McCormick-Morgan, Inc. v. Teledyne Industries, Inc.

134 F.R.D. 275, 21 U.S.P.Q. 2d (BNA) 1412, 91 Daily Journal DAR 2024, 1991 U.S. Dist. LEXIS 11691, 1991 WL 16674
CourtDistrict Court, N.D. California
DecidedFebruary 11, 1991
DocketNo. C-89-4338 SC (WDB)
StatusPublished
Cited by26 cases

This text of 134 F.R.D. 275 (McCormick-Morgan, Inc. v. Teledyne Industries, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McCormick-Morgan, Inc. v. Teledyne Industries, Inc., 134 F.R.D. 275, 21 U.S.P.Q. 2d (BNA) 1412, 91 Daily Journal DAR 2024, 1991 U.S. Dist. LEXIS 11691, 1991 WL 16674 (N.D. Cal. 1991).

Opinion

ORDER AND OPINION RE DISCOVERY

WAYNE D. BRAZIL, United States Magistrate Judge.

Having considered the parties’ written and oral submissions regarding defendant/ counterclaimant, TELEDYNE INDUSTRIES, INC.’s (“Teledyne”) Motion to Compel Discovery, and plaintiff, counter-defendant McCORMICK-MORGAN, INC.’s (“MMI”) motion for a protective order, the court hereby enters the following opinion and ORDER.

I. Introduction And Background

The disputes addressed here involve the scope of waiver of the attorney-client privilege and issues related to depositions noticed under F.R.Civ.P. 30(b)(6). On December 18th, 1990, the court ordered the parties to submit supplemental briefs regarding several issues. The following is apparent from those and other submissions.

On December 18, 1989, counsel for plaintiff, McCormick-Morgan, Inc. (MMI) wrote to the president of Teledyne that “we [counsel for MMI] have advised our client that, in our opinion, the '977 patent is invalid____” Counsel for MMI then proceeded to set forth some of the bases for that opinion of invalidity. On April 16, 1990, counsel for MMI informed American Airlines (not a party to this action) by letter that, “[i]t is our view, previously conveyed in writing to our client (and to Teledyne), that the ’977 patent is invalid for any one of a number of reasons____” The letter then summarized those reasons. On September 25, 1990, counsel for MMI informed counsel for Teledyne by letter that;

McCormick-Morgan ... will assert ... in defense of Teledyne’s charges of willful [277]*277infringement reliance on the advice of counsel.
McCormick-Morgan ... will accordingly waive the attorney-client privilege as to the subject-matter of the advice given ... or communicated to ... them by any attorney regarding the validity, enforceability, and/or infringement of the patent-in-suit, up to the date of the letter from Townsend and Townsend to American Airlines. [April 16, 1990],

On October 17, 1990, MMI responded to Teledyne’s second request for production of documents by, among other things, restating that it was invoking the advice of counsel defense to Teledyne’s allegation of willful infringement and was waiving the attorney-client privilege:

1) as to all documents on which it will rely in defense of Teledyne’s charges of willful infringement, which documents are all dated or were all communicated to plaintiff prior to about mid-April, 1990, and 2) as to all documents, otherwise privileged, that are dated prior to about mid-April 1990 and that constitute communications with, or the basis of communications with, the client on the subjects of the validity and enforceability of the patent in suit or whether any activities or products of plaintiff infringe any valid claim of the patent in suit.

Pursuant to this waiver, MMI thereafter voluntarily produced a November 30, 1989, letter from counsel for MMI to William J. Sewalk, President of MMI, and two file memoranda dated November 6, 1989, prepared by MMI’s counsel. These documents reflect advice given by counsel to MMI regarding infringement, validity, and enforceability of the patent-in-suit. The November 6, 1989, memorandum also includes a very brief reference to how damages are calculated.

On October 26, 1990, in response to Teledyne’s October 8, 1990, 30(b)(6) deposition notice, MMI designated Messrs. Lombardi and Cunningham to testify on behalf of MMI. It appears that MMI also contemplated that James McCormick and, perhaps, Patrick G. O’Brien would respond to some of the matters covered in Teledyne’s 30(b)(6) notice. During the subsequent depositions of Mr. McCormick and Mr. Lombardi, on October 30 and 31, 1990, respectively, counsel for MMI invoked the attorney-client privilege as grounds for instructing the witnesses not to answer certain questions.

II. The Parties’ Arguments

Teledyne contends in its November 30, 1990, motion that by asserting the “advice of counsel” defense, MMI has explicitly and unconditionally waived the attorney/client privilege as to communications between counsel and MMI with respect to infringement, validity and enforceability of the patent-in-suit. Teledyne also contends that, independent of the explicit waiver in connection with the advice of counsel defense, counsel for MMI waived MMI’s attorney-client privilege by sending the letters adverted to above to Teledyne and to American Airlines. In addition, Teledyne argues that because otherwise privileged documents that MMI disclosed pursuant to its decision to invoke the advice of counsel defense included references to damages and to litigation strategy, MMI also has waived its privilege with respect to communications between it and its counsel on those subjects. Finally, Teledyne contends that MMI has violated F.R.Civ.P. 30(b)(6) by producing witnesses who were not in fact prepared to answer deposition questions in the subject areas covered by the 30(b)(6) notice.

In its December 7, 1990, brief, MMI initially admitted that it waived the attorney/client privilege by asserting the “advice of counsel” defense. It argued, however, that the waiver did not cover all affirmative defenses, but extended only to substantive advice regarding infringement, validity and enforceability that was communicated prior to early April of 1990.

For reasons we fail to comprehend, in its December 24, 1990, supplemental brief, MMI seems to reverse itself by contending that it has not actually waived the attorney/client privilege. It argues that, counsel’s statements aside, the privilege is only waived if the documents actually produced [278]*278were privileged. MMI argues that all documents produced thus far, i.e., the November 30, 1989, opinion letter from Mr. Smegal to MMI, the October 17, 1989, opinion letter from Mr. Hann to MMI, the April 20, 1990, letter from Mr. Smegal to American Airlines, and the December 18, 1989, letter from Mr. Smegal to Teledyne, are not privileged. Therefor, according to MMI, the privilege has not been waived. MMI also argues, apparently in the alternative, that any waiver of the attorney/client privilege that the court might find occurred must be limited in scope and time. It argues that Mr. Smegal’s November 30, 1989, opinion letter addressed only two of several possible bases for invalidity. Therefor, MMI argues, if any waiver has occurred, it is only as to communications regarding those two particular bases for invalidity. In addition, MMI asserts that the “advice of counsel” defense turns on the state of mind of the accused infringer only at or soon after there is actual notice of possible patent infringement; it follows, according to MMI, that it has waived the privilege only as to communications at or soon after it first learned of the Teledyne patent. Thus counsel for MMI contends that most of the instructions not to answer given to MMI witnesses during their depositions were justified.

With respect to the F.R.C.P. 30(b)(6) issues, MMI contends that the deposition notices were premature because fact discovery was not completed at that time. Further, MMI argues that the broad phrasing of Teledyne’s questioning in effect required the deponents to set forth MMI’s contentions.

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134 F.R.D. 275, 21 U.S.P.Q. 2d (BNA) 1412, 91 Daily Journal DAR 2024, 1991 U.S. Dist. LEXIS 11691, 1991 WL 16674, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mccormick-morgan-inc-v-teledyne-industries-inc-cand-1991.