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Practice Tips for Preserving Privilege Issues for Appeal

Protecting the attorney-client and work-product privileges can be painstaking at the trial court level. To preserve the right to seek appellate review of any adverse privilege determinations, however, the lawyer’s extra effort to be meticulous can pay off.

This summer, in Sessions v. Sloane, the Court of Appeals issued a tour de force of how privilege issues should be presented at the trial court level, and how those issues can be preserved for appeal.  Ironically, the court never passed on the ultimate question—whether the documents actually enjoyed the claimed privileges.  Instead, the Court affirmed the trial court’s order compelling the production of the disputed documents because Defendants had failed to meet their heavy burden of demonstrating on appeal that the privileges should have been recognized.

Factual and Procedural Background

During discovery, the Sessions v. Sloane Defendants withheld certain documents on the basis of the attorney-client privilege, work product privilege, or the joint defense privilege.  Defendants instead produced a privilege log that listed each withheld document, the name of the author and recipient of each document, the date of each document, a generic description of the document (e.g., “Email created in anticipation of litigation and legal advice”), and the privilege asserted as the basis for withholding it.

Plaintiff objected to the withholding of certain documents because they were created without the involvement of an attorney and several years before the litigation began. Plaintiff filed a motion to compel to require the production of the documents or, in the alterative, the production of the documents to the court for an in camera review.  Defendants responded by providing an affidavit stating that Defendants were contemplating litigation with the Plaintiff years before the litigation began, during the time the disputed e-mails were created.  The affidavit did not, however, address whether the disputed documents themselves were prepared for the purpose of the anticipated litigation. Defendants did not file any sort of formal response beyond the affidavit and did not formally request an in camera review of the disputed documents by the trial court.

Following a hearing on the motion to compel, the trial court entered an order requiring Defendants to produce all disputed documents that (1) were withheld on the basis of the work product doctrine or joint defense privilege and (2) were communications involving the Defendants without the participation of counsel.  Defendants were also ordered to produce the “To, From, CC, BCC, and Subject” lines of e-mails or portions thereof withheld on the basis of the attorney-client privilege so that Plaintiff could independently assess the validity of the claim of privilege.

No court reporter was present at the hearing, and on appeal, the parties were stuck with providing a “narration,” or summary, of the proceedings to the Court of Appeals.

Practice Tip No. 1:  Assert the Applicable Privilege(s) on a Document-by-Document Basis and Provide a Privilege Log that Individually Identifies Each Withheld Document To Strengthen the Argument for Immediate Appealability.

The Court of Appeals declined Plaintiff’s invitation to dismiss the appeal, concluding that Defendants’ assertion of privilege was not frivolous or unsubstantial and instead affected a substantial right because the Defendants asserted the privileges on a document-by-document basis, rather than making a blanket statement that all of certain type of documents were privileged.  The Court reasoned:

If the assertion of privilege is not “frivolous or insubstantial” then a substantial right is affected and the order compelling discovery is immediately appealable. A blanket, general objection is considered to be frivolous or insubstantial, but objections “made and established on a document-by-document basis” are sufficient to assert a privilege. See K2 Asia Ventures, 215 N.C. App. at 447–448, 717 S.E.2d at 4–5. Defendants provided a document privilege log describing the privilege relating to each withheld document. As a result, their assertion of privilege is not frivolous or insubstantial and a substantial right is affected. We therefore hold this interlocutory order is immediately appealable.

Practice Tip No. 2: File a Motion, Affidavit, and Privilege Log, Request Entry of Findings of Fact and an In Camera Review, and File a Sealed Record of the Documents in Dispute.

Reviewing the order compelling the production of certain documents under an abuse of discretion standard, the Court of Appeals noted that Defendants provided a privilege log and the affidavit to the trial court at the hearing but did not tender any of the disputed documents to the court for its in camera review.  It does appear that Defendants offered to make documents available but never formally requested that the trial court review them.

The Court of Appeals rejected Defendants’ argument that a motion for a protective order, affidavit, and privilege log alone were sufficient to support a finding of privilege under Hall v. Cumberland County Hospital System, Inc. 121 N.C. App. 425, 466 S.E.2d 317 (1996), and that an in camera review should occur after the validity of the privilege was determined.  Instead, the Court reasoned (with emphasis by bold and underlining added):

The better practice in privilege controversies would be to submit a motion, affidavit, privilege log, request for findings of fact and an in camera review together with a sealed record of the documents to be reviewed. Defendants concede they made no formal request for in camera review. Using the method followed by Defendants, if the trial court has questions regarding the factual basis of the alleged privileged documents, the court would not have a basis to resolve its questions. Lacking the documents, there is no evidence to determine if the claims of privilege are bona fide. Moreover, if the documents are not provided under seal to this Court for our review, appellants run the risk of providing insufficient evidence for this Court to make the necessary inquiry. It is therefore problematic for the Defendants to meet their burden of proof at trial or on appeal.

Practice Tips No. 3 and 4:  Request that the Court Make Findings Regarding Key Issues in a Dispute, and if It is Possible that Any of the Matters Being Decided May be an Appealable Issue, Have a Court Reporter Attend the Hearing. 

