Earl v. Boeing Co., Civil Action No. 4:19-cv-507

• Decision Date: 15 March 2021
• Docket Number: Civil Action No. 4:19-cv-507
• Parties: DAMONIE EARL, ET AL., Plaintiffs, v. THE BOEING COMPANY, ET AL., Defendants.
• Court: U.S. District Court — Eastern District of Texas

DAMONIE EARL, ET AL., Plaintiffs, v. THE BOEING COMPANY, ET AL., Defendants.

Civil Action No. 4:19-cv-507

United States District Court EASTERN DISTRICT OF TEXAS SHERMAN DIVISION

March 15, 2021

Judge Mazzant

MEMORANDUM OPINION AND ORDER

On March 4, 2021, the Court granted Plaintiffs' Motion to Compel Boeing to Produce Documents Under the Crime-Fraud Exception (Dkt. #321). The next day, Boeing produced the documents specified in the Court's March 4, 2021 Order. After conducting an in camera review of these documents, the Court orders Boeing to produce the documents specified in this Order in fully unredacted form to Plaintiffs as instructed herein.

LEGAL STANDARD

Under the crime-fraud exception, the attorney-client and work product privileges "can be overcome 'where communication or work product is intended to further continuing or future criminal or fraudulent activity.'" United States v. Edwards, 303 F.3d 606, 618 (5th Cir. 2002) (quoting In re Grand Jury Subpoena, 220 F.3d 406, 410 (5th Cir. 2000)); In re Int'l Sys. & Controls Corp. Sec. Litig., 693 F.2d 1235, 1242 (5th Cir. 1982) ("The crime-fraud exception therefore comes into play if 'the client consults an attorney for advice that will assist the client in carrying out a contemplated illegal or fraudulent scheme.'" (quoting In re Murphy, 560 F.2d 326, 337 (8th Cir. 1977))). These privileges are overcome "when an attorney-client communication or work product is intended to further continuing or future criminal or fraudulent activity." In re EEOC, 207 F. App'x 426, 434 (5th Cir. 2006) (citing In re Grand Jury Subpoena, 419 F.3d 329, 335 (5th Cir. 2005)). The crime-fraud exception may apply even when the attorney providing legal services is unaware of the ongoing crime or fraud being perpetrated by the client. See In re Grand Jury Proc. #5 Empanelled Jan. 28, 2004, 401 F.3d 247, 256 (4th Cir. 2005). The party asserting the crime-fraud exception bears the burden to show the "attorney-client relationship was intended to further criminal or fraudulent activity." Id. (citing In re Grand Jury Subpoena, 419 F.3d at 335).

After the movant makes a prima facie showing of the crime-fraud exception's applicability, courts then conduct an in camera review of the documents at issue. The Fifth Circuit has made clear that even when a prima facie case exists, the crime-fraud exception "does not extend to all communications made in the course of the attorney-client relationship, but rather is limited to those communications and documents in furtherance of the contemplated or ongoing criminal or fraudulent conduct." In re Grand Jury Subpoena, 419 F.3d at 343. Materials protected by the attorney-client privilege or the work product doctrine fall within the scope of the crime-fraud exception when they "hold 'some valid relationship' to the prima facie violation such that they 'reasonably relate to the fraudulent activity.'" Id. at 346 (quoting In re Int'l Sys., 693 F.2d at 1243). The crime or fraud at issue must be ongoing, which may include "occasional backward looks" that are "part of a forward looking scheme." In re Grand Jury Subpoenas, 561 F.3d 408, 412 (5th Cir. 2009); see In re Sealed Case, 676 F.2d 793, 812 n.74 (D.C. Cir. 1982) ("Once a sufficient showing of crime or fraud has been made, the privilege vanishes as to all material related to the ongoing violation." (emphasis added)). The focus of this analysis is not on formal elements but rather the distinction between "material for which the law should not furnish the protections of a privilege and material for which a privilege should be respected." In re Burlington N., Inc.,822 F.2d 518, 525 n.5 (5th Cir. 1987) (internal quotation marks omitted) (quoting In re Sealed Case, 676 F.2d at 815 n.91).

ANALYSIS

The Court first looks to the validity of Boeing's privilege assertions and then turns to crime-fraud exception's applicability to the remaining documents.

I. Claims of Privilege

Boeing asserts privilege over the 232 documents under in camera review. Because the crime-fraud exception applies only when material is privileged, the Court first reviewed each document and evaluated Boeing's privilege claims. The Court finds Boeing's assertions of privilege proper—aside from one set of documents.

The documents numbered under tabs 8-13 and 15-27 involve Boeing employees workshopping the company's public response to inquiries from media outlets. The employees communicating or looped into the conversations include, among others, Boeing in-house counsel. Boeing argues these documents are protected by attorney-client privilege since they (a) involve in-house counsel "provid[ing] legal advice on the content of these communications" or (b) are "implicit request[s] for legal advice on the draft statements"¹ (Dkt. #332, Exhibit 1 at p. 3). The Court finds this position unpersuasive.

