Southern Union Co. v. Southwest Gas Corp.

205 F.R.D. 542, 2002 U.S. Dist. LEXIS 1810, 2002 WL 169279
District Court, D. Arizona·Decided January 29, 2002·No. No. CV 99-1294-PHX-ROS·Published·Cited by 14 cases

Opinion

AMENDED ORDER

SILVER, District Judge.

At the November 28, 2001 hearing on the parties’ Daubert motions, the Court ordered the parties to meet and confer regarding all outstanding discovery issues and to file status reports by December 17, 2001 identifying all remaining unresolved discovery issues. As set forth in those status reports, there are four discovery matters fully briefed and pending before the Court, which are addressed in turn and resolved by this Order.1

I. Southern Union Company’s [Appeal from] Special Master’s May 29, 2001 Order re: Southern Union’s Motion to Compel Production of Documents and Testimony from Tiffany & Bosco LLP and Mark Dioguardi Over Claims of Privilege Asserted on Behalf of ONEOK and Jack Rose

Southern Union filed a Motion to Compel Production of Documents and Testimony from Tiffany & Bosco LLP and Mark Diog-uardi Over Claims of Privilege Asserted on Behalf of ONEOK and Jack Rose (“Motion to Compel”) (Doc. # 231) on April 4, 2000. Rose filed a Response (Doc. #245) as did Dioguardi and Tiffany & Bosco LLP (Doc. # 253), Dioguardi’s law firm. On October 24, 2000, Rose filed a Motion for an Evidentiary Hearing on the Motion to Compel. Southern Union then subpoenaed Dioguardi and Rose to testify at the hearing. Dioguardi and Rose responded by filing on May 3 and 9, 2001 Defendant Dioguardi’s Motion to Quash Subpoena (Doc. # 857) and Motion to Quash Subpoena of Defendant Rose; Alternatively, Motion For Protective Order and Motion in Limine (Doc. # 871). Southern Union filed supplemental exhibits (Doc. # 881) in support of its Motion to Compel, and a hearing before the Special Master was held on May 11, 2001. The Special Master issued an Order ruling on the Motion to Compel on May 29, 2001 (Doe. # 922), from which Southern Union appealed (Doc. # 970) on June 12, 2001.

In its Appeal, Southern Union stated two objections to the Special Master’s decision, that is, the rulings (1) denying Southern Union’s Motion to Compel production of Document No. MDD00118 (“MDD00118”) containing the handwritten notes of Mark Dioguardi concerning a conversation he had with Rose in January or February 1999,2 and (2) denying Southern Union’s Motion to Compel production from ONEOK, Dioguardi, and Tiffany & Bosco of the ghostwritten letter sent by James Irvin to the Southwest Board of Directors, as well as prior drafts of the letter. Responses in opposition to Southern Union’s objections were filed by Dioguardi (Doe. # 1015), Rose (Doc. # 1043), and ONEOK (Doe. # 1157), followed by Southern Union’s Replies (Doc. # 1091 & # 1118). The Court held a hearing on Southern Union’s two objections and other discovery disputes on August 2, 2001, followed by an in camera hearing with Rose’s counsel on August 14, 2001. At the in camera hearing, Rose’s counsel disclosed to the Court MDD00118 in its entirety as well as Document Nos. MDD00119-167. The transcript of this hearing was later unsealed, and on September 21, 2001, Southern Union filed a Response (Doc. # 1371) to the in camera disclosures of Rose’s counsel. The Court then took Southern Union’s Appeal from the Special Master’s May 29, 2001 Order under advisement.

A. Rose’s Claim of Privilege Regarding MDD00118

Rose, Dioguardi, and ONEOK contend that MDD00118 was not produced and that the deposition questions of Mark Dioguardi were not answered because Rose believed he had, and did have as a matter of law, an attorney-client relationship with Mark Diog-uardi at the time that Dioguardi and Rose [546]*546conversed and Dioguardi prepared notes of their conversation set forth in MDD00118.

Federal Rule of Evidence 501 provides that when a federal court hears a civil action in which state law provides the rule of decision, “the privilege of the witness ... shall be determined in accordance with State law.” Fed.R.Evid. 501; Star Editorial v. U.S. Dist. Ct. C.D. Cal., 7 F.3d 856, 859 (9th Cir.1993). The rule of decision on the remaining claims in this case is clearly provided in and governed by California, Arizona, and Oklahoma law. On this issue, the parties have relied on both Arizona and federal law, which because taken from the common law, is generally the same.

The Ninth Circuit has set forth the following “essential elements” for invocation of the attorney-client privilege: (1) legal advice is sought; (2) from a professional legal adviser in his or her capacity as such; (3) the communication relates to that purpose; (4) is made in confidence; and (5) by the client. Admiral Ins. Co. v. U.S. Dist. Ct. D. Ariz., 881 F.2d 1486, 1492 (9th Cir.1989) (citing In re Fischel, 557 F.2d 209, 211 (9th Cir.1977)). Regarding the question of legal advice, “[a] party seeking to withhold discovery based upon the attorney-client privilege must prove that all of the. communications it seeks to protect were made ‘primarily for the purpose of generating legal advice.’ ” Griffith v. Davis, 161 F.R.D. 687, 697 (C.D.Cal.1995) (citation omitted); see also N.C. Elec. Membership Corp. v. Carolina Power & Light Co., 110 F.R.D. 511, 514 (1986) (“In order for the privilege to apply, the attorney receiving a communication must be acting as an attorney and not simply as a business advisor.”).

Whether an attorney-client relationship exists is a question of law, but the decision is dependent on the facts. Sky Valley Ltd. P’ship v. ATX Sky Valley, Ltd., 150 F.R.D. 648, 652 (N.D.Cal.1993); United States v. Layton, 855 F.2d 1388, 1406 (9th Cir.1988) (holding that deciding factor is what perspective client, not lawyer, thought). Further, when deciding what constitutes legal advice from an attorney, the court examines whether the potential client reasonably believed that he was consulting an attorney as an attorney and manifested an intention to seek professional legal advice, even if actual employment does not result. Id.; see also Matter of Wade, 174 Ariz. 13, 846 P.2d 826, 830 (1993) (assessing reasonableness of client’s belief that attorney was acting as client’s attorney); Matter of Pappas, 159 Ariz. 516, 768 P.2d 1161, 1167 (1988) (finding attorney-client relationship if client’s belief was objectively reasonable); Matter of Spear, 160 Ariz. 545, 774 P.2d 1335, 1344 (1989) (focusing on client’s reasonable belief in assessing whether attorney client relationship existed). Because the application of the privilege does not require formal representation by the attorney, neither the absence of a formal contract of employment nor the payment of fees preclude the attachment of the privilege.

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Southern Union Co. v. Southwest Gas Corp., 205 F.R.D. 542, 2002 U.S. Dist. LEXIS 1810, 2002 WL 169279 (D. Ariz. 2002).

205 F.R.D. 542 (Southern Union Co. v. Southwest Gas Corp.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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