Opinion

Gawel v. Radius Health, Inc.

Court: District Court, S.D. California
Filed: Aug 26, 2021
Cited by: 0 cases
Authority: More cited than 19.1%

“The primary purpose of the work product rule is to ‘prevent exploitation 26 of a party’s efforts in preparing for litigation.’”

How later courts described this case

“The primary purpose of the work product rule is to ‘prevent exploitation 26 of a party’s efforts in preparing for litigation.’”

Written by the judges who cited it.

The opinion

8 UNITED STATES DISTRICT COURT

9 SOUTHERN DISTRICT OF CALIFORNIA

JULIA GAWEL, CASE NO. 20-CV-1744-H(WVG)

Plaintiff, ORDER ON DISCOVERY DISPUTE

13 v. [Doc Nos. 38-39.]

RADIUS HEALTH, INC. et al.;

Defendants.

Defendant has asserted the attorney-client privilege, work-product doctrine,

or both to 177 documents that it has either produced redacted or completely

withheld. As explained below, the Court finds neither doctrine applies to the

underlying investigation materials, but the attorney-client privilege does apply to the

items in Defendant’s privilege log. The Court also finds the work-product doctrine

does not apply.

I. BACKGROUND

Defendant hired an outside law firm, Loeb & Loeb, LLP (“Loeb”), to

investigate an anonymous hotline complaint about misconduct that involved

Plaintiff and ultimately led to her termination. Initially, this was the sole reason for

Defendant’s retention of Loeb. In October 2019, Loeb interviewed Sandra Chavez,

1 the main employee at the center of the anonymous complaint, as well as several other

employees, including Joe Kelly, Chad McGuckin, JJ Roth, Rikki Martin, and

Plaintiff. On November 7, 2019, Defendant terminated Plaintiff based on the

investigation’s findings that she had committed compliance violations.

At certain points during the investigation, Defendant also sought Loeb’s

advice and counsel, and Loeb provided Defendant with its attorneys’ impressions

and analyses regarding matters tangentially related to the investigation. For example,

Defendant sought advice regarding messaging that Defendant should use during the

pendency of the investigation. Further, Defendant also sought Loeb’s input on how

Defendant could address or remedy the violations the investigation uncovered.

II. DISCUSSION

A. Attorney-Client Privilege

The Court’s first task is to determine whether Defendant, as the party invoking

the attorney-client privilege, has met its burden to establish prima facie showing of

its applicability. In doing so, the Court looks to the dominant purpose of Loeb’s

relationship with Defendant. The Court concludes that Loeb’s dominant purpose was

generally that of an investigator and not an attorney. Accordingly, the Court finds

the attorney-client privilege does not apply to Loeb’s investigation materials.

However, it does apply to tangential communications between Loeb and Defendant

20 when Defendant sought Loeb’s advice as its attorney.

21 1. State law governs attorney-client privilege issues in federal district

22 courts sitting in diversity. Fed. R. Evid. 501; Star Editorial, Inc. v. Dangerfield, 7

23 F.3d 856, 859 (9th Cir. 1993). Under California law, “evidentiary privileges such as

24 the attorney-client privilege are governed by statute.” HLC Props., Ltd. v. Sup. Ct.,

25 105 P.3d 560, 563 (Cal. 2005). California Evidence Code section 954 confers a

26 privilege on the client “to refuse to disclose, and to prevent another from disclosing,

27 a confidential communication between client and lawyer . . . .” “Confidential

28 communications include information transmitted between attorney and client, and ‘a

1 legal opinion formed and the advice given by the lawyer in the course of that

relationship.’” Calvert v. State Bar, 819 P.2d 424, 431 (Cal. 1991) (quoting Cal.

Evid. Code § 952). “The attorney-client privilege attaches to a confidential

communication between the attorney and the client and bars discovery of the

communication irrespective of whether it includes unprivileged material.” Costco

Wholesale Corp. v. Sup. Ct., 219 P.3d 736, 741 (Cal. 2009). Moreover, it does not

matter that the communication was not made in anticipation of active or threatened

litigation. Id. at 741 (citing Roberts v. City of Palmdale, 853 P.2d 496, 500 (Cal.

