Apica Sellers Representative, LLC v. Abbott Laboratories

Background

The case concerns the negotiation and drafting of Section 2.05(a)(ii) of a July 2, 2014 equity purchase agreement and the meaning of the term “Product Coil.” Abbott asked the court to define the scope of a possible voluntary subject-matter waiver of attorney-client privilege. Abbott proposed producing documents exchanged during the negotiations between its predecessor, Thoratec Corporation, and Thoratec’s in-house lawyers.

A subject-matter waiver can occur when a party discloses some protected communications and thereby waives protection over related communications. Abbott proposed a cutoff date of July 2, 2014, the agreement’s effective date. Apica, the receiving party, argued that this cutoff would permit Abbott to disclose favorable documents selectively. Apica proposed extending the waiver through February 7, 2023, the date the complaint was filed.

Privilege Waiver

The court relied on its analysis of a prior decision involving a limited privilege waiver. That decision treated the agreement’s effective date as the appropriate end date because communications after the agreement was effective generally did not concern its negotiation. The court found Apica’s proposed date drastically overinclusive because it would extend the waiver nearly ten years beyond the agreement’s effective date.

The court also explained that a party’s unilateral, post-contract understanding of an agreement is not probative of the parties’ intent when they negotiated the agreement. The proposed disclosure involved communications between Thoratec and its own in-house counsel, not communications showing how both contracting parties interpreted the agreement in practice before the litigation.

Ruling

The court granted Abbott’s request for a protective order. If Abbott produces documents exchanged between Thoratec and its in-house counsel concerning the negotiation of Section 2.05(a)(ii), Abbott will waive attorney-client privilege and work-product protection for related privileged or protected communications from on or before July 2, 2014. If Abbott does not produce any privileged documents or communications, the protective order will be moot and those materials will remain protected.

Discovery Deadlines

Because the parties postponed depositions of third-party fact witnesses Jon Shear and Robert Edesess while awaiting the privilege ruling, the court directed the parties to meet and confer. The parties must file a joint status letter by December 9, 2024, identifying any remaining discovery and proposing new deadlines for fact discovery and, if necessary, expert discovery.