Polaris Engineering, Inc. v. Texas International Terminals, Ltd.
Filing
472
OPINION AND ORDER granting 377 MOTION to Compel. With regard to the parties' dispute over the Lessons Learned documents (Dkt. 414), these documents are not protected. If TXIT destroyed these documents, Polaris must reproduce them; if the documents were sequestered, TXIT is free to use them. (Signed by Magistrate Judge Andrew M Edison) Parties notified. (RubenCastro, 3)
Case 3:21-cv-00094 Document 472 Filed on 08/23/23 in TXSD Page 1 of 19
United States District Court
Southern District of Texas
ENTERED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
GALVESTON DIVISION
POLARIS ENGINEERING, INC.,
Plaintiff.
V.
TEXAS INTERNATIONAL
TERMINALS, LTD., et al.,
Defendants.
August 23, 2023
Nathan Ochsner, Clerk
§
§
§
§
§ CIVIL ACTION NO. 3:21-cv-00094
§
§
§
§
§
23,1,21$1'ORDER
Presently before me are three separate privilege disputes. Plaintiff Polaris
Engineering, Inc. (“Polaris”) has moved to compel: (1) communications between
Defendant Texas International Terminals, Ltd. (“TXIT”), TXIT’s counsel Andrews
Myers, P.C. (“Andrews Myers”), and non-party GCC Supply & Trading, LLC
(“GCC”); and (2) three documents between TXIT, Andrews Myers, and TXIT’s
former employee Jereme Crouthamel (“Crouthamel”). See Dkts. 377, 469.
Separately, TXIT challenges Polaris’s claw back of various documents generated
during the course of a “Lessoned Learned” or “Opportunity for Improvement”
(“OFI”) exercise that Polaris claims was conducted at the direction and guidance
of its general counsel Joseph Pousson. See Dkt. 414.
BACKGROUND
This case concerns a contractual dispute between Polaris and TXIT. In 2018,
TXIT contracted with GCC “to seek out and negotiate a contract with a contractor
that could timely build a profitable crude processing facility.” Dkt. 199 at 19. In
2019, TXIT contracted with Polaris to design, engineer, and construct a crude oil
processing plant in Galveston, Texas (the “Facility”). In 2020, a dispute arose
concerning the project, and Polaris ultimately sued TXIT in Texas state court on
September 25, 2020. In October 2020, TXIT removed the case to federal district
court and counterclaimed.
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There have been numerous amendments to the parties’ pleadings in the
nearly three years that this litigation has been underway. The operative pleadings
are Polaris’s Fourth Amended Complaint (Dkt. 197) and TXIT’s Fifth Amended
Answer, Counterclaim, and Third-Party Complaint (Dkt. 199), which purports to
assert claims against Polaris that GCC assigned to TXIT. On January 13, 2022—
more than a year after this litigation was initiated—GCC assigned to TXIT “any and
all claims it has against Polaris and its officers which relate to or arise of the Facility
and Polaris’s representations regarding the timing and performance capabilities of
the same.” Dkt. 199 at 31. Thus, although GCC is not a party to this litigation, it is
nevertheless a critical player.
Another critical player is Crouthamel, who was employed by TXIT for
approximately four years and worked as Terminal Operations Manager for TXIT
until his termination in May 2021. In his last six months of employment with TXIT,
Crouthamel worked with TXIT and its litigation team in support of TXIT’s defense
against Polaris’s suit. Shortly after TXIT terminated Crouthamel’s employment, he
accepted an offer of employment with Polaris. Like GCC, Crouthamel is a crucial
non-litigating third party.
With these background relationships in mind, I turn to the parties’ privilege
assertions.
LEGAL STANDARDS
“In diversity cases such as this, state law applies to claims of attorney–client
privilege, while federal law governs whether the items are immune from discovery
under the work product doctrine.” Homeland Ins. Co. of N.Y. v. Clinical Pathology
Labs., Inc., No. 1-20-CV-783-RP, 2022 WL 17255798, at *2 (W.D. Tex. Nov. 28,
2022); see 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.”). Thus, Texas
law governs the application or waiver of the attorney–client privilege, while federal
common law governs the work product privilege. See In re Avantel, S.A., 343 F.3d
311, 323 (5th Cir. 2003); United Coal Cos. v. Powell Constr. Co., 839 F.2d 958, 966
2
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(3d Cir. 1988) (“Unlike the attorney client privilege, the work product privilege is
governed, even in diversity cases, by a uniform federal standard embodied in Fed.
R. Civ. P. 26(b)(3).”).
A.