1993) (“[T]he attorney-client privilege applies to confidential communications

within the scope of the attorney-client relationship even if the communication does

not relate to pending litigation; the privilege applies not only to communications

made in anticipation of litigation, but also to legal advice when no litigation is

threatened.”)); Wells Fargo Bank v. Sup. Ct., 990 P.2d 591, 596 (Cal. 2000).

The dispositive factor here is the relationship between the attorney and party.

Thus, “[t]he party claiming the privilege has the burden of establishing the

preliminary facts necessary to support its exercise, i.e., a communication made in

the course of the attorney-client relationship.” Costco Wholesale Corp., 219 P.3d at

741. “Once that party establishes facts necessary to support a prima facie claim of

privilege, the communication is presumed to have been made in confidence and the

20 opponent of the claim of privilege has the burden of proof to establish the

21 communication was not confidential or that the privilege does not for other reasons

22 apply.” Id. (citing Cal. Evid. Code § 917(a)).

23 “[T]o determine whether a communication is privileged, the focus of the

24 inquiry is the dominant purpose of the relationship between the parties to the

25 communication. Under that approach, when the party claiming the privilege shows

26 the dominant purpose of the relationship between the parties to the communication

27 was one of attorney-client, the communication is protected by the privilege.” Clark

28 v. Superior Court, 125 Cal. Rptr. 3d 361, 372 (Cal. Ct. App. 2011) (citation omitted).

1 “[W]hen an insurer hires an attorney both to provide a legal opinion and to serve as

[an investigator], the court must make a determination of which purpose was

primary.” McAdam v. State Nat’l Ins. Co., 15 F. Supp. 3d 1009, 1015 (S.D. Cal.

2014).

2. Here, it appears Loeb served a dual purpose. Defendant initially and

primarily hired Loeb to investigate the anonymous allegations against Plaintiff and

others. Loeb did this and concluded that Plaintiff and others engaged in misconduct.

Thereafter, Defendant sought Loeb’s counsel on what remedial measures Defendant

should implement to address the misconduct. Thus, the dominant purpose of Loeb’s

relationship with Defendant was that of an investigator and not as attorney and client.

Defendant acknowledges this and acknowledges that Plaintiff is entitled to the

underlying investigative documents: “Radius acknowledges that any documents that

were reviewed by Loeb for the purposes of the Loeb Investigation are not privileged.

Similarly, any factual findings that Loeb uncovered during the course of the Loeb

Investigation or recommendations made by Loeb for Radius to consider in light of

those findings are not privileged where such findings and recommendations do not

contain the impressions and analyses of legal counsel.” (Doc. No. 29 at 5.) Thus, as

Defendant acknowledges, the Court finds that (1) documents reviewed by Loeb for

the investigation, (2) any factual findings Loeb made, and (3) Loeb’s remedial

20 recommendations are not privileged and must be produced if Defendant has not

21 already done so.

22 2. The foregoing notwithstanding, Defendant contends that insofar as any

23 of the above three unprivileged categories contain Loeb’s impressions or analysis,

24 they are privileged because these go beyond Loeb’s hired purpose “to uncover

25 facts.” (Id.) However, Defendant is splitting hairs and casts Loeb’s role far too

26 narrowly. The Loeb attorneys functioned primarily as investigators here. As part of

27 their investigation, they prepared a “Summary Investigation Report” as well as other

1 documents, including separate memoranda for each person they interviewed. Any

impressions or analysis contained in these documents were drafted in their role as

investigators—not legal counsel. As such, these investigatory impressions and

analyses fall within the investigator-client relationship that Defendant has already

acknowledged does not cover at least some portions of Loeb’s investigation. It

would be overly restrictive—and illogical—to limit disclosure of any impressions

or analyses contained in investigation reports, summaries, or memoranda when the

Loeb investigators made these impressions and analyses while acting in their roles

as investigators.2 Such a restrictive position would shield otherwise unprivileged and

discoverable material from disclosure simply because the investigator happens to be

an attorney but would not shield this material if the investigator is a non-attorney.

