Kadrey v. Meta Platforms, Inc.

• Court: District Court, N.D. California
• Decided: August 22, 2024
• Docket: 3:23-cv-03417
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 RICHARD KADREY, et al., Case No. 23-cv-03417-VC (TSH)

8 Plaintiffs, DISCOVERY ORDER 9 v. Re: Dkt. No. 105 10 META PLATFORMS, INC., et al., 11 Defendants.

12 13 The present discovery dispute concerns certain communications made by a former part- 14 time Meta employee, Tim Dettmers, on two Discord channels (the “Subject Communications”). 15 The Court has reviewed the Subject Communications in camera. The Court held a hearing on 16 August 22, 2024, and now issues the following order. 17 A. Were the Subject Communications Attorney-Client Privileged in the First Place? 18 Plaintiffs weakly contend that the Subject Communications were not privileged in the first 19 place, saying they were not requests for legal advice or responses thereto, and that they are 20 disclosures of facts not entitled to privilege protection. Those arguments are wrong. The Subject 21 Communications contain or reveal legal advice from Meta’s attorneys and requests to them for 22 legal advice by Meta employees. This is evident from the Subject Communications themselves, 23 and is further supported by the Dettmers and Zettlemoyer Declarations (ECF Nos. 105-1 & 105- 24 2). It is true that Dettmers was communicating with EleutherAI, but his communications plainly 25 reveal privileged legal advice given to him by Meta’s attorneys. Accordingly, the Subject 26 Communications were privileged in the first place. 27 B. Did Meta Waive the Privilege? 1 management and is normally exercised by its officers and directors.” United States v. Chen, 99 2 F.3d 1495, 1502 (9th Cir. 1996) (quoting Commodity Futures Trading Comm’n v. Weintraub, 471 3 U.S. 343, 348 (1985)). Plaintiffs say Chen is distinguishable because it involved a former 4 employee. However, the Ninth Circuit reasoned as follows: “[W]hen control of a corporation 5 passes to new management, the authority to assert and waive the corporation’s attorney-client 6 privilege passes as well. It follows a fortiori that since a corporate employee cannot waive the 7 corporation’s privilege, that same individual as an ex-employee cannot do so.” Id. (cleaned up). 8 Thus, the Ninth Circuit’s explanation for why a former employee cannot waive the privilege took 9 as its starting assumption that a current employee cannot waive the corporation’s privilege, which 10 is the principle Meta seeks to apply here. 11 Still, both Chen and the Supreme Court decision it cited say that the power to waive a 12 corporate privilege is “normally” exercised by its officers and directors. As other courts have 13 observed, also after citing Chen, “[s]ometimes, however, the privilege can be waived by lower- 14 level employees [who] inadvertently yet voluntarily disclose privileged material while acting 15 within the scope of their authority.” Vans, Inc. v. Walmart, Inc., 2023 WL 4291986 (C.D. Cal. 16 June 5, 2023) (cleaned up). See also Phoenix Ins. Co. v. Diamond Plastics Corp., 2020 WL 17 4261419, *4 (W.D. Wash. July 24, 2020) (“The Supreme Court said nothing about what happens 18 if lower-level employees inadvertently yet voluntarily disclose privileged material while acting 19 within the scope of their authority. When faced with such disclosures, many courts have held that 20 the disclosure waives the corporation’s attorney-client privilege if the corporation took inadequate 21 steps to prevent the disclosure.”). “To exempt corporations from this general rule ‘would be 22 unfair’ because then ‘corporations would have no responsibility to monitor how their low-level 23 employees handle privileged communications even though those employees are covered by 24 modern expansions of the attorney-client privilege.’” Vans, 2023 WL 4291986, *6 (quoting 25 Phoenix Ins., 2020 WL 4261419, *4). 26 Here, however, Meta has established that Dettmers did not have authority to waive the 27 privilege over the Subject Communications and that Meta did take adequate steps to prevent the 1 Dettmers made the disclosures intentionally and held himself out as a representative of Meta. But 2 the relevant inquiry is what Meta did. In Vans, relied on heavily by Plaintiffs, the court found a 3 waiver by a lower level employee after finding a delegation of authority over certain types of 4 communications to that employee and knowledge by others at the company that he was having 5 those kinds of communications. 2023 WL 4291986, *6. In Truckstop.net, L.L.C. v. Sprint 6 Corporation, 2005 WL 8166195 (D. Idaho July 28, 2005), also relied on by Plaintiffs, the court 7 found a waiver by an employee who was an enterprise account executive at the time he disclosed 8 the privileged material, and he served as the “main point of contact” between the recipient 9 company and the company he worked for. Id. *6. In this case, by contrast, there is no indication 10 that Meta expressly or impliedly gave Dettmers any authority to conduct any external 11 communications, nor that Meta had any awareness of or reason to be aware of external 12 communications he was having. Plaintiffs essentially ask the Court to infer this delegation of 13 authority from the communications themselves. However, that is not a reasonable inference, 14 particularly in view of Meta’s contrary showing that Dettmers did not have this authority. 15 To be clear, the Court is not demanding evidence that Meta (then, Facebook) specifically 16 gave authority to Dettmers to disclose privileged materials. Rather, the relevant inquiry is whether 17 Dettmers acted within the scope of the authority Meta gave him. At oral argument, Plaintiffs used 18 the example of two companies working on a deal, where the lead negotiator for company A asks 19 the lead negotiator for company B why she won’t agree to something, and she says “our legal 20 department says we can’t do that.” That’s a voluntary waiver of the privilege by an employee who 21 is acting within the scope of the authority the company gave her, namely, to negotiate a deal. See 22 Jonathan Corp. v. Prime Computer, 114 F.R.D. 693, 700 (E.D. Va. 1987) (“Prime cannot now 23 disclaim the voluntary disclosure of the document to Jonathan by the very individual Prime had 24 designated to deal with Jonathan on the matter . . . . Prime both intentionally put the individual in a 25 position to make the disclosure as well as gave him the information to disclose.”). Plaintiffs argue 26 that Dettmers was similarly charged by Meta to collaborate with EleutherAI, but there is no 27 evidence Meta did that. To be sure, paragraph 8 of Dettmers’ declaration says that he “sought to 1 not give himself authority to waive Meta’s privilege. There is nothing to suggest that Meta 2 designated Dettmers to communicate or collaborate with EleutherAI, or was even aware he had 3 any such communications until they showed up in Plaintiffs’ First Consolidated Amended 4 || Complaint. 5 In addition, Meta took all reasonable steps to protect the privilege, including following the 6 || discovery of this disclosure, and Plaintiffs’ arguments that Meta was not diligent enough are 7 unsupported and meritless. ECF Nos. 104-4 (Hartnett Decl.), 105-2 (Zettlemoyer Decl.). 8 || C. Conclusion 9 Meta’s motion for a protective order is GRANTED, and Plaintiffs’ motion to compel is 10 || DENIED. The Court finds that the Subject Communications are privileged and that Meta has not 11 waived the privilege. Plaintiffs therefore cannot use the Subject Communications and must return 12 || them to Meta or destroy them. 13 IT IS SO ORDERED. 14 15 || Dated: August 22, 2024 TAA. | 5 Ur se S. HIXSON nited States Magistrate Judge 18 19 20 21 22 23 24 25 26 27 28