(analyzing the implied waiver and at issue implications of a corporate buyer who settled a claim by a third party and then sued a corporate seller for negligent misrepresentation; explaining that the corporate buyer sought recovery from the seller of the settlement amount and litigation costs; holding that the reasonableness of the settlement involved an objective standard, and therefore did not trigger an implied waiver or at issue waiver; "[A] client waives the privilege by affirmatively relying on attorney-client communications to support an element of a legal claim or defense -- thereby putting those communications 'at issue' in the case."; "This opinion does not concern the 'anticipatory waiver' version of this rule, which finds waiver 'when a privilege-holder pleads a claim or a defense in such a way that he will be forced inevitably to draw upon a privileged communication at trial in order to prevail,' Smith v. Kavanaugh, Pierson & Talley, 513 So. 2d 1138, 1145 (La. 1987), and which no party has invoked."; "Defendants would have us broaden the Jackson Medical [Jackson Medical Clinic for Women, P.A. v. Moore, 836 So. 2d 767, 773 (Miss. 2003)] rule such that waiver occurs whenever the client files a lawsuit to which privileged communications, if disclosed, might prove 'highly relevant' -- even if the client never relies on or uses those communications to make her legal case. The magistrate judge embraced a more expansive rule, requiring only simple relevance. These expansions of Jackson Medical find no support in the Mississippi Rules of Evidence, see Miss. R. Evid. 502(d), or any Mississippi caselaw. And given Jackson Medical and other persuasive authorities, we conclude this is not the law the Mississippi Supreme Court would apply."; "Our circuit and others agree that '[r]elevance is not the standard for determining whether or not evidence should be protected from disclosure as privileged, . . . even if one might conclude the facts to be disclosed are vital, highly probative, directly relevant or even go to the heart of an issue.' Rhone-Poulenc Rorer Inc. v. Home Indem. Co., 32 F.3d 851, 864 (3d Cir. 1994) (emphasis added)."; "Defendants fall back on dicta in an out-of-circuit federal district court opinion, decided in 1975, which no reported Mississippi case has cited. The case is Hearn v. Rhay, 68 F.R.D. 574 (E.D. Wash. 1975)."; "Here, Defendants ask us to apply an interpretation of Hearn that would require only that the privileged material have high relevance to case. But as discussed above, that view has no basis in Mississippi law, contradicts prevailing notions of waiver, and would effectively nullify the privilege."; "Even accepting for the sake of argument that the privilege takes flight whenever privileged communications become 'highly relevant' to an adversary's defense -- which, we emphasize, it does not -- Defendants still fail to show how Itron's privileged communications meet that standard."; "Defendants' primary theory of relevance apparently concerns whether Itron took reasonable steps to mitigate its damages. According to Itron's complaint, Defendants' negligent misrepresentations caused Itron to become liable to Consert, necessitating the Consert litigation which Itron eventually settled. There is thus a colorable argument that, under ordinary tort principles, Itron cannot recover the cost of the settlement as damages to the extent Defendants show the settlement to have been unreasonable. See Rolison v. Fryar, 204 So. 3d 725, 736 (Miss. 2016) ("An injured party has a duty to take reasonable steps to mitigate damages."); see also Wall v. Swilley, 562 So. 2d 1252, 1258 (Miss. 1990) (in Mississippi, failure to mitigate 'is an affirmative defense' defendants must plead and prove)."; "But this does not render the opinions of Itron's counsel 'highly relevant.' Instead, '[t]he reasonableness of the settlement . . . [must] be examined under an objective standard.'"; "Defendants similarly claim they must see Itron's privileged communications to know 'whether Itron's settlement damages are attributable to [Defendants], a third party, or Itron itself.' Although Defendants' argument is not entirely clear, they apparently seek to uncover that Itron followed unreasonable advice from its law firm (Gibson Dunn), which might arguably relieve Defendants of liability as a superseding cause."; "Either way, the argument fails for at least the reasons just discussed: Both potential theories turn on whether Itron engaged in a course of action that was objectively reasonable. And as discussed above, the objective reasonableness of Itron's conduct should be apparent from the facts known to Itron at the time (which again, are not privileged) coupled with objective legal analysis.")
| Case Date |
Jurisdiction |
State |
Cite Checked |
| 2018-02-21 |
Federal |
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