Lawson v. Spirit Aerosystems, Inc.
Filing
284
MEMORANDUM AND ORDER denying 231 Motion to Compel the Production of Clawed Back Documents. Signed by Magistrate Judge Angel D. Mitchell on 2/12/2020. (ctv)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
LARRY A. LAWSON,
Plaintiff,
v.
SPIRIT AEROSYSTEMS, INC.,
Defendant.
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Case No. 18-1100-EFM-ADM
MEMORANDUM AND ORDER
This matter comes before the court on plaintiff Larry A. Lawson’s (“Lawson”) Motion to
Compel the Production of Clawed Back Documents. (ECF No. 231.) Lawson asks the court to
compel defendant Spirit AeroSystems, Inc. (“Spirit”) to re-produce seven documents that Spirit
inadvertently produced. Spirit clawed back the documents and re-produced three of them with
redactions. Spirit contends the documents and redactions at issue are protected by the attorneyclient privilege whereas Lawson contends they are not. The court finds that Spirit has established
the subject documents and redactions are privileged. Lawson’s motion is therefore denied.
I.
BACKGROUND
The background of this lawsuit is more thoroughly set forth in this court’s prior orders,
familiarity with which is presumed. See generally, e.g., Lawson v. Spirit AeroSystems, Inc., 410
F. Supp. 3d 1195 (D. Kan. 2019); Lawson v. Spirit AeroSystems, Inc., No. 18-1100-EFM, 2018
WL 3973150, at *1-*4 (D. Kan. Aug. 20, 2018). Highly summarized, Lawson is Spirit’s former
chief executive officer who retired on July 31, 2016. His Retirement Agreement contained noncompete obligations for two years, until July 31, 2018. In early 2017, Lawson engaged in business
dealings with non-party investment firms Elliott Associates, L.P. and Elliott International, L.P.
(collectively, “Elliott”) to provide consulting services in connection with a proxy contest Elliott
launched to replace five board members of Arconic, Inc. (“Arconic”). When Spirit learned about
this, Spirit notified Lawson that his involvement with Arconic constituted a breach of his noncompete, and Spirit stopped paying Lawson and demanded that he repay what the company had
already paid him under the Retirement Agreement. Lawson disputes that he breached the noncompete. He filed this lawsuit seeking to recover what he believes Spirit owes him.
Seven documents are at issue on Lawson’s current motion to compel. Spirit initially
produced these documents and then clawed them back pursuant to Paragraph 12 of the Protective
Order.1 Spirit ultimately withheld four of the documents and re-produced three of them with
selected text redacted. Lawson now asks the court to compel Spirit to re-produce these seven
documents. (See ECF No. 232, at 2-3.) Spirit opposes Lawson’s motion, arguing the withheld
documents and redactions are protected by the attorney-client privilege. As directed by the court,
Spirit submitted the documents for in camera review concurrently with filing its opposition brief.
II.
LEGAL STANDARD
Because this is a diversity case, state law governs attorney-client privilege. FED. R. EVID.
501 (“[I]n a civil case, state law governs privilege regarding a claim or defense for which state law
supplies the rule of decision.”); see also Frontier Ref., Inc. v. Gorman-Rupp Co., 136 F.3d 695,
699 (10th Cir. 1998) (“[S]tate law supplies the rule of decision on privilege in diversity cases.”).
In Kansas, the attorney-client privilege is codified at KAN. STAT. ANN. § 60-426. Under the statute,
with few exceptions, “communications found by the judge to have been between [a] lawyer and
his or her client in the course of that relationship and in professional confidence, are privileged.”
State v. Gonzalez, 234 P.3d 1, 10 (Kan. 2010). The term “communication” includes “advice given
1
The Protective Order was originally entered as ECF No. 41 and has since been amended.
(See ECF No. 236.)
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the emails involve counsel collecting information for the purpose of rendering legal advice. (ECF
No. 230, at 2, 3.)
The timing of these emails is important. The events that led to this lawsuit began in January
of 2017, when Elliott identified Lawson as a potential candidate for Arconic’s board of directors
or its CEO. See Lawson, 410 F. Supp. 3d at 1201. On January 10, Lawson alerted Spirit about his
proposed involvement with Arconic, and Spirit expressed concern about potential overlap. Id.
Conversations between Elliott’s counsel and Spirit’s counsel ensued between January 19 and
January 29. Id. On January 31, Elliott engaged Lawson as a consultant, agreed to indemnify him
against any claim by Spirit that the arrangement was a breach of his Retirement Agreement, and
issued a press release announcing the arrangement. Id. at 1202-03. On February 2, Spirit notified
Lawson that his involvement with Arconic constituted a breach of the Retirement Agreement and
that Spirit would cease making payments to him and terminate his right to continued vesting in
Spirit’s shares. Id. On February 3, Elliott agreed to assume Lawson’s defense of Spirit’s claim
against him. Id. On February 21, Lawson retained counsel to represent him, at Elliott’s expense,
in connection with the dispute with Spirit. Id.
After reviewing the subject documents in camera and taking into account the timing of
these emails, the court finds that Spirit has met its burden to establish privilege—specifically, that
legal advice predominated over business advice. The subject emails are dated February 9 and 10,
2017. This was in the midst of the events that took place in February of 2017, when the parties
were staking out their positions with respect to the Retirement Agreement and gearing up for
potential litigation. These emails were only approximately one week after Spirit notified Lawson
of his alleged breach and Elliott agreed to indemnify and defend Lawson against Spirit’s claim.
And they were just days before Lawson formally retained counsel. The emails consist of
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confidential communications between attorney and client made for the purpose providing legal
advice with respect to potential litigation relating to Lawson’s involvement with Arconic.
