United States District Court, D. Oregon
MCKENZIE LAW FIRM, P.A., and OLIVER LAW OFFICES, INC., on behalf of themselves and all others similarly situated, Plaintiffs,
RUBY RECEPTIONISTS, INC., Defendant.
S. Dubanevich and Cody Berne, Stoll Stoll Berne Lokting &
Schlachter PC, Laurence D. King, Matthew B. George, and Mario
M. Choi, Kaplan Fox & Kilsheimer LLP, Robert I Lax, Lax
LLP, Jon M. Herskowitz, Baron & Herskowitz, Miami FL;
Gregory J. Brod, Brod Law Firm, PC, Of Attorneys for
R. Escobar and Austin Rainwater, DLA Piper LLP, Of Attorneys
OPINION AND ORDER
MICHAEL H. SIMON UNITED STATES DISTRICT JUDGE.
named plaintiffs in this putative class action are McKenzie
Law Firm, PA (“McKenzie”) and Oliver Law Offices,
Inc. (“Oliver”) (collectively,
“Plaintiffs”). McKenzie and Oliver are two
relatively small law firms. The defendant is Ruby
Receptionists, Inc. (“Ruby” or
“Defendant”). Ruby provides virtual receptionist
services to small businesses, including law firms. McKenzie
and Oliver are former clients of Ruby and assert claims of
breach of contract, breach of the implied covenant of good
faith and fair dealing, unjust enrichment, and money had and
received. Pending before the Court is a discovery dispute
between the parties concerning the application of the
connection with both this lawsuit and a related state court
action, counsel for Ruby sent emails and several drafts of a
declaration to a former employee of Ruby after Ruby's
counsel learned that the former employee had been speaking
with an investigator working for Plaintiffs' counsel. As
part of this email exchange, the former employee requested
that Ruby's counsel make certain changes to the draft
declaration. Ruby's counsel revised the draft
declaration, the former employee signed the declaration, and
Ruby's counsel filed the declaration in the related state
court action. The former employee, without the need for a
subpoena from Plaintiffs' counsel and without anyone
telling Ruby's counsel, voluntarily sent to
Plaintiffs' counsel copies of the emails exchanged with
Ruby's counsel, including the drafts of the declaration.
Ruby contends that these emails and the drafts of the
declaration are protected under the work-product doctrine and
may not be used by Plaintiffs in litigation with Ruby.
Plaintiffs offer essentially two responses. First, Plaintiffs
argue that the emails and declaration drafts are not
work-product. Second, Plaintiffs contend that even if these
documents are work product, Ruby waived the protections of
the work-product doctrine by disclosing them to its former
employee under circumstances in which there was a reasonable
probability that the opposing party (Plaintiffs) would see
these documents. As explained more fully below, the Court
concludes that the documents are presumptively work product
but that Ruby waived its right to preclude Plaintiffs'
use of those documents in this lawsuit.
federal court, the work-product doctrine is governed by
federal law, even in diversity cases. See Kandel v.
Brother Int'l Corp., 683 F.Supp.2d 1076, 1083 (C.D.
Cal. 2010) (citing Frontier Refining, Inc. v.
Gorman-Rupp, Inc., 136 F.3d 695, 702 n.10 (10th Cir.
1998) (“Unlike the attorney-client privilege, the
application of the work-product doctrine in diversity of
citizenship cases is determined under federal law.”).
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.
United States Dist. Court for the Dist. of Arizona, 881
F.2d 1486, 1494 (9th Cir. 1989) (citing Fed.R.Civ.P.
26(b)(3)). Documents or the compilation of materials created
by an attorney or agents of the attorney in preparation for
litigation or trial may be covered by the work-product
doctrine. United States 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). 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, however, like the
attorney-client privilege, is waivable. Richey, 632
F.3d at 567.
the work-product doctrine affords special or heightened
protection to materials that reveal an attorney's mental
impressions or opinions. Admiral Ins. Co., 881 F.2d
at 1494; Fed.R.Civ.P. 26(b)(3)(B). Such materials are
generally referred to as “opinion” or
“core” work product and are distinguished from
“fact” work product. Fact work-product may be
ordered produced upon a showing of substantial need for the
information and 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). Opinion or
core work product, however, is discoverable only “when
mental impressions are at issue in a case and the need for
the material is compelling.” Holmgren v. State Farm
Mutual Ass'n. Ins. Co., 976 F.2d 573, 577 (9th Cir.
the party asserting protection under the work-product
doctrine generally has the burden to show that the elements
of the doctrine have been established. United States v.
