Leibel v. General Motors Corp.

• Decision Date: 14 June 2002
• Docket Number: Docket No. 224734.
• Parties: Charles Allen LEIBEL, Grace Patricia Leibel, Charles A. Leibel and Jennifer Leibel, Plaintiffs-Appellees, v. GENERAL MOTORS CORPORATION, Defendant-Appellant.
• Court: Court of Appeal of Michigan — District of US

646 N.W.2d 179

250 Mich. App. 229

Charles Allen LEIBEL, Grace Patricia Leibel, Charles A. Leibel and Jennifer Leibel, Plaintiffs-Appellees, v. GENERAL MOTORS CORPORATION, Defendant-Appellant.

Docket No. 224734.

Court of Appeals of Michigan.

Submitted November 14, 2001, at Detroit.

Decided March 1, 2002, at 9:05 a.m.

Released for Publication June 14, 2002.

Potter, Carniak, Anderson & DeAgostino (by Thomas M. DeAgostino), Auburn Hills, for the plaintiffs.

Bowman and Brooke LLP (by Terrence E. Haggerty, Frank Nizio, and Norma M. Gant), McGuire, Woods, Battle and Boothe LLP (by Evan A. Burkholder), and Kirkland & Ellis (by Jay P. Leftkowitz and Kelion N. Kasler), Detroit; Richmond, VA; Washington, D.C., for the defendant.

Before: BANDSTRA, C.J., and SAAD, P.J., and WHITBECK, J.

SAAD, P.J.

I. Nature of the Case

Plaintiffs attached to their complaint a document (identified as the "Toth Memo") that General Motors (GM) says is protected from use in this litigation by the attorney-client privilege and the work-product doctrine. This document was prepared by a GM in-house lawyer, Gary Toth, and renders legal advice to agents of GM regarding ongoing product liability litigation involving alleged defectively designed seatbacks in rear-end collisions.

Plaintiffs say that the Toth Memo is not privileged because (1) the document is essentially factual, not legal, and (2) GM waived its privilege because it produced the Toth Memo in other litigation and the document is open to inspection in other court files. In response, GM says the Toth Memo is quintessentially legal advice and strategy regarding ongoing litigation and any disclosure of the Toth Memo in other litigation throughout the United States was either ordered or done inadvertently and, thus, GM has not waived its attorney-client or work-product privileges as a matter of Michigan law.

Without addressing the mixed question of law and fact whether GM voluntarily disclosed and thus waived its actual privilege, the trial court essentially ruled that, because the Toth Memo is open to inspection in other litigation throughout the United States, it is not privileged.¹ Because we hold that the Toth Memo is clearly covered by the attorney-client and work-product privileges, and because we further hold that involuntary disclosure through inadvertence or court orders in other jurisdictions does not constitute a voluntary waiver of the privilege, we reverse the trial court's holding to the contrary and remand to the trial court for it to determine whether GM voluntarily disclosed the Toth Memo in connection with other litigation.

II. Facts and Procedural History

A. Nature of the Disputed Document

In 1992, Gary Toth, an attorney on GM's legal staff, prepared a slide presentation (copies of which are identified as the "Toth Memo") regarding GM's defense of product liability lawsuits based on the seatback² design in GM automobiles. Specifically, the Toth Memo discusses GM's analysis and documentation supporting the design of "yielding" seats and the effect of such seats on potential occupant ejections and injuries in rear-end collisions. In the memo, Toth also outlines problems encountered by GM in litigating seatback lawsuits and suggests particular information needed to bolster GM's position in seatback litigation.

On May 11, 1997, Charles Allen Leibel sustained severe injuries in an automobile accident involving a vehicle driven by James Samuel Napier and owned by Birdie Virginia Fisher. On February 20, 1998, Leibel filed a complaint against Napier and Fisher for negligence. Thereafter, Leibel filed an amended complaint and added his wife and children as plaintiffs and GM as a defendant. Plaintiffs alleged that GM negligently designed the seats in the 1988 Pontiac 6000, which Leibel was driving at the time of the accident. Plaintiffs attached a copy of the Toth Memo to their amended complaint.

