Wolpert v. Branch Banking Tr. & Co.

• Decision Date: 30 March 2023
• Docket Number: 3:19-CV-138-TRM-DCP
• Parties: GEOFFREY WOLPERT, et al., individually and on behalf of all others similarly situated, Plaintiffs, v. BRANCH BANKING TRUST & COMPANY, Defendant.
• Court: U.S. District Court — Eastern District of Tennessee

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GEOFFREY WOLPERT, et al., individually and on behalf of all others similarly situated, Plaintiffs, v. BRANCH BANKING TRUST & COMPANY, Defendant.

No. 3:19-CV-138-TRM-DCP

United States District Court, E.D. Tennessee, Knoxville

March 30, 2023

MEMORANDUM AND ORDER

Debra C. Poplin United States Magistrate Judge

This case is before the undersigned pursuant to 28 U.S.C. § 636, the Rules of this Court, and Standing Order 13-02.

Now before the Court is Plaintiffs' Motion to Determine Claim of Privilege [Doc. 167]. Defendant responded in opposition to the motion [Doc. 171], and Plaintiffs replied [Doc. 173]. The parties also filed supplemental briefs [Docs. 165, 175]. The parties appeared before the undersigned on February 23, 2023 for a motion hearing.^[1] Attorneys Donald Vowell and William Hickerson appeared on behalf of Plaintiffs. Attorneys Kristine Roberts and Robert Tom appeared on behalf of Defendant.^[2] For the reasons explained below, the Court GRANTS Plaintiffs' motion [Doc 167].

I. BACKGROUND

This is a breach of contract case [Doc. 87]. According to the allegations in the Amended Complaint, Plaintiffs invested their money in Money Market Investment Accounts (“MMIAs”) at First National Bank of Gatlinburg [Id. ¶ 2]. The bank guaranteed that the interest rate on the MMIAs would never fall below 6.5% [Id.]. The successor bank, BankFirst, kept that promise, and Defendant also kept that promise for approximately seventeen years after it purchased BankFirst [Id. ¶ 3]. Plaintiffs allege that Defendant later lowered the interest rate below the guaranteed 6.5%, and now Plaintiffs have filed suit [Id. ¶ 4].^[3]

The instant dispute relates to Defendant's request to claw back documents based on the attorney-client privilege. On December 29, 2021, the Court compelled Defendant to supplement its discovery responses within thirty days [Doc. 171 p. 24]. Defendant states that it “reviewed approximately 9,445 pages of documents for responsiveness and privilege[,]” and it employed a four-step review process [Id.]. According to defense counsel, Nicholas W. Diegel (“Attorney Diegel”), Defendant employs this four-step review process when reviewing documents, and Attorney Diegel explains as follows:

I conducted the initial review to determine responsiveness to written discovery requests and to determine whether documents were potentially subject to claims of privilege. Christopher E. Thorsen, another attorney with the firm, conducted a second-level [review] of the documents that I identified as privileged or potentially privileged. Following the second-level review by Mr. Thorsen, I then applied redactions to the privileged portions of those documents or identified them as documents to be withheld as wholly subject to privilege. Mr. Thorsen then reviewed my redactions and withholding designations to privileged documents. Finally, Mr. Thorsen and I generated a privilege log to list and provide identifying information for documents that were withheld or redacted based on their privileged designations.

[Id. at 23-24].

On January 28, 2022, Defendant produced approximately 7,951 pages of additional documents [Id. at 24]. This production included a letter dated March 5, 2018 (“March 5 Letter”), from a former bank employee and a MMIA accountholder, Rhonda Parton (“Parton”), to Becky Beeler, who was at the time Defendant's employee [Doc. 171 pp. 13 and 25]. Later, on October 3, 2022, Plaintiffs sent Defendant a meet and confer letter alleging certain issues with Defendant's discovery responses [Doc. 167-2]. In the October 3 letter, Plaintiffs noted that Defendant redacted information relating to Parton, but Defendant did not mention it in the privilege log [Id. at 2-3]. Plaintiffs requested that Defendant supplement the privilege log. Defendant claims that in reviewing its production on October 25, 2022, it “discovered the inadvertent disclosure of certain portions of [the March 5 Letter] that implicated the attorney-client privilege [Doc. 171 at 25]. On November 2, 2022, Defendant served a claw back letter requesting “that all copies of [the March 5 Letter] be destroyed and that Plaintiffs certify their compliance” [Id.].^[4] The instant motion followed.