City of Torrance, 163 F.R.D. 590, 593 (C.D. Cal. 1995)
(“The party claiming work product immunity has the
burden of proving the applicability of the doctrine.”);
Murphy v. Kmart Corp., 259 F.R.D. 421, 428 (D. S.
Dakota 2009) (“The party asserting the work product
privilege to resist disclosure bears the burden of providing
a factual basis for asserting the privilege.”); see
also United States v. Ruehle, 583 F.3d 600, 608 (9th
Cir. 2009) (holding that the party asserting an
attorney-client privilege has the burden of proving
“each essential element” of that privilege).
party opposing the assertion of the work-product doctrine,
however, contends that the opposing side has waived the
benefits of that doctrine, the question of which side bears
the burden of proving waiver or non-waiver arises. The Court
has not located any decision from the Ninth Circuit
addressing this question or even any decision from a district
court within the Ninth Circuit. The Fifth Circuit, however, has
addressed this issue and held that the party asserting waiver
“bears the burden of demonstrating that a waiver of
work product protection occurred.” Ecuadorian
Plaintiffs v. Chevron Corp., 619 F.3d 373, 379 (5th Cir.
2010). As the Fifth Circuit explained:
Chevron argues that the plaintiffs, as the party claiming
work product protection, bear the burden of demonstrating
non-waiver. It cites to United States v. MIT, a
decision of the First Circuit that adopts this view. 129 F.3d
681, 686 (1st Cir. 1997). However, to support this
proposition, the First Circuit only cites authority
concerning the attorney-client privilege. Id.
(citing United States v. Wilson, 798 F.2d 509,
512-13 (1st Cir. 1986)). The work product doctrine differs
from the attorney-client privilege in that nonwaiver need not
be proven to invoke work product immunity. Johnson
[v. Gmeinder], 191 F.R.D. [638, ] 643 [(D.Kan.
Id. at 379 n.10. Similarly, other out-of-circuit
district courts have placed the burden on the party asserting
waiver of work-product protection. See, e.g.,
Pipeline Productions, Inc. v. The Madison Companies,
LLC, 2019 WL 3973955, *4 (D. Kan. Aug. 22, 2019)
(“Once the party objecting to discovery establishes
that the materials are protected work product, the burden
shifts to the party asserting waiver to establish that a
waiver has occurred.”); Towne Place Condo.
Ass'n v. Philadelphia Indem. Ins. Co., 284 F.Supp.3d
889, 899 (N.D. Ill. 2018) (“Where work product is
claimed, the party asserting waiver has the burden to show
that a waiver occurred.”); United States Sec. &
Exch. Comm'n v. Herrera, 324 F.R.D. 258, 262 (S.D.
Fla. 2017) (stating that after the party asserting
work-product protection meets its initial burden, “the
burden shifts to the party asserting waiver”); Mir
v. L-3 Commc'ns Integrated Sys., L.P., 315 F.R.D.
460, 467 (N.D. Tex. 2016) (“Unlike the attorney-client
privilege, the burden of proving waiver of work product
immunity falls on the party asserting waiver.”).
Accordingly, this Court holds that the party asserting waiver
of work-product protection bears the burden of demonstrating
that a waiver of that protection has occurred.
