Greyhound Lines Incorporated v. Viad Corporation
Filing
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ORDER granting in part and denying in part 54 Motion for Discovery. Defendant Viad Corporation shall produce the documents in categories 2 and 5 to Greyhound on or before 9/12/2016. Signed by Judge David G Campbell on 9/8/2016.(DGC, nvo)
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IN THE UNITED STATES DISTRICT COURT
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FOR THE DISTRICT OF ARIZONA
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Greyhound Lines Incorporated,
Plaintiff,
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ORDER
v.
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No. CV-15-01820-PHX-DGC
Viad Corporation,
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Defendant.
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Plaintiff Greyhound Lines, Inc. seeks to compel production of certain documents
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that Defendant Viad Corporation has withheld as privileged. Doc. 54. The Court held a
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telephonic conference with the parties to discuss this issue. Doc. 56. As a result,
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Greyhound submitted for in camera review three representative documents from each of
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six disputed categories, and the parties provided a matrix setting forth their arguments on
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each category. Doc. 60. After reviewing the representative documents and the parties’
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arguments, the Court will grant Plaintiff’s motion in part and deny it in part.
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I.
Legal Standard.
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A.
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Federal Rule of Evidence 501 provides that “in a civil case, state law governs
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privilege regarding a claim or defense for which state law supplies the rule of decision.”
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Fed. R. Evid. 501. This case includes federal and state claims (Doc. 30), but the parties
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do not address whether federal or state privilege law should apply. When state law does
Attorney-Client Privilege.
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apply, Rule 501 “does not tell us which state law the forum state should apply.” KL Grp.
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v. Case, Kay & Lynch, 829 F.2d 909, 918 (9th Cir. 1987). Commentators have suggested
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several methods of resolving this choice-of-law issue: (1) use the privilege law of the
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state whose substantive law provides the rule of decision; (2) apply the privilege law of
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the state in which the federal court sits; or (3) apply the choice-of-law doctrine of the
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state in which the federal court sits. Id. (citing 23 C. Wright & K. Graham, Jr., Federal
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Practice and Procedure § 5435, at 865-69 (1980); 2 Weinstein’s Federal Evidence
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§ 501[02] (1986)). The parties do not address this choice of law issue either.
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Greyhound relies on an Arizona statute that defines the attorney-client privilege
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for corporations, A.R.S. § 12-2234. Doc. 60-1 at 1. Viad does object to the use of this
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statute, and does not cite contrary authority. Id. at 1-8. Because Greyhound is the party
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challenging Viad’s assertion of the privilege, and Viad does not object to Greyhound’s
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legal arguments, the Court will apply the Arizona statute and relevant cases.
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The attorney-client privilege “is rigorously guarded to encourage full and frank
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communications between attorneys and their clients and thereby promote broader public
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interests in the observance of law and the administration of justice.” State v. Sucharew,
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66 P.3d 59, 64, ¶ 10 (Ariz. Ct. App. 2003) (citing State v. Towery, 920 P.2d 290, 299 n.6
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(Ariz. 1996) (internal quotation marks omitted)). “The privilege belongs to the client and
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encompasses communication between the attorney and client made in the course of the
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attorney’s professional employment.” Id. (citing State v. Holsinger, 601 P.2d 1054, 1058
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(Ariz. 1979)). A.R.S. § 12-2234 protects “any communication” that is either “[f]or the
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purpose of providing legal advice to the entity,” or “[f]or the purpose of obtaining
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information in order to provide legal advice to the entity[.]” A.R.S. § 12-2234(B)(1), (2).
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The privilege protects communications. A.R.S. § 12-2234(B). “The burden of showing
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the relationship, the confidential character of the communication, and other necessary
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facts, is that of the party claiming the privilege.” State v. Sands, 700 P.2d 1369, 1374
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(Ariz. Ct. App. 1985) (citation omitted).
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B.
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Federal law governs application of the work product doctrine. Bickler v. Senior
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Lifestyle Corp., 266 F.R.D. 379, 382 (D. Ariz. 2010) (citing cases). “Ordinarily, a party
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may not discover documents and tangible things that are prepared in anticipation of
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litigation or for trial by or for another party or its representative (including the other
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party’s attorney, consultant, surety, indemnitor, insurer, or agent).” Fed. R. Civ. P.
