#CaseoftheWeek Episode 32: Is the Work and Communications With Service Providers Privileged

If you work with an ediscovery service provider or are a service provider, the Episode 32 of #CaseoftheWeek is an important one. Kelly Twigger discusses whether the work and communications with your ediscovery services provider are privileged. The cases we analyze are Pajak v. Under Armour, Inc. 2021 WL 2933173 (N.D. W. Va. 2021) and Pajak v. Under Armour, Inc. 2021 WL 2933174 (N.D. W. Va. 2021) both from July 12, 2021 and presided over by United States Magistrate Judge Michael J. Aloi.

Good morning. Welcome to our #CaseoftheWeek for July 20, 2021. My name is Kelly Twigger. I am the CEO and founder of eDiscovery Assistant and the Principal at ESI Attorneys. Thank you so much for joining me today.

Through our partnership with ACEDS at eDiscovery Assistant, each week we choose a recent decision from our case law database that highlights key issues for litigators and those involved in the ediscovery process. Then we want to talk with you about the practical implications of that decision for you, your practice and your clients—what it means for you on an ongoing daily basis.

You’ll see the links to the two decisions—we are covering two specific decisions today in the Pajak vs. Under Armour case. You’ll see links to those in the comments no matter what platform you’re watching us on today. You’ll also see a link to our 2020 Annual Case Law Report that we did in cooperation with Doug Austin at eDiscovery Today. There’s lots of great information in there on the decisions from 2020. We’ll be having a new case law report this year showing what the changes are and what we’re seeing in 2021. I’ll give you a little tip. It’s a lot of case law, a lot of issues, one of which is attorney client privilege and privilege logs, which is what we’re going to discuss today.

We’ve also launched our new website, over at eDiscovery Assistant. Hop on over there and sign up for our blog to receive the weekly case law newsletter. If you’re not seeing this live today, you can sign up on our blog to receive the case law newsletter that comes out every Thursday. That will include transcribed version of this webcast, as well as the video for you to be able to watch.

We’re also putting out regular information on other issues in ediscovery. Most notably right now, we’re continuing our series on the elements to be included in your ESI protocol and considerations. There’s also a specific section on checklists and forms that have been created with any discovery to address ESI protocols.

All right. Let’s get into this week’s case. As I mentioned, we’re talking about two separate decisions in the Pajak vs. Under Armour Inc. Case. There are many, many discovery decisions from this case in eDiscovery Assistant. We have 13 total. Last year we had the Lawson case, which we had 11 in, and we thought that was a lot. This year we’ve got 13 that stem back from 2020 to 2021 in the case.

The plaintiff sued Under Armour and her supervisor for wrongful termination. At one point in March of 2021, the Court allowed the plaintiff to amend her complaint to allege claims for spoliation. There’s not any information in these two decisions on what the underlying basis was for that amendment so we’re not going to talk about that today. What we’re going to talk about is that in following up after allowing that amendment, the plaintiff suddenly brought a lot of discovery issues to the court related to Under Armour’s productions and third party subpoenas against folks seeking to find out further information about the alleged spoliation claims.

In these particular cases, as I mentioned, two decisions issued on the same day, both on motions to quash by Under Armour.  I mentioned that on March 8th the plaintiff was allowed to amend her complaint. A couple of months later in May, which is also a decision in eDiscovery Assistant, the plaintiff brought a motion to the Court requiring Under Armour to produce privilege logs for post litigation communications. If you’ve done a privilege log, you know that generally the parties stipulate, whether it’s in the ESI protocol or in a protective order or in some way, that  communications regarding the litigation after the complaint is filed do not need to be logged on the privilege log. That’s a pretty standard stipulation that parties would enter into.

Here the plaintiff is asking the Court to require Under Armour to produce the privilege log, and in that May ruling, the Court looks at the spoliation claims that were allowed to be added just recently in February of this year and says, OK, well, some of these post litigation communications may be implicated by the spoliation claim. So we’re going to require you to to provide a privilege log, even though that’s not normally what would happen with post litigation communications.

Under Armour then provides that privilege log and and the plaintiff, either at some point before privilege log was issued, served third party subpoenas on the paralegal at Under Armour who gave a presentation at the 2019 Relativity Fest in Chicago. They also served subpoenas on Under Armour’s service provider, JND, and as well as seeking information from Planet Data, who was another service provider. It looks like from the decision that JND did most of the work being Under Armour’s provider for the litigation and that Planet Data did some specific forensic work.

