OSCAR SANCHEZ v. MAQUET GETINGE GROUP
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APPROVAL OF THE APPELLATE DIVISION
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SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4994-15T4
OSCAR SANCHEZ,
Plaintiff-Appellant,
v.
MAQUET GETINGE GROUP,
Defendant-Respondent.
_________________________________
Argued March 15, 2017 – Decided May 23, 2018
Before Judges Fuentes, Carroll, and Gooden
Brown.
On appeal from Superior Court of New Jersey,
Law Division, Essex County, Docket No. L-4643-
15.
Cindy N. Vogelman argued the cause for
appellant (Chasan Lamparello Mallon &
Cappuzzo, PC, and Niedweske Barber Hager, LLC,
attorneys; Ralph J. Lamparello and Cindy N.
Vogelman, on the brief).
Ashley D. Brightwell (Alston & Bird LLP) of
the Georgia bar, admitted pro hac vice, argued
the cause for respondent (McElroy, Deutsch,
Mulvaney & Carpenter, LLP, and Ashley
Brightwell, attorneys; William A. Cambria,
John F. Cambria of the Georgia bar, admitted
pro hac vice, and Ashley D. Brightwell, of
counsel and on the brief).
The opinion of the court was delivered by
FUENTES, P.J.A.D.
Plaintiff Oscar Sanchez worked as the Chief Quality
Regulatory and Compliance Officer for defendant MAQUET GETINGE
GROUP1 (MAQUET), a German pharmaceutical company. Sanchez worked
in this capacity for eighteen months, until MAQUET terminated his
employment in April 2015. On July 2, 2015, plaintiff filed a
civil action against MAQUET in which he alleged his former employer
wrongfully terminated him for engaging in whistleblowing
activities, in violation of the Conscientious Employee Protection
Act (CEPA),
N.J.S.A. 34:19-1 to -14.
In October 2015, defendant served plaintiff with its First
Request for Production of Documents. Defendant's request focused
on retrieving purported confidential or proprietary documents that
plaintiff had taken from MAQUET during the time he worked at the
company. On January 27, 2016, the trial court entered a Consent
Order for Protection of Confidential Material, that authorized the
parties to designate as "Confidential" any information or
1
Defendant notes in the brief filed in this appeal that the correct
legal name of plaintiff's former employer is "MAQUET
Cardiovascular, LLC." Defendant claims that it informed plaintiff
of this error in its responsive pleading and throughout the
discovery process. Despite these efforts, plaintiff did not
correct this error. We express no opinion as to the legal
significance, if any, of this alleged error.
2 A-4994-15T4
documents which they believed "in good faith" was entitled to be
protected from disclosure under Rule 1:38-1.2 The Consent Order
also provided a dispute resolution procedure if a party "objects
to such designation." Finally, if a confidential document or
confidential information was released inadvertently, the recipient
of such unintended disclosure was required to return it or dispose
of it as instructed by the producing party.
On February 1, 2016, plaintiff responded to defendant's
request for documents. Defendant claimed that the documents
plaintiff's counsel produced were owned by MAQUET and had been
improperly taken by plaintiff from MAQUET's premises while he was
employed by the company, without the company's knowledge or
consent. More importantly, defendant claimed that many of these
documents contained privileged attorney-client communications
between MAQUET's staff and its attorneys, including
"correspondence between MAQUET employees . . . regarding, among
other subjects, [Food and Drug Administration (FDA)] compliance
issues, results of third-party audits, budgeting issues, research
and development, quality processes and procedures, and FDA
findings."
2
Although the Consent Order states Rule 1:38, effective September
1, 2009, the new caption is Rule 1:38-1.
3 A-4994-15T4
In a letter dated February 1, 2016, plaintiff's counsel,
Kevin Barber, and Niedweske Barber Hager, LLC, conceded that they
had produced "communications between [plaintiff] and, among
others, [in-house counsel] Abraham Ronai . . . ." They argued,
however, that MAQUET had waived the attorney-client privilege
between plaintiff and Ronai during the latter's deposition
testimony in an unrelated arbitration hearing. Defendant moved
to preclude plaintiff from using these documents as evidence in
the prosecution of his CEPA action against defendant, and to remove
Kevin Barber and Niedweske Barber Hager, LLC, from continuing to
represent plaintiff in this case.