ATTORNEY–CLIENT PRIVILEGE
The
attorney–client
privilege
exists
to
facilitate
free
and
open
communication between attorneys and their clients. See Paxton v. City of Dallas,
509 S.W.3d 247, 259–60 (Tex. 2017). In Texas, the attorney–client privilege is
governed by Texas Rule of Evidence 503, which states, in relevant part:
A client has a privilege to refuse to disclose and to prevent any other
person from disclosing confidential communications made to
facilitate the rendition of professional legal services to the client:
(A) between the client or the client’s representative and the client’s
lawyer or the lawyer’s representative;
(B) between the client’s lawyer and the lawyer’s representative;
(C) by the client, the client’s representative, the client’s lawyer, or the
lawyer’s representative to a lawyer representing another party in a
pending action or that lawyer’s representative, if the communications
concern a matter of common interest in the pending action;
(D) between the client’s representatives or between the client and the
client’s representative; or
(E) among lawyers and their representatives representing the same
client.
TEX. R. EVID. 503(b)(1).
The Supreme Court of Texas has recently summarized the parameters of the
attorney–client privilege under Texas law:
A communication is “confidential” if it is not intended to be disclosed
to third persons other than (1) those to whom disclosure is made in
furtherance of the rendition of professional legal services to the client
or (2) those reasonably necessary for the transmission of the
communication. TEX. R. EVID. 503(a). The presence of third persons
during the communication will destroy confidentiality, and
communications intended to be disclosed to third parties are not
generally privileged. See id. Further, the person who holds the
privilege—the client—waives it if “the person . . . while holder of the
privilege, voluntarily discloses or consents to disclosure of any
3
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significant part of the privileged matter unless such disclosure itself is
privileged.” TEX. R. EVID. 511(a)(1).
At the core of the privilege is the notion that the
communications are “made for the purpose of facilitating the
rendition of professional legal services.” Huie v. DeShazo, 922 S.W.2d
920, 922 (Tex. 1996). . . . However, the mere copying of legal counsel,
in and of itself, does not transform an otherwise nonlegal
communication into one made for a legal purpose. See Tex. Att’y Gen.
Op. No. JC–0233, at 6 (2000).
Univ. of Tex. Sys. v. Franklin Ctr. for Gov’t & Pub. Integrity, No. 21-0534, 2023
WL 4278243, at *3 (Tex. June 30, 2023).
“The party who seeks to limit discovery by asserting a privilege has the
burden of proof.” In re E.I. DuPont de Nemours & Co., 136 S.W.3d 218, 223 (Tex.
2004). “The documents themselves may constitute sufficient evidence to make a
prima facie showing of attorney-client . . . privilege.” Id. But “[t]here is no
presumption that documents are privileged, and there is no presumption that a
party listed on the privilege log is an authorized person under the rule governing
the privilege.” Id. at 225. “The party asserting a privilege in opposition to a
discovery request must establish by testimony or affidavit a prima facie case
for the privilege, although the party need produce only the minimum quantum of
evidence necessary to support a rational inference that the allegation of fact is
true.” In re Nat’l Lloyds Ins. Co., 532 S.W.3d 794, 804 (Tex. 2017) (emphasis
added) (cleaned up).
B.
ATTORNEY WORK PRODUCT DOCTRINE
The work product doctrine first appeared in the United States Supreme
Court’s decision in Hickman v. Taylor, 329 U.S. 495 (1947). Hickman served as
the authority for work product protection until 1970 when the work product
doctrine was codified in Federal Rule of Civil Procedure 26(b)(3). Today, the rule
provides: “Ordinarily, a party may not discover documents and tangible things that
are prepared in anticipation of litigation or for trial by or for another party or its
representative (including the other party’s attorney, consultant, surety,
indemnitor, insurer, or agent).” FED. R. CIV. P. 26(b)(3)(A).
4
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To assert work product protection, the party resisting discovery must show:
(1) the materials sought are documents or tangible things; (2) the
materials sought were prepared in anticipation of litigation or for
trial; (3) the materials were prepared by or for a party’s
representative; [and] (4) if the party seeks to show that the material is
opinion work product, that party must show that the material contains
the mental impressions, conclusions, opinions, or legal theories of an
attorney or other representative of a party.
SEC v. Brady, 238 F.R.D. 429, 441 (N.D. Tex. 2006). As with assertions of
attorney–client privilege, the burden is on the party who seeks work product
protection to show that its representative prepared the materials at issue in
anticipation of litigation or for trial. See Hodges, Grant & Kaufman v. U.S. Gov’t,
Dep’t of the Treasury, I.R.S., 768 F.2d 719, 721 (5th Cir. 1985). “In contrast to the
attorney-client privilege, the work product privilege belongs to both the client and
the attorney, either one of whom may assert it.” Malik v. U.S. Dep’t of Homeland
Sec., No. 22-10772, 2023 WL 5211651, at *5 (5th Cir. Aug. 15, 2023) (quotation
omitted).
