United States District Court, D. Arizona
IN RE BARD IVC FILTERS PRODUCTS LIABILITY LITIGATION This Relates to All Actions
G. CAMPBELL UNITED STATES DISTRICT JUDGE.
dispute concerns documents withheld from discovery under the
attorney-client privilege and the work-product doctrine by
Defendants C.R. Bard, Inc. and Bard Peripheral Vascular, Inc.
(“Bard”). Plaintiffs challenge a substantial
number of documents on Bard’s privilege log. Plaintiffs
sampled 307 documents on the log, which represents five
percent of the total. After meeting and conferring, the
parties reached agreement on all but 133 of the sampled
documents. The resolution of this discovery dispute will be
used to guide the parties as they attempt to resolve the
overall privilege dispute in this multi-district litigation
March 25, 2016, Plaintiffs moved to compel production of the
133 disputed documents. Doc. 1214. On March 31, 2016, the
Court held a third case management conference where the issue
was discussed (Doc. 1246), and the Court provided additional
guidance in the ensuing case management order (Doc. 1319 at
5-6). The issues have now been fully briefed (Docs. 1476,
1590, 1976, 2219, 2222), and the Court heard oral arguments
on June 21, 2016. The Court has also reviewed the
representative sample documents submitted by the parties. For
the following reasons, the Court will grant in part and deny
in part Plaintiffs’ motion to compel.
Choice of Law.
parties agree that the work-product doctrine is governed by
federal law, but disagree on which law should govern the
attorney-client privilege. The parties’ briefing
suggests four possibilities: (1) generally applicable common
law, (2) Arizona law, (3) New Jersey law, or (4) the law of
each transferor district.
Choice of Law Approaches.
Rule of Evidence 501 provides that “in a civil case,
state law governs privilege regarding a claim or defense for
which state law supplies the rule of decision.”
Fed.R.Evid. 501. “Rule 501, however, does not tell us
which state law the forum state should apply.” KL
Grp. v. Case, Kay & Lynch, 829 F.2d 909, 918 (9th
Cir. 1987). Commentators have suggested several methods of
resolving this choice-of-law issue: (1) use the privilege law
of the state whose substantive law provides the rule of
decision; (2) apply the privilege law of the state in which
the federal court sits; or (3) apply the conflict-of-law
doctrine of the state in which the federal court sits.
Id. (citing 23 C. Wright & K. Graham, Jr.,
Federal Practice and Procedure § 5435, at 865-69 (1980);
2 Weinstein’s Federal Evidence § 501 (1986)).
issue is complicated in the MDL context, where cases
originate in many different states. In In re Yasmin and
Yaz (Drospirenone) Marketing, Sales Practices and Products
Liability Litigation, MDL No. 2100, 2011 WL 1375011, at
*1 (S.D. Ill. Apr. 12, 2011), the court addressed a privilege
challenge to 330 documents, a representative sample of the
12, 857 documents withheld as privileged. Consistent with
Rule 501, the Court found that “privilege matters that
are relevant to an element of a claim or defense for which
state law supplies the rule of decision will be governed by
state privilege law.” Id. at *7. The court
recognized that “a federal court sitting in diversity
applies the choice of law rules emanating from the state in
which it sits, ” and that, in the MDL context,
“the transferee court applies the choice of law rules
of the state in which the transferor court sits.”
Id. at *4. After surveying the choice of law
principles of every state, the court decided to apply the
“most significant relationship” test found in
Restatement (Second) of Conflict of Laws § 139 (Am. Law
Inst. 1971). The court found that in most states, “the
law of the state with the most significant relationship to
the communication will govern the existence and scope of
attorney-client privilege.” Id. at
cases have adopted different approaches. See In re Vioxx
Prods. Liab. Litig., MDL No. 1657, 501 F.Supp.2d 789,
791-92 (E.D. La. 2007) (applying generally-known principles
of the attorney-client privilege); In re Baycol Prods.
Litig., MDL No. 1431, 2003 WL 22023449, at *1-2 (D.
Minn. Mar. 21, 2003) (applying the choice-of-law rules of the
state where the transferee court sits); U.S. Surety Co.
v. Stevens Family Ltd., No. 11-C-7480, 2014 WL 902893,
at *1 (N.D. Ill. Mar. 7, 2014) (applying the privilege law of
state that supplies the substantive rule of decision).
considering these various approaches, the Court agrees with
Yasmin, which looked to the transferor states’
choice of law rules to determine which privilege law to
apply. This approach comports with the Supreme Court’s
instruction that federal courts should look to state conflict
laws as well as substantive laws. See Klaxon Co. v.
Stentor Elec. Mfg. Co., Inc., 313 U.S. 487, 496-97
(1941). The Court also agrees with Yasmin’s
selection of the Restatement’s most significant
relationship test as best representative of the choice of law
rules applied by the various states. 2011 WL 1375011, at *7.