Defendant's motion was argued on June 2, 2016, before a
different judge than the one who entered the January 27, 2016
Protective Order. After considering the arguments of counsel, the
judge found MAQUET, as a legal entity, had not waived the attorney-
client privilege. Relying on a long line of decisions that have
recognized the right of corporations to invoke the attorney-client
privilege to protect communications expressed through its agents,
the judge rejected plaintiff's argument based on waiver.
With respect to the disqualification of plaintiff's counsel,
the judge found Barber and Niedweske Barber Hager, LLC "knew or
should have known the material was privileged." The judge
particularly noted counsel's failure "to promptly notify the
4 A-4994-15T4
opposing side that they had received its privileged information."
The judge made the following specific findings:
They did not notify their adversary that
privileged communications were in their
possession until February, 2016. Nine (9)
months passed before Mr. Barber or [Niedweske
Barber Hager, LLC] notified the Defendants.
. . . .
R.P.C. 4.4(b), which states, "[a] lawyer who
receives a document and has reasonable cause
to believe that the document was inadvertently
sent shall not read the document or, if he or
she has begun to do so, shall stop reading the
document, promptly notify the sender, and
return the document to the sender." . . .
[T]here is no denying that there was
"reasonable cause to believe" that the
documents were privileged. The documents were
quite clearly labeled as attorney-client
privileged communications and expressly
involved MAQUET's General Counsel.
On the issue of prejudice to plaintiff if his counsel was
disqualified, the judge did not find any facts that plaintiff
would be harmed in the prosecution of this case nor that he would
be unable to secure competent substitute counsel. The judge
especially noted that the parties were still at the beginning of
the discovery phase. In an order dated June 9, 2016, the judge
disqualified Barber and Niedweske Barber Hager, LLC from serving
as counsel for plaintiff in this matter. The order also reflected
"that plaintiff and plaintiff's counsel agree by consent to be
precluded from further divulging . . . defendant's attorney-client
5 A-4994-15T4
privileged communications . . . ." Finally, the judge ordered
plaintiff to return all of defendant's property in plaintiff's or
his counsel's possession "within 10 days from the entry of this
Order . . . ." The judge explained the reasons supporting her
decision in a letter-opinion.
In an order entered on July 21, 2016, this court granted
plaintiff's motion for leave to appeal the Law Division's June 9,
2016 order. In this appeal, plaintiff argues the motion judge
erred in reaching her decision to disqualify his chosen counsel
without conducting an evidentiary hearing. Plaintiff also argues
the judge misapplied the multi-factor analysis the Supreme Court
established in Quinlan v. Curtiss-Wright Corp.,
204 N.J. 239, 269-
71 (2010). We reject these arguments and affirm.
I
Before we address the relevant legal issues, we will briefly
summarize the following uncontested facts. As a pharmaceutical
company, defendant designs, develops, manufactures, and
distributes medical devices. The medical and related
technological focus of defendant's business requires it to amass
and maintain confidential information and documentation which is
primarily stored on computer systems located on its various
business sites. This information includes sensitive research and
6 A-4994-15T4
development data, new products, quality processes and procedures,
and protocols for the preparation of inspections by the FDA.
Defendant has developed comprehensive policies designed to
protect this vital proprietary information. Any unwarranted or
unauthorized disclosure of confidential information would cause
severe irreparable harm to defendant's business activities.
Defendant thus maintains a "Standards of Conduct" policy that
requires employees to "[m]aintain a commitment to protect the
trade secrets and all other proprietary information of MAQUET[.]"
Employees are prohibited from mishandling, or improperly
possessing or using MAQUET property or employee property or
financial assets. An employee who violates these policies or
fails to uphold these standards may be terminated.
MAQUET's "End User Acceptable Use Policy," among other
things, forbids employees from: (1) "[a]ccess[ing] confidential
or secret information outside the scope of [their] work
responsibilities[;]" and (2) "[m]isus[ing] or disclos[ing] company
information assets and personal information belonging to
employees, customers[,] or suppliers . . . ." MAQUET also has
strict standards governing the use of its computer system by
employees. This standard specifically and strictly prohibits an
employee from accessing confidential or secret information that
is kept "outside the scope of one's work responsibilities."
