Montgomery County v. MicroVote Corp.
| Decision Date | 30 April 1999 |
| Docket Number | No. 98-1923,98-1923 |
| Citation | 175 F.3d 296 |
| Parties | MONTGOMERY COUNTY, Appellant, v. MICROVOTE CORPORATION; Carson Manufacturing Company, Inc.; Westchester Fire Insurance Co., Inc. |
| Court | U.S. Court of Appeals — Third Circuit |
Timothy T. Myers (Argued), John M. Elliott, Krista K. Beatty, Brian J. McCormick, Jr., Elliott, Reihner, Siedzikowski & Egan, Blue Bell, PA, for Appellant.
Samuel E. Klein, Robert C. Clothier, III, Dechert, Price & Rhoads, Philadelphia, PA, for Appellee MicroVote Corporation.
Michael T. Scott (Argued), Reed, Smith, Shaw & McClay, Philadelphia, PA, Scott R. Alexander, Gayle A. Reindl, Sommer & Barnard, Indianapolis, IN, for Appellee Carson Manufacturing Company, Inc.
Robert T. Carlton, Jr., Ellsworth, Wiles & Chalphin, Philadelphia, PA, for Appellee Westchester Fire Insurance Co., Inc.
Before: GREENBERG, ROTH, and ROSENN, Circuit Judges.
This appeal raises an important question regarding the presence and scope of the attorney-client privilege. The defendant Carson Manufacturing Company ("Carson") seeks to discover six documents generated by Michael I. Shamos, a member of the Bar of Pennsylvania who holds a Ph.D. in computer science. Carson claims that the documents are discoverable because Shamos was acting as a consultant, rather than an attorney, for plaintiff Montgomery County ("County"). The United States District Court for the Eastern District of Pennsylvania agreed and held, inter alia, that the documents Shamos created were not protected by the attorney-client privilege. Our review of the record, however, compels us to conclude that Shamos, who was retained through his law firm and participated in contract negotiations, acted as the County's attorney and, thus, the attorney-client privilege precludes discovery of five of the documents. We therefore vacate the order of the district court in part and affirm as to one of the documents.
On May 25, 1994, for a price exceeding four million dollars, Montgomery County purchased nine hundred MICROVOTE-464 Electronic Voting Computer and Direct Electronic Voting Units from defendant MicroVote Corporation ("MicroVote"). Carson manufactured these electronic voting machines.
Montgomery County used these machines in the 1994 and 1995 general elections and the 1995 primary election. In November 1995, the County for the first time used the machines county-wide for a multi-page ballot. According to the County, the machines malfunctioned during that election. When voters scrolled the ballot to proceed to the next page, the machines sometimes shut down. The power failures created long lines at the polls. Some voters waited two hours, and others went home without voting. After the polls closed, the MicroVote software miscalculated the results. Consequently, County officials gave erroneous results to the press, which reported incorrect election winners.
After the difficulties experienced during the November 1995 election, County officials decided to retain someone to analyze past elections and make recommendations to secure properly functioning voting machines for upcoming elections. As described by Thomas E. Waters., Jr., Montgomery County Solicitor, the County was "looking for an expert who could evaluate the performance of the machines, tell [the County] what was wrong with them, tell [the County] whether it was fixable, and tell [the County] whether or not [the County] could use the machines if [the County] wanted to." Joseph Passarella, Montgomery County Director of Voter Services, contacted five election experts who had been recommended by the County Commissioners or the Pennsylvania State Department. Shamos was the only attorney included in the list of experts. He worked for the Commonwealth of Pennsylvania certifying voting machines, including the MICROVOTE-464. Shamos was willing and able to work for Montgomery County. The other four experts were not interested in consulting for the County.
The County Commissioners ultimately decided to retain Webb Ziesenheim Bruening Logsdon Orkin & Hanson P.C. ("Webb Law Firm"), of which Shamos is a partner. On January 30, 1996, Montgomery County entered into a fee agreement with the Webb Law Firm. The letter confirming the fee agreement states: "This letter acknowledges the engagement by Montgomery County of Webb Ziesenheim Bruening Logsdon Orkin & Hanson, P.C. as counsel in connection with rendering advice on contractual relations with the county's present vendor of electronic voting systems." Two days later, at a County Board of Elections meeting, the County retained the Webb Law Firm.