The subpoenas sought information not just related to the presentation at Relativity Fest, which we’ll get into, but also to actual work that was done to identify, collect, produce data from Under Armour in the underlying claims. That’s what we’re dealing with on the motion to quash.

Now, with regard to the Relativity Fest presentation, apparently the paralegal from Under Armour participated on one of the panels at Relativity Fest in 2019 and the information in the decision states that the paralegal made comments about issues that Under Armour had with a previous ediscovery platform and also referenced some information related to collection of mobile device information, forensic examination of those devices. It was those comments that were made at that panel session that spurred a lot of the requests for information on the third party subpoenas that are the basis for the motion to quash here.

If you haven’t been to Relativity Fest before, you’re not a Relativity user or you just haven’t been to Fest, it’s a conference that I’ve been privileged to speak at a number of times. It’s a user conference. The point of the user conference is to go and discuss issues that you find in dealing with ESI, not even specific necessarily to the Relativity platform, but to have a space where a lot of practitioners are coming together and addressing issues that they’re finding and providing practical advice. It’s within the context of that event and one panel discussion that the third party subpoenas issue here.

That’s an important point to consider, because largely what we’re talking about in this case are attorney-client privilege and attorney work product issues related to the relationship between Under Armour and service providers. When you talk about that Relativity Fest presentation, you think about it, you go, what about that presentation is really going to be privileged, it kind of depends on the scope of what was involved. There’s nothing in the decision about whether or not the paralegal was there at the invitation of the service provider or how that whole thing came about or what is involved in these documents that’s potentially privileged.

That’s one of the challenges that we have with this with these two decisions, that there’s very little discussion of the actual documents themselves. What we have is a theoretical sort of high level discussion of the attorney-client privilege, the attorney work product doctrine, and at what point you’re able to pierce either of those privileges in order to be able to recover documents that would otherwise be protected. It’s important to note that in response to these subpoenas, Under Armour did provide some materials to the plaintiff that were not privileged and then filed the current motions to quash arguing that the documents were attorney-client privileged or subject to the attorney work product doctrine. They then provided those documents to the Court asking for an in camera review of the documents at issue to determine whether or not the privilege applied.

Now, as you read both of these decisions, you’re going to see that the bulk of the language is exactly the same in both of them, because they both at its heart have the same underlying analysis. There are some nuances in the two of them, particularly when you talk about the paralegal at Under Armour versus the external third parties. But the analysis is roughly the same. It’s an important consideration here because I think it raises some key issues in how we need to think about privilege logs and our communication with service providers as we’re engaging in the process on a regular basis.

There are three different steps to the analysis here: 1) the whether or not the attorney-client privilege and work product doctrine apply to the documents at issue, 2) whether the crime fraud exception applies to compel disclosure of those otherwise privileged and confidential information in those documents and 3) whether there is a substantial need that compels disclosure of existing work product. You’ve got whether or not the documents are attorney client privileged, whether the crime fraud exception overcomes that privilege, whether or not there’s a substantial lead under Rule 26 that compels disclosure despite the privilege.

The Court starts by going through the analysis of the attorney-client privilege, and in order to assert the attorney- client privilege, a party has three main elements that it has to show.

1. That both parties contemplate that the attorney client relationship does or will exist.
2. That the advice must be sought by the client from that attorney in his capacity as a legal adviser.
3. That the communication between the attorney and the client must be identified to be confidential.

Here in this case, the Court looked at when an attorney rendering legal services directs confidential communications to other parties in aid of rendering such services. Under Armour’s counsel worked very closely with JND to provide services for electronic discovery for the case. The Court said that when that relationship exists, “the privilege extends to protect communication between the attorney and the agent’s superiors or attorneys in light of or attorneys in joint representation.”

Really, what the court looked at is, yes, there’s a relationship here between counsel and JND. And yes, that means the privilege is extended to communications with JND. That’s really all the discussion that they go into. There’s not a broader analysis that will allow service providers to rely on or clients, for that matter, to rely on the attorney-client privilege protection between communications or about communications between the client and a service provider. It’s clear from this case that, in fact, they believe that they are privileged. Again, no real analysis, but there is a statement that the privilege exists.

