Showing 190 of 190 results

Chapter: 7.1

Case Name: Fiduciary Trust International of Cal. v. Klein, A144558, 2017 Cal. App. LEXIS 254 (Cal. App. March 21, 2017)
(holding that a trustee must establish privilege protection for any documents the trustee withholds from a successor trustee; "In this case, the parties both take issue with the trial court's resolution of appellants' privilege claims. The point of disagreement among the parties is how one distinguishes between confidential communications occurring when the trustee seeks legal advice or guidance on matters of trust administration, and those occurring when the trustee seeks legal advice or guidance in its personal capacity out of a genuine concern for possible future charges of breach of fiduciary duty. FTI and Alexander argue that a former trustee is required to turn over all communications, including privileged communications, in the trust's legal files unless they can demonstrate that they retained the counsel with whom they communicated in a personal capacity and took affirmative steps to distinguish the purported personal advice from advice obtained in a fiduciary capacity, citing Moeller, supra, 16 Cal.4th at page 1139. Appellants, in turn, contend that attorney-client communications can be withheld as privileged so long as the communications are relevant to the defense of actual or anticipated charges raised by the beneficiary against them rather than to trust administration matters, citing Moeller, supra [Moeller v. Superior Court (1997) 16 Cal. 4th 1124, 1229-1130], 16 Cal.4th at pages 1134-1135. (See also Rest.2d Trusts, § 173 & com. (b) [a trustee is 'privileged to refrain from communicating to the beneficiary opinions of counsel obtained by him at his own expense and for his own protection'].) We conclude the approach taken by FTI and Alexander is more consistent with Moeller, as well as the general underlying principle that the party claiming privilege has the burden to establish the preliminary facts necessary to support its exercise.")

Case Date Jurisdiction State Cite Checked
2017-03-21 State CA

Chapter: 7.1

Case Name: Mennen v. Wilmington Trust Co., C.A. No. 8432 ML, 2013 Del. Ch. LEXIS 204, at *10-11 (Del. Ch. July 25, 2013)
(reaffirming the fiduciary exception's application to trusts, but finding the doctrine inapplicable, because the fiduciary bank had been threatened by the plaintiff, and because it paid the lawyer's fees; "[T]he holding in Riggs [Riggs Nat'l Bank of Wash. D.C. v. Zimmer, 355 A.2d 709 (Del. Ch. 1976)] was simply a specific application of the doctrine articulated in Garner v. Wolfingbarger, [430 F.2d 1093 (5th Cir. 1970),] which this Court repeatedly has applied in a variety of contexts since Rule 502 last was amended in 2001. Whether this doctrine technically is an 'exception' to the privilege, or instead 'results in its nonapplication' is not relevant to divining the continued viability of Riggs. It is plain that the law underlying Riggs remains valid notwithstanding the amendment to Rule 502.")

Case Date Jurisdiction State Cite Checked
2013-07-25 State DE B 4/14

Chapter: 7.2

Case Name: Durand v. The Hanover Ins. Group, Inc., Civ. A. No. 3:07-CV-00130-HBB, 2016 U.S. Dist. LEXIS 143064 (W.D. Ky. Oct. 17, 2016)
("The Court notes that the burden of establishing the protection of the attorney-client privilege rests with the person or entity asserting it."; "The Court is aware that when a party asserts the crime-fraud exception to the attorney-client privilege he or she bears the burden of demonstrating the applicability of that exception. . . . This makes sense because the crime-fraud exception defeats or strips away the privilege when the communications between lawyer and client are "'made for the purpose of getting advice for the commission of a fraud' or crime.'. . . The Court notes that in the context of ERISA, the fiduciary exception is something of a misnomer because it does not vitiate the attorney-client privilege like the crime-fraud exception. Instead, it sets forth a general proposition that, at least as to advice regarding plan administration, the beneficiaries are the real client, and, thus, the trustee 'never enjoyed the privilege in the first place.'. . . When '[u]nderstood in this fashion, the fiduciary exception is not really an 'exception' to the attorney-client privilege at all.' Id. Because of this substantial distinction, case law regarding the crime-fraud exception is not an appropriate source for guidance on the question of burden."; "While no court appears to have expressly ruled on the question of burden, the majority of courts addressing the fiduciary exception, in the context of ERISA, appear to have reasoned the employer/administrator/trustee has the burden of demonstrating the communications withheld on claim of privilege are not subject to the fiduciary exception. . . . in the context of ERISA, the majority view appears to be the employer/administrator has the burden of demonstrating counsel's communications concerned non-administrative/non-fiduciary matters or personal representation in potential or pending litigation.")

Case Date Jurisdiction State Cite Checked
2016-10-17 Federal KY

Chapter: 7.2

Case Name: NAMA Holdings, LLC v. Greenberg Traurig LLP, 601054/08, 2015 N.Y. App. Div. LEXIS 7289 (N.Y. Sup. Oct. 8, 2015)
(applying the fiduciary exception; holding that an investor which on seventy percent of an LLC did not automatically deserve access to the LLC's privileged documents, and remanding for an in camera review; "The fiduciary exception has its origins in English trust law, which long ago recognized that the fiduciary nature of the relationship between a trustee and a beneficiary of a trust provides an exception to the privilege with respect to communications between the trustee and the trust's attorney . . . The theory is that when a trustee seeks legal advice in executing his or her fiduciary duties, he or she is acting ultimately on behalf of the beneficiaries of the trust and, accordingly, cannot cloak his or her actions from them, the attorney's 'real clients.'")

Case Date Jurisdiction State Cite Checked
2015-10-08 Federal NY

Chapter: 7.2

Case Name: In re The Kipnis Section 3.4 Trust v. The Northern Trust Co., No. 1 CA-CV 13-0260, 2014 Ariz. App. LEXIS 103, at *7 (Ariz. Ct. App. June 3, 2014)
(analyzing the fiduciary exception; "To date, Arizona has neither adopted nor rejected the 'fiduciary exception' to the attorney-client privilege, which stems from a principle of English trust law that requires a trustee to comply with a beneficiary's request to produce all legal advice that the trustee has obtained on matters concerning administration of the trust.")

Case Date Jurisdiction State Cite Checked
2014-06-03 State AZ

Chapter: 7.2

Case Name: Mennen v. Wilmington Trust Co., C.A. No. 8432 ML, 2013 Del. Ch. LEXIS 204, at *19 (Del. Ch. July 25, 2013)
(reaffirming the fiduciary exception's application to trusts, but finding the doctrine inapplicable, because the fiduciary bank had been threatened by the plaintiff, and because it paid the lawyer's fees; "I am persuaded that Wilmington Trust's payment of the Petition Action legal fees, at the very least, weighs in favor of finding that Wilmington Trust intended to receive legal advice that primarily would benefit itself.")

Case Date Jurisdiction State Cite Checked
2013-07-25 State DE B 4/14

Chapter: 7.2

Case Name: Mennen v. Wilmington Trust Co., C.A. No. 8432 ML, 2013 Del. Ch. LEXIS 204, at *10-11 (Del. Ch. July 25, 2013)
(reaffirming the fiduciary exception's application to trusts, but finding the doctrine inapplicable, because the fiduciary bank had been threatened by the plaintiff, and because it paid the lawyer's fees; "[T]he holding in Riggs [Riggs Nat'l Bank of Wash. D.C. v. Zimmer, 355 A.2d 709 (Del. Ch. 1976)] was simply a specific application of the doctrine articulated in Garner v. Wolfingbarger, [430 F.2d 1093 (5th Cir. 1970),] which this Court repeatedly has applied in a variety of contexts since Rule 502 last was amended in 2001. Whether this doctrine technically is an 'exception' to the privilege, or instead 'results in its nonapplication' is not relevant to divining the continued viability of Riggs. It is plain that the law underlying Riggs remains valid notwithstanding the amendment to Rule 502.")

Case Date Jurisdiction State Cite Checked
2013-07-25 State DE B 4/14

Chapter: 7.2

Case Name: Mennen v. Wilmington Trust Co., C.A. No. 8432 ML, 2013 Del. Ch. LEXIS 204, at *16 (Del. Ch. July 25, 2013)
(reaffirming the fiduciary exception's application to trusts, but finding the doctrine inapplicable, because the fiduciary bank had been threatened by the plaintiff, and because it paid the lawyer's fees; "Pending litigation against the trustee is not, however, a prerequisite to finding that the trustee had a legitimate personal interest in legal advice. That determination must be made in light of all of the facts at hand.")

Case Date Jurisdiction State Cite Checked
2013-07-25 State DE B 4/14

Chapter: 7.2

Case Name: Mennen v. Wilmington Trust Co., C.A. No. 8432 ML, 2013 Del. Ch. LEXIS 204, at *17-18 (Del. Ch. July 25, 2013)
(reaffirming the fiduciary exception's application to trusts, but finding the doctrine inapplicable, because the fiduciary bank had been threatened by the plaintiff, and because it paid the lawyer's fees; "Although the Riggs [Riggs Nat'l Bank of Wash. D.C. v. Zimmer, 355 A.2d 709 (Del. Ch. 1976)] Court noted that the payment of legal fees out of the trust assets was a strong indication of precisely who the real client was, in general, payment of legal fees out of the trust is not dispositive of that issue. Delaware law confirms that a trustee's retention of counsel, and its payment of counsel's fees out of trust funds, does not operate as a waiver of the attorney-client privilege.")

Case Date Jurisdiction State Cite Checked
2013-07-25 State DE B 4/14

Chapter: 7.5

Case Name: Wit v. United Behavioral Health, Case Nos. 14-cv-02346- & -05337-JCS, 2016 U.S. Dist. LEXIS 7242, at *33 (N.D. Cal. Jan. 21, 2016)
("[A]ny privilege that might have been afforded the redacted material in this document has been waived by UBH. In particular, Easterday [defendant's in-house counsel] states in his declaration that the redacted portions of the document in Exhibit H.3 'reflect a request that counsel, my in-house attorney colleague Melissa Brettingen and I, provide legal advice regarding potential litigation exposure relating to utilization management activities.' Because UBH has disclosed in the Easterday Declaration all of the information contained in the redacted portion of UBH-0083 (which contains no substantive legal advice or any specific questions), this material is subject to disclosure. . . . Therefore, UBH must produce this document (UBH-0083) in unredacted form.")

Case Date Jurisdiction State Cite Checked
2016-01-21 Federal CA B 7/16

Chapter: 7.5

Case Name: NAMA Holdings, LLC v. Greenberg Traurig LLP, 601054/08, 2015 N.Y. App. Div. LEXIS 7289 (N.Y. Sup. Oct. 8, 2015)
(applying the fiduciary exception; holding that an investor which on seventy percent of an LLC did not automatically deserve access to the LLC's privileged documents, and remanding for an in camera review; "In 2002, the legislature amended CPLR 4503 by adding subsection 4503(a)(2), effectively eliminating the 'fiduciary exception' with respect to communications between counsel and the personal representatives of decedents' estates. However, '[b]ecause of the definitional limitations of the amendment, it is a fair inference that the Legislature intended to leave the fiduciary exception intact with respect to attorney-client communications in contexts other than the representation of estate fiduciaries and specified Article 81 guardianships' (Vincent C. Alexander, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C4503:7).'")

Case Date Jurisdiction State Cite Checked
2015-10-08 Federal NY

Chapter: 7.5

Case Name: Heisenger v. Cleary, X04HHDCV126049497S, 2014 Conn. Super. LEXIS 1835 (Conn. Super. Ct. July 29, 2014)
(rejecting the idea of a fiduciary exception in the trust context; "This trial court has thoroughly reviewed the legal authority provided by the parties, including the Jicarilla decision, and has conducted its own research into the origins and logical underpinnings of the 'fiduciary exception.' Based on that effort, this court is not persuaded that the Supreme Court of the State of Connecticut, if faced with the question, would adopt and recognize the fiduciary exception to the attorney client privilege within this state.")

Case Date Jurisdiction State Cite Checked
2014-07-29 State CT

Chapter: 7.5

Case Name: Galena St. Fund, L.P. v. Wells Fargo Bank, N.A., Civ. A. No. 12-cv-00587-BNB-KMT, 2014 U.S. Dist. LEXIS 31257, at *5-6 (D. Colo. Mar. 10, 2014)
(analyzing a claim by plaintiff, an investor in mortgage-backed trusts; "I anticipate that the Colorado Supreme Court would not limit the fiduciary exception to the corporation/shareholder context but, instead, would apply it to an action involving a dispute between a trustee and trust beneficiaries. However, in order for the fiduciary exception to the attorney-client privilege to apply, the communication must concern legal advice related to the execution of fiduciary obligations and there must be good cause justifying a finding that the privilege was waived.")

Case Date Jurisdiction State Cite Checked
2014-03-10 Federal CO B 8/14

Chapter: 7.5

Case Name: Swortwood v. Tenedora De Empresas, S.A. DE C.V., Case No. 13cv362-BTM (BLM), 2014 U.S. Dist. LEXIS 29247, at *32 (S.D. Cal. Mar. 6, 2014)
(analyzing a claim by plaintiffs, who sold their stock in the Neology to Smarttrac, after which the defendant eliminated plaintiffs' liquidation preferences; "California does not recognize Garner [Garner v. Wolfinbarger, 430 F.2d 1093 (5th Cir. 1970)] and does not permit shareholders to discover privileged communications upon a showing of good cause.")

Case Date Jurisdiction State Cite Checked
2014-03-06 Federal CA B 8/14

Chapter: 7.5

Case Name: Swortwood v. Tenedora De Empresas, S.A. DE C.V., Case No. 13cv362-BTM (BLM), 2014 U.S. Dist. LEXIS 29247, at *35 (S.D. Cal. Mar. 6, 2014)
(analyzing a claim by plaintiffs, who sold their stock in the Neology to Smarttrac, after which the defendant eliminated plaintiffs' liquidation preferences; "Applying California law, the Court finds that the communications at issue are subject to the attorney-client privilege and not subject to the fiduciary-duty exception. . . . California law applies to this issue and California does not recognize the fiduciary-duty exception to attorney-client privilege.")

Case Date Jurisdiction State Cite Checked
2014-03-06 Federal CA B 8/14

Chapter: 7.5

Case Name: Swortwood v. Tenedora De Empresas, S.A. DE C.V., Case No. 13cv362-BTM (BLM), 2014 U.S. Dist. LEXIS 29247, at *30 (S.D. Cal. Mar. 6, 2014)
(analyzing a claim by plaintiffs, who sold their stock in the Neology to Smarttrac, after which the defendant eliminated plaintiffs' liquidation preferences; "California also recognizes the fiduciary-duty exception, however, California's view of the exception is much narrower than Delaware's and does not stem from Garner [Garner v. Wolfinbarger, 430 F.2d 1093 (5th Cir. 1970)].")

Case Date Jurisdiction State Cite Checked
2014-03-06 Federal CA B 8/14

Chapter: 7.5

Case Name: MDA City Apartments LLC v. DLA Piper LLP (US), 967 N.E.2d 424, 429, 430 (Ill. App. Ct. 2012)
("As this court recently noted in Garvy v. Seyfarth Shaw LLP, 2012 IL App (1st) 110115, ¶ 35, 966 N.E.2d 523, 359 Ill. Dec. 202, Illinois has not adopted the fiduciary-duty exception to the attorney-client privilege."; "One of the factors considered was whether there were any adversarial proceedings pending between the fiduciary and the beneficiary at the time the legal advice was sought. . . . This factor was important because, if adversarial proceedings were pending, it would indicate that the fiduciary was seeking legal advice in a personal rather than a fiduciary capacity, and the exception would not apply. . . . This court concluded that even if Illinois did recognize the fiduciary-duty exception, it would not apply where the fiduciary sought legal advice in connection with the client's legal malpractice claims against the fiduciary. . . . It is clear that the same reasoning applies to the communications sought by MDA from both in-house and outside counsel related to threatened litigation by MDA. The remaining communications sought by MDA relate to the motions to disqualify that were filed in both the chancery action and the arbitration proceedings in which DLA represented MDA. We note that there is nothing in the record to indicate that any malpractice claims had been asserted by MDA at the time the motions to disqualify were filed. Indeed, the motions to disqualify were filed in June 2006, DLA hired Quinlan in July 2006, and MDA did not file its legal malpractice action against DLA until May 2008.")

Case Date Jurisdiction State Cite Checked
2012-01-01 State IL B 8/13

Chapter: 7.5

Case Name: Batt v. Manchester Oaks Homeowners Ass'n, 80 Va. Cir. 502, 506, 506-07 (Va. Cir. Ct. 2010)
(rejecting a fiduciary exception argument by members of a homeowners association, who sought access to communications between a homeowners association's Board of Directors and its lawyer; "The Fiduciary Beneficiary Exception is a creature of the federal courts and has not been applied by any court in the Commonwealth of Virginia. . . . . For the Fiduciary Beneficiary exception to apply it must not run afoul of the express intent of the Supreme Court of Virginia. Adopting the Fiduciary Benefit exception would serve as a formidable barrier to the express purpose of the attorney client privilege, and essentially nullify the attorney client privilege in the case of corporations being sued by their shareholders. Such is not the law in the Commonwealth of Virginia."; "Additionally, incorporating the exception would chill communication between parties and their attorneys for fear that such exchanges could be used against them in the future. Because the purpose of the privilege is to facilitate open communication between lawyer and client as well as promoting broader public interest in the observance of law, this Court declines to apply the Fiduciary Beneficiary Exception."), aff'd in part, rev'd in part and remanded on other grounds, 732 S.E.2d 690 (Va. 2012)

Case Date Jurisdiction State Cite Checked
2010-01-01 State VA N 12/12
Comment:

key case


Chapter: 7.7

Case Name: Christoff v. Unum Life Ins. Co. of America, Case No. 0:17-cv-03512-DWF-KMM, 2018 U.S. Dist. LEXIS 43535 (D. Minn. March 15, 2018)
(analyzing the fiduciary exception; finding that the exception applied to an insurance company rather than just an employer, and finding the liability exception inapplicable; "This same reasoning applies here. The Court's in camera review confirms that the communications at issue were generated in connection with Unum's processing of Mr. Christoff's claim for benefits. Prior to the final determination, Mr. Christoff's counsel sought information that he asserted Unum was required to provide. There was no request for advice connected to any pending legal action or a specific threat of litigation. Nothing in the context or content of these communications suggests that Unum was seeking legal help to defend itself against Mr. Christoff. Rather, their context and content suggests that Ms. Tuck sought input from counsel to determine whether Unum had an obligation to provide information to Mr. Christoff as his attorney had alleged. This is a matter of plan administration, not a communication on a non-fiduciary matter.")

