HPD Laboratories, Inc. v. Clorox Co.

202 F.R.D. 410, 57 Fed. R. Serv. 1143, 59 U.S.P.Q. 2d (BNA) 1506, 2001 U.S. Dist. LEXIS 8231, 2001 WL 909258
CourtDistrict Court, D. New Jersey
DecidedJune 8, 2001
DocketNo. Civ.A. 99-4620 (HAA) (SRC)
StatusPublished
Cited by6 cases

This text of 202 F.R.D. 410 (HPD Laboratories, Inc. v. Clorox Co.) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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HPD Laboratories, Inc. v. Clorox Co., 202 F.R.D. 410, 57 Fed. R. Serv. 1143, 59 U.S.P.Q. 2d (BNA) 1506, 2001 U.S. Dist. LEXIS 8231, 2001 WL 909258 (D.N.J. 2001).

Opinion

OPINION

CHESLER, United States Magistrate Judge.

This discovery dispute presents an interesting question about the scope of the attorney-client privilege. Plaintiff, HPD Laboratories, Inc. (“HPD”), seeks to compel defendant, The Clorox Company (“Clorox”), to turn over documents that contain statements to and from Karen Peeff (“Ms. Peeff’), a longtime paralegal in Clorox’s in-house legal department. Clorox objects and contends that the documents are cov[411]*411ered by the attorney-client privilege, as defined by California law. HPD disagrees and reasons that, under federal law, the attorney-client privilege does not encompass Ms. Peeffs communications because she acted independently rather than in conjunction with or at the direction of an attorney. For the following reasons, the documents are not privileged and are discoverable.1

I. BACKGROUND

A. The Parties

This is a patent infringement and unfair competition action between competitors in the bathroom cleaning products market. HPD, a Delaware corporation headquartered in Edison, New Jersey, claims to be a pioneer in the development of toilet bowl cleaning systems. (Second Am.Compl. at HI.) It sells “2000 Flushes Blue Plus Bleach,” an automatic toilet cleaner that combines bleaching and detergent agents.

Clorox, a California-based company, does business throughout the nation. It markets — or has marketed — various toilet cleaners, including “Clorox Bleach and Blue Automatic Toilet Bowl Cleaner” and “Clorox Rain Clean Automatic Toilet Bowl Cleaner.” It currently sells a number of its products, including Rain Clean, in New Jersey.

To facilitate its operations, Clorox maintains an in-house legal team. Karen Peeff has been a part of that team since 1985. (Decl. of Karen Peeff at H 2.) She currently serves as a “Legal Specialist” for advertising and regulatory matters.2 Her duties include (1) reviewing prospective product labels, packages, and advertisements; (2) assessing whether those items comply with apposite state and federal statutes and regulations; and (3) advising Clorox’s marketing department on compliance issues. (Id. at H 3.) Ms. Peeffs immediate supervisor is Patrick Mee-han, an attorney. (Id. at H 6.) Notably, Ms. Peeff admits that she does not regularly consult with her supervisor, or other in-house counsel, prior to dispensing advice. (Id. at H 5.)

B. The Parties’ Respective Products

HPD asserts that it has developed, manufactured, and sold “drop-in” toilet cleaning products since 1984. Over time, it produced commercially viable chlorine bleach tablets, which remove stains, kill germs, and deodorize; as well as colored detergent blocks, which contain surfactants that prevent stains from occurring. (Second Am.Compl. at HH 5, 7.)3 Beginning in 1993, HPD began developing a toilet cleaner that combined bleaching and detergent elements. That endeavor came to fruition in May 1995 when HPD applied for a patent for the new product. (Id. at H 8.)4 HPD began selling that product one month later as 2000 Flushes Blue Plus Bleach (“2000 Flushes”). The packaging gave notice that HPD’s patent application was pending. (Id.)

Shortly after HPD introduced 2000 Flushes, Clorox started marketing Clorox Bleach and Blue Automatic Toilet Bowl Cleaner (“Bleach & Blue”). Like 2000 Flushes, Bleach & Blue contained bleach and detergent. (Id. at H 9.) Anticipating the issuance of its patent, HPD informed Clorox that its product infringed upon the allowed claims for the 2000 Flushes patent, to no avail.

In May 1998, the Patent Office issued United States Patent 5,755,330 (“the 330 Patent”) for HPD’s product. The 330 Patent covered:

A package for containing two automatic toilet bowl cleaners, one containing a [412]*412bleaching cleaner and the other containing a detergent cleaner and a fragrance or dye ... In operation, the water in the toilet cistern and bowl is cleaned both.by the detergent and the bleaching agent ...

(Id. at Ex. B.) HPD contends that it immediately informed Clorox of the 330 Patent and demanded that Clorox terminate the Bleach & Blue line. Clorox purportedly ignored HPD’s overtures until some time in 1999, when it replaced Bleach & Blue on store shelves with Clorox Rain Clean Automatic Toilet Bowl Cleaner (“Rain Clean”).

According to HPD, 2000 Flushes was the only legitimate detergent plus bleach toilet cleaner on the market following the withdrawal of Clorox Bleach & Blue. Its replacement, Rain Clean, did not contain an efficacious chlorine bleaching agent. (Id. at 111116,18.) Instead, it merely included small quantities of oxygen bleach that, in HPD’s view, did not clean, deodorize, or eradicate germs. (Id. at 1116.) Despite the absence of a functional bleach component, Clorox purportedly advertised Rain Clean as bleach-containing toilet cleaner. (Id. at UK 14-18.) HPD claims that it suffered diminished sales because of Clorox’s deceptive marketing, ostensibly because consumers purchased Rain Clean over 2000 Flushes under the mistaken belief that the two products were equivalents.

C. The Litigation

HPD filed this suit in September 1999. It accused Clorox of (1) willfully infringing the 330 Patent by selling Bleach & Blue in violation of 35 U.S.C. § 271; (2) falsely advertising Rain Clean in derogation of 15 U.S.C. § 1125; (3) committing unfair competition under N.J.S. § 56:8-2 and New Jersey common law; and (4) tortious interference with business relations. HPD seeks a combination of injunctive and monetary relief to remedy these alleged wrongs.

Discovery ensued and, at times, became contentious. In addition to professing concerns about the confidential nature of their business information, the parties raised numerous objections to document production. Clorox’s invocation of the attorney-client privilege — to avoid disclosing communications between Ms. Peeff and its marketing employees — precipitated this discovery dispute.

D. The Disputed Documents

Ms. Peeff is an important source of information at Clorox, no doubt due to her longevity and experience. (See Peeff. Decl. at H111-4.) Employees routinely confer with her on marketing and other issues.5 6 Notably, Ms. Peeff took part in many discussions concerning Rain Clean. She raised several questions for consideration and provided advice in her capacity as a Legal Specialist on advertising and regulatory matters. Her statements are embodied in several documents. Ms. Peeff candidly acknowledges that she has “no specific recollection of consulting with attorneys in the Clorox legal department regarding the issues raised in these specific documents prior to responding to the questions.” (Id. at H 9.) The documents are as follows:

1. December 9,1997 Minutes

The first document reflects the minutes of a December 9, 1997 meeting between Ms.

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202 F.R.D. 410, 57 Fed. R. Serv. 1143, 59 U.S.P.Q. 2d (BNA) 1506, 2001 U.S. Dist. LEXIS 8231, 2001 WL 909258, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hpd-laboratories-inc-v-clorox-co-njd-2001.