The Fifth Circuit has said that the privilege can apply where litigation is not
imminent “as long as the primary motivating purpose behind the creation of the
document was to aid in possible future litigation.” United States v. El Paso Co.,
682 F.2d 530, 542 (5th Cir. 1982) (quotation omitted). “[D]etermining whether a
document is prepared in anticipation of litigation is a slippery task.” Id. “It is
admittedly difficult to reduce to a neat general formula the relationship between
preparation of a document and possible litigation necessary to trigger the
protection of the work product doctrine.” United States v. Davis, 636 F.2d 1028,
1040 (5th Cir. Unit A Feb. 1981). Nevertheless, “[i]f the document would have been
created without regard to whether litigation was expected to ensue, it was made in
the ordinary course of business and not in anticipation of litigation.” Jolivet v.
Compass Grp. USA, Inc., 340 F.R.D. 7, 18 (N.D. Tex. 2021); see also El Paso Co.,
682 F.2d at 542 (“The work product doctrine is not an umbrella that shades all
materials prepared by a lawyer, however. . . . Excluded from work product
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materials . . . are ‘(m)aterials assembled in the ordinary course of business.’”
(quoting FED. R. CIV. P. 26(b)(3) advisory comm. note to 1970 amendment)).
ANALYSIS
A.
WHETHER COMMUNICATIONS BETWEEN TXIT, ANDREWS MYERS, AND
GCC ARE PROTECTED BY THE ATTORNEY–CLIENT PRIVILEGE
Polaris seeks “all communications exchanged between non-party GCC,
TXIT, and [Andrews Myers] as it relates to Polaris, the Facility, and this lawsuit
since 2018.” Dkt. 377 at 2. TXIT has refused to produce these documents, arguing
that they are protected by both the attorney–client privilege and the work product
doctrine because “(i) GCC employees served as corporate representatives of TXIT
in seeking and facilitating legal advice concerning Polaris and the Facility; and
(ii) GCC is a joint client of TXIT’s litigation counsel.”1 Dkt. 402 at 3. I will address
these arguments in reverse order. But first, I want to describe the evidence that
TXIT has offered in support of its burden to establish a prima facie claim of
privilege over communications between GCC, TXIT, and Andrews Myers.
1.
TXIT’s Evidence in Support of Its Prima Facie Burden
a.
The Mafrige Affidavit
First, TXIT offers an affidavit by GCC’s Managing Director, John Mafrige
(“Mafrige”). See Dkt. 402-3. Mafrige states:
3.
On September 18, 2020, I attended a meeting with Todd
Sullivan2 and Scott Mixon3 with Tim Ross and Hunter Barrow of
Andrew Myers, P.C. I understood the meeting to pertain to obtaining
If TXIT cannot establish that GCC was its representative and/or joint client, then GCC’s
inclusion on the communications at issue waives TXIT’s privilege. See In re XL Specialty
Ins. Co., 373 S.W.3d 46, 50 (Tex. 2012) (“[T]he privilege is waived if the lawyer or client
voluntarily discloses privileged communications to a third party.”); see also TEX. R. EVID.
511(a)(1) (“A person upon whom these rules confer a privilege against disclosure waives
the privilege if . . . the person or a predecessor of the person while holder of the privilege
voluntarily discloses or consents to disclosure of any significant part of the privileged
matter unless such disclosure itself is privileged.”).
1
Mafrige fails to identify Todd Sullivan (“Sullivan”) beyond his name. Polaris states that
Sullivan is TXIT’s owner. See Dkt. 468 at 4.
2
3
Scott Mixon (“Mixon”) is GCC’s in-house attorney.
6
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legal advice and discussing legal strategy, including with respect to
potential litigation, involving [Polaris’s] failure to engineer, procure,
and construct [the Facility]. I understood my role in that meeting to
serve as a representative and/or agent of GCC for purposes of it
seeking legal advice, as well as a representative or agent of [TXIT] in
seeking legal advice concerning the Facility. After that meeting, GCC,
including myself, understood that Andrews Myers was serving as
GCC’s outside legal counsel, as well as TXIT’s outside legal counsel, as
it pertained to Polaris and the Facility.
4.
In November 2020, Mark VandeVoorde4 and I met with
Tim Ross and Andy Clark of Andrews Myers at GCC’s offices in
Houston. During that meeting, we discussed GCC’s potential claims
against Polaris related to the Facility and sought legal advice on those
potential claims from Andrews Myers.
5.
As I testified in my deposition in March 2023, GCC did
not formally execute an engagement letter with Andrews Myers. In
that respect, I could not say that GCC “hired” Andrews Myers.
However, beginning at least in early October 2020, myself and others
with GCC sought legal advice from Andrews Myers in connection with
the lawsuit against Polaris and with respect to claims GCC might have
against Polaris. GCC understood that Andrews Myers was its legal
counsel and conducted itself accordingly in meetings, phone calls, and
email communications. In all respects, Andrews Myers agreed—as it
provided legal advice, met with GCC regarding litigation strategy,
collected documents, responded to subpoena requests, and
otherwise—that it represented GCC in connection with the lawsuit.
