Smith v. Alyeska Pipeline Service Co.

• Decision Date: 10 May 1982
• Docket Number: Civ. A. No. 81-259.
• Citation: 538 F. Supp. 977
• Parties: Raymond P. SMITH, Jr., Plaintiff, v. ALYESKA PIPELINE SERVICE CO. and Sohio Pipe Line Co., Defendants.
• Court: U.S. District Court — District of Delaware

538 F. Supp. 977

Raymond P. SMITH, Jr., Plaintiff, v. ALYESKA PIPELINE SERVICE CO. and Sohio Pipe Line Co., Defendants.

Civ. A. No. 81-259.

United States District Court, D. Delaware.

May 10, 1982.

Vincent A. Theisen of Theisen, Lank, Mulford & Goldberg, Wilmington, Del., Allen Kirkpatrick, Lawrence A. Hymo and William T. Bullinger of Cushman, Darby & Cushman, Washington, D. C., of counsel, for plaintiff.

Januar D. Bove, Jr. of Connolly, Bove & Lodge, Wilmington, Del., Garret R. Tucker, Jr. and Alan Rosenthal of Baker & Botts, Houston, Texas, of counsel, for defendants.

OPINION

LATCHUM, Chief Judge.

Raymond P. Smith, Jr., has filed this action seeking to recover $5,000,000 from defendants Alyeska Pipeline Service Co. ("Alyeska") and Sohio Pipe Line Co. ("Sohio") for damages allegedly caused by defendants' willful and wanton infringement of U. S. Patent 3,741,233 ("the '233 Patent") issued June 26, 1973. (Docket Item "D.I." 1.) Plaintiff timely demanded a jury trial. (D.I. 8.) Smith asserts that the patent relates to a system for the protection of the environment against leaks from an oil pipeline and that Alyeska and Sohio have infringed the patent by incorporating a system covered by the '233 Patent into the Trans Alaskan Pipeline System ("TAPS"). (Id.) Smith further alleges that he has neither issued a license nor been compensated by Alyeska and Sohio, and that their adoption of the patented system was undertaken with full knowledge of his patent.¹ (D.I. 1, ¶¶ 6 & 7.)

Alyeska and Sohio deny that Smith is the owner of the '233 Patent and deny that any system covered by the '233 Patent has been incorporated into TAPS. (D.I. 5.) Alyeska and Sohio assert that the leak detection and control equipment and procedures used in TAPS follow the teachings of the prior art and utilize equipment and techniques known to and used by those skilled in the art prior to the alleged invention by Smith. (D.I. 5, ¶ 10.) Further, they allege that the '233 Patent is invalid, void and unenforceable because it fails to comply with the Patent Laws of the United States, including 35 U.S.C. §§ 101, 102, 103 and 112. (D.I. 5, ¶ 9.) Alyeska and Sohio also assert an affirmative defense alleging that Smith is barred by laches from recovering, or attempting to recover, any money damages from them for the alleged infringement of the '233 Patent. (D.I. 5, ¶ 11.)

Alyeska and Sohio have moved in this Court, pursuant to Rule 37(a), F.R.Civ.P., for an order requiring Smith to produce and permit Alyeska and Sohio to inspect and copy various documents. (D.I. 21.) They also have moved the Court, pursuant to Rule 42(b), F.R.Civ.P., to order the issues of liability (i.e., patent validity, enforceability and infringement) to be tried separately from, and prior to, the trial, if such be necessary, of the issue of damages. (D.I. 20.) Finally, Alyeska and Sohio have moved to stay all proceedings, including discovery, relative to damages, until it has been established that the patent in suit is valid and enforceable and has been infringed by the defendants.² (Id.)

I. Defendants' Rule 37(a) Motion.

Alyeska and Sohio first move the Court, pursuant to Rule 37(a), for an order requiring Smith to produce and permit Alyeska and Sohio to inspect and copy all documents in his possession, custody or control comprising, recording or relating to communications between Smith and his former attorney, Donald E. Zinn,³ dealing with the question whether Alyeska and/or TAPS infringed, or would infringe, the '233 Patent. (D.I. 21.) Alyeska and Sohio claim that they are entitled to these documents because they are relevant to the subject matter of this litigation and that the documents are believed to contain information reasonably calculated to lead to the discovery of admissible evidence. (Id.) Smith objects to defendants' motion to compel the production of documents on the grounds that the documents sought are protected by the attorney-client privilege. (D.I. 24 at 1.)

Communications made by a client to his attorney for the purpose of seeking professional advice, as well as the responses by the attorney to such inquiries, are generally privileged communications and not subject to disclosure. See Colton v. United States, 306 F.2d 633, 639 (C.A. 2, 1962), cert. denied, 371 U.S. 951, 83 S.Ct. 505, 9 L.Ed.2d 499 (1963); Haymes v. Smith, 73 F.R.D. 572, 577 (W.D.N.Y.1976). The attorney-client privilege is based on public policy "and was developed to promote full and complete freedom of consultation between clients and their legal advisors without any fear of compelled disclosure except with the client's consent." Lee National Corp. v. Deramus, 313 F.Supp. 224, 226 (D.Del.1970). It bestows upon a client a privilege to refuse to disclose and to prevent others from disclosing confidential communications made for the purpose of facilitating the rendition of professional legal services to the client. See McCormick, Evidence § 87 (2d ed. 1972); 8 Wigmore, Evidence § 2292 (McNaughton rev. 1961).