The parties also agree. Docs. 1476 at 6; 1590 at 2. Thus, the
Court will use Restatement § 139 to identify the
privilege law to be applied in this case.
Section 139 Analysis.
of § 139 provides: “Evidence that is not
privileged under the local law of the state which has the
most significant relationship with the communication will be
admitted, even though it would be privileged under the local
law of the forum, unless the admission of such evidence would
be contrary to the strong public policy of the forum.”
Restatement (Second) of Conflict of Laws § 139 (Am. Law
Inst. 1971). Part 2 provides: “Evidence that is
privileged under the local law of the state which has the
most significant relationship with the communication but
which is not privileged under the local law of the forum will
be admitted unless there is some special reason why the forum
policy favoring admission should not be given effect.”
Id. Thus, § 139 applies only when the privilege
law of the forum differs from that of the state with the most
significant relationship to the allegedly privileged
determine which state has the most significant relationship,
Comment e to § 139 provides this guidance:
The state which has the most significant relationship with a
communication will usually be the state where the
communication took place, which, as used in the rule of this
Section, is the state where an oral interchange between
persons occurred, where a written statement was received or
where an inspection was made of a person or thing. . . . The
state where the communication took place will be the state of
most significant relationship in situations where there was
no prior relationship between the parties to the
communication. If there was such a prior relationship between
the parties, the state of most significant relationship will
be that where the relationship was centered unless the state
where the communication took place has substantial contacts
with the parties and the transaction.
case of written communications (the only kind of
communication at issue in this order), the comment suggests
that the state where the communication was
“received” has the most significant relationship.
This suggestion, made by the ALI in 1971, is problematic in a
day of electronic communications. Email communications
– which represent most of the communication at issue in
this motion – usually go back and forth between the
communicating parties several times in a single email string,
resulting in virtually everyone being the
“receiving” party for at least some of the
communications. Email communications can also be
“received” by many people in many states
simultaneously. Thus, it may be impossible to determine which
party “received” the communication. Commentators
have noted this difficulty with the Comment e approach.
See Graham C. Lilly & Molly Bishop Shadel,
When Privilege Fails: Interstate Litigation and the
Erosion of Privilege Law, 66 Ark. L. Rev. 613, 643
(2013) (“determining the state with the ‘most
significant relationship’ may prove problematic with
case provides an apt example. The first communication at
issue in this motion (Log 2, Control 809) is just over one
page long, and yet it includes an initial email between two
people on July 15, 2005; a response copied to three more
people on July 17, 2005; a forwarding of the email to still
another person on July 18, 2005; and a response from the
recipient of the forwarded email that is addressed to five
new individuals and copied to one new individual, in addition
to those already in the email chain. Three communications,
among a total of 12 people, over the course of four days
render it virtually impossible to determine where this
communication was “received.” To make matters
more difficult, the parties have not provided the Court with
the roles and locations of many of the people on this email,
and this is just one of dozens the Court must review. Many of
the documents at issue in this motion include the same kind
of back-and-forth among many persons over the course of
Court concludes that it would make little sense to find that
the state with the most significant relationship – and
therefore the applicable privilege law – varies from
email to email, or maybe even within a single email string,
depending on whom happens to be copied and whom the Court
deems to be the primary recipient. The Court finds that the
“received” test for written email communication
is simply not workable in this case.
Court need not dwell longer on this issue, however, because
the other part of Comment e suggests that if the parties to
the communication in question had a prior relationship, then
the state where that relationship was “centered”
will usually be the state with the most significant
relationship. This approach provides a workable solution for
this case. The communications in question appear primarily to
be among Bard in-house lawyers, based at C.R. Bard
headquarters in New Jersey, and managers and employees of
Bard Peripheral Vascular (“BPV”), located in
Arizona. The subject of this litigation is the design and
performance of filters made and sold by BPV, as well as the
marketing and compliance efforts of BPV. Thus, although
lawyers and paralegals for Bard may be based in New Jersey,
it appears their client for purposes of these communications,
as well as the subject of their communications, is primarily
BPV and its activities in Arizona.
appearance is confirmed by the evidence. BPV is a
wholly-owned subsidiary of C.R. Bard. Doc. 2219-1 at 2,
¶ 3. BPV is headquartered in Arizona, id., and
“is the company that was and is primarily responsible
for all activities related to” the filters at issue in
this case, id., ¶ 4.
From its headquarters in Tempe, Arizona, [BPV] had and
continues to have principal responsibility in designing the
filters, testing the filters, directing the manufacturing of
the filters, developing contents of the instructions for use
that accompanies the filters, communicating with the FDA
regarding the filters, developing marketing material for the
filters, training the sales force regarding interacting with
physicians about [the] filters, developing written
communications to physicians related to the filters,
developing and maintaining a quality and post-market
surveillance system regarding the filters, and deciding when
each new generation of filter is first marketed and the
previous filter stops being marketed.
