LEXINGTON PUBLIC LIBRARY V. THOMAS L . CLARK, JUDGE, FAYETTE CIRCUIT COURT AND DIANA KOONCE
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RENDERED: NOVEMBE
TO
LEXINGTON PUBLIC LIBRARY
V.
APPELLANT
ORIGINAL ACTION FROM COURT OF APPEALS
2001-CA-531
FAYETTE CIRCUIT COURT NO . 00-CI-288
THOMAS L. CLARK, JUDGE,
FAYETTE CIRCUIT COURT
APPELLEE
AND
DIANA KOONCE
(REAL PARTY IN INTEREST)
APPELLEE
OPINION OF THE COURT BY JUSTICE COOPER
AFFIRMING
The issues raised by this appeal from a denial of a petition for a writ of
prohibition concern (1) the application of the lawyer-client privilege to communications
made by employees of a client that is a "corporation, association, or other organization
or entity," KRE 503(a)(1) ; and (2) the extent of proof required either to successfully
challenge a trial court's KRE 104(x) ruling by way of a petition for a writ of mandamus or
prohibition, or to support a de novo determination that the communications fall within
the lawyer-client privilege .
The underlying action was brought by Diana Koonce against her former
employer, Lexington Public Library, alleging unlawful retaliation and constructive
discharge . Koonce claims the library unlawfully retaliated against her because she filed
a complaint against her supervisor, Bob Patrick, and that, in December 1999, she was
constructively discharged by Patrick and another library manager . During the course of
discovery, Koonce learned that Patrick had terminated his employment as marketing
director of the library in September 2000. Pursuant to CR 30 .02(6), Koonce noticed the
library to produce an agent or officer to testify as to "all of the facts, circumstances and
events leading up to, contributing to and relevant to the termination of Bob Patrick's
employment with defendant ." Koonce further requested that the agent or officer
produce "all documents referred to or relied upon by the deponent for his or her
testimony on the above-stated points" and "all documents relating to the termination of
Bob Patrick's employment with defendant, including any reports, complaints and other
documents ."
As to the latter request, the library sought a protective order against discovery of
fourteen documents that it claimed were privileged under KRE 503(b). CR 26 .03.
Following an in camera review of those documents, Fayette Circuit Court Judge
Thomas L . Clark entered an order finding that one of the documents was privileged but
that the remaining thirteen had been generated for business purposes, not legal
purposes. He issued a protective order with respect to the privileged document and
held that the remaining thirteen were subject to discovery by Koonce. He further
ordered that all of the documents be filed and sealed in the circuit court record . The
library then petitioned the Court of Appeals for a writ of prohibition with respect to the
documents that had been determined not privileged . The petition was denied and the
library now appeals to this Court as a matter of right. Ky. Const. § 115. Only twelve of
the original fourteen documents remain at issue . No writ was sought, of course, with
respect to the document Judge Clark held was privileged, and the library now concedes
that another of the original fourteen documents is not privileged .
A petition for an extraordinary writ is a separate civil action brought pursuant to
CR 81, not an interlocutory appeal from the underlying action brought pursuant to CR
73.01(2). Thus, the record in the underlying action is not forwarded by the local circuit
court clerk to the court in which the petition is filed and the only evidence available for
consideration is that filed by the parties either in support of or in opposition to the
petition . None of the documents reviewed by Judge Clark have been filed in this
record . Nor does Judge Clark's order describe the documents or recite any factual
bases for his conclusion that thirteen of the documents were generated for business,
not legal, purposes . The only source of information available to us with respect to the
contents of the documents is the affidavit of Susan Brothers, the library's assistant
director for training and human resources, which describes the nature of the documents
in question but not their contents . The affidavit also gratuitously states that the
documents were generated for legal, not business, purposes, in direct contradiction of
Judge Clark's KRE 104(a) findings . Judge Clark's order was entered on February 9,
2001 . Brothers' affidavit was executed thereafter on March 13, 2001 . Thus, we have
no way of knowing whether the only evidence available to us was also available to
Judge Clark during his examination of the documents at issue.
