Newman v. Highland Sch. Dist. No. 203 ( 2016 )

This opinion was filed for record
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SUSAN L. CARLSON
SUPREME COURT CLERK
IN THE SUPREME COURT OF THE STATE OF WASHINGTON
MATTHEW A. NEWMAN, RANDY
NEWMAN and MARLA NEWMAN,
NO. 90194-5
Respondents,
v. ENBANC
HIGHLAND SCHOOL DISTRICT NO.
203,
Petitioner.
STEPHENS, J.-Highland High School quarterback Matthew Newman
suffered a permanent brain injury at a football game in 2009, one day after he
allegedly sustained a head injury at football practice. Three years later, Newman
and his parents (collectively Newman) sued Highland School District No. 203
(Highland) for negligence. Before trial, Highland's counsel interviewed several
former coaches and appeared on their behalf at their depositions. Newman moved
to disqualify Highland's counsel, asserting a conflict of interest. The superior court
denied the motion but ruled that Highland's counsel "may not represent non-
Newman, eta!. v. Highland Sch. Dist. No. 203, 90194-5
employee witness[es] in the future." Clerk's Papers (CP) at 636. Newman then
sought discovery concerning communications between Highland and the former
coaches during time periods when the former coaches were unrepresented by
Highland's counsel. Highland responded with a motion for a protective order,
arguing its attorney-client privilege shielded counsel's communications with the
former coaches. The trial court denied the motion, and Highland appealed.
At issue is whether postemployment communications between former
employees and corporate counsel should be treated the same as communications
with current employees for purposes of applying the corporate attorney-client
privilege. Although we follow a flexible approach to application of the attorney-
client privilege in the corporate context, we hold that the privilege does not broadly
shield counsel's postemployment communications with former employees. The
superior court properly denied Highland's motion for a protective order. We affirm
the lower court and lift the temporary stay of discovery.
FACTS AND PROCEDURAL HISTORY
Matthew Newman suffered a permanent brain injury during a football game
on September 18, 2009. Newman sued Highland for negligence in violation of the
Lystedt law, RCW 28A.600.190, which requires the removal of a student athlete
from competition or practice if he or she is suspected of having a concussion.
Newman alleges that Matthew suffered a head injury at football practice the day
before the September 18 game, and that Highland coaches permitted him to play in
the game even though he exhibited symptoms of a concussion.
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In preparing for trial, Newman's counsel deposed the entire football coaching
staff employed at the time of Newman's injury, including coaches who were no
longer employed by Highland. At the depositions, Highland's counsel indicated that
he had interviewed the former coaches before their individual depositions, and was
appearing on their behalf for purposes of their depositions.
Newman moved to disqualifY Highland's counsel from representing the
former coaches, claiming a conflict of interest under Rule of Professional Conduct
(RPC) 1. 7. The superior court denied the motion but ruled that Highland's counsel
"may not represent non-employee witness[es] in the future." CP at 636.
Newman then sought discovery concerning communications between
Highland's counsel and its former coaches. Highland moved for a protective order
to shield those communications, asserting attorney-client privilege. The superior
court denied the protective order and directed Highland to respond to Newman's
discovery requests. The superior court ordered Highland's counsel to disclose
"exactly when defense counsel represented each former employee," and barred
defense counsel from asserting the attorney-client privilege with respect to
communications outside the deposition representation. CP at 70. 1
1 Newman did not appeal the trial court's order denying disqualification of
Highland's counsel from representing the former coaches at their depositions, and does not
challenge the assertion of attorney-client privilege during this period. Nor do the parties
dispute that communications with counsel during the coaches' employment are protected
by the attorney-client privilege. This notion of a "durable privilege" is well recognized
and does not appear to be at issue here because the relevant communications occurred after
the coaches left Highland's employment. See In re Coordinated Pretrial Proceedings in
Petrol. Prods. Litig., 658 F.2d 1355, 1361 n.7 (9th Cir. 1981) (recognizing that attorney-
client privileged conversations "remain privileged after the employee leaves"); see also
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Highland sought discretionary review of the superior court's discovery order,
which the Court of Appeals denied. This court subsequently granted discretionary
review and entered a temporary stay of discovery. Newman v. Highland Sch. Dist.
No. 203, 180 Wn.2d 1031,332 P.3d 985 (2014).
ANALYSIS
1. The Corporate Attorney-Client Privilege Does Not Shield Communications
between Corporate Counsel and Former Employees
Whether the attorney-client privilege extends to postemployment
communications between corporate counsel and former employees is an issue of first
impression in Washington. The leading United States Supreme Court case
addressing corporate attorney-client privilege, Upjohn Co. v. United States,
expresslydidnotanswerthis question. 449U.S. 383, 394n.3, 101 S. Ct. 677,66 L.
Ed. 2d 584 (1981). Highland argues the flexible approach to protecting privileged
communications recognized in Upjohn supports extending the privilege to
postemployment communications with former employees. Am. Pet'r's Br. at 23.
We disagree. Because we conclude Upjohn does not justify applying the attorney-
client privilege outside the employer-employee relationship, the trial court properly
denied Highland a protective order to shield from discovery communications with
Peralta v. Cendant Corp., 190 F.R.D. 38, 41 (D. Conn. 1999) (concluding any privileged
information obtained during employment remains privileged upon termination of
employment).
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former coaches who are otherwise fact witnesses in this litigation. We affirm the
trial court's decision to deny Highland's motion for protective order, and lift the
temporary stay of discovery.
We begin by recognizing that, in our open civil justice system, parties may
obtain discovery regarding any unprivileged matter that is relevant to the subject
matter ofthe pending action. CR 26(b)(1). "'[T]he privilege remains an exception
to the general duty to disclose."' Peralta v. Cendant Corp., 190 F.R.D. 38, 41 (D.
