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

Filing 603

ORDER in case 4:10-cv-00307-BLW-CWD; granting in part and denying in part 539 Motion to Compel in case 4:10-md-02186-BLW-CWD. 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 (klw)

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 RE MDL DKT. 539, DIRECT
PURCHASER PLAINTIFFS’ MOTION
TO COMPEL

This memorandum decision and order completes the Court’s review and analysis
of Direct Purchaser Plaintiffs’ Motion to Compel (MDL Dkt. 539). The Court
incorporates by reference the introduction, background, and discussion of the standards to
be applied from its prior memorandum decision and order, (MDL Dkt. 625), and will
address the remaining privilege issues below. 1

1

Appendix A identifying the documents on the various privilege logs that Plaintiffs contend are subject to their
motion to compel can be found at MDL Docket No. 540-1.

MEMORANDUM DECISION AND ORDER - 1

DISCUSSION
3.

Waiver of the Privilege by Voluntary Disclosure of Privileged
Communications to Third Parties— Potandon, Orrick Defendant Driscoll,
Andersen Defendant UPGA, and Offutt
A.

Potandon

Potandon contends that the common interest doctrine applies to protect the
documents identified on Appendix A, category 3. It argues that the communications at
issue, although not made in anticipation of litigation, fall within the common interest
doctrine because the parties to the communications shared a common legal interest to
meet requirements of the Capper-Volstead Act and plan their conduct accordingly. The
Court will address this category of documents in its discussion about the common interest
doctrine in Section 7, below.
B.

Orrick

Plaintiffs identify seven documents on Appendix A, category 3, that they claim are
not privileged because the documents appear to have been disclosed to third parties.
Plaintiffs identified documents attached to the Pouya Declaration, Ex. A, as follows: Priv.
548, 549, 880, 881, 882, 883, and 961. Document number 549 was identified also in
Appendix A, category 1, and the Court previously ordered it produced. It appears to be an
attachment to document number 548, an email from Rdale Price forwarded to several
individuals, and it contains an email chain from attorney Randon Wilson providing legal
advice regarding the Farmer Cooperatives. The attachment ordered produced per the
Court’s prior order was a legal research document. Here, the Court orders Priv. 548 to be

MEMORANDUM DECISION AND ORDER - 2

produced, as it should fall within the scope of the privilege waiver and Plaintiffs are
entitled to the context within which the legal advice was given.
Documents 880-883 appear to be an email chain between counsel which had, as an
attachment, a draft marketing agreement between Potandon and Agricultural
Cooperative. The email was shared among Jeremy Ladle, attorney Dave Gallafent and
Winston Beard, and copied to others, including Loraine Driscoll. Dave Gallafent has
been the attorney for the Driscoll family and the Sterling cooperative. Document 961 is
another email chain from Jeremy Ladle sent to attorney Dave Gallafent and copied to
others, including Loraine Driscoll, discussing the draft marketing agreement. Orrick
contends that the email chain was between counsel, and provided information necessary
for providing legal advice regarding the draft marketing agreement. Orrick Defendants
explain that Driscoll was involved with cooperatives NFC, Premier, and Sterling, as well
as a stockholder of Potandon, and that these seven documents reflect communications
between an attorney for the organization and constituents in their organizational capacity
that the individuals expected to remain confidential.
Orrick cites Rule 1.13 of the Idaho Rules of Professional Conduct as grounds for
maintaining the privilege. Comment 2 to the rule states that, “[w]hen one of the
constituents of an organizational client communicates with the organization's lawyer in
that person's organizational capacity, the communication is protected” even if the
constituent is not a client of the organization’s attorney. But the rule is meant to protect
communications by constituents or members of the same organization, such as when
Member A of Organization B consults with the organization’s attorney.
MEMORANDUM DECISION AND ORDER - 3

Here, however, the communications appear to have been shared between and
among Driscoll, NFC, Premier, and Sterling. Orrick claims that Driscoll, in its capacity as
a member of NFC, Premier, and Sterling, and because of its stakeholder interest in
Potandon, sought the advice of the organization’s attorney. However, the description on
the privilege log indicates the draft marketing agreement was related to Driscoll’s
business interests in the cooperatives. In other words, from the description, Driscoll was
seeking business advice concerning its marketing arrangements with the cooperatives. It
does not appear that Driscoll was acting solely in its capacity as a constituent of the
cooperatives. The advice then was shared with several individuals Orrick failed to
identify in its privilege log or brief. Other than Loraine Driscoll and Dave Gallafent, the
Court has no idea who Jeremey Ladle, Winston Beard, Steve Ottum, Mel Davenport, and
Gabriel Boldt are, or what their relationship is to Driscoll. All of these individuals are
recipients of the email.
Based upon the description in the privilege log, it does not appear the privilege
applies to the remaining five documents. The privilege does not extend to
communications about a joint business strategy between or among different entities even
if the communication happens to include a concern about litigation. FSP Stallion 1, LLC
v. Luce, 201 WL 3895914 *18 (D. Nev. Sept. 30, 2010). Further, it was Orrick’s burden
to explain why the privilege applies, and Orrick did not adequately identify all the
individuals who received the communication. These remaining five documents should be
produced.

MEMORANDUM DECISION AND ORDER - 4

C.

Andersen

Plaintiffs identify six documents on Appendix A, category 4, for which they claim
Andersen Defendant UPGA waived the privilege by voluntarily disclosing the
communications to third parties. The Court has reviewed the privilege log entries for
these eight documents. All eight entries reflect that the documents are board meeting
minutes containing the legal advice of attorney Randon Wilson to UPGA, Mr. Wilson’s
client, which were disseminated to the UPGA Board and documented in the Board’s
meeting minutes. The legal advice is described as advice concerning meeting protocols,
corporate documents, tax issues, and cooperative documents.
In the context of Andersen Defendant UPGA’s privilege log, the Court finds the
communications directed to UPGA, or authored by UPGA in the form of meeting
minutes, and shared with the UPGA board, are protected from disclosure. The
communications reflect confidential attorney-client communications from UPGA’s
attorney Rand Wilson given to UPGA, which may only act through its board members. 2
See Upjohn v. United States, 449 U.S. 383 (1981) (discussing the scope of the privilege
when the client is a corporation). The motion to compel is denied as to these six
documents.
D.

