In re Blue Cross Blue Shield Antitrust Litig.
In re Blue Cross Blue Shield Antitrust Litig.
2018 WL 10801571 (N.D. Ala. 2018)
March 5, 2018
Proctor, R. David., United States District Judge
Summary
The court upheld BCBSAL's claims of privilege for the 160 documents on the basis of twelve documents selected from BCBSAL's privilege log for in camera review. Electronically stored information was used to determine the basis of the privilege and to associate attachments with e-mail parents. The court declined to issue an advisory opinion on the contours of the parties' agreed-upon privilege protocols.
Additional Decisions
IN RE: BLUE CROSS BLUE SHIELD ANTITRUST LITIGATION
Master File No. 2:13-CV-20000-RDP | MDL No. 2406
United States District Court, N.D. Alabama, Southern Division
Filed March 05, 2018
Proctor, R. David., United States District Judge
ORDER REGARDING SUBSCRIBER PLAINTIFFS' RULE 72 OBJECTIONS TO DISCOVERY ORDER NO. 85
*1 This matter is before the court on Subscriber Plaintiffs' Rule 72 Objections to Discovery Order No. 85. (Doc. # 1913). BCBSAL has responded to the Objections. (Doc. # 1949).
I. Background
In this litigation, Blue Cross and Blue Shield of Alabama (“BCBSAL”) has invoked the “filed rate doctrine” as a partial defense to Subscribers' antitrust damages claims. During discovery into this defense, it was discovered that BCBSAL had charged some small group subscribers rates that differed from the rates approved by the Alabama Department of Insurance (“ALDOI”). (Doc. # 1949 at 3).
After that discovery occurred, BCBSAL reported the rate variances to the ALDOI. In August 2017, BCBSAL and the ALDOI entered into a Consent Order regarding the rate variance issue under which BCBSAL issued refunds. Accompanying the refunds, BCBSAL included a letter explaining the refund (the “Refund Letter”). BCBSAL also prepared standardized “talking points” (the “Talking Points”) to be used when representatives communicated with subscribers about the refund. BCBSAL has produced the final, operative versions of both the Refund Letter and Talking Points. (Doc. # 1949 at 3).
Subscribers filed an Omnibus Motion to Compel Remaining Filed Rate Discovery (Doc. # 1676). In that Motion, they requested the production of internal drafts of the Refund Letter and Talking Points, plus internal communications relating to the internal drafts. (Id.). Judge Putnam granted the motion in part and ordered BCBSAL to produce internal documents that were not privileged. (Doc. # 1820). In connection with their production of the non-privileged internal documents, BCBSAL provided a privilege log with 160 entries. (Doc. # 1913 at 5-6). Thereafter, Plaintiffs filed a Motion to Compel Production of Filed Rate Discovery and Challenging Assertion of Privilege. (Doc. # 1864).
The parties agreed that Judge Putnam could resolve the privilege dispute regarding the 160 documents on the basis of twelve documents selected from BCBSAL's privilege log for in camera review, six chosen by each side. (Docs. # 1874 at 15; 1949 at 5). At issue are preliminary drafts of the Refund Letter and Talking Points, and internal communications related to the drafts, over which BCBSAL asserts a claim of attorney-client privilege. (Doc. # 1877 at 2).
Plaintiffs asserted that the documents were created for the business purpose of communicating with BCBSAL's customers, rather than primarily for litigation purposes. BCBSAL contended that the documents are privileged drafts, and that the creation and revisions to the documents were overseen and controlled by counsel due to their relevance to this ongoing litigation. In Discovery Order No. 85, Judge Putnam upheld BCSAL's privilege claim over all 160 documents. He concluded as follows:
[I]n the unique circumstances of the preparation of these communications with the customers of BCBS-AL, [ ] the drafts and edits of the refund letter and the talking points are covered by the attorney-client privilege. When BCBS-AL was faced with the need to explain to its customers why some were receiving refunds due to errors in it “rate stabilization practices,” it turned first to outside counsel, Maynard Cooper, to provide a draft refund letter. The review and editing of the draft was then tasked to Michael Velezis, one of BCBS-AL in-house attorneys, who both circulated within BCBS-AL proposed edits and sought confirmation of factual details stated in the letter. Similarly, Velezis prepared “talking points” for BCBS-AL customer service representatives to use in responding to inquiries from customers about the rate variance refund. What makes this process unique is that, at the time the drafts were being prepared and edited, BSBC-AL and Velezis knew that the communications were going to putative class members in this very litigation. BCBS-AL was in the unique posture of having to communicate not simply with its customers, but also putative plaintiffs against it in this antitrust case. The need to assure that the refund letter and talking points were both factually and legally correct was great. These communications with small-group subscribers implicated not only customer relations, but involved potential new liability for overcharges, as well as admissions that might be consequential in this action. The task required the active participation of a lawyer to assure both legal accuracy and the avoidance or reduction of risk of liability to the greatest extent possible. Velezis, therefore, was providing legal assistance as he reviewed, drafted, and edited these communications with customers.
