Court Concludes Determining Whether Communications Involving In-House Counsel are Privileged is "Complicated"

By Rebekah L. Hudgins

Late last year, the United States District Court of the Eastern District of Louisiana issued an informative opinion in Texas Brine Company, LLC et al. v. Dow Chemical Company, et al.[1], addressing when communications between an entity and its in-house counsel may not be considered privileged. In that case, two limited liability companies owning property (the "property owners") sued a number of companies alleging encroachment of a solution mining cavern onto the property owners' land.  During discovery, the property owners asserted the claim of privilege over a number of communications.  After the companies challenged the property owners' assertion of privilege, the Court ordered certain communications be produced for in camera review.

Ultimately, the Court rejected the property owners' assertion of privilege over a number of communications. "For a communication to be protected under the claim of privilege, the proponent 'must prove: (1) that he made a confidential communication; (2) to a lawyer or his subordinate; (3) for the primary purpose of securing either a legal opinion or legal services, or assistance in some legal proceeding.'"[2]  In applying this standard, the Court rejected the assertion of privilege over an employee's emails forwarding information to an in-house lawyer, as well as over emails that merely included in-house counsel as a co-recipient.  The Court reasoned there were no indications in the emails that legal advice was being sought or provided, let alone that the primary purpose of the communications was to obtain or provide legal advice.  The Court reiterated the complicated nature of asserting privilege over communications between an entity and in-house counsel, as determining whether the primary purpose of the communication was to provide or receive legal advice is often convoluted due to the fact that an in-house attorney fulfills multiple roles within the entity.  Indeed, the Court cautioned that it is more difficult to define the scope of privilege when a communication is made to in-house counsel due to the level of participation in-house counsel has in an entity's day-to-day operations.

The Texas Brine opinion should serve as a warning to companies and in-house counsel alike.  Given the mixed roles an in-house attorney may have within a company, including roles that may be non-legal in nature, retaining outside counsel may be appropriate so as to preserve the claim of privilege.

[1] Civil Action No. 15-1102 c/w No. 15-3324, 2017 WL 5625812, at *1 (E.D. La. Nov. 21, 2017).

[2] Id. (quoting United States v. Robinson, 121 F.3d 971, 974 (5th Cir. 1997) (emphasis in original omitted)).