Overview of Federal and State Lawsuits
Receptionists is a business based in Portland, Oregon that
provides receptionist services to small businesses throughout
North America. The putative class in this federal action
consists of all of Ruby's clients in the United States
for telephone call answering and messaging services. Many of
Ruby's clients are small law firms and solo
practitioners. Ruby's clients enter into written
contracts with Ruby to purchase receptionist services. Ruby
bills its clients based on the quantity of
“receptionist minutes” used or contracted for per
month. Plaintiffs' claims in this case stem from two of
Ruby's billing practices. First, Plaintiffs allege that
Ruby failed to disclose to its clients Ruby's practice of
“rounding up” to the nearest 30-second increment
when calculating a “receptionist minute.” Second,
Plaintiffs allege that Ruby failed to disclose to its clients
that Ruby includes in its charges the time that callers have
been placed “on hold” or “parked” by
clients enter into written contracts with Ruby for a set
number of “receptionist minutes” per month for a
fixed monthly fee. There also is an agreed-upon fee
“per receptionist minute” for any additional
minutes used beyond the set monthly number. Plaintiff Oliver
contracted with Ruby from October 2012 through May 2013.
Oliver agreed to purchase 100 receptionist minutes per month
for $229 and further agreed to pay $2.29 for each additional
receptionist minute used after 100 minutes per month.
Plaintiff McKenzie contracted with Ruby from April 2016
through November 2018. McKenzie agreed to purchase 200
receptionist minutes per month for $413.08 and further agreed
to pay $2.07 for each additional receptionist minute used
after 200 minutes per month.
alleged by Plaintiffs, when calculating billing Ruby rounds
up telephone calls to the next 30-second increment. Thus, a
telephone call that lasts ten seconds, for example, would be
billed for thirty seconds (or one-half of a receptionist
minute). A telephone call that lasts one minute and
thirty-one seconds would be billed for two minutes, as would
a telephone call that lasts one minute and fifty-nine
seconds. The time billed also includes any “hold”
or “parked” time incurred after a Ruby
receptionist first answers the call until the call is
transferred. Ruby charges for the entire duration of the
telephone call, including “hold” or
“parked” time, from the moment the call is first
answered until: (a) the call is connected to the client; (b)
the call is transferred to voicemail; (c) the receptionist
finishes taking a message or answering a question and the
call terminates or disconnects; or (d) the call otherwise
terminates or disconnects.
written contracts do not define the term “receptionist
minute” or otherwise explain how Ruby calculates time
for billing purposes. Ruby has a document entitled
“Terms and Conditions, ” which includes an
integration clause. That clause states: “These Terms
and Conditions and the Ruby Receptionist Service Agreement
set forth the entire Agreement between the parties. This
Agreement shall be binding upon all successors and assigns of
the parties hereto.” The Terms and Conditions and the
separate document titled “Service Agreement, ”
thus, together comprise the written contract between Ruby and
its client. The contract has a 30-day term and automatically
renews unless one party gives written notice 30 days in
advance. Ruby's clients can access and view their billing
records and call history on Ruby's website and app.
2017, the same attorneys who represent McKenzie and Oliver in
this federal putative class action filed a putative class
action against Ruby in Oregon state court on behalf of a
different named plaintiff. That action is currently titled
Maiden Insurance LLC v. Ruby Receptionists, Inc.,
Multnomah County Circuit Court, Case No. 17CV48545
(“Maiden”). In Maiden, the
plaintiffs allege facts and claims against Ruby that are very
similar to the facts and claims presented in this federal
Pending Discovery Dispute
several months between late 2014 and early 2015, Mr. Justin
Enger worked for Ruby as a sales associate. ECF 96-9, ¶
2. As previously noted, the Maiden lawsuit was filed
in state court in 2017. In late 2018, an investigator working
for Plaintiffs' counsel spoke with Mr. Enger. ECF 96,
¶ 3. Plaintiffs commenced this federal action in
3, 2019, Plaintiffs' counsel filed in Maiden
Plaintiff's Second Motion to Compel. ECF 96-1. In that
motion, Plaintiffs' counsel asked the state court to
order Ruby to search the electronic files of certain current
and former Ruby employees, including Mr. Enger. Also in that
motion, Plaintiffs' counsel stated:
Justin Enger, former Sales Associate: Enger told an
investigator that his former supervisor, Ashley
Fisher-Nelson, instructed him “not to advertise”
the round-up charges to clients. Enger also thought that Ruby
did not charge customers when a receptionist was not involved
in the call, which he referred to as “parking.”
This contradicts Ruby's practice of charging for the time
a caller is on hold. Enger ...