*2 (Doc. # 1877 at 7-8).
Subscribers filed Rule 72 Objections to Discovery Order No. 85. (Doc. # 1913). In support of their objection, they make three primary arguments: (1) BCBSAL's privilege log was inadequate to uphold the claims of privilege; (2) BCBSAL did not provide an attorney affidavit to substantiate its privilege assertion; and (3) the documents and communications are not protected by the attorney-client privilege because their primary purpose was business advice rather than legal advice. (Doc. # 1913).
II. Standard of Review
Because Discovery Order No. 85 does not dispose of a claim or defense of a party, it is a non-dispositive order. See Smith v. Sch. Bd. of Orange County, 487 F.3d 1361, 1365 (11th Cir. 2007). Therefore, to prevail on an objection, a party must establish that the challenged findings are clearly erroneous and/or that the legal conclusions are contrary to law. See Rule 72(a); 28 U.S.C. § 636(b)(1)(A); In re Commissioner's Subpoenas, 325 F.3d 1287, 1292 n. 2 (11th Cir. 2003) (observing that district court properly applied “clearly erroneous or contrary to law” standard of review in reconsidering magistrate judge's determination of pretrial matter); see also Merritt v. Int'l Bhd. of Boilermakers, 649 F.2d 1013, 1016–17 (5th Cir. Unit A June 1981)[1] (“Pretrial orders of a magistrate under § 636(b)(1)(A) are reviewable under the ‘clearly erroneous and contrary to law’ standard; they are not subject to a de novo determination....”). “Clear error is a highly deferential standard of review.” Holton v. City of Thomasville Sch. Dist., 425 F.3d 1325, 1350 (11th Cir. 2005) (citation omitted). “[A] finding is ‘clearly erroneous’ when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” Id. (citations and quotations omitted); see also Weeks v. Samsung Heavy Indus. Co., Ltd., 126 F.3d 926, 943 (7th Cir. 1997) (“The clear error standard [under Rule 72(a) and 28 U.S.C. § 636(b)(1) (A)] means that the district court can overturn the magistrate judge's ruling only if the district court is left with the definite and firm conviction that a mistake has been made.”). A magistrate judge's order “is contrary to law ‘when it fails to apply or misapplies relevant statutes, case law, or rules of procedure.’ ” Botta v. Barnhart, 475 F.Supp.2d 174, 185 (E.D. N.Y. 2007) (quoting Catskill Dev., L.L.C. v. Park Place Entm't Corp., 206 F.R.D. 78, 86 (S.D. N.Y. 2002); see also Pigott v. Sanibel Dev., LLC, 2008 WL 2937804, at *5 (S.D. Ala. July 23, 2008) (similar).
III. Analysis
The court has carefully reviewed the parties' submissions and addresses Plaintiffs' arguments, in turn.
A. Was BCBSAL's Privilege Log Inadequate?
This argument is another chapter in the ongoing saga regarding Defendants' privilege logs. Plaintiffs assert the logs are insufficient to truly evaluate the claim of privilege. Defendants respond that they complied with the privilege log protocol negotiated by the parties at the early stages of the MDL. As this court has noted a number of times recently, in reviewing the objections to Judge Harwood's privilege determinations, regardless of any agreed-upon protocol, “[t]he party invoking the attorney-client privilege has the burden of proving” that the documents at issue are protected by the attorney-client privilege. See United States v. Schaltenbrand, 930 F.2d 1554, 1562 (11th Cir. 1991). Therefore, a party bearing the burden of establishing a privilege should not rest on an agreed-upon protocol under which it may not have properly carried that burden. Just because log entries comply with an agreed-upon protocol does not also mean that a party has satisfied its burden of establishing the application of a privilege.
*3 However, regardless of whether the privilege logs are sufficient, and to be clear the court is expressly not addressing whether they are,[2] Judge Putnam had more before him when undertaking his privilege review than the logs. Judge Putnam also considered the twelve documents selected from BCBSAL's privilege log for in camera review, six chosen by each side, which the parties agreed Judge Putnam could consider in resolving the privilege dispute. (Docs. # 1874 at 15; 1949 at 5). Moreover, he had representations of counsel made in their briefing and during argument on the Motion to consider. (Doc. # 1874).
Plaintiffs argue that BCBSAL's log with regard to these particular documents is insufficient because it does not address whether the documents were maintained as confidential. (Doc. # 1913 at 11). However, as BCBSAL points out, the log itself was limited to internal documents because Discovery Order No. 80 only required production of “internal documents and records related to the rate variance.” (Doc. # 1820 at 3).
In short, any insufficiency in BCBSAL's privilege log does not render Judge Putnam's Discovery Order No. 85 either clearly erroneous or contrary to law.
