Showing 155 of 155 results

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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction State Cite Checked
2010-01-01 State VA N 12/12
Comment:

key case


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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction State Cite Checked
1992-01-01 Federal VA B 3/16
Comment:

key case


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 Jurisidction 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 Jurisidction State Cite Checked
2017-03-09 Federal NY

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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction State Cite Checked
1992-12-12 State VA B 3/16
Comment:

key case


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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction State Cite Checked
2014-01-24 Federal WI B 6/14

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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 Jurisidction 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 beneficiary, as opposed to being sued, the change in perspective does not eliminate the divergence of interest. In any event, a limitation to circumstances in which the fiduciary faces 'personal liability' is chimerical. A fiduciary is in the singular position of facing potential liability for failing to pursue a claim. The third-party complaint's tenth and eleventh causes of action illustrate the point. . . . Ms. Spear and Alliance are facing a shareholder derivative claim and a failure to monitor claim for not suing themselves. Consulting with counsel over whether to pursue a claim may be every bit as 'defensive' in nature as 'offensive.'")

Case Date Jurisidction State Cite Checked
2015-06-19 Federal PA

Chapter: 7.11

Case Name: O'Blenis v. National Elevator Industry Pension Plan, Civ. A. No. 2:13-cv-05842 (SRC) (CLW), 2015 U.S. Dist. LEXIS 80860 (D.N.J. June 18, 2015)
(analyzing the fiduciary exception; finding that the liability exception applied; "As described above, the communications at issue were not merely claims administration in light of the substance of the second appeal, the attendant particularized prospect of litigation, the communications among opposing counsel, and Defendants' and Plan counsel's consequent approach to the case. That is, on the facts presented, the interests of the fiduciary and the beneficiary were sufficiently divergent for the fiduciary exception not to apply. In particular, the second appeal and the associated attorney communications differ greatly from a simple appeal of a denial or miscalculation of benefits and therefore signify a compelling divergence of interests. Where, as here, a fiduciary seeks and obtains legal advice for its own defense in contemplation of adversarial proceedings with a beneficiary -- and not merely with respect to the administration of benefits -- the fiduciary exception does not apply. . . . The Court therefore concludes that the fiduciary exception does not require disclosure of the communications at issue.")

Case Date Jurisidction State Cite Checked
2015-06-18 Federal NJ

Chapter: 7.11

Case Name: Searls v. Sandia Corp., Civ. No. 1:14cv578, 2015 U.S. Dist. LEXIS 37196 (E.D. Va. March 24, 2015)
(analyzing the fiduciary exception; "The first four documents submitted for in camera review (Documents 1, 5, 8, and 13) contain legal analysis of legal risks relating to the potential liability of defendant concerning the SLOA and Retirement Income Plans' non-duplication provisions. They constitute legal advice aimed at addressing the liability of the plan's fiduciaries should they adopt certain changes to the plan. Therefore, the defendant was not acting as a fiduciary at the time they sought this advice, and the documents are not part of 'plan administration.' Instead, the documents are protected by the attorney-client privilege and rightly withheld from plaintiffs.")

Case Date Jurisidction State Cite Checked
2015-03-24 Federal VA

Chapter: 7.11

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 *22, *23-24 (Ariz. Ct. App. June 3, 2014)
("To prevent a predecessor trustee from interfering with a successor trustee's duties and impeding the transition of trustees to the detriment of the beneficiaries, we hold that a predecessor trustee cannot assert the attorney-client privilege against a successor trustee as to legal advice that the predecessor trustee sought in its fiduciary capacity on matters of trust administration. . . . However, the limit on the fiduciary exception in the beneficiary context applies with equal weight in the successor trustee context: when a trustee communicates with an attorney in the trustee's personal capacity on matters not of trust administration, disclosure of that communication may not be compelled by a successor trustee."; "The trial court erred by ordering Northern Trust to provide attorney-client communications to Bank of Arizona as successor trustee without considering whether Northern Trust made those communications in a corporate, nonfiduciary capacity on matters not of trust administration. The court further erred to the extent that it ordered Northern Trust to disclose those same communications to DBK, an asset of the Section 3.4 Trust that Northern Trust managed in its role as trustee.")

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

Chapter: 7.11

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 *18-19 (Ariz. Ct. App. June 3, 2014)
("[W]e hold that a trustee's attorney-client privilege vis-à-vis a beneficiary extends to all legal advice sought in the trustee's personal capacity for purposes of self-protection. The trial court erred by ordering Northern Trust to disclose legal advice without considering whether Northern Trust had sought that advice in its corporate capacity or whether the advice concerned matters of trust administration. A trustee's attorney-client communications made in a personal capacity do not cease to be privileged merely because the trustee used trust funds to compensate the attorneys or because the same attorneys also provided advice on matters of trust administration. If a trustee's expenditures, including its compensation of counsel from trust funds, prove to have been unauthorized, the proper recourse is for the beneficiary to ask the probate court to remedy that breach under A.R.S. § 14-11001.")

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

Chapter: 7.11

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; "[T]he fiduciary exception to the attorney-client privilege has no application where, as here, there is no mutuality of interest between the fiduciary and the beneficiary and where the fiduciary seeks legal advice for its own protection against claims by the beneficiary."; "Wells Fargo had reasons to seek advice for its own protection against the Trusts and their beneficiaries, and the advice was intended for purposes other than to benefit the Trust. On balance, the factors indicate that Wells Fargo, and not the Trusts or their beneficiaries, was the real client.")

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

Chapter: 7.11

Case Name: Gresser v. Wells Fargo Bank, N.A., Case No. CCB-12-0987, 2014 U.S. Dist. LEXIS 9021, at *18-19, *19, *20 (D. Md. Jan. 24, 2014)
("While it is true that the Plaintiffs may have stood to benefit from the legal advice Wells Fargo received from Thompson Hine, that benefit was indirect, and would have been owed to Wells Fargo discharging its obligations under its contract with KH Funding. The need to protect Wells Fargo's privileged communications with Thompson Hine far outweighs any benefit the Plaintiffs might have indirectly stood to gain from the advice."; "Wells Fargo retained Thompson Hine for legal advice related to its obligations under the indenture. Wells Fargo and Plaintiffs were not co-clients and Thompson Hine had no duty to act in the Plaintiffs' best interest. Accordingly, I find that no exception to the attorney-client privilege applies in this case that would entitle Plaintiffs to the communications they now seek."; "Wells Fargo's privilege log indicates that all documents were withheld on the basis of the attorney-client privilege, and several documents were withheld on the basis of both the attorney client-privilege and the work-product doctrine. Because I have found that the attorney-client privilege protects all of the documents at issue from disclosure to Plaintiffs, I am not required to address the issue of whether the fiduciary exception applies to the documents Wells Fargo has designated as protected from disclosure by the work-product doctrine.")

