TTI Consumer Power Tools Inc v. Engineered Plastic Components Inc

Filing 192

OPINION AND ORDER granting in part and denying in part 111 Motion for Protective Order. Signed by Honorable Jacquelyn D Austin on 9/24/24.(jtho, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
ANDERSON/GREENWOOD DIVISION
TTI Consumer Power Tools Inc. formerly
known as One World Technologies Inc.
doing business as Techtronic Industries
Power Equipment,
Plaintiff/Counter Defendant,
v.
Engineered Plastic Components Inc.,
Defendant/Counter Claimant.

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Case No.: 8:22-cv-04085-JDA

OPINION AND ORDER

This matter is before the Court on a motion for protective order filed by
Defendant/Counter Claimant Engineered Plastic Components, Inc. (“EPC”) and James
Rank (“Rank”). [Doc. 111.] Plaintiff/Counter Defendant TTI Consumer Power Tools, Inc.
(“TTI”) filed a response in opposition to the motion, and EPC filed a reply. [Docs. 117;
120.] The motion is ripe for review.
BACKGROUND
Rank is a former employee of EPC. [Doc. 117-1 at 7–8.] On August 11, 2023, TTI
noticed the videotaped deposition of Rank for September 6, 2023. [Doc. 111-1.] After
receiving the notice, EPC’s counsel reached out to Rank and had a ten-minute
conversation on the telephone. [Docs. 111 at 2; 117 at 1; 117-1 at 13; 120-1 ¶¶ 3–4.]
Rank and EPC’s counsel were the only participants in the conversation, and they
discussed Rank’s knowledge of facts giving rise to this lawsuit, which Rank learned during
his employment with EPC. [Doc. 120-1 ¶ 5.] EPC’s counsel expected and understood
that the conversation would remain confidential and not be shared with third parties. [Id.

¶ 6.] During the conversation, EPC’s counsel offered to represent Rank in connection
with his deposition, and Rank took the offer under advisement.

[Id. ¶ 5.]

Rank

subsequently retained his own counsel and, through counsel, entered into a common
interest agreement with EPC. [Id. ¶ 7; Doc. 117 at 1.] On November 7, 2023, TTI issued
a second amended notice of taking Rank’s videotaped deposition on November 21, 2023.
[Doc. 111-2.]
On November 21, 2023, Rank was deposed. [See Doc. 117-1.] During the
deposition, TTI’s counsel asked several questions to which both Rank’s counsel and
EPC’s counsel asserted attorney-client privilege and/or protection under the common
interest doctrine and directed Rank not to answer some questions. [Id. at 12, 13, 14, 16–
17, 20–24.] EPC and Rank then filed this motion for protective order. [Doc. 111.]
APPLICABLE LAW
Protective Orders Under Rule 26(c)
Rule 26(c)(1) of the Federal Rules of Civil Procedure allows a court, upon a
showing of good cause, to enter a protective order to protect a party “from annoyance,
embarrassment, oppression, or undue burden or expense.”

Rule 26(b)(1) permits

“discovery regarding any nonprivileged matter that is relevant to any party’s claim or
defense and proportional to the needs of the case.”
The party seeking a protective order must show good cause. United Prop. & Cas.
Ins. v. Couture, No. 2:19-cv-01856-DCN, 2021 WL 5141292, at *2 (D.S.C. Nov. 4, 2021).
“[I]n determining good cause, a court will balance the interest of a party in obtaining the
information versus the interest of his opponent in keeping the information confidential or
in not requiring its production.” Id. (internal quotation marks omitted). Whether to enter a

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protective order is committed to the sound discretion of the trial court. Fonner v. Fairfax
Cnty., 415 F.3d 325, 331 (4th Cir. 2005).
Local Civil Rule Requirements for Protective Orders
Local Civil Rule 30.04(C), D.S.C., provides that “[c]ounsel shall not direct or
request that a witness not answer a question, unless that counsel has objected to the
question on the ground that the answer is protected by a privilege.” Further, “[c]ounsel
directing that a witness not answer a question on those grounds . . . shall move the court
for a protective order under Fed. R. Civ. P. 26(c) or 30(d)(3) within seven (7) days of the
suspension or termination of the deposition.” Local Civ. Rule 30.04(C) (D.S.C.). Failure
to file a timely motion for a protective order constitutes a waiver of the objection and “the
deposition may be reconvened.” Id.
Attorney-Client Privilege
South Carolina privilege law applies in this diversity action. Fed. R. Evid. 501.
“The

attorney-client

privilege

protects

against

the

disclosure

of

confidential

communications by a client to his attorney.” Tobaccoville USA, Inc. v. McMaster, 692
S.E.2d 526, 529 (S.C. 2010) (internal quotation marks omitted). This privilege is meant
to facilitate attorney-client communications “by inviting the utmost confidence on the part
of the client in disclosing his secrets to this professional advisor.” Id. (internal quotation
marks omitted). The privilege consists of the following elements:
(1) Where legal advice of any kind is sought (2) from a
professional legal adviser in his capacity as such, (3) the
communications relating to that purpose (4) made in
confidence (5) by the client, (6) are at his instance
permanently protected (7) from disclosure by himself or by the
legal adviser, (8) except the protection be waived.