Now, the Court says that all of the documents that that Under Armour submitted to it following an in camera review were, in fact, privileged.  That analysis kind of goes away. There’s one important point here, and I think that is to make. That there are separate legal considerations for the attorney client-privilege versus the attorney work product doctrine. Attorney client privilege is decided under the Federal Rules of Civil Procedure (FRCP) and not subject to the jurisdiction that you’re in. Attorney work product is a matter of state law. That is subject to the jurisdiction that you’re in, where the state law would control. That’s an important distinction when you’re doing your analysis that’s noted by the Court here.

OK, so at this point, documents are protected, and the question then becomes, is there any way that the plaintiff can get to those documents that have been determined to be protected. The first question is whether or not a crime fraud exception applies. The crime fraud exception arises when a party makes a prima facie showing that the attorney client privilege or attorney work product doctrine protection is lost when a client gives information to an attorney for the purpose of committing or furthering a crime or fraud. It’s really that last statement when a client gives information to an attorney for the purpose of committing or furthering a crime or fraud. It’s the plaintiff’s burden here to make a prima facie case in order to be able to further elevate the crime fraud exception to the Court’s consideration.

In order to invoke the crime fraud exception, the plaintiff here has to show two different elements.

1. That the client was engaged or planning a criminal or fraudulent scheme when he sought the advice of counsel to further the scheme.
2. That the documents containing the privileged materials bear a close relationship to the client’s existing or future scheme to commit a crime or fraud.

Those are the two elements that we’re looking at now. The Court doesn’t really do a whole lot of analysis here, but says basically the plaintiff did not make any showing that JND and Under Armour worked together in any kind of, “scheme to defraud.” There was an allegation of some deletion of text messages by the plaintiff’s supervisor, but the Court found that there was absolutely no showing that counsel were involved in the deletion of those messages and that that was not sufficient absent any showing that counsel was involved. No basis for the crime fraud exception. At this point, the privilege still attaches to those documents.

Second attempt by the plaintiff to really pierce that privilege comes at a showing of substantial need. Rule 26(b)(3)(a) says the documents that are not usually discoverable unless they are otherwise discoverable under Rule 26(b)(1) and 2) the party shows that it has substantial need for the materials to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by other means. That’s the basis for substantial need is that Rule 26 language.

The Court reiterated here that our adversary system really depends on the privacy of communications between the lawyer and the client to develop legal theories, opinions and strategies for the client, and that in this particular instance, based on the facts before it (i.e. that the plaintiff has taken extensive discovery, engaged in numerous discovery disputes, has multiple actions pending in multiple jurisdictions, conducted forensic examinations of devices and deposed an array of individuals) all of which reveal very little information, led the Court to say, “It’s unclear what possibly could be available to plaintiff to set aside work product protections.” As such, the Court found that there was no compelling reason to pierce the work product protection under the substantial lead language of Rule 26.

At that point, there’s really no further analysis. The Court determines that the documents that Under Armour withheld under the attorney-client privilege and work product protections are in fact privileged and protected and the motions to quash were denied.

What are our takeaways from here?

Well, there’s a few of them, and they’re pretty practical. Right? I mean, we know that I lean towards the practical all the time. One of the things that we do in our work with clients is to make sure that at the outset of the case, we identify any privilege related issues. In the instance that you have third parties that you want privilege to extend to, whether that’s through a common interest doctrine, whether it’s through agency, however it applies, you want to be sure that you’re taking those communications into consideration in creating privilege filters and in determining privilege.

Whether you do just a basic first past review when you’re reviewing documents and you simply mark things as potentially privileged for a second pass privilege review, or if you’re doing more of a combined review where you’re having your initial review team conduct the majority of the privilege review and then the second pass is just really more of a second pass review versus the first pass privilege review. However you’re doing that, you need to be thinking clearly about these third parties and what the issues are that apply to them for privilege purposes. Common interest is one that comes up a lot with our clients in relationships, and whether or not those privileges apply is a jurisdiction by jurisdiction analysis. You need to understand how those concepts are applied and what can happen and set up your privilege filters as well as your privilege review, whether again, that’s first or second pass accordingly.