Case Date Jurisdiction State Cite Checked
2018-03-15 Federal MN

Chapter: 7.7

Case Name: Christoff v. Unum Life Ins. Co. of America, Case No. 0:17-cv-03512-DWF-KMM, 2018 U.S. Dist. LEXIS 43535 (D. Minn. March 15, 2018)
(analyzing the fiduciary exception; finding that the exception applied to an insurance company rather than just an employer, and finding the liability exception inapplicable; "[E]ven when the exception is recognized, it does not defeat the attorney-client privilege where the fiduciary communicates with its attorneys 'on non-fiduciary matters.'. . . For example, an ERISA fiduciary that obtains legal advice to defend itself against plan beneficiary claims can maintain the confidentiality of otherwise privileged communications."; "Drawing the line between matters of plan administration (which are not protected from disclosure) and communications involving legal advice on nonfiduciary matters (which remain protected) requires 'a fact-specific inquiry, examining both the content and context of the specific communication.'"; "[A] sufficiently adversarial relationship may arise before the final decision denying benefits."; "To summarize, a fiduciary exception to the attorney-client privilege is widely accepted in federal courts. The exception has also been fairly consistently applied in the ERISA context. Courts applying the exception in ERISA cases attempt to differentiate between situations in which an ERISA fiduciary obtains legal advice about matters of plan administration, which must be disclosed, and those where the fiduciary seeks advice for non-fiduciary matters, which remain privileged. The focus in that inquiry is often the point at which an adversarial relationship between fiduciary and beneficiary materialized such that the fiduciary is justified in seeking legal advice for its own benefit. Finally, although the exception has not been expressly adopted by the Eighth Circuit generally or in ERISA cases, its application by a district court in the ERISA context has gone undisturbed.")

Case Date Jurisdiction State Cite Checked
2018-03-15 Federal MN

Chapter: 7.7

Case Name: Christoff v. Unum Life Ins. Co. of America, Case No. 0:17-cv-03512-DWF-KMM, 2018 U.S. Dist. LEXIS 43535 (D. Minn. March 15, 2018)
(analyzing the fiduciary exception; finding that the exception applied to an insurance company rather than just an employer, and finding the liability exception inapplicable; "As noted above, to support its argument that the fiduciary exception does not apply to an ERISA insurer, Unum relies heavily on the Third Circuit's decision in Wachtel v. Health Net, Inc., 482 F.3d 225 (3rd Cir. 2007). Unum argues that we should follow Wachtel because it is well-reasoned and other Eighth Circuit cases generally recognize that the attorney-client privilege's protection from disclosure of corporate in-house counsel's advice ensures compliance with the law."; "Since it was decided more than a decade ago, Wachtel has not been widely adopted and its reasoning has been heavily criticized."; "The Court finds that the fiduciary exception to the attorney-client privilege applies in cases such as this where an insurer acts as a fiduciary of an ERISA plan. The more recent cases rejecting Wachtel are the more persuasively reasoned precedent. Like the Ninth Circuit in Stephan [Stephan v. Unum Life Ins. Co. of Am., 697 F.3d 917, 931 n.6 (9th Cir. 2012)] and the District of Massachusetts in Smith [Smith, 245 F.R.D. at 48], the Court concludes that there is no principled basis for applying the fiduciary exception differently in the context of an insurance company than for other ERISA fiduciaries. Unum has failed to point to any Eighth Circuit case that conflicts with the fiduciary exception generally, its application to ERISA cases, or its application in ERISA cases where the fiduciary is an insurance company. Indeed, the closest Eighth Circuit decision on point is Carr, which indicated no disapproval of the doctrine and cited Smith with approval. For these reasons, the Court concludes that the fiduciary exception applies in this case.")

Case Date Jurisdiction State Cite Checked
2018-03-15 Federal MN

Chapter: 7.7

Case Name: Christoff v. Unum Life Ins. Co. of America, Case No. 0:17-cv-03512-DWF-KMM, 2018 U.S. Dist. LEXIS 43535 (D. Minn. March 15, 2018)
(analyzing the fiduciary exception; finding that the exception applied to an insurance company rather than just an employer, and finding the liability exception inapplicable; "Several courts have recognized an exception to the attorney-client privilege where a fiduciary relationship is concerned, such as when a beneficiary of a trust is attempting to obtain otherwise privileged documents from the trustee. . . . Generally, the fiduciary exception exists because a trustee has a common law duty to disclose information to the beneficiaries of the trust when the trustee receives legal advice "relating to his administration of the trust.'. . . The exception has also been explained by the rationale that a trustee is not the "real client" receiving the advice because the trustee acts as a representative of the beneficiaries' interests. . . .")

Case Date Jurisdiction State Cite Checked
2018-03-15 Federal MN
Comment:

key case


Chapter: 7.7

Case Name: Salberg v. Genworth Financial, Inc., C.A. No. 2017-0018-JRS, 2017 Del Ch. LEXIS 130 (Del. Ch. July 27, 2017)
(analyzing the multi-part Garner doctrine standard for plaintiff's effort to obtain documents from Genworth related to its acquisition by a Chinese company; holding that plaintiff could obtain documents under Garner, but would have to wait until the merger had been consummated; "Genworth next argues that the communications that have been redacted from the produced documents reflect advice concerning the litigation itself. Plaintiffs' initial response is that this Garner factor does not fit here because the advice the board received related to the Derivative Action, not the direct breach of fiduciary duty action they are contemplating with respect to the Merger. Genworth does not directly address this argument but instead focuses on the impropriety of derivative plaintiffs securing information through a Section 220 action that they inarguably could not secure through discovery in the underlying derivative litigation."; "Here, these same Plaintiffs are the plaintiffs in the Derivative Action. They are represented in both actions by the same counsel. They have initiated this action to gain access to privileged documents that they undeniably would not have access to through discovery in the Derivative Action. While I take Plaintiffs at their word that they seek the documents to investigate potential direct claims relating to the Merger, the fact remains that the documents undoubtedly will contain the mental impressions and assessments of the defendants and defense counsel in the Derivative Action regarding the strengths and weaknesses of the derivative claims. The Company's board is understandably concerned that the production of these most sensitive documents will give Plaintiffs an unfair advantage in the Derivative Action. One can hardly blame them."; "I am satisfied that Plaintiffs do not require access to the Company's privileged attorney-client communications regarding the strengths and weaknesses of Plaintiffs' derivative claims in order to protect themselves or other stockholders in connection with the settlement of the federal securities action. There is simply no reason, then, not to wait to see what happens with the Merger. If the transaction closes, and the Derivative Action goes away, then there will be ample time for Plaintiffs to discover whether the Genworth board adequately considered the value of the derivative claims when negotiating merger consideration should they choose to bring direct claims relating to the Merger. If, for some reason, the Merger does not close, then there will be no basis under Section 220 or otherwise to compel the defendants in the Derivative Action to produce to their adversary the privileged communications they engaged in with their attorneys regarding the bona fides of the claims they are defending.")

Case Date Jurisdiction State Cite Checked
2017-07-27 State DE

Chapter: 7.7

Case Name: Salberg v. Genworth Financial, Inc., C.A. No. 2017-0018-JRS, 2017 Del Ch. LEXIS 130 (Del. Ch. July 27, 2017)
(analyzing the multi-part Garner doctrine standard for plaintiff's effort to obtain documents from Genworth related to its acquisition by a Chinese company; holding that plaintiff could obtain documents under Garner, but would have to wait until the merger had been consummated; "In addition to the codified exceptions to the attorney-client privilege, Delaware recognizes 'an oft-invoked exception [that] applies in suits by minority shareholders.' This exception -- the celebrated 'Garner fiduciary exception' -- recognizes that 'where the corporation is in suit against its stockholders on charges of acting inimically to stockholder interests, protection of those interests as well as those of the corporation and of the public require that the availability of the privilege be subject to the right of the stockholders to show 'good cause' why the privilege should not apply.' Our Supreme Court has adopted the Garner fiduciary exception in both plenary actions and Section 220 actions."; "In keeping with the important policy rationales that justify the attorney-client privilege, 'the Garner fiduciary exception to the attorney-client privilege is narrow, exacting, and intended to be very difficult to satisfy.' The plaintiff stockholder must carry a burden of showing 'good cause' to overcome the privilege.")

Case Date Jurisdiction State Cite Checked
2017-07-27 State DE

Chapter: 7.7

Case Name: Hasrbor Mktg. v. Newman (In re Newman), 500 B.R. 328, 330, 330-31, 331 (Bankr. D. Conn. Oct. 23, 2015)
(holding that a member of a limited liability company can obtain otherwise privileged documents between management of the LLC and its lawyer if it was "just and reasonable" to require production of the documents; "Clearly, a Connecticut LLC has the ability to claim documents are subject to the attorney-client privilege. The respondents in their submissions repeatedly express their concern that the court's conclusion in this matter could potentially 'obliterate' or 'eviscerate the attorney-client privilege belonging to LLCs' in Connecticut. The court neither intends nor foresees such an extreme or generalized result as a consequence of its conclusions here and emphasizes that it is not advancing a bright line rule but rather a limited and fact-specific holding based on the particular circumstances of this case."; "The court does not see this as a privilege question but as an access question under the LLC statute. Conn. Gen. Stat. § 34-144(d) as quoted above, expressly requires, inter alia, that an LLC render full information of all things affecting LLC members to those members, to the extent the circumstances render it just and reasonable."; "The documents at issue in this case are sought for use in litigation between members and the managing member based on the managing member's conduct in operation of the LLCs, including solicitation of their investments in the LLCs. This court cannot think of circumstances more reasonable than that for allowing access to those LLC documents. Further, in these circumstances allowing a manager accused of fraud to utilize the LLCs' the LLCs' privilege as a shield to insulate himself from allegations of fraud brought by members of the LLCs strikes the court as palpably unjust, particularly where the LLCs themselves are not even parties to the action.")

Case Date Jurisdiction State Cite Checked
2015-10-23 Federal CT B 7/16

Chapter: 7.7

Case Name: Jones v. Life Insurance Co. of North Am., Case No. 08-cv-03971-RMW, 2015 U.S. Dist. LEXIS 134945 (N.D. Cal. Oct. 2, 2015)
("There is no doubt that plaintiff is entitled to discovery of documents that relate to matters of plan administration, regardless of whether the documents may otherwise be protected by the attorney-client privilege.")

Case Date Jurisdiction State Cite Checked
2015-10-02 Federal CA

Chapter: 7.7

Case Name: de Vries v. Diamanté Del Mar, L.L.C., C.A. No. 9782 ML, 2015 Del. Ch. LEXIS 156 (Del Ch. June 3, 2015)
(applying the fiduciary exception to a limited liability company, and permitting members to obtain otherwise privileged communications while investigating possible mismanagement)

Case Date Jurisdiction State Cite Checked
2015-06-03 State DE B 2/16

Chapter: 7.7

Case Name: Edelstein v. Optimus Corp., 8:10CV61 (D. Neb. June 14, 2014)
("[A]lthough the administrator of a nonqualfied plan may not be a fiduciary, the role played by Optimus vis-à-vis the beneficiaries in this case is sufficient analogous to a fiduciary relationship that application of ordinary contract principles, including the duty of good faith and fair dealing, would compel the finding that the ERISA Plan attorneys may not shield the material from their ultimate clients, the plan beneficiaries.")

Case Date Jurisdiction State Cite Checked
2014-06-14 Federal NE

Chapter: 7.7

Case Name: In re The Kipnis Section 3.4 Trust v. The Northern Trust Co., No. 1 CA-CV 13-0260, 2014 Ariz. App. LEXIS 103, at *12 (Ariz. Ct. App. June 3, 2014)
(analyzing the fiduciary exception; "We therefore adopt the fiduciary exception and hold that a component of a trustee's duty under A.R.S. § 14-10813(A) is a duty to disclose 'legal consultations and advice obtained in the trustee's fiduciary capacity concerning decisions or actions to be taken in the course of administering the trust.' . . . . The attorney-client privilege does not permit a trustee to withhold 'material facts' from a beneficiary simply because the trustee has communicated those facts to an attorney.")

Case Date Jurisdiction State Cite Checked
2014-06-03 State AZ

Chapter: 7.7

Case Name: Galena St. Fund, L.P. v. Wells Fargo Bank, N.A., Civ. A. No. 12-cv-00587-BNB-KMT, 2014 U.S. Dist. LEXIS 31257, at *5-6 (D. Colo. Mar. 10, 2014)
(analyzing a claim by plaintiff, an investor in mortgage-backed trusts; "I anticipate that the Colorado Supreme Court would not limit the fiduciary exception to the corporation/shareholder context but, instead, would apply it to an action involving a dispute between a trustee and trust beneficiaries. However, in order for the fiduciary exception to the attorney-client privilege to apply, the communication must concern legal advice related to the execution of fiduciary obligations and there must be good cause justifying a finding that the privilege was waived.")

Case Date Jurisdiction State Cite Checked
2014-03-10 Federal CO B 8/14

Chapter: 7.7

Case Name: Swortwood v. Tenedora De Empresas, S.A. DE C.V., Case No. 13cv362-BTM (BLM), 2014 U.S. Dist. LEXIS 29247, at *20-21 (S.D. Cal. Mar. 6, 2014)
(analyzing a claim by plaintiffs, who sold their stock in the Neology to Smarttrac, after which the defendant eliminated plaintiffs' liquidation preferences; "Defendant potentially had a fiduciary duty when it became the single majority shareholder of the preferred Neology shares and voted to convert all of the preferred shares into common stock. . . . Accordingly, for purposes of this discovery dispute, the Court finds that there was a mutuality of interest between Plaintiffs and Defendant beginning when Defendant became the majority shareholder of the preferred Neology shares regarding the conversion of the preferred stock into common stock and the subsequent sale of Neology. To the extent Defendant sought legal advice on those issues, the communications are governed by the fiduciary duty exception.")

Case Date Jurisdiction State Cite Checked
2014-03-06 Federal CA B 8/14

Chapter: 7.7

Case Name: In re Baugher, No. 353909/P, 2013 N.Y. Slip Op. 51622(U), at 3 (N.Y. Sur. Ct. Sept. 30, 2013)
(analyzing the fiduciary exception; "In order for the fiduciary exception to apply, the action must be brought on behalf of the trust corpus . . . . By analogy, in a shareholder's action, the fiduciary exception only applies if the action is for the benefit of the corporation.")

Case Date Jurisdiction State Cite Checked
2013-09-30 Federal NY B 5/14

Chapter: 7.7

Case Name: Sizemore v. Pacific Gas & Electric Retirement Plan, No. C 13-00169 WHA, 2013 U.S. Dist. LEXIS 89996 (N.D. Cal. June 25, 2013)
September 25, 2013 (PRIVILEGE POINT)

"The Fiduciary Exception Can Ebb and Flow in an ERISA Context"

Under the "fiduciary exception," beneficiaries of a fiduciary duty may sometimes access otherwise privileged communications between the fiduciary and the fiduciary's lawyer. The exception arises most frequently in ERISA cases – in which ERISA beneficiaries seek access to communications between ERISA administrators and their lawyers.

However, the exception applies only when the administrator is acting in a fiduciary role. In Sizemore v. Pacific Gas & Electric Retirement Plan, No. C 13-00169 WHA, 2013 U.S. Dist. LEXIS 89996 (N.D. Cal. June 25, 2013), the ERISA plan denied an employee's claim for pension benefits. The court explained that "[u]nder normal circumstances, the fiduciary exception might have expired after that point," because that ended the plan’s fiduciary function. Id. At *16. But the court then noted that defendants had agreed to consider the employee's second appeal of the pension benefits denial. According to the court, "[d]efendants voluntarily stepped back into their role as fiduciaries during the pendency of that second appeal" – meaning that "during [that] same time period the fiduciary exception applies." Id. At *17. The court ultimately denied plaintiff's attempt to apply the fiduciary exception to documents created during the "period of time between plaintiff's first and second appeals" – because during that period "defendants had not yet stepped back into the role of non-adverse fiduciaries." Id.

Because the fiduciary exception depends on the fiduciary's role at the time, courts must carefully analyze the pertinent chronology.

Case Date Jurisdiction State Cite Checked
2013-06-25 Federal CA
Comment:

key case


Chapter: 7.7

Case Name: Krase v. Life Ins. Co. of N. Am., 962 F. Supp. 2d 1033, 1036-37, 1037 (N.D. Ill. 2013)
("There is a split of authority about whether the fiduciary exception applies when an insurance company, acting as an ERISA fiduciary, asserts the attorney-client privilege."; "We . . . conclude that the fiduciary exception applies to insurers in ERISA cases.")