Id., ¶ 5. BPV is responsible for managing its
own day-to-day operations. Doc. 2219-2 at 3-4. C.R. Bard is
responsible for setting “corporate quality standards or
guidance that the divisions would need to follow at a
global level, ” id. at 4, but the divisions
act as “their own business that reports back up to Bard
corporate or C.R. Bard, ” id. at 5. C.R.
Bard’s legal department acts as “a full
functioning legal department” covering “[a]ll
matters of legal breadth, ” and the legal work for BPV.
Id. at 6.
these facts, and the reality that lawyers advise clients on
the clients’ activities and issues, not the
lawyers’ activities and issue, the Court concludes both
that there was a preexisting relationship between the Bard
in-house lawyers and BPV, and that the relationship can most
accurately be described as “centered” in Arizona.
That is where products are developed, marketing materials are
written, FDA communications originate, training occurs,
testing is done, and legal advice is needed, received, and
authors of the law review article cited above reach a similar
conclusion. They note that “[s]ince privileges
primarily benefit their holders – such as a client or
patient – identifying the holder should be an important
indication of which state has the most significant
relationship to the communication.” Lilly & Shadel,
66 Ark. L. Rev. at 649. The privilege holder’s
“affiliation with competing states is of paramount
importance” and “should be a primary factor in
determining which state has the most significant relationship
to a communication.” Id.
Court concludes that the preexisting relationship between the
parties to the communications at issue in this case was
centered in Arizona, and that Arizona therefore has the most
significant relationship to the communications. As a result, the
Court will apply the privilege law of Arizona. Because
Arizona also is the forum where this Court is located, the
Court need not further apply the conflict resolution
principles set forth in parts 1 and 2 of §
argue that New Jersey is the state with the most significant
relationship to the communications, but the evidence does not
support this conclusion. It is true that C.R. Bard’s
corporate center, including its legal department, is located
in New Jersey. But the evidence shows that C.R. Bard was not
involved in the management of day-today operations of BPV
and, as discussed above, virtually all of the relevant
conduct and events occurred at BPV. The fact that
Bard’s legal department is located in New Jersey is not
dispositive, particularly when the relevant client, BPV, is
located in Arizona.
argue that “in the intra-corporate context, the parent
and wholly-owned subsidiary should be treated as one
entity.” Doc. 2222 at 4. Plaintiff cite Teleglobe
Communications Corp. v. BCE Inc., 493 F.3d 345 (3d Cir.
2007), but that case addressed the effect of disclosing an
otherwise privileged attorney-parent communication to the
parent’s subsidiary, see Id. at 369-74. It did
not address the complicated choice-of-law issue presented in
argue that “it is reasonable to presume that
Bard’s lawyers relied on New Jersey law” when
advising BPV. Doc. 2222 at 4-5. The Court does not agree.
Plaintiffs’ own cases suggest that lawyers typically
apply the laws of their client’s state when providing
guidance. See, e.g., Compuware Corp. v.
Moody’s Investors Servs., Inc., 222 F.R.D. 124,
133 (E.D. Mich. 2004) (holding that New York company’s
lawyers advising on privilege “surely relied on the
protections of New York law”).
assert that Bard’s litigation counsel never mentioned
Arizona law in the parties’ meet and confer process,
involving “claims going back several years” in
related cases. Doc. 2222 at 5. While this may support an
estoppel argument, which Plaintiffs have not made, it is does
not address the choice of law issue.
assert that Bard “is hardly a major employer in
Arizona” and that BPV “does not specifically
market in Arizona, has no retail locations here, and some of
its products including IVC filters are manufactured
elsewhere.” Doc. 2222 at 5. But Plaintiffs do not
dispute that BPV is an Arizona corporation with its principal
place of business here. The relevant question is not the
significance of BPV’s presence in Arizona, but where
the relationship between BPV and its lawyers was centered.
For reasons discussed above, the Court concludes that the
relationship was centered in Arizona, the location of the
activities for which the legal advice was provided.
attorney-client privilege “is rigorously guarded to
encourage full and frank communications between attorneys and
their clients and thereby promote broader public interests in
the observance of law and the administration of
justice.” State v. Sucharew, 66 P.3d 59, 64,
¶ 10 (Ariz.Ct.App. 2003) (citing State v.
Towery, 920 P.2d 290, 299 n.6 (Ariz. 1996) (internal
quotation marks omitted)). “The privilege belongs to
the client and encompasses communication between the attorney
and client made in the course of the attorney’s
professional employment.” Id. (citing
State v. Holsinger, 601 P.2d 1054, 1058 (Ariz.
1979)). “The burden of showing the relationship, the