7 A-4994-15T4
As the Chief Quality Regulatory and Compliance Officer,
plaintiff had high-level clearance and routinely encountered and
accessed sensitive proprietary and otherwise confidential
information. Consequently, defendant required plaintiff and other
similarly situated employees to sign a contract agreeing to return
documents and other work-related data after he or she separated
from the company. Here, plaintiff signed a "Confidential
Information, Invention Assignment, and Non-Compete Agreement" in
August 2013. MAQUET's offer of employment to plaintiff was
expressly conditioned upon him agreeing to enter into this
confidentiality/non-compete agreement.
This agreement also contained the following two provisions:
"Covenant Not to Disclose" and "Return of Company Documents." The
"Covenant Not to Disclose" provision states:
I agree that I will not, at any time during
my employment or after the termination of my
employment, with the Company communicate,
disclose, or otherwise make available to any
person or entity (other than the Company
. . .), or use for my account (except in the
course of my employment with the Company but
only when such disclosure is necessary and
appropriate to perform my responsibilities) or
for the benefit of any other person or entity,
any information or materials proprietary to
the Company that relates to the Company's
business or affairs which is of a confidential
nature ("Proprietary Information"). . . . I
further agree that I will retain such
knowledge and information which I acquire and
develop during my employment respecting such
8 A-4994-15T4
Proprietary Information in trust for the sole
and exclusive benefit of the Company and its
successors and assigns.
[(Emphasis added).]
Under the second provision, plaintiff made the following promise:
I will promptly communicate and disclose to
the Company all observations made and data
obtained by me in the course of my employment
by the Company. Upon termination of my
employment (or at such earlier time as the
Company may request me to do so), I will
promptly deliver the same to the Company or
to any party designated by it, without
retaining any copies, notes, or excerpts
thereof.
[(Emphasis added).]
Two months before his termination, plaintiff received a
written disciplinary warning as a result of an investigation into
numerous complaints about his conduct and deportment involving
employees who reported to him, as well as his colleagues. Both
of these type of employees complained that plaintiff made
threatening and/or discriminatory comments, mistreated employees,
and was overall incompetent. After plaintiff received these
complaints, he informed Senior Vice President of Marketing Philip
Freed that "he had personally retained copies of all kinds of
MAQUET-owned documentation – which he referred to as his 'burn
files' and which included copies of . . . two executives' hard
drives and a binder full of emails and documents." According to
9 A-4994-15T4
Freed, plaintiff told him that he "would use the 'burn files' to
'fuck' MAQUET 'when they try to get [him].'"
II
Against this factual backdrop, we will now address the legal
issues raised by plaintiff in this appeal. Because the motion
judge's decision was based entirely on her assessment of the law
applicable in this case, our review is de novo. Manalapan Realty,
LP v. Twp. Comm. of Manalapan,
140 N.J. 366, 378 (1995). We will
review de novo whether the attorney-client privilege applies here,
whether the documents involved here fall under the purview of the
attorney-client privilege, and whether defendant may have waived
its attorney-client privilege. Hedden v. Kean Univ.,
434 N.J.
Super. 1, 10 (App. Div. 2013); see also Paff v. Div. of Law,
412 N.J. Super. 140, 149 (App. Div. 2010).
New Jersey law generally permits parties involved in a civil
dispute to "obtain discovery regarding any matter, not privileged,
which is relevant to the subject matter involved in the pending
action, whether it relates to the claim or defense of the party
seeking discovery or to the claim or defense of any other party
. . . ." R. 4:10-2(a). Our rules of discovery also provide for
the protection of information subject to certain established
privileges:
10 A-4994-15T4
If information is produced in discovery that
is subject to a claim of privilege or of
protection as trial preparation material, the
party making the claim may notify any party
that received the information of the claim and
the basis for it. After being notified, a
party must promptly return, sequester, or
destroy the specified information and any
copies it has and may not use or disclose the
information until the claim is resolved. A
receiving party may promptly present the
information to the court under seal for a
determination of the claim. If the receiving
party disclosed the information before being
notified, it must take reasonable efforts to
retrieve it. The producing party must
preserve the information until the claim is
resolved.
[R. 4:10-2(e)(2) (emphasis added).]
Furthermore, the Rules of Professional Conduct established
by our Supreme Court impose an ethical obligation on attorneys to
safeguard confidential information of third persons:
A lawyer who receives a document or electronic
information and has reasonable cause to
believe that the document or information was
inadvertently sent shall not read the document
or information or, if he or she has begun to
do so, shall stop reading it. The lawyer shall
(1) promptly notify the sender (2) return the
document to the sender and, if in electronic
form, delete it and take reasonable measures
to assure that the information is
inaccessible.
