Where Agency Has Its Counsel Sign Formal Determination, It Waives Privilege and Work Product for All Related Communications with Counsel and for Counsel’s Investigation — Depositions of Counsel Permitted

From Arizona ex rel. Goddard v. Frito-Lay, Inc., 2011 U.S. Dist. LEXIS 22813 (D. Ariz. Mar. 7, 2011):

This discovery dispute arises in a case in which Arizona Civil Rights Division ("ACRD") brought suit against Defendants Frito-Lay. The ACRD brought suit after investigating the complaints of discrimination brought by the Intervenor Shelly Reyes ("Reyes") and after concluding that there was reasonable cause to believe that the Defendants engaged in unlawful employment practices with respect to Reyes. ***

[O]n August 5, 2008, prior to filing her formal complaint with the ACRD, Reyes had her initial intake interview with an ACRD compliance officer. *** The compliance officer prepared a form that contained several possible priorities for processing the charge.... On August 18, 2008, Reyes filed her charge with the ACRD. The matter was assigned to Thompson, who is not an attorney. On September 17, 2008, Thompson filled out a request for attorney assistance in investigating the discrimination charge.... In response, Thompson received a two-page memo, dated October 3, 2008, from Assistant Attorney General Sandra Kane.... Thompson made separate notes to herself for purposes of conducting her investigation....

Apparently, Thompson's initial draft was revised by Melanie Pate ("Pate"), an attorney who was Chief Counsel of the ACRD, and who was also acting at times in the role of the ACRD Compliance Section's Chief Counsel. Pate then referred the document to Assistant Attorney General Ann Hobart ("Hobart") and requested her assistance for further revision and review.... While working on her revision to the reasonable cause determination, Hobart made handwritten notes based on her review of the investigation file and her revisions to the determination.... The State has in its files an unsigned draft of the reasonable cause determination that contains some of Pate's and Hobart's revisions to Thompson's draft.... In response to interrogatories, the ACRD indicated that Mike Walker and Diana L. Varela, ACRD employees who are also attorneys, were also involved "to some extent in reaching the ACRD's determination and/or in drafting" the reasonable cause determination. ***

On July 30, 2009, Pate, acting as the ACRD Division Chief Counsel, and, as ACRD further acknowledges, in her role as an attorney, signed and issued the final reasonable cause determination. On that date, the ACRD transferred the matter from its compliance section to its litigation division for conciliation or possible litigation. ***

In its complaint the ACRD alleges on its own behalf and on behalf of Reyes that she was subjected to a hostile work environment and discriminated against on the basis of her sex and race in violation of the Arizona Civil Rights Act, A.R.S.§ 41-1401. ***

In this case, there is, of course, no privilege in the reasonable cause determination itself. The determination was provided to the Defendants and is otherwise publicly available. It was not, therefore, a communication made in confidence.

There is no dispute between the parties as to whether the document contains a legal conclusion or conclusions. As the ACRD itself puts it, "the 'business' of the ACRD is legal work exclusively.... The Court need not decide whether it agrees with the ACRD's assertion of whether all of its operations are covered by the attorney-client privilege to accept the ACRD's position that the reasonable cause determination contains legal conclusions. Certainly, the determination has legal effects.

However, the document does not simply contain the ACRD's legal conclusion that there was reasonable cause to believe that discrimination had occurred. Rather, as the ACRD asserts, the document was signed and prepared by an ACRD lawyer in her capacity as such. Further, the document itself identifies Pate as Chief Counsel. The ACRD thus asserts, based on the attorney-client privilege, that Pate is not subject to being deposed concerning its creation because she was acting in her role as an attorney in doing so. The ACRD also asserts that none of the other three lawyers who played a role in the investigation of the charges, or the preparation of the reasonable cause determination, are subject to deposition.

In having its attorney sign the reasonable cause determination in her capacity as a lawyer, therefore, the ACRD created a public document containing its attorney's legal conclusion that is per se admissible at trial for the purpose of meeting Plaintiffs' burden of proof. ***It is black letter law that the ACRD's intentional public disclosure of its attorney's legal opinion results in waiver of the attorney-client privilege and the work product immunity "as to all other communications on the same subject." *** Thus, when the ACRD, in lieu of simply stating the agency's conclusion that reasonable cause exists, provides that determination under the signature of one of its lawyers, who signs the document as "Chief Counsel," the ACRD has waived all attorney-client and work product privilege that it may have in the investigation of Reyes' complaint and the preparation of the reasonable cause decision itself. There is a limit, however, to the waiver. It extends only so far as "to communications about the matter actually disclosed." ***

New Federal Rule of Evidence 502(a), effective September 19, 2008, suggests that in evaluating the extent of waiver, the court limit the waiver to those communications or information that concern the same subject matter as the communication constituting the waiver***. [T]he scope of the waiver is determined by the subject matter of the reasonable cause determination itself. ***

[T]he ACRD cannot bolster its reasonable cause determination by having it issued by an attorney, and at the same time claim the attorney-client privilege in how it arrived at the conclusion. Thus, in fairness, the communications the agency received from its attorneys concerning the reasonable cause determination ought to be considered in conjunction with the reasonable cause determination to the extent that determination is to be admitted for the fact-finder's consideration.

As a result, to the extent that it concerns the investigation of Reyes' complaint and the preparation of the reasonable cause determination, the ACRD has waived any attorney-client or work product privilege it may have in any document, or to prevent the depositions of its employee attorneys. Therefore, to the extent the motion for protective order seeks to completely bar the five requested depositions in this matter, the motion is denied. Further, the ACRD has waived any privilege in the documents in which it claims privilege.

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