Aero Tech, Inc. v. Great American Insurance Company, an Ohio Corporation

Filing 82

ORDER AFFIRMING NONDISCLOSURE OF PRIVILEGED EMAILS by Magistrate Judge Gregory J. Fouratt. (gbg)

Case 2:22-cv-00476-WJ-GJF Document 82 Filed 05/22/23 Page 1 of 9

UNITED STATES DISTRICT COURT
DISTRICT OF NEW MEXICO
AERO TECH, INC.,
Plaintiff,
v.

Civ. No. 22-476 WJ/GJF

GREAT AMERICAN INSURANCE
COMPANY and GEORGE’S AIRCRAFT
REPAIR,
Defendants.
ORDER AFFIRMING NONDISCLOSURE OF PRIVILEGED EMAILS
THIS MATTER is before the Court on Plaintiff’s request that the Court (1) “perform[ ] an
in-camera review” of certain emails between Defendants to “determine whether [Defendants’]
privilege claims . . . are valid and appropriate” and (2) conclude that “no claim of privilege can be
asserted for [the withheld] emails.” ECF 74 (Plaintiff’s letter) at 1–2.1 In light of this request, the
Court held a hearing on April 26, 2023, to discuss “whether the[ ] withheld documents are
protected under an attorney-client privilege based on a claimed common interest.” ECF 80 at 1
(quotation omitted). The Court also conducted an in camera review of the withheld emails. As
explained below, the Court concludes that New Mexico’s attorney-client privilege rules protect
these emails from disclosure.

See also ECF 76 (Great American’s letter in response); ECF 80 (clerk’s minutes) at 2 (noting that “[t]he parties
confirmed that they were satisfied with how this issue has been presented to the Court (i.e., through counsels’ letters,
ECFs 74, 76) and that formal briefing on this issue was unnecessary”). Because Plaintiff’s letter was filed the evening
before the hearing on this issue, George’s did not have sufficient time to submit a letter in response. George’s,
however, maintains the same fundamental position as Great American—that the withheld documents are protected
under New Mexico’s attorney-client privilege rules. See ECFs 80 at 1–2; 76 at 1–4.
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I.

PARTIES’ PRIMARY ARGUMENTS
A. Plaintiff’s Contentions
Plaintiff “challenge[s] . . . the privilege claims raised [by Defendants]” with respect to

forty-one pages of documents: pages 88–97 and 104–134 (PRIVLOG). ECF 74 at 1. These
documents consist of emails between counsel for Great American and counsel for George’s from
September 2022 to December 2022. See Defendants’ April 24, 2023, Joint Privilege Log [ECF 74
at 3–9] at 5–8. Plaintiff represents that the “descriptions of the documents claimed to be privileged
. . . . are now sufficient.” ECF 74 at 1.
“[Plaintiff], however, maintains its challenge to the privilege claims”—contending that
“Defendants’ interests were not aligned and, therefore, no claim of privilege can be asserted for
those emails.” Id. Plaintiff specifically argues that Defendants could not have “shared an identical
legal interest in the subject matter of each communication,” Albuquerque J. v. Bd. of Educ. of
Albuquerque Pub. Schs., 2019-NMCA-012, ¶ 19, 436 P.3d 1, 9, because the withheld emails
concerned (1) “Aero Tech’s agency argument”—an “undecided issue” showing Defendants “have
potential claims against the other”; (2) “George’s motion to dismiss” when “Great American was
not [moving to be dismissed]”; and (3) “George’s previous motion to stay” when “Great American
did not [move to stay].” ECF 74 at 1–2.
B. Defendants’ Contentions
For their part, Defendants contend that they “were/are completely aligned with regard to
the issues discussed in the subject communications.” ECF 76 at 1–4. Defendants specifically
argue that they shared “an identical interest as to the substance of [the withheld] emails” because
Defendants had (1) “tak[en] the identical position [in connection with George’s motion to dismiss,
see ECFs 24, 25] that there was not at any time an agency relationship between them” and (2)