Case Date Jurisidction State Cite Checked
2014-01-24 Federal MD B 6/14

Chapter: 7.12

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 Jurisidction State Cite Checked
2015-03-02 Federal

Chapter: 7.12

Case Name: In re Baugher, No. 353909/P, 2013 N.Y. Slip Op. 51622(U), at 5-6 (N.Y. Sur. Ct. Sept. 30, 2013)
(analyzing the fiduciary exception; "[T]he power of a trustee to assert the attorney-client privilege is not personal to a particular trustee. Successor trustees can assert the privilege as to communications with their predecessors.")

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

Chapter: 7.13

Case Name: Loop Ai Labs Inc. v. Gatti, Case No. 15-cv-00798-HSG (DMR), 2016 U.S. Dist. LEXIS 22656 (N.D. Cal. Feb. 24, 2016)
(analyzing the fiduciary exception's applicability to law firms; finding internal Orrick documents were not covered by the fiduciary exception, because the law firm withdrew from representing the plaintiff client twelve days after learning of its conflict; "At the December 10, 2015 hearing, the court ordered Orrick to submit for in camera review all documents dated between February 27, 2015 and March 11, 2015 withheld on the basis of attorney-client privilege. Orrick submitted approximately 650 documents. The court has carefully reviewed these documents, many of which are duplicates or include chains of emails that appear in other documents. With two exceptions, the documents contain communications about Loop's subpoena and this lawsuit, and subsequent internal communications about Orrick's legal and ethical obligations in connection with representing Loop, the Italian Almaviva Defendants and Almawave USA. The withheld documents do not contain communications discussing claims that Loop might have against Orrick, errors in Orrick's representation of Loop, or conflicts between Orrick and Loop. The court adopts the reasoning set forth in Thelen [Thelen Reid & Priest LLP v. Marland, No. 06-2071 VRW, 2007 U.S. Dist. LEXIS 17482, 2007 WL 578989, at *8 (N.D. Cal. Feb. 21, 2007)] and SonicBlue [In re SonicBlue, Inc., No. 03-51775, 2008 Bankr. LEXIS 181, 2008 WL 170562, at *9 (Bankr. N.D. Cal. Jan. 18, 2008)], and therefore finds that the fiduciary exception to attorney-client privilege does not apply here. The documents are therefore protected from production.")

Case Date Jurisidction State Cite Checked
2016-02-24 Federal CA

Chapter: 7.13

Case Name: Stock v. Schnader Harrison Segal & Lewis LLP, 35 N.Y.S.3d 31, 32-33, 38, 40, 41 (N.Y. App. Div. 2016)
(analyzing privilege protection for internal communications within the law firm of Schnader Harrison; holding that the fiduciary exception did not apply; "The primary issue on this appeal is whether attorneys who have sought the advice of their law firm's in-house general counsel on their ethical obligations in representing a firm client may successfully invoke attorney-client privilege to resist the client's demand for the disclosure of communications seeking or giving such advice. We hold that such communications are not subject to disclosure to the client under the fiduciary exception to the attorney-client privilege . . . because, for purposes of the in-firm consultation on the ethical issue, the attorneys seeking the general counsel's advice, as well as the firm itself, were the general counsel's 'real clients' . . . Further, we decline to adopt the 'current client exception,' under which a number of courts of other jurisdictions . . . have held a former client entitled to disclosure by a law firm of any in-firm communications relating to the client that took place while the firm was representing that client. Because we also find unavailing the former client's remaining arguments for compelling the law firm and one of its attorneys to disclose the in-firm attorney-client communications in question, we reverse the order appealed from and deny the motion to compel."; "Because the applicability of the fiduciary exception depends on whether the 'real client' of the attorney rendering counsel was the fiduciary in his or her individual capacity or, on the other hand, the beneficiaries to whom the fiduciary duty was owed, the fiduciary exception does not apply to the attorney-client communications of a fiduciary who seeks legal advice to protect his or her own individual interests, rather than to guide the fiduciary in the performance of his or her duties to the beneficiary."; We also reject plaintiff's argument that the January 2011 emails are necessarily subject to the fiduciary exception because his relationship with SHS & L had not yet reached the stage of actual hostility as of the time of those communications. The considerations that support sustaining SHS & L's invocation of attorney-client privilege as to these communications are not diminished by the fact that, when the communications took place, neither plaintiff nor SHS & L was threatening to sue the other. The protection afforded by the attorney-client privilege encourages lawyers to seek advice concerning their ethical responsibilities and potential liabilities in a timely manner so as to minimize any damage to the client from any conflict or error. Much of this benefit -- to both lawyers and clients -- would be lost if the attorney-client privilege could be invoked by a lawyer who sought legal advice to protect his or her own interests only for consultations that took place after the lawyer or the client had openly taken a position adverse to the other."; "[W]e find that the fiduciary exception simply has no application to the January 2011 emails. Those communications were part of a consultation between three SHS & L attorneys and the firm's in-house counsel to obtain advice about the ethical obligations of the firm and the attorneys, in representing plaintiff in his arbitration against MSSB, in light of the demand by plaintiff's adversary for the testimony of Carty, a member of the firm. The in-house counsel had never worked on any matter for plaintiff, and plaintiff was not charged for the time the in-house counsel devoted to the consultation. While plaintiff, as the firm's client, might well have benefited incidentally from this consultation, SHS & L and the attorneys concerned, not plaintiff, were the in-house counsel's 'real client' in rendering his advice."; "[W]e observe that we do not believe that a consultation by attorneys with their firm's in-house counsel on a purely ethical issue arising from the representation of a current client -- which, according to SHS & L and Carty, was the sole subject of the consultation with Kipnes -- inherently gives rise to a conflict of interest between the firm and the client.").

Case Date Jurisidction State Cite Checked
2016-01-01 State NY B 11/16

Chapter: 7.13

Case Name: Palmer v. The Superior Court of Los Angeles County, No., B255182, 2014 Cal. App. LEXIS 1081 (Cal. Ct. App. 2d Nov. 25, 2014)
(finding that intra-law firm communications about a current client might deserve privilege protection, despite the fiduciary exception; "The question before us is whether the attorney-client privilege applies to intrafirm communications between attorneys concerning disputes with a current client, when that client later sues the firm for malpractice. We conclude that when an attorney representing a current client seeks legal advice from an in-house attorney concerning a dispute with the client, the attorney-client privilege may apply to their confidential communications. Adoption of the so-called 'fiduciary' and 'current client' exceptions to the attorney-client privilege is contrary to California law because California courts are not at liberty to create implied exceptions to the attorney-client privilege. In the unpublished portion of the opinion, we hold that the exceptions to the attorney-client privilege embodied in Evidence Code sections 958 and 962 do not apply to the circumstances presented here. Accordingly, we grant in part the petition of Edwards Wildman Palmer LLP and Dominique Shelton for a writ of mandate, and remand to the trial court for further proceedings.")