According to the affidavit, Brothers contacted one of the library's attorneys in July
2000 about her "increasing concerns surrounding Patrick's behavior and performance ."
The affidavit also states that the library was "particularly concerned about its possible
legal exposure should it take any action adverse to Patrick because he was over the
age of forty (40) and was experiencing health problems," and that the attorney
"suggested that Geneva Pullen [not further identified (hereinafter "nfi")] and I solicit
comments and concerns about Patrick from Patrick's co-workers so that we could
evaluate Patrick's performance ." The affidavit then describes the general nature of
each document as follows :
(1) E-mail from Becky Croft (nfi) to Susan Brothers and Geneva Pullen,
dated July 21, 2000, regarding Patrick's performance .
(2) Memorandum from Peggy McAllister (nfi) to Geneva Pullen, dated
July 21, 2000, concerning Patrick's performance.
(3) Memorandum from Joyce Probus, Technical Marketing Assistant, to
Geneva Pullen, dated July 21, 2000, concerning management issues
surrounding Patrick .
(4) Handwritten chronology of events on July 20, 2000, prepared by
Geneva Pullen .
(5) Memorandum from Doug Tattershall (nfi) to Geneva Pullen, dated
July 24, 2000, concerning Patrick's performance .
(6) Memorandum from Penny Reeves, Foundation Executive Director, to
Susan Brothers, dated July 22, 2000, regarding Patrick's performance.
(7) Handwritten notes of Geneva Pullen concerning Patrick's
development of a marketing plan.
The affidavit states that each of these first seven documents were forwarded to
the library's attorney "so that he could advise us how to handle Patrick's employment
status with the Library ."
(8) Memorandum from Geneva Pullen and Susan Brothers to Patrick,
dated July 28, 2000, concerning performance and behavior issues . "This
memorandum was drafted with the help of the Library's attorney after he
reviewed the written documentation from Patrick's co-workers."
(9) Handwritten notes of Brothers, dated August 29, 2000, documenting a
telephone conversation with Patrick concerning a timetable for Patrick's
response to the July 28, 2000 memorandum . [The library now concedes
that this document is not privileged .]
(10) Memorandum from Bob Patrick, Marketing Manager, to Geneva
Pullen and Susan Brothers, dated August 31, 2000, responding to issues
surrounding his behavior and performance . "This memorandum was
immediately forwarded to the Library's attorney in order to seek his advice
about how handle [sic] Patrick's employment status."
(11) Internal investigation interview notes of Susan Brothers including
notes of phone conversation with the library's counsel. "These notes
document my discussions and interviews with Patrick's co-workers . I
interviewed the co-workers at the request of the Library's attorney and
forwarded these notes to our attorney so that he could advise us how to
handle Patrick's employment status with the Library."
(12) Handwritten notes of Susan Brothers documenting a telephone
conversation with the Library's attorney . "The notes reflect legal advice
provided by our attorney concerning how to handle our investigation and
identify specific legal concerns surrounding Patrick."
(13) E-mail to Ron Steensland (nfi) and Geneva Pullen from Susan
Brothers concerning Patrick's performance, including discussion of
recommendation of Library's counsel. [This is the only document that
Judge Clark found to be privileged .]
(14) Handwritten notes of Susan Brothers documenting a telephone
conversation with the library's attorney and a meeting with Bob Patrick on
August 30, 2000. "The notes reflect specific advice provided by the
library's attorney concerning what to say to Patrick during the meeting ."
Without revealing the actual contents of any of the documents, Judge Clark
found that only document number thirteen was privileged . His order of February 9,
2001, states, inter alia :
The Court finds the documents may lead to relevant information
and are appropriate for discovery and are not subject to the attorney-client
privilege . It appears from the record the documents in question were
prepared either in the normal course of business or a part of an internal
investigation by the Defendant. Though counsel may have been
consulted regarding the manner in which to conduct the investigation the
documents in question do not purport to give legal advice or reveal any
confidential communication between the client and counsel, except for the
document excluded herein .
