Recorded Statements by Counsel for Vessel Owner Close in Time to Accident Not Discoverable as Privileged Communications

McQuay v. TVA, 2018 U.S. Dist. LEXIS 153460 *; 2018 WL 4326827 (W.D. Ky. 2018)

By: Maura Toups

This issue arises from an accident occurring on September 23, 2014. Timothy McQuay was working for Inland Marine Services, Inc. (“IMS”) as a deckhand on the tugboat M/V BETTY FEAGIN. The tug and accompanying coal barge were docked at a Tennessee Valley Authority (“TVA”) plant on the Green River. While a TVA operator lowered the haul wire, the wire broke apart, striking McQuay’s left lower leg. On September 24, 2014, Patton, an attorney with law firm Schroeder Maundrell Barbiere & Powers (“SMB&P”) boarded the boat and informed crewmembers that he represented IMS. He recorded crewmember’s statements regarding incident. TVA sought recorded statements through discovery; and IMS objected, claiming attorney-client privilege. In its brief, TVA asserted that the proffer during the July 10 hearing failed to show that attorney recorded crewmember statements “because of a subjective anticipation of litigation that was objectively reasonable.” TVA contended it showed crewmember statements were recorded in ordinary course of business and the defendant had a duty to release them. TVA argued the statements are ordinary rather than opinion work product and are discoverable, because they have substantial need for material. TVA asserted that IMS waived its claim of attorney-client privilege by failing to raise it in the beginning. IMS subsequently maintained that the proffer demonstrated that the statements are exempt from disclosure under attorney-client privilege because they are confidential communications from IMS’ employees to IMS’s attorney. These statements were made at direction of IMS’ corporate director. In response, TVA asserted that IMS failed to demonstrate the crewmembers were informed that they were providing the information for IMS to secure legal advice, and that the communications to counsel were confidential. TVA maintained that without the statements, they would be unable to discern how the crewmembers’ initial recollections of the incident might have changed due to fading memories. Conversely, IMS contended that crewmembers were sufficiently aware of the reasoning behind their questioning. Accordingly, the critical issue is whether attorney-client privilege applies to the recorded statements of the crew members. Because this case concerned a federal question, the court applied federal common law on privilege. Consequently, IMS, the party asserting attorney-client privilege, had the burden of demonstrating the applicability of the privilege to the recorded statements of the crewmembers. The court looked to eight elements of attorney client privilege: (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) unless the protection is waived. These elements apply to only a portion of the confidential communications that courts have deemed subject to attorney-client privilege. The court relied on the reasoning in Upjohn Co. v. United States, 449 U.S. 383, 394-96, 101 S. Ct. 677, 66 L. Ed. 2d 584 (1981) to determine the merits of the present case.  In Upjohn, the Supreme Court pointed out that it will frequently be mid and lower level employees who are beyond the control group of officers and agents that, by actions within the scope of their employment, will possess the relevant information needed by the corporation’s lawyer to adequately advise the client with respect to legal matters. The Supreme Court applied the attorney-client privilege to the confidential communications made by Upjohn’s mid and lower level employees to counsel for Upjohn because the communications were made at the direction of their superiors to secure legal advice from counsel. Relying upon the information provided during counsels’ proffer on July 10, 2018 and from the in camera review of crewmember statements, the magistrate held that the communications at issue were made by IMS employees to counsel for IMS at the direction of corporate superiors of IMS in order to secure legal advice from counsel. The judge found adequate information that the instructions were relayed to the other crewmembers and that they all were sufficiently aware they were being questioned by counsel with regard to the incident that took place on September 23. In addition, the court determined there was more than adequate information to conclude that each of the confidential communications made to counsel concerned matters within the scope of the crewmember’s duties and counsel for IMS took the appropriate steps to keep the communications confidential. Therefore, the magistrate held that the recorded crewmember statements are subject to the attorney-client privilege and must be protected against compelled disclosure. TVA’s motion for an order directing IMS to produce the recorded crewmember statements was DENIED.