Brigiotta's Farmland Produce and Garden Center, Inc. v. United Potato Growers of Idaho, Inc. et al

Filing 584

MEMORANDUM DECISION AND ORDER RE MDL DKT. 539, DIRECT PURCHASER PLAINTIFFS' MOTION TO COMPEL (539 in 4:10-md-02186-BLW-CWD)( 528 in 4:10-cv-00307-BLW-CWD) MOTION to Compel Production of Documents Identified on Defendants' Privilege Logs . Direct Purchaser Plaintiffs Motion to Compel (Dkt. 539) is GRANTEDIN PART AND DENIED IN PART. Signed by Judge Candy W. Dale. Associated Cases: 4:10-md-02186-BLW-CWD, 4:10-cv-00307-BLW-CWD(caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (cjm)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

IN RE: FRESH AND PROCESS
POTATOES ANTITRUST LITIGATION
THIS MATTER PERTAINS TO:
Direct Purchaser Plaintiffs Action.

Case No. 4:10-md-02186-BLW-CWD
MEMORANDUM DECISION AND
ORDER 1 RE MDL DKT. 539, DIRECT
PURCHASER PLAINTIFFS’ MOTION
TO COMPEL

INTRODUCTION
Direct Purchaser Plaintiffs (“Plaintiffs”) move the Court under Fed. R. Civ. P. 37
and Dist. Idaho L. Rule 7.1 to compel certain Defendants 2 to produce documents
identified on their privilege logs. The Court has been involved with the parties’ ongoing
1

The Court issues a partial decision and order on the issue of waiver of privilege to facilitate discovery in this
matter. The remainder of the Court’s decision will be issued in a later memorandum decision and order.

2

The Defendants to whom the motion is directed are: Driscoll Potatoes, Inc.; Blaine Larsen; Blaine Larsen Farms,
Inc.; Albert T. Wada; Wada Farms, Inc.; Wada Farms Potatoes, Inc.; Wada-Van Orden Potatoes, Inc.; Wada Farms
Marketing Group, LLC; Wada Family LLC; Pro Fresh LLC; Cedar Farms, Inc.; Snake River Plains Potatoes, Inc.;
Raybould Brothers Farms LLC; United Potato Growers of Idaho, Inc.; United Potato Growers of America, Inc.;
United II Potato Growers of Idaho, Inc.; R.D. Offutt Company; Ronald D. Offutt, Jr.; and Potandon LLC
(collectively “Defendants”). However, there are four groups of Defendants to which the Court will refer. The
Andersen Defendants to whom the Motion is directed are represented by attorney Steve Andersen, and include:
Albert T. Wada; Wada Farms, Inc.; Wada Farms Potatoes, Inc.; Wada-Van Orden Potatoes, Inc.; Wada Farms
Marketing Group, LLC; Wada Family LLC; Pro Fresh LLC; Cedar Farms, Inc.; Snake River Plains Potatoes, Inc.;
Raybould Brothers Farms LLC; United Potato Growers of Idaho, Inc.; United Potato Growers of America, Inc.; and
United II Potato Growers of Idaho, Inc. The Offutt Defendants, or as Plaintiffs refer to them, the RDO Defendants,
are: R.D. Offutt Company and Ronald D. Offutt, Jr. The Court will refer to these Defendants as the Offutt
Defendants. Then, there are the Orrick Defendants, represented by the firm Orrick Herrington & Sutcliffe, who
include Blaine Larsen; Blaine Larsen Farms, Inc.; and Driscoll Potatoes, Inc. Finally, Potandon, LLC submitted its
own response brief, and will be referred to as Potandon.

MEMORANDUM DECISION AND ORDER - 1

discovery disputes since August 31, 2012, and has conducted a series of status
conferences and motion hearings with the parties in multiple attempts to resolve issues as
they arose. (See Case Mgt. Order No. 4 MDL Dkt. 239).
Now, however, the parties require the Court’s intervention in the form of
Plaintiffs’ latest motion, filed on December 11, 2013, per the Court’s October 22, 2013
Order (as amended). (MDL Dkt. 486.) The Court instructed the parties to file one brief 3
of no more than 20 pages from each collectively represented group of parties to be filed
in support of or in response to a party’s motion to compel, and the parties did so. The
Andersen Defendants submitted also a box of documents for in camera review, and the
Court has had the opportunity to review them, along with the several thousand or so
pages of privilege logs and other documents comprising the motion and the four
responses thereto.
The Court does not believe additional briefing or a hearing would further aid it in
understanding the issues in light of its involvement and familiarity gained throughout the
parties’ ongoing discovery disputes. Therefore, the Motion will be decided on the record
without a hearing. Further, this will serve to avoid delay, given the amended fact
discovery completion deadline of July 3, 2014. (MDL Dkt. 588.)