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26(b)(3)(A). The party claiming work-product protection bears the burden of proof.
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Conoco Inc. v. U.S., 687 F.2d 724, 728 (3d Cir. 1982).
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II.
Work-Product Doctrine.
Analysis.
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A.
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Greyhound challenges Viad’s privilege assertion for certain monthly and quarterly
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reports prepared by Dr. Kenneth Ries for lawyers in Viad’s law department. Doc. 60-1 at
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1-2. Greyhound argues that the reports are not privileged because they are factual in
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nature, Dr. Ries did not seek legal advice, and Dr. Ries did not label the reports
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“attorney-client privileged.”
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because its Rule 30(b)(6) witness did not know whether the reports were on the
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company’s privilege log or which attorney specifically directed Dr. Ries to prepare the
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reports in prior years. Id.
Category 1: Reports Prepared by Dr. Kenneth Ries.
Greyhound also argues that Viad waived the privilege
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Viad provides the following evidence related to the reports. Dr. Ries was a non-
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lawyer member of Viad’s legal department from 1987 to 2001. Docs. 60-4 at 2, ¶ 4; 60-5
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at 2, ¶ 6. After 2001, Dr. Ries served as a consultant to Viad’s law department, providing
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the “functional equivalent” of his previous services, but “on a more limited basis.”
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Doc. 60-4 at 2, ¶ 5. In this role, Dr. Ries “often provided monthly and quarterly reports
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and other information to Viad’s General Counsel and others in Viad’s law department.”
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Id. at ¶ 4. These reports were always prepared at the direction of lawyers in Viad’s law
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department so that the lawyers could monitor the company’s environmental obligations
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and provide appropriate legal advice. Docs. 60-4 at 2, ¶¶ 4, 7; 60-5 at 2, ¶ 6.
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Greyhound contends that the reports are not privileged because they are factual in
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nature. Doc. 60-1 at 1-2. To be protected, a communication must be made for the
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purpose of providing legal advice or for the purpose of obtaining information to provide
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legal advice. A.R.S. § 12-2234(B)(1), (2); see also In re Bard IVC Filters Prods. Liab.
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Litig., No. MDL 2641, 2016 WL 3970338, at *7 (D. Ariz. July 25, 2016). The affidavits
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of Dr. Ries and one of Viad’s in-house lawyers establish that the reports were prepared at
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the direction of lawyers in Viad’s law department, to enable the lawyers to provide legal
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advice to the company. Docs. 60-4 at 2, ¶¶ 4, 7; 60-5 at 2, ¶ 6. This is reinforced by the
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reports themselves, which address a wide range of topics on which lawyers typically
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advise clients, including ongoing and threatened litigation, settlement discussions and
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offers, general legal exposure, and regulatory action.
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contained factual information (Doc. 60-1 at 1), or documented Dr. Ries’s monthly
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activities (id. (citing Doc. 54-10)), does not refute Viad’s evidence that they were created
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to enable lawyers to provide legal advice. The reports thus fall squarely within A.R.S.
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§ 12-2234(B)(2).
The fact that these reports
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Greyhound argues that the reports are not privileged because Dr. Ries did not
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label them as privileged. Doc. 60-1 at 1. But some of the reports are labeled as
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privileged.1 And even for those that are not, the Arizona statute does not require that
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communications be labeled to be privileged. The statute instead looks to the nature and
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content of the communication and protects those made “[f]or the purpose of obtaining
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information in order to provide legal advice.” See A.R.S. § 12-2234(B)(2).
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Greyhound also argues that Viad has waived the attorney-client privilege. A party
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waives the privilege when it discloses confidential communications to third parties,
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Ulibarri v. Superior Court In & For Cty. of Coconino, 909 P.2d 449, 452 (Ariz. Ct. App.
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1995), or when it affirmatively places privileged communications at issue, State Farm
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Mutual Automobile Insurance Co. v. Lee, 13 P.3d 1169, 1175, ¶ 16 (Ariz. 2000)).
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Greyhound does not argue that either of these events occurred here.
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These include Documents 1 (6/6/2000) and 2 (5/7/2001).
