November 28, 2018 (PRIVILEGE POINT)
Courts Deal With Standing to Assert Privilege and Work Product Protections
When a privilege owner shares protected documents with third parties without waiving the protections, who must or can protect those documents from adversaries' discovery? Can the third parties who possess the protected documents assert the protection, or must the owner intervene?
In In re TQ Delta, Civ. A. No. 17-mc-328-RGA, 2018 U.S. Dist. LEXIS 178367 (D. Del. Oct. 17, 2018), defendants served a subpoena on plaintiff's law firm seeking protected documents. Defendants argued that the plaintiff "lacks standing to move to quash a nonparty subpoena." Id. at *3-4. The court rejected defendants' argument, concluding that "Plaintiff's standing is irrelevant," because both the plaintiff and the law firm had moved to quash. Id. at *4. The court bluntly stated that "[a]s the nonparty to whom the subpoenas are directed, [plaintiff's lawyer] clearly has standing to move to quash the subpoenas." Id. Several days later, the court in Sun Sky Hospitality LLC v. U.S. Dep’t of Agriculture, No. CV-18-00094-TUC-RM, 2018 U.S. Dist. 184742 (D. Ariz. Oct. 25, 2018), dealt with the same issue. Plaintiff sought documents from defendant government agency. Nonparty First Citizens Bank sought to intervene, arguing that the privilege protected some of those documents in the government's possession, because its predecessor had worked with the government on an earlier loan to the plaintiff. The court allowed the intervention, explaining that "[a]s First Citizens is the holder of the asserted privilege, First Citizens' interest in the non-disclosure of those documents is not adequately represented by the current parties to this action." Id. at *6.
Corporations whose privileged or work-protected documents are in others' possession might need to assess standing and possible intervention if a third party seeks those documents.