Offutt

Plaintiffs identify eight documents on Offutt’s privilege log on Appendix A,
category 3, for which they claim Offutt Defendants waived the privilege. The documents

2

However, if these same board meeting minutes containing legal advice directed to UPGA were then disseminated
elsewhere, and appear on other privilege logs as email attachments, the privilege may have been waived by others.

MEMORANDUM DECISION AND ORDER - 5

appear on R.D. Offutt Company’s privilege log. In reviewing the log entries, the Court
observes the email communications were all to or from Mr. Paul Noah, General Counsel
for R.D. Offutt Company. Others were copied on the emails. The individuals copied on
the emails have email addresses from wholly owned subsidiaries of R.D. Offutt
Company, such as RDO Equipment Company. See Aff. of Noah (Dkt. 567-2.) Several of
the communications involve attorney legal advice regarding an investigation by the
Department of Justice.
The Court finds the eight documents on the privilege log are properly withheld as
privileged, and that the privilege was not waived due to disclosure to third parties. The
parties to whom the emails were directed were part of the Offutt organization or an
employee of a wholly owned subsidiary of Offutt. The email communications involved
legal advice about ongoing litigation. In this case, it would appear that the associational
privilege doctrine or the common interest doctrine would be sufficient grounds to
maintain the attorney-client privilege. See Section 7, below. The motion to compel is
denied with respect to these eight documents.
4.

Communications Made for a Purpose Other Than Obtaining or Providing
Confidential Legal Advice – Potandon, Orrick Defendant Driscoll
A.

Potandon

Potandon argues the documents identified in Appendix A, category 4, are
privileged under the common interest doctrine. It asserts that the identified documents
constitute communications between Potandon and the cooperatives about the formation
and structure of entities seeking to take advantage of Capper-Volstead Act immunity, and
MEMORANDUM DECISION AND ORDER - 6

contain “legal advice” regarding compliance with the Act. The Court will address this
category of documents in its discussion about the common interest doctrine in Section 7,
below.
B.

Orrick

In their response brief, Orrick Defendants Larson and Driscoll indicate this dispute
was resolved with Plaintiffs. The Court therefore will not address it. Larson Brief at 2
(Dkt. 569).

5.

Failure to Identify Attorney as Party to Communication – Andersen
Defendants UPGI, United II, Raybould, and Wada
Plaintiffs argue the Andersen Defendants noted above failed to demonstrate an

attorney-client relationship existed between members of the cooperatives and the attorney
for the cooperatives, which included attorney Randon Wilson, for certain
communications included on their privilege logs. Plaintiffs identify communications on
the privilege logs for these Andersen Defendants circulated among members of UPGI,
UPGA, Raybould, Wada, and United II with Randon Wilson, the cooperatives’ attorney.
See Appendix A, category 5 (Dkt. 540-1.) Second, Plaintiffs contend the privilege logs
fail to establish whether the communications were intended to remain, or were in fact
kept, confidential.
Defendants contend that these Andersen Defendants had an attorney-client
relationship with Randon Wilson in their capacity as members of the cooperatives
represented by Mr. Wilson. Defendants assert that the cooperatives were akin to
corporations, and assert the cooperative members therefore had the ability to
MEMORANDUM DECISION AND ORDER - 7

communicate and share their communications among members of UPGI, UPGA, and
United II, and Mr. Wilson. Defendants have provided the Court with the documents
reflecting communications falling in this category for in camera review.
Upon review of the communications in camera, the Court concludes these
Andersen Defendants have not carried their burden in establishing the communications
are privileged. First, with regard to any documents in category 5 previously identified in
category 1 for which the Court ordered production, Defendants may not claim the
privilege separately here. These documents include UPGI documents 63, 182, 207, and
208; United II documents Priv 4 and 15; Raybould 1583; and Wada Priv. 16, 376, 415,
423, 441, and 442. See Appendix A, category 5 (Dkt. 540-1.)
Second, upon review of the documents submitted in camera, it appears that the
individuals seeking Mr. Wilson’s advice were not necessarily doing so in their capacities
as members of a cooperative. Rather, the communications are replete with requests for
Mr. Wilson’s thoughts about a particular subject, and once received, the communications
were shared among other entities such as Wada, Raybold, Cornelienson, Driscoll, and
others. There are also emails between Wada and Mr. Wilson giving the attorney a “heads
up” about actions Wada and others had taken, for the purpose of ascertaining how these
actions might affect the cooperatives. In other words, the communications did not involve
just the business or operations of the cooperatives. Rather, the interrelated entitites shared
the information given to or received from Randon Wilson, disseminated it to others the
Court often cannot identify from the email addresses, and otherwise did not treat the
communications or information as confidential. And, other emails in this category appear
MEMORANDUM DECISION AND ORDER - 8

to be asking Mr. Wilson for general business advice in his capacity as a Capper-Volstead
expert---not as an attorney for one of the cooperatives.
An analogy the Court likens this to would be if grocers such as Winco and
Albertsons formed and were members of a national grocery cooperative, and decided to
seek the advice of the cooperative’s attorney regarding pricing. That attorney is neither
Winco’s nor Albertsons’ attorney. Assume the communications between Winco and
Albertsons representatives as members of the cooperative sought advice outside the
activities of the cooperative, such as advice relating to how Winco and Albertsons
conduct their businesses in relation to the cooperative. Then, the information is shared
and discussed by Winco, Albersons, and other grocers. Under those facts, there is no
intent the information would remain confidential. Put differently, there is no indication
that the “client,” in this case the cooperative (through its member(s)), sought information
from the attorney for the cooperative in confidence and limited disclosure to third persons
for whom disclosure was necessary for the accomplishment or purpose for which the
attorney was consulted. Rather, the information was shared by and among various entities
for purposes other than strictly the cooperative’s business. The attorney-client privilege
does not extend to communications about a joint business strategy between or among
different entities, even if the communications happen to include a concern about potential
litigation. FSP Stallion 1, LLC v. Luce, 201 WL 3895914 *18 (D. Nev. Sept. 30, 2010).
The Court concludes that the privilege does not attach to the communications
identified on Appendix A, category 5, and to the extent it may have attached initially, it
was waived.
MEMORANDUM DECISION AND ORDER - 9

6.

