Deciding What Third-Party Communications Are Considered "Privileged

Digital Mentor, Inc. v. Ovivo USA, LLC (W.D. Wash. Feb. 4, 2020) showcases that as more organizations use contract employees and third parties to help do business, it’s imperative for them to clearly understand what communications between those parties will be protected as privileged.

Overview:

In this trademark infringement/breach of contract case, the two parties had an e-discovery dispute around whether the plaintiff’s consultant was an employee of the plaintiff making any communications between the two privileged.

The plaintiff’s consultant was heavily involved in creating and defining the contracts at issue in this case. The plaintiff argued that their consultant was a “functional employee.” This consultant was not paid and was never officially employed by the plaintiff.

On the other hand, the defendant argued that the plaintiff’s consultant wasn’t an employee and asked the plaintiff to produce all data that included the plaintiff’s consultant.

Ruling:

• • Consultant Not a “Functional Employee.” The court ruled that the plaintiff’s consultant did not possess “information about the company that would assist the company’s attorneys in rendering legal advice,” making the communications between the plaintiff and consultant not covered by attorney-client privilege.
    
  • Plaintiff Compelled to Produce Consultant Communications. The plaintiff never produced any evidence to prove that the consultant had (1) specialized knowledge that counsel would rely on the consultant to facilitate legal advice, (2) communications were not of a primarily legal nature. Based on this, the court grants the defendants motion for plaintiff to produce data withheld because of privilege.
    

Expert Opinion from Hon. Andrew Peck, J.D. Sr. Counsel, DLA Piper

"The Court also denied the claim of privilege finding little evidence that the communications were for legal as opposed to business reasons. Lawyers need to remember that not all communications are privileged just because a lawyer is involved. The Court refused to impose spoliation sanctions, however, because of lack of evidence of “what was purportedly destroyed, when it occurred, what extent [defendant] had any involvement, and any resulting prejudice.” Curiously, while referring to FRCP Rule 37(a), the Court made no mention of Rule 37(e)."

Case Law Tip:

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