"The attorney-client privilege protects two related, but different communications: (1) confidential communications made by a client to his lawyer for the purpose of obtaining legal advice; and (2) any communication from an attorney to his client when made in the course of giving legal advice, whether or not that advice is based on privileged communications from the client." United States v. Mobil Corp., 149 F.R.D. 533, 536 (N.D. Tex. 1993) (citing In re LTV Sec. Litig., 89 F.R.D. 595, 600-03 (N.D. Tex. 1981)) . 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 (1981). "For a communication to be protected under the privilege, the proponent 'must prove: (1) that he made a confidential communication; (2) to a lawyer or his subordinate; (3) for the primary purpose of securing either a legal opinion or legal services, or assistance in some legal proceeding.'" EEOC v. BDO USA, L.L.P., 876 F.3d 690, 695 (5th Cir. 2017) (quoting United States v. Robinson, 121 F.3d 971, 974 (5th Cir. 1997)). "Communications by the lawyer to the client are protected 'if they would tend to disclose the client's confidential communications.'" O'Malley v. Pub. Belt R.R. Comm'n for City of New Orleans, CV 17-4812, 2018 WL 814190, at *2 (E.D. La. Feb. 9, 2018) (quoting Hodges, Grant & Kaufmann v. United States, 768 F.2d 719, 721 (5th Cir. 1985)). "Because the attorney-client privilege 'has the effect of withholding relevant information from the fact-finder,' it is interpreted narrowly so as to 'apply only where necessary to achieve its purpose.'" BDO USA, L.L.P., 876 F.3d at 695 (brackets omitted) (quoting Robinson, 121 F.3d at 974). Further, "[t]he privilege only protects disclosure of communications; it does not protect disclosure of the underlying facts by those who communicated with the attorney." Upjohn, 449 U.S. at 395.

"[A]pplication of the attorney-client privilege is a 'question of fact, to be determined in the light of the purpose of the privilege and guided by judicial precedents.'"² In re Auclair, 961 F.2d 65, 68 (5th Cir. 1992) (quoting Hodges, Grant & Kaufmann, 768 F.2d at 721). "Determining the applicability of the privilege is a 'highly fact-specific' inquiry, and the party asserting the privilege bears the burden of proof." BDO USA, L.L.P., 876 F.3d at 695 (quoting Stoffels v. SBC Commc'ns, Inc., 263 F.R.D. 406, 411 (W.D. Tex. 2009)). Attorney-client privilege is not presumed, United States v. Tedder, 801 F.2d 1437, 1441 (4th Cir. 1986), and "[a]mbiguities as to whether the elements of a privilege claim have been met are construed against the proponent," BDO USA, L.L.P., 876 F.3d at 695.

The circumstances of Boeing's privilege assertion are less straightforward, however, since corporate in-house counsel is involved. As described by the court in Stoffels,

The attorney-client privilege applies in a corporate setting. However, because in-house counsel has an increased level of participation in the day-to-day operations of the corporation, it is more difficult to define the scope of the privilege when a communication is made to in-house counsel. Thus, in such a setting, the attorney-client privilege attaches only to communications made for the purpose of giving or obtaining legal advice or services, not business or technical advice or management decisions. The critical inquiry is, therefore, whether any particular communication facilitated the rendition of predominantly legal advice or services to the client.³

Stoffels, 263 F.R.D. at 411 (emphasis added) (citations omitted). "Legal advice, as contrasted with business advice, 'involves the interpretation and application of legal principles to guide future conduct or to assess past conduct.'" EEOC v. BDO USA, L.L.P., 856 F.3d 356, 365 (5th Cir. 2017) (quoting In re Cnty. of Erie, 473 F.3d 413, 419 (2d Cir. 2007)), opinion withdrawn and superseded,876 F.3d 690 (5th Cir. 2017). If advice offered by in-house counsel intertwines business and legal advice, attorney-client privilege protects the communication only if the legal advice predominates. Neuder v. Battelle Pac. Nw. Nat. Lab., 194 F.R.D. 289, 292 (D.D.C. 2000). Simply labeling communications as "legal advice" is conclusory and insufficient to satisfy the privilege-proponent's burden. See Coltec Indus., Inc. v. Am. Motorists Ins. Co., 197 F.R.D. 368, 373 (N.D. Ill. 2000) ("[D]escribing a document as 'legal advice' . . . is not the same as establishing that [it is] immune from discovery.").

To justify its assertion of attorney-client privilege over tabs 8-13 and 15-27, Boeing offers that these "email communications discussing draft public communications regarding the Lion Air accident" involve the provision of legal advice by in-house counsel or implied requests for such (Dkt. #332, Exhibit 1 at p. 3). This explanation is not enough.

After its in camera review, the Court sees these documents as having been created for primarily non-legal purposes. The...