Id. at 2–3.
Polaris argues that Mafrige’s affidavit is a sham that “attempt[s] to change
GCC’s prior testimony,” as offered by Mafrige during his deposition as GCC’s
corporate representative. Dkt. 404 at 2. “[T]he ‘sham-affidavit doctrine’ is an
exception to th[e] general rule by which [a] court does not allow a party to defeat a
motion for summary judgment using an affidavit that impeaches, without
explanation, sworn testimony.” Seigler v. Wal-Mart Stores Tex., L.L.C., 30 F.4th
472, 477 (5th Cir. 2022) (quotation omitted). I will assume without deciding that
the doctrine has applicability outside of the summary judgment context. Even so,
Again, neither Mafrige nor TXIT bothers to identify the relevant players mentioned in
this affidavit beyond stating their names.
4
7
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Mafrige’s affidavit—while vague and unhelpful—is not quite a sham.5 As the Fifth
Circuit has explained, “not every discrepancy in an affidavit justifies disregarding
it,” and “the bar for applying the doctrine is a high one, typically requiring affidavit
testimony that is ‘inherently inconsistent’ with prior testimony.” Id.
Mafrige’s affidavit clarifies that because GCC did not execute an engagement
letter with Andrews Myers, he could not testify that GCC “hired” Andrews Myers.
This is not so markedly inconsistent with Mafrige’s testimony that GCC did not
hire outside counsel as to be a sham. Words matter, and “hired” is sufficiently
distinct from “engaged” or “consulted” to explain the discrepancy between
Mafrige’s testimony and his affidavit. Additionally, Mafrige’s testimony that GCC’s
in-house counsel represented GCC in negotiating the assignment of GCC’s claims
against Polaris to TXIT is not entirely inconsistent with the proposition that
Andrews Myers could otherwise (theoretically) represent GCC in this litigation.
On that note, I am unmoved by Polaris’s arguments regarding any conflicts
created by Andrews Myers’s purported representation of TXIT and GCC given their
adversity to each other. See Dkt. 377 at 9–10 (TXIT testified that GCC put TXIT in
default of their Tolling Agreement). Such a conflict may very well exist. Indeed,
TXIT makes little attempt to refute such a conflict. In the face of such a conflict,
Andrews Myers would certainly have failed in its ethical obligations if it did not
secure a conflict waiver from both parties before undertaking any purported
representation of GCC. See TEX. DISC. R. PROF’L CONDUCT 1.06(c)(2). Yet, Polaris
points me to no authority stating that violating the rule against representing clients
with adverse interests destroys the attorney–client privilege. To the contrary,
punishing innocent clients—by disregarding their privilege—for an attorney’s
As I explain below, the majority of Mafrige’s affidavit is not so inconsistent with his
deposition testimony as to make it a sham affidavit. That said, Mafrige’s testimony that
he did not “know of” “any attorney from Andrews Myers [who was] GCC’s counsel,
outside of depositions,” Dkt. 377-3 at 28, is incredibly difficult to reconcile with his
affidavit. Alas, I have generously considered Mafrige’s affidavit anyway. Even so, it fails
to move the needle in establishing a prima facie claim of attorney–client privilege.
5
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breach of the ethical rules would be anathema to clients’ “reasonable expectation
that information relating to the client will not be voluntarily disclosed and that
disclosure of such information may be judicially compelled only in accordance with
recognized exceptions to the attorney-client and work product privileges.” Id.
Preamble: Scope ¶ 16. The proper remedy for such a situation is the withdrawal or
disqualification of the conflicted attorney. See id. R. 1.06(e). Accordingly, Polaris
is incorrect to suggest that adversity between GCC and TXIT would operate to
destroy the attorney–client privilege (assuming there is an attorney–client
relationship to give rise to the privilege in the first place).
Finally, contrary to Polaris’s assertion otherwise, Mafrige never gave
“unequivocal testimony that no [attorney–client] relationship existed” between
GCC and Andrews Myers. Dkt. 404 at 4. Literally, Mafrige never said those words.
Thus, I will not disregard Mafrige’s affidavit as a sham.
b.
The Harrison-Alcorta Email
TXIT’s second piece of “evidence” in support of its burden to establish a
prima facie claim of attorney–client privilege is an October 29, 2020 email from
GCC employee Ben Harrison (“Harrison”) to Robert Alcorta (“Alcorta”) stating
that Tim Ross (“Ross”) of Andrews Myers “is our primary outside council [sic].”
Dkt. 402-4 at 2. TXIT does not offer an affidavit that establishes (1) Harrison’s and
Alcorta’s roles or relationships (or the roles or relationships of other individuals
copied on the email); (2) explains who “our” refers to; (3) explains why this email
demonstrates that GCC is a co-client of Andrews Myers with TXIT; or (4) explains
how this email shows that GCC had the authority to obtain legal services for TXIT,
or to act for TXIT on legal advice rendered.
c.