Conn. 1999) (alteration in original) (quoting 8 JOHN HENRY WIGMORE, EVIDENCE IN
TRIALS AT COMMON LAW 554 (McNaughton rev. ed. 1961)). A party claiming that
otherwise discoverable information is exempt from discovery on grounds of the
attorney-client privilege carries the burden of establishing entitlement to the
privilege. See Dietz v. John Doe, 131 Wash. 2d 835, 844, 935 P.2d 611 (1997).
Washington's attorney-client privilege provides that "[a]n attorney or
counselor shall not, without the consent of his or her client, be examined as to any
communication made by the client to him or her, or his or her advice given thereon
in the course of professional employment." RCW 5.60.060(2)(a). But the attorney-
client privilege does not automatically shield any conversation with any attorney.
See, e.g., Morgan v. City of Federal Way, 166 Wash. 2d 747, 755-56, 213 P.3d 596(2009). To qualify for the privilege, communications must have been made in
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confidence and in the context of an attorney-client relationship. See id. at 755-57.
It is "a narrow privilege and protects only 'communications and advice between
attorney and client."' Hangartner v. City of Seattle, 151 Wash. 2d 439, 452, 90 P .3d
26 (2004) (quoting Kammerer v. W Gear Corp., 96 Wn.2d 416,421, 635 P.2d 708(1981)). The privilege extends to corporate clients and may encompass some
communications with lower level employees, as both the United States Supreme
Court and this court have recognized. Upjohn, 449 U.S. at 396; Wright v. Grp.
Health Hosp., 103 Wash. 2d 192, 195-96, 691 P.2d 564 (1984); Youngs v. PeaceHealth,
179 Wash. 2d 645,650-51,316 P.3d 1035 (2014).
The attorney-client privilege does not shield facts from discovery, even if
transmitted in communications between attorney and client. Youngs, 179 Wn.2d at
653 ("Facts are proper subjects of investigation and discovery, even if they are also
the subject of privileged communications."). Rather, only privileged
communications themselves are protected in order "to encourage full and frank
communication between attorneys and their clients and thereby promote broader
public interests in the observance oflaw and administration of justice." Upjohn, 449
U.S. at 389. The attorney-client privilege "recognizes that sound legal advice or
advocacy serves public ends and that such advice or advocacy depends upon the
lawyer being fully informed by the client." Id. However, because "the privilege
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sometimes results in the exclusion of evidence which is otherwise relevant and
material, contrary to the philosophy that justice can be achieved only with the fullest
disclosure of the facts, the privilege cannot be treated as absolute; rather, it must be
strictly limited to the purpose for which it exists." Pappas v. Holloway, 114 Wash. 2d
198, 203-04, 787 P.2d 30 (1990) (citing Dike v. Dike, 75 Wash. 2d 1, 11, 448 P.2d 490(1968)).
In enunciating a flexible test for determining the scope of the attorney-client
privilege in the corporate setting, Upjohn expanded the definition of "client" to
sometimes include nonmanagerial employees. 449 U.S. at 394-95; see also Youngs,
179 Wn.2d at 661. The Upjohn Court considered several factors, including whether
the communications at issue (1) were made at the direction of corporate superiors,
(2) were made by corporate employees, (3) were made to corporate counsel acting
as such, (4) concerned matters within the scope of the employee's duties, (5) revealed
factual information "'not available from upper-echelon management,"' (6) revealed
factual information necessary "'to supply a basis for legal advice,"' and whether the
communicating employee was sufficiently aware that (7) he was being interviewed
for legal purposes, and (8) the information would be kept confidential. Youngs, 179
Wn.2d at 664 n.7 (quoting Upjohn, 449 U.S. at 394).
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In denying Highland's motion for a protective order, the superior court
incorrectly stated that this court has never adopted Upjohn. In both Wright and
Youngs, this court embraced Upjohn's flexible approach to applying the attorney-
client privilege in the corporate client context. Wright, 103 Wn.2d at 195-96;
Youngs, 179 Wn.2d at 645. However, until today we have never considered whether
Upjohn supports expanding the scope of the privilege to include counsel's
communications with former nonmanagerial employees. In Youngs, this court relied
on Upjohn to recognize that corporate litigants have the right to engage in
confidential fact-finding and to communicate directions to employees whose
conduct may embroil the corporation in disputes. Youngs, 179 Wn.2d at 651-52. The
court in Youngs relied on the values underlying the attorney-client privilege to create
an exception to the general prohibition on defense counsel's ex-parte contact with
the plaintiffs treating physician, applicable when the physician is employed by the
defendant. Jd. at 662 (creating exception based on attorney-client privilege to rule
established in Loudon v. Mhyre, 110 Wn.2d 675,756 P.2d 138 (1988)). But Youngs
did not answer whether the attorney-client privilege should extend beyond
termination of the employment relationship.
Today, we reject Highland's argument that Upjohn and Youngs support a
further extension of the corporate attorney-client privilege to postemployment
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communications with former employees. The flexible approach articulated in
Upjohn presupposed attorney-client communications taking place within the
corporate employment relationship. Upjohn, 449 U.S. at 389 (the purpose of the
attorney-client privilege is "to encourage full and frank communication between
attorneys and their clients"); see also Youngs, 179 Wn.2d at 661 (noting corporate
employees may sometimes be corporate clients). We decline to expand the privilege
to communications outside the employer-employee relationship because former
employees categorically differ from current employees with respect to the concerns
identified in Upjohn and Youngs.
A school district, like any organization, can act only through its constituents
and agents. See RPC 1.13 cmt. 1. Corporate attorney-client privilege may arise
when "the constituents of an organizational client communicate[] with the
organization's lawyer in that person's organizational capacity." Id. at cmt. 2; see
also RESTATEMENT (THIRD) OF THE LAW GOVERNJNG LAWYERS § 73(2) (AM. LAW
INST. 2000). An organizational client, including a governmental agency, can require
its own employees to disclose facts material to their duties (with some limits not
relevant here) to its counsel for investigatory or litigation purposes. See
RESTATEMENT (THIRD) OF AGENCY§ 8.11 (AM. LAWINST. 2006).