3

Several Defendants chastised Plaintiffs for filing only one brief, criticizing Plaintiffs for their lack of specificity
and “indiscriminate lumping” of all parties together. However, Plaintiffs complied with Court’s Order, and the Court
was able to discern the parties’ arguments upon review of the privilege logs submitted with Plaintiffs’ motion. The
Court appreciates Plaintiffs’ brevity, although it cannot say the same for the thousands of pages of documents that
were not highlighted in any manner that the Court was required to sift through to resolve the pending motion.

MEMORANDUM DECISION AND ORDER - 2

BACKGROUND
Plaintiffs’ motion raises several substantive legal issues. Each issue is directed to
an individual defendant, or a group of defendants. The motion is globally directed at
Defendants’ privilege logs, with Plaintiffs seeking production of documents withheld.
Plaintiffs assert that the attorney-client privilege has been waived as to documents set
forth in Appendix A to Plaintiffs’ Motion. (MDL Dkt. 540-1.) Plaintiffs assert several
arguments as to why certain documents are no longer subject to protection because of
privilege, including waiver of the attorney-client privilege by stipulation; assertion of the
affirmative defense of reliance upon advice of counsel; disclosure of documents to third
parties; and reliance upon an erroneous interpretation of the association and common
interest privilege. The Court will discuss the factual context applicable to each issue in
more detail below.
DISCUSSION
The Federal Rules of Civil Procedure creates a “broad right of discovery” because
“wide access to relevant facts serves the integrity and fairness of the judicial process by
promoting the search for the truth.” Epstein v. MCA, Inc., 54 F.3d 1422, 1424 (9th Cir.
1995) (quoting Shoen v. Shoen, 5 F.3d 1289, 1292 (9th Cir. 1993)). But the right of a
party to obtain discovery is not unlimited. A party may obtain discovery regarding “any
nonprivileged matter that is relevant to any party’s claim or defense.” Fed. R. Civ. P.
26(b)(1). “Relevant information need not be admissible at trial if the discovery appears
reasonably calculated to lead to the discovery of admissible evidence.” Id.

MEMORANDUM DECISION AND ORDER - 3

Evidence is relevant if the evidence has any tendency to “make the existence of
any fact that is of consequence to the determination of the action more probable or less
probable that it would be without the evidence.” Fed. R. Evid. 401. Although parties are
not given unfettered license to obtain all information, no matter how tangentially relevant
it might be, Rule 26(b)(1) is construed broadly to “encompass any matter that bears on, or
that reasonably could lead to other matter that bears on, any issue that is or may be in the
case.” Oppenheimer Fund, Ind. v. Sanders, 437 U.S. 340, 350 (1978).
If a responding party asserts an evidentiary privilege, that party has the burden to
demonstrate the privilege applies to the information in question. Tornay v. U.S. 840 F.2d
1424, 1426 (9th Cir. 1988). “When a party withholds information otherwise discoverable
by claiming that the information is privileged… the party must …describe the nature of
the documents, communications, or tangible things not produced or disclosed—and do so
in a manner that, without revealing information itself privileged or protected, will enable
other parties to assess the claim.” Fed. R. Civ. P. 26(b)(5).
The attorney-client privilege is designed to protect the forced disclosure in a
judicial proceeding of certain confidential communications between a client and a lawyer.
U.S. v. Ruehle, 583 F.3d 600, 606 n.6 (9th Cir. 2009). The privilege protects confidential
disclosures made by a client to an attorney to obtain legal advice, and the attorney’s
advice in response to such disclosures. Id. (quoting United States v. Bauer, 132 F.3d 504,
507 (9th Cir.1997)). But, the fact a person is a lawyer does not make all communications
with that person privileged. Id. (quoting United States v. Martin, 278 F.3d 988, 999 (9th
Cir.2002)). Because assertion of the privilege “impedes full and free discovery of the
MEMORANDUM DECISION AND ORDER - 4