Case Date Jurisdiction State Cite Checked
2013-01-01 Federal IL B 4/14

Chapter: 7.7

Case Name: Stephan v. Unum Life Ins. Co. of Am., 697 F.3d 917, 931 & n.6, 932 (9th Cir. 2012)
(applying the fiduciary exception to a situation in which an insurance company acted as the ERISA fiduciary; "Although there is no Ninth Circuit precedent on this question, several other courts have considered it. The Third Circuit, the only Court of Appeals to address the issue, held that the fiduciary exception was inapplicable to insurance companies. See Wachtel v. Health Net, Inc., 482 F.3d 225 (3d Cir. 2007). . . . The justifications for excepting ERISA fiduciaries from attorney-client privilege apply equally to insurance companies.; "[T]he obligation that an ERISA fiduciary act in the interest of the plan beneficiary does not differ depending on whether that fiduciary is a trustee or an insurer. There is therefore no principled basis for excluding insurers from the fiduciary exception.")

Case Date Jurisdiction State Cite Checked
2012-01-01 Federal B 6/13

Chapter: 7.7

Case Name: Solis v. Food Emp'rs Labor Relations Ass'n, 644 F.3d 221, 229, 230, 231 (4th Cir. 2011)
("Turning to the case before us, the Funds argue that the district court erred in applying the fiduciary exception to their claim of attorney-client privilege in the context of the Secretary's investigation. Courts have held, and the parties agree, that the fiduciary exception extends to the Secretary acting on behalf of beneficiaries in the context of an ERISA enforcement action. See Doe, 162 F.3d at 557. . . . We can discern no principled basis on which to distinguish between enforcement actions and investigations in the application of the fiduciary exception; accordingly, we will not disturb the judgment of the district court. . . . the district court properly applied the fiduciary exception to the documents requested by the Secretary that related to fund administration. . . . Because we find that the fiduciary exception applies to the Funds' claims of attorney-client privilege and no good cause showing is required in the ERISA context, we find no error in the district court's order.")

Case Date Jurisdiction State Cite Checked
2011-01-01 Federal

Chapter: 7.7

Case Name: Solis v. Food Emp'rs Labor Relations Ass'n, 644 F.3d 221, 228, 229, 229 n.6 (4th Cir. 2011)
("In the context of the shareholder derivative action, the fiduciary exception also has been limited by a requirement that one seeking to overcome a privilege show good cause. See Garner, 430 F.2d at 1101, n.17, 1103-04 (rejecting unqualified fiduciary exception out of concern, in part, that corporations may be 'vulnerable to suit by shareholders whose interests or intention may be inconsistent with those of other shareholders'). In the context of the Secretary's investigative or enforcement activity under ERISA, however, the concerns that inspired the good cause requirement in the corporate context do not obtain, as 'there exists no legitimate need for a trustee to shield his actions from those whom he is obligated to serve.' Washington Star, 543 F. Supp. at 909, n.5; see also In re Occidental Petrol. Corp., 217 F.3d 293, 298 (5th Cir. 2000). . . . Several other courts that have addressed the scope of the fiduciary exception in the ERISA context have also refused to apply a good cause requirement. See Mett, 178 F.3d at 1063 (applying fiduciary exception without reference to good cause requirement); Wildbur, 974 F.2d at 645 (same); Becher, 129 F.3d at 272 (same); Tatum, 247 F.R.D. at 495 (expressly rejecting Garner's good cause analysis); Henry v. Champlain Enters., Inc., 212 F.R.D. 73, 83-86 (N.D.N.Y. 2003) (applying good cause requirement to plaintiffs' shareholder derivative claim but not to their ERISA claims); Hudson v. Gen. Dynamics Corp., 186 F.R.D. 271, 274 (D. Conn. 1999) (finding good cause not required in ERISA context); Washington Star, 543 F. Supp. at 909 n.5 (same). Indeed, to our knowledge, only one thirty-year-old district court opinion has applied the good cause requirement to limit the fiduciary exception in the ERISA context. See Donovan v. Fitzsimmons, 90 F.R.D. 583, 586-87 (N.D. Ill. 1981). We do not find that case persuasive. The Funds' attempt to portray the good cause showing as governed by our decision in Sandberg [Sandberg v. Virginia Bankshares, Inc., 979 F.2d 332 (4th Cir. 1992)] is misplaced. Even apart from the fact that we vacated our Sandberg opinion, Sandberg arose in the context of a corporate shareholder derivative action. 979 F.2d at 352. As discussed supra, the application of the fiduciary exception in the ERISA context presents different concerns from those involved in the corporate context, and courts have continued to impose a good cause showing on the latter but not the former. Nor does our decision in Faircloth v. Lundy Packing Co., 91 F.3d 648 (4th Cir. 1996), support the imposition of a good cause requirement here. Faircloth dealt with provisions in ERISA that require certain automatic disclosures, and made no mention of the fiduciary exception whatsoever. Id. at 655. Accordingly, it has little bearing on our determination of the scope of that exception. Even courts that have refused to impose a good cause requirement, however, have maintained the limits imposed by the fiduciary relationship itself. In particular, non-fiduciary communications and a trustee's personal legal advice will not be subject to the exception. Thus, the application of the fiduciary exception to any particular communication remains a matter of 'context and content.' Mett, 178 F.3d at 1064; Tatum, 247 F.R.D. 495. In sum, we conclude that application of the fiduciary exception to the attorney-client privilege in the context of a subpoena issued by the Secretary of Labor under ERISA does not require a showing of good cause; instead, its application turns on the context and content of the individual communications at issue.")

Case Date Jurisdiction State Cite Checked
2011-01-01 Federal

Chapter: 7.7

Case Name: Solis v. Food Emp'rs Labor Relations Ass'n, 644 F.3d 221, 227 (4th Cir. 2011)
("This principle has been applied to fiduciary relationships beyond the traditional trust context. See, e.g., Garner v. Wolfinbarger, 430 F.2d 1093, 1103-04 (5th Cir. 1970). . . . Several of our sister circuits, moreover, have recognized the exception to assertions of attorney-client privilege by ERISA fiduciaries. See, e.g., Bland v. Fiatallis N. Am. Inc., 401 F.3d 779, 787-88 (7th Cir. 2005) (recognizing fiduciary exception but finding it did not apply to communications relating to non-fiduciary actions, including amendments to plan benefits); United States v. Mett, 178 F.3d 1058, 1062 (9th Cir. 1999) (finding fiduciary exception applied in ERISA context, but did not extend to 'any advice that a fiduciary obtains in an effort to protect herself from civil or criminal liability'); United States v. Doe, 162 F.3d 554, 557 (9th Cir. 1999) (applying fiduciary exception to claims of privilege in context of ERISA enforcement action); Becher v. Long Island Lighting Co., 129 F.3d 268, 272 (2d Cir. 1997) (recognizing fiduciary exception to attorney-client privilege in ERISA context was limited to fiduciary matters); Wildbur v. ARCO Chem. Co., 974 F.2d 631, 645 (5th Cir. 1992) (recognizing fiduciary exception but finding it did not apply to communications that were 'made for the purpose of defending the pending lawsuit and did not deal with plan administration'). Cf. Wachtel v. Health Net, Inc., 482 F.3d 225, 234 (3d Cir. 2007) (describing evolution of fiduciary exception in ERISA context and finding exception did not reach communications of ERISA plan insurer with plan attorneys regarding benefit claims).")

Case Date Jurisdiction State Cite Checked
2011-01-01 Federal

Chapter: 7.7

Case Name: Solis v. Food Emp'rs Labor Relations Ass'n, 644 F.3d 221, 227-28 (4th Cir. 2011)
("Analogizing the ERISA fiduciary's role to the role of the trustee at common law, these courts have relied on one of two related rationales. Applying the reasoning of the Fifth Circuit in Garner, some courts have concluded that the ERISA fiduciary's duty to act in the exclusive interest of beneficiaries supersedes the fiduciary's right to assert attorney-client privilege. See, e.g., Bland, 401 F.3d at 787; Becher, 129 F.3d at 271-72. Other courts, however, have reasoned that the ERISA fiduciary, as a representative of the beneficiaries, is not the real client in obtaining advice regarding plan administration and 'thus never enjoyed the privilege in the first place.' Mett, 178 F.3d at 1063 (internal citations omitted). See Doe, 162 F.3d at 556; Wildbur, 974 F.2d at 645; Washington- Baltimore Newspaper Guild, Local 35 v. Washington Star Co., 543 F. Supp. 906, 909 (D.D.C. 1982). Under either rationale, 'where an ERISA trustee seeks an attorney's advice on a matter of plan administration and where the advice clearly does not implicate the trustee in any personal capacity, the trustee cannot invoke the attorney-client privilege against the plan beneficiaries.' Mett, 178 F.3d at 1064. (footnote omitted). . . . . This court has not previously examined the fiduciary exception in the context of ERISA, though several district courts in this circuit have addressed the issue. See, e.g., Tatum v. R.J. Reynolds Tobacco Co., 247 F.R.D. 488, 495 (M.D.N.C. 2008) (recognizing 'the existence of a fiduciary exception where an ERISA plan administrator asserts attorney-client privilege to withhold from plan beneficiaries communications related to matters on which a fiduciary duty is owed to the beneficiaries'); Coffman v. Metro. Life Ins. Co., 204 F.R.D. 296, 299 (S.D.W. Va. 2001) (finding that fiduciary exception required disclosure of documents dealing with plan administration to ERISA trust beneficiaries). Persuaded by the reasoning set forth in the opinions of our sister circuits and the lower courts within our circuit, we find that the fiduciary exception to attorney-client privilege extends to communications between an ERISA trustee and a plan attorney regarding plan administration. . . . In now recognizing the fiduciary exception, we acknowledge that it is not without limits. The exception will not apply, for example, to a fiduciary's communications with an attorney regarding her personal defense in an action for breach of fiduciary duty. See Mett, 178 F.3d at 1064. Similarly, communications between ERISA fiduciaries and plan attorneys regarding non-fiduciary matters, such as adopting, amending, or terminating an ERISA plan, are not subject to the fiduciary exception. See Bland, 401 F.3d at 787-88." (footnote omitted))

Case Date Jurisdiction State Cite Checked
2011-01-01 Federal

Chapter: 7.7

Case Name: Wagner v. Wagner, Case No. CH05-162, 2006 Va. Cir. LEXIS 253 (Prince George's, Va. Cir. Ct. Aug. 2, 2006)
(ordering an estate executor and trustee to disclose otherwise privileged communications to beneficiaries; "When Ms. Vaughn qualified as executor of the estate and trustee of the trust, she assumed a fiduciary responsibility with regard to all of the beneficiaries, and, as counsel to both the estate and the trust, if she has an attorney-client relationship with any of the beneficiaries, she has a relationship with all of them. Her role as attorney obligates her to offer legal advice to the estate and the trust, as she is 'purely counsel to the estate and counsel to the trust. . . . ' For the Court to shield some correspondence between Ms. Vaughn and an appraiser from discovery by other beneficiaries is to afford some beneficiaries different access to the estate's legal counsel. This is, in the Court's view, an incongruous result, which places some beneficiaries in a different status than others, and which distorts the fiduciary duty the executor and trustee owes to all beneficiaries."; "Accordingly, the discovery requested in number 6 shall be permitted to the extent it is relevant and germane to the issues in this cause. The request will, however, be narrowed in scope to those individuals specifically stated and shall not include 'anyone else.'")

Case Date Jurisdiction State Cite Checked
2006-08-02 State VA

Chapter: 7.7

Case Name: Wagner v. Wagner, 71 Va. Cir. 334, 338 (Va. Cir. Ct. 2006)
(holding that the beneficiary of an estate could obtain access to communications between the estate's lawyer and an appraiser; not using the term "fiduciary exceptions"; "When Ms. Vaughn qualified as executor of the estate and trustee of the trust, she assumed a fiduciary responsibility with regard to all of the beneficiaries, and, as counsel to both the estate and the trust, if she has an attorney-client relationship with any of the beneficiaries, she has a relationship with all of them. Her role as attorney obligates her to offer legal advice to the estate and the trust, as she is 'purely counsel to the estate and counsel to the trust. . . .' (Transcript 4/24/06, at 27). For the Court to shield some correspondence between Ms. Vaughn and an appraiser from discovery by other beneficiaries is to afford some beneficiaries different access to the estate's legal counsel. This is, in the Court's view, an incongruous result, which places some beneficiaries in a different status than others, and which distorts the fiduciary duty of the executor and trustee owes to all beneficiaries.")

Case Date Jurisdiction State Cite Checked
2006-01-01 State VA B 3/16
Comment:

key case


Chapter: 7.7

Case Name: Dotson v. Lillard, Ch. No. 135209, 1994 WL 1031449, at *3 (Va. Cir. Ct. Nov. 23, 1994)
("Although the trustee's counsel owes no fiduciary duty to the beneficiaries, the trustee does owe such a duty. That duty includes the duty to disclose all information and documents relating to the trust and its administration. Such documents include opinions of counsel obtained by the trustee in discharging his representative duties.")

Case Date Jurisdiction State Cite Checked
1994-11-23 State VA B 3/16
Comment:

key case


Chapter: 7.7

Case Name: Nellis v. Air Line Pilots Ass'n, 144 F.R.D. 68 (E.D. Va. 1992)
(applying the Garner factors to a lawsuit by union members against the union; noting that the Garner rule applies to any fiduciary-beneficiary relationship, not just derivative suits against corporations)

Case Date Jurisdiction State Cite Checked
1992-01-01 Federal VA B 3/16
Comment:

key case


Chapter: 7.8

Case Name: Peters v. Aetna Inc., Civ. Case No. 1:15-cv-00109-MR, 2018 U.S. Dist. LEXIS 126108 (W.D.N.C. July 27, 2018)
(analyzing the fiduciary exception in an ERISA case; "Here, only Aetna has a contractual relationship with Mars and the Mars Plan."; "None of the Aetna-Optum contracts delegates to Optum discretionary authority to make benefits determinations for Aetna plans or gives Optum control over any plan's assets."; "Optum plays a limited ministerial role in Aetna's claims process."; "With respect to this issue, the Mars Plan makes clear that Aetna, not Optum, has the authority to determine a plan member's financial responsibility. Because it is clear that Optum did not manage or administer this aspect of the Plan, the Court must conclude that Optum was not acting in a fiduciary capacity with respect to the actions complained of by the Plaintiff."; "The Plaintiff nevertheless claims that Optum is a fiduciary because: (1) Aetna granted Optum the authority to grant or deny benefit claims; (2) the contract between Aetna and Optum allowed Optum to control its own compensation for its services; and (3) Optum had control over the amount of administrative charges it would collect, which charges were taken out of plan assets."; "Contrary to the Plaintiff's argument, however, the record before this Court shows that Aetna retains all discretionary authority to pay or deny benefits claims."; "Optum has no authority to decide whether a particular claim is covered under a particular Aetna plan and cannot pay itself, much less pay itself out of a particular plan's assets."; "Aetna's field communications were not part of any fiduciary function owed to the Plaintiff's plan or any particular ERISA plan; they were system-wide communications to Aetna's account teams, including teams responsible for non-ERISA plans completely irrelevant to this case. The Plaintiff has failed to demonstrate that these documents come within the purview of the fiduciary exception. Accordingly, the Court concludes that these draft communications are not subject to disclosure under the fiduciary exception.")

Case Date Jurisdiction State Cite Checked
2018-07-27 Federal NC

Chapter: 7.8

Case Name: Morris v. Spectra Energy Partners (DE) GP, LP, Civ. A. No. 12110-VCG, 2018 Del. Ch. LEXIS 146 (Del. Ch. May 7, 2018)
(analyzing a dispute in a master limited partnership, involving the general partner's transfer of assets to the principal; holding that the at issue doctrine did not apply because the plaintiff rather than the defendant raised the key issue; also holding that the Garner fiduciary exception did not apply to limited partnerships; "Garner [Garner v. Wolfinbarger, 430 F.2d 1093 (5th Cir. 1970)] itself does not say that certain factors are more important than others, but Delaware courts have typically accorded 'particular significance' to three. 'They are: (1) the colorability of the claim; (2) the extent to which the communication is identified versus the extent to which the shareholders are blindly fishing; and (3) the apparent necessity or desirability of shareholders having the information and availability of it from other sources.'"; "Here, the Plaintiff is a unitholder in a limited partnership, and he is pursuing a derivative action premised on an alleged breach of contract. The limited partnership agreement at issue expressly eliminates all fiduciary duties. Nevertheless, the Plaintiff argues that Garner requires production of unredacted copies of the emails reviewed in camera. Thus, the Plaintiff's Motion raises an issue that has yet to be addressed by a written opinion in this state: does the Garner exception apply to a limited partnership that has eliminated common-law fiduciary duties? In my view, the answer to that question is no.")

