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Michael E. Taylor, et al v. Waddell & Reed

May 20, 2011


The opinion of the court was delivered by: Hon. William V. Gallo U.S. Magistrate Judge



On or about February 4, 2011, Plaintiffs' counsel sent letters to Defendant Waddell & Reed's (hereafter "Defendant" or "Waddell") former and present Financial Advisors. Waddell's current Financial Advisors were contacted via use of Defendant's e-mail system.*fn1 Waddell's current Financial Advisors were contacted pursuant to a Court order entered on January 20, 2011. The letters informed the recipients of the instant lawsuit and sought further information regarding the lawsuit. The letters invited the recipi-ents to contact Plaintiffs' counsel if the recipients wanted to learn more about the lawsuit.

Waddell has sought from Plaintiffs the responses from the letter's recipients. (Waddell's Request for Production of Documents, Set 2, No. 1). Plaintiffs have refused to produce to Defendant the responses to the letters, claiming that the responses are protected by the attorney-client privilege.


Given the discovery and briefing schedule for Plaintiffs'

Motion for Class Certification, the Court did not require formal briefing of this matter. Instead, it opted for counsel to submit more efficient informal letter briefing. The parties submitted their letter briefs on May 3 and 5, 2011. A telephonic conference was held on May 16, 2011 at which time the parties had the opportunity to argue their respective positions.


It well settled under California law that the attorney-client privilege applies to confidential communications during preliminary negotiations with an attorney even if employment of the attorney is declined. Rosso, Johnson & Ebersold v. Superior Court, 191 Cal. App. 3d 1514, 1518 (1987)[citing Estate of Dupont, 60 Cal. App. 2d 276, 287-288 (1943)]. "The fiduciary relationship existing between lawyer and client extends to preliminary consultations by a prospective client with a view to retention of the lawyer, although actual employment does not result." People ex. rel. Department of Corps. v. Speedee Oil Changes Systems, 20 Cal. 4th 1135, 1147-1148 (1999)[citing Westinghouse Elec. Corp. v. Kerr-McGee Corp., 580 F.2d 1311, 1319 (7th Cir. 1978)]. This legal principle is further supported by California Evidence Code § 951, which states in pertinent part: "...(C)lient means a person who, directly or through an authorized representative, consults a lawyer for the purpose of retaining the lawyer or securing legal service or advice from him in his professional capacity..." (emphasis added).

Therefore, it is axiomatic that communications by prospective clients with a view toward obtaining legal services are protected in California by the attorney-client privilege regardless of whether they ever retain the attorney. Beery v State Bar of Cal., 43 Cal. 3d 802 (1987). Both parties accept this basic proposition. Here, the question is whether responses to Plaintiffs' attorneys' letter can be considered a communication by a prospective client who was considering whether to be represented by Plaintiffs' attorneys or to opt into the lawsuit.*fn2

First, the Court must start with Plaintiffs' attorneys' letter to the putative class members:

After an introductory opening paragraph, the letter states "[w]e are in the process of gathering additional information and would like to ask you a few short questions..." The letter concludes by stating that "[i]f you or anyone you know would like to learn more about this case please go to [Plaintiffs' attorneys' website], send an e-mail to [Plaintiffs' attorneys' e-mail address] or call [a phone number]." A close reading of the letter "does not make clear that its purpose was to solicit responses only from persons who wanted to be represented by [Plaintiffs' attorney."] U.S. Equal Employment Opportunity Commission v. AMB Industries Inc., 261 F.R.D. 503, 509 (E.D. CA 2009). To the contrary, a fair reading of the letter clearly suggests that Plaintiffs' attorneys were seeking information and also making themselves available to answer any questions about the lawsuit. The letter does not state directly, or even indirectly, that Plaintiffs' attorneys are seeking to establish an attorney-client relationship or are looking for clients. Nor does the letter suggest to the recipient that any response to it will be construed as a request for representation. Further, the letter does not indicate or promise that the recipients' responses will be kept confidential. "[T]he mere fact that the letter and questionnaire was sent to a group of potential claimants (and/or) witnesses does not suffice to create the privileged professional relationship." Id. at 508.

The Court contrasts the letter in this case with other plaintiff attorney-initiated letters, questionnaires, and solicitations via websites in putative and certified class actions where courts have held responses were in fact protected by the attorney-client privilege. In Vodak v. City of Chicago, 2004 WL 783051 at *2 (N.D. IL 2004), the questionnaire in that case specifically stated that any information provided would be "held in strict confidence and used only by the attorneys providing legal representation."

In Hudson v. General Dynamics Corp, 186 F.R.D. 271, 276-277 (D. CT 1999), the Court determined that a questionnaire completed by existing clients or those "attempting to become prospective clients" was privileged and protected from discovery while questionnaires completed by former employees of defendant "not for the purpose of obtaining legal advice, but solely to serve as witness statements, and were completed prior to the existence of or any ...

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