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Instead, Greyhound argues that Viad waived the privilege because attorney
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Jonathan Massimino, while testifying as Viad’s Rule 30(b)(6) witness, could not
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determine whether certain items listed on Viad’s privilege log were Dr. Ries’s reports.
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Doc. 54-9 at 1. But Greyhound provides no legal or logical argument as to why this
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testimony would constitute a waiver of the privilege.
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Greyhound contends that Massimino gave inconsistent testimony on whether the
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reports were prepared at the direction of Viad’s counsel. The Court does not agree.
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Massimino testified that the Ries reports were prepared at the request of counsel,
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although he was not able to identify the specific attorney who made the request before he
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joined the legal department. Doc. 60-8 at 3-4. In his declaration – issued about a month
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after his deposition – Massimino avowed that he had directed Dr. Ries to prepare the
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reports while he was in the law department, and that records indicated that Dr. Ries had
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always done so at the direction of Viad’s lawyers. Doc. 60-5 at 2, ¶ 6. The Court does
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not view these assertions as inconsistent with his deposition testimony.
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The Court concludes that the quarterly and monthly reports prepared by Dr. Ries
are protected by the attorney-client privilege under A.R.S. § 12-2234(B).
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B.
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Greyhound challenges Viad’s privilege assertion for documents containing
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notations of unidentified individuals. Doc. 60-1 at 3-4. Greyhound does not dispute that
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Viad has already produced unannotated versions of the documents. Id. Viad invoked the
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attorney-client privilege for all three documents (Doc. 54-1 at 5, 7), and the work-product
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doctrine only for document 4 (id. at 5).
Category 2: Annotated Documents.
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Viad asserts that attorney authorship of the notations is established by the fact that
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the documents were found in the law department’s files. Doc. 60-5 at 2, ¶ 7. It explains
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that it cannot identify specific authors because Viad employed up to 35 attorneys at one
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time. Id. But even if these facts could be used to show that lawyers made the notations,
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Viad has failed to provide any evidence that the notations were ever communicated to
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anyone.
Arizona’s corporate attorney-client privilege protects “communication[s].”
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A.R.S. § 12-2234(B). Viad has made no effort to show that the notations were prepared
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in anticipation of litigation.
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Viad has not carried its burden of establishing that the attorney-client privilege or
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the work-product doctrine protects the annotated documents from disclosure. The Court
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therefore concludes that the documents in category 2 are not protected from disclosure.
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C.
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This category includes memoranda written by Dr. Ries, but addressed to “file” or
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to no one at all. Doc. 60-1 at 4-5. Greyhound contends that Dr. Ries sent memoranda to
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the file for the sole purpose of documenting facts, and that Viad cannot prove the
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Category 3: Dr. Ries’s Memoranda to the File or to No One.
memoranda were communications. Id.
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Dr. Ries testified that he sometimes wrote a “memorandum to file” for the sole
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purpose of documenting information. Doc. 54-4 at 2-3. But Dr. Ries prepared the three
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documents submitted for in camera review at the direction of Viad’s counsel to enable
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them to provide the company with legal advice, and he designated each document as
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attorney-client privileged. Docs. 60-4 at 2, ¶ 8; 60-5 at 2-3, ¶ 8. The documents were
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found in the law department’s files. Doc. 60-5 at 2-3, ¶ 8.
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Greyhound argues that Dr. Ries’s testimony that he sometimes prepared a
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“memorandum to file” for the sole purpose of documenting information proves that these
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documents are not privileged. Doc. 60-1 at 4-5. The Court does not agree. One of the
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three documents reviewed by the Court was addressed to “Files: TLC – General.” The
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other two were labeled “Estimated Future Environmental Liabilities.” All three are
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labeled as privileged.
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memoranda to file does not refute his sworn declaration about the documents submitted
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for in camera review. Dr. Ries stated that these documents were prepared at the direction
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of lawyers in Viad’s law department, and Massimino stated that Viad lawyers rely on
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these materials to advise the company. These facts support application of the privilege.
Dr. Ries’s testimony about his practice of writing unrelated
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Greyhound also asserts that Viad has not provided proof that these documents
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were ever communicated. The Court does not agree. The declarations of Dr. Ries and
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Mr. Massimino, and the location of the documents in the law department’s files, provides
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sufficient circumstantial evidence that the memoranda were communications of
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information needed to render legal advice.