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“both agreed that to the extent discovery was to be stayed against George’s [‘pending
determination of George’s motion to dismiss’], it also should be stayed as against Great
American.” Id. at 1–3 (also representing that the withheld emails “comprised . . . [these] two
issues”).
Defendants further assert that they are “aligned in their contention that [Plaintiff] is at fault
for the delayed reassembly and repair of the Aircraft . . . . and with regard to [Plaintiff’s] damages
claim.” Id. at 3. Indeed, they assert that they are “almost entirely aligned with respect to the
defense of this action.” Id. at 2–4.2 Furthermore, Defendants maintain that New Mexico’s
“common interest privilege” does not require them to have complete unanimity on all issue in
order to confidentially “work together on mutually beneficial issues.” Id. at 2–4. Instead,
Defendants argue that this privilege requires only a “shared . . . identical legal interest in the subject
matter of each communication.”

Id. at 1–4 (emphasis added) (quoting Albuquerque J., 2019-

NMCA-012 at ¶ 19).3
II. APPLICABLE LEGAL STANDARDS
In diversity cases, state law governs claims of privilege. See Fed. R. Evid. 501; Frontier
Refining, Inc. v. Gorman-Rupp Co., Inc., 136 F.3d 695, 699 (10th Cir. 1998) (observing that “Rule

Defendants acknowledge that “there admittedly are limited potential sources of contention between [them].” ECF 76
at 4. For instance, “Great American also has an argument that even if [Plaintiff] is not at fault for delaying the limited
reassembly [of the Aircraft], then the delay was caused by George’s, over whom Great American had no control.” Id.
at 2.
2

Defendants correctly observe that Plaintiff’s letter only “argues that the first element [of the common interest
privilege] is missing.” ECF 76 at 2; accord ECF 74 at 1–2 (arguing only that Defendants failed to meet this first
element—i.e., that Defendants failed to “share[ ] an identical legal interest in the subject matter of [their]
communications” (quoting Albuquerque J., 2019-NMCA-012 at ¶ 19)). Defendants nevertheless “note[ ] that the
other [two] elements of the common interest privilege are present” because “[1] [Defendants’] communications arose
‘during the course of a joint defense effort between’ [them], and [2] the shared legal interest was ‘reflected by a
preexisting, or at the very least contemporaneous, agreement of the parties,’ as is evidenced by the express reference
to a ‘jointly privileged communication’ in the subject of email correspondence between [Defendants’ counsel] as early
as September 1, 2022.” Id. at 3 (quoting Albuquerque J., 2019-NMCA-012 at ¶ 19).
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501 of the Federal Rules of Evidence provides that state law supplies the rule of decision on
privilege in diversity cases”).
New Mexico’s civil procedure rules “provide[ ] that ‘[p]arties may obtain discovery of any
information, not privileged, which is relevant to the subject matter involved in the pending action.’
Privileged information, then, is not discoverable.” Albuquerque J., 2019-NMCA-012 at ¶ 16
(emphasis in original) (quoting NMRA 1-026(B)(1)). “To establish the applicability of the
attorney-client privilege,” the party asserting the privilege “[bears] the burden of proving all
elements of the privilege as to each communication claimed to be privileged.” Id. at ¶ 19. “In
New Mexico, the basic elements of the attorney-client privilege are (1) a communication (2) made
in confidence (3) between privileged persons (4) for the purpose of facilitating the attorney’s
rendition of professional legal services to the client.” Id. (quotation omitted). “The third
element—‘between privileged persons’—may be established by,” inter alia, “demonstrating that
the communication occurred ‘between [a] the client or client’s lawyer and [b] another lawyer
representing another in a matter of common interest.’” Id. (emphasis added) (quoting NMRA 11503(B)(3)).
This “common interest doctrine” permits a party to “claim privilege as to particular
communications” between lawyers representing different clients—provided that the party satisfies
“the additional burden of establishing, at a minimum, a factual basis allowing the district court to
find that: (1) the parties to the communication shared an identical legal interest in the subject matter
of each communication claimed to be privileged; (2) the communication was made during the
course of a joint defense effort between the resisting party and the third party and in furtherance
of that effort; and (3) the shared identical legal interest existed at the time the communication was