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But everything changes when employment ends. When the employer-
employee relationship terminates, this generally terminates the agency relationship. 2
As a result, the former employee can no longer bind the corporation and no longer
owes duties ofloyalty, obedience, and confidentiality to the corporation. See id. &
cmt. d. Without an ongoing obligation between the former employee and employer
that gives rise to a principal-agent relationship, a former employee is no different
from other third-party fact witnesses to a lawsuit, who may be freely interviewed by
either party. See lnfosystems, Inc. v. Ceridian Corp., 197 F.R.D. 303, 305 (E.D.
Mich. 2000) ('"It is virtually impossible to distinguish the position of a former
employee from any other third party who might have pertinent information about
one or more corporate parties to a lawsuit."' (quoting Clark Equip. Co. v. Lift Parts
Mfg. Co., 1985 WL 2917, at *5 (N.D. Ill. Oct. 1, 1985) (court order))).
Highland's argument for extending the attorney-client privilege to its
communications with the former coaches emphasizes that these former employees
2
Some courts have recognized that the attorney-client privilege could extend to
former employees in those situations in which a continuing agency duty exists. See
Peralta, 190 F.R.D. at 41 n.l (stating "[a]ccording to the Restatement (Third) of the Law
Governing Lawyers, [§ 73 cmt. e,] the attorney-client privilege would not normally attach
to communications between former employees and counsel for the fonner employer" in
the absence of "a continuing duty to the corporation" based on agency principles);
Infosystems, Inc. v. Ceridian Corp., 197 F.R.D. 303, 306 (E.D. Mich. 2000) (recognizing
"there may be situations where the former employee retains a present connection or agency
relationship with the client corporation" that would justify application of the privilege).
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may possess vital information about matters in litigation, and that their conduct
while employed may expose the corporation to vicarious liability. These concerns
are not unimportant, but they do not justif'y expanding the attorney-client privilege
beyond its purpose. The underlying purpose of the corporate attorney-client
privilege is to foster full and frank communications between counsel and the client
(i.e., the corporation), not its former employees. State v. Chervenell, 99 Wash. 2d 309,
316, 662 P.2d 836 (1983). This purpose is preserved by limiting the scope of the
privilege to the duration of the employer-employee relationship. See RESTATEMENT
(THIRD) OF THE LAW GOVERNJNG LAWYERS § 73(2). 3 Upon termination of the
employment relationship, the interests of employer and former employee may
diverge. But the attorney-client privilege belongs solely to the corporation, and it
may be waived or asserted solely by the corporation, even to the detriment of the
employee.
3
The Restatement recognizes that in general privileged connnunications are
temporally limited to the duration of a principal-agent relationship:
[A] person making a privileged communication to a lawyer for an
organization must then be acting as agent of the principal-organization. The
objective of the organizational privilege is to encourage the organization to
have its agents connnunicate with its lawyer ... [.] Generally, that premise
implies that persons be agents of the organization at the time of
connnunicating.
RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS § 73 cmt. e. The Restatement
connnent acknowledges the privilege may extend to postemployment connnunications in
limited circumstances, based on the agency principles discussed in note 2 of this opinion.
I d.
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Refusing to extend the corporate attorney-client privilege articulated in
Upjohn beyond the employer-employee relationship preserves a predictable legal
framework. Upjohn recognized the value of predictability when determining the
applicability of the attorney-client privilege:
[I]f the purpose of the attorney-client privilege is to be served, the attorney
and client must be able to predict with some degree of certainty whether
particular discussions will be protected. An uncertain privilege, or one which
purports to be certain but results in widely varying applications by the courts,
is little better than no privilege at all.
449 U.S. at 393. We find this considerations particularly relevant here, where the
question before us is at what point in the employer-employee relationship the
attorney-client privilege ceases to attach. All agree that it cannot extend forever and
that it cannot encompass every communication between corporate counsel and
former employees. But it is difficult to find any principled line of demarcation that
extends beyond the end of the employment relationship. We conclude that the
interests served by the privilege are sufficiently protected by recognizing that
communications between corporate counsel and employees during the period of
employment continue to be privileged after the agency relationship ends. See supra
note 1.
We recognized that some courts have extended the corporate attorney-client
privilege to former employees because ofthe corporation's perceived need to know
what its former employees know. See In re Allen, 106 F.3d 582, 605-06 (4th Cir.
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1997) (collecting cases). We find this justification unpersuasive. A defendant might
easily perceive itself as needing to know many things known by potential witnesses,
and might strongly prefer not to share its conversations with those witnesses with
the other side. So might a plaintiff. So might a government. That alone should not
be enough to justify frustrating "the truthseeking mission of the legal process" by
extending the old privilege. United States v. Tedder, 801 F.2d 1437, 1441 (4th Cir.
1986) (citing United States v. (Under Seal), 748 F.2d 871, 875 (4th Cir. 1984)).
The superior court properly rejected Highland's argument that former
employees should be treated the same as current employees. The court appropriately
allowed Highland to assert its attorney-client privilege over communications with
the former coaches only during the time Highland's counsel purportedly represented
them at their depositions. We therefore affirm the superior court's decision to deny
Highland's motion for a protective order and lift the temporary stay of discovery
issued by our commissioner.
2. Attorney Fees on Appeal
We deny Newman's request for attorney fees on appeal. Newman requests
fees under CR 26( c) and CR 37(a)(4) for successfully challenging Highland's claim
of attorney-client privilege. Br. of Resp'ts at 33. We deny Newman's request
because Highland's opposition to discovery was reasonable given that the question
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of whether the corporate attorney-client privilege extends to former employees was
a novel legal question of first impression in Washington. CR 37(a)(4) (mandatory
award of expenses and attorney fees for successfully challenging a motion becomes
discretionary if "the court finds that the opposition to the motion was substantially
justified or that other circumstances make an award of expenses unjust"). For these
same reasons, we also exercise our discretion to deny Newman's request for fees
pursuant to chapter 7.21 RCW (2001). 4
CONCLUSION
We affirm and lift the temporary stay of discovery. The supenor court
properly denied Highland's motion for a protective order shielding from discovery
its postemployrnent communications with former employees.