Case Date Jurisdiction State Cite Checked
2018-05-07 State DE

Chapter: 7.8

Case Name: Morris v. Spectra Energy Partners (DE) GP, LP, Civ. A. No. 12110-VCG, 2018 Del. Ch. LEXIS 146 (Del. Ch. May 7, 2018)
(analyzing a dispute in a master limited partnership, involving the general partner's transfer of assets to the principal; holding that the at issue doctrine did not apply because the plaintiff rather than the defendant raised the key issue; also holding that the Garner fiduciary exception did not apply to limited partnerships; "Where there is no mutuality of interest between the parties, however, Garner does not apply. It is true that Garner has been extended to situations far removed from stockholder derivative suits, including 'actions by union members against union officers; an action by trust beneficiaries against the trust and its trustee; an action by an excess insurer against the primary insurer; [and] an action by creditors against a bankruptcy creditor's committee.' But in each of these situations, the court determined that a fiduciary relationship existed. Such a relationship established the requisite mutuality of interest between the party opposing the privilege and the party asserting it. As one leading treatise puts it, '[t]he only prerequisite for the application of Garner is the existence of a fiduciary relationship between the parties in dispute.'"; "Here, as noted above, there is no fiduciary relationship between the parties. To the contrary, the limited partnership agreement is a contract, and it contains a provision that expressly disclaims common-law fiduciary duties. Thus, by investing in the MLP and becoming a unitholder, the Plaintiff entered into a purely contractual relationship. The elimination of fiduciary duties from that relationship means the Plaintiff, and other unitholders, 'can no longer hold the general partner to fiduciary standards of conduct, but instead must rely on the express language of the partnership agreement to sort out the rights and obligations among the general partner, the partnership, and the limited partner investors.' The litigants here are contractual counterparties. Given the absence of any fiduciary relationship between these parties, the mutuality of interest that underpins the Garner exception does not exist. Garner is therefore inapplicable, and I decline to compel production of unredacted copies of the emails reviewed in camera.")

Case Date Jurisdiction State Cite Checked
2018-05-07 State DE

Chapter: 7.8

Case Name: Buttonwood Tree Value Partners, L.P. v. R.L. Polk & Co., Civ. A. No. 9250-VCG, 2018 Del. Ch. LEXIS 6 (Del. Ch. Ct. Jan. 10, 2018)
(analyzing the Garner doctrine and the client fraud exception; ultimately concluding that neither one applied in a lawsuit by the members of a family who sold their stock to self-tender; "The Garner exception is a judicially created doctrine founded on the recognition that 'where the corporation is in suit against its stockholders on charges of acting inimically to stockholder interests, protection of those interests as well as those of the corporation and of the public require that the availability of the privilege be subject to the right of the stockholders to show 'good cause' why the privilege should not apply.' A corporation invokes the attorney-client privilege through its officers and directors; those individuals owe a duty to the stockholders to exercise the privilege in the best interests of the corporation. On the other hand, 'management has a legitimate concern that its confidential communications should be allowed to remain confidential.' Thus, the Garner exception balances 'the privilege's purpose of encouraging open communication between counsel and client [against] . . . the right of a stockholder to understand what advice was given to fiduciaries who are charged with breaching their duties."'; "Garner itself does not say that certain factors are more important than others, but Delaware courts have typically accorded 'particular significance' to three. 'They are: (1) the colorability of the claim; (2) the extent to which the communication is identified versus the extent to which the shareholders are blindly fishing; and (3) the apparent necessity or desirability of shareholders having the information and availability of it from other sources.' I view the application of these factors thusly: The first two are gatekeepers; they function as sieves to strain out frivolous attempts to vitiate the privilege. Those matters clearing that gate are subject to a balancing test to see whether the interest in discovery, or that of maintaining the privilege, is paramount."; "[T]he Plaintiffs are former stockholders, asserting a direct claim that a class of stockholders was injured by corporate fiduciaries. The Defendants argue that, in such a case, Garner is inapplicable. Logically, it appears to me that the doctrine is applicable, but that the nature of the action must be accounted for in the balance of interests that Garner requires. I need not so hold, however, because, assuming the doctrine applies, the Plaintiffs have nonetheless failed to demonstrate that their Motion to Compel should be granted."; "This Court has held that information found in privileged communications is available from other sources when depositions may allow a stockholder-plaintiff to obtain the information without intruding on the attorney-client privilege. That is the case here. The Plaintiffs have yet to depose a single party witness, though they have deposed non-party Jeff Risius, one of Polk's financial advisors. And there is no reason to believe that depositions of the Defendants (and other fact witnesses) would fail to reveal non-privileged information about the Polk family's plans regarding the self-tender, the sale of the company, and various restructuring possibilities. That is the information the Plaintiffs need to prove their allegation that the Polk family hatched a scheme to benefit itself to the detriment of the minority stockholders. This factor therefore tips against disclosure of the privileged documents."; "The Plaintiffs suggest that the documents they seek will help them prepare for the depositions they plan to take, and that in any case, the Defendants may simply lie about the events in question when they are deposed. But that is not enough to show good cause under Garner. Privileged documents will often be useful to attorneys preparing to depose witnesses, and there is always the concern that some witnesses will be less than truthful during questioning. The question is not whether it is easier to obtain the information at issue from privileged documents than from depositions of fact witnesses, or whether access to privileged communications will make it easier to take depositions. If the Court were to adopt that test, Garner's scope would expand significantly, an outcome contrary to our Supreme Court's admonition that the exception is 'narrow, exacting, and intended to be very difficult to satisfy,' and inimical to the salutary protection the privilege provides. Instead, the question is whether the Plaintiffs 'have exhausted every available method of obtaining the information they seek.' This the Plaintiffs have not done."; "Accordingly, I hold that the Garner exception does not apply to the documents withheld as privileged by the Defendants.")

Case Date Jurisdiction State Cite Checked
2018-01-10 State DE
Comment:

key case


Chapter: 7.8

Case Name: Violetta v. Steven Bros. Sports Mgmt., LLC, Case No. 16-1193-JTM-GEB, 2017 U.S. Dist. LEXIS 135861 (D. Kansas Aug. 24, 2017)
(analyzing the fiduciary exception in an ERISA setting; "In the Court's review of the documents, it appears the communications fall under this umbrella. Nearly all of the communications took place after litigation began, and the few occurring earlier were created after litigation was threatened. Defendants, as plan administrators, were communicating with counsel in order to defend themselves against Plaintiff's claims, and therefore they lacked any 'mutuality of interest' with Plaintiff as the beneficiary. Therefore, the Court finds that Plaintiff, as the party asserting the fiduciary exception, failed to meet his burden to establish the applicability of the exception to the communications otherwise protected by attorney-client privilege or work product protection.")

Case Date Jurisdiction State Cite Checked
2017-08-24 Federal KS

Chapter: 7.8

Case Name: Blackrock Allocation Target Shares v. Wells Fargo Bank, 14-CV-09371 (KPF) (SN), 2017 U.S. Dist. LEXIS 34918 (S.D.N.Y. March 9, 2017)
("Second, application of the fiduciary exception depends on the identity of the 'real client' of the attorney, i.e., the beneficiary of the attorney's advice. . . . If counsel has advised the trustee fiduciary regarding his or her administration of the trust and is paid out of trust assets, then the trust beneficiary is the attorney's 'real client,' triggering the exception. . . . If the fiduciary consults with counsel to protect her own interests, however, then the real client is the fiduciary in her individual capacity. . . . Even assuming there does exist a fiduciary relationship between indenture trustees and trust beneficiaries, Wells Fargo has represented convincingly that the advice solicited was intended to better inform its own obligations as trustee under the governing agreements and not to advance the interests of the certificateholders. Therefore, Wells Fargo is the 'real client.'")

Case Date Jurisdiction State Cite Checked
2017-03-09 Federal NY

Chapter: 7.8

Case Name: Blackrock Allocation Target Shares v. Wells Fargo Bank, 14-CV-09371 (KPF) (SN), 2017 U.S. Dist. LEXIS 34918 (S.D.N.Y. March 9, 2017)
("Plaintiffs finally contend that the trusts are the parties-in-interest and that the fiduciary exception to the attorney-client privilege therefore waives Wells Fargo's privilege. The Court disagrees."; "First, the fiduciary exception generally applies in the context of a traditional, common law fiduciary trustee. Anderson v. Sotheby's Inc. Severance Plan, No. 04 Civ. 8180, (SAS)(DFE), 2005 U.S. Dist. LEXIS 9033, 2005 WL 6567123, at *9 (S.D.N.Y. May 13, 2005). Both sides agree that Wells Fargo is not a traditional fiduciary trustee. In its capacity as an indenture trustee, Wells Fargo does not serve as a fiduciary to trust beneficiaries before an Event of Default. Instead, Wells Fargo's obligations are strictly circumscribed by the governing agreements and its obligations prior to an Event of Default are ministerial in nature.")

Case Date Jurisdiction State Cite Checked
2017-03-09 Federal NY

Chapter: 7.8

Case Name: In re Oxbow Carbon LLC, Unitholder Litigation, Consol. C.A. No. 12447-VCL, 2017 Del. Ch. LEXIS 425 (Del. Ch. March 7, 2017)
(holding that its point two members of a company's board of directors (appointed by investors) may be so adverse to the company that they can be denied access to privileged communications; "The extent to which the Company can invoke privilege against the Crestview Directors turns on the point at which sufficient adversary existed between them such that the Crestview Directors could no longer have a reasonable expectation that they were clients of Company counsel."; "I conclude that for purposes of discovery, Robert Popeo's email to Michael Carlinsky dated October 23, 2015, was the point at which adversary was established sufficiently to enable the Company to begin asserting privilege. Arguments can be made and evidence cited in support of a finding of adversity before or after that point. Clearly, tensions were rising before then. Equally clearly, there are arguments as to why the Crestview Directors should be able to continue to access privileged material after that date. In my view, it is important for purposes of discovery to have as clear a line of demarcation as possible, and I have selected the date that appears most justified on the facts of the case."; "Consequently, the Company cannot withhold discovery material dated before October 23, 2015, from the Crestview Directors on the basis of the attorney-client privilege or the work product doctrine. The Company shall produce the Crestview Directors all items on its privilege log that pre-date October 23, 2015. Thereafter, the Company can invoke the attorney-client privilege and the work product doctrine, subject to the additional rulings made in this order."; "Because of the nature of the relationship between Crestview and the Crestview Directors, Crestview is entitled to the same information as Crestview Directors and vice versa. . . ."; "Crestview cannot obtain access to otherwise privileged materials separately under Gamer v. Wolfinbarger, 430 F.2d 1093 (5th Cir. 1970). Once sufficient adversity existed for the Crestview Directors not to have access to privileged information, there was insufficient mutuality of interest between Crestview and the Company for Garner to apply."; "The Company has alleged that Crestview sought to undermine the Company 'from the inside' by secretly enlisting McAuliffe and Eric Johnson 'to undercut the advice the Company was receiving from its outside counsel,' which had been retained specifically to analyze to Put Right. . . . The complaint posits that Crestview already was knowledgeable about the two firms' advice. The complaint further alleges that when one of the two firms produced a memo partially supporting Oxbow's position. McAuliffe had the offending passage removed before sharing the memo with Koch. . . . Given these allegations, the Company has placed at issue its communications with its original counsel and the two additional law firms about ThoughtWorks and the legal advice it received from them."; "The Company similarly has put at issue the advice it received from Mintz Levin regarding a potential payment to the Small Holders by asserting in its answer that Popeo only suggested this to Crestview to broker a compromise and not because it represented his belief or the Company's belief. By taking the additional step of drawing a distinction between what was said that what they believed, the Company placed at issue advice showing what Popeo and the Company actually believed on this point. . . ."; "The Company shall produce the items on its privilege log for which no attorney is identified.")

Case Date Jurisdiction State Cite Checked
2017-03-07 State DE
Comment:

key case


Chapter: 7.8

Case Name: Bivins v. Rogers, Civ. No. 15-cv-81298-MARRA/MATTHEWMAN, 2016 U.S. Dist. LEXIS 120892 (S.D. Fla. Sept. 7, 2016)
(analyzing the fiduciary exception, and finding that a Florida statute revised the traditional common law approach; "[U]nder the Tripp [Tripp v. Salkovitz, 919 So. 2d 716 (Fla. 2d DCA 2006)] line of cases, it would appear that Plaintiff holds his deceased father's attorney-client privilege and may waive the privilege to obtain the documents he seeks, and, further, that the guardians and the guardians' attorneys may not assert the attorney-client privilege to prevent the production of documents sought by Plaintiff."; "In 2011, however, the Florida legislature enacted Section 90.5021, Florida Statutes."; "The fact of the matter is that Section 90.5021 is clear and unambiguous, and the statute supersedes the pre-2011 case law. Therefore, Plaintiff (as personal representative of the estate of the deceased ward) cannot step into the shoes of the ward and waive the attorney-client privilege under the facts of this case.")

Case Date Jurisdiction State Cite Checked
2016-09-07 Federal FL
Comment:

key case


Chapter: 7.8

Case Name: Wit v. United Behavioral Health, Case Nos. 14-cv-02346- & -05337-JCS, 2016 U.S. Dist. LEXIS 7242, at *22-23 (N.D. Cal. Jan. 21, 2016)
("Based on the case law discussed above, the undersigned concludes that in the class action context, as in cases involving individual claimants, an approach that focuses too heavily on litigation exposure without requiring a showing that advice was actually sought for defensive purposes undermines the principles that the fiduciary exception is designed to protect. In particular, the fiduciary exception recognizes that beneficiaries are entitled to information about how their benefits are administered and that when counsel is advising an ERISA trustee about plan administration, this advice is generally for the benefit of the plan members. As virtually any policy or guideline may, at some point, be the subject of litigation, merely invoking that possibility is not sufficient to avoid the exception. Rather, either the context (e.g. actual or imminent litigation on the subject of the communication) or the contents of the communications themselves must reflect that they are defensive in nature and relate to advice sought and obtained to determine how far the trustees are 'in peril.'" (citation omitted))

Case Date Jurisdiction State Cite Checked
2016-01-21 Federal CA B 7/16

Chapter: 7.8

Case Name: Obeid v. La Mack, 14 cv. 6498 (LTS) (MHD), 2015 U.S. Dist. LEXIS 127327 (S.D.N.Y. Sept. 16, 2015)
(denying access to privileged communications generated by an LLC, which was sought by one of the LLC members whose interests are now adverse to the LLC; "It follows that in the current circumstances, to compel the controlling management of Gemini to disclose to the dissenting member the confidential communications and work product that have resulted from the need to defend the presumptively best interests of the company against his lawsuits and his other extra-corporate endeavors, and to do so based solely on Obeid's continued status as a Member of Gemini, would set at naught the policies underlying the corporate privilege and the work-product rule.").

Case Date Jurisdiction State Cite Checked
2015-09-16 Federal NY

Chapter: 7.8

Case Name: Obeid v. Mack, 14 cv. 6498 (LTS) (MHD), 2015 U.S. Dist. LEXIS 127327 (S.D.N.Y. Sept. 16, 2015)
(denying access to privileged communications generated by an LLC, which was sought by one of the LLC members whose interests are now adverse to the LLC; "In this case, although Mr. Obeid remains a member and manager of Gemini, he has, for all intents and purposes, assumed an adversarial relationship to that entity insofar as (1) he has sought to place Arcade in the position of a potential purchaser of property from Gemini's affiliate 33 Peck Slip Holding, (2) he has pursued a course designed to frustrate the ability of 33 Peck Slip Holding to sell the Seaport Property to another buyer, and (3) he has done so by litigation against the seller. In that circumstance, it cannot be said that the disclosure to him of confidential information reflecting communications by, or presumptively for the benefit of, Gemini and its affiliates is justified by the underlying rationale for disclosure to management -- that is, to enable them to act on behalf of the entity.").

Case Date Jurisdiction State Cite Checked
2015-09-16 Federal NY
Comment:

key case


Chapter: 7.8

Case Name: Marketel Media, Inc. v. Mediapotamus, Inc., 5:13-CV-427-D, 2015 U.S. Dist. LEXIS 76523 (E.D.N.C. June 11, 2015)
(analyzing a situation in which Ortiz and Hassell formerly co-owned Marketel; explaining that Marketel and one of the owners sued the other owner, who sought to discover communications between the plaintiff and his brother, who was a lawyer; holding that the fiduciary exception did not apply, and that the plaintiff could not obtain discovery of the communications even if the lawyer had represented both the company and one of the owners; "In some shareholder derivative contexts, the so-called fiduciary exception to the attorney-client privilege can require, for good cause, disclosure of communications covered by the corporation's privilege to dissident shareholders. . . . Ortiz has not invoked the fiduciary exception. Assuming Hassell's communications on behalf of Marketel with deRosset are ones to which the fiduciary exception could apply, the record does not establish the requisite good cause for disclosure to Ortiz [Defendant] because of, among other factors, the focus of the communications on the dispute with Ortiz and minimal need of Ortiz for such communications.")

Case Date Jurisdiction State Cite Checked
2015-06-11 Federal NC

Chapter: 7.8

Case Name: Marketel Media, Inc. v. Mediapotamus, Inc., 5:13-CV-427-D, 2015 U.S. Dist. LEXIS 76523 (E.D.N.C. June 11, 2015)
(analyzing a situation in which Ortiz and Hassell formerly co-owned Marketel; explaining that Marketel and one of the owners sued the other owner, who sought to discover communications between the plaintiff and his brother, who was a lawyer; holding that the fiduciary exception did not apply, and that the plaintiff could not obtain discovery of the communications even if the lawyer had represented both the company and one of the owners; "Ortiz's [Defendant] status as a shareholder and officer of Marketel does not entitle her to confidential attorney-client communications between Hassell [Plaintiff] when acting on behalf of Marketel and deRosset. Because Hassell controlled management of Marketel, he retained the authority to assert or waive the attorney-client privilege on its behalf.")

