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Cave Consulting Group, Inc. v. Optuminsight, Inc.

United States District Court, N.D. California

November 6, 2017





         In accordance with the procedures set by this Court for raising discovery disputes, Plaintiff Cave Consulting Group, Inc. ("CCGroup") and OptumInsight, Inc. have met and conferred in person and filed a joint letter brief raising six issues. See generally Joint Letter (dkt. 209). The Court heard argument on November 3, 2017, and now resolves those disputes as follows.[1]


         A. Procedural Background

         On October 25, 2016, the Court issued an order granting in part and denying in part CCGroup‘s motion to compel documents based on waiver of the attorney-client privilege and the work product doctrine. See generally Order Re Mot. to Compel (dkt. 138).[2] The Court held that OptumInsight‘s predecessor Symmetry, Inc. waived attorney-client privilege as to certain topics by offering in a USPTO reexamination proceeding its attorney‘s affidavit regarding the conception date of U.S. Patent No. 5, 835, 897 (the "‘897 patent") and whether Symmetry‘s 1994 response to a request for proposal ("RFP") from Aetna constituted an invalidating offer for sale. Id. at 16. The Court determined that the waiver continued as to documents created and communications occurring after the date of disclosure, and that it applied to OptumInsight after its merger with Symmetry in 2007, but set a cutoff date of April 28, 2014 to allow OptumInsight to defend itself fairly and effectively in the case at hand. Id. at 16, 18-19.

         With respect to work product protection, the Court relied on the Federal Circuit‘s explanation of how waiver applies to that doctrine: "'[W]ork product waiver is not a broad waiver of all work product related to the same subject matter like the attorney-client privilege. Instead, work-product waiver only extends to "factual" or "non-opinion" work product concerning the same subject matter as the disclosed work product.‘" Id. at 13 (quoting In re EchoStar Commc'ns Corp., 448 F.3d 1294, 1302 (Fed. Cir. 2006)). Applying that rule to the case at hand, the Court held as follows:

[Work product] protection is waived by Symmetry‘s disclosure of the process by which [its counsel] Rosenbaum reached his legal conclusion that the ‘897 patent was not subject to a statutory bar as a result of the Aetna RFP Response and "decided to file the information . . . in the . . . Information Disclosure Statement." See Brophy Decl. Ex. B (Rosenbaum Aff.) ¶¶ 5-8. Where Symmetry presented its counsel‘s investigation and legal conclusion as a sword to persuade the USPTO to rule in its favor in the reexamination, it cannot also rely on the work product doctrine as a shield to bar discovery of documents prepared or gathered during that investigation and that serve as a basis for that legal conclusion, nor other material related to the same subject matter. Cf. EchoStar, 448 F.3d at 1304 (discussing waiver of work product protection where a client asserts an advice of counsel defense). Such waiver is limited to the same scope as the attorney-client privilege waiver discussed above, including the cutoff date of April 28, 2014. Moreover, work product protection is waived only as to "'factual‘ or 'non-opinion‘ work product"; there is no waiver as to counsel‘s "mental impressions, conclusions, opinions, or legal theories." See Id. at 1302 (citation omitted).

Id. at 18 (ellipses in original). The parties‘ present dispute focuses on the last sentence of the passage above, addressing the distinction between "fact" and "opinion" work product.

         OptumInsight moved for reconsideration of that order, or in the alternative for leave to file an interlocutory appeal. The Court denied that motion as to reconsideration but granted leave to appeal, and issued an amended order identical to the first order on the motion to compel except for the addition of a paragraph finding the matter suitable for interlocutory appeal pursuant to 28 U.S.C. § 1292. See Order Denying Leave to File Mot. for Reconsideration (dkt. 160);[3] Am. Order Re Mot. to Compel (dkt. 161)[4] at 22. The Federal Circuit disagreed with this Court‘s conclusion that § 1292 applied and therefore dismissed the appeal, but noted that its dismissal was without prejudice to OptumInsight petitioning for mandamus. See Cave Consulting Grp., Inc. v. OptumInsight, Inc., No. 2017-108 (Fed. Cir. Feb. 24, 2017) (unpublished, available in the record of this case at dkt. 168). OptumInsight subsequently petitioned for mandamus, arguing primarily that this Court erred in applying Symmetry‘s waiver to OptumInsight after the two companies merged, and although the Federal Circuit held mandamus review to be appropriate, it held that this Court did not abuse its discretion and therefore declined to grant relief. In re OptumInsight, Inc., No. 2017-116, 2017 U.S. App. LEXIS 13483 (Fed. Cir. July 20, 2017) (available in the record of this case at dkt. 200). The Federal Circuit‘s order does not address the scope of waiver of work product protection separately from waiver of attorney-client privilege, nor does it address the distinction between "fact" and "opinion" work product. See id.