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Id. (internal quotation marks omitted). “In general, the burden of establishing the privilege
rests upon the party asserting it.” State v. Love, 271 S.E.2d 110, 112 (S.C. 1980). South
Carolina courts strictly construe the attorney-client privilege. State v. Doster, 284 S.E.2d
218, 219 (S.C. 1981).
DISCUSSION
EPC and Rank ask the Court to prevent TTI from making further inquiry into “(a) Mr.
Rank’s conversation with EPC’s counsel as to matters within the scope of Mr. Rank’s
former employment at EPC, and (b) Mr. Rank’s reasons for retaining his own counsel,”
arguing that inquiry into these areas “intrude[s] into the sacrosanct area of attorney-client
privilege, as well as principles of common interest privilege that exists between Mr. Rank
and EPC.” [Doc. 111 at 1.] TTI argues that EPC’s motion should be denied because
(1) no attorney-client relationship existed between EPC’s outside counsel and Rank;
(2) the common interest doctrine does not apply; (3) Rank’s decision to retain separate
counsel is not privileged; and (4) Rank waived any privilege with respect to the question
of whether he considered EPC’s counsel to be trustworthy. [Doc. 117 at 5–14.] The
Court addresses the areas into which EPC and Rank seek to prevent further inquiry
seriatim.
Rank’s Conversation with EPC’s Counsel
EPC and Rank contend that the contents of the telephone conversation between
EPC’s counsel and Rank are protected by the attorney-client privilege and the common
interest doctrine. [Doc. 111 at 4.] They argue that the conversation “is privileged as to
both Rank and EPC” because, with respect to Rank, “the meeting constitutes
communication between a prospective client and his potential counsel” and, with respect

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to EPC, the purpose of the meeting was to “enabl[e] EPC to understand Rank’s
recollection of the relevant events in this litigation, which constitutes protected
communications between an employer’s counsel and a former employee.” [Doc. 120 at
4–5; see Doc. 111 at 4–5.] TTI contends that EPC and Rank cannot show that the
purpose of the call was for Rank to obtain legal advice such that Rank may assert
attorney-client privilege. [Doc. 117 at 7–8.] TTI further contends that EPC may not assert
attorney-client privilege with respect to the conversation because the motion “fails to cite
any decision suggesting that South Carolina courts intend the attorney-client privilege to
apply to communications between a company’s outside counsel and its former
employees.” [Id. at 8.] The Court concludes that the conversation is protected by EPC’s
attorney-client privilege.
Initially, the Court notes that EPC and Rank have not established an attorney-client
relationship between Rank and EPC’s counsel because they have directed the Court to
nothing to support a finding that Rank sought legal advice or assistance from EPC’s
attorney “with a view to employing [her] professionally.” Marshall v. Marshall, 320 S.E.2d
44, 47 (S.C. Ct. App. 1984); [see Doc. 120-1 ¶ 5 (declaration of EPC’s counsel, averring
only that she “conveyed an offer to Mr. Rank to represent him in connection with his
deposition in this matter” and that he “took that offer under advisement”)]. As for whether
the attorney-client privilege applies to a company’s outside counsel’s communications
with the company’s former employees, neither party has directed the Court to a South
Carolina case analyzing the privilege in this circumstance, nor has the Court’s
independent research found such a case. Accordingly, the Court must predict how the
Supreme Court of South Carolina would likely rule. See ContraVest Inc. v. Mt. Hawley

