Source and Choice of Privilege Law in Federal Courts: Part II

August 31, 2022

Last week’s Privilege Point summarized a California federal court decision confirming that California recognizes its privilege in a statute, but then inexplicitly acknowledging that courts can themselves create exceptions. One day earlier, a court dealt with privilege protection for overseas communications – in a complicated analysis of both the privilege’s source and choice of law.

In Aviva Sports, Inc. v. Fingerhut Direct Marketing, Case No. 09-cv-1091 (JNC/HB), 2022 U.S. Dist. LEXIS 101007 (D. Minn. June 7, 2022), the court had earlier granted plaintiff’s motion to compel the production of documents held by Liquidators of a defunct Hong Kong company. But the Liquidators explained that they needed permission to do so by a Hong Kong court or official. The court first noted that under U.S. law the Liquidator’s failure to object to production waived privilege, but not so under Hong Kong law – which somewhat surprisingly, given Chinese political control, often follows “the law of other common law jurisdictions, such as England and New Zealand.” Id. at *9. Clearly struggling with this choice of law issue, the court applied what is called the “touch base” test. The “touch base” test applies U.S. privilege law to communications to and from the U.S., but also (quoting an earlier case) to “communications related to legal proceedings in the United States, or that reflect the provision of advice regarding American law.” Id. at *11-12 (citation omitted). The court found that under applicable U.S. privilege law the now-defunct company had “likely waived its claims of privilege as to those documents by failing to fulfill its obligation to respond to [plaintiff’s] requests.” Id. at *12. So the court ultimately ordered production of the documents governed by U.S. privilege law.

Perhaps not surprisingly, the court apologetically “agrees that it erred [initially] in assuming U.S. privilege law applied to all documents” – noting that Hong Kong privilege law “differs in significant respects from U.S. jurisprudence.” Id. at *16. It can be difficult enough to locate the source of privilege law, let alone select and then apply it. But lawyers and courts must sometimes engage in such difficult tasks.