We have seen that identifying privilege issues and evaluating what is privileged and what is not very closely has become a much more prominent issue in ediscovery decisions in the last three years. If you go into eDiscovery Assistant and you click on the attorney-client privilege tag, you’re going to start to see a lot more case law in the last two to three years than we’ve seen in previous determinations. What we’re seeing is a lot of submission of documents to the court for in camera review on determination of privilege.

We’ve talked about this multiple times on the case of the week. I still think that the information that’s required to go on the privilege log under Rule 26 and the process for creating a privilege law makes it very difficult for the receiving party to understand information and truly be able to identify whether non-privileged information is being withheld as a result of privilege considerations. We’ve got a lot of work to do in the industry on that front, but it’s really becoming much more of an issue in the case law. People are challenging privilege documents being withheld for privilege on a more regular basis. We’re starting to see a lot more of this. Don’t be afraid to avail yourself of the courts for in camera review. Make sure that your privilege logs at the outset are being set up correctly and that you’re doing regular privilege logs.

We’re also seeing more and more guidelines from courts on a regular basis that are requiring that privilege logs be provided for each production rather than at the close of discovery, and that they be provided within 30 days of that production. That’s a pretty tough deadline to meet. I mean, if you’re familiar with doing review and then doing the review of the privilege log once the production goes out, there’s a lot going on. Often you’re producing documents while you’re continuing to prepare for and conduct depositions. Getting that privilege log ready on a regular basis is tough, but it’s what the courts are requiring. You need to be prepared—have as much in place as you can at the outset to make that process of producing that privilege log after a production goes out easier, faster, more efficient.

OK, next takeaway. Kind of talked a little bit about this, but I’m also seeing a lot of decisions from the courts on the in camera review, and that is judges saying, “bring me the documents. Let me decide what’s privileged.” And a lot of requests from judges lately that we work with on multiple facets to say make sure we’re talking about a small number of documents. If you’re giving a judge ten thousand documents to determine whether or not they’re privileged on a hidden camera review, that’s not a productive use of the court system. It’s more likely that the Court’s going to appoint some kind of special master to be able to handle that amount of work, that amount of information. You also need to understand that as you provide these documents to the judges, they’re not familiar with platforms. Whether it’s Relativity, whether it’s Everlaw, iCONECT, Disco, whatever it might be, they’re just not familiar with them. You’ve got to be able to provide a set up database for them with a coding platform that’s going to help them be able to review the information effectively. Otherwise, you’re creating a nightmare of a review for a judge with an in camera review.

Next takeaway. There is absolutely no question that as we all engage with service providers in the ediscovery process, that the relationships and correspondence with those providers is just completely ubiquitous. I mean, it’s everywhere, and it is consistent. There is tons of attorney-client privileged information in there. You need to make sure that those documents, that those communications are protected and this decision goes a ways to helping that. But that may be a jurisdiction by jurisdiction determination from an agency perspective.

We talked about the in camera review so I think our final takeaway really is just think practically. As you are engaged in the ediscovery process for your organization, whether that’s for a law firm and you’re working regularly with a handful of clients, whether you’re in-house, whether you’re at a service provider, what are the practical steps that you can help your clients take to identify those privileged related issues early and set up a better review so that you can identify some of those privileged things and move that privileged law process forward better, faster and easier.

You may also think about having categories of privileged communications to identify within your review platform in order that you can jump back to those issues later. We don’t often see this kind of issue where we get the ediscovery service provider subpoenaed. This purported to be a narrow issue related to this 2019 Relativity Fest presentation, but some of the categories of information that were sought were more into the line of what work was done by the service provider, what the scope of it was. That’s information that should be attorney-client privileged, no question.

OK, that’s our #CaseoftheWeek for this week. Thank you so much for joining me. If you are a member of ACEDS and want to be able to do test run of our eDiscovery Assistant platform, there’s a discount available to current ACEDS members and a trial for folks who are preparing for the ACEDS exam, you can reach out to our team at ACEDS@ediscoveryassistant.com and one of us will get back to you. If you’re interested in doing a free trial of our case law and resource database at eDiscovery Assistant, you can log on to eDiscoveryAssistant.com and click on the free trial in the upper right hand corner. Or you can drop us a line at support@ediscoveryassistant.com, and we’ll get you started.

Thanks so much. Have a great week. Stay safe and healthy and I’ll see you next week.

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