A client, nevertheless, may waive the privilege by deliberately injecting into the case the advice which he received from his attorney. See Handgards, Inc. v. Johnson & Johnson, 413 F.Supp. 926, 929 (N.D. Cal.1976); Garfinkel v. Arcata National Corp., 64 F.R.D. 688, 689 (S.D.N.Y.1974); Smith v. Bentley, 9 F.R.D. 489, 490 (S.D.N. Y.1949). See also 8 Wigmore, Evidence § 2327 (McNaughton rev. 1961). It would be unfair to allow a client to assert the attorney-client privilege and prevent disclosure of damaging communications while allowing the client to disclose other selected communications solely for self-serving purposes. See Handgards, 413 F.Supp. at 929; International Telephone and Telegraph Corp. v. United Telephone, 60 F.R.D. 177, 185-86 (M.D.Fla.1973). Therefore, if a client chooses to disclose some privileged communications between the attorney and himself, then he waives the remainder of the communication which relate to the same subject matter. See Haymes v. Smith, 73 F.R.D. 572, 577 (W.D.N.Y.1976). See also Handgards, 413 F.Supp. at 929; In re Penn Central Commercial Paper Litigation, 61 F.R.D. 453, 464 (S.D.N.Y.1973); International Telephone, 60 F.R.D. at 185-86; Lee National, 313 F.Supp. at 227.

Smith has identified thirty-six documents relating to the issue of infringement which were exchanged between Zinn and himself. See D.I. 21, letter dated February 4, 1982. Smith argues that these documents need not be produced pursuant to Alyeska and Sohio's discovery request because the documents are privileged communications. (D.I. 24.) Alyeska and Sohio, however, argue that Smith has waived the attorney-client privilege when Zinn, acting on behalf of Smith, voluntarily sent a copy of an opinion letter addressed to Smith dated February 12, 1975, to Alyeska advising that TAPS and Alyeska were infringing or would infringe the '233 Patent. (D.I. 28 at 2.)

Smith argues that the copy of the opinion letter sent to Alyeska "was born out of unusual circumstances where Craftmaster and Alyeska were trying to resolve the issue of infringement." (D.I. 24 at 6.) He notes that there would be no waiver of the attorney-client privilege if Mr. Zinn had taken the time to reproduce the text of the opinion letter to create another letter addressed solely to Alyeska. He maintains that to distinguish an opinion letter sent to a client from an identical letter sent to an adversary is to rely on form rather than substance. Smith, therefore, argues that the opinion letter addressed to Smith with a copy thereof sent to Alyeska cannot act as a waiver of the privilege. (Id.)

The Court disagrees. The form of the letter is of critical importance because of the relationship of the parties. There is a fundamental difference between a letter written to the client giving a balanced and objective presentation of the factual and legal issues and a letter written to the opposing party presenting the factual and legal position in an adversarial posture. If an adversary receives a letter from the opposing attorney which purports to be an opinion letter to an attorney's client, the adversary is more likely to give it greater weight and not discount the factual and legal propositions as being merely adversarial, as one may do when he receives a letter written for his adversary. Thus, there is a great deal of difference in the form of the letter because of the reliance by the adversary.

Smith secondly contends that if he has waived the attorney-client privilege, then such waiver is limited to those communications between Zinn and Smith from Sept. 18, 1973, the date the issue of infringement was first discussed, through February 13, 1975, the date the opinion letter was sent to Alyeska. (D.I. 24 at 7.) He maintains that he is not required to produce those documents created after the opinion letter which relate to the issue of infringement because those subsequent opinions are based on other information. (Id.) He relies upon Hercules, Inc. v. Exxon Corp., 434 F.Supp. 136 (D.Del.1977), Lee National Corp. v. Deramus, 313 F.Supp. 224, 225 (D.Del.1970), and International Business Machines, Inc. v. Sperry Rand Corp., 44 F.R.D. 10 (D.Del. 1968) to support this proposition.

In Hercules, the plaintiff objected to the defendant's discovery request on the grounds that the thirty-one documents sought by the defendant were protected by the attorney-client privilege. The defendant contended that the plaintiff had waived the privilege because the plaintiff had produced eighteen of the thirty-one documents. Although the documents were inadvertently produced, the court found that the plaintiff had voluntarily produced the documents, without limitation. It noted the well established principle that "voluntary waiver, without limitation, of one or more privileged documents passing between a certain attorney and the client discussing certain subject, waives the privilege as to all communications between the same attorney and the same...