Wrench LLC v. Taco Bell Corp.

212 F.R.D. 514, 2002 U.S. Dist. LEXIS 10438, 2002 WL 31955750
CourtDistrict Court, W.D. Michigan
DecidedJune 6, 2002
DocketNo. 1:98-CV-45
StatusPublished
Cited by3 cases

This text of 212 F.R.D. 514 (Wrench LLC v. Taco Bell Corp.) is published on Counsel Stack Legal Research, covering District Court, W.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wrench LLC v. Taco Bell Corp., 212 F.R.D. 514, 2002 U.S. Dist. LEXIS 10438, 2002 WL 31955750 (W.D. Mich. 2002).

Opinion

MEMORANDUM OPINION AND ORDER

QUIST, District Judge.

The Court has read the documents discussed at the May 8, 2002, Rule 16 conference, which have been submitted in unredact-ed form by Defendant, Taco Bell Corp. (“Taco Bell”), for in camera review. Taco Bell has divided the documents into three groups. Group I contains two of a series of nine pages Taco Bell’s counsel received from Charles Warner (Werner 006 and Werner 007), an attorney who represented Ed klfaro (“Alfaro”) in the negotiation of his severance package from Taco Bell. Group II contains documents from the files of Frank Tucker, Director of People Support (Human Resources), which relate to the negotiation of Alfaro’s severance package. Finally, Group III contains a document Taco Bell believes came from Alfaro’s file. The document is a letter to Frank Tucker from attorney Charles Warner regarding negotiations over Alfaro’s severance package. The Court’s rulings on the documents are as follows:

I. Group I

The document in Group I contains two redactions on Werner 006 and one redaction on Werner 007 based upon Taco Bell’s assertion that the redacted statements are subject to the attorney-client privilege. The first redaction on Werner 006 concerns a statement by Richard Smith, Taco Bell’s general counsel, to Vada Hill, and the second redaction on that page concerns a conversation between Vada Hill and outside lawyers. The redaction on Werner 007 concerns statements made by Richard Smith to Alfaro. Taco Bell contends that even though Alfaro, who was then a Taco Bell employee, shared the privileged information with his attorney — a third party — in connection with negotiations of Al-faro’s severance package, there was no waiver of the privilege because Alfaro was a lower-level employee without power to waive the privilege on behalf of Taco Bell. Plaintiffs contend that the privilege was waived, even if Alfaro had no authority to do so, because Taco Bell’s disclosure of the privileged information to Alfaro constituted a waiver.

The first question the Court must resolve is whether the redacted statements are protected by the attorney-client privilege because if they are not, that is the end of the analysis. Because this is a diversity case governed by Michigan law, the Court must apply Michigan law in determining whether the privilege applies. Fed.R.Evid. 501. See also Jewell v. Holzer Hosp. Found., Inc., 899 F.2d 1507, 1513 (6th Cir.1990). The purpose of the attorney-client privilege “is to encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice.” Upjohn Co. v. United States, 449 U.S. 383, 389, 101 S.Ct. 677, 682, 66 L.Ed,2d 584 (1981). Under Michigan law, the attorney-client privilege attaches to confidential communications made by the client to his attorney for the purpose of obtaining legal advice. McCartney v. Attorney Gen., 231 Mich.App. 722, 731, 587 N.W.2d 824, 828 (1998)(per curiam). The privilege also generally protects communications from an attorney to a client, including the attorney’s opinions, conclusions, and recommendations based upon the facts furnished by the client. Hubka v. Pennfield Township, 197 Mich.App. 117, 121-22, 494 N.W.2d 800, 802 (1992)(per curiam). In addition, “where the attorney’s ‘client is an organization, the privilege extends to those communications between attorneys and all agents or employees of the organization who are authorized to act or speak for the organization in relation to the subject matter of the communication.’ ” Id. at 121, 494 N.W.2d at 802 (quoting Mead Data Cent., Inc. v. United States Dep’t of the Air Force, 566 F.2d 242, 253 n. 24 (D.C.Cir.1977)). Cf. Upjohn Co., 449 U.S. at 394-97, 101 S.Ct. at 685-86 (rejecting the “control group” test for determining the extent of the privilege for corporate clients and holding instead that the privilege extends to communications by lower-level employees regarding matters within the scope of their corporate duties made at the direction of their superiors and with knowledge that the information was being sought in order to secure legal advice). The privilege is narrow. Fruehauf Trailer Corp. [517]*517v. Hagelthorn, 208 Mich.App. 447, 450, 528 N.W.2d 778, 780 (1995)(per curiam). Thus, while confidential communications between attorney and client are protected, the privilege does not extend to facts included in such communications. Id. at 451-52, 528 N.W.2d at 781 (citing Upjohn Co.).

The Court concludes that the first redaction on Werner 006 regarding a discussion between Vada Hill and corporate attorney Richard Smith is protected by the attorney-client privilege because it indicates the content of a legal opinion Richard Smith conveyed to Vada Hill. In contrast, the Court concludes that the second redaction is not protected because it reveals only that Vada Hill had a discussion with outside lawyers, apparently arranged by Peter Stack. The redacted statement does not indicate the content of the discussion, nor does it necessarily show that legal advice was given. Finally, the Court concludes that the redaction on Werner 007 is protected because it repeats legal advice Richard Smith gave directly to Alfaro.

Having concluded that two of the three redactions are covered by the privilege, the Court must now determine whether Alfaro’s inclusion of those statements in the materials he furnished to his personal attorney constituted a waiver of the attorney-client privilege. The Court has not found any Michigan case discussing the parameters of waiver by a corporate employee, and the parties have not cited any Michigan case on the subject. In particular, the issue is whether Alfaro had authority to waive the privilege for Taco Bell. In general, the privilege belongs to the corporation and may be asserted or waived only by those with authority to do so — typically the officers and directors. United States v. Chen, 99 F.3d 1495, 1502 (9th Cir.1996)(quoting Commodity Futures Trading Comm’n v. Weintraub, 471 U.S. 343, 348, 105 S.Ct. 1986, 1991, 85 L.Ed.2d 372 (1985)). See also Velsicol Chem. Corp. v. Parsons, 561 F.2d 671, 674-75 (7th Cir.1977)(concluding that a corporate officer who was senior house counsel had authority to waive the privilege on behalf of the corporation); Milroy v. Hanson, 875 F.Supp. 646, 649-50 (D.Neb.1995)(noting that a lone director is without authority to waive the privilege in the face of the board’s decision to the contrary).

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Bluebook (online)
212 F.R.D. 514, 2002 U.S. Dist. LEXIS 10438, 2002 WL 31955750, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wrench-llc-v-taco-bell-corp-miwd-2002.