The Court declines to accept such an incongruous result, as it would encourage the

use of attorneys as investigators with intent to shield otherwise discoverable

materials from discovery.3 Thus, just as the underlying facts uncovered by

1 The Court has reviewed redacted and unredacted versions of the Summary

17 Investigation Report. The Court has not reviewed any of the interview memoranda.

2 Defendant did not cite—and the Court is not aware of any—authority for the

19 narrow position it advocates.

20 3 See generally Wellpoint Health Networks v. Sup. Ct., 59 Cal. App. 4th 110, 127

21 (Cal. Ct. App. 1997) (quoting Andrews v. Philadelphia, 895 F.2d 1469, 1482 (3d

Cir. 1990) (“[The employer] has attempted to utilize the results of [the attorney’s]

investigation both as a defense to liability under Title VII and as an aspect of its

23 preparation for the sexual discrimination trial itself. By asking [the attorney] to serve

multiple duties, the defendants have fused the roles of internal investigator and legal

advisor. Consequently, [the employer] cannot now argue that its own process is

25 shielded from discovery. Consistent with the doctrine of fairness, the plaintiffs must

be permitted to probe the substance of [the employer’s] alleged investigation to

determine its sufficiency.”). Yes, the Court recognizes that Defendant has not

27 claimed wholesale privilege as to Loeb’s investigative materials. However, the Third

Circuit’s observations in Andrews remain germane here.

1 investigators are discoverable under the circumstances of this case, so too are the

investigators’ impressions and analyses.

Having reviewed redacted and unredacted versions of the Summary

Investigation Report, the Court finds none of the redactions therein were justified

under the Court’s analysis here.4 Accordingly, Defendant shall produce an

unredacted version of the Summary Investigation Report. And to the extent that any

of the Loeb investigators’ interview memoranda have been withheld or redacted

based on the position that the attorney-client privilege protects the investigators’

impressions and analyses, so too shall those documents be produced without

redactions.

3. Next, Defendant contends communications related to legal advice Loeb

provided during its investigation are privileged. These instances include seeking

advice on “messaging that [Defendant] should use during the pendency of the

investigation.” Here, the Court agrees because privileged communications may

occur unpredictably during the course of an investigation. Thus, while the dominant

purpose of Loeb’s retention was to investigate the anonymous complaint, Loeb

nonetheless may have been called upon to provide legal advice that was related to

the ongoing investigation. On these instances, those communications are protected.

The Court finds Kaiser Foundation Hospitals v. Superior Court, 78 Cal. Rptr.

20 2d 543 (Cal. Ct. App. 1998), instructive here.5 There, the plaintiff sought

21 communications between Kaiser’s in-house counsel and a Kaiser employee who had

22 been tasked with investigating sexual harassment allegations. The Court of Appeal

4 To the extent Defendant claims these are protected by the work-product doctrine,

25 the Court addresses this doctrine later in this Order.

26 5 Although the investigator in that case was a non-attorney and the adequacy of the

27 investigation was directly at issue, the Court finds these distinctions are not

particularly pertinent, as the Loeb investigators were primarily acting as any other

1 considered whether disclosure of the investigation file waived the attorney-client

privilege as to communications between the investigator and in-house counsel. The

court held that “[w]here a defendant has produced its files and disclosed the

substance of its internal investigation conducted by nonlawyer employees, and only

seeks to protect specified discrete communications which those employees had with

their attorneys, disclosure of such privileged communications is simply not essential

for a thorough examination of the adequacy of the investigation or a fair adjudication

of the action.” 78 Cal. Rptr. 2d at 548. So too here, the disclosure of the Loeb

investigators’ communications with Defendant’s in-house counsel are not essential

given that what Plaintiff seeks is the substance of the investigation. That substance

is found in the investigation report and interview memoranda—not in

communications with in-house counsel. It follows a fortiori that Defendant’s

communications are protected when its investigators were called upon to don their

attorney hats and advise Defendant on legal matters.