Failure to Establish Communications Were Within the Scope of An AttorneyClient Relationship – Orrick Defendant Driscoll; Potandon
A.

Orrick

There are several documents in Appendix A, category 6, identified also in
category 1 that the Court ordered produced in its prior order. Although the documents are
repeated in category 6, they are subject to production under the Court’s order finding the
attorney client privilege was waived because of Orrick’s advice of counsel affirmative
defense. These documents are numbers 546, 549, 576, 579, 581-583, 600, 610, 611, 765769, and 829.
Regarding the remaining documents identified in category 6 on Appendix A, it
appears the communications were between the Driscolls, who were members of IFC
(Idaho Fresh Cooperative) and NFC (National Fresh Cooperative), and Mr. Randon
Wilson, 3 who represented IFC and NFC as the organizations’ attorney. See Decl. of
Rinkema Ex. P (Dkt. 569-18.) IFC dissolved in September of 2006, and NFC began its
operations in September of 2006. Loraine Driscoll was the president of IFC, and then
NFC, up through July of 2010. Id. Orrick Defendants represent that the documents reflect
Mr. Wilson’s advice as attorney for IFC or NFC, sought by or given to Ms. Driscoll or
other officers or directors of IFC or NFC. Id. Ex. Q. Plaintiffs contend that Orrick
Defendants have not established these communications occurred within the scope of an
attorney-client relationship, because the communications were between counsel for the
association and its members.
3

The Court is familiar with Mr. Wilson’s representation of the cooperatives and his role in this litigation.

MEMORANDUM DECISION AND ORDER - 10

First, the privilege logs are inadequate. The Court has had to parse the above
information by reading the email attachments to the Rinkema Declaration, and reviewing
the email exchanges between the attorneys to this dispute. The facts described above are
not apparent from the privilege logs themselves. And, if these communications were
between Loraine Driscoll (and others) in her capacity as association president of IFC, and
later NFC, and the associations’ attorney, Mr. Wilson, it is unclear why they appear on
Orrick Defendant Driscoll’s privilege log. The Court is left to question whether Ms.
Driscoll, in her dual capacity as association president and owner of Driscoll Potatoes,
Inc., had an ulterior motive for seeking or receiving the advice. Further, Orrick Defendant
Driscoll did not explain Ms. Driscoll’s dual role, or why the documents are included on
Driscoll’s privilege log.
Second, IFC apparently has dissolved and no longer operates. The attorney-client
privilege should be applied only when necessary to achieve its limited purpose of
encouraging full and fair disclosure by the client to his or her attorney. Lopes v. Vieira,
688 F.Supp.2d 1050, 1068 (E.D. Cal. 2010). A dissolved corporation, or in this case,
association, has less need for the protections provided by the privilege than a natural
person would need. Id. (quoting City of Rialto v. United States Dep’t of Defense, 492
F.Supp.2d 1193, 1200-01 (C.D.Cal.2007)). In Lopes, following the reasoning of Rialto,
the court found that a dissolved limited liability company that carried out no ongoing
business lost its ability to invoke the attorney-client privilege. Id. at 1068-69. Here, IFC
has dissolved, and Ms. Driscoll is no longer its President. It is not clear how Ms. Driscoll,

MEMORANDUM DECISION AND ORDER - 11

as an owner of Orrick Defendant Driscoll, can assert the privilege on behalf of Mr.
Wilson’s client, IFC, which no longer exists.
Turning now to NFC, again, it is not clear how Orrick Defendant Driscoll and Ms.
Driscoll, who no longer appears to be NFC’s president, can assert the privilege on behalf
of NFC. It bears repeating that Orrick Defendant Driscoll has not explained why these
communications are retained in Orrick Defendant Driscoll’s files. Like Potandon, Orrick
Defendant Driscoll may have had a common interest in seeking the advice from Mr.
Wilson, ostensibly in Ms. Driscoll’s capacity as NFC president, but perhaps not. Mr.
Wilson, the attorney from whom the advice was sought and given, was not Orrick
Defendant Driscoll’s attorney. Yet, the information was shared with Driscoll’s attorney
Dave Gallafent, and another attorney, Ryan Peterson, whose representational capacity is
not identified. See e.g. Priv. 602, attachment authored by Ryan Peterson to email chain
containing legal advice from Randon Wilson, shared by Loraine Driscoll with Gabriel
Boldt and Tyler Driscoll. (Dkt. 541-1 at 101.) 4 Other documents are shared as well. 5
Ultimately, it was Orrick Defendant Driscoll’s burden to persuade the Court the
privilege applies to the IFC and NFC documents in category 6. They have not done so.
There is no adequate explanation for the above issues. The documents must be produced.

4

Orrick Defendant Driscoll has not explained who Gabriel Boldt or Tyler Driscoll were at the time of these
communications. The communication from Mr. Wilson to Ms. Driscoll was shared with these individuals.
5
See e.g., Priv. 589, from Rdale Price to Curtis Looslie, Taylor McLaren, Russ Leonardson, Gabriel Boldt and
copied to Loraine Driscoll, Dirk Driscoll, Jeff Pahl, Jack Poulson, Keith Erikson, Carl Taylor, and Dave Robison,
which shared an email discussing the draft packing agreement with NFC and containing advice “of counsel Randon
Wilson.” Driscoll Potatoes Privilege Log (Dkt. 541-1 at 99.)

MEMORANDUM DECISION AND ORDER - 12

B.

Potandon

Potandon contends that the common interest doctrine applies to protect the
documents identified on Appendix A, category 6, from production. Potandon argues that
the communications at issue, although not made in anticipation of litigation, fall within
the common interest doctrine because the parties to the communications shared a
common legal interest to meet legal requirements and plan their conduct accordingly. The
Court will address this category of documents in its discussion about the common interest
doctrine in Section 7, below.

7.