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made as reflected by a preexisting, or at the very least contemporaneous, agreement of the parties.”
Id. (quotations omitted).4
The Tenth Circuit “review[s] the district court’s determinations regarding waiver of
attorney-client privilege . . . for abuse of discretion.” Harte v. Bd. of Comm’rs of the Cnty. of
Johnson, 940 F.3d 498, 522 (10th Cir. 2019) (quotation omitted). “Under this deferential standard
of review, [the Tenth Circuit] won’t disturb the district court’s ruling unless it was arbitrary,
capricious, whimsical, or manifestly unreasonable.” Pueblo of Jemez v. United States, 63 F.4th
881, 889 (2023) (quotation omitted) (observing that “an error of law per se constitutes an abuse of
discretion”). In other words, “under the abuse-of-discretion standard [the Tenth Circuit] defer[s]
to the district court’s judgment so long as it falls within the realm of . . . rationally available
choices.” Id. (quotation omitted).
III. DISCUSSION
A. Withheld Emails Do Not Contain Useful Discovery Information
As a preliminary matter, upon reviewing the forty-one pages of withheld emails, the Court
can confirm Defendants’ representation that these emails “do not contain significant revelations.”
ECF 80 at 2. For instance, the redacted portions of PRIVLOG documents 88–97 amount to six
sentences that Defendants’ counsel emailed to each other between September 22–26, 2022.5

As

for the other thirty-one pages of documents that Defendants entirely withheld from disclosure

“[M]ere ‘indicia’ of joint strategy” or “a shared desire to see the same outcome” are “insufficient to demonstrate that
a common interest agreement has been formed . . . . [or] to bring a communication between two parties within the
common interest doctrine.” Albuquerque J., 2019-NMCA-012 at ¶ 19 (quotations and bracket omitted). Nevertheless,
“a written agreement is not a prerequisite for invoking the common interest doctrine”—because (1) “a common interest
agreement can be inferred where two parties are clearly collaborating” and (2) parties can “establish [without a written
agreement] that they agreed to engage in a joint effort and to keep the shared information confidential.” Id. (emphasis
added) (quotations omitted). The question, therefore, is not whether a written common interest agreement existed—
but rather whether the party asserting the privilege made “some showing that the parties, indeed, came to an agreement
embodying a cooperative and common enterprise towards an identical legal strategy.” Id. (quotation omitted).
4

5

Defendants disclosed documents 88–97 to Plaintiffs, albeit in this redacted form.

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(documents 104–134), approximately sixteen pages contain non-privileged emails exchanged with
Plaintiff’s counsel—emails that Plaintiff presumably already has in its possession.6
Of the remaining fifteen pages, four pages (documents 104, 112, 108, and 130) are
complete repeats of emails already included in other documents (documents 107, 118, 132–33).
The final eleven pages of these withheld documents contain brief email exchanges (with
accompanying attachments) between Defendants’ counsel on three dates: October 24–25
(documents 105–07, 117–18), November 15–16 (documents 126–27, 131–33), and December 7,
2022 (document 134). Although these emails do not seem to contain particularly helpful discovery
information, the parties have represented that “the resolution of this discovery dispute is
nevertheless important—particularly as it will help the parties as they move forward with
discovery.” ECF 80 at 2. Consequently, the Court issues this decision not only to resolve the
instant dispute but also to provide guidance to navigate and forestall future disputes.
B. Defendants Shared an Identical Legal Interest in Subject Matter of Each Email
With regard to the withheld emails, Plaintiff does not challenge three of the four “basic
elements of the attorney-client privilege.” Albuquerque J., 2019-NMCA-012 at ¶ 19. Specifically,
Plaintiff does not challenge that the withheld emails contained “[1] communication[s] [2] made in
confidence . . . [3] for the purpose of facilitating the attorney’s rendition of professional legal
services to the client”—and the Court agrees. Id.; see ECF 74. Plaintiff’s fundamental contention
is that these confidential emails were not made “between privileged persons”—e.g., between
lawyers representing their respective clients “in a matter of common interest.’” Albuquerque J.,
2019-NMCA-012 at ¶ 19. As to this assertion, the Court disagrees, holding that Defendants indeed
“shared an identical legal interest in the subject matter of [their withheld emails].” Id.