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Ins. Co., 273 F. Supp. 3d 607, 615 (D.S.C. 2017) (“Where the state’s highest court has
not spoken on an issue, the court must predict how the court would rule.”).
As recognized in Wellin v. Wellin, 211 F. Supp. 3d 793 (D.S.C. 2016), “South
Carolina courts have cited to decisions applying federal privilege law,” and “[f]ederal
courts applying South Carolina law have also cited to federal law.” Id. at 806–07 (citing
cases). Looking to federal privilege law for guidance, the Court notes that the Court of
Appeals for the Fourth Circuit has held that the attorney-client privilege applies to
communications between a company’s attorney and the company’s former employee who
was employed during the time period in question and possessed information relevant to
the attorney’s investigation when the attorney interviewed the former employee at the
direction of her client in order to provide legal advice to the client. In re Allen, 106 F.3d
582, 606 (4th Cir. 1997). The Court concludes that South Carolina courts would likely
apply the attorney-client privilege to communications between a company’s attorney and
the company’s former employee in circumstances similar to In re Allen.
Here, as stated, EPC and Rank contend that the attorney-client privilege prevents
further inquiry into Rank’s conversation with EPC’s counsel as to matters within the scope
of Rank’s former employment at EPC. EPC’s counsel has submitted a declaration stating
that, “[a]t the time of the [telephone call], [she] was an attorney of record for EPC,” and
“in furtherance of [her] role as EPC’s counsel in this matter,” she “met with Mr. Rank to
discuss, and did discuss, Mr. Rank’s knowledge of facts giving rise to this Matter, which
Mr. Rank learned during the course of his employment at EPC.” [Doc. 120-1 ¶¶ 4–5.]
The Court concludes that the communications between Rank and EPC’s counsel are
protected by the attorney-client privilege under In re Allen with respect to the portions of

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the conversation related to information that Rank learned during his employment with
EPC. 1 Accordingly, because these communications are protected by a privilege, EPC
and Rank have established good cause for the Court to enter a protective order as to the
communications between EPC’s counsel and Rank related to Rank’s knowledge from the
time he was employed by EPC that is related to this case.
Rank’s Reasons for Retaining His Own Counsel
EPC and Rank contend that Rank’s rationale and thought-process for retaining his
own counsel are protected by the attorney-client privilege. [Doc. 111 at 6–8.] TTI
contends that Rank’s rationale is not protected because he concedes that he developed
his reasons for hiring his own counsel before soliciting his own attorney and before
discussing his rationale with his attorney. [Doc. 117 at 12 (citing Doc. 111 at 7).] The
Court concludes that Rank’s rationale for retaining his own counsel is not protected by
the attorney-client privilege.
As stated, in South Carolina, the attorney-client privilege protects communications
where legal advice is sought, and the privilege is to be strictly construed. It protects only
the “disclosure of communications; it does not protect disclosure of the underlying facts
by those who communicated with the attorney.” Wellin, 211 F. Supp. 3d at 808 (internal
quotation marks omitted). Neither EPC nor Rank have offered any explanation for why

Because the Court concludes that these communications are protected by EPC’s
attorney-client privilege, the Court need not address EPC and Rank’s alternative
argument that the communications are protected under the common interest doctrine.
The Court notes that “[t]he common interest doctrine is not a privilege in itself, but is
instead an exception to the waiver of an existing privilege.” Tobaccoville USA, 692 S.E.2d
at 531. It “protects the transmission of data to which the attorney-client privilege . . . has
attached when it is shared between parties with a common interest in a legal matter.” Id.
(internal quotation marks omitted).
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Rank’s explaining his reasons for obtaining separate counsel would necessarily implicate
the disclosure of privileged communications. Accordingly, Rank’s reasons for retaining
his own counsel are not protected by the attorney-client privilege, and EPC and Rank
have not established good cause for the Court to enter a protective order as to Rank’s
reasons for retaining his own counsel. 2
CONCLUSION
Based on the foregoing, EPC and Rank’s motion for protective order [Doc. 111] is
GRANTED IN PART and DENIED IN PART. The Court grants a protective order as to
the communications between EPC’s counsel and Rank related to Rank’s knowledge from
the time he was employed by EPC that is related to this case and denies a protective
order as to Rank’s reasons for retaining his own counsel.
IT IS SO ORDERED.
s/Jacquelyn D. Austin
United States District Judge
Greenville, South Carolina
September 24, 2024

To the extent that Rank’s answers to questions about his reasons for retaining his own
counsel would require him to disclose some of the conversation he had with EPC’s
counsel, that portion is protected. TTI argues that any privilege regarding questions to
Rank about whether he trusted EPC’s lawyers has been waived because, although
Rank’s counsel objected to the question and instructed Rank not to answer during the
deposition, EPC and Rank failed to address this question in their motion for protective
order. [Doc. 117 at 14.] The Court notes that the motion for protective order seeks to
prevent TTI from making further inquiry into “Rank’s reasons for retaining his own
counsel” [Doc. 111 at 1], and to the extent a question about whether Rank trusted EPC’s
lawyers falls under this category, any objection has not been waived. However, as
explained, the Court concludes that Rank’s reasons for retaining his own counsel is not
protected by the attorney-client privilege.
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