PRIV_000087
On July 28, 2023, I held another hearing on Polaris’s motion to compel.
During that hearing, Ross, TXIT’s counsel, directed my attention to a particular
entry on TXIT and GCC’s privilege log that he argued demonstrates the attorney–
client relationship between Andrews Myers and GCC. Ross described this
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document, subsequently provided to me for in camera review, as an October 2,
2020 email exchange between himself and Mixon, in-house counsel for GCC. The
email is titled “RE: Surety Call – Confidential and Privileged.” Copied on the email
are Sullivan, Bill Bevers (“Bevers”), Mafrige, and attorneys Andrew Clark and
Hunter Barrow of Andrews Myers. TXIT has not provided an affidavit explaining
the roles and relationships of the folks copied on this email, though Polaris has
stated that Sullivan is TXIT’s owner. Ross informed me at the July 28, 2023
hearing that Bevers is with TXIT, though I am still unclear as to his role.
***
I will now analyze whether these three pieces of evidence are sufficient to
carry TXIT’s burden to establish a prima facie claim of privilege.
2.
Whether GCC Is a Joint or Co-Client of Andrews Myers
“The joint client or co-client doctrine applies when the same attorney
simultaneously represents two or more clients on the same matter.” In re XL
Specialty Ins. Co., 373 S.W.at 50 (cleaned up). “Where an attorney acts as counsel
for two parties, communications made to the attorney for the purpose of
facilitating the rendition of legal services to the clients are privileged, except in a
controversy between the clients.” Id.; see also RESTATEMENT (THIRD) OF THE LAW
GOVERNING LAWYERS § 75(1) (“If two or more persons are jointly represented by
the same lawyer in a matter, a communication of either co-client that otherwise
qualifies as privileged under §§ 68–72 and relates to matters of common interest
is privileged as against third persons, and any co-client may invoke the privilege,
unless it has been waived by the client who made the communication.”).
Establishing “[w]hether a client–lawyer relationship exists between each
client and the common lawyer” is a prerequisite to any purported co-client
situation. RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS § 75 cmt. c.
Whether an attorney–client relationship exists in the first place is a fact-intensive
inquiry. “[T]he parties must explicitly or by their conduct manifest an intention to
create it. To determine whether there was a meeting of the minds, [courts] use an
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objective standard examining what the parties said and did and do not look at their
subjective states of mind.” Sutton v. Est. of McCormick, 47 S.W.3d 179, 182 (Tex.
App.—Corpus Christi–Edinburg 2001, no pet.). A putative client’s failure to pay a
fee, though not dispositive, is one of many factors that may be considered in
determining whether an attorney–client relationship exists. See Border
Demolition & Env’t, Inc. v. Pineda, 535 S.W.3d 140, 154 (Tex. App.—El Paso 2017,
no pet.) (collecting cases that considered a lack of paid attorney’s fees in finding no
evidence of an attorney–client relationship).
As Polaris points out, GCC never executed an engagement agreement with
GCC; GCC admitted that it did not “hire” Andrews Myers; and there is no evidence
that GCC has paid Andrews Myers any legal fees. Mafrige’s affidavit is unhelpful to
the extent it references Mafrige’s “subjective state[] of mind,”6 which is entirely
irrelevant. Maersk Tankers MR K/S v. M/T Swift Winchester, No. 3:22-CV00390, 2023 WL 1824832, at *3 (S.D. Tex. Feb. 8, 2023) (quoting Sutton, 47
S.W.3d at 182). Mafrige’s affidavit is also internally inconsistent. For example,
Mafrige states that he and GCC’s Mark VandeVoorde met with Andrews Myers
attorneys in November 2020 to “discuss[] GCC’s potential claims against Polaris
related to the Facility and sought legal advice on those potential claims.” Dkt.
402-3 at 3. Yet he later states that GCC’s in-house counsel—not Andrews Myers—
“evaluated whether to assert claims against TXIT” and “whether to independently
pursue claims against Polaris or assign its claims to TXIT.” Id.
Mafrige’s affidavit is also heavy on conclusory statements but light on
details. Mafrige states that he “and others with GCC sought legal advice from
Andrews Myers in connection with the lawsuit against Polaris and with respect to
claims GCC might have against Polaris.” Id. But Mafrige does not elaborate as to
who these “others” are, why “GCC understood that Andrews Myers was its legal
counsel,” or what it means for GCC to have “conducted itself accordingly in
6
“I understood” and “GCC understood” are subjective statements. Dkt. 402-3 at 2–3.
