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Central Valley Ag Cooperative v. Leonard

United States District Court, D. Nebraska

April 29, 2019

CENTRAL VALLEY AG COOPERATIVE, for itself and as Fiduciary of the Central Valley Ag Cooperative Health Care Plan, Plaintiff,
v.
DANIEL K. LEONARD, SUSAN LEONARD, THE BENEFIT GROUP, INC., ANASAZI MEDICAL PAYMENT SOLUTIONS, INC., CLAIMS DELEGATE SERVICES, LLC, and GMS BENEFITS, INC., Defendants.

          MEMORANDUM AND ORDER

          Cheryl R. Zwart United States Magistrate Judge.

         The following motions are pending before me and fully submitted:

Filing No. 178 Motion to Compel filed by The Benefit Group, Inc. (TBG) for Production of Unredacted Kutak Rock Invoices;
Filing No. 181 Plaintiff's Motion to Compel Production of Documents from Defendant TBG; and
Filing No. 184 Plaintiff's Motion to Compel Production of Documents from Defendants Anasazi Medical Payment Solutions, Inc. (AMPs), and Claims Delegate Services, LLC (CDS).

         For the reasons discussed below, TBG's motion, (Filing No. 178) will be granted; Plaintiff's motion to compel directed to TBG (Filing No. 181), will be denied; and as to Plaintiff's motion to compel, (Filing No. 184), AMPs and CDS will be ordered to confirm that its production is complete and state under oath that all requested documents have been produced.

         TBG's Motion to Compel Production of Unredacted Kutak Rock Invoices (Filing No. 178)

         Plaintiff Central Valley Ag Cooperative (CVA) alleges Defendants violated ERISA by failing to pay, or to adequately pay, claims submitted by health care providers to the Central Valley Ag Cooperative Health Care Plan (the “Plan”). As part of its damage claim, Plaintiff seeks recovery of $138, 000 in attorney fees CVA paid to the Kutak Rock law firm, and over $17, 000 in fees it paid to Plaintiff's expert, Jean Reed, to negotiate and settle the unpaid or partially paid claims against the Plan. (Filing No. 180-5, at CM/ECF p. 3, ¶¶ 8-9).

         In discovery, TBG demanded production of the Kutak Rock billing documents underlying Plaintiff's $138, 000 damage claim. CVA has provided redacted versions of those documents, and asserts the portions redacted are protected from disclosure under the attorney-client privilege and the work product doctrine. (Filing No. 180-4). TBG argues any privilege or work product protection was waived when CVA placed the invoices and the work they reflect at issue. TBG seeks unredacted invoices.

         Federal courts follow federal attorney-client privilege law in all federal cases other than civil diversity actions (Fed. R. Evid. 501), and apply the federal work product doctrine in all federal cases. Baker v. GMC, 209 F.3d 1051, 1053 (8th Cir. 2000). Plaintiff seeks recovery under ERISA. Thus, the question presented is whether, as to both the attorney-client privilege and the work product doctrine, federal law permits Plaintiff to redact information from the Kutak Rock invoices supporting CVA's claim to recover attorney fee expenses.

         Under federal attorney-client privilege law, when a party places privileged matters at issue as evidence in a case, it thereby waives the privilege as to all related privileged matters on the same subject. Tasby v. United States, 504 F.2d 332, 336 (8th Cir. 1974) (applying federal law). The “at issue” implied waiver of the attorney-client privilege was explained by the United States Supreme Court in in Hunt v. Blackburn, 128 U.S. 464 (1888). As explained in Hunt,

The rule which places the seal of secrecy upon communications between client and attorney is founded upon the necessity, in the interest and administration of justice, of the aid of persons having knowledge of the law and skilled in its practice, which assistance can only be safely and readily availed of when free from the consequences or the apprehension of disclosure. But the privilege is that of the client alone, and no rule prohibits the latter from divulging his own secrets.

Hunt, 128 U.S. at 470 (1888).

         Where a party places the attorney's services at issue in the case, any privilege as to the services rendered is waived. Id. Allowing the attorney-client privilege to shield documents at the heart of the proponent's case would undermine the adversary system by permitting only one side to have full access to the facts. A party's reliance on its own attorney's communications to advance a claim is a waiver as to all other communications on the same matter “because the privilege of secret communication is intended only as an incidental means of defense, and not as an independent means of ...


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