truth, the attorney-client privilege is strictly construed.” Id. Accordingly, “it protects only
those disclosures necessary to obtain informed legal advice which might not have been
made absent the privilege.” Fisher v. U.S. 425 U.S. 391, 403 (1976).
To establish a communication is protected by the attorney-client privilege, a party
must prove each element of an eight-part test:
(1) Where legal advice of any kind is sought (2) from a professional legal
adviser in his capacity as such, (3) the communications relating to that
purpose, (4) made in confidence (5) by the client, (6) are at his instance
permanently protected (7) from disclosure by himself or by the legal
adviser, (8) unless the protection be waived.
In re Grand Jury Investigation, 974 F.2d 1068, 1071 n.2 (9th Cir.1992).
1.

Waiver of the Privilege – Andersen and Orrick Defendants
Plaintiffs contend the Andersen and Orrick Defendants are withholding documents

for which they agreed to waive the privilege because they assert an affirmative defense of
a reasonable good faith belief in the legality of their conduct based upon advice of
counsel. Andersen and Orrick Defendants assert their conduct was permissible under
federal antitrust law or fell within the scope of the Capper-Volstead Act, or that they had
a good faith belief their conduct was permissible based upon counsel’s advice.
The Capper-Volstead Act enumerates an exclusive list of collective conduct in
which eligible associations may engage without risk of antitrust liability, which list
includes acting together in collectively processing, preparing for market, handling, and
marketing products grown or produced by their farmer-members. U.S. v. Borden Co., 308
U.S. 188, 204 (1939). Cooperatives may have “marketing agencies in common,” and they
may make “the necessary contracts and agreements to effect such purposes.” Id.
MEMORANDUM DECISION AND ORDER - 5

But, the right of the agricultural producers to unite in preparing for market and in
marketing their products cannot be deemed to authorize any combination or conspiracy
with other persons in restraint of trade that the producers my see fit to devise. Id.
Agreements among producers to restrict production do not fall within the scope of the
exemption. In re Fresh and Process Potatoes Antitrust Litig., 834 F.Supp. 2d 1141 (D.
Idaho 2011). Further, otherwise exempt cooperatives may not conspire with non-exempt
entities to restrain trade. See Borden, 308 U.S. at 205 (conspiracy with distributors to
control price and supply).
Andersen and Orrick Defendants assert the defense that Plaintiffs’ claims are
barred because they acted in good faith with intent to comply with the law and, to the
extent illegal conduct occurred, they acted with the reasonable belief that the conduct
alleged in the Second Amended Complaint was lawful under Section 6 of the Clayton
Act, the Capper-Volstead Act, the Cooperative Marketing Act, and the Agricultural
Marketing Act. But they claim that the good faith defense is separate and distinct from
the defense that Capper-Volstead actually immunized their conduct. In other words, they
claim the good faith defense applies only if the Court finds their acts were not protected
under Capper-Volstead.
These Defendants allege that the only information pertinent to the good faith
defense is “information that has some bearing on the Defendants’ belief in the legality of
the conduct that plaintiffs challenge in the lawsuit.” Larson Brief in Opp. At 5 (Dkt. 569.)
Thus, they assert that communications going to the fact of immunity are irrelevant to the
defense, and also what the defendants thought about the legality of their conduct under
MEMORANDUM DECISION AND ORDER - 6

other laws similarly is irrelevant, as is their belief about the applicability of CapperVolstead immunity to other conduct not challenged by Plaintiffs in this litigation. Id.
Finally, these Defendants argue that only information conveyed to Defendants could
influence their state of mind on these issues, so the waiver extends only to
communications sent to or seen by them. Id. at 6. 4
Second, these Defendants assert that the waiver they crafted was “narrowly
tailored” to exclude documents merely relating to compliance with Capper-Volstead. The
Andersen Defendants explain that the waiver was “carefully negotiated” and its “precise
language specifically” crafted to avoid the argument Plaintiffs raise in their motion to
compel. Thus, they contend only those documents that involve legal advice
communicated to the Defendants, relates to Capper-Volstead, and involves conduct that
Plaintiffs claim is not exempt under Capper-Volstead must be produced under the terms
of the waiver. Defendants therefore assert, for example, that documents relating to the
structure of marketing agreements, or how compensation to potato growers was
calculated, are not within the scope of the waiver because such documents do not meet all
three of the above criteria.
Plaintiffs contend that the legal advice regarding compliance with the Act will
span a wide range of topics implicitly related to the exemption, and should be produced
under the terms of the parties’ waiver. For example, Plaintiffs argue that communications
related to the formation, incorporation, bylaws, membership agreements, contracts and