I. LAWYER-CLIENT PRIVILEGE .
KRE 503 provides in pertinent part as follows :
(a)
Definitions . As used in this rule:
(1)
"Client" means a person, including a public officer,
corporation, association, or other organization or entity, either public or
private, who is rendered professional legal services by a lawyer, or who
consults a lawyer with a view to obtaining professional legal services from
the lawyer.
(2)
"Representative of the client" means :
(A)
A person having authority to obtain professional legal
services or to act on advice thereby rendered on
behalf of the client; or
(B)
Any employee or representative of the client who
makes or receives a confidential communication :
In the course and scope of his or her
(i)
employment;
(ii)
Concerning the subject matter of his or her
employment ; and
(iii)
To effectuate legal representation for the
client.
A communication is "confidential" if not intended to be
disclosed to third persons other than those to whom
disclosure is made in furtherance of the rendition of
professional legal services to the client or those reasonably
necessary for the transmission of the communication .
(b)
General rule of privilege . A client has a privilege to refuse to
disclose and to prevent any other person from disclosing a confidential
communication made for the purpose of facilitating the rendition of
professional legal services to the client:
(1)
Between the client or a representative of the client and the
client's lawyer or a representative of the lawyer ;
(2)
Between the lawyer and a representative of the lawyer ;
(3)
By the client or a representative of the client or the client's
lawyer or a representative of the lawyer representing
another party in a pending action and concerning a matter of
common interest therein ;
(4)
Between representatives of the client or between the client
and a representative of the client; or
(5)
Among lawyers and their representatives representing the
same client.
(Emphasis added .)
Except for subsection (a)(2), which defines "representative of the client," KRE
503 is largely identical to the proposed federal rule, FRE 503, that was drafted by the
Judicial Conference Advisory Committee on Rules of Evidence and submitted by the
Chief Justice to Congress in 1972 . Congress rejected all of the proposed privilege
rules, including proposed FRE 503, when it adopted the Federal Rules of Evidence in
1975. Instead, it chose to leave this area of federal law for development under
common law principles . FRE 501 ; see Stidham v. Clark, Ky., 74 S.W.3d 719, 713 n .3
(2002). Unlike KRE 503(x)(2), the proposed federal rule did not include a definition of
"representative of the client," but intended to leave that issue open for common law
development . FRE 503(x)(2), Advisory Committee's Note, 56 F .R.D . 183, 237 (1972).
The definition of "representative of the client" in KRE 503(x)(2) was intended to embody
the principles enunciated in Upjohn v. United States, 449 U.S. 383, 101 S .Ct. 677, 66
L .Ed.2d 584 (1981) . Commentary to proposed KRE 503(x)(2), Evidence Rules Study
Commission, Final Draft (November 1989) .
Upjohn , supra , rejected the so-called "control group" definition of "representative
of the client," i .e . , that the privilege applies only to communications made by an
employee in a position to control or to take a substantial part in the decision about any
action the corporation may take upon the advice of the attorney . 449 U .S . at 390-97,
101 S .Ct. at 683-86 . Instead, Upjohn held that the privilege also applied to
communications made by noncontrol group employees of the client (1) at the direction
of their superiors ; (2) in order to secure legal advice for the corporation ; (3) about
matters within the scope of the employees' corporate duties; and (4) while the
employees were aware that they were being questioned in order that the corporation
could obtain legal advice . Id . at 394, 101 S .Ct. at 685. See also Admiral Ins . Co . v.
United States Dist. Court for the Dist. of Ariz. , 881 F.2d 1486, 1492 (9th Cir. 1989);
Robert G . Lawson, The Kentucky Evidence Law Handbook , § 5 .10, at 247 (3d ed .
Michie 1993) . Although the employees at issue in Upjohn were questioned personally
by the attorney, KRE 503(b)(4) clarifies that such is not a requirement for application of
the privilege if the other Upjohn requirements are satisfied . Thus, each communication
made to Brothers by another employee and forwarded to the library's attorney is treated
the same as if the communication had been made directly by the employee to the
attorney . If the communication would have been privileged if made to the attorney, it is
no less privileged because it was made to Brothers who forwarded it to the attorney .
