United States of America et al v. Bozeman Health Deaconess Hospital et al

Filing 256

ORDER granting in part 199 Relators' Second Rule 26(b)(5)(8) Motion. Exhibit 17 is not protected by attorney-client privilege. Deposition testimony related to Exhibit 17 is not privileged. Documents relied upon by the Court in resolving this issue, "including documents filed under seal" are now public. The Clerk is directed to unseal docket numbers 201, 201-1, 201-2, 201-3, 201-4 and 241. Signed by Judge Sam E Haddon on 4/3/2018. (ASG)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONT ANA
BUTTE DIVISION

FILED
APR 03 2018

UNITED STATES OF AMERICA EX
REL. FRANK M. REMBERT AND
MICHAEL R. PARADISE,

Clerk. U.S. District Court
District Of Montana
Helen&

No. CV 15-80-BU-SEH

Relators,
ORDER
vs.
BOZEMAN HEAL TH DEACONESS
HOSP ITAL D/B/A BOZEMAN
HEALTH, and
DEACONESS-INTERCITY
IMAGING, LLC D/B/A ADV ANCED
MEDICAL IMAGING,
Defendants.
Background
Relators' Second Rule 26(b )( S)(B) Motion for Deteremination of Privilege
Re: Claw-Back 1 ("Second Rule 26(b )(S)(B) Motion") and supporting documents

1

Doc. 199.
-1-

were filed March 1, 2018. 2 A response was provided on March 15, 2018.' The
Court's Order of March 15, 2018, provides:
If any part of the excerpt of the deposition
transcript of Gordon Davidson is considered by the
Court or relied upon by any party in addressing or
resolving any issue now pending before the Court in this
case or that is hereinafter presented to the Court for
resolution, the entirety of the content of the excerpt "will
be made public contemporaneously with the Court's
ruling on the issue." 4

At issue is a letter ("Exhibit 17")5 from Liz Lewis ("Lewis"), a Bozeman
Health Deaconess ("BDH") Vice President,6 to BDH's counsel T.J. Sullivan
("Sullivan"). 7 The letter recites on its face: "CC: D. Monaghan." 8 David
Monaghan ("Monaghan") is identified as an employee of Intercity Radiology
("I CR"). 9
Relators claim the letter and the deposition testimony relating to the letter
2

Docs. 200 and 201.

3

Doc. 242.

4

Doc. 243 at 1-2.

5

See Docs. 201-1 and 201-2.

6

See Doc. 242 at 3.

7

See Doc. 200 at 2-3; Doc. 242 at 3.

8

Doc. 201-1 at l; Doc. 201-2 at I.

9

See Doc. 200 at 3; See also Doc. 242 at 3.
-2-

was not privileged, or alternatively, that any such privilege was waived. 10
Defendants assert in response that the letter and the deposition testimony were
protected by attorney-client privilege and that "[t]here is no evidence that the
document was sent to Monaghan or anyone else that would break the attorneyclient privilege between BDH and Sullivan." 11
Exhibit 17 was first produced by Defendants on November 9, 201 7, in two
copies provided in response to two separate requests for production. 12 It was
marked and introduced at Monaghan's deposition on December 11, 2017 . 13
Selections of it were read into the record. 14 Monaghan was asked and answered
questions about it. 15 No privilege objection was stated.
Exhibit 17 was again introduced and discussed at Sullivan's deposition on
December 20, 2017. 16 Defendants raised a privilege concern at that time, noting

10

See Doc. 199 at 2.

11

Doc. 242 at 4.

12

See Doc. 200 at 7; see also Docs. 200-5 and 200-6.

13

See Doc. 201-3 at 2.

14

See Doc. 201-3 at 3.

15

See Doc. 201-3.

16

See Doc. 201-4.

-3-

that they were attempting "to sort out the privilege here" 17 and voicing a
conditional privilege objection "to the extent that [Exhibit 17] was sent as a draft
to [Sullivan] by Ms. Lewis, that would be privilege." 18 No claw-back notice 1,vas
issued.
The same exhibit was again introduced at the deposition of Gordon
Davidson on February 26, 2018, 19 at which Defendants asserted attorney-client
20

privilege. Later on that same that day, Defendants issued a claw-back notice"
concerning the exhibit and related deposition testimony.
Discussion 22
The Ninth Circuit employs an eight-part test for determination of attorneyclient privilege. 23 If present, it extends to:
(I) [ ] legal advice of any kind is sought (2) from a
professional legal adviser in his capacity as such, (3) the

17

Doc. 201-4 at 3.

18

Doc. 201-4 at 2.

19

See Doc. 241 at 3.

20

See Doc. 241 at 3.

21

See Doc. 200-1.