While the Court recognizes that the foregoing finding may shield some

pertinent information from discovery, the California Court of Appeal has also

acknowledged this concern and explained the balancing of policy considerations at

play:

We recognize, of course, that a defendant’s assertion of the

attorney-client privilege and the work product doctrine is in direct

20 conflict with a plaintiff’s right to discovery and production of

21 documents. We also appreciate that certain aspects of Kaiser’s

investigation in this case may not come to light because of the claim of

22 attorney-client privilege and the work product protection. However,

23 this situation is no different than other instances in which relevant

information may be shielded from discovery based on the assertion of

24 a privilege. Inherent in the recognition of both the attorney-client

25 privilege and the work product doctrine is the policy of encouraging

candor in the attorney-client relationship. That important policy would

26 be defeated if all privileged communications regarding employment

27 investigations were ordered disclosed in every case where the adequacy

of an employer’s internal investigation is placed in issue, regardless of

28 whether or not the investigation itself was performed by an attorney.

1 Kaiser Found. Hosps., 78 Cal. Rptr. 2d at 549. The Court also recognizes and

2 appreciates these concerns, but finds its rulings here strike an appropriate balance

3 between Plaintiff’s need for discovery and Defendant’s right to seek and receive

4 confidential advice of counsel.

5 Of the 177 items on Defendant’s privilege log, the Court has reviewed in

6 camera eight redacted documents and sixteen withheld documents. Defendant

7 selected these documents and provided them to the Court. Based on the discussion

8 above, the Court finds these specific documents were properly redacted or withheld.

9 However, Plaintiff will now have the opportunity to select additional documents for

10 in camera review. Accordingly, Plaintiff may select 15 redacted documents and 30

11 withheld documents and notify Defendant of its selections.6

12 4. Finally, Defendant contends Loeb’s advice on Defendant’s remediation

13 efforts are privileged because this matter goes beyond Loeb’s original fact-finding

14 role. To the extent that Defendant’s contention here relates to Loeb’s advice

15 contained in communications with Defendant, the Court agrees to an extent. The

16 Court reaches this conclusion not based on Defendant’s contention that “this goes

17 beyond Loeb’s original fact-finding role,” but because Loeb had at this point been

18 asked to advise Defendant as its attorney—a nuanced but important distinction. That

19 being said, to the extent that the Summary Investigation Report contains the

20 investigators’ remediation recommendations, the Court notes that the redacted

21 version of the report did not contain redactions of any of the remediation

22 recommendations.7 As a result, they may not now be redacted.

6 To avoid selection of duplicate items, Defendant shall notify Plaintiff which log

items it chose to provide the Court in camera by providing Plaintiff those log

27 numbers.

1 B. The Work Product Doctrine

Defendant has also withheld numerous documents based on the work-product

doctrine. This doctrine is independent of the attorney-client privilege, has its own

criteria and nuances, and it must be analyzed separately. Because none of the

documents on the privilege log were prepared in anticipation of litigation, this

doctrine does not apply here. Accordingly, Defendant may not redact or withhold

documents based on this doctrine to the extent this is the sole basis upon which

Defendant relies.

The work product doctrine is not a privilege but a qualified immunity that

protects documents and tangible things from being disclosed during discovery that

have been prepared by a party or his representative in anticipation of litigation.

Miller v. Pancucci, 141 F.R.D. 292, 303 (C.D. Cal. 1992). The federal work product

doctrine was established in Hickman v. Taylor, 329 U.S. 495 (1947) and is now

codified in Rule 26 of the Federal Rules of Civil Procedure. Garcia v. City of El

Centro, 214 F.R.D. 587, 591 (S.D. Cal. 2003). Rule 26(b)(3)(A) provides that

“[o]rdinarily, a party may not discover documents and tangible things that are

prepared in anticipation of litigation or for trial by or for another party or its

representative. . . .” If a court orders production of such materials, “it must protect

against disclosure of the mental impressions, conclusions, opinions, or legal theories

20 of a party’s attorney or other representative concerning the litigation.” Fed. R. Civ.

