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Feinberg v. T. Rowe Price Group, Inc.

United States District Court, D. Maryland

December 17, 2019

DAVID G. FEINBERG, et al., and all others similarly situated, Plaintiffs
T. ROWE PRICE GROUP, INC., et al. Defendants.


          J. Mark Coulson United States Magistrate Judge

         Chief Judges James Bredar referred this case to me for discovery and all related scheduling. (ECF No. 75). Now pending before the Court is David Feinberg's (and all others similarly situated) (“Plaintiffs”) Motion to Compel Production of Certain Documents Defendants Have Withheld or Redacted on Grounds of Attorney-Client Privilege and/or Attorney Work Product, as well as the T. Rowe Price Defendants' Opposition and Plaintiffs' Reply. (ECF Nos. 121-1, 121-28 & 121-35). This issue is fully briefed pursuant to Local Rule 104(8), and no hearing is necessary. See Local Rule 105(6) (2018). Additionally, the Court conducted its own in camera review of the disputed documents.[1] For the reasons stated below, Plaintiffs' Motion to Compel is GRANTED in part and DENIED in part.

         I. BACKGROUND

         As described in this Court's recent Memorandum, Plaintiffs allege that Defendants violated the Employment Retirement Income Security Act (“ERISA”) by limiting the investment options of the T. Rowe Price U.S. Retirement Program (“the Plan”) to a range of investment options offered by T. Rowe, to the exclusion of other funds by non-T. Rowe affiliated providers. (ECF No. 125 at 1). In addition, Plaintiffs allege: the Plan's investment options were too expensive; Defendants imprudently failed to remove funds that underperformed; Defendants relied upon improper benchmarks to assess performance; and Defendants used Plan assets to seed new investment vehicles. Id. at 2.

         During the course of discovery, Defendants withheld (or, in three instances, “clawed back”) documents on the grounds of privilege and produced a privilege log outlining the reasons for such assertions. The current dispute involves nineteen logged documents: fourteen are redacted and five are withheld in their entirety. (ECF No. 121-3 at 3). Plaintiffs seek an order compelling Defendants to produce the “withheld documents as well as unredact the redacted documents.” Id.

         II. LAW

         Intended to encourage “full and frank communication between attorneys and their clients, ” the attorney-client privilege is “the oldest of the privileges for confidential communications known to the common law.” Upjohn Co. v. United States, 449 U.S. 383, 389 (1981). Nonetheless, the privilege is not absolute, and within this Circuit, the Court of Appeals has noted that it “is to be strictly confined within the narrowest possible limits consistent with the logic of its principle.” Solis v. Food Employers Labor Relations Ass'n, 644 F.3d 221, 226 (4th Cir. 2011). Accordingly, for this privilege to apply, the party claiming its protection bears the burden of demonstrating its applicability. In re Grand Jury Proceedings, 33 F.3d 342, 353 (4th Cir. 1994). A party must satisfy procedural and substantive criteria to effectively establish a claim of privilege. Procedurally, the party must “expressly make the claim” and “describe the nature of the documents . . . in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the claim.” Fed.R.Civ.P. 26(a)(5)(A). Substantively, a party 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 is 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.

N.L.R.B. v. Interbake Foods, LLC, 637 F.3d 492, 501-02 (4th Cir. 2011) (hereinafter “Interbake”).

         When information is withheld by claiming privilege, and this is attempted via the production of a privilege log, a sufficient one identifies: each document withheld, information regarding the nature of the privilege/protection claimed, the name of the person making/receiving the communication, the date and place of the communication, and the document's general subject matter. Maryland Restorative Justice Initiative v. Hogan, 2018 WL 5295825, at *4 (D. Md. Oct. 25, 2018) (referencing Discovery Guideline 10.d. and Paul W. Grimm, Charles S. Fax, & Paul Mark Sandler, Discovery Problems and Their Solutions 62-64 (2005)).[2] If a satisfactory privilege log is produced, and subsequently the requesting party challenges the sufficiency of the proclaimed privilege/protection, the asserting party may no longer rely on the privilege log, but bears the burden of establishing an evidentiary basis (by affidavit, deposition transcript, or other evidence) for each element of each privilege/protection claimed for each documents or category of document. See Charter Oak Fire Ins. Co. v. American Capital, Ltd., 2013 WL 6844359, at *7. (D. Md. Dec. 24, 2013).

         The attorney-client privilege applies in a corporate setting. In the corporate context, the attorney-client privilege is applicable if “the communication is not disseminated beyond those persons who, because of the corporate structure, need to know its contents.” Krueger v. Ameriprise Fin., Inc., LLC, 2014 WL 12597432, at *10 (D. Minn. May 7, 2014).[3] However, because the modern-day in-house counsel has increased participation in the day-to-day operations of many corporations, the scope of such privilege becomes harder to define. The attorney-client privilege can extend to communications involving third-parties whom, by virtue of their relationship to a party in the litigation, necessitate an attorney to communicate with the third-party in order to know all that relates to the client's reasons for seeking representation.[4] See In re Bieter Co., 16 F.3d 929, 937-38 (8th Cir. 1994); SmithKline Corp. v. Apotex Corp., 232 F.R.D. 467, 476 (E.D. Pa. 2005) (recognizing attorney-client privilege may be waived in the corporate context “if the communications are disclosed to employees who did not need access to them”).

         In the ERISA context, courts have recognized an exception to the attorney-client privilege, known as the “fiduciary exception, ” when the client procuring the legal advice is acting as a fiduciary for another. Peters v. Aetna Inc., 2018 WL 3616923, at *3-4 (W.D. N.C. July 27, 2018). As the Fourth Circuit explained in Solis v. Food Employers Labor Relations Association, the fiduciary exception is “[r]ooted in the common law of trusts” and “is based on the rationale that the benefit of any legal advice obtained by a trustee regarding matters of trust administration runs to the beneficiaries.” 644 F.3d at 226. The fiduciary exception applies where this duty of disclosure overrides the attorney-client privilege. See United States v. Jicarilla Apache Nation, 564 U.S. 162, 184 (2011). “Consequently, trustees cannot subordinate the fiduciary obligations owed to the beneficiaries to their own private interests under the guise of attorney-client privilege.” Solis, 644 F.3d at 226-27.

         The ERISA fiduciary exception, however, is not without its limits.[5] For example, the exception does not apply to a fiduciary's communications with an attorney regarding her personal defense in an action for breach of fiduciary duty. Peters, 2018 WL 3616923, at *4. Similarly, “communications between ERISA fiduciaries and plan attorneys regarding non-fiduciary matters, such as adopting, amending, or terminating an ERISA plan, are not subject to the fiduciary exception.” Solis, 644 F.3d at 228; Clark, 799 F.Supp.2d at 537. Significantly, some courts determined that “advice that a fiduciary obtains to protect itself from liability” does not fall within the fiduciary exception. Fischel v. Equitable Life Assurance, 191 F.R.D. 606, 609 (N.D. Ca. 2000) (“[T]he use of a fiduciary-nonfiduciary activity distinction as the touchstone for privilege is awkward at best, simply because the existence of a fiduciary duty may be an ultimate issue that simply cannot be resolved in the course of discovery disputes.”); Hudson v. ...

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