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In re Premera Blue Cross Customer Data Security Breach Litigation

United States District Court, D. Oregon

October 27, 2017



          Kim D. Stephens, Christopher I. Brain, Chase C. Alvord, and Jason T. Dennett, Tousley Brain Stephens; Keith S. Dubanevich and Steve D. Larson, Stoll Stoll Berne Lokting & Shlachter; Tina Wolfson, Ahdoot and Wolfson; James Pizzirusso, Hausfeld LLP; and Karen Hanson Riebel, Lockridge Grindal Nauen Of Attorneys for Plaintiffs.

          Paul G. Karlsgodt, BakerHostetler LLP; James A. Sherer, BakerHostetler LLP; Daniel R. Warren and David A. Carney, BakerHostetler LLP, and Darin M. Sands, Lane Powell PC, Of Attorneys for Defendant Premera Blue Cross.

          Michael H. Simon, United States District Judge.

         Plaintiffs bring this putative class action against Defendant Premera Blue Cross (“Premera”), a healthcare benefits servicer and provider. On March 17, 2015, Premera publicly disclosed that its computer network had been breached. Plaintiffs allege that this breach compromised the confidential information of approximately 11 million current and former members, affiliated members, and employees of Premera. The compromised confidential information includes names, dates of birth, Social Security Numbers, member identification numbers, mailing addresses, telephone numbers, email addresses, medical claims information, financial information, and other protected health information (collectively, “Sensitive Information”). According to Plaintiffs, the breach began in May 2014 and went undetected for nearly a year. Plaintiffs allege that after discovering the breach, Premera unreasonably delayed in notifying all affected individuals. Based on these allegations, among others, Plaintiffs bring various state common law claims and state statutory claims.

         Before the Court is Plaintiffs' motion to compel. Plaintiffs request an order requiring Premera to produce certain documents, described by category, that Premera has withheld based on assertions of attorney-client privilege or protection under the attorney work-product doctrine. For the reasons discussed below, Plaintiffs' motion is granted in part and denied in part.


         A. Applicable Law

         Plaintiffs originally argued that Oregon law, as the law of the forum state, applies to the parties' dispute regarding the scope of the attorney-client privilege. Premera responds that Washington law applies. In supplemental briefing, Plaintiffs concede that there is no material conflict between Oregon and Washington law on the specific issues of attorney-client privilege relevant to the pending motion. Thus, Plaintiffs do not oppose the application of Washington law. The parties also agree that federal law governs the work-product doctrine in federal court.

         B. Attorney-Client Privilege

         Washington law recognizes that “in our open civil justice system, parties may obtain discovery regarding any unprivileged matter that is relevant to the subject matter of the pending action” and that the attorney-client privilege is “an exception to the general duty to disclose.” Newman v. Highland Sch. Dist. No. 203, 186 Wash.2d 769, 777 (2016). “A party claiming that otherwise discoverable information is exempt from discovery on grounds of the attorney-client privilege carries the burden of establishing entitlement to the privilege.” Id. In Newman, the Washington Supreme Court explained the attorney-client privilege as follows:

Washington's attorney-client privilege provides that “[a]n attorney or counselor shall not, without the consent of his or her client, be examined as to any communication made by the client to him or her, or his or her advice given thereon in the course of professional employment.” RCW 5.60.060(2)(a). But the attorney-client privilege does not automatically shield any conversation with any attorney. To qualify for the privilege, communications must have been made in confidence and in the context of an attorney-client relationship. It is a narrow privilege and protects only communications and advice between attorney and client. The privilege extends to corporate clients and may encompass some communications with lower level employees, as both the United States Supreme Court and this court have recognized.
The attorney-client privilege does not shield facts from discovery, even if transmitted in communications between attorney and client. Rather, only privileged communications themselves are protected in order to encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice. The attorney-client privilege recognizes that sound legal advice or advocacy serves public ends and that such advice or advocacy depends upon the lawyer being fully informed by the client. However, because the privilege sometimes results in the exclusion of evidence which is otherwise relevant and material, contrary to the philosophy that justice can be achieved only with the fullest disclosure of the facts, the privilege cannot be treated as absolute; rather, it must be strictly limited to the purpose for which it exists.

Id. at 777-78 (quotation marks and citations omitted) (alteration in original).