Common Interest Privilege – Potandon and Offutt Defendants
Plaintiffs argue that entries on the privilege logs for Defendants Potandon and

Offutt cite the common interest privilege as the basis for withholding the documents, but
the privilege does not apply because the communications occurred prior to the
commencement of litigation, and relate to business strategies.
The common interest privilege, or joint defense privilege, is an extension of the
attorney client privilege. U.S. v. Gonzalez, 669 F.3d 974, 978 (9th Cir. 2012). The
privilege applies if “(1) the communication is made by separate parties in the course of a
matter of common [legal] interest; (2) the communication is designed to further that
effort; and (3) the privilege has not been waived.” Nidec Corp. v. Victor Co. of Japan,
249 F.R.D. 575, 578 (N.D.Cal. 2007).
The rationale for the rule is to allow “persons who share a common interest in
litigation [to] be able to communicate with their respective attorneys and with each other
MEMORANDUM DECISION AND ORDER - 13

to more effectively prosecute or defend their claims.” In re Grand Jury Subpoenas, 902
F.2d 244, 249 (4th Cir. 1990). Although the privilege is not limited to situations in which
litigation has commenced or is in progress, there must be some common legal effort in
furtherance of anticipated litigation. In re Grand Jury Subpoenas, 902 F.2d at 249; U.S. v.
Schwimmer, 892 F.2d 237 244 (2nd Cir. 1989); Gonzalez, 669 F.3d at 980; Nidec Corp.
v. Victor Co. of Japan, 249 F.R.D. 575, 578 (N.D.Cal. 2007).
But the doctrine does not extend the privilege to communications about a joint
business strategy that happens to include a concern about litigation. FSP Stallion 1, LLC
v. Luce, 201 WL 3895914 *18 (D. Nev. Sept. 30, 2010). In practice, the parties must
demonstrate cooperation in formulating a common legal strategy. Id. And, even if the
parties do share a common legal interest, for the privilege to apply, the communication at
issue must be designed to further that legal effort. Id. “The fact that the parties may have
been developing a business deal that included a desire to avoid litigation ‘does not
transform their interest and enterprise into a legal, as opposed to a commercial matter.’”
Id. (quoting Bank of Am. v. Terra Nova Ins. Co., LLT, 211 F.Supp.2d 493, 497 (S.D.N.Y.
2002)).
A.

Potandon

Potandon argues it is a “marketing agent in common” (“MAIC”) under the
Capper-Volstead Act, and to maintain its status as a MAIC it must comply with a variety
of legal issues regarding its structure and marketing agreements with the cooperatives for
which it sells potatoes. Potandon argues that each of the cooperatives share the same
legal interest with Potandon. Potandon identifies the shared legal interest as “ensuring
MEMORANDUM DECISION AND ORDER - 14

that Potandon’s structure and marketing agreements comply with the Capper-Volstead
Act’s requirements.” Potandon Response at 3 (MDL Dkt. 570.) Potandon explains that its
lawyers “sometimes coordinate with lawyers for each of the cooperatives” so they can
“assess and discuss whether certain business decisions and arrangements have legal
consequences that affect all of their common interest under the Act.” Potandon argues
that there is no waiver of the attorney-client privilege when it shares communications
containing legal advice, if the legal advice “concerns the parties’ common legal interest
in structuring their entities and business relationships to comply” with the Act.
Potandon claims that the documents identified on Appendix A, in categories 3, 4,
6, and 7, are all privileged pursuant to the common interest doctrine. The Court disagrees.
Accepting Potandon’s characterization of the interest it shared with the cooperatives, and
its “collaborative effort” to maintain compliance with the Capper-Volstead Act, the
“mere fact that the parties were working together to achieve a common commercial goal
cannot by itself result in an identity of interest between the parties.” Terra Nova, 211
F.Supp. 2d at 497.
The fact they may have had a shared desire to maintain compliance and avoid
litigation also does not transform the cooperatives’ common interest with Potandon “into
a legal, as opposed to commercial, matter.” Id. Although Potandon characterizes the
interest it shared with the cooperatives as a “legal” interest, naming it as such does not
transform its business interest into a legal interest for purposes of the common interest
doctrine. There is no evidence of any concern regarding pending or threatened litigation
raised during the time period of these communications. Even if there was a general
MEMORANDUM DECISION AND ORDER - 15

consensus to avoid litigation by maintaining compliance with Capper-Volstead, “a
business strategy which happens to include a concern about litigation is not a ground for
invoking the common interest rule.” In re FTC, 2001 WL 396522 *5 (S.D.N.Y. April 19,
2001).
Turning first to the documents identified in Appendix A, category 4, Potandon
describes them as communications between Potandon and the cooperatives containing
legal advice about the formation and structure of entities seeking to take advantage of
Capper-Volstead immunity. These documents include communications to third parties
containing legal advice about the parties’ membership agreements, contracts, and
memoranda of understanding with members of cooperatives and non-members. These
documents fall outside of the common interest doctrine under the standards the Court has
articulated. The communications are general legal advice, shared with third parties, about
the parties’ joint business strategies. The common interest doctrine does not extend the
privilege to such communications. FSP Stallion 1, LLC, 2010 WL 3895914 at *21 (“The
common interest doctrine does not extend to communications about a joint business or
financial transaction, merely because the parties share an interest in seeing the transaction
is legally appropriate.”).
Potandon treats the documents identified in Appendix A, categories 3, 6, and 7
together. It argues that the documents in these three categories were communications
shared with the cooperatives containing legal compliance advice provided in anticipation
of litigation. Potandon did not identify specific litigation, or even this litigation.
Nebulously, Potandon identifed only the “prospect of litigation” and the parties’ joint
MEMORANDUM DECISION AND ORDER - 16

desire to maintain immunity under the Capper-Volstead Act. The documents apparently
contain advice about how to structure the relationships between Potandon, a MAIC, and
the cooperatives for which it markets.
Potandon cites several cases in support of its argument that communications need
not have been made in anticipation of litigation to fall within the protection of the
common interest doctrine. The cases cited are distinguishable. For example, Potandon
cites U.S. v. Zolin, 809 F.2d 1411, 1417 (9th Cir. 1987), 6 for the proposition that the
common interest privilege applies even if a non-party to the communication has not been
sued and faces no immediate liability. However, in that case, the government was
investigating L. Ron Hubbard, of the Church of Scientology, for criminal tax fraud. The
communications at issue were between Mr. Hubbard and his attorneys, and nonlawyers
were present at the meeting. These third parties were all members of the Church, and had
a common interest in sorting out the affairs of the Church and Mr. Hubbard in the context
of the litigation; thus, the court found the communications were protected by the common
interest doctrine even though the nonlawyers were not part of the litigation. Zolin, 809
F.2d at 1417. However, litigation had commenced, and the government sought disclosure
of the communications during the course of its investigation of Mr. Hubbard for criminal
tax fraud. Such is not the case here, where the communications were not shared with third
parties in the context of any specifically anticipated or ongoing litigation.

