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Carolina Casualty Insurance Co. v. Oahu Air Conditioning Service, Inc.

United States District Court, E.D. California

March 30, 2015



ALLISON CLAIRE, Magistrate Judge.

Pending before the court are cross-motions to compel by plaintiff Carolina Casualty Insurance Co. ("CCIC"), and defendant Pacific Commercial Services LLC ("PCS"). ECF Nos. 106 (PCS's motion) & 107 (plaintiff's motion). The motions came on for hearing on February 18, 2015, and were taken under submission. The court ordered the parties to file declarations and detailed privilege logs of the documents they were withholding, and ordered plaintiff to produce a certain settlement agreement to defendant PCS. ECF No. 111.


This is a lawsuit by plaintiff insurance company to get reimbursement of money it paid to settle claims against its insured, Smith Systems Transportation, Inc. ("Smith Systems"). The claims arose from a fire and hazardous waste spill from containers that Smith Systems had transported to a waste disposal site in Sacramento, California from San Jose, California. The claims were made by the City of Sacramento, the County of Sacramento and Clean Harbor Environmental Services ("Clean Harbor"). In addition, plaintiff reimbursed Smith for its cleanup expenses and indemnified it against additional personal injury damages.

Plaintiff sued (1) Pacific Commercial Services, LLC ("PCS"), which allegedly packed the hazardous waste into the containers, (2) Oahu Air Conditioning Service, Inc. ("Oahu"), which allegedly generated the hazardous waste and negligently packed it into the containers, and (3) Matson Navigation Company, Inc. ("Matson"), which allegedly transported the hazardous waste to California. In turn, defendant PCS filed a third-party complaint against Smith Systems and Clean Harbor, and defendant Oahu filed a third-party complaint against Smith Systems, Clean Harbor and Don Sozzi.


Plaintiff CCIC seeks to compel PCS to produce all documents referring or relating to all relationships, contracts, communications and agreements from January 1, 2006 to the present, between PCS and Oahu; all such communications and agreements between PCS and Matson; and all documents relating to the incident, the cleanup, PCS's defenses and contentions, and its third-party claims. ECF Nos. 110 at 17-23 & 110-1 at 2-39. Defendant PCS produced no documents in response to these RFPs. ECF No. 110 at 14. PCS asserted that the RFPs call for the production of documents "that are privileged or subject to the work product doctrine, including documents protected by the joint defense and common interest doctrines." ECF No. 17-23 & 110-1 at 2-39. PCS produced a "privilege log" of the documents it was withholding. However, pursuant to an earlier stipulation between the parties (ECF No. 34 ¶ 8), this "privilege log" contained only three entries, setting forth broad categories of documents. ECF No. 109-2 at 27.[1]

In addition, PCS stated that it had already produced responsive, non-privileged documents other than those that were already produced or were as readily available to plaintiff as they were to PCS. ECF No. 17-23 & 110-1 at 2-39. PCS narrowed the scope of documents it said it had produced, to those relating to "the collection, transport, or disposal of waste." CCIC has not argued here that this narrowing was improper, and so the court does not address it.

A. Joint Defense Privilege

Plaintiff moves to compel the production of documents that PCS has withheld under a claim of joint defense privilege. Plaintiff argues that PCS has the burden of establishing the existence of the privilege, and that it has not made the required showing.

1. The law

"The Ninth Circuit has long recognized that the joint defense privilege is an extension of the attorney-client privilege.'" United States v. Gonzalez, 669 F.3d 974, 978 (9th Cir. 2012) (quoting United States v. Henke, 222 F.3d 633, 637 (9th Cir. 2000)). "[N]o written agreement is required, and... a JDA may be implied from conduct and situation, such as attorneys exchanging confidential communications from clients who are or potentially may be codefendants or have common interests in litigation." Gonzalez, 669 F.3d at 979. Moreover, "the case law is clear that one party to a JDA cannot unilaterally waive the privilege for other holders." Gonzalez, 669 F.3d at 982.

