United States District Court, D. Oregon, Portland Division
DULCICH, INC., an Oregon corporation, d/b/a Pacific Seafood Group, Plaintiff,
USI INSURANCE SERVICES NATIONAL, INC., a North Carolina corporation, f/k/a Wells Fargo Insurance Services USA, Inc., Defendant.
OPINION AND ORDER
YIM YOU UNITED STATES MAGISTRATE JUDGE
the court is defendant USI Insurance Services National,
Inc.'s motion to compel the production of unredacted
attorney's fee invoices that plaintiff Dulcich, Inc.
incurred in a separate action. Defendant brought the motion
informally under this court's pretrial order. See Minutes
of Proceedings, ECF #16. This court resolved several other
discovery disputes but requested additional briefing on the
issue of whether plaintiff must produce unredacted
attorney's fee invoices from the underlying litigation.
Minutes of Proceedings, ECF #21; Official Transcript 38, ECF
#26. The court has reviewed the parties' written
submissions and, for the reasons set forth below,
defendant's motion is granted.
2016, plaintiff brought an action for breach of insurance
contract in this district against its primary and umbrella
insurers. See Dulcich, Inc. v. Alterra Excess &
Surplus Insurance Co., No. 16-cv-00305 (D. Or.)
(“underlying litigation”). Plaintiff incurred
approximately $1 million in attorney's fees litigating
that action, which ultimately settled. Id.,
Stipulation for Dismissal 1-2 (ECF #92) (dismissing all
claims with prejudice and without attorney's fees or
costs under FRCP 41(a)(1)).
plaintiff seeks to recover those attorney's fees as
damages in this action. Compl. ¶ 30, ECF #1. In Request
No. 10, defendant seeks “[a]ll invoices for the
attorney fees you allege you incurred in paragraph 30 of the
complaint.” Defendant's First Set of Interrogs. and
Request for Production, Decl. of Reed Morgan, Ex. 9, at 8,
ECF #19-9. Plaintiff objected on the grounds of work-product
doctrine and attorney-client privilege,  but nonetheless
produced redacted billing invoices that it received from its
prior counsel in the underlying litigation. Pl.'s Letter
at 2-3 (February 6, 2019), Decl. of Reed Morgan, Ex. 1, ECF
#23-1; Pl.'s Objs. and Resps. to Def.'s First Set of
Interrogs. 8, Decl. of Timothy Snider, Ex. 1, ECF #25.
represents that it did not redact nonprivileged information,
that is, “the identity of the client, the amount of the
fee, the identification of payment by case file name, and the
general purpose of the work performed.” United
States v. Amlani, 169 F.3d 1189, 1195 (9th Cir. 1999)
(quoting Clarke v. American Commerce Nat'l Bank,
974 F.2d 127, 129 (9th Cir. 1992)). However, it redacted
privileged information, that is, information that would
“reveal the motive of the client in seeking
representation, litigation strategy, or the specific nature
of the services provided, such as researching particular
areas of law.” Id. (quoting Clarke, 974 F.2d
this is a diversity action, the court applies the substantive
law of the forum state, Oregon. Home Indem. Co. v. Lane
Powell Moss & Miller, 43 F.3d 1322, 1326 (9th Cir.
1995). In Oregon, “[a] client has a privilege to refuse
to disclose and to prevent any other person from disclosing
confidential communications made for the purpose of
facilitating the rendition of professional legal services to
the client. . . .” ORS 40.225(2) (alternatively known
as Rule 503).
The attorney-client privilege is one of the oldest and most
widely recognized evidentiary privileges. The purpose of the
privilege is 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.
Longo v. Premo, 355 Or. 525, 533 (2014) (internal
citations, quotations, and alterations omitted). “[T]he
burden of proving that the attorney-client privilege applies
rests . . . with the party asserting it.” Weil v.
Inv./Indicators, Research & Mgmt., Inc., 647 F.2d
18, 25 (9th Cir. 1981); see also Goldsborough v. Eagle
Crest Partners, Ltd., 105 Or.App. 499, 503 (1991),
aff'd, 314 Or. 336 (1992) (citing Weil); Groff v.
State Indus. Acc. Comm'n, 246 Or. 557, 565 (1967)
(“The burden is on him who seeks its invocation to show
that both the one asserting a privilege and the nature of the
testimony offered are within the ambit of the statute
according the privilege.”).
the attorney-client privilege is not absolute.” Longo,
355 Or. at 533. The Oregon Supreme Court has not addressed
the exact issue presented in this case. “Where the
state supreme court has not ruled on a question in issue,
[the court] look[s] to other state-court decisions,
well-reasoned decisions from other jurisdictions, and any
other available authority to determine the applicable state
law.” Home Indem., 43 F.3d at 1326 (citation and
quotation marks omitted). “Substantial authority holds
the attorney-client privilege to be impliedly waived where
the client asserts a claim or defense that places at issue
the nature of the privileged material.” Laird C.
Kirkpatrick, Oregon Evidence § 503.13 (6th ed. 2018)
(emphasis added) (citing Hearn v. Rhay, 68 F.R.D.
574, 582-83 (E.D. Wash. 1975)).
Ninth Circuit applies a three-pronged test for determining
whether there has been an implied waiver of the
attorney-client privilege. Home Indem., 43 F.3d at 1326
(citing Hearn, 68 F.R.D. at 581).
First, the court considers whether the party is asserting the
‘privilege as the result of some affirmative act, such
as filing suit.' Second, the court examines whether
‘through this affirmative act, the asserting party puts
the privileged information at issue.' Finally, the court
evaluates whether ‘allowing the privilege ...