22

Because Defendants do not argue that Exhibit 17 is protected word product, the Court
will not analyze Rel a tors' argument on that topic.
23

See United States v. Ruehle, 583 F.3d 600, 607 (9th Cir. 2009).
-4-

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. 24
Three components of the test are at issue here: (I) whether legal advice was
sought; (2) whether the communication was confidential; and (3) whether the
privilege was waived. Defendants have the burden of establishing the attorneyclient relationship and the privileged character of the document. 2'
The attorney-client privilege protects only communications concerning legal
advice:
"[The] protection of the privilege extends only to
communications and not to facts. A fact is one thing and
a communication concerning that fact is an entirely
different thing. The client cannot be compelled to answer
the question, 'What did you say or write to the attorney?'
but may not refuse to disclose any relevant fact within
his knowledge merely because he incorporated a
statement of such fact into his communication to his
attorney." 26

24

United States v. Graf, 610 F.3d 1148, 1156 (9th Cir. 20 l 0)( quoting In re Grand .fur,
Investigation, 974 F.2d 1068, 1071 n.2 (9th Cir. 1992)).
25

United States v. Richey, 632 F.3d 559, 566 (9th Cir. 2011 ).

26

Upjohn Co. v. United States, 449 U.S. 383, 395-96 (198 l)(citations omitted).
-5-

Exhibit 17 is a communication from BDH to counsel about an agreement's terms.
Though the communication disseminates facts, is it a communication made for the
purpose of receiving legal advice? Are Relators attempting to ask a question
seeking legal advice? As Defendants note, Relators may obtain facts expressed in
Exhibit 17- they may not obtain facts requiring disclosure of a communication
between client and counsel.
To invoke attorney-client privilege, the communication must have been
"'made in confidence. "' 27 "[A]ny voluntary disclosure of information to a third
party waives the attorney-client privilege, regardless of whether such disclosure
later turns out to be harmful." 28 The intent to keep the communication confidential
is critical. 29
Exhibit 17 is a document purportedly sent from Lewis regarding the joint
venture to attorney Sullivan and upon which Monaghan was "cc'd". Defendants
argue that the document was a draft and that "[t]he mere inclusion of Monaghan as
a potential recipient of an unsigned, non-letterhead, draft document does not waive
27

Ruehle, 583 F.3d at 607 (quoting In re Grand Jury Investigation, 974 r.2d at 1071 n.2).

28

United States v. Ruehle, 583 F.3d 600, 601 (9th Cir. 2009)(citing 3 Jack B. Weinstein
& Margaret A Berger, Weinstein's Federal Evidence,§ 503.40 (Joseph M. Mcl.aughlin, ed ..
Matthew Bender 2d ed. 2009)).
29

Griffith v. Davis, 161 F.R.D. 687, 694 (C.D. Cal. l 995)(citing Uni1ed Stutes v. ,'viii/er.
874 F.2d 1255 (9th Cir. I 989).
-6-

the privilege." 30 Defendants further state: (1) that the two copies of Exhibit 17
were produced by Defendants and not Monaghan or others; (2) that during his
deposition, Monaghan testified that he did not remember seeing the document
before; and (3) "Sullivan testified that he remembered the document, but did not
recall it going to Monaghan." 31 Plaintiffs state that "Exhibit 17 indicates that it
was shared with Monaghan, who was at that time the practice administrator for
ICR" and whose inclusion would break the confidentiality. 32
Disclosure to a third party by the client, who stands as both possessor and
protector of the attorney-client privilege, is treated as waiver of the privilege."
The privilege is strictly construed. 34 The communication was not "made in
confidence." Defendants' argument hinges on argument that Exhibit 17 likely was
not sent to or was not received by Monaghan. That Sullivan does not recall if
Exhibit 17 was sent to Monaghan 35 and that Monaghan could not recall receiving

30

Doc. 242 at 4.

31

Doc. 242 at 5.

32

Doc. 200 at 10.

33

Weilv. Inv./Indicators, Research & Mgmt., Inc., 647 F.2d 18, 24 (9th Cir. 1981)).

34

Id. at 24 (citations omitted).

35

Doc. 201-4 at 3 ("This is- it's hard to say here because this isn't an email. So if-this
is some sort of draft document. I can't - I can't answer about that.")
-7-

6

it3 proves little, if anything, regarding sending or receiving. The letter itself was
dated February 2005- nearly 11 years before the instant lawsuit was filed, and
almost 13 before Sullivan's and Monaghan's depositions were taken. Even if not
sent to or received by Monaghan, it evidences some intent by BDH to send the
communication to a third party. The letter was not "made in confidence. " 37 It does
not fall within the ambit of the strictly construed attorney-client privilege. Waiver
need not be addressed.
ORDERED:
Relators' Second Rule 26(b )(5)(8) Motion 38 is GRANTED in part as
follows:
1.

Exhibit 17 is not protected by attorney-client privilege.

2.

Deposition testimony related to Exhibit 17 is not privileged.

III

Ill

36

See Doc. 201-3 at 6.

37

Ruehle, 583 F.3d at 607 (quoting In re Grand Jury Investigation, 974 f.2d at I 071 n.2).

38

Doc. 199.
-8-

3.

Documents relied upon by the Court in resolving this issue,"including

documents filed under seal" are now public. 39 The Clerk is directed to unseal
docket numbers 201, 201-1, 201-2, 201-3, 201-4 and 241.
DATED this ..3~y of April, 2018.

~ /UIUf'cl"'=
SAM E. HADDON
United States District Judge

39

Doc. 144 at 9.
-9-

\.