6

The Court of Appeals for the Ninth Circuit granted a rehearing, and withdrew the opinion cited above in U.S. v.
Zolin, 832 F.2d 127 (9th Cir. 1987), and later vacated that order, instructing only that the portion of the three-judge
panel opinion in U.S. v. Zolin, 809 F.2d 1411 (9th Cir. 1987), beginning with “the first full paragraph on page 1418
to and including the last full paragraph in the second column on the same page is withdrawn.” U.S. v. Zolin, 842
F.2d 1135, 1136 (9th Cir. 1988).

MEMORANDUM DECISION AND ORDER - 17

Potandon relies heavily upon Hewlett-Packard Co. v. Baush & Lomb, Inc., 115
F.R.D. 308, 309-312 (N.D. Cal. 1987), in support of its argument that litigation need not
be commenced for the common interest privilege to apply. Potandon contends that the
court in Hewlett-Packard reasoned “that because both parties could potentially have to
defend against an infringement suit at some indefinite point in the future, the parties had a
common legal interest sufficient for the privilege to apply.” The statement is true so far as
it goes. In that case, the issue was whether Bausch & Lomb waived its right to withhold
documents under the attorney-client privilege, the work product doctrine, or both, when it
voluntarily disclosed its attorney’s opinion letter to a non-party with whom it was
negotiating the sale of a business. There, however, the letter actually involved the threat
of impending litigation. If the third party entered into the business deal, Bausch & Lomb
wanted it to be clear that both of them likely would be sued by Hewlett-Packard. In other
words, the threat of litigation rose to a level greater than a mere desire to avoid the
remote possibility of litigation---both parties “anticipated litigation in which they would
have a common interest.” Hewlett-Packard Co., 115 F.R.D. at 310.
Potandon also cites Pulse Engineering, Inc. v. Mascon, Inc., 2009 WL 3234177 at
*3 (S.D. Cal. Oct. 2, 2009), for the proposition that communications mixing both
business-related content and legal concerns do not lose protection of the privilege. In
Pulse, however, actual litigation was commenced between the parties. Further, the court’s
review of the communications at issue revealed that defense counsel directed the
communications to the third party, which party shared the defendant’s interest in the
pending litigation, and the communications were for the purpose of conducting tests
MEMORANDUM DECISION AND ORDER - 18

required for the pending litigation. Pulse, 2009 WL 3234177 at *3. Therefore, although
the communications involved a shared commercial interest, the communications were
related to the parties’ shared interest in conjunction with the lawsuit.
In all of the cases relied upon by Potandon, it is clear to the Court that the threat of
impending litigation, or actual litigation, was involved. Yet Potandon seeks to stretch the
bounds of the common interest doctrine too far. It acknowledges that there was no threat
of litigation at the time the communications were shared, just a common desire to remain
in compliance with the Capper-Volstead Act. The communications therefore involve
legal compliance advice merely to remain compliant with the Act.
Consequently, the relationship between Potandon and the cooperatives with which
it shared information is distinguishable from the cited cases. In each of those cases, the
court found a common legal interest because the communications were made to advance
a joint legal strategy concerning either separate litigation involving similar claims and
issues or reasonably anticipated joint litigation. In Pulse, Hewlett-Packard and Zolin, the
litigation had already commenced or was very likely to occur, and the third parties to
whom the privileged information was disclosed shared a common goal in connection with
the identified litigation or litigation threat. Here, in contrast, Potandon and the
cooperatives merely desired to structure their business relationships to remain compliant
with the Capper-Volstead Act and avoid the potential of litigation.
Plaintiffs’ motion to compel directed at Potandon with respect to the documents
identified in Appendix A, category 3, 4, 6, and 7, or to any other documents claimed to be
protected by the common interest doctrine under the grounds Potandon advances here, is
MEMORANDUM DECISION AND ORDER - 19

granted. Communications containing legal advice regarding Potandon’s general business
relationships with the cooperatives, and shared by Potandon with the cooperatives, must
be produced.
B.

Offutt

Offutt explains that the documents identified on Appendix A in category 7 (Dkt.
540-1) are subject to a different aspect of the privilege—the common interest and
associational privilege. The Affidavit of Paul Noah establishes he is general counsel for
Offutt and RDO Equipment Company. (Dkt. 567-2.) In that role, Mr. Noah represents the
wholly owned subsidiaries of Offutt and RDO Equipment Company, which include RDO
Frozen Co., Ag Capital Company, RDO Agriculture Equipment Co. and RDO
Construction Equipment Co. (Dkt. 567-2.) Part of Mr. Noah’s job involves also serving
as counsel to Offutt’s partially owned subsidiary, Idahoan. Offutt and its wholly owned
subsidiaries together own 51.0541% of Idahoan. Id. ¶ 5.
The documents listed on the privilege log Plaintiffs seek to compel include: (1)
communications between Paul Noah and Idahoan employees; and (2) communications
involving employees of both Offutt and Idahoan, and counsel for one or both entities. As
to the first category of documents, Offutt argues they are communications between
attorney and client, and subject to the privilege. Further, Offutt argues Idahoan is the
entity that “owns” the privilege. For the second category of documents, Offutt invokes
the associational privilege because Idahoan is a subsidiary of Offutt. Plaintiffs complain
that the privilege logs lack the identity of the individuals to whom the documents were