4

The Andersen Defendants rely upon the arguments asserted by the Orrick Defendants and referred to those
arguments in their brief. Andersen Defendants’ Response Brief at 7 (Dkt. 572.)

MEMORANDUM DECISION AND ORDER - 7

memoranda of understanding with members and non-members; the operating structure of
UPGI, UPGA and United II; advice or communications that relate to the nature,
participants in, and specific programmatic elements of, the supply management and
price-fixing schemes; protocols for conducting meetings, such as who can participate in
them and what may be discussed; and the relationships and agreements (including agency
and consultancy agreements) of the co-ops and their members with non-members and
non-producer packers, processors, marketers and other non-producers are all relevant,
and the privilege was waived with respect to those types of documents.
Turning to the waiver language, the Court finds it was not so carefully drafted as
these Defendants argue, and does encompass the types of documents Plaintiffs describe.
Andersen and Orrick Defendants signed the following waiver agreeing to produce
privileged documents as follows: “All documents reflecting communications with
counsel and/or relating to advice from counsel regarding defendant’s belief that the
conduct alleged in the Direct Purchaser Plaintiffs’ Second Amended Class Action
Complaint.” Stipulation at 1 (Dkt. 494.) 5 The Court has previously commented on the
sloppy and careless use of the phrase, “and/or,” and expressed that it was not impressed
with a similar argument. See Blue Cross of Idaho Health Serv., Inc. v. Atlantic Mut. Ins.

5

Although the Court approved the parties’ waiver, it did so via docket entry order and without a hearing or other
inquiry. (Dkt. 500).

MEMORANDUM DECISION AND ORDER - 8

Co., No. 1:09–CV–246–CWD, 2001 WL 162283 *14 (D. Idaho Jan. 19, 2011). 6
In this case, the meaning of the phrase “and/or” is consistent with the following
interpretations:
1) All documents regarding communications with counsel and relating to advice
from counsel regarding the defense are subject to the privilege waiver;
or
2) All documents reflecting communications with counsel or relating to the
advice from counsel regarding the defense are subject to the privilege waiver;
or
3) All documents either reflecting communications with counsel or relating to the
advice from counsel regarding the defense are subject to the privilege waiver.
Number two and three, above, both support Plaintiffs’ interpretation that any documents
containing communications relating to advice from counsel regarding Defendants’ belief
that the conduct alleged was lawful are subject to disclosure because of the waiver.
Further, the use of “and/or” interjects a blanket waiver. In number three, all documents
merely reflecting communications with counsel are subject to the waiver of the privilege.
The second phrase after the word or is a standalone phrase, and grammatically, the phrase
“regarding the defense” modifies “relating to the advice from counsel.” In other words,

6

Footnote 14 of the Blue Cross decision is particularly apropos here in light of these Defendants’ claim of their
artful drafting, and is quoted in its entirety:
The use of the ambiguous phrase “and/or” has been “frequently condemned as improper and
confusing,” and at least one court has construed the phrase against the drafter. See Newlon v.
Newlon, 310 Ky. 737, 220 S.W. 2d 961, 963 (Ky.1949). See also Moran v. Shern, 60 Wis.2d 39,
208 N.W. 2d 348, 351 (Wis.1973): “‘and/or,’ that befuddling, nameless thing, that Janus-faced
verbal monstrosity, neither word nor phrase, the child of a brain of someone too lazy or too dull to
express his precise meaning, or too dull to know what he did mean, now commonly used by
lawyers in drafting legal documents, through carelessness or ignorance or as a cunning device to
conceal rather than express meaning with view to furthering the interests of their clients.”; Raine
v. Drasin, 621 S.W. 2d 895, 905 (Ky.1981): “error is achieved by use of the much condemned
conjunctive-disjunctive crutch of sloppy thinkers, and/or.”