Case Date Jurisidction State Cite Checked
2014-11-25 State CA

Chapter: 7.13

Case Name: Palmer v. The Superior Court of Los Angeles County, No., B255182, 2014 Cal. App. LEXIS 1081 (Cal. Ct. App. 2d Nov. 25, 2014)
(finding that intra-law firm communications about a current client might deserve privilege protection, despite the fiduciary exception; "[T]he privilege will attach only when a genuine attorney-client relationship exists. RFF [RFF Family Partnership, LP v. Burns & Levinson, LLP (Mass. 2013) 465 Mass. 702 [991 N.E.2d 1066] (RFF)] held that four prerequisites must be present in order for the attorney-client privilege to apply to confidential communications between law firm attorneys and the firm's in-house counsel concerning a malpractice claim: (1) the law firm must have designated, either formally or informally, an attorney or attorneys within the firm to represent the firm as in-house or ethics counsel, so that there is an attorney-client relationship between in-house counsel and the firm when the consultation occurs; (2) where a current outside client has threatened litigation against the law firm, the in-house counsel must not have performed any work on the particular client matter or a substantially related matter; (3) the time spent on the in-house communications may not have been billed to the client; and (4) the communications must have been made in confidence and kept confidential.")

Case Date Jurisidction State Cite Checked
2014-11-25 State CA

Chapter: 7.13

Case Name: Crimson Trace Corp. v. Davis Wright Tremaine LLP, SC S061086, 2014 Ore. LEXIS 433 (Ore. May 30, 2014)
(issuing a writ of mandamus, and relying on a Oregon's statute to reverse a lower court's motion to compel the Davis Wright law firm to produce internal communications under a fiduciary exception theory; "We conclude that OEC 503(4) was intended as a complete enumeration of the exceptions to the attorney-client privilege. Insofar as that list does not include a 'fiduciary exception,' that exception does not exist in Oregon, and the trial court erred in relying on that exception to compel production of communications that otherwise fell within the general scope of the privilege. It follows that the trial court's order must be vacated to the extent that it orders production of communications that were otherwise within the privilege. The trial court remains free, however, to order production of the three communications that it found were not within the general scope of the privilege because, in essence, those communications were not made for the purpose of facilitating the rendition of professional legal services to DWT.")

Case Date Jurisidction State Cite Checked
2014-05-30 State OR

Chapter: 7.13

Case Name: St. Simons Waterfront, LLC v. Hunter, Maclean, Exley & Dunn, P.C., 746 S.E.2d 98, 103, 104, 105, 106, 107, 108, 109 (Ga. 2013)
(finding that a plaintiff suing a law firm could not obtain internal law firm communications; "It is well settled law in Georgia that the attorney-client privilege generally applies in the context of communications between in-house corporate counsel and the corporation's management and employees."; "This Court has never addressed the parameters of the attorney-client privilege in the context of communications involving a law firm's in-house counsel. In considering this issue, courts in other jurisdictions have reached different results. Some have concluded that intra-firm communications regarding a current firm client are not entitled to privilege under any circumstances, due to the fiduciary relationship between the firm and its client. . . . Other courts have held that the privilege applies only in limited circumstances."; "Having examined these varying approaches and considered their underlying rationales, we have determined that the best course is simply to analyze the privilege issue here as we would in any other lawsuit in which the privilege is asserted."; "[W]here the in-house counsel holds a full-time position as firm counsel to the exclusion of other work, it should be easier to establish the existence of attorney-client relationship between counsel and the firm with respect to a given matter."; "While we acknowledge that the principle of imputed conflicts may present ethical problems for firms employing in-house counsel, we do not believe that potential ethics violations are relevant to the attorney-client privilege determination."; "[W]e conclude that the potential existence of an imputed conflict of interest between in-house counsel and the firm client is not a persuasive basis for abrogating the attorney-client privilege between in-house counsel and the firm's attorneys."; "As applied within law firms, this principle means that, in order to maintain privileged status, intra-firm communications regarding the client's claims against the firm should generally involve only in-house counsel, firm management, firm attorneys, and other firm personnel with knowledge about the representation that is the basis for the client's claims against the firm."; "The 'real client' rationale clearly does not apply in the law firm in-house counsel context, because it depends on the existence of a mutuality of interest between the firm/firm attorneys as fiduciaries and the firm client as beneficiary of the fiduciary relationship. . . . Attorneys within a firm seeking advice to defend against threatened litigation by a current client clearly do not share a mutuality of interest with that client. Therefore, the fiduciary exception does not apply in the present context under this rationale."; "We have previously concluded that the breach of an attorney's duty of loyalty is an issue of legal ethics and professional responsibility collateral to, and not directly bearing on, privilege law. For the same reasons we decline to engraft our Rules of Professional Conduct onto our privilege law, we also reject the notion that the attorney's duty of loyalty should automatically trump the privilege."; "[O]nce the relationship between the attorney and client develops into an adversarial one, we believe that work product protection will attach under the same principles as discussed with respect to the attorney-client privilege. That is, once an attorney-client relationship has been established between firm in-house counsel and the firm for purposes of defending against perceived or actual legal action by the firm's outside client, the materials generated by in-house counsel in connection with those efforts should enjoy work product protection vis-á-vis the outside client just as in any other context.")