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The Court concludes that the three documents reviewed in camera are protected
by the attorney-client privilege.
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D.
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Greyhound challenges Viad’s privilege claim for certain charts prepared by Dr.
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Ries. Doc. 60-1 at 5-6. Viad provides the following evidence. Dr. Ries prepared or
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assisted in preparing these charts at the direction of Viad’s counsel, who used them to
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“monitor and advise the company as to environmental liabilities and obligations.” Doc.
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60-4 at 3, ¶ 9; see also 54-5 at 1. Viad continues to prepare such documents today at the
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request of Viad’s general counsel to assist the law department in monitoring and advising
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the company on environmental liabilities. Doc. 60-5 at 3, ¶ 9. The charts submitted for
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in camera review contain the phrase “Confidential – Attorney-Client Privilege.”
Category 4: Dr. Ries’s Charts Without a Recipient.
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Greyhound asserts that Viad has failed to establish that the charts were
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communicated to anyone. Doc. 60-1 at 5-6. Greyhound notes that Viad’s privilege log
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supports this assertion because the “To” and “CC” columns are designated as “N/A,” or
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not applicable. Doc. 54-1 at 6-7. But Viad has presented evidence that the charts were
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created at the request of counsel and to assist counsel in advising the company, and this
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purpose necessarily includes communication of the charts to counsel. What is more, one
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of the charts contains a note that states “update & copy to DJD.” Doc. 60-1 at 6. Viad
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has submitted evidence that “DJD” are the initials of Viad’s general counsel. Doc. 60-5
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at 3, ¶ 9. This further supports Viad’s assertion that the charts are shared with counsel.
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The Court concludes that Viad has carried its burden of establishing that the charts
are communications within the scope of Arizona’s corporate attorney-client privilege.
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E.
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Greyhound challenges Viad’s privilege assertion for memoranda prepared by
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Daryl Hagg. Doc. 60-1 at 6-7. Hagg was an assistant to Viad’s general counsel and
Category 5: Memoranda Prepared by Daryl Hagg.
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others in Viad’s law department, and prepared memoranda addressing reimbursement
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figures from various sites. Doc. 60-4 at 3, ¶ 10.
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The Court has reviewed these documents, and no legal advice is communicated in
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them. Nor has Viad provided any evidence that the information contained in them was
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obtained for purposes of providing legal advice. Viad has failed to meet its burden. See
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Sands, 700 P.2d at 1374.
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Viad asserts work-product protection for document 15. See Doc. 54-1 at 9. This
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document appears to be a draft, but Viad makes no attempt to show that the document
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was prepared in anticipation of litigation. Doc. 60-1 at 6-7.
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The Court concludes that the memoranda in category 5 are not protected by the
attorney-client privilege or the work-product doctrine.
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F.
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Dr. Ries prepared two memoranda addressing invoices and reimbursement. Both
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Category 6: Memoranda Prepared by Dr. Kenneth Ries.
are labeled “attorney/client communication” and were sent to lawyers. Doc. 60-4, ¶ 11.2
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Greyhound argues that the memoranda do not seek legal advice and merely
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convey facts. Doc. 60-1 at 7. But the memoranda are not limited to transmitting invoice
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information for payment. They contain other information that would assist a lawyer in
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providing legal advice concerning the company’s legal liability. The Court concludes
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that the memoranda in category 6 are protected by the attorney-client privilege.
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IT IS ORDERED:
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1.
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Plaintiff Greyhound Lines Inc.’s motion to compel (Doc. 54) is granted in
part and denied in part as set forth above.
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Viad states that document 18 is not relevant because it “references a dispute over
a property not at issue in this case.” Doc. 60-1 at 7. Greyhound argues that it was
prejudiced by this late disclosure because Greyhound would have selected another
document from Viad’s privilege log for in camera review. Id. at 7-8. The Court is not
persuaded. The two documents submitted for review are sufficiently representative to
allow the Court to determine whether this category of documents is privileged.
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2.
Defendant Viad Corporation shall produce the documents in categories 2
and 5 to Greyhound by September 12, 2016.
Dated this 8th day of September, 2016.
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