MEMORANDUM DECISION AND ORDER - 9

according to the imprecise language, Defendants effected a waiver of all documents
reflecting communications with counsel.
Second, the waiver does not apply to protect from disclosure other privileged
documents, and the Court finds they should be produced. The Court illustrates the issue
with an analogy to a donut with sprinkles. 7 There is a universe of documents—the
donut—being withheld on the basis of the attorney-client privilege. The waiver cut out
the middle of the donut—the donut hole—and those documents have, according to these
Defendants, been produced. Now, Defendants seek to protect the rest of the donut from
consumption. Contrary to Defendants’ assertion, the waiver did not affect the greater
universe of documents withheld. It was silent as to those documents. Nor is the waiver
being interpreted “too narrowly,” as Plaintiffs argue. Rather, the waiver merely classified
certain attorney-client privileged documents (the donut hole) as subject to a limited
waiver of the privilege. But, because of the defense of reliance upon the advice of
counsel, Defendants may not exclude the rest of the attorney-client privileged documents
(the donut) from production. All that should remain on Defendants’ plate are the
sprinkles that fell off the donut—privileged communications not relevant to the parties’
claims or defenses.
As support for its conclusion, the Court relies upon the analysis in Aspex Eyeware,
Inc., v. E’lite Optik, Inc., 276 F.Supp. 2d 1084 (D. Nev. 2003). In that case, an accused
patent infringer relied upon the defense of advice of counsel. The court held that the

7

Not to make light of the issue, but the donut analogy was particularly helpful in analyzing the effect of the waiver
and illustrating the result.

MEMORANDUM DECISION AND ORDER - 10

defendant, “having waived the privilege by asserting the advice of counsel defense, must
produce not only attorney-client communications, but also all documents relied upon or
considered by counsel in rendering the opinions relied upon.” 276 F.Supp. 2d at 1093.
(emphasis added). Otherwise, a litigant may use the attorney-client privilege as a shield,
and deprive the opposing party of the opportunity to test the legitimacy of the defendant’s
claim. Id. at 1092.
A contrary result ignores the potential for litigation abuses, and erects too
much of an impediment to the truth seeking process. Counsel for the
opposing party should not be able to act as the gatekeeper to determine
what information their adversary is entitled to have. … [P]arties should not
be able to selectively disclose privileged communications they consider
helpful while claiming privilege on damaging communications relating to
the same subject.
Id. at 193. (internal citations omitted).
The court in Aspex cited and discussed other cases supporting the view that
reliance upon the affirmative defense of advice of counsel waives the attorney
client privilege. For instance, the court quoted Hoover Univ., Inc. v. Graham
Packaging Corp., 44 USPQ2nd 1596, 1598 1996 WL 907737 (C.D. Cal. 1996),
which observed that a narrowly circumscribed waiver “creates a danger of a
defendant utilizing favorable opinion letters while allowing unfavorable evidence
to languish in their attorney’s files.” Aspex Eyeware, Inc., 276 F.Supp.2d at 1093.
Even if negative evidence contained in the attorney’s files may not reflect upon
the client’s state of mind, and may not be admissible as evidence, the evidence
may still lead to discovery of relevant and admissible evidence. Id. The plaintiff
has a “right to know about such evidence in order to fully question defendants and
MEMORANDUM DECISION AND ORDER - 11