However, if the communication would not have been privileged if made to the attorney,
it did not become privileged just because it was subsequently forwarded to the attorney .
Simon v. G .D . Searle & Co . , 816 F.2d 397, 403 (8th Cir. 1987) . Whether a particular
communication is privileged depends (absent waiver) not on what use was ultimately
made of the communication, but on the facts and circumstances under which the
communication was made .
Koonce does not question that most of the twelve communications at issue were
generated at the instigation of Brothers and that she was a superior of the other
employees (though one might suspect otherwise with respect to document number six
generated by Penny Reeves, Foundation Executive Director). Koonce instead argues
that, as found by Judge Clark, the communications were made for business reasons,
not legal reasons. The privilege "protects only those disclosures necessary to obtain
legal advice which might not have been made absent the privilege," Fisher v. United
States, 425 U .S . 391, 403, 96 S .Ct. 1569, 1577, 48 L .Ed .2d 39 (1976), and "is triggered
only by a client's request for legal, as contrasted with business, advice ." In re Grand
Jury Subpoena Duces Tecum , 731 F.2d 1032, 1037 (2d Cir. 1984). "Where the
attorney acts merely as a . . . business adviser . . . the privilege is inapplicable ." United
States v . Horvath , 731 F.2d 557, 561 (8th Cir. 1984), citing Colton v. United States, 306
F .2d 633, 638 (2d Cir. 1962) . Thus, "business documents sent to . . . the corporation's
attorneys, do not become privileged automatically ." Simon , supra , at 403. On the other
hand, "[c]lient communications intended to keep the attorney apprised of business
matters may be privileged if they embody an implied request for legal advice based
thereon ." Id . at 404 (quotation omitted) . Finally, "[w]hen the ultimate corporate
decision is based on both a business policy and a legal evaluation, the business
aspects of the decision are not protected simply because legal considerations are also
involved ." Hardy v. New York News. Inc. , 114 F.R.D. 633, 643-44 (S .D.N .Y. 1987),
citin SCM v. Xerox, 70 F .R.D. 508, 517 (D.Conn . 1976) .
Koonce also asserts that many of the communications at issue were made
outside the scope of the corporate duties of the employees who made them, i .e . , that it
was not within the employment duties of Becky Croft, Peggy McAllister or Doug
Tattershall to observe and evaluate the job performance of Bob Patrick . The library
responds that if those persons worked under Brothers' supervision, their employment
duties included whatever duties were assigned to them by Brothers, including reporting
on their observations and evaluations of Patrick's job performance . A duty to report,
however, is different from a duty to observe and evaluate . Illustrative of the issue is the
example cited by the drafters of KRE 503(a)(2)(B)(ii) :
Suppose, in a suit for personal injuries sustained when the client's truck
entering the client's loading yard struck a pedestrian, the lawyer for the
client interviews the driver of the truck and a secretary who happened to
be looking out the window when the accident occurred . The interview with
the driver would be privileged but not so the interview with the secretary
because the accident was not a matter within the course and scope of her
employment.
Commentary to proposed KRE 503(a)(2), Evidence Rules Study Committee, Final Draft
(November 1989) . The secretary had a duty to report what she had observed, but the
subject matter of her report was not privileged because, at the time she observed what
she ultimately reported, she did not have a duty to observe it. Likewise, Croft,
McAllister and Tattershall had a duty to report what they had observed about Patrick's
job performance, but the subject matter of their reports is not privileged unless, at the
time they observed what they ultimately reported, they had a duty to make that
observation .' The record before us does not contain that information .