         It is well accepted that “[t]he attorney client privilege is limited to information related to obtaining [legal] advice.” Mechling v. City of Monroe, 152 Wash.App. 830, 853 (2009). The privilege “applies to any information generated by a request for legal advice, including documents created by clients with the intention of communicating with their attorneys.” Doehne v. EmpRes Healthcare Mgmt., LLC, 190 Wash.App. 274, 281 (2015). It does not, however, “protect documents that are prepared for some other purpose than communicating with an attorney.” Morgan v. City of Fed. Way, 166 Wash.2d 747, 755 (2009) (quotation marks omitted).

         Thus, “a document prepared for a purpose other than or in addition to obtaining legal advice and intended to be seen by persons other than the attorney, does not become subject to the privilege merely by being shown to the attorney.” Mechling, 152 Wash.App. at 853 (emphasis added).

         Further, “if a portion of a document is not covered by the attorney-client privilege, under the civil rules of discovery it must be disclosed.” Id.

         In evaluating assertions of the attorney-client privilege in a corporate setting, the Washington Supreme Court has adopted the U.S. Supreme Court's “flexible” approach set forth in Upjohn Co. v. United States, 449 U.S. 383 (1981). See Newman, 186 Wash.2d at 779. This analysis allows non-managerial employees to qualify as the “client” for purposes of privilege protection, based on considerations including:

whether the communications at issue (1) were made at the direction of corporate superiors, (2) were made by corporate employees, (3) were made to corporate counsel acting as such, (4) concerned matters within the scope of the employee's duties, (5) revealed factual information not available from upper-echelon management, (6) revealed factual information necessary to supply a basis for legal advice, and whether the communicating employee was sufficiently aware that (7) he was being interviewed for legal purposes, and (8) the information would be kept confidential.

Id. at 778-779 (quotation marks omitted). The corporate attorney-client privilege, however, does not extend to former employees. Id. at 779.

         C. Work-Product Doctrine

         The work-product doctrine “is not a privilege but a qualified immunity protecting from discovery documents and tangible things prepared by a party or his representative in anticipation of litigation.” Admiral Ins. Co. v. U.S. Dist. Court for the Dist. of Ariz., 881 F.2d 1486, 1494 (9th Cir. 1989) (citing Fed.R.Civ.P. 26(b)(3)). Documents or the compilation of materials prepared by agents of the attorney in preparation for litigation may be covered by the work-product doctrine. U.S. v. Richey, 632 F.3d 559, 567 (9th Cir. 2011). To qualify for work-product protection, materials must: “(1) be prepared in anticipation of litigation or for trial and (2) be prepared by or for another party or by or for that other party's representative.” Id. (quotation marks omitted).

         When materials are prepared for a “dual purpose, ” meaning they are not prepared exclusively for litigation, then the “because of” test applies. Id. at 568. Under that test, “[d]ual purpose documents are deemed prepared because of litigation if ‘in light of the nature of the document and the factual situation in the particular case, the document can be fairly said to have been prepared or obtained because of the prospect of litigation.'” Id. Courts, however, must view “the totality of the circumstances and determine whether the document was created because of anticipated litigation, and would not have been created in substantially similar form but for the prospect of litigation.” Id. (quotation marks omitted).

         The work-product doctrine also affords special or heightened protection to materials that reveal an attorney's mental impressions and opinions, i.e., “opinion” or “core” work product. Admiral Ins. Co., 881 F.2d at 1494; Fed.R.Civ.P. 26(b)(3)(B). Work-product that does not rise to the level of opinion or core work product may be ordered produced to an opposing party upon a showing of substantial need for the information or that the information cannot be otherwise obtained without undue hardship. Admiral Ins. Co., 881 F.2d at 1494; Fed R. Civ. P. 26(b)(3)(A)(ii). To obtain the opinion or core work product, however, an opposing party must show that the mental impressions of counsel are at issue in the case and the need for the material is compelling. Holmgren v. State Farm Mutual Auto. Ins. Co., 976 F.2d 573, 577 (9th Cir. 1992).

         The primary purpose of the work-product doctrine is to “prevent exploitation of a party's efforts in preparing for litigation.” Admiral Ins. Co., 881 F.2d at 1494. Work-product protection, like the ...

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