Robinson v. Texas Auto. Dealers Ass'n: Court Rejects Association's Privilege Claims for Communications between Association Counsel and Members

A Texas federal court has considered whether a trade association could claim as privileged documents between the association's general counsel and members regarding ongoing litigation involving the association.

A group of individuals (collectively, "Challengers") filed a class-action lawsuit against the Texas Automobile Dealers Association ("Association") and its members. The lawsuit alleged that the Association and its members entered into an illegal agreement to fix the prices by agreeing to add a fixed inventory tax to each vehicle sold. As part of the discovery process, the Association filed a privilege log for documents that it argued it was not required to produce to Challengers because these were privileged communications. The Challengers sought to compel production of some of those documents. Among the documents that the Association claimed were privileged were communications between the Association's general counsel ("GC") and members of the Association.

The United States District Court for the Eastern District of Texas ruled that the Association could not claim any privilege over the communications between the GC and members, although the work product doctrine did protect these documents from production to the Challengers. The Challengers argued that there was not an attorney/client relationship between the GC and the members and also that the documents at issue were not kept confidential, thereby destroying any privilege claims. The documents in question involved updates/information authored by the GC about various lawsuits filed against members and these were mass-emailed to 700 members.

The court first looked to see whether the attorney/client privilege applied to the communications between the GC and members. In order to claim the privilege, a party must show that the recipients were clients or sought to become clients of the attorney making the statements. This determination is made on a case-by-case basis, with a court independently evaluating every privilege claim. Looking at other cases involving trade associations and privilege claims, the court found that while an attorney/client relationship could exist between an association attorney and association members, the court would need to determine whether such a relationship existed here. In addition, the Association would need to show that the communications were intended to be kept confidential and were in fact kept confidential.

The court first looked at the subject matter of the communications and found that these communications qualified for the attorney/client privilege, as they contained analysis of pending lawsuits. However, the court ruled that these communications did not qualify for the attorney/client privilege because there was no showing that the recipients had sought to have the GC serve as their attorney. While the Association claimed that all members thought of the GC as their counsel, the court found that was insufficient to claim the protections of the attorney/client privilege. The court stated that while there were ways in which the GC could have established an attorney/client privilege with members of the Association, there was no such evidence offered by the Association in this case. Indeed, when the GC asked members to confirm the existence of an attorney client relationship, many of the members for whom the privilege was now being asserted had failed to return the acknowledgement. Thus, the court rejected the attorney/client privilege for these communications.

Next, the court looked to see whether the joint defense privilege protected these communications. The joint defense privilege allows disclosure of privileged communications to parties who share a common legal interest so long as the communications otherwise remain confidential. The court found that the Association failed to show that the communications were kept confidential by the members. The Association argued that it intended that the documents should be kept confidential and also that the Challengers had not shown that the documents had lost their confidentiality. The court rejected this argument, finding that the documents in question had been mass-emailed to 700 members. In order to show that these were privileged communications, the Association would need to produce an affidavit stating the name of every person who had received or discussed the communications, that such person had an appropriate relationship with the association so that no waiver of the privilege had occurred, and that the person understood that the communications were intended to remain confidential. Since the Association had failed to provide such information, the court ruled that the joint defense privilege did not maintain the confidentiality of these documents.

Finally, the court looked to see whether the work product protection applied to the documents in question. The work product privilege applies to documents prepared during litigation or in anticipation of litigation and contain an attorney's legal opinions. The work product privilege does not require confidentiality, only that the documents in question have not been disclosed to the adversary in litigation. The court found that the documents qualified for the work product protection, as these documents were prepared by the GC in anticipation of future litigation against the Association and the members, and the documents also contained her legal analysis. The court also found there was no showing that the Challengers had received these documents, so no waiver of the work product protection had occurred. Thus, the court ruled that the work product protection applied to these documents and they did not need to be disclosed to the Challengers.

The court also considered whether the communications from the chairman ("Chairman")of the Association's legal defense fund were privileged. The Association argued that the Chairman worked under the direction of the GC and so the Chairman's communications should be treated as privileged. The court found that since none of the communications contained a "substantive" legal discussion and also there was no showing by the Association that these communications were kept confidential, these communications were not entitled to protection from any of three doctrines discussed above. Thus, the court ordered the Association to produce these documents to the Challengers.

The Association also claimed privilege for minutes and briefs from Association Board meetings and Executive committee meetings. The Association had redacted both sets of documents, removing the "Legal" sections from each. The court found that there was no showing by the Association that these documents were kept confidential, and the court found that most of the discussion in the removed sections simply involved business, lobbying, or financial issues. The court ordered these documents be produced in their entirety.

Robinson v. Texas Auto. Dealers Ass'n, 214 F.R.D. 432 (E.D. Tex.), modified, No. 03-40860, 2003 WL 21911333 (5th Cir. July 25, 2003).

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