4 This discretionary review does not include any issue concerning the trial court's
order imposing contempt sanctions against Highland, or limit the trial court's ability to
revisit that order in light of our decision. See Washburn v. Beatt Equip. Co., 120 Wash. 2d
246, 300, 840 P.2d 860 (1992) ("Absent a proper certification, an order which adjudicates
fewer than all claims or the rights and liabilities of fewer than all parties is subject to
revision at any time before entry of final judgment as to all claims and the rights and
liabilities of all parties.").
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WE CONCUR:
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No. 90194-5
WIGGINS, J. (dissenting)-! agree with the majority that any communications
that fall within the attorney-client privilege during employment remain protected by the
privilege after employment is terminated. I also agree with the majority this court has
adopted the reasoning of Upjohn Co. v. United States, 449 U.S. 383, 101 S. Ct. 677,
66 L. Ed. 2d 584 (1981 ). However, I disagree with the majority's decision to adopt a
bright-line rule that will cut off the corporate attorney-client privilege at the termination
of employment, and will exclude from its scope all postemployment communications
with former employees, even when those employees have relevant personal
knowledge regarding the subject matter of the legal inquiry and even though had they
remained employed, such communications with counsel would have been privileged
under Upjohn. This temporal limitation is at odds with the functional analysis underlying
the decision in Upjohn and ignores the important purposes and goals that the attorney-
client privilege serves.
Instead, I would conclude the scope of the attorney-client privilege and the
decision as to whether to extend its protections to former employees is based on the
flexible approach articulated in Upjohn. Under this flexible analysis, I would hold that
postemployment communications consisting of a factual inquiry into the former
employee's conduct and knowledge during his or her employment, made in furtherance
of the corporation's legal services, are privileged. Accordingly, I respectfully dissent.
Newman v. Highland Sch. Oist. No. 90194-5
(Wiggins, J., dissenting)
ANALYSIS
I. The Majority's Position Is at Odds with Upjohn's Functional Analysis
As the majority correctly acknowledges, this court has embraced the flexible
approach in Upjohn for determining the scope of the attorney-client privilege in the
corporate context. Majority at 8; see also Youngs v. PeaceHealth, 179 Wash. 2d 645, 653,
316 P.3d 1035 (2014). Upjohn is the leading case on the scope of corporate attorney-
client privilege. In Upjohn, the Supreme Court was presented with the question of
whether the attorney-client privilege in the corporate context could ever apply to
communications between corporate counsel and lower-level corporate employees.
At the time the Supreme Court decided Upjohn, two competing tests had
emerged in the lower courts regarding the scope of the corporate attorney-client
privilege. Upjohn, 449 U.S. at 386. One such test, adopted by the lower court in Upjohn,
was the "control group test," which would have limited the corporate attorney-client
privilege to the "'control group"' of the corporation, namely "those officers, usually top
management, who play a substantial role in deciding and directing the corporation's
response to the legal advice given." United States v. Upjohn Co., 600 F.2d 1223, 1224,
1226 (6th Cir. 1979), rev'd, 449 U.S. 383. The control group test was based on the
rationale that only those individuals who acted like a traditional "client" would receive
the protection of the privilege, and as the lower court in Upjohn stated, it adopted the
control group because the corporate client was an inanimate entity and "only the senior
management, guiding and integrating the several operations, ... can be said to
possess an identity analogous to the corporation as a whole." /d. at 1226.
2
Newman v. Highland Sch. Dist. No. 90194-5
(Wiggins, J., dissenting)
On appeal, the Supreme Court unanimously rejected the narrow control group
test. Upjohn, 449 U.S. at 390. Instead of looking to the identity of the individual
corporate actors to see whether they possessed a sufficient identity of relationship to
the corporation so as to qualify as a client-as the lower court had done-the Court
looked to the nature of the communications to see whether the purposes underlying the
attorney-client privilege would be furthered by its extension to the communications at
issue. /d. at 391-92. The Supreme Court identified several purposes underlying the
privilege, including that the privilege encourages full and frank communication between
attorneys and their clients, and enables clients to take full advantage of the legal
system. /d. at 389, 391. The privilege is based on a recognition "that sound legal advice
or advocacy serves public ends and that such advice or advocacy depends upon the
lawyer's being fully informed by the client." /d. at 389. The control group test was
inadequate because it failed to recognize that the privilege "exists to protect not only
the giving of professional advice to those who can act on it but also the giving of
information to the lawyer to enable him to give sound and informed advice." /d. at 390.
The Upjohn Court declined to establish a bright-line rule regarding the scope of
the attorney-client privilege in the corporate setting. /d. at 396-97. Instead, the Court
provided a functional framework for analyzing the scope of the attorney-client privilege
on a case-by-case basis. /d. This functional analysis focused on the communications
at issue and the perceived purposes underlying the privilege. /d. at 394-95. "In large
part, the Court's inquiry resolves into a single question: Would application of the
privilege under the circumstances of this particular case foster the flow of information
3
Newman v. Highland Sch. Dist. No. 90194-5
(Wiggins, J., dissenting)
to corporate counsel regarding issues about which corporations seek legal advice?"
John E. Sexton, A Post-Upjohn Consideration of the Corporate Attorney-Client
Privilege, 57 N.Y.U. L. REV. 443, 459 (1982).
In Upjohn, the Court found it relevant that the communications were made by
corporate employees to corporate counsel at the direction of corporate superiors, and
that the communications concerned factual information that fell within the scope of the
employee's duties that was '"not available from upper-echelon management"' and that
was necessary "'to supply a basis for legal advice."' Youngs, 179 Wn.2d at 664 n. 7
(quoting Upjohn, 449 U.S. at 394). The Court also noted that the communicating
employee was aware that the interview was conducted for legal purposes and that the
information would be kept confidential. /d. In light of these characteristics, the Upjohn
Court held that these communications were privileged because doing so was consistent
with the underlying purpose of the attorney-client privilege to allow for full and frank
fact-finding. Upjohn, 449 U.S. at 395.
