Inadequacy of Log Not Waiver of Privilege

Tuesday, December 8, 2015

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Inadequacy of Log Not Waiver of Privilege—Court

By KENNETH OFGANG, Staff Writer

A party’s failure to provide an adequate privilege log in response to a trial court order was not a waiver of the attorney-client privilege or the right to protect attorney work product, the Fourth District Court of Appeal has ruled.

Div. Three ruled Friday that Orange Superior Court Judge Kirk Nakamura was in error when he ruled that the Catalina Island Yacht Club and its directors had waived their claims of privilege by providing inadequate support for the claims, in a dispute with a former director.

“When confronted with a deficient privilege log that fails to provide the necessary information to rule on attorney-client and work product objections, a trial court may order the responding party to provide a further privilege log that includes the necessary information to rule on those objections, but may not order the privileges waived based on deficiencies in the privilege log because serving a deficient privilege log, or even failing to serve a privilege log, is not one of the three statutorily-authorized methods for waiving the attorney-client privilege,” Justice Richard Aronson explained.

Possible Sanctions

The court may impose monetary sanctions, or issues, evidentiary, or even terminating sanctions, Aronson added. But Nakamura exceeded the court’s jurisdiction when he ruled that the defendants had waived their protections and had to disclose the 167 emails identified in the log to attorneys for the plaintiff, Timothy Beatty.

Beatty’s complaint alleges that the defendants conspired to remove him from the board and oust him from the club because he exposed improper sewage dumping, questionable accounting, and suspicious weapons possession. He pled claims for libel, slander, invasion of privacy, and intentional infliction of emotional distress.

“The individual board members…plaintiff is informed and believes, decided to oust Beatty from the club because of his position that the club should be transparent with regard to the issues relating to the sewer discharge, should be forthcoming about problems with the point of sale system and the club’s accounting, and should comply with applicable law regarding [employees’] possession of weapons,” Beatty——owner of Beatty & Company Computing, Inc.—said in his complaint.

Privilege Arguments

In response to a request for production, the defense identified 17 “communications” it said it would not produce because they were privileged, identifying the date of each and explaining that it was between “counsel for Defendants and Defendants.”

Beatty’s counsel moved to compel production, based on the inadequacy of the response. The parties eventually agreed that the defendants would present a supplemental privilege log identifying the sender and recipients of each communication.

In September of last year, the defendants served the supplemental log, increasing the number of identified documents to 36 and explicitly stating for the first time that all of the communications were emails. The plaintiff accused the defendants of withholding documents and moved for sanctions, after which the defendants produced another supplemental log increasing the number of withheld emails to 167, which Beatty moved to compel the production of.

In May of this year, Nakamura ordered that all of the emails be produced within 10 days, and imposed $1,140 in monetary sanctions. He said the most recent log failed to contain “[e]ven a minimal statement…as to why the subject emails may be protection from disclosure.”

The plaintiffs challenged the order in a writ petition, and the Court of Appeal granted a stay and order to show cause.

Abuse of Discretion

Aronson, in his opinion Friday, said the trial judge’s order was an abuse of discretion.

Under the Evidence Code and the Civil Discovery Act, the justice explained, the attorney-client privilege can only be waived by disclosure “in a nonconfidential context,” by “failing to claim the privilege in a proceeding in which the holder has the legal standing and opportunity to do so,” or by failure to assert it in a timely response to an inspection demand.

“Failing to serve a privilege log or serving an inadequate privilege log does not fall into any of these three methods,” he said.

The proper response when a privilege log is not served, or when an inadequate log is served, is for the court to order the service of a log or supplemental log, which may be accompanied by monetary sanctions, the justice explained. If the party then provides an inadequate log, the court may, upon further motion, impose evidentiary, issue, or “even terminating” sanctions, as well as further monetary sanctions, he added.

Nakamura’s order, the justice wrote, was a “forced waiver” of privilege and beyond his authority, also Aronson agreed with the trial judge that the supplemental log was inadequate.

The panel directed the trial court to grant the plaintiff’s motion to compel a supplemental privilege log, and to impose additional monetary sanctions on the defendants in an appropriate amount.

The case is Catalina Yacht Club v. Superior Court (Beatty), 15 S.O.S. 5835.