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meetings, phone calls, and email communications.” Id. Lastly and most
importantly, Mafrige’s affidavit fails to address the documents that are at issue
here, to identify the people listed on the privilege log, or to even reference the
privilege log. See DuPont, 136 S.W.3d at 224 (“[A]n affidavit is of no probative
value if it merely presents global allegations that documents come within the
asserted privilege.”). Thus, Mafrige’s affidavit is not prima facie evidence that GCC
had an attorney–client relationship with Andrews Myers, or that any of the
documents on the privilege log are privileged.
Nor does the Harrison-Alcorta email, offered without an affidavit or context,
give rise to a rational inference that GCC had an attorney–client relationship with
Andrews Myers, or that any of the documents on the privilege log are privileged.
PRIV_000087 is an email exchange between GCC’s in-house counsel,
Mixon, and TXIT’s outside counsel, Ross. Although marked “Confidential and
Privileged,” this document does not show Mixon seeking legal advice from Ross for
GCC, or Ross providing legal advice to Mixon for GCC’s benefit. Rather, the email
is an exchange of factual information regarding events related to Polaris’s suit. At
most, this document shows coordination between GCC’s in-house counsel (Mixon)
and TXIT’s outside litigation counsel (Ross)—not Andrews Myers’s representation
of GCC.7 Thus, TXIT fails to establish that GCC is a joint client of Andrews Myers.
3.
Whether GCC Is TXIT’s “Client’s Representative”
TXIT has hedged its privilege bet, asserting that even if GCC is not a joint
client, GCC is TXIT’s “corporate representative.” Dkt. 402 at 4. What matters
Coordination can potentially indicate a common interest. “Unlike the joint client rule,
the joint defense and common interest rules apply when there has been sharing of
information between or among separately represented parties.” In re XL Specialty Ins.
Co., 373 S.W.3d at 50 (citing RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS § 75
cmt. c). But TXIT has not articulated its mutual interest with GCC or even claimed
application of the common interest rule. In fact, TXIT’s insistence that GCC is its client’s
representative and/or that GCC is its co-client of Andrews Myers precludes application of
the common interest rule, which applies only to “separately represented parties.” Id.
7
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though is whether GCC is TXIT’s “client’s representative” as defined by the Texas
Rules of Evidence:
(2) A “client’s representative” is:
(A) a person who has authority to obtain professional legal
services for the client or to act for the client on the legal advice
rendered; or
(B) any other person who, to facilitate the rendition of
professional legal services to the client, makes or receives a
confidential communication while acting in the scope of
employment for the client.
TEX. R. EVID. 503(a)(2).
GCC was not an employee of TXIT, so by its plain language, Rule
503(a)(2)(B) is inapplicable. As for Rule 503(a)(2)(A), TXIT offers no evidence
that GCC and/or Mafrige had “authority to obtain professional legal services for
[TXIT] or to act for [TXIT] on the legal advice rendered.” Id. (emphasis added).
Neither the Harrison-Alcorta email nor PRIV_000087 can be read to establish
GCC’s authority to act for TXIT. And TXIT offers no “testimony or affidavit” from
anyone at TXIT who could have bestowed such authority upon GCC to establish
that GCC was, in fact, TXIT’s representative. In re Nat’l Lloyds Ins. Co., 532 S.W.3d
at 804.
Mafrige’s statement that he “understood” his role at the September 18, 2020
meeting to including acting “as a representative or agent of [TXIT] in seeking legal
advice concerning the Facility” is conclusory. Dkt. 402-3 at 2–3. Mafrige does not
offer any details as to why that was his understanding. Moreover, that conclusory
statement, which simply parrots the standard for who is a “client’s representative,”
is undercut by the fact that Mafrige attended the September 18, 2020 meeting
with TXIT’s owner, Sullivan. Yet Mafrige fails to explain why he needed to act
as TXIT’s representative in seeking legal advice when TXIT’s owner was at the
same meeting. Regardless, Mafrige’s affidavit does not mention Mafrige’s
purported authority to act for TXIT beyond that isolated meeting on September
18, 2020. More importantly, Polaris has created an enormous hurdle for TXIT by
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pointing to the Terminal Services Agreement, which explicitly states: “Neither
[TXIT] nor [GCC] is authorized to take any action in any way whatsoever for or on
behalf of the other.” Dkt. 404 at 8. Similarly, the Tolling Agreement states that “no
action taken by [TXIT and GCC] . . . shall constitute . . . either Party as the agent of
the other Party for any purpose.” Id. TXIT fails to respond to this argument in its
supplemental brief, so I am left to presume that it has conceded this point. Thus,
TXIT fails to show that GCC is TXIT’s representative under Rule 503.
***
For the reasons stated above, I find that TXIT has not carried its burden to
establish a prima facie claim of attorney–client privilege over documents
exchanged between itself, GCC, and Andrews Myers. Specifically, TXIT fails to
establish that GCC was a joint or co-client of Andrews Myers. TXIT also fails to
establish that GCC was TXIT’s client’s representative as defined by Rule 503.