We previously praised the Upjohn Court's analysis and its focus on furthering the
"laudable goals of the attorney-client privilege." Wright v. Grp. Health Hasp., 103 Wash. 2d
192, 202, 691 P.2d 564 (1984). In our recent decision in Youngs, we acknowledged in
our discussion of the attorney-client privilege that Upjohn "defines the scope of the
corporate attorney-client privilege," 179 Wn.2d at 651, and we expressly relied on
Upjohn's reasoning after observing that Washington courts had endorsed Upjohn's
"'flexible ... test"' for more than 30 years, id. at 662 (alteration in original) (quoting
Wright, 103 Wn.2d at 202).
4
Newman v. Highland Sch. Dist. No. 90194-5
(Wiggins, J., dissenting)
The majority in this case now eschews Upjohn's functional analysis for a bright-
line rule, cutting off the privilege at the termination of employment. See majority at 12.
The majority argues that Upjohn supports this bright-line rule because the Court
presupposed that the communications occurred within the corporate employee
relationship. /d. at 9. Nothing in the Upjohn decision supports the majority's bald
assertion that the decision "presupposed attorney-client communications taking place
within the corporate employment relationship" before the privilege would attach. /d. In
fact, 7 of the 86 employees interviewed by corporate counsel in Upjohn had left
employment prior to being interviewed. Upjohn, 449 U.S. at 394 n.3. The Court
expressly declined to decide the issue whether former employees were included in the
privilege, instead providing the functional framework for lower courts to utilize in
answering that precise question. 1 See id.
Moreover, the majority's focus on the formalities of the relationship between the
employee and the corporation as the standard for the attorney-client privilege misses
the point of the Upjohn Court's functional framework. The Upjohn Court rejected the
control group test, and the focus that test placed on the level of control and
responsibilities of the specific employee, to instead adopt a framework that looked at
the communications themselves and the benefits and goals of the privilege. "A primary
reason that the Upjohn Court rejected the control group test was that in the Court's
1 In a concurring opinion in Upjohn, Chief Justice Burger approved of the factors considered
by the majority to conclude that the communications were privileged, but would have gone
further to hold that the privilege would also protect communications with a former employee
regarding conduct "within the scope of employment." Upjohn, 449 U.S. at 403 (Burger, C.J.,
concurring in part and concurring in the judgment).
5
Newman v. Highland Sch. Dist. No. 90194-5
(Wiggins, J., dissenting)
eyes the restriction placed upon the relationship of the information-giver to the
corporation undermined the purposes of the corporate attorney-client privilege."
Sexton, supra, at 497. "[A]n approach that focuses solely upon the status of the
communicator fails to adequately meet the objectives sought to be served by the
attorney-client privilege." Samaritan Found. v. Goodfarb, 176 Ariz. 497, 501, 862 P.2d
870 (1993). By looking only at the identity of the former employee, the majority
sidesteps around the important functional analysis contemplated by Upjohn.
II. The Functional Upjohn Analysis Supports Extending the Attorney-Client
Privilege to Communications with Former Employees for Purposes of Factual
Investigation
At issue in this case is not, as the majority puts it, "whether postemployment
communications between former employees and corporate counsel should be treated
the same as communications with current employees," majority at 2 (emphasis added),
but rather whether the corporate attorney-client privilege provides any protection for the
communications between the former coaches and the counsel for the school district
and the scope of any such protection. Though neither Upjohn nor Youngs had cause
to consider whether and to what degree the privilege extends to former employees, the
principles underlying these and other decisions support extending the privilege to
former employees in certain circumstances based on the flexible analysis of Upjohn.
While it is well established that the attorney-client privilege attaches to
corporations, the application of the privilege to corporations presents unique and
special problems. Commodity Futures Trading Comm'n v. Weintraub, 471 U.S. 343,
348, 105 S. Ct. 1986, 1991, 85 L. Ed. 2d 372 (1985). Unlike an individual client, who is
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Newman v. Highland Sch. Dist. No. 90194-5
(Wiggins, J., dissenting)
traditionally both the provider of information and the person who will act on a lawyer's
advice, these roles of providing information and acting are often separated within a
corporation. Upjohn, 449 U.S. at 391. As an inanimate entity, a corporation can act only
through its agents and thus cannot itself speak directly to its lawyers. Commodity
Futures Trading Comm'n, 471 U.S. at 348. And as the Court recognized in Upjohn, it
will often be the lower-level employees who possess the information needed by
corporate counsel in order to adequately advise the client. Upjohn, 449 U.S. at 391.
Moreover, lower-level employees can and do, by their individual actions as agents of
the corporation, embroil a corporate client in legal difficulties. /d. Thus, in at least some
cases, the only way corporate counsel will be able to determine what the actions of its
client (the corporation) were in order to provide relevant legal advice would be to speak
with those lower-level employees that have knowledge of the relevant events and
activities of the corporation.
Former employees, just like current employees, may possess relevant
information pertaining to events occurring during their employment "needed by
corporate counsel to advise the client with respect to actual or potential difficulties." In
re Coordinated Pretrial Proceedings in Petrol Prods. Antitrust Litig., 658 F.2d 1355,
1361 n.7 (9th Cir. 1981). Relevant knowledge obtained by an employee during his or
her period of employment does not lose relevance simply because employment has
ended. When former employees have relevant knowledge about incidents that occurred
while they were employed, the extension of the attorney-client privilege to cover
postemployment communications may further support the privilege's fact-finding
7
Newman v. Highland Sch. Dist. No. 90194-5
(Wiggins, J., dissenting)
purpose. See id.; In re Allen, 106 F.3d 582, 606 (4th Cir. 1997). "[A] formalistic
distinction based solely on the timing of the interview [between corporate counsel and
the knowledgeable employee] cannot make a difference if the goals of the privilege as
outlined in Upjohn are to be achieved." Sexton, supra, at 499.
