Southern District Of California Denies Motion To Compel Attorney Communications In Price Fixing Action
05/14/2019On May 6, 2019, U.S. Magistrate Judge Mitchell D. Dembin of the United States District Court for the Southern District of California denied plaintiffs’ motions (i) to compel production of attorney-client communications and work product and (ii) to compel additional testimony in a multidistrict litigation over alleged price-fixing in the canned tuna industry. In re Packaged Seafood Prods. Antitrust Litig., No. 15-md-2670 (S.D. Cal. May 6, 2019). In denying the motions, the Court found that the general counsel for one of the defendants (the “Company”) did not waive privilege regarding analysis conducted by the Company’s outside counsel when he testified during his deposition that outside counsel had reviewed the discovery in the case and opined that there was no evidence of price-fixing other than regarding one product—5-ounce cans of tuna.
Plaintiffs in the multidistrict litigation allege that major manufacturers of packaged seafood products, including the Company, engaged in a conspiracy to fix the price of canned tuna in the United States. A probe by the U.S. Department of Justice into the canned seafood industry was made public in 2015, which led to more than seventy lawsuits by tuna buyers such as Walmart, Target, and CVS Pharmacy Inc., which claimed that they were swindled. In October 2018, the Company and one of its executives pled guilty to price-fixing charges as part of an agreement with federal prosecutors. The Company’s plea agreement included a fine of up to $100 million.
On February 12, 2019, plaintiffs deposed the Company’s general counsel as a corporate witness for the Company under Rule 30(b)(6) of the Federal Rules of Civil Procedure. Among other topics, the deposition sought testimony on the Company’s knowledge of all “facts relating to communications among [defendants] regarding the Pricing and Sale of Packaged Tuna . . . or in any way related to the Company’s guilty plea” and on the Company’s knowledge of all “facts relating to participation in any agreement or understanding among [the defendants] . . . or in any way related to the Company’s guilty plea.” In response to questions from plaintiffs’ counsel, the Company’s general counsel stated that the discovery in the case was reviewed by outside counsel, who opined that there was no evidence of price-fixing other than regarding 5-ounce cans of tuna.
Citing the general counsel’s testimony, four groups of plaintiffs moved to compel the Company to produce communications and documents from its counsel that relate to the company’s determination that it only colluded on 5-ounce cans and not on cans of any other size. These plaintiffs asserted that the Company had waived privilege over these communications as a matter of law because the Company’s general counsel’s testimony revealed that privileged information to opposing counsel. These plaintiffs further argued that such testimony reflected an attempt by the Company to revise previous testimony and the Company’s plea agreement with federal prosecutors by claiming that it colluded only on 5-ounce cans of tuna (and not on other sizes). Three other groups of plaintiffs did not take a position on whether the general counsel’s testimony waived privilege, but argued instead that additional testimony was needed because the general counsel’s response showed that he was not adequately prepared to testify about the facts known to the Company regarding its involvement in the alleged conspiracy. The Company responded that the motions were meritless and reflected plaintiffs’ frustration that the Company did not admit to “unsubstantiated allegations of a vast conspiracy encompassing all packaged tuna products.” The Company further argued that if plaintiff’s position on waiver is accepted, then there would be waiver of work product and attorney communications any time counsel is involved in educating a 30(b)(6) witness and the witness testifies to that fact.
The Court sided squarely with the Company, finding that general counsel’s statement that the Company relied on the opinion of its outside counsel in concluding that collusion was limited to 5-ounce cans was insufficient to constitute a waiver of privilege regarding the analysis undertaken by outside counsel. The Court also found that plaintiffs failed to demonstrate a substantial need for these materials, explaining that the opinion of the Company’s outside counsel on the extent of the collusion was irrelevant, as these issues would be determined by the trier of fact based upon the evidence. Finally, the Court rejected plaintiffs’ alternative request for additional 30(b)(6) testimony, finding that the general counsel’s response was a sufficient answer to the questions posed.
Although plaintiffs’ motions to compel were denied on these facts, Judge Dembin’s decision serves as a warning to carefully prepare 30(b)(6) witnesses and to consider carefully how to address the involvement and advice of a corporation’s outside counsel. Judge Dembin does not address what sorts of responses might have constituted waiver, but a more detailed response from the Company may well have led to a different result. The case also serves as a reminder of the need for counsel to be vigilant in defending a deposition and to timely object to questions that may implicate legal advice and to provide the client with proper instruction.CATEGORY: Price-Fixing