Shamos performed several tasks for the County. On February 1, 1996, Shamos attended a morning meeting between Montgomery County, Carson, and MicroVote officials, during which they discussed options available to the County to resolve the problem caused by the malfunctioning voting machines. At a meeting with MicroVote and Carson officials later that day, Shamos told MicroVote that he would not positively recommend MicroVote's machines to the County unless he received specific information and proposals. The following day, Shamos met with officials from MicroVote and Carson. Shamos conditioned a positive recommendation on MicroVote giving the County a one-hundred-percent performance bond or letter of credit and conditioning the recovery of the bond on the machines' performing at a specific level. On February 5, 1996, MicroVote sent Shamos a draft of its proposals, which Shamos critiqued in a letter to the president of MicroVote on the following day.
On February 20, 1996, Shamos sent Passarella, the County's Director of Voting Services, a seven-page letter in which Shamos is believed to have made his findings and recommendations to Montgomery County. This letter, which was not part of the district court record, is the key document that Carson seeks and the County has been trying to protect.
According to Passarella's hearing testimony, in February 1996, Shamos and County Solicitor Waters negotiated with Dean Richards, MicroVote's counsel, and helped write an addendum to the contract between Montgomery County and MicroVote. In the addendum, which was executed on March 13, 1996, MicroVote agreed to provide the County with 390 additional MICROVOTE-464 voting machines for the April 1996 primary elections.
Shamos performed services for Montgomery County until March 12, 1996. Shamos was the only Webb Law Firm attorney who billed the County for services rendered. The County paid its fees for Shamos's services to the Webb Law Firm, not directly to Shamos.
At times, County officials called Shamos a consultant. The minutes of the February 2, 1996 Board of Elections meeting reported: "[T]he County is hiring a consultant to ensure there will not be a repetition of the previous election day problems." The minutes added that Shamos The Board of Elections adopted a resolution retaining the Webb Law Firm's services as a consultant. The resolution specifically mentioned that the County was engaging Shamos. In a letter written on February 7, 1996, County Commissioner Chairman Mario Mele referred to Shamos as a consultant. The minutes taken at the February 22, 1996 Board of Elections meeting called Shamos "the County's Consultant."
Other County officials and MicroVote's counsel considered Shamos to have been its counsel. In his testimony delivered at the hearing before the district court to determine if the Shamos report was privileged, Passarella said that the County retained the Webb Law Firm to consider all of the County's options, including litigation. He referred to Shamos as counsel and said that the engagement letter called the Webb Law Firm counsel. In his deposition, Waters testified that Shamos was acting as the County's lawyer. A March 1, 1996 letter from Richards to Waters stated that Shamos "previously represented the County" in connection with the voting machine dispute.
The problems with the MicroVote voting machines persisted in the April 1996 primary elections. Afterward, relations between the parties grew rancorous. On July 1, 1996, MicroVote sued the County for allegedly breaching an oral contract. That suit was dismissed. On October 10, 1997, Montgomery County filed this diversity action with the United States District Court for the Eastern District of Pennsylvania. In its complaint, the County alleged, inter alia, negligence, breach of warranty, breach of contract, and fraud.
In its request for production of documents, Carson sought from the County "[t]he report of Dr. Shamos concerning the 1995 election and/or the performance of the voting machines and all other documents generated by and/or provided to Dr. Shamos" ("Shamos documents"). The County asserted that the Shamos documents were not discoverable under the attorney-client and work-product privileges. Neither Shamos nor the Webb Law Firm has represented the County in either suit.
On July 2, 1998, Carson filed a motion to compel discovery, and the district court held a hearing on August 21, 1998. On September 24, 1998, the court ordered the County to produce to Carson six documents, which the court dubbed "the Shamos Report." The "report" comprises:
(1) 1/30/96 fee agreement letter
(2) 2/29/96 bill for services
(3) 3/31/96 bill for services
(4) 2/5/96 one-page letter from Shamos to Passarella
(5) 2/13/96 fax cover sheet from Passarella to Shamos
(6) 2/20/96 seven-page letter from Shamos to Passarella
In its memorandum and order, the district court concluded that the County hired Shamos as an election consultant, not as an attorney. Consequently, the court held that the Shamos documents were not protected by the attorney-client...
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