The majority dismisses this "need to know" rationale as unpersuasive and as an
unjustified extension of the purpose of the privilege. Majority at 11, 13. But the majority
overlooks that this stated purpose-facilitating the flow of relevant and necessary
information from lower-level employees to counsel-was a key function of the privilege
identified by the Court in Upjohn and a critical reason that Court extended the privilege
to lower-level employees in the first place. See Upjohn, 449 U.S. at 391.
Other courts have relied on Upjohn's reasoning, and its acknowledgment that
one purpose of the privilege is to facilitate the gathering of relevant facts by counsel, to
justify extending the scope of the attorney-client privilege to cover at least some
communications with former employees. See, e.g., In re Coordinated Pretrial
Proceedings, 658 F.2d at 1361 n. 7 ("Former employees, as well as current employees,
may possess the relevant information needed by corporate counsel to advise the client
with respect to actual or potential difficulties."); Admiral Ins. Co. v. U.S. Dist. Court, 881
F.2d 1486, 1493 (9th Cir. 1989) ("[T]he Upjohn rationale necessarily extended the
privilege to former corporate employees .... "); In re Allen, 106 F. 3d at 606 ("[W]e hold
that the analysis applied by the Supreme Court in Upjohn to determine which
employees fall within the scope of the privilege applies equally to former employees.");
Peralta v. Cendant Corp., 190 F.R. D. 38, 41 (D. Conn. 1999).
8
Newman v. Highland Sch. Dist. No. 90194-5
(Wiggins, J., dissenting)
However, I acknowledge that Upjohn's policies and purposes do not require us
to consider former employees exactly as we consider current employees. Former
employees present their own unique considerations: they probably do not communicate
with corporate counsel "at the direction of corporate superiors," Upjohn, 449 U.S. at
394, and they do not hold an agency relationship with the corporate client such that
their present or future actions could bind the corporation.
I am persuaded that the appropriate line is expressed in this simple test: Did the
communications with the former employee, whenever they occurred, "relate to the
former employee's conduct and knowledge, or communication with defendant's
counsel, during his or her employment?" Peralta, 190 F.R.D. at 41. If so, the
communications are privileged, consistent with Upjohn. /d. The Peralta court that
adopted this test noted it was rejecting a wholesale application of the specific factors
identified in Upjohn because former employees, unlike current employees, were not
directed to speak with corporate counsel at the direction of management. /d. But the
court relied on the rationale of Upjohn, which is to say the court looked to the purpose
of the attorney-client privilege and whether that privilege was served by applying it to
postemployment communications with a former employee-it held that the privilege
applied to the extent the communications concerned the underlying facts in the case.
See id.
The majority justifies departing from Upjohn on the basis that former employees
"categorically differ" from current lower-level employees, such that the privilege should
extend to their communications with corporate counsel. Majority at 9. The majority
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Newman v. Highland Sch. Dist. No. 90194-5
(Wiggins, J., dissenting)
focuses on agency principles and the policy announced in the Restatement (Third) of
the Law Governing Lawyers§ 73 (Am. Law lnst. 2000). /d. I reject these positions as
incorrectly framed statements of the law, and because they are inconsistent with the
functional framework of Upjohn.
The majority gives much weight to the fact that during employment, an employer
can force an employee to disclose information to the corporation, but after employment,
any such duty expires. Majority at 9-10. In addition, the majority notes that current
employees owe duties of loyalty and obedience to the corporation, which also expire at
termination. /d. (citing Restatement (Third) of Agency§ 8.11 (Am. Law lnst. 2006)).
Without this continuing duty to the corporation, the majority argues that a former
employee becomes a simple third-party fact witness to whom the attorney-client
privilege should not attach. /d.
The majority's premise is mistaken. Upjohn based its analysis of the attorney-
client privilege on the idea that the attorney-client privilege, if applied to lower-level
employees, would allow corporate counsel to obtain necessary and relevant
information regarding the client, and with that information the attorney could inform the
corporation's managers and officers of the corporation's legal duties and obligations.
Upjohn, 449 U.S. at 392. The value the Court placed on the privilege to in effect promote
the free and frank exchange of information presupposes that application of the privilege
would foster communications that, but for the privilege, would never have occurred.
See Sexton, supra, at 491; Upjohn, 449 U.S. at 389 (noting that a goal of the privilege
is to promote "full and frank communication"). Moreover, notably missing from the
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Newman v. Highland Sch. Dist. No. 90194-5
(Wiggins, J., dissenting)
Supreme Court's analysis in Upjohn is any discussion of the roles that a duty of loyalty
or obedience plays with respect to the attorney-client privilege. The privilege itself is
not grounded in concepts of a duty on behalf of the client to disclose information to its
attorney, just as its extension to lower-level employees is not based on their duty to
provide information to the corporation.
Concepts of agency are undoubtedly relevant to the corporate attorney-client
privilege, just not as the majority applies them. The rationale behind extending the
privilege beyond the control group of the corporation is that lower-level employees, by
virtue of their agency relationship with the corporation, have the authority to bind the
corporation and control its actions in ways that can lead to legal consequences for the
corporation. See Upjohn, 449 U.S. at 391; see also Commodity Futures Trading
Comm'n, 471 U.S. at 348 (noting that a corporation is an inanimate entity that can act
only through its agents). It is for this reason that corporate counsel should be able to
speak frankly with those employees and agents who have knowledge of the events that
relate to the subject of the lawyer's legal services, regardless of those employees'
subsequent personal employment decisions. Extending the privilege to cover
communications with former employees who were knowledgeable agents of the
corporation with respect to the time period and subjects discussed in the
communications ensures that this remains a privilege with the corporation and
distinguishes these employees from third-party witnesses. Sexton, supra, at 497.
