Does a conversation with an in-house attorney always carry with it the protection of the attorney-client privilege? The answer is a resounding “no,” according to a recent federal appellate decision covering a range of issues arising from a disputed privilege log. In Equal Emp’t Opportunity Comm’n v. BDO USA, L.L.P., --- F.3d ---, 2017 WL 1746035 (5th Cir. May 4, 2017), the US Court of Appeals for the Fifth Circuit found that a magistrate judge had applied an improper legal standard in determining whether a party’s privilege log adequately described its bases for claims of attorney-client privilege. The decision provides a useful framework for preparing a privilege log and serves as a cautionary tale for parties attempting to withhold questionably privileged documents.
The underlying dispute in EEOC v. BDO arose from a charge filed with the EEOC by the employer’s former Chief Human Resources Officer, Hang Bower. Ms. Bower alleged violations of Title VII and the Equal Pay Act for gender discrimination, retaliation and a hostile work environment. As part of its investigation, the EEOC issued a subpoena. In response, the employer produced a privilege log listing 278 withheld documents. The withheld documents included (i) emails Ms. Bower exchanged with members of the employer’s in-house legal team while serving in her human resources role, (ii) similar emails other employees exchanged with the in-house legal team, (iii) emails on which in-house counsel was only copied, and (iv) emails exchanged between non-attorney employees regarding legal advice. The EEOC challenged the privilege log and the employer separately sought a protective order to prevent Ms. Bower from disclosing any communications she had with the employer’s in-house lawyers.
During a hearing before a magistrate judge in the Southern District of Texas, the magistrate implied—but did not directly hold—that the burden was on the EEOC to show that the privilege log was insufficient. The judge rejected the EEOC’s request for an in camera review of the 278 documents, and said that “anything that comes out of the lawyer’s mouth is legal advice.” The magistrate enforced the privilege log and denied the motion for a protective order.
On appeal, the Fifth Circuit summarily rejected the magistrate judge’s decision, finding that the judge’s application of law to the privilege log was incorrect, and that the log was lacking in at least three respects: (1) vague and incomplete entries; (2) failure to distinguish between legal and business advice; and (3) failure to establish whether privilege was maintained on email chains. The overall problem the Fifth Circuit found was an abject lack of detail in the log entries that prevented it from determining whether the employer had a real basis for asserting privilege for each of the 278 withheld documents.
First, the court held that, despite the magistrate’s implicit statement to the contrary, the proponent of the privilege log bears the burden of proof on whether each document is privileged. To satisfy that burden, there must be enough detail for the court and the adversary to understand whether the document is privileged. The entries in the privilege log lacked the kind of detail that would allow such a determination. Specifically, the Fifth Circuit pointed out that “numerous log entries fail to identify a sender, recipient, date, or . . . substantive description of the subject matter.” Simply stating that the email sought or provided “legal advice” was not enough.
Second, the court found that the employer failed to draw a line between legal and business advice, instead lumping together any communications with attorneys and calling them privileged. Once again contradicting the magistrate’s statement on the record, the court found that there is “no presumption that a company’s communications with counsel are privileged.” This includes emails with copies sent to counsel, emails between non-attorneys describing legal advice, and even emails to or from an in-house lawyer. To satisfy its burden, the employer needed to provide more detail and explanation of why each document was privileged, particularly in light of Ms. Bower’s sworn affidavit that the employer had directed her to copy counsel on a host of non-privileged emails.
Third, the Fifth Circuit held that the privilege log failed to explain when, in the context of email chains, privilege had been waived or broken. For example, if a person outside the scope of the intended confidentiality received the email via copy or forward, privilege could be waived. The privilege log did not provide enough details relating to when, if ever, that waiver occurred or was contemplated, and the court found that the lower court erred in failing to consider that point. Separately, the court held that the magistrate similarly erred by applying the wrong legal standards to the EEOC’s proposed protective order.
The Fifth Circuit remanded the matter back to the trial court, with instructions to apply the attorney-client privilege exception “narrowly and with particularity.” The court also noted that an in camera review was probably necessary under the circumstances.
In preparing a privilege log, it is important to provide the kind of detail not evident in the log challenged in EEOC v. BDO. Parties should be mindful of their jurisdiction, however, because as the Fifth Circuit noted in a footnote, “Rule 26 does not create a requirement as to what information must be included in a privilege log and the adequacy of a privilege log is determined on a case-by-case basis, [so] there is some variation as to the level of detail courts have found to be sufficient.” Regardless of jurisdiction, it is safe to assume that not all communications with counsel are privileged. Furthermore, a privilege log must contain adequate detail for an adversary and a court to ascertain the basis for any asserted privilege.