Case Date Jurisidction State Cite Checked
2013-01-01 State GA B 4/14

Chapter: 7.13

Case Name: RFF Family P'ship, LP v. Burns & Levinson, LLP, 991 N.E.2d 1066, 1067-68, 1072, 1073, 1075, 1076, 1078, 1078-79, 1079, 1080 (Mass. 2013)
(finding that a plaintiff suing a law firm for malpractice could not obtain access to communications during a five-day period before the firm withdrew from representing the client; "The issue presented on appeal is whether confidential communications between law firm attorneys and a law firm's in-house counsel concerning a malpractice claim asserted by a current client of the firm are protected from disclosure to the client by the attorney-client privilege. We conclude that they are, provided that (1) the law firm has designated an attorney or attorneys within the firm to represent the firm as in-house counsel, (2) the in-house counsel has not performed any work on the client matter at issue or a substantially related matter, (3) the time spent by the attorneys in these communications with in-house counsel is not billed to a client, and (4) the communications are made in confidence and kept confidential. Because these criteria were met in this case, we affirm the judge's order allowing the defendant law firm and its attorneys to invoke the attorney-client privilege to preserve the confidentiality of these communications."; "Where a law firm designates one or more attorneys to serve as its in-house counsel on ethical, regulatory, and risk management issues that are crucial to the firm's reputation and financial success, the attorney-client privilege serves the same purpose as it does for corporations or governmental entities: it guarantees the confidentiality necessary to ensure that the firm's partners, associates, and staff employees provide the information needed to obtain sound legal advice."; "[A]n attorney's or a law firm's duty of loyalty to a client is not always painted in bright lines. It may not always be clear when the interests of the client and the law firm have become so adverse that withdrawal is required in the absence of client waiver, and even when it is clear that withdrawal is necessary, a law firm may need to consider how to minimize the potential adverse consequences of withdrawal to the client, such as where a law firm's withdrawal may imperil a business deal that is near a closing or where a law firm represents the client, or its subsidiaries, in multiple legal matters. . . . Soliciting such advice, whether from an in-house counsel at the law firm or from an attorney at another law firm, is not in and of itself adverse to the client, and doing so may ultimately benefit the client."; "The attorney-client communications whose discovery is at issue in this case were 'for the [law firm's] own defense' in the litigation threatened in the Prince Lobel letter. . . . The attorneys' time was not billed to RFF, because B & L, not RFF, was the 'real client' of the in-house counsel whose legal advice was sought."; "Preserving the privileged nature of these communications does not affect a law firm's duty to provide a client with 'full and fair disclosure of facts material to the client's interests' . . . . [A] client is entitled to full and fair disclosure of facts that are relevant to the representation, including any bad news, and to sound legal advice from its law firm. But a client is not entitled to revelation of the law firm's privileged communications with in-house or outside counsel where those facts were presented and the sound legal advice was formulated if those communications were conducted for the law firm's own defense against the client's adverse claims."; "[I]t is plain that the rule of imputation in rule 1.10 (a) of both the Massachusetts Rules of Professional Conduct and the ABA Model Rules of Professional Conduct generally prohibits attorneys in the same law firm from representing outside clients that are adverse to each other, but there is nothing in the language of or commentary to these rules to suggest that the rule of imputation was meant to prohibit an in-house counsel from providing legal advice to his own law firm in response to a threatened claim by an outside client. Nor does it make sense to apply the rule in this context."; "[W]here a law firm is already representing a client and that client threatens to bring a claim against the law firm, the potential conflict between the law firm's loyalty to the client and its loyalty to itself cannot be avoided and must instead be addressed, either by resolving the conflict satisfactorily to the client or withdrawing from the representation. However, a law firm is not disloyal to a client by seeking legal advice to determine how best to address the potential conflict, regardless of whether the legal advice is given by in-house counsel or outside counsel. . . . Applying the rule of imputation in such circumstances therefore would not avoid conflicting loyalties or prevent disloyalty; it would simply prevent or delay a law firm from seeking the expertise and advice of in-house counsel in deciding what to do where there is a potential conflict."; "Even if the rule of imputation were to prohibit a law firm's in-house counsel from representing the law firm against an adverse outside client, the law firm would still be entitled to reveal confidential client information to outside counsel where necessary to the law firm's own defense."; "Applying this 'black-letter law,' a client should not be deprived of the benefit of the attorney-client privilege because of its attorney's violation of rule 1.7, even if that 'client' is a law firm and the 'attorney' is an in-house counsel within that same law firm."; "In law, as in architecture, form should follow function, and we prefer a formulation of the attorney-client privilege that encourages attorneys faced with the threat of legal action by a client to seek the legal advice of in-house ethics counsel before deciding whether they must withdraw from the representation to one that would encourage attorneys to withdraw or disclose a poorly understood potential conflict before seeking such advice. The 'current client' exception is a flawed interpretation of the rules of professional conduct that yields a dysfunctional result."; "[W]e hold that the attorney-client privilege applies to confidential communications between a law firm's in-house counsel and the law firm's attorneys, even where the communications are intended to defend the law firm from allegations of malpractice made by a current outside client.")

Case Date Jurisidction State Cite Checked
2013-01-01 State MA B 4/14

Chapter: 7.13

Case Name: St. Simons Waterfront, LLC v. Hunter, Maclean, Exley & Dunn, P.C., 746 S.E.2d 98, 102 (Ga. 2013)
(finding that a plaintiff suing a law firm could not obtain internal law firm communications; "We now hold that the same basic analysis that is conducted to assess privilege and work product in every other variation of the attorney-client relationship should also be applied to the law firm in-house counsel situation. We hold further that the Georgia Rules of Professional Conduct do not govern the applicability of the attorney-client privilege or work product doctrine, and therefore the conflict of interest that may arise between the firm and the client when the firm begins acting in its own defense does not affect the protections afforded to privileged communications and attorney work product.")

Case Date Jurisidction State Cite Checked
2013-01-01 State GA B 4/14

Chapter: 7.13

Case Name: RFF Family P'ship v. Burns & Levinson, LLP, Civ. A. No. 12 2234 BLS1, slip op. at 9 (Mass. Super. Ct. Nov. 20, 2012)
(holding that the fiduciary exception did not apply in the law firm setting; "The trust analogy, and the logic behind it, thus suggest that the question presented in this case . . . -- that is, whether the 'fiduciary exception' should apply to an attorney's (the 'first attorney's') otherwise privileged consultation with a second attorney (in house or outside) concerning what steps the first attorney should take in response to a client's claim or potential claim of malpractice -- should be answered in the negative. In this scenario, the first attorney seeks the second's legal advice solely for the first attorney's guidance and benefit, at his or her expense. The first attorney's interests are, or may be, adverse to his client's, perhaps to the point of requiring withdrawal. Before the first attorney can make a fully informed decision concerning the appropriate course, however, s/he may be well advised to consult counsel who may be better schooled in ethical rules, and will almost certainly be better capable of dispassionate analysis of the problem at hand.")

Case Date Jurisidction State Cite Checked
2012-11-20 State MA B 1/13

Chapter: 7.13

Case Name: In re Mortgage & Realty Trust v. Zim Co., Case No. LA 95-31101, Ch. 11, AD 95-05861, 1996 Bankr. LEXIS 464 (C.D. Cal. April 29, 1996)
(relying on a unique California rule, disqualifying Bryan Cave from representing a defendant contract action, based on one of the law firm's lawyers having served as a trustee on the plaintiff's board at the pertinent time; "The reorganized debtor in this case, which has brought this adversary proceeding to cancel a purported contract with defendant Zim Co. ('Zim'), moves this Court to disqualify Zim's counsel of record, Bryan Cave. The Court holds that Bryan Cave must be disqualified, because one of its lawyers served on the debtor's board of trustees when the transaction here at issue was considered by the board. The Court finds that the fiduciary duty of loyalty of the trustee continues after his resignation from the board (which happened on the effective date of the reorganization plan), with respect to matters considered by the board of trustees while he was a member, and that these duties conflict with those owing by the trustee's law firm as counsel for the defendant. The Court further holds that this conflict of interest of the trustee is imputed to the law firm, and requires its disqualification."; "While conceding that Bucher at one time owed fiduciary duties to MRT, Bryan Cave argues that a director's fiduciary duties terminate when the director leaves the board, and that the result is the same for a trustee leaving a REIT's board of trustees. In consequence, the firm argues, it is not hindered in representing Zim in this lawsuit by those duties formerly owing by Bucher."; "In general Bryan Cave's argument is correct: the fiduciary duties of a director or trustee terminate when the director or trustee ends his or her tour of duty."; "The duty to protect and preserve confidential information received during service as a director continues after the director leaves the board. Similarly, this duty continues for a trustee of a REIT after the trustee ceases to serve."; "The rule prohibiting a lawyer from representing clients with conflicting interests is an instance of a more general rule: a lawyer may not represent a client when the representation involves a conflict of interest with any other position that the attorney holds or represents. Such a conflict may arise from the attorney's own interests, or from fiduciary duties of any sort that the attorney has undertaken. While the most typical application of this rule occurs where conflicting interests relate to different clients, the rule is much broader."; "Rule 3-310(A) notably does not limit the disqualification relationship to the representation of another client. . . . Fiduciary duties undertaken as a member of a board of directors or board of trustees are included within the scope of an attorney's relationship that may give rise to a disqualifying conflict of interest under this rule."; "In this case the Court has found that Bucher did not act as attorney to MRT [Plaintiff] while he served as a member of its board of trustees. Thus he may not have received information relevant to this disqualification motion that was protected by the attorney-client privilege. However, the Court must presume that he did receive confidential information for which VPT is entitled to continued protection."; "Furthermore, this presumption is irrebuttable. Proof of actual confidences is not necessary, and a fiduciary is not permitted to present evidence that the fiduciary did not receive relevant confidences."; "The fiduciary duties that Bucher owes to MRT and its creditors disqualify him from representing Zim in this adversary proceeding. Bucher was on the board of trustees of MRT when the Zim transaction was considered and approved. The Court finds it likely that he received confidential information relating to the transaction with Zim at the board meeting where the transaction was approved. He may have received confidential information relating to the transaction or to MRT generally that is relevant to this litigation outside of the board meeting as well. Thus the Court must presume that he received such confidential information, and holds that this presumption is irrebuttable. Bucher is disqualified from representing Zim in this litigation."; "Bucher's alleged lack of memory is not a defense to such an irrebuttable presumption. The present recollection of an attorney is not an adequate criterion for determining whether confidences are disclosed."; "Bryan Cave is precisely the sort of large law firm that the Seventh Circuit had in mind when in [sic] made this ruling. Bryan Cave has approximately 400 attorneys practicing in sixteen offices, including seven foreign countries. Under the Westinghouse [Westinghouse Electric Corp. v. Kerr-McGee Corp., 580 F.2d 1311, 1318 (7th Cir.)] standard, it is of no consequence that Bucher practices with the Washington office, and the litigation relating to this case is being handled by the St. Louis office. Like an infectious disease, the disqualification affects every lawyer in the law firm, wherever located."; "It is also of no consequences that Bucher is of counsel to Bryan Cave, rather than a partner or associate. Under the ABA Model Rules, an attorney may be designated 'of counsel' only if the attorney has a 'close, regular and personal' relationship with the law firm.")