[RPC 4.4(b) (emphasis added).]
N.J.R.E. 504 codifies the attorney-client privilege. Subject
to certain exemptions not applicable here, see N.J.R.E. 504(2),
11 A-4994-15T4
the privilege protects "communications between lawyer and his [or
her] client in the course of that relationship and in professional
confidence . . . ." N.J.R.E. 504(1). Thus, a client has the
right:
(a) to refuse to disclose any such
communication, and (b) to prevent his [or her]
lawyer from disclosing it, and (c) to prevent
any other witness from disclosing such
communication if it came to the knowledge of
such witness (i) in the course of its
transmittal between the client and the lawyer,
or (ii) in a manner not reasonably to be
anticipated, or (iii) as a result of a breach
of the lawyer-client relationship, or (iv) in
the course of a recognized confidential or
privileged communication between the client
and such witness.
[Ibid.]
The attorney has the commensurate obligation to invoke the
privilege "unless otherwise instructed by the client or his [or
her] representative . . . ." Ibid. The privilege may also be
claimed by a corporation or association. Ibid. The privilege
even survives the dissolution of the corporate entity and "may be
claimed by its successors, assigns or trustees in dissolution."
Ibid.; see also Hedden,
434 N.J. Super. at 11.
Plaintiff argues the privilege does not apply here because
the documents in question do not contain any advice, input, or
opinion by defendant's house counsel Ronai. Plaintiff claims that
merely including Ronai's name as a "cc" on these communications
12 A-4994-15T4
do not bring them within the purview of the attorney-client
privilege. Plaintiff argues the motion judge erred when she
swathed these documents with the attorney-client privilege without
a proper evidential foundation. We disagree.
The motion judge particularly noted that the documents "in
dispute contain [electronic] communications between the
[p]laintiff, MAQUET's Global Chief Quality Assurance & Regulatory
Officer, and MAQUET's General Counsel, [Gail Christie] . . . ."
The appellate record also includes emails labeled "ATTORNEY CLIENT
PRIVILEGE" by plaintiff, copied to counsel, discussing whether
defendant is complying with federal regulations. Christie also
certified that the emails contained discussions between her and
plaintiff concerning whether FDA regulations demand second-shift
workers to obtain Product Performance Qualification validation
before starting work. Although defendant's in-house counsel did
not respond to these emails, the motion judge reasonably inferred
that plaintiff and Christie included counsel in these discussions
to make him "aware of the dispute, effectively work with MAQUET's
regulatory and compliance personnel, and position himself to offer
legal advice and guidance on the subject." We discern no legal
basis to question the soundness of the judge's conclusion.
13 A-4994-15T4
III
The motion judge applied the multi-factor test established
by the Court in Quinlan,
204 N.J. at 269-71, to conclude plaintiff
was required to return to defendant the documents plaintiff removed
from his employer's custody through self-help, pre-litigation
measures. For the first time on appeal, plaintiff argues the
motion judge should have conducted an evidentiary hearing to
properly apply the Quinlan factors. We reject this argument as
both untimely and legally unnecessary.
The approach endorsed by the Court in Quinlan to determine
when an employee may take or use documents belonging to his or her
employer required the judge to complete the following seven tasks:
First, the court should evaluate how the
employee came to have possession of, or access
to, the document . . . [T]he employee who finds
a document by rummaging through files or by
snooping around in offices of supervisors or
other employees will not be entitled to claim
the benefit of this factor.
Second, the court should evaluate what
the employee did with the document. If the
employee looked at it, copied it and shared
it with an attorney for the purpose of
evaluating whether the employee had a viable
cause of action or of assisting in the
prosecution of a claim, the factor will favor
the employee.
. . . .
Third, the court should evaluate the
nature and content of the particular document
14 A-4994-15T4
in order to weigh the strength of the
employer's interest in keeping the document
confidential. If the document is protected by
privilege, in whole or in part, . . . or
. . . [reveals] proprietary business
information . . . the employer's interest
will be strong.
Fourth, the court should also consider
whether there is a clearly identified company
policy on privacy or confidentiality that the
employee's disclosure has violated.
. . . .
Fifth, the court should evaluate the
circumstances relating to the disclosure of
the document to balance its relevance against
considerations about whether its use or
disclosure was unduly disruptive to the
employer's ordinary business.
