Lumentum Operations LLC v. nLIGHT Inc

• Court: District Court, W.D. Washington
• Decided: July 11, 2024
• Docket: 3:22-cv-05186
• Status: Unknown

Opinion

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5 UNITED STATES DISTRICT COURT 6 WESTERN DISTRICT OF WASHINGTON AT TACOMA 7 LUMENTUM OPERATIONS, LLC., CASE NO. C22-5186 BHS 8 Plaintiff, ORDER 9 v. 10 NLIGHT, INC., DAHV KLINER, and ROGER FARROW, 11 Defendant. 12

13 THIS MATTER is before the Court on the parties’ Joint Rule 37 Submission for 14 Expedited Ruling on Communications with Counsel, Dkt. 91. 15 Plaintiff Lumentum Operations is the successor to JDS Uniphase (JDSU), which 16 formerly employed defendants Dahv Kliner and Roger Farrow. Lumentum alleges that 17 Kliner and Farrow breached their JDSU employment agreements (“EPIIAs”) by sharing 18 JDSU’s proprietary fiber laser information with their new employer, defendant nLIGHT. 19 Lumentum sued in 2022, asserting breach of contract claims against Kliner and Farrow, 20 and correction of inventorship and declaration of patent ownership claims against 21 nLIGHT. Dkt. 1. 22 1 In discovery, nLIGHT produced a portion of a 2014 email Dahv Kliner sent to an 2 nLIGHT employee, Lynn Sheehan, about his communications with his attorney:

3 5. I have held several meetings with an outside attorney to ensure that our activities don't violate my contracts with JDSU and nLIGHT to protect JDSU's proprietary information. In particular: 4 a. I haven't disclosed any proprietary information. b. I've made sure that any direction I've given the engineers derives from publically 5 accessible documents. c. When nLIGHT engineers have developed technologies that may overlap with JDSU proprietary 6 information, I haven't read or discussed the IDFs.

7 Dahv

Dkt. 91-2 at 2. 8 Lumentum’s counsel inquired persistently about this email, and about Kliner’s 9 conversations with his own attorney, at Kliner’s April 19–20, 2024 deposition. Kliner 10 confirmed that he had more than 10 but fewer than 100 conversations with counsel about 11 his employment contracts with his former and his new employer. Counsel repeatedly 12 asked about the explicit content of those conversations, and Kliner’s counsel in this case 13 properly and predictably instructed him not to answer. See Dkts. 91-3 and 91-4. 14 On May 1, 2024, Lumentum’s counsel sent nLIGHT”s counsel a letter asserting 15 that Kliner’s email and testimony had waived the attorney client privilege: 16 By producing evidence and by providing testimony that not only suggests, 17 but explicitly states, that Mr. Kliner sought advice from an attorney regarding his compliance with his EPIIA, Mr. Kliner has waived any and 18 all claims to privilege.

19 Dkt. 91-7 (citing Lexington Ins. Co. v. Swanson, No. C05-1614MJP, 2007 WL 2121730, 20 at *2 (W.D. Wash. July 24, 2007)). 21 nLIGHT disagreed, and asserted both that Lumentum’s effort to breach the 22 privilege by repeatedly asking about privileged communications had failed and that its 1 reliance on Lexington was misplaced. Dkt. 91-8. It argues here that disclosing the fact 2 that privileged communications occurred, and even that certain subjects were discussed,

3 is not an express waiver. Dkt. 91 at 14 (citing Roberts v. Legacy Meridian Park Hosp. 4 Inc., 97 F. Supp. 3d 1245, 1252-56 (D. Or. 2015)). 5 The Court agrees with nLIGHT. First, Kliner did not expressly waive the privilege 6 by producing1 the redacted email, or through his limited responses to Lumentum’s 7 repeated inquiries into the substance of the privileged communications. Lumentum does 8 not strenuously contend that he did.

