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Valenzuela v. Union Pacific Railroad Co.

United States District Court, D. Arizona

December 21, 2016

Alonzo Valenzuela, et al., Plaintiffs,
v.
Union Pacific Railroad Company, et al., Defendants.

          ORDER

          David G. Campbell United States District Judge

         Plaintiffs assert that six documents produced by Defendants Union Pacific and Kinder Morgan in this litigation are not privileged and should be available as evidence. Following a telephone conference, the Court directed the parties to submit the documents for in camera review and to provide the Court with memoranda on the issue. Doc. 190. The Court has reviewed the documents and memoranda (Docs. 213, 215, 217, 225), and holds that the privilege applies and has not been waived.

         The six documents reviewed in camera are referred to by the parties as Exhibits A through F. Exhibits A, B, C, and D are memoranda written by in-house attorney Roy Jerome between 1966 and 1976, and were addressed to officers or employees of Union Pacific's and Kinder Morgan's predecessor corporations. Doc. 215 at 3.[1] Mr. Jerome was employed as a lawyer by Southern Pacific Company, the former parent of Union Pacific's and Kinder Morgan's predecessors. Exhibit E is a 1976 internal memorandum written to several individuals, including Mr. Jerome. Exhibit F is a 1957 document written by Engineering Management, Inc. (“EMI”) that discusses legal advice provided by Paul DeFord, an in-house attorney employed by Southern Pacific Company. Doc. 217 at 3-4. Union Pacific asserts the attorney-client privilege with respect to Exhibits A-C, and Kinder Morgan asserts the privilege with respect to Exhibits D-F. Doc. 213 at 2.

         At the parties' request, the Court previously entered a stipulated order which provides that “[t]he production of any privileged or otherwise protected or exempted Information shall not be deemed a waiver or impairment of any claim of privilege or protection, including, but not limited to, the attorney-client privilege or the protection afforded to work product materials, or the subject matter thereof, as to the produced Information, or any other Information.” Doc. 110 at 2. As a result, Plaintiffs do not contend that the production of Exhibits A-F waived the attorney-client privilege. They instead argue that the documents are not privileged in the first instance, that subject matter waiver has occurred through the production and use of related documents, and that Defendants waived the privilege by taking certain positions in this case and by failing to make timely objections when the documents were used in a deposition. Doc. 213.

         Plaintiffs cite Arizona privilege law in support of their arguments. Id. at 2. Kinder Morgan argues that California law applies. Doc. 217 at 2-3. Union Pacific cites both Arizona and California law. Doc. 215. All parties cite Federal Rule of Evidence 502. The Court need not engage in a choice-of-law analysis because Rule 502 resolves most of the issues and, where state law is relevant, the result would be the same under Arizona and California law.

         A. Are the Documents Privileged?

         Plaintiffs make only cursory arguments that Exhibits A-F are not privileged. Doc. 213 at 4. They assert that the documents do not provide legal advice based on confidential information, but Exhibits A-E are written either by or to an attorney, Exhibit F recounts the advice of an attorney, and the significance of all six documents, in Plaintiffs' view, is their legal advice - their statements about the legal status of the railroad's ownership interest in the railroad right-of-way. Plaintiffs contend that the privilege does not extend to both Union Pacific and Kinder Morgan, but do not dispute Defendants' assertion that they were sister corporations at the time of the communications, owned by a single corporate parent. Nor do Plaintiffs dispute that the attorneys involved were employed by the parent. Finally, Plaintiffs contend that Exhibit F was written by EMI, an unrelated third-party, but do not dispute that EMI was retained by Kinder Morgan's predecessor as its right-of-way agent. Both Arizona and California law include agents within the corporate attorney-client privilege. See A.R.S. § 12-2234(B) (corporate privilege includes agents); Nemirofsky v. Seok Ki Kim, 523 F.Supp.2d 998, 1002 (N.D. Cal. 2007), as amended (Nov. 24, 2007) (privilege “includes communications with the entity's agent, at least where the agent is acting within the scope of his agency.”).

         Union Pacific and Kinder Morgan provided detailed responses to Plaintiffs' arguments on this issue, and the Court afforded Plaintiffs an opportunity to reply, but the reply said nothing more about this issue. Doc. 225. The Court finds that Exhibits A-F satisfy the requirements for privileged attorney-client communications.

         B. Subject Matter Waiver under Rule 502.

         Plaintiffs argue that Defendants waived the attorney-client privilege with respect to Exhibits A-F by disclosing three other letters or memoranda - Exhibits G, H, and I - which address the same subject matter (the status of the railroad's right-of-way title) and were written by Defendants' in-house lawyers. Although Plaintiffs initially suggested that the waiver occurred when Exhibits G-I were used in related California litigation referred to by the parties as the Rent Action, Plaintiffs narrowed their position in their reply, asserting that the Court need not consider the Rent Action. Plaintiffs instead claim that Defendants waived the privilege by failing to object to Plaintiffs' use of Exhibits G-I in this litigation, both in Plaintiffs' complaint and in depositions. Doc. 225 at 4.

         Plaintiffs assert an argument for subject-matter waiver - that Defendants' waiver of the privilege with respect to Exhibits G-I constitutes a waiver of the privileged for other documents addressing the same subject matter (Exhibits A-F). In support, Plaintiffs rely on Federal Rule of Evidence 502(a):

When the disclosure is made in a federal proceeding . . . and waives the attorney-client privilege or work-product protection, the waiver extends to an undisclosed communication or information in a federal or state proceeding only if:
(1) the waiver is intentional;
(2) the disclosed and undisclosed communications or information concern the same ...

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