The Court of Appeals also rejected Defendants’ argument that the trial court erred by not making a finding whether the documents withheld on the basis of the work product doctrine or joint defense privilege were prepared in anticipation of litigation. Instead, the Court found no error in the trial court’s lack of such findings in the order because the findings were not required without a request by the parties and the record did not indicate that Defendants had made any such request.  The Court reasoned:

Pursuant to Rule 52 of the North Carolina Rules of Civil Procedure “[f]indings of fact and conclusions of law are necessary on decisions of any motion or order ex mero motu only when requested by a party and as provided by Rule 41(b).” N.C. Gen. Stat. § 1A-1, Rule 52 (a)(2) (2015). Rule 41, governing dismissal of claims, does not apply to this case. See N.C. Gen. Stat. § 1A-1, Rule 41 (2015). If the trial court is not required to make findings of fact and conclusions of law and does not do so, then we presume the trial court found facts sufficient to support its judgment. Estrada v. Burnham, 316 N.C. 318, 324, 341 S.E.2d 538, 542 (1986) (citations omitted).  Although findings of fact and conclusions of law are helpful for meaningful review by our appellate courts, if a party did not request the court to make findings of fact, then it is within the discretion of the trial court whether to make findings. Evans, 142 N.C. App. at 26–27, 541 S.E.2d at 788; Watkins v. Hellings, 321 N.C. 78, 82, 361 S.E.2d 568, 571 (1987).

The record on appeal lacks a transcript from the hearing on the motion to compel. The parties included a summary of the hearing, but the summary does not mention a request for factual findings. Additionally, the record contains no response to the motion to compel other than Kelly’s affidavit. As a result, there is no evidence in the record that indicates Defendants requested the trial court make findings of fact. Accordingly, the trial court was not required to make findings of fact, and we presume the trial court found facts sufficient to support its judgment. The trial court did not abuse its discretion by failing to make findings of fact regarding whether the documents at issue were prepared in anticipation of litigation.

Practice Tip No. 5:  Give the Trial Court Information about the Nature and Context of the Documents for which a Privilege is Asserted.

In reviewing Defendants’ assertion that the trial court erred in requiring the production of documents prepared in anticipation of ligation, the Court of Appeals agreed with Defendants that an attorney need not be directly involved in the production of a document for the work product doctrine to apply. However, Defendants’ arguments failed because they did not meet their burden of demonstrating that the disputed documents were prepared in anticipation of litigation. The Court reasoned:

Although Defendants provided evidence to show litigation was anticipated at the time of the email exchanges, any business-related communication during that time is not protected. Defendants did not meet their burden to show the communications “can fairly be said to have been prepared or obtained because of the prospect of litigation.” See Cook, 125 N.C. at 624, 482 S.E.3d at 551.

Defendants could have met their burden by showing the documents were prepared in anticipation of litigation. Defendants should have given the trial court more information about the nature of the withheld documents and the factual situation surrounding them instead of a broad claim of privilege. The best practice would have been for Defendants to turn over the documents to the trial court for an in camera review. On the facts before us, we hold the trial court did not abuse its discretion by ordering Defendants to produce the emails at issue under the work product and joint defense doctrines.

Similarly, the Court of Appeals agreed that the “To, From, CC, BCC, and Subject” lines of e-mails could contain information protected by the attorney-client privilege.  However, the Court again rejected Defendants’ assertion of error because Defendants had not met their burden of showing that the information was privileged:

The record provides no evidence Defendants met their burden at trial to show the subject lines of the emails contained privileged information by meeting the [five part] test [recognized by the Supreme Court of North Carolina in In re Miller, 357 N.C. at 328, 584 S.E.2d 782]. The record only reflects Defendants claimed the emails, including their subject lines, are protected by attorney-client privilege.

Practice Tip No. 6:  Request that the Trial Court Conduct an In Camera Review of Any Documents at Issue in a Privilege Dispute and Provide Copies of the Disputed Documents to the Court for Inspection In Camera When Responding to a Motion to Compel.

The Court of Appeals also rejected Defendants’ argument that the trial court erred by failing to conduct an in camera review of the disputed documents prior to issuing its order compelling their production.  The Court noted that “the decision whether to conduct an in camera review … is within the sound discretion of the trial court” and there was “no evidence” in the record that Defendants requested that the trial court conduct an in camera review or submitted documents to the trial court for inspection.  The Court appeared to have little sympathy for Defendants and instead observed:

Unless the court is given the documents to inspect, Defendants will have difficulty meeting their burden to show any specific emails were prepared or obtained because of the prospect of litigation. Defendants took a strategic risk in not submitting the documents to be sealed for in camera review.

In short, to avoid being forced to hand over privileged documents, practitioners need to provide the most comprehensive information available to the trial court to support a claim that each document is protected. In addition, the Court of Appeals made repeatedly clear that even though not strictly required, providing a sealed copy of the disputed documents for the court’s in camera review is highly recommended when responding to a motion to compel or otherwise seeking to protect potentially privileged materials from disclosure.

–Carrie Hanger

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One Response to "Practice Tips for Preserving Privilege Issues for Appeal"

  • Cal Adams
    September 10, 2018 - 10:38 am Reply

    Carrie, this well done and very informative. Thanks and take care. Cal

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