The record is also silent as to whether any of the persons, except Brothers and
Pullen, who made the communications now claimed to be privileged, knew at the time
the communications were made that they were being made for the purpose of obtaining
legal advice as opposed to, e .g., furnishing information to Brothers to be used in
determining whether to terminate Patrick's employment. Compare this record with the
facts recited in Upjohn , supra :
The questionnaire identified Thomas [the attorney who interviewed the
employees] as "the company's General Counsel" and referred in its
opening sentence to the possible illegality of payments such as the ones
on which information was sought. . . . A statement of policy
accompanying the questionnaire clearly indicated the legal implications of
the investigation . The policy statement was issued "in order that there be
'If Brothers had directed the employees to observe Patrick's performance and
then report what they observed, they would have been under a duty to both observe
and report . However, it appears from Brothers' affidavit that the employees were only
directed to report what they had already observed . The distinction is that in the former
instance, the observations were made for the purpose of making a communication and
in the latter instance they were not .
- 1 0-
no uncertainty in the future as to the policy with respect to the practices
which are the subject of this investigation ." . . . [E]ven those interviewees
not receiving a questionnaire were aware of the legal implications of the
interviews .
449 U .S. at 394-95, 101 S.Ct . at 685.
Similarly, in Admiral Insurance Co . , supra :
Gardner and Kinney [employees] were aware that the purpose of the
interviews was to enable Streich, Lang [attorneys] to provide legal advice
to Admiral concerning its potential liability in the JNC matter.
881 F.2d at 1493 .
Finally, neither the July 28, 2000, memorandum from Pullen and Brothers to
Patrick about his job performance nor the August 31, 2000, memorandum from Patrick
to Pullen and Brothers in response thereto can be considered privileged . Patrick was
not a "representative of the client" because, as the target of the investigation and
potential adverse litigant, he was not in a position to make any communications "to
effectuate legal representation for the client ." KRE 503(a)(2)(B)(iii) . Thus, even if the
July 28, 2000, memorandum was drafted with the assistance of the library's attorney,
and even if it was based partially on privileged information, any privilege was waived
when the information was voluntarily disclosed to Patrick. "[C]ommunications that occur
in confidence lose their confidentiality (and the protection of the privilege) if the client
voluntarily discloses them to third persons ." Lawson, supra , § 5 .10, at 236, citing, inter
alia , Hawkins v. Stables , 148 F.3d 379, 384 n .4 (4th Cir. 1998) (implied waiver occurs
when client discloses confidential communications to anyone not covered by the
privilege) and In re Sealed Case , 877 F .2d 976, 980 (1989) (privilege lost even if the
disclosure is inadvertent) . And, of course, Patrick's response was not privileged
because he was not a "representative of the client." That reduces to ten the number of
communications at issue in this case that could possibly be considered privileged .
II. SUFFICIENCY OF THE EVIDENCE .
A writ of prohibition may be granted only upon a showing that:
1) the lower court is proceeding or is about to proceed outside its
jurisdiction and there is no adequate remedy by appeal, or 2) the lower
court is about to act incorrectly, although within its jurisdiction, and there
exists no adequate remedy by appeal or otherwise and great injustice and
irreparable injury would result .
Southeastern United Medigroup, Inc. v. Hughes, Ky., 952 S.W .2d 195, 199 (1997) . See
also Kentucky Labor Cabinet v. Graham , Ky. 43 S .W .3d 247, 251 (2001). Here, the
library asserts that the lower court has acted incorrectly, although within its jurisdiction.
Where a petition for one of the extraordinary writs alleges that a lower
adjudicatory body within its jurisdiction has acted incorrectly, and the
threshold factors of inadequate remedy and irreparable injury are
satisfied, the writ should be granted only upon a showing that the
challenged action reflects an abuse of discretion . If the legitimacy of the
challenged action presents only a question of law, the reviewing court may
of course determine the law without necessary deference to the lower
court or hearing officer . Where the challenge involves matters of fact, or
application of law to facts, however, an abuse of discretion should be
found only where the factual underpinning for application of an articulated
legal rule is so wanting as to equal, in reality, a distortion of the legal rule .
Application of any lesser standard for interlocutory intervention would
ignore the extraordinary nature of the writs of prohibition and mandamus .
Southeastern United Medigroup , supra, at 199-200.