Case Date Jurisidction State Cite Checked
1996-04-29 Federal CA

Chapter: 7.301

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 Jurisidction State Cite Checked
2016-02-22 Federal MA

Chapter: 7.302

Case Name: Chill v. Calamos Advisors LLC, No. 17 C 1658, 2017 U.S. Dist. LEXIS 62565 (N.D. Ill. April 25, 2017)
(holding that the plaintiff shareholder in a derivative case could not satisfy the Garner standard, because the information the plaintiff sought was available elsewhere; "The Garner [Garner v. Wolfinbarger, 430 F.2d 1093 (5th Cir. 1970)] doctrine, known as the fiduciary exception, has been expanded to nonderivative cases based on the principle that 'a trustee may not with-hold from the beneficiary any communications by the trustee with an attorney that were triggered by the trustee's need for advice on how to carry out his fiduciary responsibilities.'"; "Plaintiffs have the burden to demonstrate good cause to overcome the attorney-client privilege based on the fiduciary exception."; "Several factors do weigh in Plaintiffs' favor. They survived a motion to dismiss, in which the court noted that a key issue is whether the Trustees properly exercised their fiduciary duties."; "However, Plaintiffs have failed to demonstrate the necessity of the information and its unavailability from other sources. The Court agrees with the Southern District of New York that this is the 'most important factor' in determining whether the attorney-client privilege should be pierced."; "But 'unavailability' means more than whether these specific privileged documents are not available elsewhere -- of course they are not. Instead, Plaintiffs must demonstrate that information for this lawsuit is otherwise unavailable. And Plaintiffs' conclusory statements do not demonstrate what Plaintiffs expect the privileged documents to show, how they are important for their case, and why the information contained therein cannot be discovered from nonprivileged sources."; "Discovery has been ongoing for a year and Plaintiffs have deposed at least two of the Trustees; however, Plaintiffs cite nothing from the discovery or the depositions to suggest that the privileged documents may contain information that is both necessary and unavailable elsewhere. The Court appreciates that Plaintiffs cannot know exactly what is in the privileged documents. Nevertheless, a request to invoke the fiduciary duty exception 'should be supported by (without limitation) an explanation of what plaintiffs expect to obtain by examination of a particular document (possibly supported by deposition testimony concerning the context, although not the content, of the document), and a showing of the unavailability of what they expect to obtain from the document.'")

Case Date Jurisidction State Cite Checked
2017-04-25 Federal IL

Chapter: 7.302

Case Name: Pittsburgh History and Landmarks Foundation, No. 113 C.D. 2016, 2017 Pa. Commw. LEXIS 116 (Pa. April 21, 2017)
(addressing the fiduciary exception's applicability in a derivative case; ultimately finding a broad fiduciary exception inapplicable, and remanding the trial court to apply the Garner "good cause" standard; "[T]he Investigating Committee completed its investigation and recommended against the prosecution of the derivative action. The Boards of each nonprofit corporation considered the Report of the Investigating Committee and adopted its recommendations. Accordingly, Defendants/Appellants filed the motion to dismiss based on the Report of the Investigating Committee. . . . The motion to dismiss is pending before the trial court."; "During the discovery phase of the lawsuit, disputes arose. In particular, Plaintiffs/Appellees sought disclosure of all information provided to the Investigating Committee as part of its investigation, including material which may be privileged. Defendants/Appellants resisted such disclosure. Plaintiffs/Appellees filed a motion to compel, which, together with the pending motion to dismiss, prompted the trial court order under review."; "Based on our review, we conclude that both Section 7.13 of the ALI Principles and Section 85 of the Restatement (Third) of the Law Governing Lawyers adopt the reasoning and procedure of the Garner [Garner v. Wolfinbarger, 430 F.2d 1093 (5th Cir. 1970), cert. denied, 401 U.S. 974, 91 S. Ct. 1191, 28 L. Ed. 2d 323 (1971)] line of cases. We view these provisions for withholding the attorney-client privilege for a communication that occurred prior to the assertion of charges and relating directly to those charges, based on certain predicate findings, as functionally equivalent. This is in addition to the limited waiver of the attorney-client privilege to legal opinions based on the submission to the trial court of an investigating committee's report in support of a motion to dismiss. AM. LAW INST. PRINCIPLES OF CORPORATE GOVERNANCE: ANALYSIS AND RECOMMENDATIONS §7.13(e) (1994)."; ". . . when faced with a question involving assertion of the attorney-client privilege and work product protection, a trial court should undertake a Garner 'good cause' inquiry, which would include consideration of the non-exclusive factors discussed in Garner and cases following it. As discussed in Comment e to Section 7.13 of the ALI Principles, this inquiry will largely focus on communications that were roughly contemporaneous with the events giving rise to the litigation. AM. LAW INST. PRINCIPLES OF CORPORATE GOVERNANCE: ANALYSIS AND RECOMMENDATIONS §7.13(e) cmt. e (1994). The trial court here did not undertake this inquiry. Therefore, we are constrained to vacate the trial court's discovery order and remand to the trial court for it to do so."; "Plaintiffs/Appellees explain the type of information that might be within the ambit of a potential Garner-based withholding of the attorney-client privilege: legal advice about efforts to pack the nonprofit corporation boards; legal advice about whether investments questioned by members of a Board were proper; and, legal advice about whether a Board could vote out all existing Trustees and elect successors based on a state statute, where a Board by-law only provided for termination of directors for cause. . . . Such legal advice rendered at about the time of those alleged events and before the current suit was pending could be reached by a discovery order, consistent with both Section 7.13 of the ALI Principles and Section 85 of the Restatement (Third) of the Law Governing Lawyers, after consideration of pertinent factors."; "We caution that the breadth of legal advice and opinions potentially discoverable under a Garner approach may be more confined than that envisioned by the trial court. In particular, post-event attorney-client communications, particularly those communications advising with respect to pending litigation, are probably not discoverable."; "As discussed above, upon remand, the trial court will consider whether a Garner-based withholding of the attorney-client privilege is appropriate. If it is, Plaintiffs'/Appellees' discussions with Ms. Nelson [former general counsel] would most likely be limited to communications that were roughly contemporaneous with the events giving rise to the litigation. More particularly, under a Garner-based approach discussions would most likely be limited to communications during the approximate period from 2009 to Ms. Nelson's departure as General Counsel in 2012."; "As to communications occurring between Ms. Nelson and the Investigating Committee or its counsel after the Committee's formation in 2013, a period when Ms. Nelson was no longer General Counsel and therefore not obviously involved in providing legal services to either corporation or the Investigating Committee, it is hard to see how any new attorney-client privilege arises."; "The trial court made reference to what it called the fiduciary duty exception to the attorney-client privilege. The trial court applied this exception despite acknowledging that this case does not involve a trust or beneficiaries. Instead, the trial court focused on a fiduciary duty."; "The Garner Court referenced the fiduciary duty exception to the privilege. It struggled, however, to characterize corporate management's duties as being co-extensive with those of a common law trustee. . . . This was particularly true in describing the duty of corporate management to a very minor stockholder. . . . Because we share these concerns, we doubt that a broad fiduciary duty exception sufficiently captures the relationships in this derivative action, and we hold that a nuanced Garner-based exception is more appropriate here.")