9 Instead, it argues, as it did in its letter, that one who asserts reliance on counsel as 10 a defense waives the privilege and must disclose the substance of the communications 11 supporting (or refuting) the defense. Dkts. 91-7 at 3 and 91 at 8 (citing Lexington). But as 12 Lumentum’s letter concedes, an implied waiver applies only where the one asserting the 13 privilege also asserts privileged communications as a defense to a claim:

14 If Lexington asserts as a defense the actual advice given by Lexington’s attorneys to Lexington, or if Lexington refers to or attempts to put into 15 evidence any suggestion that Lexington’s adjusters sought, obtained, or relied on coverage counsel's advice, Lexington waives the privilege. 16 Therefore, Lexington may not refer to or proffer any evidence regarding any advice given by Lexington’s attorneys, or regarding any involvement 17 those attorneys may have had in counseling Lexington’s adjusters. Likewise, Lexington's experts may not testify regarding the fact that 18 Lexington’s adjusters sought, obtained, and/or relied on advice from coverage counsel. 19 Dkt. 91-7 at 3 (quoting Lexington at *4). 20 21

22 1 nLIGHT produced the email, not Kliner, but it is not a waiver in any event. 1 nLIGHT’s response accurately asserted that the attorney client privilege is 2 impliedly waived only where

3 (1) assertion of the privilege was the result of some affirmative act, such as filing suit, by the asserting party; (2) through this affirmative act, the 4 asserting party put the protected information at issue by making it relevant to the case; and (3) application of the privilege would deny the opposing 5 party access to information vital to his defense.

6 Dkt. 9-18 at 2 (citing Pappas v. Holloway, 114 Wn.2d 198, 207 (1990)). 7 Lumentum argues that Kliner put his legal advice “at issue” by implying in his 8 deposition that his attorney had “blessed” his conduct. It asserts that Kliner is seeking to 9 improperly use the privilege as both a sword and a shield. Dkt. 91 at 8 (citing Chevron 10 Corp. v. Pennzoil Co. 974 F.2d 1156, 1162 (9th Cir. 1992)). 11 But neither the email nor Kliner’s testimony in response to questions seeking 12 privileged communications put the legal advice he sought and obtained “at issue.” He 13 answered questions put to him by Lumentum’s counsel; he is not asserting the advice he 14 obtained as a defense to Lumentum’s breach of contract claim against him. He cannot; 15 advice of counsel is not a defense to a breach of contract claim, any more than 16 Lumentum’s breach of contract claim is advanced by its stated intention to prove that 17 Kliner “knowingly” breached his EPIIA. See Dkt. 91 at 10. Intent is simply not an 18 element of a breach of contract claim, and evidence that the alleged breacher did not 19 consult counsel is not relevant. 20 Lumentum cannot put Kliner’s privileged communications “at issue” by asking 21 him about them, or by seeking to prove that he knowingly misappropriated JDSU’s 22 technology even after seeking legal advice about his contract and his conduct. This is not 1 a close call. Kliner did not impliedly waive his attorney client privilege by responding to 2 discovery asking whether he consulted counsel and exactly what was said.

3 It gets a little murkier, though, because Kliner also suggests that he reserves the 4 right to testify that he did talk to an attorney, to rebut any Lumentum argument that he 5 “took no steps to ensure that he complied with his contractual obligations to JDSU.” Dkt. 6 91 at 13. 7 The Court appreciates that the parties utilized the Rule 37 procedure and they have 8 efficiently presented this issue. But the issue is, or at least should be, a red herring.

9 Lumentum does not need to prove that Kliner took no steps to meet his contractual 10 obligations, or that he knew what he was doing was a breach of his EPIIA, to prevail on 11 its claim. Kliner has not waived the privilege, and Lumentum can’t make him waive it by 12 arguing or providing evidence that he did not talk to an attorney about the contract or the 13 conduct.

14 The Court agrees with Lumentum that the “easiest”—and most appropriate— 15 resolution is “an order or stipulation that no party will refer to anyone consulting with 16 an attorney or not consulting with an attorney.” Dkt. 91 at 22. That is what the 17 Lexington court wisely did, in a different context. 18 This is such an Order. The parties may modify it by a better-informed, more

19 specific stipulation, consistent with the Court’s ruling. For now, the Court will sustain 20 any objection to testimony or argument about the consultation of counsel. 21 IT IS SO ORDERED. 22 \\ 1 \\ 2 Dated this 11th day of July, 2024. A 3 4 BENJAMIN H. SETTLE 5 United States District Judge

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