Case Date Jurisdiction State Cite Checked
2015-06-11 Federal NC

Chapter: 7.8

Case Name: Bain v. McIntosh, 597 F. App'x 623, 623-24 (11th Cir. 2015)
(holding that a trustee's lawyer does not owe beneficiaries of the trust any fiduciary duty; "The district court did not err in . . .granting summary judgment because Kane [lawyer for trustee] owed no fiduciary duty to the Walthers [trust beneficiaries] under Florida law. The Florida Legislature has indicated an unwillingness to expand a lawyer's fiduciary duties to a person other than the trustee. Pursuant to Florida Statutes § 90.5021(2) (2011), ' only the person or entity acting as a [trustee] is considered a client of the lawyer.' Furthermore, the Rules Regulating the Florida Bar, which are promulgated by Florida Supreme Court, narrowly limit a lawyer's duties to third parties when serving as the personal representative of an estate. R. Regulating Fla. Bar 4-1.7 cmt. (2014) ('In Florida, the personal representative is the client rather than the estate or the beneficiaries.'); see also ABA Comm. on Ethics & Prof'l Responsibility, Formal Op. 94-380 (1994) ('The majority of jurisdictions consider that a lawyer who represents a fiduciary does not also represent the beneficiaries, and we understand the Model Rules to reflect this majority view.' (citation omitted))." (footnote omitted))

Case Date Jurisdiction State Cite Checked
2015-03-02 Federal

Chapter: 7.8

Case Name: In re PWK Timberland, LLC, Case No. 13-20242, 2015 Bankr. LEXIS 248 (W.D. La. Jan. 27, 2015)
(holding that a bankrupt LLC's members could not automatically access the LLC's document, and that former directors could likewise not access the document; "[T]he fact that Movants were members of PWK prior to January 2011 does not provide them with an independent ground to access PWK's privileged communications because the privilege belongs to PWK, not its members."; "In the intervening years [since a 1970 Fifth Circuit Garner case], the Fifth Circuit and other courts have expanded the scope of the Garner exception beyond shareholder derivative actions to a broad range of fiduciary relationships outside the corporate context."; "[C]ourts have generally been reluctant to apply the Garner exception where the parties seeking disclosure are seeking disclosure to benefit their individual interests as opposed to the collective interests of all shareholders or of all members of a organization imbued with similar fiduciary duties. . . . While the presence of an adverse interest alone may not defeat the Garner exception, the fact that the privileged communications at issue here relate to the present dispute between the LLC and a minority of former LLC members weighs heavily against the appicability [sic] of the exception.")

Case Date Jurisdiction State Cite Checked
2015-01-27 Federal LA

Chapter: 7.8

Case Name: Mennen v. Wilmington Trust Co., C.A. No. 8432 ML, 2013 Del. Ch. LEXIS 204, at *17-18 (Del. Ch. July 25, 2013)
(reaffirming the fiduciary exception's application to trusts, but finding the doctrine inapplicable, because the fiduciary bank had been threatened by the plaintiff, and because it paid the lawyer's fees; "Although the Riggs [Riggs Nat'l Bank of Wash. D.C. v. Zimmer, 355 A.2d 709 (Del. Ch. 1976)] Court noted that the payment of legal fees out of the trust assets was a strong indication of precisely who the real client was, in general, payment of legal fees out of the trust is not dispositive of that issue. Delaware law confirms that a trustee's retention of counsel, and its payment of counsel's fees out of trust funds, does not operate as a waiver of the attorney-client privilege.")

Case Date Jurisdiction State Cite Checked
2013-07-25 State DE B 4/14

Chapter: 7.8

Case Name: Mennen v. Wilmington Trust Co., C.A. No. 8432 ML, 2013 Del. Ch. LEXIS 204, at *16 (Del. Ch. July 25, 2013)
(reaffirming the fiduciary exception's application to trusts, but finding the doctrine inapplicable, because the fiduciary bank had been threatened by the plaintiff, and because it paid the lawyer's fees; "Pending litigation against the trustee is not, however, a prerequisite to finding that the trustee had a legitimate personal interest in legal advice. That determination must be made in light of all of the facts at hand.")

Case Date Jurisdiction State Cite Checked
2013-07-25 State DE B 4/14

Chapter: 7.8

Case Name: Mennen v. Wilmington Trust Co., C.A. No. 8432 ML, 2013 Del. Ch. LEXIS 204, at *12 (Del. Ch. July 25, 2013)
(reaffirming the fiduciary exception's application to trusts, but finding the doctrine inapplicable, because the fiduciary bank had been threatened by the plaintiff, and because it paid the lawyer's fees; "In Riggs [Riggs Nat'l Bank of Wash. D.C. v. Zimmer, 355 A.2d 709 (Del. Ch. 1976)], the application of the fiduciary exception to the attorney-client privilege primarily turned on a determination of who the 'real' 'or 'ultimate' client was, meaning the person for whose benefit the legal advice was procured. Riggs, and subsequent federal cases that discussed it, identified several factors that courts should consider in making this determination. These include: (i) the purpose of the legal advice; (ii) whether litigation was pending or threatened between the trustee and the beneficiaries at the time the advice was obtained; and (iii) the source from which the legal fees associated with the advice were paid. I will consider each of these factors in turn for each of the categories of documents the Beneficiaries seek to compel.")

Case Date Jurisdiction State Cite Checked
2013-07-25 State DE B 4/14

Chapter: 7.8

Case Name: Hubbell v. Ratcliffe, No. HHDX04CV08403824S, 2010 Conn. Super. LEXIS 2853, at *15 (Conn. Super. Ct. Nov. 8, 2010)
(declining to recognize the fiduciary exception in the context of a family trust beneficiary seeking access to communications between the trustee and the trustee's lawyer; "There has been no showing that the reason for disclosure outweighs the potential chilling of essential attorney client communications. An exception to the attorney client privilege is not warranted.")

Case Date Jurisdiction State Cite Checked
2010-11-08 State CT B 1/13

Chapter: 7.8

Case Name: Hubbell v. Ratcliffe, No. HHDX04CV08403824S, 2010 Conn. Super. LEXIS 2853, at *15 (Conn. Super. Ct. Nov. 8, 2010)
(declining to recognize the fiduciary exception in the context of a family trust beneficiary seeking access to communications between the trustee and the trustee's lawyer; "[T]he payment of counsel out of trust funds does not convert trust beneficiaries into clients of the trustees' counsel. 'An attorney's allegiance is to his client, not to the person who happens to be paying him for his services.'. . . The beneficiaries of the Hubbell trusts, including the plaintiff, are not clients of the trustees' counsel.")

Case Date Jurisdiction State Cite Checked
2010-11-08 State CT B 1/13

Chapter: 7.8

Case Name: Hubbell v. Ratcliffe, No. HHDX04CV08403824S, 2010 Conn. Super. LEXIS 2853, at *14 (Conn. Super. Ct. Nov. 8, 2010)
(declining to recognize the fiduciary exception in the context of a family trust beneficiary seeking access to communications between the trustee and the trustee's lawyer; "The analysis in Spinner [Spinner v. Nutt, 631 N.E.2d 542 (Mass. 1994)] and Huie [Huie v. DeShazo, 922 S.W. 2d 920 (Tex. 1996)] is also consistent with decisions of this court and those of other Superior Court judges, which have found that an attorney for a fiduciary of an estate does not represent its beneficiaries.")

Case Date Jurisdiction State Cite Checked
2010-11-08 State CT B 1/13

Chapter: 7.8

Case Name: Batt v. Manchester Oaks Homeowners Ass'n, 80 Va. Cir. 502, 506, 506-07 (Va. Cir. Ct. 2010)
(rejecting a fiduciary exception argument by members of a homeowners association, who sought access to communications between a homeowners association's Board of Directors and its lawyer; "The Fiduciary Beneficiary Exception is a creature of the federal courts and has not been applied by any court in the Commonwealth of Virginia. . . . . For the Fiduciary Beneficiary exception to apply it must not run afoul of the express intent of the Supreme Court of Virginia. Adopting the Fiduciary Benefit exception would serve as a formidable barrier to the express purpose of the attorney client privilege, and essentially nullify the attorney client privilege in the case of corporations being sued by their shareholders. Such is not the law in the Commonwealth of Virginia."; "Additionally, incorporating the exception would chill communication between parties and their attorneys for fear that such exchanges could be used against them in the future. Because the purpose of the privilege is to facilitate open communication between lawyer and client as well as promoting broader public interest in the observance of law, this Court declines to apply the Fiduciary Beneficiary Exception."), aff'd in part, rev'd in part and remanded on other grounds, 732 S.E.2d 690 (Va. 2012)

Case Date Jurisdiction State Cite Checked
2010-01-01 State VA N 12/12

Chapter: 7.8

Case Name: Batt v. Manchester Oaks Homeowners Ass'n, 80 Va. Cir. 502, 506 & n.2, 506-07 (Va. Cir. Ct. 2010)
(in an opinion by Judge Ney, holding that the fiduciary exception did not apply in a situation involving homeowners' attempt to obtain an opinion letter from the homeowners association's lawyer to management; "The Fiduciary Beneficiary Exception is a creature of the federal courts and has not been applied by any court in the Commonwealth of Virginia."; "Home Owners embrace the Fiduciary Beneficiary Exception even though relying on a 2008 Fairfax Circuit Court case. Rush v. Sunrise Senior Living, Inc., 2008 Va. Cir. LEXIS 12 (Fairfax 2008). In Rush, the court dealt with a motion to compel documents that were created during the plaintiff's tenure as CFO. While the court mentions the four elements necessary for a privilege under the Fiduciary Beneficiary Exception (as laid out in Garner v. Wolfinbarger, 430 F. 2d 1093 (5th Cir. Ala. 1970)), the court did not apply this test. Instead, the court concluded that the plaintiff's right to access to the documents that the plaintiff received, reviewed, authored, or had reasonable access to, outweighed the public policy considerations of full and frank communication, and, thus, such documents were not privileged."; "For the Fiduciary Beneficiary xception to apply it must not run afoul of the express intent of the Supreme Court of Virginia. Adopting the Fiduciary Benefit exception would serve as a formidable barrier to the express purpose of the attorney client privilege, and essentially nullify the attorney client privilege in the case of corporations being sued by their shareholders. Such is not the law in the Commonwealth of Virginia."; "Additionally, incorporating the exception would chill communication between parties and their attorneys for fear that such exchanges could be used against them in the future. Because the purpose of the privilege is to facilitate open communication between lawyer and client as well as promoting broader public interest in the observance of law, this Court declines to apply the Fiduciary Beneficiary Exception." (footnote omitted))

Case Date Jurisdiction State Cite Checked
2010-01-01 State VA B 4/11

Chapter: 7.8

Case Name: Batt v. Manchester Oaks Homeowners Ass'n, 80 Va. Cir. 502, 505 (Va. Cir. Ct. 2010)
(in an opinion by Judge Ney, holding that the fiduciary exception did not apply in a situation involving homeowners' attempt to obtain an opinion letter from the homeowners association's lawyer to management; "The communications between the Directors and their counsel are protected by the attorney client privilege as well as the work product doctrine. The documents the Home Owners seek to recover are the documents between the Board, acting on behalf of the HOA, and its counsel. And, unlike Virginia Electric [Virginia Elec. & Power Co. v. Westmoreland LG&E Partners, 526 S.E. 2d 750 (Va. 2000)], where the document sought was merely a letter between negotiating parties, here the documents specifically request legal advice. Because Virginia Electric makes plain that the privilege attaches even where the document on its face does not seek legal advice, the documents are clearly privileged.")

Case Date Jurisdiction State Cite Checked
2010-01-01 State VA B 4/11

Chapter: 7.8

Case Name: Layton v. Layton, Ch. No. 920764, slip op. (Va. Cir. Ct. Dec. 12, 1992)
(finding that the executor and trustee can assert the attorney-client privilege protecting disclosures with his lawyer in the beneficiaries' action for breach of fiduciary duty)

Case Date Jurisdiction State Cite Checked
1992-12-12 State VA B 3/16

Chapter: 7.8

Case Name: Layton v. Layton, Ch. No. 920764, slip op. (Alexandria Cir. Ct. Dec. 12, 1992)
(finding that the executor and trustee can assert the attorney-client privilege protecting disclosures with his lawyer in the beneficiaries' action for breach of fiduciary duty)

Case Date Jurisdiction State Cite Checked
1992-12-12 State VA B 3/16
Comment:

key case


Chapter: 7.9

Case Name: Peters v. Aetna Inc., Civ. Case No. 1:15-cv-00109-MR, 2018 U.S. Dist. LEXIS 126108 (W.D.N.C. July 27, 2018)
(analyzing the fiduciary exception in an ERISA case; "Here, only Aetna has a contractual relationship with Mars and the Mars Plan."; "None of the Aetna-Optum contracts delegates to Optum discretionary authority to make benefits determinations for Aetna plans or gives Optum control over any plan's assets."; "Optum plays a limited ministerial role in Aetna's claims process."; "With respect to this issue, the Mars Plan makes clear that Aetna, not Optum, has the authority to determine a plan member's financial responsibility. Because it is clear that Optum did not manage or administer this aspect of the Plan, the Court must conclude that Optum was not acting in a fiduciary capacity with respect to the actions complained of by the Plaintiff."; "The Plaintiff nevertheless claims that Optum is a fiduciary because: (1) Aetna granted Optum the authority to grant or deny benefit claims; (2) the contract between Aetna and Optum allowed Optum to control its own compensation for its services; and (3) Optum had control over the amount of administrative charges it would collect, which charges were taken out of plan assets."; "Contrary to the Plaintiff's argument, however, the record before this Court shows that Aetna retains all discretionary authority to pay or deny benefits claims."; "Optum has no authority to decide whether a particular claim is covered under a particular Aetna plan and cannot pay itself, much less pay itself out of a particular plan's assets."; "Aetna's field communications were not part of any fiduciary function owed to the Plaintiff's plan or any particular ERISA plan; they were system-wide communications to Aetna's account teams, including teams responsible for non-ERISA plans completely irrelevant to this case. The Plaintiff has failed to demonstrate that these documents come within the purview of the fiduciary exception. Accordingly, the Court concludes that these draft communications are not subject to disclosure under the fiduciary exception.")

Case Date Jurisdiction State Cite Checked
2018-07-27 Federal NC

Chapter: 7.9

Case Name: Blackrock Allocation Target Shares v. Wells Fargo Bank, 14-CV-09371 (KPF) (SN), 2017 U.S. Dist. LEXIS 34918 (S.D.N.Y. March 9, 2017)
("Second, application of the fiduciary exception depends on the identity of the 'real client' of the attorney, i.e., the beneficiary of the attorney's advice. . . . If counsel has advised the trustee fiduciary regarding his or her administration of the trust and is paid out of trust assets, then the trust beneficiary is the attorney's 'real client,' triggering the exception. . . . If the fiduciary consults with counsel to protect her own interests, however, then the real client is the fiduciary in her individual capacity. . . . Even assuming there does exist a fiduciary relationship between indenture trustees and trust beneficiaries, Wells Fargo has represented convincingly that the advice solicited was intended to better inform its own obligations as trustee under the governing agreements and not to advance the interests of the certificateholders. Therefore, Wells Fargo is the 'real client.'")

Case Date Jurisdiction State Cite Checked
2017-03-09 Federal NY

Chapter: 7.9

Case Name: Durand v. The Hanover Ins. Group, Inc., Civ. A. No. 3:07-CV-00130-HBB, 2017 U.S. Dist. LEXIS 5337 (W.D. Ky. Jan. 13, 2017)
("Defendants argue the Court made a clear error when it determined the documents at issue should be produced to Plaintiffs because they are subject to the fiduciary exception to the attorney-client privilege. Because the attorney-client privilege is fundamentally important to our system of justice, the Court will reconsider its interlocutory order with regard to the documents at issue. Notably, the parties agree that the attorney-client privilege applies to each of the documents at issue. Therefore, the question before the Court is whether these documents are subject to the fiduciary exception to the attorney-client privilege."; "Under either rationale, when an attorney advises an ERISA plan administrator or other fiduciary concerning a matter of plan administration, the attorney's client is the plan beneficiaries for whom the fiduciary acts, instead of the plan administrator."; "There are two types of situations where the fiduciary exception should not be applied because counsel's advice to the ERISA plan administrator concerns a non-administrative or non-fiduciary matter. . . . Additionally, the fiduciary exception does not apply to an administrator's communications with plan attorneys regarding non-fiduciary matters, such as adopting, amending, or terminating an ERISA plan."; "Obviously, the context and content of the communications must be considered in determining whether the fiduciary exception applies to the withheld communications. . . . For this reason, an in camera evaluation of each document must be conducted in order to assess the content of counsel's confidential communications with the plan administrator because the same attorney may advise the administrator in both his fiduciary and nonfiduciary capacities at different times.")

Case Date Jurisdiction State Cite Checked
2017-01-13 Federal KY

Chapter: 7.9

Case Name: Durand v. The Hanover Ins. Group, Inc., Civ. A. No. 3:07-CV-00130-HBB, 2016 U.S. Dist. LEXIS 143064 (W.D. Ky. Oct. 17, 2016)
("[W]hen an attorney advises an ERISA plan administrator or other fiduciary concerning a matter of plan administration, the attorney's client is the plan beneficiaries for whom the fiduciary acts, instead of the plan administrator."; "There are two types of situations where the fiduciary exception should not be applied because counsel's advice to the ERISA plan administrator or fiduciary concerns a non-administrative or non-fiduciary matter."; "The first situation involves 'the 'settlor' exception, where courts distinguish between fiduciary acts and settlor acts, the former being discretionary acts of plan administration and the latter involving the adoption, modification, or termination of an employee benefit plan."; "The second situation involves the "liability" exception, where the issue is whether the fiduciary sought the advice of counsel for his or her own personal defense in contemplation of civil or criminal proceedings.")