Accordingly, TXIT has waived whatever attorney–client privilege it may have had
concerning any document on which GCC personnel were included. See Univ. of
Tex. Sys., 2023 WL 4278243, at *3 (inclusion of third parties to otherwise
privileged communications operates as waiver).
B.
WHETHER COMMUNICATIONS BETWEEN TXIT, ANDREWS MYERS, AND
GCC ARE PROTECTED BY THE WORK PRODUCT DOCTRINE
In its reply, Polaris argues that “any work product protection (to the extent
this ever existed) belonging to any material TXIT or its counsel shared with GCC
has been waived” because GCC and TXIT were adverse. Dkt. 404 at 13. There is
ample case law to support the proposition that a party who “discloses work product
to an adversary” or who “disclos[es work product] to a potential adversary may
waive work product protection.” In re Sanchez Energy Corp., No. 19-34508, 2022
WL 17586713, at *6 (Bankr. S.D. Tex. Dec. 12, 2022) (collecting cases). TXIT does
not dispute this legal proposition, or seriously dispute that TXIT and GCC were
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adverse.8 TXIT’s conclusory assertion that “TXIT and GCC are 100% aligned” is
betrayed by the very next sentence, which states that “to the extent there was the
possibility of any deviation from that alignment . . . , GCC sought advice from
additional counsel.” Dkt. 470 at 3. TXIT mistakenly directs this argument to
whether a potential conflict prevents forming an attorney–client relationship.
TXIT is correct that “a potential conflict does not prevent the attorney–client
relationship from forming.” Id. at 4. But I found that no attorney–client
relationship existed between Andrews Myers and GCC. Thus, if TXIT and GCC
were potentially adverse, then the disclosure of TXIT’s work product to GCC
operated as a waiver of work product protection.
Polaris has provided convincing evidence that, even if they are 100 percent
aligned now, GCC was adverse or potentially adverse to TXIT for years.
Specifically, TXIT’s owner and corporate representative Todd Sullivan testified
that “TXIT is in default of its agreement with GCC for not being able to reach these
performance requirements” and that “TXIT is liable to GCC for . . . GCC losses.”
Dkt. 377-1 at 105, 151. At no point does TXIT even attempt to explain why this is
not clear adversity between TXIT and GCC. Thus, I find that communications
between GCC, TXIT, and Andrews Myers are not protected work product.9
In its response to Polaris’s Motion to Compel, TXIT states without explanation that
“TXIT and GCC have never been adverse parties in this lawsuit or any other litigation
concerning the Facility.” Dkt. 402 at 6 n.16. In support, TXIT cites to “Motion at 9, 19”
but fails to specify to which of the motions in the 400 preceding docket entries it is
referring. “Judges are not like pigs, hunting for truffles buried in the record.” United
States v. del Carpio Frescas, 932 F.3d 324, 331 (5th Cir. 2019) (quotation omitted).
8
Polaris’s Motion to Compel concerns only “communications between . . . TXIT, its
counsel, and [GCC].” Dkt. 377 at 1. Thus, my ruling today does not reach documents on
TXIT’s privilege log that do not fall into this category.
9
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C.
WHETHER TXIT’S CROUTHAMEL DOCUMENTS ARE PRIVILEGED
Polaris challenges only three documents between Crouthamel, TXIT, and
Andrews Myers as not privileged. I have reviewed all three documents:
PRIV_006380, PRIV_006379, and PRIV_006267.
PRIV_006380 is an April 26, 2021 email from Cameron Ellis (“Ellis”) to
Crouthamel. In all its briefing, TXIT never bothers to identify Ellis. I can deduce
from Ellis’s signature block that Ellis is likely an attorney, but for whom I do not
know. Ellis’s email address uses the same domain as Mixon (@sullbros.com).
Thus, for all I know, Ellis is a GCC attorney, not a TXIT attorney. Without an
affidavit to explain why this document is privileged, I cannot say that it is.
PRIV_006380 must be produced.
PRIV_006379 is an April 26, 2021 email from Ellis to Mixon. If Ellis is a
TXIT attorney (assuming, again, that Ellis is an attorney at all), then this email is
not privileged because I have already held that TXIT has failed to establish a prima
facie claim of privilege over TXIT–GCC communications. If Ellis is a GCC attorney,
then the privilege is GCC’s to claim, not TXIT’s. Either way, because TXIT has not
provided an affidavit explaining Ellis’s role or why documents to or from Ellis are
privileged, TXIT has failed to carry its burden to establish a prima facie claim of
privilege over this document. PRIV_006379 must be produced.