Case Date Jurisidction State Cite Checked
2017-04-21 State PA

Chapter: 7.302

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 Jurisidction State Cite Checked
2015-10-23 Federal CT B 7/16

Chapter: 7.302

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 Jurisidction State Cite Checked
2015-01-27 Federal LA

Chapter: 7.302

Case Name: Chambers v. Gold Medal Bakery, Inc., 983 N.E.2d 683, 695 (Mass. 2013)
(holding that directors whose interests are adverse to the corporation's interest cannot rely on their role as shareholders or on the Garner (Garner v. Wolfinbarger, 430 F.2d 1093 (5th Cir. 1970)) doctrine to obtain privileged corporate documents; "The defendants also ask that we review the lower court's determination that the plaintiffs are entitled to the requested documents because of their status as shareholders, separate and apart from their status as directors. To this end, the defendants ask that we pass judgment on the lower court's application of Garner v. Wolfinbarger, 430 F.2d 1093 (5th Cir. 1970), to this case. We need not. We determined that the plaintiffs are not entitled to privileged information because their interests are adverse to the corporation. . . . Their status as shareholders does not change our disposition.")

Case Date Jurisidction State Cite Checked
2013-01-01 State MA B 3/14

Chapter: 7.302

Case Name: Moore v. Lender Processing Servs., Inc., Case No. 3:12 cv 205 J 99TJC MCR, 2012 U.S. Dist. LEXIS 158387, at *7 (M.D. Fla. Nov. 5, 2012)
(holding that a former executive should be given access to privileged documents to which he had access while at the company, although she would not be allowed to make a copy; "While Defendant is correct that the Garner [Garner v. Wolfinbarger, 430 F.2d 1093 (5th Cir. 1970)] case dealt specifically with a shareholder derivative action, the analysis of the case has been applied to other corporate actions beyond simply shareholder cases. Indeed, the Braniff [In re Braniff, Inc., 153 B.R. 941 (Bankr. M.D. Fla. 1993)] case was not a shareholder action. Accordingly, the simple fact that the instant case does not involve a shareholder action is not sufficient to completely disregard the Garner analysis.")

Case Date Jurisidction State Cite Checked
2012-11-05 Federal FL B 5/13

Chapter: 7.303

Case Name: Tracy v. Telemetrix, Inc., 8:12CV359, 2015 U.S. Dist. LEXIS 153852 (D. Neb. Nov. 13, 2015)
(finding the fiduciary exception inapplicable in a closely held corporation setting; "Plaintiff argues for an extension of the fiduciary exception, claiming those who control a closely held business should not be able to claim the attorney-client privilege against the minority shareholders."; "Other courts have since followed Garner [Garner v. Wolfinbarger, 430 F.2d 1093 (5th Cir. 1970)] and applied the fiduciary exception in certain cases -- such as derivative actions -- where shareholders are asserting claims against the management of the company. . . . However, the Eighth Circuit has not formally adopted Garner. And even those courts that have adopted Garner note that the fiduciary exception is inapplicable to communications made during a time when the parties' interests were not aligned . . . .'"; "Similar to the plaintiff in Milroy I [Milroy v. Hanson, 875 F.Supp. 646, 651-52 (D. Neb. 1995)], Plaintiff has brought derivative and personal claims and is suing primarily for his personal gain. In his proposed amended complaint Plaintiff asserts claims based on alleged violations of RICO, conversion, civil conspiracy, breach of fiduciary duty, unjust enrichment, a request for an accounting, and for imposition of a constructive trust. Plaintiff states he personally lost 'millions of dollars in the value of Telemetrix and Convey's . . . Stock value' and that he 'suffered harm distinct from the Defendant shareholders of Telemetrix.'. . . Thus, if successful, he will personally benefit to the detriment of the majority of the remaining shareholders."; "For the foregoing reasons, the court will not apply to the fiduciary exception to this case and any attempt to discover otherwise privileged documents on this ground is overruled.")

Case Date Jurisidction State Cite Checked
2015-11-13 Federal NE
Comment:

key case


Chapter: 7.303

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 Jurisidction State Cite Checked
2015-06-11 Federal NC

Chapter: 7.303

Case Name: Chambers v. Gold Medal Bakery, Inc., 983 N.E.2d 683, 695 (Mass. 2013)
(holding that directors whose interests are adverse to the corporation's interest cannot rely on their role as shareholders or on the Garner (Garner v. Wolfinbarger, 430 F.2d 1093 (5th Cir. 1970)) doctrine to obtain privileged corporate documents; "The defendants also ask that we review the lower court's determination that the plaintiffs are entitled to the requested documents because of their status as shareholders, separate and apart from their status as directors. To this end, the defendants ask that we pass judgment on the lower court's application of Garner v. Wolfinbarger, 430 F.2d 1093 (5th Cir. 1970), to this case. We need not. We determined that the plaintiffs are not entitled to privileged information because their interests are adverse to the corporation. . . . Their status as shareholders does not change our disposition.")