their counsel regarding that evidence, disclosure to the client, and other related
issues.” Id.
There are numerous other courts holding that the assertion of advice of
counsel as a substantive defense renders the attorney-client privilege waived.
Trans world Airlines, Inc. v. Hughes, 332 F.2d 602, 615 (2nd Cir. 1964), cert.
denied, 380 U.S. 248 (1965) (attorney client privilege waived where the advice of
counsel defense was raised in an antitrust case and attorney had submitted an
affidavit to the Civil Aeronautics Board); Tsai-Son Nguyen v. Excel Corp., 197
F.3d 200 (5th Cir. 1999) (executive deponents claiming during deposition that they
relied upon advice of counsel to substantiate good faith defense to violation of
federal law waived attorney-client privilege, and opposing counsel could depose
the attorneys on whose advice deponents testified they relied); Panter v. Marshall
Field & Co., 80 F.R.D. 718 (N.D. Ill. 1978) (in an antitrust case, court held that
defendant’s reliance upon advice of counsel defense waived the attorney-client
privilege with respect to all communications, written or oral, to or from counsel
concerning the merger transaction for which counsel’s advice was sought, and
plaintiff was entitled to discovery of all relevant documents considered in forming
counsel’s opinion). Therefore, the privilege is waived with respect to all
documents and communications touching upon these Defendants’ organization
under the antitrust laws, and specifically Capper-Volstead, as well as the greater
universe of communications concerning Defendants’ conduct for which
Defendants sought counsel’s advice.
MEMORANDUM DECISION AND ORDER - 12

To hold otherwise would, in this Court’s view, deprive Plaintiffs of the
broader context in which the advice was given. For example, perhaps these
Defendants based their decision to organize the cooperatives in the way they did
because favorable securities or income tax benefits could be realized, and perhaps
they knew about some uncertainty with regard to Capper-Volstead. If counsel
knew of that uncertainty, and either failed to or did communicate it to Defendants,
Plaintiffs should be able to probe into the basis for the advice or lack thereof.
It would be patently unfair for a party to assert that they relied upon the
advice of counsel, yet deprive the opponent of the opportunity to understand why
the advice was given, what other alternatives were looked at, why certain advice
was rejected, and how the advice was interrelated to other business decisions. See
Gorzengno v. Magquire, 62 F.R.D. 617, 621 (S.D.N.Y. 1973) (“It would be
manifestly unjust to allow the application to be introduced in a vacuum, totally
immunized from contextual analysis.”). Plaintiffs are entitled to understand and
ask questions about the validity of counsel’s advice, and Defendants may not use
the assertion of the privilege both “as a sword and a shield.” Id. The donut must be
relinquished, and there should be no crumbs left on the plate other than the few
sprinkles that fall off.

MEMORANDUM DECISION AND ORDER - 13

The Court’s conclusion is buttressed by the content of the documents the
Andersen Defendants shared with the Court in camera. 8 The Andersen Defendants
are correct that the documents submitted for in camera review, and that pertain to
this issue, are not necessarily snared by the waiver language. They may not relate
to Defendants’ good faith belief that their alleged conduct was lawful. But they
belong to the universe of documents comprising the donut. Without these
documents, Plaintiffs will be hard pressed to understand the underlying motivation
behind counsel’s advice, and why Defendants made certain decisions.
Plaintiffs’ motion to compel documents from the Andersen and Orrick
Defendants set forth in Appendix A, category 1, (Dkt. 540-1), will be granted. The
Court did not review Appendix A, category 1, for any overlapping claims. But if
documents identified in category 1 of Appendix A are claimed as privileged for
additional reasons and appear in other categories of Appendix A, the Court’s order
to compel production of documents in category 1 overrides any other claim of
privilege.

8

Although the Orrick Defendants did not provide the documents they continue to withhold for in camera review,
they gave examples in their brief. Orrick Defendants continue to withhold marketing agreements between growers
or sheds associated with local cooperatives; internal documents about the formation of a Driscoll family cooperative;
documents containing legal advice relating to how Driscoll calculates compensation to potato growers; and
documents about the termination of membership in certain cooperatives. Brief at 10-11 (Dkt. 569.) Orrick
Defendants claim these types of documents do not reflect upon what they believed about the applicability of CapperVolstead, although they concede that some documents relate to Plaintiffs’ claims. These documents must be
produced if Orrick Defendants rely upon the advice of counsel defense. They provide context to Defendants’
conduct, organization, structure, and motives. Further, Rule 26(b)(1) indicates parties may obtain discovery
regarding matters “relevant to any party’s claim or defense.” Thus, Orrick Defendants’ arguments that they need not
produce privileged documents related to Plaintiffs’ claims is without merit if they intend to assert the advice of
counsel defense. Plaintiffs are entitled to the documents given the reliance upon the defense of advice of counsel.
And, if the documents the Court was not privileged to see are anything like the Andersen Defendants’ documents it
did review, they should be produced.