Since the joint defense privilege is but an extension of the attorney-client privilege (and not a separate privilege), the party asserting it "has the burden of establishing the [existence of an attorney-client] relationship and the privileged nature of the communication.'" United States v. Graf, 610 F.3d 1148, 1156 (9th Cir. 2010) (emphasis in text) (quoting United States v. Ruehle, 583 F.3d 600, 607 (9th Cir. 2009)).

Typically, an eight-part test determines whether information is covered by the 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 be waived.

Ruehle, 583 F.3d at 607-08 (quoting In re Grand Jury Investigation, 974 F.2d 1068, 1071 n. 2 (9th Cir. 1992)).

2. PCS's showing regarding Oahu

PCS has now submitted a Supplemental Declaration of Christopher T. Johnson, an attorney for PCS, together with a privilege log that identifies the documents being withheld pursuant to the joint defense privilege and the work product doctrine. ECF No. 116 ("Johnson Privilege Log Decl."). The declaration establishes that PCS and Oahu "executed a written, confidential Joint Defense Agreement ("JDA") on December 11, 2013." Id. ¶ 4. According to the declaration, "communications between Oahu and PCS regarding this litigation were to be treated as confidential and protected by a joint defense privilege." Id. The agreement "references and includes communications made prior to its execution, that both parties made in confidence and intended to be protected by the JDA."

The declaration further establishes that the withheld documents that relate to communications between PCS and Oahu, including those that pre-date the JDA, are identified in the privilege log, are the subject of the JDA, "relate exclusively to defending against Plaintiff's claims" here, were made between lawyers for PCS and Oahu, were made in confidence and that PCS's lawyers did not share these communications to anyone other than counsel for Oahu. Id., ¶¶ 5-8. These sworn assertions facially establish the existence of the joint defense privilege.

The court notes that PCS does not assert that Oahu's lawyers kept the communications confidential, and it has not provided a declaration from Oahu's counsel so asserting. It does not appear that such a declaration is necessary however, since (1) as a factual matter, Oahu agreed to keep the communications confidential, id., ¶ 4, and no evidence has been presented that it failed to do so, and (2) as a legal matter, Oahu cannot unilaterally waive the protection for PCS. Gonzalez, 669 F.3d at 982.

3. PCS's showing regarding Matson

PCS also asserts the joint defense privilege for communications it had with, or shared with, Matson's counsel. See Johnson Privilege Log Decl., Exh. A ¶¶ 2-16, 15, 20, 26-35, 76, 126-27, 129, 131, 160-61, 194-95, 196-201, 203-05, 209-13, 217-28, 232-40, 243-51.[2] However, PCS has made no showing that Matson was participating in the joint defense agreement, or had any intention of keeping its communications with PCS's counsel confidential. PCS's counsel asserts that "my communications with Matson were made in confidence, " and goes on to state that he, PCS's counsel, "intended these communications to be in confidence." Johnson Privilege Log Decl. ¶ 9. PCS does not assert, nor has it offered a declaration from Matson, that Matson intended the communications to be in confidence. To the contrary, the privilege log shows that Matson's counsel received communications authored by PCS's counsel and by Oahu's counsel regarding joint defense issues and the joint defense agreement, but that "Matson did not execute the JDA." See Johnson Privilege Log Decl. ¶ 9 & Exh. A ¶¶ 26-35.

4. Resolution

PCS has made a facial showing that those of its listed communications with Oahu, that were not shared with Matson, are protected from disclosure by the joint defense privilege. Accordingly, plaintiff CCIC's motion to compel production of those documents will be denied. The motion will be denied without prejudice, however, since plaintiff did not have the benefit of the detailed privilege log, or PCS's referenced declaration, at the time it made its motion.

PCS has failed to make a facial showing that the above listed communications with, or shared with, Matson, are protected by the joint defense privilege or the work produce doctrine. Accordingly, plaintiff's motion ...

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