Case Date Jurisidction State Cite Checked
2013-01-01 State MA B 3/14

Chapter: 7.304

Case Name: Pittsburgh History and Landmarks Foundation, No. 113 C.D. 2016, 2017 Pa. Commw. LEXIS 116 (Pa. April 21, zxc vm vcxzzz 2017)
(addressing the fiduciary exception's applicability in a derivative case; ultimately finding a broad fiduciary exception inapplicable, and remanding the trial court to apply the Garner "good cause" standard; "[T]he Investigating Committee completed its investigation and recommended against the prosecution of the derivative action. The Boards of each nonprofit corporation considered the Report of the Investigating Committee and adopted its recommendations. Accordingly, Defendants/Appellants filed the motion to dismiss based on the Report of the Investigating Committee. . . . The motion to dismiss is pending before the trial court."; "During the discovery phase of the lawsuit, disputes arose. In particular, Plaintiffs/Appellees sought disclosure of all information provided to the Investigating Committee as part of its investigation, including material which may be privileged. Defendants/Appellants resisted such disclosure. Plaintiffs/Appellees filed a motion to compel, which, together with the pending motion to dismiss, prompted the trial court order under review."; "Based on our review, we conclude that both Section 7.13 of the ALI Principles and Section 85 of the Restatement (Third) of the Law Governing Lawyers adopt the reasoning and procedure of the Garner [Garner v. Wolfinbarger, 430 F.2d 1093 (5th Cir. 1970), cert. denied, 401 U.S. 974, 91 S. Ct. 1191, 28 L. Ed. 2d 323 (1971)] line of cases. We view these provisions for withholding the attorney-client privilege for a communication that occurred prior to the assertion of charges and relating directly to those charges, based on certain predicate findings, as functionally equivalent. This is in addition to the limited waiver of the attorney-client privilege to legal opinions based on the submission to the trial court of an investigating committee's report in support of a motion to dismiss. AM. LAW INST. PRINCIPLES OF CORPORATE GOVERNANCE: ANALYSIS AND RECOMMENDATIONS §7.13(e) (1994)."; ". . . when faced with a question involving assertion of the attorney-client privilege and work product protection, a trial court should undertake a Garner 'good cause' inquiry, which would include consideration of the non-exclusive factors discussed in Garner and cases following it. As discussed in Comment e to Section 7.13 of the ALI Principles, this inquiry will largely focus on communications that were roughly contemporaneous with the events giving rise to the litigation. AM. LAW INST. PRINCIPLES OF CORPORATE GOVERNANCE: ANALYSIS AND RECOMMENDATIONS §7.13(e) cmt. e (1994). The trial court here did not undertake this inquiry. Therefore, we are constrained to vacate the trial court's discovery order and remand to the trial court for it to do so."; "Plaintiffs/Appellees explain the type of information that might be within the ambit of a potential Garner-based withholding of the attorney-client privilege: legal advice about efforts to pack the nonprofit corporation boards; legal advice about whether investments questioned by members of a Board were proper; and, legal advice about whether a Board could vote out all existing Trustees and elect successors based on a state statute, where a Board by-law only provided for termination of directors for cause. . . . Such legal advice rendered at about the time of those alleged events and before the current suit was pending could be reached by a discovery order, consistent with both Section 7.13 of the ALI Principles and Section 85 of the Restatement (Third) of the Law Governing Lawyers, after consideration of pertinent factors."; "We caution that the breadth of legal advice and opinions potentially discoverable under a Garner approach may be more confined than that envisioned by the trial court. In particular, post-event attorney-client communications, particularly those communications advising with respect to pending litigation, are probably not discoverable."; "As discussed above, upon remand, the trial court will consider whether a Garner-based withholding of the attorney-client privilege is appropriate. If it is, Plaintiffs'/Appellees' discussions with Ms. Nelson [former general counsel] would most likely be limited to communications that were roughly contemporaneous with the events giving rise to the litigation. More particularly, under a Garner-based approach discussions would most likely be limited to communications during the approximate period from 2009 to Ms. Nelson's departure as General Counsel in 2012."; "As to communications occurring between Ms. Nelson and the Investigating Committee or its counsel after the Committee's formation in 2013, a period when Ms. Nelson was no longer General Counsel and therefore not obviously involved in providing legal services to either corporation or the Investigating Committee, it is hard to see how any new attorney-client privilege arises."; "The trial court made reference to what it called the fiduciary duty exception to the attorney-client privilege. The trial court applied this exception despite acknowledging that this case does not involve a trust or beneficiaries. Instead, the trial court focused on a fiduciary duty."; "The Garner Court referenced the fiduciary duty exception to the privilege. It struggled, however, to characterize corporate management's duties as being co-extensive with those of a common law trustee. . . . This was particularly true in describing the duty of corporate management to a very minor stockholder. . . . Because we share these concerns, we doubt that a broad fiduciary duty exception sufficiently captures the relationships in this derivative action, and we hold that a nuanced Garner-based exception is more appropriate here.")

Case Date Jurisidction State Cite Checked
2017-04-21 Federal PA

Chapter: 7.304

Case Name: Tracy v. Telemetrix, Inc., 8:12CV359, 2015 U.S. Dist. LEXIS 153852 (D. Neb. Nov. 13, 2015)
(finding the fiduciary exception inapplicable in a closely held corporation setting; "Plaintiff argues for an extension of the fiduciary exception, claiming those who control a closely held business should not be able to claim the attorney-client privilege against the minority shareholders."; "Other courts have since followed Garner [Garner v. Wolfinbarger, 430 F.2d 1093 (5th Cir. 1970)] and applied the fiduciary exception in certain cases -- such as derivative actions -- where shareholders are asserting claims against the management of the company. . . . However, the Eighth Circuit has not formally adopted Garner. And even those courts that have adopted Garner note that the fiduciary exception is inapplicable to communications made during a time when the parties' interests were not aligned . . . .'"; "Similar to the plaintiff in Milroy I [Milroy v. Hanson, 875 F.Supp. 646, 651-52 (D. Neb. 1995)], Plaintiff has brought derivative and personal claims and is suing primarily for his personal gain. In his proposed amended complaint Plaintiff asserts claims based on alleged violations of RICO, conversion, civil conspiracy, breach of fiduciary duty, unjust enrichment, a request for an accounting, and for imposition of a constructive trust. Plaintiff states he personally lost 'millions of dollars in the value of Telemetrix and Convey's . . . Stock value' and that he 'suffered harm distinct from the Defendant shareholders of Telemetrix.'. . . Thus, if successful, he will personally benefit to the detriment of the majority of the remaining shareholders."; "For the foregoing reasons, the court will not apply to the fiduciary exception to this case and any attempt to discover otherwise privileged documents on this ground is overruled.")

