A federal district court in Indiana recently ruled on whether email communications with environmental contractors hired by an attorney are protected from discovery. In Valley Forge Ins. Co. v. Hartford Iron & Metal, Inc., No. 1:14-cv-00006-RLM-SLC, 2017 WL 1361308 (N.D. Ind. April 14, 2017), the Court held that the communications were not protected by the attorney-client privilege, but were, in part, protected by the work-product doctrine. This decision provides much-needed guidance to lawyers when retaining environmental consultants on behalf of their clients.
The Valley Forge litigation involved a dispute between the owner of a scrap metal recycling facility and its insurer over a settlement agreement relating to an environmental clean-up at the insured’s property. The settlement agreement allocated responsibilities for the clean-up pursuant to an agreed order with the Indiana Department of Environmental Management (IDEM). USEPA also later asserted enforcement claims against the defendant.
Following these claims, the defendant’s attorney hired two environmental consultants – one to design a stormwater management system to treat PCB-contaminated stormwater and another to perform site remediation. The attorney initially retained both consultants directly, with the defendant’s approval; however, the defendant was found to have later entered into a standard construction contract directly with one of the contractors.
The Court performed an in camera review of 185 emails or email threads with the environmental contractors that the defendant had withheld as privileged in response to discovery requests by the plaintiff. Applying Indiana law, the Court held that none of the emails were protected by the attorney-client privilege. The Court stated that, while the “attorney-client privilege can extend to consultants hired by the attorney on behalf of a client,” only communications made for the “primary purpose” of obtaining legal advice from the lawyer come within the attorney-client privilege. These protected communications can include reports made by third parties from gathering information from the client, where the primary purpose of the report is to assist a lawyer in giving legal advice.
In this case, the Court held that that the primary purpose in retaining the environmental contractors was not to provide legal advice, but to provide environmental remediation services. The Court further held that the attorney’s retention of the contractors, by itself, was not sufficient to bring the contractors within the scope of the attorney-client privilege, nor was labeling the communications as “privileged and confidential” or “attorney-work product.”
The Court then addressed whether the communications were protected by the attorney work-product doctrine, applying federal law. The Court noted that the doctrine is “distinct from and broader than the attorney-client privilege,” and applies to documents prepared in anticipation of litigation by any representative of the client, “regardless of whether the representative is acting for the lawyer.” The primary motivating purpose must be to “aid in possible future litigation.”
The record in this case supported the defendant’s claim that the motivating factor to complete the clean-up of its facility was the threat of litigation with IDEM and USEPA. All of the emails at issue were created after the lawsuit was filed and after the parties became aware of the claims by IDEM and USEPA. The fact that the emails also served an ordinary business purpose of completing the environmental remediation did not deprive them of their protection under the doctrine because the defendant was able to show that the anticipated litigation was the driving force behind the preparation of the requested documents.
In performing the in camera review, the Court declined to extend the protections of the work product doctrine to transmittal communications that did not contain any attorney comment, impressions or strategy, billing records or emails that merely pertained to administrative, logistical or scheduling matters. The rest of the emails were held to be protected by the work-product doctrine.