B. Was BCBSAL Required to Provide an Attorney Affidavit?
Although an attorney affidavit may, in some circumstances, be helpful, Plaintiffs have cited to no authority for the proposition that a privilege ruling in the absence of declaration is error. Thus, Plaintiffs have not shown that Judge Putnam's issuance of a privilege ruling without requiring an attorney affidavit is either clearly erroneous or contrary to law.
C. The Question of Business vs. Legal Advice.
Plaintiffs argue that Judge Putnam misapplied the law in holding that the documents at issue are privileged. They argue that the party asserting the privilege has the burden of establishing that the communication at issue was (1) intended to remain confidential and (2) under the circumstances was reasonably expected and understood to be confidential. (Doc. # 1913 at 18-19 (citing United States v. Bell, 965 F.2d 965, 971 (11th Cir. 1985). They further argue that the fact that the Refund Letter and Talking Points were ultimately made public necessarily means that BCBSAL cannot establish these elements.
To begin with, the communications at issue before Judge Putnam were not the final Refund Letter and Talking Points. Rather, the communications at issue were the drafts by outside counsel and the correspondence relating to the revision process and resulting drafts supervised by in-house counsel. BCBSAL has demonstrated that these internal documents were (1) intended to remain confidential and (2) under the circumstances were reasonably expected and understood to be confidential. Plaintiffs have presented no evidence that the communications leading up to the final products were not intended to remain confidential or were not reasonably expected and understood to be confidential.
Plaintiffs further argue that the documents are not privileged because the primary purpose behind all these internal communications was not primarily for the purpose of seeking legal advice. But, as Judge Putnam noted, the circumstances of the preparation of the Refund Letter and Talking Points are unusual and relevant to this inquiry. BCBSAL was tasked with drafting communications to putative class members in this ongoing litigation relating to refunds for payments that, at least potentially, could affect a defense raised in this ongoing litigation. Therefore, it is not surprising that BCBSAL's counsel supervised that process from beginning to end and provided legal advice from beginning to end. Contrary to Plaintiffs' expressed concern, this cautionary practice, particularly under the particular circumstances of this case, does not transform all internal communications into attorney-client communications merely because litigation is pending. Not all communications involving an attorney are privileged, and not all communications about business matters are not privileged. Blanket rules are inappropriate, and a review of the relevant document to determine whether it is privileged is necessary. See In re Grand Jury Subpoena, 831 F.2d 225, 227 (11th Cir. 1987) (privilege must be determined on a document-by-document basis).
*4 Finally, Plaintiffs have the final communications. What they seek are drafts reflecting edits and suggestions either made or evaluated by in house counsel. If disclosed, those edits and suggestions may reveal legal advice which is entitled to the protection of the attorney-client privilege. “The Court generally finds that the attorney-client privilege applies to confidential, non-public drafts of documents which were prepared by an attorney at the request of the client; communications attaching a draft to an attorney with a request for legal advice regarding its content; or communications that contain notes or comments of the attorney reflecting legal advice regarding a document's content.” See United States v. Davita, Inc., 301 F.R.D. 676, 683 (N.D. Ga. 2014) (citing United Food and Commercial Workers Union v. Chesapeake Energy Corp., 2012 WL 2370637, *10–11 (W.D. Okla. June 22, 2012)). “Indeed, the proper drafting of sensitive business documents ‘is often the type of communication at the core of the attorney-client privilege,’ and attorney-client communications discussing and attaching such drafts should generally be entitled to a privilege.” Davita, Inc., 301 F.R.D. at 683 (citing UFCW v. Chesapeake Energy Corp., 2012 WL 2370637 at *10 (internal citations omitted)).
Plaintiffs have not shown that Judge Putnam's application of the attorney-client privilege doctrine to these particular documents was either clearly erroneous or contrary to law.
IV. Conclusion
Subscriber Plaintiffs' Rule 72 Objections to Discovery Order No. 85 (Doc. # 1913) are OVERRULED.[3]
DONE and ORDERED this March 5, 2018.
Footnotes
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc) the Eleventh Circuit adopted as binding precedent all the decisions of the former Fifth Circuit handed down prior to the close of business on September 30, 1981.
Plaintiffs point out that certain entries on BCBSAL's log contain no description of the basis of the privilege. (Doc. # 1913 at 15). Defendants respond that, under the agreed-upon privilege log protocols, where metadata is missing for a particular attachment, it is not recorded by Defendants on the log for that particular attachment, but rather should be gleaned from the “parent” document on the log, via a family identifier shown on the log to associate attachments with e-mail parents. (Doc. # 1949 at 9).
Again, this court is not expressing an opinion as to whether BCBSAL's privilege log entries are sufficient. The court declines to issue an advisory opinion on the contours of the parties' agreed-upon privilege protocols or whether the logs are in compliance with that protocol.