Case Date Jurisdiction State Cite Checked
2016-10-17 Federal KY

Chapter: 7.9

Case Name: Durand v. The Hanover Ins. Group, Inc., Civ. A. No. 3:07-CV-00130-HBB, 2016 U.S. Dist. LEXIS 143064 (W.D. Ky. Oct. 17, 2016)
("[D]ocuments that Defendants have withheld on claim of attorney-client privilege or work product protection that were generated between March 29, 2002 and May 20, 2002, are subject to the fiduciary exception, and, therefore, should be produced. By contrast, the documents that Defendants have withheld that were generated on or after May 21, 2002 are subject to the attorney-client privilege and work product protection, but the fiduciary exception does not apply to these documents because Allmerica and the Plan administrator were no longer involved in acts of plan administration. Plaintiffs have referred to these documents as Group 2A. The Court has determined that numerous spread sheets PwC prepared, between May 21, 2002 and October 14, 2002, are subject to the work product protection because they were prepared at the direction of Allmerica's counsel, and that Allmerica had a subjective anticipation of Plan beneficiary litigation that was objectively reasonable.")

Case Date Jurisdiction State Cite Checked
2016-10-17 Federal KY

Chapter: 7.9

Case Name: Durand v. The Hanover Ins. Group, Inc., Civ. A. No. 3:07-CV-00130-HBB, 2016 U.S. Dist. LEXIS 143064 (W.D. Ky. Oct. 17, 2016)
("The withheld documents also indicate that the Plan Administrator and Allmerica sought and received legal advice from Allmerica's in-house counsel and outside legal counsel (the Sonnenschein firm) in connection with responding to the OIG's October 26, 2001 letter and notice. Under the fiduciary exception, the Plan beneficiaries are entitled to access to these withheld documents because the documents indicate the Plan Administrator was involved in the process of preparing Attorney Klein's response to the OIG's letter and notice. The Court is aware that some of the correspondence have attached copies of documents pertaining to the process of converting the Plan from a traditional pension plan to a cash balance plan. While these documents concern an amendment to the Plan and ordinarily might be considered beyond the scope of the fiduciary exception, that is not the case here because the documents were utilized in the context of preparing a response to the OIG's letter and notice, an act of plan administration.")

Case Date Jurisdiction State Cite Checked
2016-10-17 Federal KY

Chapter: 7.9

Case Name: Durand v. The Hanover Ins. Group, Inc., Civ. A. No. 3:07-CV-00130-HBB, 2016 U.S. Dist. LEXIS 143064 (W.D. Ky. Oct. 17, 2016)
("The Court notes that the burden of establishing the protection of the attorney-client privilege rests with the person or entity asserting it."; "The Court is aware that when a party asserts the crime-fraud exception to the attorney-client privilege he or she bears the burden of demonstrating the applicability of that exception. . . . This makes sense because the crime-fraud exception defeats or strips away the privilege when the communications between lawyer and client are "'made for the purpose of getting advice for the commission of a fraud' or crime.'. . . The Court notes that in the context of ERISA, the fiduciary exception is something of a misnomer because it does not vitiate the attorney-client privilege like the crime-fraud exception. Instead, it sets forth a general proposition that, at least as to advice regarding plan administration, the beneficiaries are the real client, and, thus, the trustee 'never enjoyed the privilege in the first place.'. . . When '[u]nderstood in this fashion, the fiduciary exception is not really an 'exception' to the attorney-client privilege at all.' Id. Because of this substantial distinction, case law regarding the crime-fraud exception is not an appropriate source for guidance on the question of burden."; "While no court appears to have expressly ruled on the question of burden, the majority of courts addressing the fiduciary exception, in the context of ERISA, appear to have reasoned the employer/administrator/trustee has the burden of demonstrating the communications withheld on claim of privilege are not subject to the fiduciary exception. . . . in the context of ERISA, the majority view appears to be the employer/administrator has the burden of demonstrating counsel's communications concerned non-administrative/non-fiduciary matters or personal representation in potential or pending litigation.")

Case Date Jurisdiction State Cite Checked
2016-10-17 Federal KY

Chapter: 7.9

Case Name: Sender v. Franklin Res., Inc., Case No. 11-cv-03828-EMC, 2016 U.S. Dist. LEXIS 42739, at *5 (N.D. Cal. Mar. 30, 2016)
(holding that the fiduciary exception could apply in a document-by-document basis; "Here, Judge Kim conducted an in camera review of nineteen sets of documents, sustaining the attorney-client privilege as to fifteen of these communications. . . . With respect to Communication 1, Judge Kim determined that the communications concerned the 'applicability of a specific legal defense and thus, the Defendant's potential liability. It does not involve the administration of the plan.'" (internal citation omitted))

Case Date Jurisdiction State Cite Checked
2016-03-30 Federal CA B 8/16

Chapter: 7.9

Case Name: Sender v. Franklin Resources Inc., Case No. 11-cv-03828-EMC, 2016 U.S. Dist. LEXIS 42739 (N.D. Cal. March 30, 2016)
(holding that the fiduciary exception could apply in a document-by-document basis; "Here, Plaintiff argues that the withheld documents must relate to plan administration because the documents were considered in deciding whether to deny Plaintiff's claim for benefits. . . . Plaintiff appears to argue for a per se rule, where any documents created during the period of administrative review must be disclosed per the fiduciary exception '[b]ecause Franklin was dutibound to act as Plaintiff's fiduciary during the period of the administrative review[; thus,] any actions it took to evaluate its own potential liability to Plaintiff were entirely voluntarily and not in response to any act or communication of Plaintiff, or any threat of imminent legal peril.'. . . However, no such per se rule exists; as Judge Kim correctly pointed out, the fiduciary exception requires 'an evaluation of the content of the communication -- whether the communication involves administration of the claim or the potential liability of the trustee.'")

Case Date Jurisdiction State Cite Checked
2016-03-30 Federal CA

Chapter: 7.9

Case Name: Sender v. Franklin Resources Inc., Case No. 11-cv-03828-EMC (SK), 2016 U.S. Dist. LEXIS 19927 (N.D. Cal. Feb. 18, 2016)
(analyzing the liability exception to the fiduciary exception; stating the court's conclusion about various communications with boilerplate language ; "The assertion of the attorney-client privilege is sustained. The request does not involve plan administration, and the fiduciary exception does not apply.")

Case Date Jurisdiction State Cite Checked
2016-02-18 Federal CA

Chapter: 7.9

Case Name: Leber v. The CitiGroup 401(K) Plan Investment Committee, 07-CV-09329 (SHS) (DF), 2015 U.S. Dist. LEXIS 144367 (S.D.N.Y. Oct. 16, 2015)
(analyzing the fiduciary exception in an ERISA setting; finding that the fiduciary exception did not apply to privileged Citi communications about how to handle press inquiries; "The key point here is that ERISA imposes fiduciary obligations on an employer only to the extent that the employer maintains discretionary authority or control. . . . While Plaintiffs are correct that the authority to select or supervise fiduciaries gives rise to fiduciary obligations . . . Where an employer, like Citigroup, has delegated the discretionary authority to manage a plan or dispose of its assets, and its only non-delegated authority relates to the ability to hire and fire committee members, the employer's fiduciary obligations extend only to those acts . . . . Thus, the fact that Prince or Thurm may have been responsible for appointing committee members does not establish that these individuals had any fiduciary responsibilities with respect to the subject matter of the email communication at issue, which related to the selection of funds for the 401(k) Plan. As Thurm, by his email, was not seeking legal advice in his fiduciary capacity, regarding any matter as to which he had a demonstrable fiduciary duty, Plaintiffs motion to compel production of the email is denied.")

Case Date Jurisdiction State Cite Checked
2015-10-16 Federal NY

Chapter: 7.9

Case Name: Leber v. The CitiGroup 401(K) Plan Investment Committee, 07-CV-09329 (SHS) (DF), 2015 U.S. Dist. LEXIS 144367 (S.D.N.Y. Oct. 16, 2015)
(analyzing the fiduciary exception in an ERISA setting; finding that the fiduciary exception did not apply to privileged Citi communications about how to handle press inquiries; "This Court has obtained and reviewed, in camera, the Davis Polk Memo, and, upon such review, the Court finds that the primary purpose of that document was to render legal advice concerning the administration and management of the BPIC, in response to a request for operational guidance. . . . This material therefore relates not to the settlor functions of plan amendment or design . . . But rather to the core fiduciary functions of asset management and avoidance of conflicts of interest, thereby implicating the fiduciary exception to Defendants' claim of privilege.")

Case Date Jurisdiction State Cite Checked
2015-10-16 Federal NY

Chapter: 7.9

Case Name: Leber v. The CitiGroup 401(K) Plan Investment Committee, 07-CV-09329 (SHS) (DF), 2015 U.S. Dist. LEXIS 144367 (S.D.N.Y. Oct. 16, 2015)
(analyzing the fiduciary exception in an ERISA setting; finding that the fiduciary exception did not apply to privileged Citi communications about how to handle press inquiries; "Determining whether a particular communication concerns a fiduciary or non-fiduciary matter requires the Court to engage in a 'fact-specific inquiry' that focuses on 'both the content and context of the specific communication.'")

Case Date Jurisdiction State Cite Checked
2015-10-16 Federal NY

Chapter: 7.9

Case Name: Leber v. The CitiGroup 401(K) Plan Investment Committee, 07-CV-09329 (SHS) (DF), 2015 U.S. Dist. LEXIS 144367 (S.D.N.Y. Oct. 16, 2015)
(analyzing the fiduciary exception in an ERISA setting; finding that the fiduciary exception did not apply to privileged Citi communications about how to handle press inquiries; "The statute contemplates that an employer may 'wear two hats,' assuming fiduciary status only when administering or managing a plan, and not when conducting business that is not regulated by ERISA.")

Case Date Jurisdiction State Cite Checked
2015-10-16 Federal NY

Chapter: 7.9

Case Name: Leber v. The CitiGroup 401(K) Plan Investment Committee, 07-CV-09329 (SHS) (DF), 2015 U.S. Dist. LEXIS 144367 (S.D.N.Y. Oct. 16, 2015)
(analyzing the fiduciary exception in an ERISA setting; finding that the fiduciary exception did not apply to privileged Citi communications about how to handle press inquiries; "Not every otherwise-privileged communication by an employer or plan administrator, however, is subject to the fiduciary exception. ERISA generally provides that 'a 'person is a fiduciary with respect to a plan,' and therefore subject to ERISA fiduciary duties, 'to the extent' that he or she 'exercises any discretionary authority or discretionary control respecting management' of the plan, or 'has any discretionary authority or discretionary responsibility in the administration' of the plan.'")

Case Date Jurisdiction State Cite Checked
2015-10-16 Federal NY

Chapter: 7.9

Case Name: In re The Kipnis Section 3.4 Trust v. The Northern Trust Co., No. 1 CA-CV 13-0260, 2014 Ariz. App. LEXIS 103, at *15 (Ariz. Ct. App. June 3, 2014)
(analyzing the fiduciary exception; "The rationales underlying the fiduciary exception are not present when a trustee seeks legal advice in a personal capacity on matters not of trust administration, as opposed to in a fiduciary capacity on matters of trust administration.")

Case Date Jurisdiction State Cite Checked
2014-06-03 State AZ

Chapter: 7.9

Case Name: In re The Kipnis Section 3.4 Trust v. The Northern Trust Co., No. 1 CA-CV 13-0260, 2014 Ariz. App. LEXIS 103, at *13-15 (Ariz. Ct. App. June 3, 2014)
(analyzing the fiduciary exception; "The question whether the trustee acted in a fiduciary capacity cannot be resolved simply by asking who paid for the advice. . . . In this case, Northern Trust has an obligation to disclose to Hammerman all attorney-client communications that occurred in its fiduciary capacity on matters of administration of the trust. The court erred to the extent that it ordered disclosure of such communications based solely on the fact that Northern Trust paid for them with trust funds the trust does not have an absolute right to information that it paid for.")

Case Date Jurisdiction State Cite Checked
2014-06-03 State AZ

Chapter: 7.9

Case Name: Hill v. State St. Corp., Master Dkt. No. 09-12146-GAO, Civ. A. No. 09-10750-DJC, 2013 U.S. Dist. LEXIS 181168, at *19-20 (D. Mass. Dec. 30, 2013)
("The first challenged redaction relates to counsel's description of the role and function of the Benefit Plans Committee as reflected in the draft of the Charter for the committee. In this court's view, this information relates to plan management and administration and is not privileged. Moreover, to the extent State Street's counsel is providing legal advice, it relates only to the 'the defendant's role as the beneficiaries' fiduciary' and is not privileged as against the beneficiaries." (citation and footnote omitted))

Case Date Jurisdiction State Cite Checked
2013-12-30 Federal MA B 5/14

Chapter: 7.9

Case Name: Hill v. State St. Corp., Master Dkt. No. 09-12146-GAO, Civ. A. No. 09-10750-DJC, 2013 U.S. Dist. LEXIS 181168, at *25 (D. Mass. Dec. 30, 2013)
("[T]his court finds that both paragraphs reflect fiduciary functions, not settlor functions. The first paragraph relates to a description to the committee members of their obligations under certan plan amendments, which relates to the management and administration of the plan. It does not relate to the decision to amend the plan in any way. Similarly, the second paragraph involves the creation of a procedures manual which would detail the steps that the committee members should follow. This falls into the category of plan administration, and the fiduciary exception applies. For all these reasons, this document shall be produced in an unredacted form.")

Case Date Jurisdiction State Cite Checked
2013-12-30 Federal MA B 5/14

Chapter: 7.9

Case Name: Sizemore v. Pacific Gas & Electric Retirement Plan, No. C 13-00169 WHA, 2013 U.S. Dist. LEXIS 89996 (N.D. Cal. June 25, 2013)
September 25, 2013 (PRIVILEGE POINT)

"The Fiduciary Exception Can Ebb and Flow in an ERISA Context"

Under the "fiduciary exception," beneficiaries of a fiduciary duty may sometimes access otherwise privileged communications between the fiduciary and the fiduciary's lawyer. The exception arises most frequently in ERISA cases – in which ERISA beneficiaries seek access to communications between ERISA administrators and their lawyers.

However, the exception applies only when the administrator is acting in a fiduciary role. In Sizemore v. Pacific Gas & Electric Retirement Plan, No. C 13-00169 WHA, 2013 U.S. Dist. LEXIS 89996 (N.D. Cal. June 25, 2013), the ERISA plan denied an employee's claim for pension benefits. The court explained that "[u]nder normal circumstances, the fiduciary exception might have expired after that point," because that ended the plan’s fiduciary function. Id. At *16. But the court then noted that defendants had agreed to consider the employee's second appeal of the pension benefits denial. According to the court, "[d]efendants voluntarily stepped back into their role as fiduciaries during the pendency of that second appeal" – meaning that "during [that] same time period the fiduciary exception applies." Id. At *17. The court ultimately denied plaintiff's attempt to apply the fiduciary exception to documents created during the "period of time between plaintiff's first and second appeals" – because during that period "defendants had not yet stepped back into the role of non-adverse fiduciaries." Id.

Because the fiduciary exception depends on the fiduciary's role at the time, courts must carefully analyze the pertinent chronology.

Case Date Jurisdiction State Cite Checked
2013-06-25 Federal CA
Comment:

key case


Chapter: 7.9

Case Name: Krase v. Life Ins. Co. of N. Am., 962 F. Supp. 2d 1033, 1036 (N.D. Ill. 2013)
("We have reviewed in camera the documents that LINA [defendant] has withheld and conclude that they relate to plan administration.")

Case Date Jurisdiction State Cite Checked
2013-01-01 Federal IL B 4/14

Chapter: 7.9

Case Name: Krase v. Life Ins. Co. of N. Am., 962 F. Supp. 2d 1033, 1036 (N.D. Ill. 2013)
("A party with discretion to grant or deny benefits is a fiduciary under ERISA.")

Case Date Jurisdiction State Cite Checked
2013-01-01 Federal IL B 4/14

Chapter: 7.9

Case Name: Sizemore v. Pac. Gas & Elec. Ret. Plan, F. Supp. 2d 894, 901 (N.D. Cal. 2013)
(in an ERISA case, finding that the fiduciary exception applied at two separate times, but not in between those times; "The email dated April 29, 2011, withheld by defendants is an email between in-house counsel that dates to a period of time between plaintiff's first and second appeals. At the time of this email, defendants had not yet stepped back into the role of non-adverse fiduciaries. On the present record, plaintiff has not shown that the fiduciary exception or another exception to the attorney-client privilege applies to this document.")