Temporal concepts associated with the duration of agency, as they relate to the
timing a communication is made to counsel, should not be dispositive of the privilege,
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Newman v. Highland Sch. Dist. No. 90194-5
(Wiggins, J., dissenting)
as they bear little relationship to the goals of the privilege identified by the Supreme
Court. It is for this reason that I would also reject the position articulated in the
Restatement (Third) of the Law Governing Lawyers § 73(2) and comment e that the
privilege be limited to those with a present and ongoing agency relationship with the
corporation. Such a position is incompatible with the Upjohn Court's focus on the nature
of the communications, rather than on the formalities of the relationship to the
corporation. Furthermore, as the Restatement itself acknowledges, its position with
respect to former employees is inconsistent with other courts that have considered the
issue. See RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS § 73 cmt. e
(acknowledging that of the few decisions on point, several courts disagree with the
Restatements position regarding former employees).
Ill. Extending the Privilege to Former Employees Will Not Burden the Legal
Process
The majority implies that extending the privilege to former employees would lack
predictability and would frustrate the truth seeking mission of the legal process. Majority
at 12, 13. While these concerns are not insignificant, I do not believe they justify the
majority's harsh, bright-line rule.
First, we have continuously held that the attorney-client privilege extends only to
communications and does not protect the underlying facts. Youngs, 179 Wn.2d at 653;
Wright, 103 Wn.2d at 195. Highland has always allowed, and concedes, that Newman
may continue to conduct ex parte interviews with the former coaches for the purposes
of learning any facts of the incident known to the coaches. See Pet'r's Reply Br. at 14.
12
Newman v. Highland Sch. Dist. No. 90194-5
(Wiggins, J., dissenting)
The attorney-client privilege exists because we recognize that the relationship
between attorney and client is important and worth protecting, even at the expense of
some measure of truth seeking. Lowy v: PeaceHealth, 174 Wash. 2d 769, 785, 280 P.3d
1078 (2012) ("[T]he attorney-client . . . privilege[] [is] ... founded on the premise that
communication in th[is] relationship[] is so important that the law is willing to sacrifice
its pursuit for the truth, the whole truth, and nothing but the truth."). Where we have
defined the scope or extended the attorney-client privilege, we have done so in
recognition of the important purposes the privilege seeks to protect. See, e.g., Youngs,
179 Wn.2d at 650; Dietz v. John Doe, 131 Wash. 2d 835, 849, 935 P.2d 611 (1997). And
we have sought to equitably balance the values underlying the privilege against
concerns over burdening discovery. See, e.g., Dietz, 131 Wn.2d at 849. In Dietz, we
addressed the question of whether the attorney-client privilege extends to protect the
disclosure of a client's identity, when doing so may implicate the client in potential
wrongdoing. /d. at 839. We noted that in such a case, application of the attorney-client
privilege would stand at odds with principles of open discovery and "a general duty to
give what testimony one is capable of giving." /d. at 843 (internal quotation marks
omitted) (quoting Jaffee v. Redmond, 518 U.S. 1, 9, 116 S. Ct. 1923, 135 L. Ed. 2d 337(1996)).
While we extended the privilege in Dietz, we recognized our need to keep that
particular extension narrow. /d. at 849. "The privilege is imperative to preserve the
sanctity of communications between clients and attorneys." /d. at 851 (emphasis
added). Moreover, the truth seeking concerns expressed by the majority are less
13
Newman v. Highland Sch. Dist. No. 90194-5
(Wiggins, J., dissenting)
serious here than in Dietz because application of the privilege will not prohibit discovery
of relevant facts; Newman remains able to interview the former coaches. By contrast,
in Dietz the privilege presented a complete obstacle to learning the identity of a
potentially at-fault party. See Dietz, 131 Wn.2d at 848-49. The policies underlying the
privilege support its extension in this case, and truth seeking principles do not justify a
different conclusion.
Second, like the majority, I too recognize the value of predictability with respect
to the boundaries of the attorney-client privilege. Because attorneys and clients must
be able to predict with at least some certainty where their discussions will be protected,
"[a]n uncertain privilege ... is little better than no privilege at all." Upjohn, 449 U.S. at
393. But such concerns do not require that we sever our analysis from the guiding
principles of Upjohn; rather, we must use those principles to set clear standards for
parties and courts to follow.
The distinction I would draw today should not be difficult for the parties to apply
if the relevant purpose of the privilege-promoting necessary factual investigation-is
kept clear. Accord Peralta, 190 F. R. D at 41. It will be incumbent on counsel to exercise
caution when communicating with their client's former employees in order to ensure
communications stay within these parameters. Should disputes arise as to whether a
specific communication is privileged, they should be submitted to the trial court for a
determination as to whether the purposes identified today would be furthered by its
application.
14
Newman v. Highland Sch. Dist. No. 90194-5
(Wiggins, J., dissenting)
IV. Application to the Facts of This Case
In this case, the trial court ordered Highland School District No. 203 to respond
to discovery requests concerning the "disclosure of communications between defense
counsel and former employees made after the employment ended and not during the
time defense counsel claims to have represented the former employees for purposes
of their depositions." Clerk's Papers at 68-70. The trial court ordered this disclosure
after erroneously concluding that we have not adopted Upjohn 2 and on the
determination that the attorney-client privilege does not apply to any postemployment
communications with former employees. /d. at 69-70.
Matthew Newman has brought claims against the school district based on the
Lystedt act, under which coaches who know or suspect an athlete is suffering from a
concussion must remove the athlete from play until the athlete receives proper medical
clearance. See RCW 28A.600.190; Pet'r's Am. Br. at 4-6; Br. of Resp'ts 6-7. Thus,
Highland's liability in this case is contingent on the actions and knowledge of its football
coaches who were employed during the time Newman played football for Highland
School District and were present when Newman allegedly suffered a concussion and/or
injury, regardless of whether those coaches remain employed by the district today. See
CP at 96-104 (Compl.).
