("In the context of the shareholder derivative action, the fiduciary exception also has been limited by a requirement that one seeking to overcome a privilege show good cause. See Garner, 430 F.2d at 1101, n.17, 1103-04 (rejecting unqualified fiduciary exception out of concern, in part, that corporations may be 'vulnerable to suit by shareholders whose interests or intention may be inconsistent with those of other shareholders'). In the context of the Secretary's investigative or enforcement activity under ERISA, however, the concerns that inspired the good cause requirement in the corporate context do not obtain, as 'there exists no legitimate need for a trustee to shield his actions from those whom he is obligated to serve.' Washington Star, 543 F. Supp. at 909, n.5; see also In re Occidental Petrol. Corp., 217 F.3d 293, 298 (5th Cir. 2000). . . . Several other courts that have addressed the scope of the fiduciary exception in the ERISA context have also refused to apply a good cause requirement. See Mett, 178 F.3d at 1063 (applying fiduciary exception without reference to good cause requirement); Wildbur, 974 F.2d at 645 (same); Becher, 129 F.3d at 272 (same); Tatum, 247 F.R.D. at 495 (expressly rejecting Garner's good cause analysis); Henry v. Champlain Enters., Inc., 212 F.R.D. 73, 83-86 (N.D.N.Y. 2003) (applying good cause requirement to plaintiffs' shareholder derivative claim but not to their ERISA claims); Hudson v. Gen. Dynamics Corp., 186 F.R.D. 271, 274 (D. Conn. 1999) (finding good cause not required in ERISA context); Washington Star, 543 F. Supp. at 909 n.5 (same). Indeed, to our knowledge, only one thirty-year-old district court opinion has applied the good cause requirement to limit the fiduciary exception in the ERISA context. See Donovan v. Fitzsimmons, 90 F.R.D. 583, 586-87 (N.D. Ill. 1981). We do not find that case persuasive. The Funds' attempt to portray the good cause showing as governed by our decision in Sandberg [Sandberg v. Virginia Bankshares, Inc., 979 F.2d 332 (4th Cir. 1992)] is misplaced. Even apart from the fact that we vacated our Sandberg opinion, Sandberg arose in the context of a corporate shareholder derivative action. 979 F.2d at 352. As discussed supra, the application of the fiduciary exception in the ERISA context presents different concerns from those involved in the corporate context, and courts have continued to impose a good cause showing on the latter but not the former. Nor does our decision in Faircloth v. Lundy Packing Co., 91 F.3d 648 (4th Cir. 1996), support the imposition of a good cause requirement here. Faircloth dealt with provisions in ERISA that require certain automatic disclosures, and made no mention of the fiduciary exception whatsoever. Id. at 655. Accordingly, it has little bearing on our determination of the scope of that exception. Even courts that have refused to impose a good cause requirement, however, have maintained the limits imposed by the fiduciary relationship itself. In particular, non-fiduciary communications and a trustee's personal legal advice will not be subject to the exception. Thus, the application of the fiduciary exception to any particular communication remains a matter of 'context and content.' Mett, 178 F.3d at 1064; Tatum, 247 F.R.D. 495. In sum, we conclude that application of the fiduciary exception to the attorney-client privilege in the context of a subpoena issued by the Secretary of Labor under ERISA does not require a showing of good cause; instead, its application turns on the context and content of the individual communications at issue.")
| Case Date |
Jurisdiction |
State |
Cite Checked |
| 2011-01-01 |
Federal |
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