Pursuant to Federal Rule of Civil Procedure 26(b)(5)(B), Plaintiffs move to determine the applicability of Defendant's claim of privilege with respect to the March 5 Letter and request that the Court deem it to be waived. To support their argument that Defendant waived the attorneyclient privilege, Plaintiffs point to other documents that Defendant produced during discovery, alleging that those documents involve the same subject matter as the March 5 Letter [See Doc. 135-4 pp. 2-5, and 42 SEALED (Bates Nos. 011219, 011220, 011249, 011250, and 012049)].^[5]

Defendant claims that it properly asserted the attorney-client privilege as to the March 5 Letter and that it has clearly satisfied the standard set forth in Federal Rule of Evidence 502(b) to claw back the document. In further response to Plaintiffs' arguments concerning others produced documents involving the same subject matter, Defendant maintained that an email exchange among four bank employees reflecting only “the fact of legal consultation” and not disclosing any advice provided by Defendant's counsel was not privileged [Doc. 171 p. 12 (citing BBT-011249)]. Another document, according to Defendant, “similarly does not disclose the substance of any confidential communications with bank's counsel” [Id. (citing BBT-012049)]. Defendant states that the Court should deny Plaintiffs' motion, direct all unredacted copies of the March 5 Letter to be destroyed, and “expunge from any other document or material or information derived from the inadvertently-produced unredacted version” [Id. at 1].

On February 14, 2023, Defendant filed a supplemental brief, claiming that it has conducted a further analysis of documents cited in Plaintiff's Motion, and “it now agrees with Plaintiffs that portions of documents [they] highlighted are privileged” [Doc. 165 p. 2]. Thus, Defendant “asserts the attorney-client privilege with respect to the following documents cited in Plaintiffs' Motion and claws them back as having been produced without necessary redactions: BBT-011219011220, BBT-011249-011250, and BBT-012049” [Id.]. Defendant describes these documents as “two email strings among [its] employees in January and April 2018” (“Email Strings”) [Id.].

Plaintiffs respond to Defendant's supplemental brief arguing that it has waived the privilege with respect to the Email Strings [Doc. 175].

II. ANALYSIS

During the hearing in this matter, the parties clarified that at issue is approximately two paragraphs in the March 5 Letter [Doc. 138-1 SEALED (Bate No. BBT-011342)] and approximately two lines in the Email Strings [Doc. 135-4 pp. 2 and 42 (Bate Nos. BBT-011219 and BBT-012049)]. The parties dispute whether the attorney-client privilege is applicable to these documents, and if so, whether Defendant waived it.

For the reasons more fully explained below, the Court finds that the attorney-client privilege applies to the two paragraphs in the March 5 Letter and the approximately two lines in the Email Strings. The Court finds, however, that Defendant has waived the attorney-client privilege.

A. Attorney-Client Privilege

Federal Rule of Evidence 501 provides that in diversity cases, the court applies state law to resolve attorney-client claims. See also In re Powerhouse Licensing, LLC, 441 F.3d 467, 472 (6th Cir. 2006) (citations omitted). “The rules governing the attorney-client privilege under Tennessee law incorporate both statutory and common law.” Robinson v. Mathis, No. 220CV02435SHLATC, 2021 WL 6804133, at *2 (W.D. Tenn. Sept. 14, 2021) (citing Boyd v. Comdata Network, Inc., 88 S.W.3d 203, 212 (Tenn. Ct. App. 2002)). Specifically, Tennessee Code Annotated § 23-3-105 provides as follows:

No attorney, solicitor or counselor shall be permitted, in giving testimony against a client or person who consulted the attorney, solicitor or counselor professionally, to disclose any communication made to the attorney, solicitor or counselor as such by such person during the pendency of the suit, before or afterward, to the person's injury.

Tenn. Code Ann. § 23-3-105. “Although T.C.A. § 23-3-105 refers to communications made to an attorney by a client, communications made by a client to an attorney are privileged to the extent those communications are based upon a client's confidential communication or would reveal the nature of a confidential communication if disclosed.” Terrell v. Memphis Zoo, Inc., No. 17-CV-2928-JPM-TMP, 2018 WL 3245003, at *2 (W.D. Tenn. July 3, 2018) (citing State v. Buford, 216 S.W.3d 323, 326 (Tenn. 2007)). In order to assert the privilege, the holder must show

(1) the asserted holder of the privilege is or sought to become a client; (2) the person to whom the communication was made (a) is a member of the bar of a court, or his subordinate and (b) in connection with this communication is acting as a lawyer; (3) the communication relates to a fact of which the attorney was informed (a) by his client (b) without the presence of strangers (c) for the purpose of securing primarily either (i) an opinion on law or (ii) legal services or (iii) assistance in some legal proceeding, and not (d) for the purpose of committing a crime or tort; and (4) the privilege has been (a) claimed and (b) not waived by the client.

Humphreys, Hutcheson & Moseley v. Donovan, 568 F.Supp. 161, 175 (M.D. Tenn. 1983), aff'd, 755 F.2d 1211 (6th Cir. 1985).

“Communications among non-attorneys in a corporation may be privileged if made at the direction of counsel, to gather information to aid counsel in providing legal services.” Adkisson v. Jacobs Eng'g...