Legal Malpractice

"At issue" and "Work Product" in Legal Malpractice Litigation

By (Andrew Lavoott Bluestone)

Discovery in legal malpractice litigation often turn around the "but for" portion of the case.  The question of why was the underlying case ultimately lost, why didn't plaintiff succeed with successor counsel and why are we responsible for this bad outcome, are often heard, and usually must be dealt with.  Here in Leviton Mfg. Co., Inc.,  v. Greenberg Traurig LLP, et al., , 09 Civ. 8083 (GBD) (THK); U.S. District Court, Southern District illustrates  theprincipals of "at issue" attorney-client privilege and " work-product" discovery.

"Plaintiff Leviton Mfg. Co. ("Leviton") alleges in its Complaint that Defendant Greenberg Traurig LLP and certain individual attorneys at Greenberg Traurig were professionally negligent in prosecuting a number of patent applications before the United States patent and Trademark Office ("USPTO" or "Patent Office"). As a consequence, the "on-sale bar" foreclosed the patentability of Leviton's inventions, because the inventions, were on sale in the United States for more than one year prior to the date of the patent applications.

The attorney-client privilege may be waived. Although Defendants' rely primarily upon federal law in arguing the issue of waiver, Leviton correctly argues that it is New York law that provides the law of decision for Leviton's claim of legal malpractice. See Chin v. Rogoff & Co., P.C., No. 05 Civ. 8360 (NRB), 2008 WL 2073934, at *4 (S.D.N.Y. May 8, 2008) ("when a discovery dispute involves an attorney-client relationship with a New York attorney, New York privilege law applies"). Nevertheless, the parties cite both New York and federal law in support of their positions, and appear to hold the view that there is no material difference in New York and federal law on this issue. (See Pl.'s Br. at 2.)

Under Second Circuit law, waiver of attorney-client privilege may occur,

when a client testifies concerning portions of the attorney-client communication,…when a client places the attorney-client relationship directly at issue,…and when a client asserts reliance on an attorney's advice as an element of a claim or defense.

In re County of Erie, 546 F.3d 222, 228 (2d Cir. 2008) (quoting Sedco Int'l S.A. v. Cory, 683 F.2d 1201, 1206 (8th Cir. 1982)). Courts have recognized that a party need not explicitly rely upon advice of counsel to implicate privileged communications. Instead, advice of counsel may be placed in issue where, for example, a party's state of mind, such as his good faith beliefin the lawfulness of his conduct, is relied upon in support of a claim of defense. Because legal advice that a party received may well demonstrate the falsity of its claim of good faith belief, waiver in these instances arises as a matter of fairness, that is, it would be unfair to allow a party to "use[] an assertion of fact to influence the decisionmaker while denying its adversary access to privileged material potentially capable of rebutting the assertion." John Doe Co. v. United States, 350 F.3d 299, 306 (2d Cir. 2003); accord County of Erie, 546 F.3d at 229; see also Bilzerian, 926 F.2d at 1292; von Bulow, 828 F.2d at 103; Am. S.S. Owners Mut. Prot. and Indem. Ass'n v. Alcoa S.S. Co., 232 F.R.D. 191, 199 (S.D.N.Y. 2005).

Like the Second Circuit, New York courts will not find an at issue waiver merely because privileged information is relevant to the issues being litigated; "(r]ather, at issue waiver occurs when the party has asserted a claim or defense that he intends to prove by use of the privileged materials," Deutsche Bank, 43 A.D.3d at 23, 837 N.Y.S.2d at 64 (internal quotation marks omitted; accord Veras Inv. Partners, LLC v. Akin Gump Strauss Hauer & Feld LLP, 52 A.D.3d 370, 374, 860 N.Y.S.2d 78, 82 (1st Dep't 2008), or, where rather than being merely relevant, "the privileged documents are indispensable to a party's claims or defenses." Chin, 2008 WL 2073934, at *5; Carl v. Cohen, 23 Misc. 3d 1110 (A), 886 N.Y.S.2d 66 (Table), 2009 WL 997517, at *3 (S. Ct. N.Y. Cty. 2009). For example, where a claim of malpractice is premised upon reliance on the erroneous advice of predecessor counsel, under both New York and federal law, the legal advice received from any other counsel on the same issue is placed at issue. See, e.g., Goldberg v. Hirschberg, 10 Misc. 3d 292, 297-98, 806 N.Y.S.2d 333, 337 (S. Ct. N.Y. Cty. 2005) (citing to the "remarkable similarity" to Bank Brussels Lambert v. Fiddler, Gonzalez & Rodriquez, No. 96 Civ. 7233 (LMM) (RLE), 2003 WL 21277139 (S.D.N.Y. June 2, 2003), aff'd 2005 WL 756859 (S.D.N.Y. April 1, 2005), for the proposition that "because plaintiff was claiming that it relied on defendant's advice on a certain issue to its detriment, the legal advice it received from any other lawyers on that issue related to the reasonableness of plaintiff's reliance and was not subject to the attorney-client privilege")."
 

Full post as published by New York Attorney Malpractice Blog on December 13, 2010 (boomark / email).