21 P. 26(b)(3)(B).

22 The primary purpose of the doctrine is to provide protection against litigation

23 adversaries. United States v. Sanmina Corp. & Subsidiaries, 968 F.3d 1107, 1120

24 (9th Cir. 2020); Holmgren v. State Farm Mut. Auto. Ins. Co., 976 F.2d 573, 576 (9th

25 Cir. 1992) (“The primary purpose of the work product rule is to ‘prevent exploitation

26 of a party’s efforts in preparing for litigation.’”) (quoting Admiral Ins. Co. v. U.S.

27 Dist. Ct., 881 F.2d 1486, 1494 (9th Cir. 1989)). Thus, work product “is guarded

28 against discovery only if prepared in anticipation of trial[, and] mental impressions

1 of an attorney in service to other objectives, such as negotiation of a transaction, are

not protected by the doctrine.” 8 Fed. Prac. & Proc. Civ. § 2026 (3d ed.) (footnote

omitted).

“To be protected by the doctrine, the primary motivating purpose behind the

creation of the materials must be to aid in possible future litigation,” and if there is

a dual purpose to the preparation, the materials must have been created “because of”

the impending litigation. Anderson v. Marsh, 312 F.R.D. 584, 592 (E.D. Cal. 2015)

(citing United States v. Richey, 632 F.3d 559, 568 (9th Cir. 2011)). “Dual purpose

documents are deemed prepared because of litigation if ‘in light of the nature of the

document and the factual situation in the particular case, the document can be fairly

said to have been prepared or obtained because of the prospect of litigation.’” Richey,

632 F.3d at 568 (quoting In re Grand Jury Subpoena, Mark Torf/Torf Envtl. Mgmt.,

357 F.3d 900, 907 (9th Cir. 2004)). In applying this standard, courts are required to

consider “the totality of the circumstances and determine whether the document was

created because of anticipated litigation, and would not have been created in

substantially similar form but for the prospect of litigation.” Richey, 632 F.3d at 568

(internal punctuation and citation omitted).

The party who asserts the work product doctrine bears the burden of proving

that the materials withheld meet the standards established to be qualified as work

20 product. Garcia v. City of El Centro, 214 F.R.D. 587, 591 (S.D. Cal. 2003). That

21 party must show that the materials are: “1) documents and tangible things;

22 2) prepared in anticipation of litigation or for trial; and, 3) the documents or tangible

23 things were prepared by or for the party or the attorney asserting the privilege.” Id.

24 If the privilege is found to apply, then the burden shifts to the party seeking discovery

25 to show that “that it has substantial need for the materials to prepare its case and

26 cannot, without undue hardship, obtain their substantial equivalent by other means.”

27 Fed. R. Civ. P. 26(b)(3)(A)(ii); Garcia, 214 F.R.D. at 591.

I Here, there is no indication from Defendant that the documents withheld

||partly under the work-product doctrine were prepared in anticipation of litigation.

3 || Nor can there be because all the documents predated Plaintiff’s November 7, 2019

4 ||termination. Accordingly, there could not have been pending or threatened litigation

5 || when these documents were prepared. And Defendant does not contend that it

6 || believed litigation was probable if it terminated Plaintiff. Accordingly, to the extent

||Defendant has withheld any documents based on the work-product doctrine,

g Defendant has not met its burden to show the doctrine’s applicability.

9 III. CONCLUSION

10 No later than August 31, 2021, Defendant shall inform Plaintiff which log

11 || numbers it selected and submitted for in camera review.

No later than September 2, 2021, Plaintiff shall inform which log numbers

13. || She selects for further in camera review.

14 No later than September 8, 2021, Defendant shall submit Plaintiff’s

15 |[{Selections to the Court in the same format and manner Defendant previously

16 ||Submitted its own selections.

17 No later than September 10, 2021, Defendant shall produce to Plaintiff

1g ||unredacted copies of the Summary Investigation Report and related interview

19 |}memoranda.

20 To the extent any documents are redacted or withheld solely on the basis of

91 ||the work-product doctrine, Defendant shall produce unredacted copies of those

22 □□ documents no later than September 10, 2021.

93 | IT IS SO ORDERED.

24 ||DATED: August 26, 2021

26 Hon. William V. Gallo

27 United States Magistrate Judge

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.