MEMORANDUM DECISION AND ORDER - 20

disclosed, their positions, and their reason for needing to know the information. See U.S.
v. Witmer, 835 F.Supp. 208, 223 (M.D. Pa. 1993).
The “associational privilege” protects communications made by corporate
employees to counsel for the corporation, at the direction of corporate superiors to secure
legal advice from counsel, provided the employees were aware they were being
questioned so the corporation could obtain legal advice. Upjohn Co. v. U.S., 449 U.S.
383, 394 (1981). The communications do not necessarily have to involve anticipated
litigation, but they must be for the purpose of securing legal advice to the company.
Upjohn, 449 U.S. at 395-6. The associational privilege is not a separate privilege but an
extension of the attorney-client privilege. Id. All other conditions of the attorney-client
privilege must be met. MGA Entertainment, Inc. v. Nat’l Prods. Ltd., 2012 WL 3150532
*3 (C.D. Cal. Aug. 2, 2012).
In Admiral Ins. Co. v. U.S. Dist. Court for Dist. of Ariz., 881 F.2d 1486, 1493 n.6
(9th Cir. 1989), the court in dicta explained that, under Upjohn, “communications
between employees of a subsidiary corporation and counsel for the parent corporation,
like communications between former employees and corporate counsel, would be
privileged if the employee possesses information critical to the representation of the
parent company and the communications concern matters within the scope of
employment.” But the mere existence of an affiliate relationship does not excuse a party
from demonstrating the applicability of the attorney-client privilege. Gulf Islands
Leasing, Inc. v. Bombardier Capital, Inc., 215 F.R.D. 466, 474 (S.D.N.Y. 2003).

MEMORANDUM DECISION AND ORDER - 21

Common ownership or control may relax the standard somewhat, but to be treated
as one entity for attorney-client privilege purposes, the corporation must either be closely
affiliated or share an identity of legal interest. Music Sales Corp. v. Morris, 1999 WL
974025 *7 S.D.N.Y. (Oct. 26, 1999). 7 In Music Sales, the court held that the
communications between two wholly owned subsidiaries of a third parent corporation,
which operated “in effect, as a single entity, … need not establish a substantial identity of
legal interest” to assert the attorney-client privilege over communications shared between
the subsidiary corporations. Id.
The problem with Offutt’s reliance upon the holding in Music Sales, however, is
that Offutt has not shown that Idahoan operates as a “single entity” with a unity of
interest such that it can be treated as if it was one and the same as Offutt. Offutt, together
with its subsidiaries and affiliates collectively own 51% of Idahoan. A collective
ownership of 51% is not equivalent to a wholly owned subsidiary, like the two
corporations considered in Music Sales. Offutt wants the Court to extrapolate, based upon
the 51% collective ownership and the “sharing” by Offutt and Idahoan of Mr. Noah as an
attorney, that the two corporations should be treated as one for purposes of the attorneyclient privilege. But the sharing of an attorney is not the equivalent of establishing the
entities themselves operate as a single entity with a unity of interest.

7

Offutt cited also Miller v. Internat’l Bus. Machines, 2006 WL 1141090 (N.D. Cal. 2006) as “taking the Admiral
rule further,” and in support of its argument that a parent corporation and a wholly owned subsidiary should be
treated as a single entity for purpose of determining attorney client privilege. But Miller did not involve the
application of the attorney-client privilege. In that case, the issue was whether IBM had sufficient control over
documents possessed by its Chinese affiliate companies such that the plaintiff could obtain them through its
production requests served upon IBM. The court held that, although IBM had control over its Chinese subsidiaries,
neither IBM nor the subsidiary companies were responsible for responding to plaintiff’s discovery requests. 2006
WL 1141090 *3. The court did not discuss application of the attorney-client privilege.

MEMORANDUM DECISION AND ORDER - 22

Offutt cites one sentence from Gulf Islands as support for its argument that sharing
an attorney is sufficient to uphold the common interest rule. Offutt Brief at 11 (Dkt. 567.)
In Gulf Islands, the court explained:
Some cases state the broad proposition that disclosure of attorney-client
privileged information to an affiliated company does not waive the
privilege—thereby obviating the need to invoke the common interest rule.
See, e.g., Cary Oil Co., Inc. v. MG Refining & Marketing, Inc., 2000 WL
1800750, at *6 (S.D.N.Y. Dec. 7, 2000); Music Sales Corp. v. Morris, 1999
WL 974025, at *7 (S.D.N.Y. Oct. 26, 1999); Duplan Corp. v. Deering
Milliken, Inc., 397 F.Supp. 1146, 1185 (D.S.C.1974), aff'd, 540 F.2d 1215
(4th Cir.1976). But it appears that in such cases no waiver was found
because the entities were represented by a common attorney, see Cary Oil,
2000 WL 1800750, at *3–6, or shared a common legal interest. See Music
Sales, 1999 WL 974025, at *3; Duplan, 397 F.Supp. at 1184. In this case,
however, Bombardier Capital and Bombardier Aerospace utilized different
attorneys and held different interests of a commercial, not legal, nature.

Gulf Islands, 215 F.R.D. at 474 (emphasis added). However, a closer look at Cary Oil,
the case cited in Gulf Islands, reveals that the holding hinged upon more than just a
shared attorney. Rather, the communications at issue in Cary Oil were between a wholly
owned subsidiary and its attorney, which communications were then shared with the
corporation’s parent company. 2000 WL 1800750 at *6. The court found no waiver of the
attorney-client privilege under such circumstances. Id.
The Court declines to extend the Admiral rule to the relationship between Idahoan
and Offutt. Idahoan may be controlled by Offutt and its subsidiaries, but Idahoan is not a
wholly owned subsidiary of Offutt. Idahoan uses Offutt’s attorney, Mr. Noah, to provide
legal advice, but that appears to be as far as the relationship goes.

