must avoid conflating different privileges; clarity is essential, as erroneous claims can undermine credibility. A party should assert either attorney-client privilege or work product protection, rather than both, to ensure clear communication with opposing counsel and the court.

Counsel must recognize the essential differences in legal assertions regarding privilege and work product protection. Defendants claim both protections for five specific documents, including UINW 0032731, UINW 0037627, UINW 0254000-01, UINW 0254002-03, and UINW 0310947. The privilege log for UINW 0310947 indicates it contains legal advice related to a regulatory investigation, which may qualify for attorney-client privilege under Mississippi Rule of Evidence 502(b). However, insufficient detail in the log prevents the court and plaintiff from verifying this claim, necessitating a revision to include all relevant parties. The assertion of work product protection appears inappropriate, but defendants may amend the privilege logs accordingly. The court has stricken the common interest privilege claim since no concurrent litigation existed between the defendants and Waddell Reed.

Regarding inadvertently produced documents, entries for UINW 0081358, UINW 0081359, UINW 0059535, UINW 0059536, UINW 0059513, UINW 0313943, UINW 0313982, UINW 0060683, UINW 0067772-74, UINW 0039717-19, UINW 0059486, UINW 0059487, UINW 0059488, and UINW 0059534 lack sufficient information for the court to ascertain privilege applicability. Defendants must clarify details, including the identities of involved parties. The court finds some plaintiff arguments unconvincing, affirming that an attorney's inclusion in an email does not negate privilege. Additionally, while widespread dissemination may suggest a lack of confidentiality, the court cannot determine from the current logs whether recipients are internal representatives or third parties, which affects privilege considerations.

The court is unable to strike the assertion of privilege due to insufficient information regarding specific documents (UINW 0039717-19, UINW 0000173-75, UINW 0108492-93, and UINW 0033062-63), particularly the identities of individuals involved, which is necessary to assess Rule 502 protection. Defendants must provide additional details to remedy these deficiencies. 

In addressing inadvertent waiver of attorney-client privilege, state law governs. Although Mississippi state courts have not explicitly ruled on this issue, the Fifth Circuit's precedent in *Alldread v. City of Grenada* is adopted as guiding authority. If defendants are found not to have waived attorney-client privilege regarding these materials, work product protection remains intact. 

The *Alldread* factors for determining waiver include: 1) precautions taken to prevent disclosure; 2) time taken to remedy the error; 3) scope of discovery; 4) extent of the disclosure; and 5) fairness. The court previously determined that defendants did not waive their attorney-client privilege concerning an email identified as Exhibit 107, relying on these factors. The analysis of the first and third factors remains unchanged, with the first being a close question and the third favoring defendants. 

The second factor, concerning the timing of remedying the error, emphasizes the initial response time rather than the overall time spent on remediation. This period begins when counsel becomes aware of the inadvertent production. Defendants recognized the error on September 16, 2005, during a deposition, and promptly sought the return of the document. Following further investigation, they identified additional inadvertently produced documents and requested their return without delay. The court concludes that this quick response favors the defendants regarding the second factor. The court will also examine the extent of the disclosure as part of its analysis.

The court adopted the interpretation of 'extent of disclosure' from Hartford Fire Insurance Company v. Garvey, which indicates that a complete disclosure occurs when the content of documents is learned through inspection and copies are provided, suggesting a waiver of privilege. The situation in this case mirrors Hartford, as the plaintiff had previously used ten documents in a motion and highlighted redacted portions in other produced documents, indicating a comprehensive review of inadvertently produced materials. The court determined that substantial information was conveyed through these documents, favoring the plaintiff, despite the defendants’ argument that the plaintiff may not have reviewed them until after a return request.

The fairness analysis centers on the use of the inadvertently produced documents, with the court reaffirming that the attorney-client privilege aims to protect against both disclosure and use. The plaintiff argued that the inability to use these documents hampered its discovery efforts, but the court found that such an inability does not inherently indicate unfairness—particularly when the plaintiff had not relied on the documents in the discovery process. The court agreed with the defendants that it would not be fair to allow privileged documents to remain with the plaintiff, who had not relied on them. Overall, the fairness factor does not strongly favor the defendants, but collectively, the factors weigh against the plaintiff.

Consequently, the court concluded that the defendants did not inadvertently waive their attorney-client privilege or work product protection. The defendants are required to amend their privilege logs to meet specified criteria, including identifying individuals relevant to the privilege assertions. The court will not accept motions or documents to supplement the log, and sanctions may be imposed for incorrect privilege assertions in the future. No extensions will be granted for amending privilege logs, and any non-compliant assertions will be struck.

1. The plaintiffs' motion for in camera review is denied. 
2. The defendants are required to amend their privilege logs by March 6, 2006, and submit them to the plaintiff. If the plaintiff disputes the privileges claimed, they have until March 20, 2006, to file a motion to compel production based on inadequate privilege log entries. 
3. The defendants' motion to compel the return of documents protected by attorney-client privilege and work product doctrine is granted, requiring the plaintiff to return all inadvertently produced documents by March 20, 2006. The plaintiff must also destroy all copies of these documents and is prohibited from using any information from them, including previously redacted sections. 
4. The defendants must identify individuals in their entries sufficiently for the court and plaintiff to understand their roles in the litigation, avoiding vague labels like 'attorney.' For example, identifying an attorney must include the client's name to establish the context of privilege. 
5. The excerpt references the legal principles surrounding work product protection and inadvertent disclosure, citing relevant case law, though the court does not reach a conclusion on whether work product protection has been waived in this case.