PRIV_006267 is an April 23, 2021 email from Crouthamel to Ellis. For all
the reasons stated above, TXIT has not carried its burden to establish a prima facie
claim of privilege over this document. But even if it had, I would still find that this
document must be produced because it is nothing more than a forward—without
any context or explanation—of an underlying email to which I am certain all parties
in this litigation already have access (because employees from both parties are
included on the underlying email). PRIV_006267 must be produced.
D.
WHETHER POLARIS’S LESSONS LEARNED DOCUMENTS ARE PRIVILEGED
In May 2022, Polaris produced 76 “Lessons Learned” documents.
Approximately eight months later, Polaris clawed these documents back. Polaris
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asserts that all of these documents are protected by the attorney–client privilege.
Polaris also claims that one of the 76 documents at issue is entitled to work product
protection. TXIT, having already seen and reviewed the documents, disagrees.
Interestingly, none of the documents at issue involve an attorney. Thus, the
only way these communications could be privileged under Rule 503 is if they are
between the “client’s representatives.” TEX. R. EVID. 503(b)(1)(D). Yet Polaris does
not identify the senders, recipients, or creators of the communications/documents
on its log, much less to articulate why each of those individuals qualifies as its
representative under Rule 503(b)(1)(D). Thus, Polaris cannot make a prima facie
claim of attorney–client privilege for any of these documents.
Polaris’s failure to claim work product protection for all 76 documents is also
odd because the work product doctrine is “distinct from and broader than the
attorney-client privilege.” United States v. Nobles, 422 U.S. 225, 238 n.11 (1975).
Polaris’s assertion that these documents were created “at the direction and
guidance of Polaris’[s] attorney . . . only after Polaris anticipated litigation” is the
(conclusory) definition of work product. Dkt. 414 at 2. Thus, I will generously
assume that Polaris meant to claim work product protection for all of the Lessons
Learned documents and not just one. Even so, none of these documents are
protected by the work product doctrine.
Polaris’s only evidence that the primary motivating purpose of creating the
Lessons Learned documents was to aid in possible future litigation is the
declaration of its general counsel, Joseph Pousson (“Pousson”). As with Mafrige’s
affidavit, Pousson’s affidavit is heavy on conclusory statements and light on details.
For example, Pousson declares that “Polaris personnel were encouraged to
communicate openly and frankly regarding the project because of the expectation
that the communications and work generated at my direction would be privileged
attorney client communications.” Dkt. 463 at 4. But Pousson fails to provide the
who, what, when, or how. Who did he direct to undertake this exercise? When did
he give this direction? How was this direction conveyed? Was it an email? A virtual
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meeting? Why is there no record of it? Such a record could easily have been
submitted to the Court for in camera review. Pousson omits all of these details
from his affidavit. This is not enough. See Orchestrate HR, Inc. v. Trombetta, No.
3:13-CV-2110-P, 2014 WL 884742, at *2 (N.D. Tex. Feb. 27, 2014) (“The proponent
must provide sufficient facts by way of detailed affidavits or other evidence to
enable the court to determine whether the documents constitute work product.”).
The documents themselves are of no help either. Again, no lawyer is
included on the documents; there is no reference to a lawyer or a lawyer’s request;
and nothing is marked privileged or confidential. “Although [Polaris] has the
burden of establishing that a document is protected by the work-product privilege,
it is noteworthy that only [TXIT] present[s] me with any evidence concerning how
the [Lessons Learned documents] are created.” Env’t Packaging Techs., Ltd. v.
Arch Ins. Co., No. 4:18-CV-00240, 2020 WL 1046822, at *2 (S.D. Tex. Mar. 4,
2020). That evidence is the deposition testimony of Polaris employee Lanty Wylie.
Wylie testified that Lessons Learned were discussions about “activities or shortcuts
we should have took that would have been better and more cost effective,” and that
he “discussed items like this after every project,” not just the TXIT project. Dkt.
414-1 at 6 (emphasis added). “This strongly suggests that the [Lessons Learned
documents] would have been created even if there was no lawsuit.” Env’t
Packaging Techs., Ltd., 2020 WL 1046822, at *2; see also Jolivet, 340 F.R.D. at
18 (“If the document would have been created without regard to whether litigation
was expected to ensue, it was made in the ordinary course of business and not in
anticipation of litigation.”). Because Polaris fails to satisfy its burden to show that
the Lessons Learned documents were created in anticipation of litigation, I find
that the work product doctrine does not protect them from disclosure.
CONCLUSION
For the reasons stated above, I GRANT Polaris’s Motion to Compel (Dkt.
377). With regard to the parties’ dispute over the Lessons Learned documents (Dkt.
414), I find that neither the attorney–client privilege nor the work product doctrine
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protect any of the Lessons Learned documents. If TXIT destroyed these
documents, Polaris must reproduce them; if the documents were sequestered,
TXIT is free to use them.
SIGNED this 23rd day of August 2023.
______________________________
ANDREW M. EDISON
UNITED STATES MAGISTRATE JUDGE
19
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