MEMORANDUM DECISION AND ORDER - 23

As examples, Priv. 00584 and 585 are emails from Idahoan employees to Mr.
Noah in his capacity as counsel for Offutt, and they are described as “communications
with counsel with shared interest in drafting contract related to Idaho Fresh-Pac
agreement.” Another example is Priv. 666-669, described as emails with counsel
“regarding draft potato storage lease for a potato storage barn in Grand Forks. Common
interest with RDO and Idahoan due to need to store raw potatoes before processing.”
Offutt represents that these communications are exchanges by employees or other
executives to or from Mr. Noah in his capacity as counsel for both the parent corporation
and subsidiary corporation. However, the Court finds that this group of documents is not
protected from production, as the associational privilege does not extend to the
communications in this category.
Plaintiffs next seek to compel production of communications between Paul Noah
and Idahoan employees. Offutt explains that these documents were not shared outside of
Idahoan. Offutt argues that Mr. Noah was acting in his role as corporate counsel for
Idahoan and therefore these communications should be protected from disclosure. Offutt
argues also that the privilege is owned by Idahoan, and that Offutt is not the proper party
to address the motion to compel. Many of these same documents, Offutt explains, appear
on Idahoan’s privilege log, and were captured by the production requests to Offutt
because Mr. Noah did not separate his email accounts. As an example, Priv. 582 is
described as an email with counsel regarding the drafting of the Idahoan HCP supply
agreement, from an employee within Idahoan to Mr. Noah.

MEMORANDUM DECISION AND ORDER - 24

With regard to communications between Paul Noah and Idahoan employees, the
Court finds the attorney-client privilege would apply, and the communications would be
protected from production. There is no indication that Mr. Noah, in his capacity as
counsel for Idahoan, waived the privilege and shared the documents with Offutt
employees or officers. Plaintiffs did not direct their motion to compel to Idahoan, even
though many of the same documents apparently are disclosed on Idahoan’s privilege log.
The privilege belongs to the client---in this case, Idahoan---and not to Offutt, or Mr.
Noah, who was acting in his role as Idahoan’s corporate counsel. See U.S. v. Doe, 429
F.3d 450, 452 (3rd Cir. 2005) (privilege belongs to the client, not to the attorney). The
motion is denied concerning documents reflecting communications exclusively between
Paul Noah and Idahoan employees in Paul Noah’s role as Idahoan’s corporate counsel.
Offutt did not separate the documents on its privilege log belonging to one or the
other category of documents it referenced. Offutt is directed to produce the documents
shared between Idahoan and Offutt for which both companies sought Mr. Noah’s advice,
but may retain as privileged those documents reflecting communications exclusively
between Idahoan and its employees with Mr. Noah.
8.

Defendants Improperly Asserted Privilege on Behalf of Third Party –
Potandon, Offutt Defendants
A.

Potandon

The second category of documents for which Plaintiffs seek to compel production
from Potandon are documents Potandon identifies as personal communications culled
from the files of Brit White, a Potandon custodian, created during his past employment
MEMORANDUM DECISION AND ORDER - 25

with IFC. See Appendix A, category 8 (Dkt. 540-1.) Plaintiffs assert that Potandon
improperly claims the privilege on behalf of a third party. But Potandon explains that Mr.
White’s personal email account, which he sometimes used for business purposes, was
subject to the parties’ production requests under the terms of the Court’s ESI order, and
there was no intent (or authority) by Potandon to waive the privilege possessed by Mr.
White’s former employer, IFC. Potandon represents that the emails were created by Mr.
White in his capacity as an attorney for IFC during the time of his employment with IFC.
Potandon is correct that the emails between Mr. White and his former employer,
Idaho Fresh Cooperative (IFC), are privileged. Mr. White, a past employee of IFC, lacks
the authority to waive IFC’s attorney-client privilege, and the power to waive it rests with
IFC. U.S. v. Chen, 99 F.3d 1495, 1502 (9th Cir. 1996). See also U.S. v. Doe, 429 F.3d at
452. Plaintiffs’ motion to compel is denied with respect to the documents identified in
Category 8 of Appendix A pertaining to Mr. White. 8
B.

Offutt

Offutt does not address the eight documents Plaintiffs identified on Appendix A
category 8 in its brief. Rather, Offutt complains that Plaintiffs did not raise the issue in
their motion, and referenced only Potandon in the motion, so Offutt “assumes Plaintiffs
have abandoned this section in Appendix A as far as it applies to Offutt and thus no
response is necessary.” The Court makes no such assumption. Plaintiffs took the time to

8

But see Section 6, supra. There, the Court discussed the implications of the shared communications between Ms.
Driscoll, association president of IFC (which no longer operates), and Orrick Defendant Driscoll as well as other
third parties. Conversely, it does not appear that Mr. White shared the communications at issue in section 8.

MEMORANDUM DECISION AND ORDER - 26

include eight documents on Appendix A. That Plaintiffs may not have directly addressed
them in their brief is inconsequential given the magnitude of the motion.
The Court reasons, based upon Chen, that the same argument applied above
regarding Mr. White’s emails applies to these eight documents. Offutt, perhaps out of an
abundance of caution, identified these eight documents because they were captured as
part of the broad production requests. But, Offutt was not improperly asserting the
privilege on behalf of a third party, and instead was preserving the third party’s right to
have its attorney-client privileged materials remain so. The privilege belongs to the client,
and it is not Offutt’s to waive.

MEMORANDUM DECISION AND ORDER - 27

CONCLUSION
Based upon the above analysis, and utilizing Plaintiffs’ Appendix A (Dkt. 540-1)
as a guide, the following chart summarizes the Court’s order and constitutes the final
resolution of Plaintiffs’ Motion to Compel: 9
Deficiency
1. The Stipulating
Defendants have waived
the attorney-client
privilege as to
communications relating
to their affirmative
defenses

Log/Defendant
Defendant United Potato
Growers of Idaho, Inc.’s
Fourth Amended ESI
Privilege Log

Defendant United Potato
Growers of Idaho, Inc.’s
Second Amended NonESI Privilege Log

Defendant United Potato
Growers of America,
Inc.’s Third Amended ESI
Privilege Log

Defendant United Potato
Growers of America,
Inc.’s Second Amended
Non-ESI Privilege Log