         B. Present Arguments

         In the joint letter now before the Court, CCGroup argues that "OptumInsight contends that it is entitled to continue withholding all post-merger attorney-client communications because those documents constitute opinion work product, " a position that CCGroup contends conflicts with OptumInsight‘s prior representations regarding the vast scope of documents affected by the Court‘s previous order. Joint Letter at 1. Based on EchoStar, CCGroup argues that OptumInsight should be required to produce its attorneys‘ opinion letters and similar documents so long as they were disclosed to the client (OptumInsight), treating only documents maintained internally by OptumInsight‘s counsel and not disclosed to OptumInsight as "opinion" work product exempt from the disclosure requirement. Id. at 1-2.

         OptumInsight asserts that it in fact produced "approximately 1400 previously-privileged pages" before the Court issued its order and "more than 500 additional pages" in response to the Court‘s order-of a total production of more than 1.4 million pages-and that CCGroup has not challenged any specific privilege log entries for documents that OptumInsight continues to withhold. Id. at 2. OptumInsight contends that "the Court‘s citation of Echostar [sic] [does not] overrule[] decades of law establishing the lines between factual and opinion work product, " and that "EchoStar does not change . . . Ninth Circuit law." Id. at 2-3.[5] Specifically, OptumInsight relies on the Ninth Circuit‘s decision in Republic of Ecuador v. Mackay, 742 F.3d 860 (9th Cir. 2014), where that court stated that "'"[o]pinion work product" represents the core types of work product protected under Hickman, namely an attorney‘s mental impressions, conclusions, opinions or legal theories developed in anticipation of litigation‘" and that such work product "'is virtually undiscoverable.‘" Joint Letter at 2 (quoting Republic of Ecuador, 742 F.3d at 869 n.3).

         C. Analysis

         As stated in the Court‘s previous order, waiver of work product protection "occurs only 'where disclosure of the otherwise [protected] documents is made to a third party, and that disclosure enables an adversary to gain access to the information.‘" Am. Order Re Mot. to Compel at 13 (quoting Nidec Corp. v. Victor Co. of Japan, 249 F.R.D. 575, 578 (N.D. Cal. 2007)). In such circumstances, "'work-product waiver only extends to "factual" or "non-opinion" work product concerning the same subject matter as the disclosed work product.‘" Id. (quoting EchoStar, 448 F.3d at 1302).

         The distinction between "fact work product" and "opinion work product" is perhaps most commonly applied in the context of Rule 26(b)(3) of the Federal Rules of Civil Procedure, which codifies work product protection but allows for discovery of protected material on a showing of substantial need, so long as the court "protect[s] against disclosure of the mental impressions, conclusions, opinions, or legal theories of a party‘s attorney or other representative concerning the litigation." Fed.R.Civ.P. 23(b)(3). The "virtually undiscoverable" language on which OptumInsight now relies from Republic of Ecuador derives from a case considering that doctrine, and holding that opinion work product is "virtually undiscoverable" based on a showing of need. See Dir., Office of Thrift Supervision v. Vinson & Elkins, LLP, 124 F.3d 1304, 1307 (D.C. Cir. 1997) (citing Fed.R.Civ.P. 26(b)(3); Upjohn Co. v. United States, 449 U.S. 383, 401-02 (1981)); see also Upjohn, 449 U.S. at 401-02 (also considering the types of documents that can be obtained based on a showing of need); Republic of Ecuador, 742 F.3d at 869 n.3 (quoting United States v. Deloitte LLP, 610 F.3d 129, (D.C. Cir. 2010) (also considering the substantial need test and in turn quoting Vinson & Elkins)).[6] It is not clear from Republic of Ecuador and similar authorities that the same rule holds true where a party has waived work product protection as to certain subject matter.

         A divide between fact and opinion work product has also been adopted in cases, like here, considering the scope of waiver. EchoStar, cited and relied on by this Court‘s previous order, was one such case, stating that "work-product waiver only extends to 'factual‘ or 'non-opinion‘ work product concerning the same subject matter as the disclosed work product." See 448 F.3d at 1302. The ...

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