Because the assertion of the lawyer-client privilege represents a mixed question
of law and fact, the issue is often reviewed de novo. Reed v. Baxter, 134 F .3d 351, 355
2 We need not determine if "there exists no adequate remedy by appeal or
otherwise and great injustice and irreparable injury would result," because the Court of
Appeals made that determination when it addressed the merits of the case and its
determination in that regard was not an abuse of discretion . Cf. St. Clair v. Roark, 10
S.W.3d 482, 485 (1999).
- 1 2-
(6th Cir. 1998). Either way, however, the burden of proof is on the party seeking the
writ to produce sufficient evidence to prove either that the trial judge abused his
discretion, Garner v. Shouse, 288 Ky. 756, 157 S .W .2d 288, 289 (1941), or, if reviewed
de novo, all of the requirements necessary to support a finding that each document falls
within the lawyer-client privilege . Hawkins v. Stables, supra, at 381 (burden of proof is
on the proponent of the privilege); United States v. Construction Prods. Research Inc.,
73 F.3d 464, 473 (2d Cir. 1996) ("If the party invoking the privilege does not provide
sufficient detail to demonstrate fulfillment of all the legal requirements for application of
the privilege his claim will be rejected .") (quotation omitted) ; United States v. Abrahams ,
905 F.2d 1276, 1283 (9th Cir. 1990) (proponent has the burden of establishing all of the
conditions necessary for application of the privilege), overruled on other grounds bX
United States v. Jose , 131 F.3d 1325, 1329 (9th Cir. 1997) ; cf. Stidham v. Clark, Ky., 74
S .W.3d 719, 725 (2002) ("Because privileges operate to exclude relevant evidence, the
party asserting the privilege has the burden to prove the privilege applies .") (quotation
omitted) .
We do not know what evidence, if any, other than the documents themselves,
was considered by Judge Clark in making his KRE 104(a) determination as to whether
any or all of the communications at issue were made for the purpose of obtaining
business advice rather than legal advice. Nor do we have access to the documents,
themselves, or to sufficient descriptions of their contents to properly evaluate whether
Judge Clark's determination that they were not privileged was an abuse of discretion.
For the same reason, we are unable to determine by de novo review whether any of the
communications fall within the lawyer-client privilege . We know only that
communications numbers one through seven were solicited by Brothers for the purpose
-1 3-
of obtaining advice from the library's attorney as to how to handle Patrick's employment
status, a purpose that could be construed as either business or legal . Further, except
for Brothers and Pullen, the record is silent as to whether any of the communications
concerned matters within the scope of the corporate duties of the persons who made
them or whether, at the time the communications were made, the persons who made
them were aware that the communications were being elicited to effectuate legal, as
opposed to business, advice . We do know that any possible privileged communications
were waived to the extent their contents were revealed to Patrick in the July 28, 2000,
memorandum -- but again, the contents of that memorandum have not been presented
to us for review. Although Brothers' affidavit states that some of the communications
claimed to be privileged were incorporated in the memorandum, we cannot determine
as to which communications the privilege was thereby waived . In sum, the record
before us is insufficient to permit a determination whether any or all of the remaining ten
communications still at issue are subject to the lawyer-client privilege .
Accordingly, the order of the Court of Appeals denying the library's petition for a
writ of prohibition is affirmed .
Lambert, C .J . ; Graves, Johnstone, Keller, and Stumbo, JJ ., concur .
Wintersheimer, J ., dissents by separate opinion .
COUNSEL FOR APPELLANT :
Richard G . Griffith
Jeffrey J . Chapuran
Stites & Harbison
2300 Lexington Financial Center
250 West Main Street
Lexington, KY 40507
COUNSEL FOR APPELLEE THOMAS L. CLARK, JUDGE, FAYETTE CIRCUIT
COURT:
Hon . Thomas L . Clark, pro se
215 West Main Street
Lexington, KY 40507
COUNSEL FOR REAL PARTY IN INTEREST APPELLEE DIANA KOONCE :
Robert L. Abell
271 W. Short Street, Suite 500
P .O. Box 983
Lexington, KY 40588-0983
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