These non-privileged emails that were sent to Plaintiff’s counsel are found at PRIVLOG documents 108 (bottom
half) through 111, 113–16, 119–22, 123 (bottom half) through 125, and 127 (bottom half) through 129.
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For instance, the six redacted sentences in the September 22–26 emails (documents 88–97)
and the eleven pages of withheld emails and attachments from October 24–25, November 15–16,
and December 7, 2022 (documents 105–07, 117–18, 126–27, 131–33, 134) deal exclusively with
either the agency issue or the motion-to-stay issue, both of which arose in connection with the
motion-to-dismiss briefing. Furthermore, the Court finds that Defendants “shared an identical
legal interest” in these issues—as both Defendants sought to advance the legal positions that
(1) “there was not at any time an agency relationship between them” and (2) “to the extent
discovery was to be stayed against George’s [‘pending determination of George’s motion to
dismiss’], it also should be stayed as against Great American.” ECF 76 at 1–3.
The Court further holds that New Mexico privilege law does not require Defendants to be
perfectly aligned on every conceivable issue to communicate with each other (under the protection
of the common interest doctrine) about any issue. Indeed, New Mexico only requires that “the
parties to the communication shared an identical legal interest in the subject matter of each
communication claimed to be privileged.” Albuquerque J., 2019-NMCA-012 at ¶ 19 (emphasis
added). Although Plaintiff did not meaningfully contest the other two elements of the common
interest doctrine, the Court nevertheless finds that the emails were “[1] made during the course of
a joint defense effort between [them] and in furtherance of that effort; and [2] the shared identical
legal interest existed at the time the communication was made as reflected by a preexisting, or at
the very least contemporaneous, agreement of the parties.” Id. Admittedly, Defendants did not
have (at least at the time of the hearing) a written agreement memorializing their “shared identical
legal interest” in the furtherance of a joint defense effort. But reducing such an agreement to
writing is unnecessary, and the Court finds that the parties had the requisite agreement—that they
made “some showing that [they], indeed, came to an agreement embodying a cooperative and

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common enterprise towards an identical legal strategy.”

Id. (quotation omitted); see, e.g.,

PRIVLOG 93 (expressly marking the email as “privileged” in the subject line).
In light of the foregoing, the Court holds that Defendants’ withheld emails are not
discoverable as they are protected under New Mexico’s attorney-client privilege rules, including
the common interest doctrine.
The Court pauses to observe that Defendants represented at the April 26th hearing that it
was not their common practice to enter into written common interest agreements. In other words,
Defendants do not typically memorialize their pursuit of a joint defense effort with other
defendants who share an identical legal interest. Although such a written agreement is not required
and might not be commonplace, the Court is nevertheless of the opinion that—at least in this
litigation—a written common interest agreement would have assisted this Court in resolving this
dispute and doubtless would assist the parties with discovery going forward.
IV. CONCLUSION
IT IS THEREFORE ORDERED that Plaintiff’s request that the Court conclude that “no
claim of privilege can be asserted for [the withheld] emails [identified in PRIVLOG 88–97, 104–
134],” ECF 74 at 1–2, is DENIED.
IT IS FURTHER ORDERED that Defendants may refrain from disclosing the documents
identified in their April 24, 2023, Joint Privilege Log [ECF 74 at 3–9] as PRIVLOG 88–97, 104–
134—with the exception of the sixteen pages of non-privileged emails that Defendants already
exchanged with Plaintiff’s counsel.7

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As noted above, the Court assumes Plaintiff already has these sixteen pages of non-privileged emails that Defendants
exchanged with Plaintiff’s counsel—PRIVLOG documents 108 (bottom half) through 111, 113–16, 119–22, 123
(bottom half) through 125, and 127 (bottom half) through 129. But should Plaintiff wish to (again) receive these
emails, the privilege rules do not protect these emails from disclosure.

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SO ORDERED.

____________ _____________________________
THE HONORABLE GREGORY J. FOURATT
UNITED STATES MAGISTRATE JUDGE

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