Case Date Jurisdiction State Cite Checked
2013-01-01 Federal CA B 4/14

Chapter: 7.9

Case Name: Solis v. Food Emp'rs Labor Relations Ass'n, 644 F.3d 221, 228, 229, 229 n.6 (4th Cir. 2011)
("In the context of the shareholder derivative action, the fiduciary exception also has been limited by a requirement that one seeking to overcome a privilege show good cause. See Garner, 430 F.2d at 1101, n.17, 1103-04 (rejecting unqualified fiduciary exception out of concern, in part, that corporations may be 'vulnerable to suit by shareholders whose interests or intention may be inconsistent with those of other shareholders'). In the context of the Secretary's investigative or enforcement activity under ERISA, however, the concerns that inspired the good cause requirement in the corporate context do not obtain, as 'there exists no legitimate need for a trustee to shield his actions from those whom he is obligated to serve.' Washington Star, 543 F. Supp. at 909, n.5; see also In re Occidental Petrol. Corp., 217 F.3d 293, 298 (5th Cir. 2000). . . . Several other courts that have addressed the scope of the fiduciary exception in the ERISA context have also refused to apply a good cause requirement. See Mett, 178 F.3d at 1063 (applying fiduciary exception without reference to good cause requirement); Wildbur, 974 F.2d at 645 (same); Becher, 129 F.3d at 272 (same); Tatum, 247 F.R.D. at 495 (expressly rejecting Garner's good cause analysis); Henry v. Champlain Enters., Inc., 212 F.R.D. 73, 83-86 (N.D.N.Y. 2003) (applying good cause requirement to plaintiffs' shareholder derivative claim but not to their ERISA claims); Hudson v. Gen. Dynamics Corp., 186 F.R.D. 271, 274 (D. Conn. 1999) (finding good cause not required in ERISA context); Washington Star, 543 F. Supp. at 909 n.5 (same). Indeed, to our knowledge, only one thirty-year-old district court opinion has applied the good cause requirement to limit the fiduciary exception in the ERISA context. See Donovan v. Fitzsimmons, 90 F.R.D. 583, 586-87 (N.D. Ill. 1981). We do not find that case persuasive. The Funds' attempt to portray the good cause showing as governed by our decision in Sandberg [Sandberg v. Virginia Bankshares, Inc., 979 F.2d 332 (4th Cir. 1992)] is misplaced. Even apart from the fact that we vacated our Sandberg opinion, Sandberg arose in the context of a corporate shareholder derivative action. 979 F.2d at 352. As discussed supra, the application of the fiduciary exception in the ERISA context presents different concerns from those involved in the corporate context, and courts have continued to impose a good cause showing on the latter but not the former. Nor does our decision in Faircloth v. Lundy Packing Co., 91 F.3d 648 (4th Cir. 1996), support the imposition of a good cause requirement here. Faircloth dealt with provisions in ERISA that require certain automatic disclosures, and made no mention of the fiduciary exception whatsoever. Id. at 655. Accordingly, it has little bearing on our determination of the scope of that exception. Even courts that have refused to impose a good cause requirement, however, have maintained the limits imposed by the fiduciary relationship itself. In particular, non-fiduciary communications and a trustee's personal legal advice will not be subject to the exception. Thus, the application of the fiduciary exception to any particular communication remains a matter of 'context and content.' Mett, 178 F.3d at 1064; Tatum, 247 F.R.D. 495. In sum, we conclude that application of the fiduciary exception to the attorney-client privilege in the context of a subpoena issued by the Secretary of Labor under ERISA does not require a showing of good cause; instead, its application turns on the context and content of the individual communications at issue.")

Case Date Jurisdiction State Cite Checked
2011-01-01 Federal

Chapter: 7.9

Case Name: Solis v. Food Emp'rs Labor Relations Ass'n, 644 F.3d 221, 226-27 (4th Cir. 2011)
("Courts have recognized one such limit in the context of fiduciary relationships. Rooted in the common law of trusts, the fiduciary exception is based on the rationale that the benefit of any legal advice obtained by a trustee regarding matters of trust administration runs to the beneficiaries. Consequently, 'trustees . . . cannot subordinate the fiduciary obligations owed to the beneficiaries to their own private interests under the guise of attorney-client privilege.' Riggs Nat. Bank of Washington, D.C. v. Zimmer, 355 A.2d 709, 714 (Del. Ch. 1976).")

Case Date Jurisdiction State Cite Checked
2011-01-01 Federal

Chapter: 7.9

Case Name: Solis v. Food Emp'rs Labor Relations Ass'n, 644 F.3d 221, 227-28 (4th Cir. 2011)
("Analogizing the ERISA fiduciary's role to the role of the trustee at common law, these courts have relied on one of two related rationales. Applying the reasoning of the Fifth Circuit in Garner, some courts have concluded that the ERISA fiduciary's duty to act in the exclusive interest of beneficiaries supersedes the fiduciary's right to assert attorney-client privilege. See, e.g., Bland, 401 F.3d at 787; Becher, 129 F.3d at 271-72. Other courts, however, have reasoned that the ERISA fiduciary, as a representative of the beneficiaries, is not the real client in obtaining advice regarding plan administration and 'thus never enjoyed the privilege in the first place.' Mett, 178 F.3d at 1063 (internal citations omitted). See Doe, 162 F.3d at 556; Wildbur, 974 F.2d at 645; Washington- Baltimore Newspaper Guild, Local 35 v. Washington Star Co., 543 F. Supp. 906, 909 (D.D.C. 1982). Under either rationale, 'where an ERISA trustee seeks an attorney's advice on a matter of plan administration and where the advice clearly does not implicate the trustee in any personal capacity, the trustee cannot invoke the attorney-client privilege against the plan beneficiaries.' Mett, 178 F.3d at 1064. (footnote omitted). . . . . This court has not previously examined the fiduciary exception in the context of ERISA, though several district courts in this circuit have addressed the issue. See, e.g., Tatum v. R.J. Reynolds Tobacco Co., 247 F.R.D. 488, 495 (M.D.N.C. 2008) (recognizing 'the existence of a fiduciary exception where an ERISA plan administrator asserts attorney-client privilege to withhold from plan beneficiaries communications related to matters on which a fiduciary duty is owed to the beneficiaries'); Coffman v. Metro. Life Ins. Co., 204 F.R.D. 296, 299 (S.D.W. Va. 2001) (finding that fiduciary exception required disclosure of documents dealing with plan administration to ERISA trust beneficiaries). Persuaded by the reasoning set forth in the opinions of our sister circuits and the lower courts within our circuit, we find that the fiduciary exception to attorney-client privilege extends to communications between an ERISA trustee and a plan attorney regarding plan administration. . . . In now recognizing the fiduciary exception, we acknowledge that it is not without limits. The exception will not apply, for example, to a fiduciary's communications with an attorney regarding her personal defense in an action for breach of fiduciary duty. See Mett, 178 F.3d at 1064. Similarly, communications between ERISA fiduciaries and plan attorneys regarding non-fiduciary matters, such as adopting, amending, or terminating an ERISA plan, are not subject to the fiduciary exception. See Bland, 401 F.3d at 787-88." (footnote omitted))

Case Date Jurisdiction State Cite Checked
2011-01-01 Federal

Chapter: 7.9

Case Name: Solis v. Food Emp'rs Labor Relations Ass'n, 644 F.3d 221, 227 (4th Cir. 2011)
("This principle has been applied to fiduciary relationships beyond the traditional trust context. See, e.g., Garner v. Wolfinbarger, 430 F.2d 1093, 1103-04 (5th Cir. 1970). . . . Several of our sister circuits, moreover, have recognized the exception to assertions of attorney-client privilege by ERISA fiduciaries. See, e.g., Bland v. Fiatallis N. Am. Inc., 401 F.3d 779, 787-88 (7th Cir. 2005) (recognizing fiduciary exception but finding it did not apply to communications relating to non-fiduciary actions, including amendments to plan benefits); United States v. Mett, 178 F.3d 1058, 1062 (9th Cir. 1999) (finding fiduciary exception applied in ERISA context, but did not extend to 'any advice that a fiduciary obtains in an effort to protect herself from civil or criminal liability'); United States v. Doe, 162 F.3d 554, 557 (9th Cir. 1999) (applying fiduciary exception to claims of privilege in context of ERISA enforcement action); Becher v. Long Island Lighting Co., 129 F.3d 268, 272 (2d Cir. 1997) (recognizing fiduciary exception to attorney-client privilege in ERISA context was limited to fiduciary matters); Wildbur v. ARCO Chem. Co., 974 F.2d 631, 645 (5th Cir. 1992) (recognizing fiduciary exception but finding it did not apply to communications that were 'made for the purpose of defending the pending lawsuit and did not deal with plan administration'). Cf. Wachtel v. Health Net, Inc., 482 F.3d 225, 234 (3d Cir. 2007) (describing evolution of fiduciary exception in ERISA context and finding exception did not reach communications of ERISA plan insurer with plan attorneys regarding benefit claims).")

Case Date Jurisdiction State Cite Checked
2011-01-01 Federal

Chapter: 7.10

Case Name: Romero v. Allstate Ins. Co., No. 01-3894 Consolidated with: Nos. 01-6764,03-6872,15-1017,15-1049,15-1190,15-2602,15-2961,15-3047, 2016 U.S. Dist. LEXIS 153142 (E.D. Pa. Nov. 4, 2016)
(analyzing the fiduciary exception; "Under the settlor exception, when an employer 'seeks legal counsel regarding 'plan design' -- e.g., forming, amending or terminating an employee benefit plan -- the employer is not acting as a fiduciary.'")

Case Date Jurisdiction State Cite Checked
2016-11-04 Federal PA
Comment:

key case


Chapter: 7.10

Case Name: Romero v. Allstate Ins. Co., No. 01-3894 Consolidated with: Nos. 01-6764,03-6872,15-1017,15-1049,15-1190,15-2602,15-2961,15-3047, 2016 U.S. Dist. LEXIS 153142 (E.D. Pa. Nov. 4, 2016)
(analyzing the fiduciary exception; "Here, the parties' submissions reference only the broadest general rules applicable to the fiduciary exception and the settlor and liability exceptions to that exception. It is plain from a review of the Privilege Log that some of the disputed documents are subject to the fiduciary exception, such as documents reflecting legal advice regarding communications with beneficiaries. The submissions and the descriptions in the Privilege Log alone do not provide sufficient information to allow this Court to fully resolve the Plaintiffs' objections. However, a good-faith application of the legal principles addressed above should permit the parties to significantly narrow the list of disputed documents. For these reasons, the parties are directed to proceed as follows. Allstate should review the documents for which Plaintiffs have challenged the applicability of the attorney-client privilege in light of the legal principles set forth in Section I, supra. To the extent that review indicates that some of the documents are not privileged, Allstate should produce them. The parties shall then meet and confer regarding the documents that remain in dispute and attempt to resolve any remaining disputes. To facilitate that meeting, Allstate shall provide Plaintiffs with information regarding the disputed documents that is sufficiently specific to allow the Plaintiffs to determine the factual and legal bases on which Allstate asserts the documents are privileged. Should there remain a dispute regarding the legal significance of the circumstances and nature of the legal advice at issue as Allstate represents them to be, the Court will address the issue at that time, including the possibility of in camera review.")

Case Date Jurisdiction State Cite Checked
2016-11-04 Federal PA
Comment:

key case


Chapter: 7.10

Case Name: Durand v. The Hanover Ins. Group, Inc., Civ. A. No. 3:07-CV-00130-HBB, 2016 U.S. Dist. LEXIS 143064 (W.D. Ky. Oct. 17, 2016)
("[W]hen an attorney advises an ERISA plan administrator or other fiduciary concerning a matter of plan administration, the attorney's client is the plan beneficiaries for whom the fiduciary acts, instead of the plan administrator."; "There are two types of situations where the fiduciary exception should not be applied because counsel's advice to the ERISA plan administrator or fiduciary concerns a non-administrative or non-fiduciary matter."; "The first situation involves 'the 'settlor' exception, where courts distinguish between fiduciary acts and settlor acts, the former being discretionary acts of plan administration and the latter involving the adoption, modification, or termination of an employee benefit plan."; "The second situation involves the "liability" exception, where the issue is whether the fiduciary sought the advice of counsel for his or her own personal defense in contemplation of civil or criminal proceedings.")

Case Date Jurisdiction State Cite Checked
2016-10-17 Federal KY

Chapter: 7.10

Case Name: Leber v. The CitiGroup 401(K) Plan Investment Committee, 07-CV-09329 (SHS) (DF), 2015 U.S. Dist. LEXIS 144367 (S.D.N.Y. Oct. 16, 2015)
(analyzing the fiduciary exception in an ERISA setting; finding that the fiduciary exception did not apply to privileged Citi communications about how to handle press inquiries; "When, in contrast, an administrator performs 'settlor functions,' such as the establishing, funding, amending, or terminating a plan, its actions are akin to those taken by the settlor of a trust, rather than a trustee, and ERISA imposes no fiduciary obligations for such conduct.")

Case Date Jurisdiction State Cite Checked
2015-10-16 Federal NY

Chapter: 7.10

Case Name: Leber v. The CitiGroup 401(K) Plan Investment Committee, 07-CV-09329 (SHS) (DF), 2015 U.S. Dist. LEXIS 144367 (S.D.N.Y. Oct. 16, 2015)
(analyzing the fiduciary exception in an ERISA setting; finding that the fiduciary exception did not apply to privileged Citi communications about how to handle press inquiries; "This Court has obtained and reviewed, in camera, the Davis Polk Memo, and, upon such review, the Court finds that the primary purpose of that document was to render legal advice concerning the administration and management of the BPIC, in response to a request for operational guidance. . . . This material therefore relates not to the settlor functions of plan amendment or design . . . But rather to the core fiduciary functions of asset management and avoidance of conflicts of interest, thereby implicating the fiduciary exception to Defendants' claim of privilege.")

Case Date Jurisdiction State Cite Checked
2015-10-16 Federal NY

Chapter: 7.10

Case Name: Leber v. The CitiGroup 401(K) Plan Investment Committee, 07-CV-09329 (SHS) (DF), 2015 U.S. Dist. LEXIS 144367 (S.D.N.Y. Oct. 16, 2015)
(analyzing the fiduciary exception in an ERISA setting; finding that the fiduciary exception did not apply to privileged Citi communications about how to handle press inquiries; "The key point here is that ERISA imposes fiduciary obligations on an employer only to the extent that the employer maintains discretionary authority or control. . . . While Plaintiffs are correct that the authority to select or supervise fiduciaries gives rise to fiduciary obligations . . . Where an employer, like Citigroup, has delegated the discretionary authority to manage a plan or dispose of its assets, and its only non-delegated authority relates to the ability to hire and fire committee members, the employer's fiduciary obligations extend only to those acts . . . . Thus, the fact that Prince or Thurm may have been responsible for appointing committee members does not establish that these individuals had any fiduciary responsibilities with respect to the subject matter of the email communication at issue, which related to the selection of funds for the 401(k) Plan. As Thurm, by his email, was not seeking legal advice in his fiduciary capacity, regarding any matter as to which he had a demonstrable fiduciary duty, Plaintiffs motion to compel production of the email is denied.")

Case Date Jurisdiction State Cite Checked
2015-10-16 Federal NY

Chapter: 7.10

Case Name: Merrill v. Briggs & Stratton Corp., Case No. 10-CV-00700, 2014 U.S. Dist. LEXIS 8762, at *7-8 (E.D. Wis. Jan. 24, 2014)
("According to the descriptions on the privilege log, defendants are withholding the documents that plaintiffs seek because they contain legal advice related to Briggs's decision to modify, amend or terminate the class members' health benefits. More specifically, they contain legal advice about whether Briggs had a right to modify or terminate the benefits. Based on the holding in Bland [Bland v. Fiatallis N. Am., Inc., 401 F.3d 779 (7th Cir. 2005)], I conclude that these documents are not subject to the fiduciary-duty exception.")

Case Date Jurisdiction State Cite Checked
2014-01-24 Federal WI B 6/14

Chapter: 7.11

Case Name: Peters v. Aetna Inc., Civ. Case No. 1:15-cv-00109-MR, 2018 U.S. Dist. LEXIS 126108 (W.D.N.C. July 27, 2018)
(analyzing the fiduciary exception in an ERISA case; "The ERISA fiduciary exception, however, is not without its limits. 'The exception will not apply, for example, to a fiduciary's communications with an attorney regarding her personal defense in an action for breach of fiduciary duty.' Id. . . . Likewise, 'communications between ERISA fiduciaries and plan attorneys regarding non-fiduciary matters, such as adopting, amending, or terminating an ERISA plan, are not subject to the fiduciary exception.' Ultimately, determining whether communications relate to fiduciary matters such that the fiduciary exception applies 'is a matter of context and content.'")

Case Date Jurisdiction State Cite Checked
2018-07-27 Federal NC

Chapter: 7.11

Case Name: Kushner v. Nationwide Mutual Insurance Co., Civ. A. No. 2:17-cv-715, 2018 U.S. Dist. LEXIS 119571 (S.D. Ohio July 18, 2018)
(analyzing the fiduciary exception's application in an ERISA case; "To determine whether the plan administrator was seeking legal advice in connection with plan administration and thus in his or her capacity as fiduciary, courts generally look to whether the interests of the fiduciary and the beneficiary had diverged at the time the communication occurred."; "Courts uniformly hold that the parties' interests of have sufficiently diverged such that the fiduciary exception no longer applies after the final administrative determination has been made or after litigation has been initiated.")

Case Date Jurisdiction State Cite Checked
2018-07-18 Federal OH

Chapter: 7.11

Case Name: Kushner v. Nationwide Mutual Insurance Co., Civ. A. No. 2:17-cv-715, 2018 U.S. Dist. LEXIS 119571 (S.D. Ohio July 18, 2018)
(analyzing the fiduciary exception's application in an ERISA case; "Before turning to the withheld documents, it is important to acknowledge several unique circumstances of this case that affect the Court's analysis. First, although whether a communication occurred before or after the final benefits determination can often be determinative of whether the parties' interests have sufficiently diverged to render the communication privileged, the timing of the communications in this case carries less than the typical weight. Here, it appears undisputed that Nationwide, through Mr. Swinehart, decided it would deny Plaintiff's claim for benefits before Plaintiff even submitted a claim, which renders the timing of the communication vis-à-vis a final benefits determination less relevant."; "Unlike a typical denial of benefits, there appears to be no dispute in this case that Nationwide repeatedly made misstatements to Plaintiff regarding his retirement benefits over the course of a decade. Plaintiff alleges that in reliance upon these misstatements, he forwent other, more lucrative employment opportunities over the years. Moreover, the difference in Nationwide's misstated calculations and its subsequent, corrected calculations is not insignificant. Under the circumstances, it was reasonable and prudent for Nationwide to anticipate even in the early stages of the dispute that Plaintiff would institute litigation following the denial of his claim."; "Further, the context of a number of the communications submitted for in camera review demonstrate that Nationwide not only reasonably anticipated that litigation would ensue, but that it took steps early on to strategize and prepare a defense to the litigation. Mr. Swinehart engaged in-house counsel in the dispute almost from the beginning. Nationwide also engaged outside counsel relatively early on to analyze its risk and develop strategy related to the litigation. Thus, even before Plaintiff's claim was denied and his administrative remedies were exhausted, Nationwide engaged in communications with counsel that related not to plan administration, but to Nationwide's defense in the litigation that it reasonably concluded was forthcoming. At that point, the parties' interests had sufficiently diverged such that communications related to the litigation were not made in Nationwide's capacity as Plan fiduciary, but in defense of itself. These communications are privileged, as discussed below, even as other contemporaneous communications between Nationwide and its counsel are not because they relate to plan administration.")