Case Date Jurisidction State Cite Checked
2015-11-13 Federal NE
Comment:

key case


Chapter: 7.304

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; "This appeal arises from a discovery dispute in which the managers of a limited liability company and corporate counsel invoke the attorney-client privilege in opposition to document requests by one of the company's investors. The investor argues that it is entitled to the so-called fiduciary exception to the privilege because it is a beneficiary of the attorney-client relationship that exists between the company's managers and counsel. The managers and counsel, on the other hand, contend that because the investor had interests that were adverse to the company's interests, the fiduciary exception is inapplicable."; "We conclude that 'adversity' is not a threshold issue in determining whether the fiduciary exception is applicable in a given case, but one of several factors to consider in making that determination, and that adversity cannot be determined without a review of the purportedly privileged communications. Therefore, we remand the matter for an in camera review of the withheld documents and a full analysis of whether the exception is applicable in this case. Absent a more deliberate review and analysis, the risk of disclosure of privileged communications is manifest.")

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

Chapter: 7.304

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; "Here, the motion court determined that NAMA demonstrated good cause to apply the fiduciary exception to the withheld communications without considering the factors set forth in either Garner [Garner v. Wolfinbarger (430 F2d 1093 [5th Cir 1970], cert denied 401 U.S. 974, 91 S. Ct. 1191, 28 L. Ed. 2d 323 [1971])] or Hoopes [Hoopes v. Carota (142 Ad2d 906, 531 N.Y.S.2d 407 [3d Dept 1988])]. . . . For example, we do not know whether the approximately 3,000 communications on the Privilege Log pertain to past or prospective actions, whether the information sought is available from other sources, or whether any of the communications concern advice regarding the instant litigation."; "Thus, although defendants do not take issue with the motion court's finding of good cause -- they focus on the determination that there never was an adversarial relationship between NAMA and Alliance -- we conclude that the case must be remanded for the court to conduct a comprehensive good-cause analysis.")

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

Chapter: 7.304

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; "While some factors in the Garner test are relevant to a determination of adversity, Garner did not create a categorical adversity limitation. Thus, adversity is not a threshold inquiry but a component of the broader good-cause inquiry. Moreover, of the Garner factors that pertain to adversity, some will indicate whether the parties are generally adverse, while others will require a review of the communications in dispute; the relevant factors may weigh against finding good cause to apply the fiduciary exception with respect to those communications that reveal adversity. Accordingly, a court may find that the party seeking disclosure has shown good cause to be given access to some communications but not others."; "That NAMA is a 70% majority investor in Alliance and is suing the Managers derivatively suggests that it is not, in this action, generally adverse to Alliance. However, while the derivative nature of a shareholder's claim tends to support a finding of good cause, it is not dispositive.")

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

Chapter: 7.304

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 extending the fiduciary exception to the corporate sphere, the Garner court set forth a non-exhaustive list of factors that should be considered to determine whether a party has shown good cause for applying the exception in a given case."; "The Garner test remains viable, and it strikes the appropriate balance between respect for the privilege and the need for disclosure; therefore, we adopt it here.")

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

Chapter: 7.304

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 Jurisidction State Cite Checked
2015-09-16 Federal NY
Comment:

key case


Chapter: 7.304

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 Jurisidction State Cite Checked
2015-09-16 Federal NY

Chapter: 7.304

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 Jurisidction State Cite Checked
2015-06-11 Federal NC

Chapter: 7.304

Case Name: In re Lululemon Athletica Inc. 220 Litig., Consol. C.A. No. 9039-VCP, 2015 Del. Ch. LEXIS 127 (Del. Ct. Chan. April 30, 2015)
(analyzing the Garner doctrine and a common interest doctrine in connection with a retailer's investigation into the sale of its stock by the company's founder and CEO; explaining that the shareholders were unions, and were entitled to otherwise privileged documents under Garner; "[W]hile Garner and Wal-Mart II enumerate a panoply of factors that courts should consider in determining whether stockholder plaintiffs have good cause to set aside attorney-client privilege under the fiduciary exception, I decline to apply those factors mechanically. Instead, I have reviewed all of the factors and, cognizant of the principles on which the fiduciary exception is founded, considered whether or not their cumulative weight tends toward a showing of -good cause to access the withheld documents."; "The Company conceded that the documents sought are identifiable and limited in number; that Plaintiffs are substantial stockholders; that Plaintiffs have a proper purpose under Garner; and that the communications did not involve trade secrets. In the preceding analysis, I found that Plaintiffs' claims of alleged wrongdoing are obviously colorable. Moreover, the documents Plaintiffs seek in this regard do not relate to the present litigation, but rather to the real-time events underlying the action that gave rise to Plaintiffs' proper purpose. I also found that the Nicholas Email and to a lesser extent the WSJ Email Chain are necessary to Plaintiffs and unavailable from another source. Furthermore, no one factor predominates under the Garner analysis. Rather, the various elements are all indicia that may contribute to a decision of presence or absence of good cause. Taking into consideration all the Garner factors, the particular circumstances of this case, and the relevant case law, I conclude that Plaintiffs have met their burden of showing good cause. I hold, therefore, that Plaintiffs are entitled to review the Nicholas Email and the WSJ Email Chain under Garner's fiduciary exception to privilege.")

Case Date Jurisidction State Cite Checked
2015-04-30 State DE

Chapter: 7.304

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 Jurisidction State Cite Checked
2015-01-27 Federal LA

Chapter: 7.304

Case Name: Wal-Mart Stores, Inc. v. Indiana Electrical Workers Pension Trust Fund IBEW, 95 A.3d 1264, 1278 (Del. 2014)
September 17, 2014 (PRIVILEGE POINT)

“Delaware Recognizes the Garner Doctrine”

As difficult as it can be to properly identify the "client" inside a corporation, within a corporate family, and when corporate lawyers deal with employees, there is another counterintuitive possibility — that the corporation's shareholders may be the real "client."

In Garner v. Wolfinbarger, 430 F.2d 1093 (5th Cir. 1970), the Fifth Circuit recognized that in certain circumstances shareholders pursuing a derivative case could access communications between corporate executives and the corporation's lawyers. That doctrine eventually developed into what is called "the fiduciary exception," when combined with an old English trust principle recognizing trusts' beneficiaries as the real "clients" (and thus entitled to communications between the trustee and her lawyer). Since Garner, some courts have applied the same principle to shareholders' non-derivative claims against corporations, while other courts have questioned that expansion. In Wal-Mart Stores, Inc. v. Indiana Electrical Workers Pension Trust Fund IBEW, 95 A.3d 1264, 1278 (Del. 2014), the Delaware Supreme Court extended the Garner doctrine to "plenary stockholder/corporation proceedings" and Delaware Code Section 220 actions (Del. Code, tit. 8, § 220). Id. Although the court described the Garner doctrine as "narrow, exacting, and intended to be very difficult to satisfy," the court easily found that IBEW shareholders met the standard. Id.

Corporations' lawyers and executives should remember that hostile shareholders may essentially be looking over their shoulders as they communicate with each other.

Case Date Jurisidction State Cite Checked
2014-01-01 State DE
Comment:

key case