Lawson’s motion is denied with respect to these documents.
C.
Redactions on SPIRIT000045188-89
SPIRIT000045188-89 is an email from Amie Emerson, a Director of Business
Management at Spirit, to Thomas C. Gentile III, Spirit’s President and CEO, containing talking
points for an upcoming phone call with Bob Johnson, Spirit’s Chairman of the Board. No attorneys
are copied on the email. Lawson argues this email is not privileged because no attorneys are copied
and “there [is no] evidence that it reflects legal advice or that it was prepared at the request of
counsel.” (ECF No. 232, at 3.) Spirit re-produced this document to Lawson and redacted selected
bullet points related to an RFI, an insurance claim, and Arconic. Spirit contends these redactions
discuss legal matters unrelated to the litigation, as well as “legal strategy regarding Lawson and
Elliott’s attempt to install Lawson at Arconic and the claims at issue in this litigation.” (ECF No.
230, at 3.)
Communications between non-attorneys may be privileged in certain circumstances. See
United States v. Adlman, 68 F.3d 1495, 1499 (2d Cir. 1995) (communications with non-attorneys
made for the purpose of assisting an attorney in rendering advice to the client may be privileged).
“Management should be able to discuss amongst themselves the legal advice given to them as
agents of the corporation with an expectation of privilege.” McCook Metals L.L.C. v. Alcoa Inc.,
192 F.R.D. 242, 254 (N.D. Ill. 2000) (applying federal common law2 and finding interoffice
2
Courts in this District have often recognized that “no real conflict between federal and Kansas
law regarding the attorney-client privilege [exists,] . . . whether the Court applies federal or Kansas
law generally makes no difference in determining whether attorney-client privilege applies.”
Black & Veatch Corp. v. Aspen Ins. (UK) Ltd., 297 F.R.D. 611, 619 (D. Kan. 2014) (alterations in
original).
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memoranda relaying legal advice to operational employees privileged); see also Veolia Water Sols.
& Techs. Support v. Siemens Indus., Inc., 63 F. Supp. 3d 558, 567 (E.D.N.C. 2014) (noting that
privileged documents “may be transmitted between non-attorneys (especially individuals involved
in corporate decision-making) so that the corporation may be properly informed of legal advice
and act appropriately” (quotation omitted)); Apsley v. Boeing Co., No. 05-1368-MLB-KMH, 2008
WL 5211001, at *1 (D. Kan. Dec. 9, 2008) (“[T]he attorney-client privilege is not lost merely
because an employee conveys the legal communication to another employee for action.”).
Privilege may still be waived, however, if legal advice is discussed outside the group of employees
“who have a need to know in the scope of their corporate responsibilities.” In re Vioxx Prod. Liab.
Litig., 501 F. Supp. 2d 789, 796 (E.D. La. 2007); see also Williams v. Sprint/United Mgmt. Co.,
238 F.R.D. 633, 641-43 (D. Kan. 2006) (discussing the “need to know” test).
After carefully reviewing the redacted text in camera, the court finds that Spirit’s redacted
bullet points relating to Arconic are appropriate. This “talking points” email is dated February 23,
2017—again, in the midst of when the parties were staking out their positions with respect to the
Retirement Agreement and considering the possibility of litigation.
The email is between
management employees with a need to know and contains a discussion of legal advice relating to
the events in February of 2017 that precipitated this lawsuit. The talking points were provided so
that Spirit’s President and CEO could update Spirit’s Chairman of the Board regarding potentially
significant litigation for the company. It was more in the nature of sharing legal advice rather than
business advice. As to the other redacted bullet points (relating to the RFI and the insurance claim),
the record lacks sufficient information for the court to evaluate whether they were properly
redacted as privileged, but those redactions are not relevant to the claims and defenses in this
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lawsuit. The court will therefore not require Spirit to re-produce this document in unredacted form.
Lawson’s motion is denied with respect to this document.
D.
Redactions on SPIRIT000045280-81 and SPIRIT000045282
Lastly, SPIRIT000045280-81 and SPIRIT000045282 consist of an email thread initiated
by Mr. Gentile to four Spirit employees, including Spirit’s General Counsel Stacy Cozad, followed
by subsequent communications between Mr. Gentile and Ron Rabe. Mr. Gentile’s initial email
includes the words “Confidential – Prepared at the Request of Counsel.” Lawson contends that
the redacted information is not privileged because it consists of “Spirit businesspeople recount[ing]
a non-privileged conversation with a third party regarding Elliott’s proxy fight with Arconic.”
(ECF No. 232, at 3.) Spirit re-produced this document with only two lines of Mr. Gentile’s initial
email redacted. Spirit argues its redactions are appropriate because Mr. Gentile was “provid[ing]
information regarding Arconic for the purpose of facilitating the rendition of legal advice related
to the claims at issue in this litigation.” (ECF No. 230, at 3.)
After carefully reviewing the subject redactions in camera, the court finds they are
appropriate. This email thread is dated May 24, 2018. This was approximately two months after
Lawson filed this lawsuit on March 28, 2018. The first-listed email recipient is Spirit’s General
Counsel. Mr. Gentile’s redacted comment appears to have been made predominantly for the
purpose of facilitating the rendition of legal advice regarding this lawsuit, rather than routine
business advice. Lawson’s motion is therefore denied with respect to these redactions.
IT IS THEREFORE ORDERED that plaintiff Larry A. Lawson’s Motion to Compel the
Production of Clawed Back Documents (ECF No. 231) is denied.
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IT IS SO ORDERED.
Dated February 12, 2020, at Topeka, Kansas.
s/ Angel D. Mitchell
Angel D. Mitchell
U.S. Magistrate Judge
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