Defendant United II
Potato Growers of Idaho,
Inc.’s Revised ESI
Privilege Log

9

Court Order on Motion to
Compel
GRANTED (See May 8,
2014, Order MDL Dkt. 638
Overruling objection and
Affirming April 11, 2014
Order Granting Motion to
Compel, MDL Dkt. 625)
GRANTED (See May 8,
2014, Order MDL Dkt. 638
Overruling objection and
Affirming April 11, 2014
Order Granting Motion to
Compel, MDL Dkt. 625)
GRANTED (See May 8,
2014, Order MDL Dkt. 638
Overruling objection and
Affirming April 11, 2014
Order Granting Motion to
Compel, MDL Dkt. 625)
GRANTED (See May 8,
2014, Order MDL Dkt. 638
Overruling objection and
Affirming April 11, 2014
Order Granting Motion to
Compel, MDL Dkt. 625)
GRANTED (See May 8,
2014, Order MDL Dkt. 638
Overruling objection and
Affirming April 11, 2014
Order Granting Motion to

The Court issued an order regarding Categories 1 and 2. Their inclusion here does not intend to invite additional
briefing or further objection.

MEMORANDUM DECISION AND ORDER - 28

Defendant Raybould
Brothers Farms, LLC’s
Fourth Amended ESI
Privilege Log

Defendant Raybould
Brothers Farms, LLC’s
Second Amended NonESI Privilege Log

Defendant Snake River
Plains Potatoes, Inc.’s
Amended Non-ESI
Privilege Log

Wada Defendants’
Fourth Amended ESI
Privilege Log

Blaine Larsen and Blaine
Larsen Farms, Inc.’s
Privilege Log

Driscoll Potatoes, Inc.’s
November 13, 2013
Privilege Log

2. The RDO Defendants
have waived the
attorney-client privilege
as to communications
relating to their affirmative
defenses

R.D. Offutt Company and
Ronald D. Offutt “ESI”
and “Paper Docs”
Privilege Logs

MEMORANDUM DECISION AND ORDER - 29

Compel, MDL Dkt. 625)
GRANTED (See May 8,
2014, Order MDL Dkt. 638
Overruling objection and
Affirming April 11, 2014
Order Granting Motion to
Compel, MDL Dkt. 625)
GRANTED (See May 8,
2014, Order MDL Dkt. 638
Overruling objection and
Affirming April 11, 2014
Order Granting Motion to
Compel, MDL Dkt. 625)
GRANTED (See May 8,
2014, Order MDL Dkt. 638
Overruling objection and
Affirming April 11, 2014
Order Granting Motion to
Compel, MDL Dkt. 625)
GRANTED (See May 8,
2014, Order MDL Dkt. 638
Overruling objection and
Affirming April 11, 2014
Order Granting Motion to
Compel, MDL Dkt. 625)
GRANTED (See May 8,
2014, Order MDL Dkt. 638
Overruling objection and
Affirming April 11, 2014
Order Granting Motion to
Compel, MDL Dkt. 625)
GRANTED (See May 8,
2014, Order MDL Dkt. 638
Overruling objection and
Affirming April 11, 2014
Order Granting Motion to
Compel, MDL Dkt. 625)
DENIED (See April 11,
2014 Order re: Motion to
Compel, MDL Dkt. 625)

3. Defendants have
waived the attorney-client
privilege by
voluntary disclosure of
communications to third
parties

5. Defendants’ privilege
log entries that fail to
identify an attorney as a
party to the
communication are not
protected by the
attorney-client privilege

GRANTED

Driscoll Potatoes, Inc.’s
November 13, 2013
Privilege Log
Defendant United Potato
Growers of America,
Inc.’s Second Amended
Non-ESI Privilege Log
R.D. Offutt Company and
Ronald D. Offutt “ESI”
and “Paper Docs”
Privilege Logs
Potandon Produce, L.L.C.
Second Revised Privilege
Log

GRANTED

Driscoll Potatoes, Inc.’s
November 13, 2013
Privilege Log
Defendant United Potato
Growers of Idaho, Inc.’s
Fourth Amended ESI
Privilege Log

MOOT

Defendant United II
Potato Growers of Idaho,
Inc.’s Revised ESI
Privilege Log
Defendant Raybould
Brothers Farms, LLC’s
Second Amended NonESI Privilege Log

4. Communications made
for a purpose other than
obtaining or providing
confidential legal advice
are not protected by the
attorney-client privilege

Potandon Produce, L.L.C.
Second Revised Privilege
Log

GRANTED

MEMORANDUM DECISION AND ORDER - 30

DENIED

DENIED

GRANTED

GRANTED

GRANTED

7. The Common Interest
Privilege Does Not Apply
to Defendants’ PreLitigation
Communications or [sic]

8. Defendants
improperly asserting the
privilege on behalf of a
third party

GRANTED

Potandon Produce, L.L.C.
Second Revised Privilege
Log
Potandon Produce, L.L.C.
Second Revised Privilege
Log

GRANTED

R.D. Offutt Company and
Ronald D. Offutt “ESI”
and “Paper Docs”
Privilege Logs

6. Defendants have failed
to establish that
communications took
place within the scope of
an attorney-client
relationship, including
communications between
counsel for an association
and members of the
association

Wada Defendants’
Fourth Amended ESI
Privilege Log
Driscoll Potatoes, Inc.’s
November 13, 2013
Privilege Log

GRANTED for
communications with Mr.
Noah shared between
Idahoan and Offutt;
DENIED for
communications between
Idahoan and its employees
and Mr. Noah.
DENIED

Potandon Produce, L.L.C.
Second Revised Privilege
Log
R.D. Offutt Company and
Ronald D. Offutt “ESI”
and “Paper Docs”
Privilege Logs

MEMORANDUM DECISION AND ORDER - 31

GRANTED

GRANTED

DENIED

ORDER
NOW THEREFORE IT IS HEREBY ORDERED:
Direct Purchaser Plaintiffs’ Motion to Compel (MDL Dkt. 539) is GRANTED IN
PART AND DENIED IN PART.
The Court’s Order resolves Plaintiffs’ Motion to Compel (Dkt. 539) in its entirety.
May 30, 2014

MEMORANDUM DECISION AND ORDER - 32