B. The Dispute Regarding How the Toth Memo Became "Public"

The parties dispute exactly how plaintiffs' counsel acquired the Toth Memo. Plaintiffs and GM agree that plaintiffs' attorneys representing clients in other cases obtained the Toth Memo from a document repository at the law offices of McGuire, Woods, Battle & Booth, LLP, in Richmond, Virginia.³ Plaintiffs further maintain that attorneys in at least three of the cases⁴ reviewed the documents at McGuire, Woods and that a GM attorney voluntarily copied the Toth Memo, among other documents, and released it to the plaintiffs' attorneys. In contrast, GM says that, while the GM attorneys at McGuire, Woods reviewed approximately 100,000 documents to identify and eliminate any privileged documents, the Toth Memo was nonetheless inadvertently placed in the repository in the files of GM engineer Mark Oleszko. GM asserts that it learned that the Toth Memo was discovered and copied when a plaintiff's attorney attempted to introduce the memo at the deposition of a GM engineer in two other cases.⁵ According to GM, the attorney obtained his copy of the Toth Memo from an attorney involved in Woody v. General Motors Corp, No. 96VS0115085A (Fulton Co St Ct, Ga, 1996). GM further claims that before it could correct the error by removing the Toth Memo from the McGuire, Woods repository, two additional attorneys in other lawsuits also obtained copies of the Toth Memo.⁶

Further, though it is clear that GM produced the Toth Memo in another case, Simpson v. General Motors Corp, No. 17972 (Morris Co Ct, Tex), it remains unclear whether this document was produced voluntarily or involuntarily. On one hand, plaintiffs claim that GM stipulated the production of the Toth Memo in Simpson and that, pursuant to the court's order, plaintiffs' counsel in this case "is entitled to full access to all documents produced by General Motors."⁷ Conversely, GM asserts that it was compelled to produce the Toth Memo in Simpson pursuant to court order.

Here, GM filed a motion in the trial court to retrieve the Toth Memo and argued that it is protected by the attorney-client privilege and the work-product doctrine and that GM never waived those protections. The trial court ultimately entered an order denying GM's motion and ruled that the Toth Memo is not protected by the attorney-client privilege or the work-product doctrine because it had been circulated in the "public domain."⁸

C. The Trial Court's Ruling

The trial court misapprehended the law regarding the attorney-client privilege and the work-product doctrine. The trial court incorrectly stated in its bench opinion that "the policy justifications for the application of the attorney/client privilege and the work product protection do not apply to the subject documents in this case." ⁹ The court also erroneously ruled that the Toth Memo is not protected by the attorney-client privilege because it is no longer confidential and because GM produced it in other courts and, specifically, in a California lawsuit, Hibbard v. General Motors, after the Hibbard court ruled that the memo was not entitled to protection. Further, the trial court inaccurately stated that the Toth Memo "would not have been made in anticipation of litigation in this case."¹⁰ Finally, the trial court held, again incorrectly, that the Toth Memo is not protected by the work-product doctrine because plaintiffs demonstrated that they had substantial need of the document and that they could not acquire it through other means without undue hardship.

III. Analysis—Attorney Client Privilege

A. Standard of Review and Applicable Law

The question whether the attorney-client privilege applies to a communication is a question of law that this Court reviews de novo. Reed Dairy Farm v. Consumers Power Co., 227 Mich.App. 614, 618, 576 N.W.2d 709 (1998). This Court considered the scope of the attorney-client privilege in Reed, at 618-619, 576 N.W.2d 709:

The attorney-client privilege attaches to direct communication between a client and his attorney as well as communications made through their respective agents. The scope of the attorney-client privilege is narrow, attaching only to confidential communications by the client to his advisor that are made for the purpose of obtaining legal advice. Where an attorney's client is an organization, the privilege extends to those communications between attorneys and all agents or employees of the organization authorized to speak on its behalf in relation to the subject matter of the communication. [Citations omitted.]

In Co-Jo, Inc. v. Strand, 226 Mich.App. 108, 112, 572 N.W.2d 251 (1997), our Court further explained that "[t]he purpose of the attorney-client privilege is to permit a client to confide in the client's counselor, knowing that the communications are safe from disclosure." Further, the United States Supreme Court explained the importance of the attorney-client privilege in the company setting in Upjohn Co. v. United States, 449 U.S. 383, 389, 101 S.Ct. 677, 66 L.Ed.2d 584 (1981). The Court articulated the vital principles underlying the rule:

The attorney-client privilege is the oldest of the privileges for confidential communications known to the common law. 8 J Wigmore, Evidence § 2290 (McNaughton rev 1961). Its purpose 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. The privilege recognizes that sound legal advice or advocacy serves public ends and that such advice or advocacy depends upon the lawyer's being fully informed by the client. As we stated last Term in Trammel v. United States, 445 U.S. 40, 51, 100 S.Ct. 906, 63 L.Ed.2d 186 (1980):

"The lawyer-client privilege rests on the need for the advocate and counselor to know all that relates to the client's reasons for seeking representation if the professional mission is to be carried out." And in Fisher v. United States, 425 U.S. 391, 96 S.Ct. 1569, 1577, 48 L.Ed.2d 39 (1976), we recognized the...