The former coaches at issue were employed by Highland during the relevant
time period when Newman was injured. See, e.g., CP at 1267. They possessed
2 Thetrial court issued its order on January 28, 2014, just five days after our decision in Youngs,
179 Wash. 2d 645. CP at 70.
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Newman v. Highland Sch. Dist. No. 90194-5
(Wiggins, J., dissenting)
knowledge of matters "within the scope of their duties" as football coaches for the
school district, such as the training they received and their interactions with and
observations of Newman before and during his injury. See, e.g., CP at 230-32, 1267,
1587-89. Communications with Highland's counsel that concerned the former coaches'
knowledge and conduct during their employment and the events surrounding
Newman's injury would be necessary to supply a basis for legal advice to the school
district as to liability.
In light of these facts, the purposes underlying the privilege support its extension
to communications with former coaches regarding their conduct and knowledge during
employment. This extension would promote frank and open fact-finding, and enable the
attorney to uncover the facts necessary to render legal advice to the client. Cf. In re
Allen, 106 F. 3d at 606. To the extent communication between the former coaches and
Highland's attorneys concerns a factual inquiry into the former coaches' conduct and
knowledge during his or her employment, I would hold that any such communications
are privileged and Highland need not answer questions regarding these
communications. I would conclude that postemployment communications between the
former employer's counsel and a former employee that constitute a relevant factual
inquiry into their conduct and knowledge during employment would be privileged,
consistent with Upjohn. Thus, I would hold that the trial court's order compelling
discovery is based on an incorrect interpretation of the law and should be reversed.
This conclusion, however, does not completely resolve the current dispute
between the parties about the postemployment communications with former coaches.
16
Newman v. Highland Sch. Oist. No. 90194-5
(Wiggins, J., dissenting)
Newman contends that the communications at issue concern more than just fact-
finding. Br. of Resp'ts at 25-30. Newman argues that the predeposition communications
with former coaches should not be privileged because the purpose of these
predeposition, postemployment communications was not fact-finding, but rather to
'"woodshed[]"' the witness and influence the witness's testimony. 3 Br. of Resp'ts at 25-
27, 30.
Some of this controversy stems from the unusual circumstance that Highland's
attorneys formally appeared for and represented the former coaches for purposes of
their depositions. 4 The trial court allowed this representation, 5 and Newman did not
challenge this order on appeal. Thus, Newman seeks, and the trial court order
compelled, discovery of communications made only "when defense counsel did not
represent the former employees for the purposes of the depositions." CP at 68-70. The
communications to prepare the former coaches for a deposition do not appear to fall
within the court's order to compel, as the actual representation of the former coaches
may potentially include these predeposition meetings between defense counsel and
3 The record and briefing indicate that each party has accused the other of witness tampering
in this case. See, e.g., Br. of Resp'ts at 30; CP at 830.
4 When asked by the trial court what it meant to represent for purposes of the deposition, the
attorney representing Highland stated, "It means that I can interview them, talk to them about
the facts, what they recall, give them ideas as to what I think subject matters will come up so
they're somewhat prepared as to the questions." Verbatim Report of Proceedings (VRP) at 44
(Sept. 27, 2013).
5 This issue came before the trial court on a motion to disqualify defense counsel filed by
Newman. /d. at 42. The trial court expressed concerns about defense counsel's representation
of these former employees and the potential conflicts this posed. VRP at 117. The trial court
concluded this was "a very poor decision" but that it was not necessarily an ethics violation. /d.
The trial court ordered Highland's counsel not to engage in any further representation of former
coaches for depositions. CP at 68-70. The parties have not challenged this ruling in the present
appeal, and the merits of this ruling are not properly before the court.
17
Newman v. Highland Sch. Dist. No. 90194-5
(Wiggins, J., dissenting)
the former coaches. See, e.g., CP at 226-27 (Dep. of Dustin Shafer) (noting that a
discussion with defense counsel regarding formal representation for purposes of
Shafer's deposition occurred at a meeting with counsel one week prior to his
deposition).
However, the record is unclear as to when the school district's defense counsel
represented the former coaches. Without knowing the scope of the communications at
issue, whether they were limited to a factual inquiry into the former employee's conduct
and knowledge during his or her employment, and whether or not such communications
occurred during the period of formal representation, it is impossible to tell whether the
communications at issue meet the test I suggest today.
Accordingly, I would vacate the trial court's order to compel. On remand, the
plaintiff would not be entitled to the broad discovery of communications with former
coaches during the time the coaches were represented, as he has requested. CP at
37-43. And if such broad requests are made, defendant may raise the privilege again
to the extent such communications fell within the scope of the direct representation, or
to the extent such communications were made as a factual inquiry concerning the
former employee's conduct and knowledge during his or her employment, relevant to
the underlying case. Consequently, discovery should and would be tailored to specific
questioning regarding communications falling outside the bounds of normal factual
inquiry and thus is outside the scope of the attorney-client privilege with former
employees.
18
Newman v. Highland Sch. Dist. No. 90194-5
(Wiggins, J., dissenting)
V. Contempt Sanctions and Attorney Fees
I would also vacate the trial court's order imposing contempt sanctions of $2,500
per day on Highland until discovery is provided. We previously placed a broad order
staying all matters before the trial court related to the discovery of allegedly privileged
communications, which put a stay on the contempt sanctions order. Because I would
reverse the trial court's order compelling production, I would also vacate the order
imposing sanctions on Highland.
I also join in the majority's denial of Newman's request for attorney fees.
CONCLUSION
I would hold that the attorney-client privilege attaches to postemployment
communications concerning a relevant factual inquiry into the former employee's
conduct and knowledge during his or her employment. The former coaches in this case
had relevant information within the scope of their employment, and to the extent these
communications concerned their knowledge and conduct during employment with
Highland, such communications would be privileged. I would vacate both the trial
court's order to compel and contempt order, lift the stay of discovery, and remand for
further proceedings consistent with this opinion.
19
No. 90194-5
(Wiggins, J., dissenting)
I dissent.
20