Case Date Jurisdiction State Cite Checked
2018-07-18 Federal OH

Chapter: 7.11

Case Name: Luper v. Board of Trustees of the Police & Fire Retirement Sys. of Wichita Kansas, Case No. 15-1399-EFM-KGG (D. Kansas April 19, 2018)
(finding that the fiduciary exception did not apply in a disability benefits case because there was no "mutuality of interests" between the plaintiff and the defendant; "Judge Gale then found that Plaintiff did not establish a 'mutuality of interest' between himself and Defendant. He found that the lack of mutuality of interest was evidenced (1) by Defendant's duty to other potential beneficiaries to not pay out benefits to an applicant who was not entitled to benefits, and (2) by the 'quasi-judicial' hearing process that Plaintiff was provided on his claim in which Plaintiff could be represented by counsel. Because there was no mutuality of interest, Judge Gale determined that the fiduciary exception was inapplicable. Thus, he denied Plaintiff's motion to compel attorney-client privileged documents.")

Case Date Jurisdiction State Cite Checked
2018-04-19 Federal KS

Chapter: 7.11

Case Name: Christoff v. Unum Life Ins. Co. of America, Case No. 0:17-cv-03512-DWF-KMM, 2018 U.S. Dist. LEXIS 43535 (D. Minn. March 15, 2018)
(analyzing the fiduciary exception; finding that the exception applied to an insurance company rather than just an employer, and finding the liability exception inapplicable; "[E]ven when the exception is recognized, it does not defeat the attorney-client privilege where the fiduciary communicates with its attorneys 'on non-fiduciary matters.'. . . For example, an ERISA fiduciary that obtains legal advice to defend itself against plan beneficiary claims can maintain the confidentiality of otherwise privileged communications."; "Drawing the line between matters of plan administration (which are not protected from disclosure) and communications involving legal advice on nonfiduciary matters (which remain protected) requires 'a fact-specific inquiry, examining both the content and context of the specific communication.'"; "[A] sufficiently adversarial relationship may arise before the final decision denying benefits."; "To summarize, a fiduciary exception to the attorney-client privilege is widely accepted in federal courts. The exception has also been fairly consistently applied in the ERISA context. Courts applying the exception in ERISA cases attempt to differentiate between situations in which an ERISA fiduciary obtains legal advice about matters of plan administration, which must be disclosed, and those where the fiduciary seeks advice for non-fiduciary matters, which remain privileged. The focus in that inquiry is often the point at which an adversarial relationship between fiduciary and beneficiary materialized such that the fiduciary is justified in seeking legal advice for its own benefit. Finally, although the exception has not been expressly adopted by the Eighth Circuit generally or in ERISA cases, its application by a district court in the ERISA context has gone undisturbed.")

Case Date Jurisdiction State Cite Checked
2018-03-15 Federal MN

Chapter: 7.11

Case Name: Christoff v. Unum Life Ins. Co. of America, Case No. 0:17-cv-03512-DWF-KMM, 2018 U.S. Dist. LEXIS 43535 (D. Minn. March 15, 2018)
(analyzing the fiduciary exception; finding that the exception applied to an insurance company rather than just an employer, and finding the liability exception inapplicable; "This scenario has sometimes been referred to as the 'liability exception' to the fiduciary exception. . . . This Court will attempt to avoid a confusing and inartful discussion of exceptions to exceptions.")

Case Date Jurisdiction State Cite Checked
2018-03-15 Federal MN

Chapter: 7.11

Case Name: Violetta v. Steven Bros. Sports Mgmt., LLC, Case No. 16-1193-JTM-GEB, 2017 U.S. Dist. LEXIS 135861 (D. Kansas Aug. 24, 2017)
(analyzing the fiduciary exception in an ERISA setting; "In the Court's review of the documents, it appears the communications fall under this umbrella. Nearly all of the communications took place after litigation began, and the few occurring earlier were created after litigation was threatened. Defendants, as plan administrators, were communicating with counsel in order to defend themselves against Plaintiff's claims, and therefore they lacked any 'mutuality of interest' with Plaintiff as the beneficiary. Therefore, the Court finds that Plaintiff, as the party asserting the fiduciary exception, failed to meet his burden to establish the applicability of the exception to the communications otherwise protected by attorney-client privilege or work product protection.")

Case Date Jurisdiction State Cite Checked
2017-08-24 Federal KS

Chapter: 7.11

Case Name: Romero v. Allstate Ins. Co., No. 01-3894 Consolidated with: Nos. 01-6764,03-6872,15-1017,15-1049,15-1190,15-2602,15-2961,15-3047, 2016 U.S. Dist. LEXIS 153142 (E.D. Pa. Nov. 4, 2016)
(analyzing the fiduciary exception; "Here, the parties' submissions reference only the broadest general rules applicable to the fiduciary exception and the settlor and liability exceptions to that exception. It is plain from a review of the Privilege Log that some of the disputed documents are subject to the fiduciary exception, such as documents reflecting legal advice regarding communications with beneficiaries. The submissions and the descriptions in the Privilege Log alone do not provide sufficient information to allow this Court to fully resolve the Plaintiffs' objections. However, a good-faith application of the legal principles addressed above should permit the parties to significantly narrow the list of disputed documents. For these reasons, the parties are directed to proceed as follows. Allstate should review the documents for which Plaintiffs have challenged the applicability of the attorney-client privilege in light of the legal principles set forth in Section I, supra. To the extent that review indicates that some of the documents are not privileged, Allstate should produce them. The parties shall then meet and confer regarding the documents that remain in dispute and attempt to resolve any remaining disputes. To facilitate that meeting, Allstate shall provide Plaintiffs with information regarding the disputed documents that is sufficiently specific to allow the Plaintiffs to determine the factual and legal bases on which Allstate asserts the documents are privileged. Should there remain a dispute regarding the legal significance of the circumstances and nature of the legal advice at issue as Allstate represents them to be, the Court will address the issue at that time, including the possibility of in camera review.")

Case Date Jurisdiction State Cite Checked
2016-11-04 Federal PA
Comment:

key case


Chapter: 7.11

Case Name: Romero v. Allstate Ins. Co., No. 01-3894 Consolidated with: Nos. 01-6764,03-6872,15-1017,15-1049,15-1190,15-2602,15-2961,15-3047, 2016 U.S. Dist. LEXIS 153142 (E.D. Pa. Nov. 4, 2016)
(analyzing the fiduciary exception; "Communications relating to advice concerning potential liability that may arise as the result of potential plan amendments are privileged.")

Case Date Jurisdiction State Cite Checked
2016-11-04 Federal PA
Comment:

key case


Chapter: 7.11

Case Name: Romero v. Allstate Ins. Co., No. 01-3894 Consolidated with: Nos. 01-6764,03-6872,15-1017,15-1049,15-1190,15-2602,15-2961,15-3047, 2016 U.S. Dist. LEXIS 153142 (E.D. Pa. Nov. 4, 2016)
(analyzing the fiduciary exception; "The 'liability exception' applies 'where a plan fiduciary retains counsel in order to defend [himself or] herself against the plan beneficiaries (or the government acting in their stead).'")

Case Date Jurisdiction State Cite Checked
2016-11-04 Federal PA
Comment:

key case


Chapter: 7.11

Case Name: Durand v. The Hanover Ins. Group, Inc., Civ. A. No. 3:07-CV-00130-HBB, 2016 U.S. Dist. LEXIS 143064 (W.D. Ky. Oct. 17, 2016)
("[W]hen an attorney advises an ERISA plan administrator or other fiduciary concerning a matter of plan administration, the attorney's client is the plan beneficiaries for whom the fiduciary acts, instead of the plan administrator."; "There are two types of situations where the fiduciary exception should not be applied because counsel's advice to the ERISA plan administrator or fiduciary concerns a non-administrative or non-fiduciary matter."; "The first situation involves 'the 'settlor' exception, where courts distinguish between fiduciary acts and settlor acts, the former being discretionary acts of plan administration and the latter involving the adoption, modification, or termination of an employee benefit plan."; "The second situation involves the "liability" exception, where the issue is whether the fiduciary sought the advice of counsel for his or her own personal defense in contemplation of civil or criminal proceedings.")

Case Date Jurisdiction State Cite Checked
2016-10-17 Federal KY

Chapter: 7.11

Case Name: Baker as Trustee of the W. Robert Allison 2003 Irrevocable Trust v. Wilmer Cutler Pickering Hale and Dorr, LLP, Op. No.: 132898, Dkt. No. 1584CV01586-BLS2, 2016 Mass. Super. LEXIS 17 (Mass. Super. Ct. Feb. 22, 2016)
(analyzing a closely held corporation's director's right to obtain access to otherwise privileged communication among the corporation's management and lawyer; ultimately finding that the director could access the communications until his interests were adverse to those of the closely held corporation; "'[C]ounsel for a closely held corporation does not by virtue of that relationship alone have an attorney-client relationship with the individual shareholders[.]'"; "Plaintiffs' reliance on Chambers v. Gold Medal Bakery, 464 Mass. 383, 983 N.E.2d 683 (2013), is also misplaced. Chambers holds that a director in a closely held corporation who is 'advancing interests shared with the corporation' is 'entitled to access [the] corporation's confidential communications with counsel,' and that '[a] director motivated by adverse interests is not so entitled.' Id. At 395. In the 2013 Action, Judge Billings ruled that Allison and the other members of ATT 'acted as the functional equivalent of Directors in a traditional business corporation,' that as a result Allison was entitled under Chambers to discover attorney-client communications with Eriksson or others acting on ATT's behalf, but that Allison is not entitled to see or obtain attorney-client communications that occurred after ATT was merged into ATT Delaware because since that time Allison's interests have been 'materially adverse to those of ATT Delaware.' Although Chambers (like Judge Billings' ruling) only concerned an objection based on the attorney-client privilege to discovery sought by a director during ongoing litigation with the close corporation, the Supreme Judicial Court made clear that the right of a non-adverse director to access the company's communications with its lawyers applied outside the context of litigation as well. 'The principle that directors have equal access to legal advice rendered to the corporation stems from their joint responsibility for management of the corporation.' Chambers, 464 Mass. At 394."; "Nothing in Chambers imposes on a close corporation's lawyers any fiduciary duty to the company's directors or voting members, or any other obligation to provide directors or their equivalent with legal counsel or advice. Nor did Chambers mandate that a close corporation's lawyers must disclose their communications with the corporation to all directors or voting members in situations where the lawyers are not responding to formal discovery served as part of a civil action. Rather, it suggests that directors in a close corporation are entitled to obtain the company's attorney-client communications from the corporation, except where a director's interests are adverse to those of the corporation. Cf. Chambers, supra, at 392-93 & n.25 (distinguishing application of attorney-client privilege and work product doctrines from discovery disputes with statutory rights of directors and shareholders to inspect corporation's books and records). Thus, Plaintiffs' allegations that the Law Firm Defendants concealed their role as counsel to ATT and Eriksson and kept the legal advice they were giving to their clients confidential do not support the breach of fiduciary duty claim against the Law Firm Defendants.")

Case Date Jurisdiction State Cite Checked
2016-02-22 Federal MA

Chapter: 7.11

Case Name: Sender v. Franklin Resources Inc., Case No. 11-cv-03828-EMC (SK), 2016 U.S. Dist. LEXIS 19927 (N.D. Cal. Feb. 18, 2016)
(analyzing the liability exception to the fiduciary exception; "Plaintiff argues that the fiduciary exception is automatic, expiring only when the parties become sufficiently adverse, e.g., after a final administrative appeal. Given that the documents sought are dated October 2007 to October 2008 -- two months or more before the Plaintiff's administrative appeal was denied on December 5, 2008, Plaintiff asserts that the fiduciary exception applies and that the documents must be produced without redaction. However, there is no bright line rule that that, until an ERISA administrative benefit claim is finally denied, there can be no attorney-client privilege.")

Case Date Jurisdiction State Cite Checked
2016-02-18 Federal CA

Chapter: 7.11

Case Name: Wit v. United Behavioral Health, Case Nos. 14-cv-02346- & -05337-JCS, 2016 U.S. Dist. LEXIS 7242, at *22-23 (N.D. Cal. Jan. 21, 2016)
("Based on the case law discussed above, the undersigned concludes that in the class action context, as in cases involving individual claimants, an approach that focuses too heavily on litigation exposure without requiring a showing that advice was actually sought for defensive purposes undermines the principles that the fiduciary exception is designed to protect. In particular, the fiduciary exception recognizes that beneficiaries are entitled to information about how their benefits are administered and that when counsel is advising an ERISA trustee about plan administration, this advice is generally for the benefit of the plan members. As virtually any policy or guideline may, at some point, be the subject of litigation, merely invoking that possibility is not sufficient to avoid the exception. Rather, either the context (e.g. actual or imminent litigation on the subject of the communication) or the contents of the communications themselves must reflect that they are defensive in nature and relate to advice sought and obtained to determine how far the trustees are 'in peril.'" (citation omitted))

Case Date Jurisdiction State Cite Checked
2016-01-21 Federal CA B 7/16

Chapter: 7.11

Case Name: Wit v. United Behavioral Health, Case Nos. 14-cv-02346- & -05337-JCS, 2016 U.S. Dist. LEXIS 7242, at *29 (N.D. Cal. Jan. 21, 2016)
(finding the fiduciary exception applicable because there was insufficient adversity; "[P]otential exposure to liability where there is no imminent threat of litigation does not, by itself, demonstrate an adversity of interests that is sufficient to override the fiduciary exception.")

Case Date Jurisdiction State Cite Checked
2016-01-21 Federal CA B 7/16

Chapter: 7.11

Case Name: Leber v. The CitiGroup 401(K) Plan Investment Committee, 07-CV-09329 (SHS) (DF), 2015 U.S. Dist. LEXIS 144367 (S.D.N.Y. Oct. 16, 2015)
(analyzing the fiduciary exception in an ERISA setting; finding that the fiduciary exception did not apply to privileged Citi communications about how to handle press inquiries; "[A]n employer or administrator is permitted to seek legal advice for its own protection, and the attorney-client privilege applies to advice rendered for the benefit of an entity seeking to protect itself from potential liability in connection with non-fiduciary matters.")

Case Date Jurisdiction State Cite Checked
2015-10-16 Federal NY

Chapter: 7.11

Case Name: Obeid v. La Mack, 14 cv. 6498 (LTS) (MHD), 2015 U.S. Dist. LEXIS 127327 (S.D.N.Y. Sept. 16, 2015)
(denying access to privileged communications generated by an LLC, which was sought by one of the LLC members whose interests are now adverse to the LLC; "In this case, although Mr. Obeid remains a member and manager of Gemini, he has, for all intents and purposes, assumed an adversarial relationship to that entity insofar as (1) he has sought to place Arcade in the position of a potential purchaser of property from Gemini's affiliate 33 Peck Slip Holding, (2) he has pursued a course designed to frustrate the ability of 33 Peck Slip Holding to sell the Seaport Property to another buyer, and (3) he has done so by litigation against the seller. In that circumstance, it cannot be said that the disclosure to him of confidential information reflecting communications by, or presumptively for the benefit of, Gemini and its affiliates is justified by the underlying rationale for disclosure to management -- that is, to enable them to act on behalf of the entity.").

Case Date Jurisdiction State Cite Checked
2015-09-16 Federal NY
Comment:

key case


Chapter: 7.11

Case Name: Obeid v. Mack, 14 cv. 6498 (LTS) (MHD), 2015 U.S. Dist. LEXIS 127327 (S.D.N.Y. Sept. 16, 2015)
(denying access to privileged communications generated by an LLC, which was sought by one of the LLC members whose interests are now adverse to the LLC; "It follows that in the current circumstances, to compel the controlling management of Gemini to disclose to the dissenting member the confidential communications and work product that have resulted from the need to defend the presumptively best interests of the company against his lawsuits and his other extra-corporate endeavors, and to do so based solely on Obeid's continued status as a Member of Gemini, would set at naught the policies underlying the corporate privilege and the work-product rule.").

Case Date Jurisdiction State Cite Checked
2015-09-16 Federal NY

Chapter: 7.11

Case Name: Spear v. Fenkell, Civ. A. No. 13-02391, 2015 U.S. Dist. LEXIS 79648 (E.D. Pa. June 19, 2015)
("In ordinary circumstances the availability of the attorney-client privilege does not depend on whether one is a plaintiff or defendant, or being sued as an individual or in some other capacity. Nor is the circumstance of a fiduciary facing personal liability as well as fiduciary liability the only one in which the interests of a fiduciary can diverge from those of a beneficiary. If the fiduciary has to contemplate suing a beneficia