. . . .
Sixth, the court should evaluate the
strength of the employee's expressed reason
for copying the document rather than, for
example, simply describing it or identifying
its existence to counsel so that it might be
requested in discovery . . . [In other words,]
whether the document would be critical to the
case, like the true "smoking gun," such that
the employee's perceived need to preserve it
would be entitled to greater weight in light
of the significance of the risk of its loss.
Last, but of the utmost importance, the
court should evaluate how its decision in the
particular case bears . . . the broad remedial
purposes the Legislature has advanced through
our laws against discrimination, including the
LAD . . . [and] the balance of legitimate
rights of both employers and employees.
15 A-4994-15T4
[Quinlan,
204 N.J. at 269-71 (emphasis
added).]
The record shows plaintiff's unauthorized removal of these
documents was in direct violation of defendant's policies related
to confidential documents containing proprietary information. The
judge correctly found that "[p]laintiff's removal of the documents
amounted to an intentional act outside of his ordinary duties" as
compliance officer because "he admittedly took a 'binder full of
emails and documents' from MAQUET to 'fuck the company when they
try to get [him].'"
The record also supports the judge's finding that plaintiff
copied these documents to share them with his attorneys for the
purpose of evaluating whether plaintiff had "a viable cause of
action" against defendant. See Quinlan,
204 N.J. at 269.
Conversely, the judge found defendant "has a very strong interest
in keeping the material confidential as they undeniably contain
highly confidential and sensitive information . . . ." We agree
and add that there are also strong public policy considerations
at stake here. The rules governing the management of civil
disputes are carefully supervised by the judiciary to prevent the
discovery process from degenerating into a chaotic self-help
battle that ultimately undermines the confidentiality of
privileged communications.
16 A-4994-15T4
Equally important, the motion judge expressly addressed one
of the Court's preoccupations in Quinlan by noting that plaintiff
did not present "any evidence of a likelihood that [defendant]
would not have maintained [the documents], or would have discarded
them in the ordinary course of business, that they would have been
destroyed, or that their authenticity would be called into question
. . . ." The last Quinlan factor also weighs in favor of defendant.
The motion judge did not preclude plaintiff from seeking to admit
these documents into evidence, provided that: (1) they are produced
in the regular course of discovery; and (2) a judge determines
their admissibility under the rules of evidence.
IV
Finally, we hold the judge did not commit plain error when
she disqualified plaintiff's counsel from representing plaintiff
in this litigation without sua sponte conducting an evidentiary
hearing. We recognize that the "[d]isqualification of counsel is
a harsh discretionary remedy which must be used sparingly."
Cavallaro v. Jamco Prop. Mgmt.,
334 N.J. Super. 557, 572 (App.
Div. 2000). As noted by our Supreme Court:
In evaluating motions for the
disqualification of counsel . . . we have
long recognized that "a motion for
disqualification calls for us to balance
competing interests, weighing the need to
maintain the highest standards of the
17 A-4994-15T4
profession against a client's right freely to
choose his counsel."
[Twenty-First Century Rail Corp. v. N.J.
Transit Corp.,
210 N.J. 264, 273-74 (2012),
(quoting Dewey v. R.J. Reynolds Tobacco Co.,
109 N.J. 201, 218 (1988)).]
In striking a proper balance between these policy interests,
we must underscore that a party's possession of its opponent's
privileged material weighs in favor of disqualification because
"[l]ess severe remedies such as assessments of expenses or counsel
fees fail to adequately address both the [RPC 4.4(b)] violation
and the attendant harm of access and exposure to privileged
documents." Cavallaro,
334 N.J. Super. at 572. Thus, the record
must show that the content of the privileged emails that would not
have been divulged in discovery absent a judicial determination
can be adequately preserved by redaction or through a carefully
crafted and enforceable protective order. R. 4:10-2(e).
Plaintiff's extra-judicial self-help measures deprived
defendant of the opportunity to prevent the disclosure of this
privileged information. Plaintiff's counsel's unreasonable delay
in disclosing this information rendered futile any attempt to
mitigate this harm. As the motion judge noted, this case is still
in its early stages. The only way left to salvage this cause of
action is to permit plaintiff a reasonable time to obtain
substitute counsel.
18 A-4994-15T4
Affirmed and remanded for such further proceedings as may be
warranted. We do not retain jurisdiction.
19 A-4994-15T4
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