MEMORANDUM DECISION AND ORDER - 14

Andersen and Orrick Defendants have fourteen (14) days to review and
produce the documents, update their respective privilege logs, and determine the
extremely limited set of documents, if any, to be withheld on the basis of the
Court’s order. If they cannot do so, and further court intervention is necessary, the
Court will order all documents to be produced. Excluded, however, from the scope
of the Court’s order are any attorney-client privileged documents created on or
after June 18, 2010, the date this case was filed.
2.

Waiver of the Privilege by Asserting Affirmative Defenses – Offutt
Defendants
Plaintiffs argue that Offutt Defendants have waived the attorney-client privilege

by asserting the same affirmative defense of reliance on advice of counsel as the
Andersen and Orrick Defendants. The documents Plaintiffs identified as falling within
this category on Offutt’s privilege log are set forth in category 2 of Appendix A. (Dkt.
540-1.) The Offutt Defendants did not sign the waiver stipulation. But Plaintiffs assert
that an implied waiver of the attorney-client privilege occurred.
Offutt Defendants explained in their response brief that they are not relying upon
the advice of counsel, but rather upon publicly made statements, in forming their belief
that the cooperatives were qualified as cooperative organizations protected by CapperVolstead. See Am. Answer at 55 (Dkt. 436); Ans. at 49-50 (Dkt. 255). Offutt Defendants
were not members of the growing cooperatives, but transacted business with them. Offutt
Defendants explain that their liability is premised upon the alleged conspiracy that
Plaintiffs claim existed between the cooperative defendants and Offutt Defendants. They
MEMORANDUM DECISION AND ORDER - 15

assert in their answer, as amended, that they did not knowingly or consciously participate
in a scheme designed to achieve an unlawful objective.
Plaintiffs rely upon the “at-issue” doctrine. The “at-issue” waiver theory has been
recognized by courts in the Ninth Circuit. Home Indem. Co. v. Lane Powell Moss and
Miller, 43 F.3d 1322, 1326-26 (9th Cir. 1995). An implied waiver of the attorney-client
privilege occurs when (1) the party asserts the privilege as a result of some affirmative
act, such as filing suit; (2) through this affirmative act, the asserting party puts the
privileged information at issue; and (3) allowing the privilege would deny the opposing
party access to information vital to its defense. Home Indem. Co., 43 F.3d at 1326 (citing
Hearn v. Rhay, 68 F.R.D. 574, 581 (E.D.Wash.1975)). But the “at-issue” test applies only
if the advice of counsel is truly at issue vis-à-vis the defendant’s affirmative defenses.
Offutt Defendants explain in their memorandum that they have not, will not, and
need not rely upon communications with counsel to prove their affirmative defenses. The
Court has no reason to question Offutt Defendants’ assertions. Because Offutt Defendants
have not put the withheld documents at issue, the Court will not order production of the
withheld documents.
However, based upon the reasoning above, if Offutt Defendants refer to or attempt
to put into evidence any suggestion that Offutt Defendants sought, obtained or relied
upon counsel’s advice in determining whether to conduct business with the cooperative
organizations, Offutt Defendants waive the privilege. Lexington Ins. Co. v. Swanson, No.
C05-1614MJP, 2007 WL 2121730 *4 (W.D. Wash. July 24, 2007). Even if Offutt
Defendants do not reveal the advice, if there is any suggestion that Offutt Defendants
MEMORANDUM DECISION AND ORDER - 16

sought, obtained or relied upon the advice of counsel, the privilege is waived. To hold
otherwise would be tantamount to allowing Offutt Defendants to use the privilege both as
a sword and a shield. Until the Court has reason to question Offutt Defendants’ assertions
that they relied upon publically available documents, and that they at no time relied upon
or sought counsel’s advice, then Plaintiffs’ motion will be denied as it pertains to Offutt
Defendants and the documents withheld in category 2 of Appendix A. (Dkt. 540-1.)

ORDER
NOW THEREFORE IT IS HEREBY ORDERED:
1) Direct Purchaser Plaintiffs’ Motion to Compel (Dkt. 539) is GRANTED
IN PART AND DENIED IN PART.

April 11, 2014

MEMORANDUM DECISION AND ORDER - 17