Courts Wrestle With the “Facts” vs. “Communications” Dilemma: Part II

April 6, 2022

Last week’s Privilege Point described a court’s careful delineation between the logistics (time, place, etc.) of a privileged communication and such communications’ explicit or implicit privileged content. The stakes naturally become higher if the client seeks some litigation advantage based on the logistics or on the content.

In Klein v. Paskolite, LLC, defendant accused of a fraudulent transfer “asserted as a defense that the transfers were done in good faith, and . . . pointed to its conferral with counsel as one piece of evidence for that good faith.” Case No. 2:19-cv-00832-DN-PK, 2022 U.S. Dist. LEXIS 11345, at *1-2 (D. Utah Jan. 19, 2022) (footnote omitted). But defendant’s lawyer objected on privilege grounds to the question of whether the company “relied upon the communications it got from its counsel.” Id. at *7. Not surprisingly, the court found that defendant’s “good faith” defense waived its privilege protection as to the communication’s content – bluntly rejecting defendant’s argument “that it did not place the ‘substance’ of the communication at issue, but merely disclosed the fact a communication had been made.” Id. at *6. The court explained that “[t]he mere fact a communication was made between [defendant] and its counsel has little relevance to a good faith defense alone. What is relevant is what was said in that communication.” Id. at *7.

It can be difficult to distinguish between a communication’s logistics and content, but litigants should not expect to gain some litigation advantage by tricky manipulation of the distinction.