Fond du Lac Band of Lake Superior Chippewa v. Cummins

Background

The Fond du Lac Band of Lake Superior Chippewa ("the Band") filed this action against the United States Forest Service and other federal agencies and officials, seeking judicial review under the Administrative Procedure Act ("APA"), 5 U.S.C. § 701 et seq., of a land exchange between the Forest Service and intervenor-defendant Poly Met Mining, Inc. ("PolyMet"). The Band later joined Northshore Mining Co. ("Northshore") as a defendant under Federal Rule of Civil Procedure 19, which governs mandatory joinder of parties needed for complete resolution.

Cleveland-Cliffs Inc. ("Cleveland-Cliffs") is the sole owner of both Northshore and Cliffs Mining Services Co. ("CMSC"), which provides support services to Cleveland-Cliffs' operating subsidiaries including Northshore. The discovery dispute at issue concerns documents relating to PolyMet's transfer to Northshore of a portion of the land PolyMet acquired from the Forest Service — a transfer relevant to PolyMet's and Northshore's laches defenses (a laches defense argues that an opposing party waited too long to bring a claim).

The Discovery Dispute

Magistrate Judge Leo I. Brisbois issued a discovery order on October 28, 2024, directing Northshore, Cleveland-Cliffs, and CMSC (collectively, "the Cliffs parties") to produce documents they claimed were protected by attorney-client privilege. The magistrate judge found that the Cliffs parties waived the privilege as to certain communications because those communications included third parties — each other — citing the principle that voluntary disclosure of attorney-client communications to third parties waives the privilege. See United States v. Workman, 138 F.3d 1261, 1263 (8th Cir. 1998).

The Cliffs parties objected to this ruling, contending that two recognized exceptions preserved the privilege: (1) the joint-representation exception, applicable when multiple clients hire the same counsel on a matter of common interest; and (2) the common-interest exception, applicable when separately represented parties with a common interest agree to exchange information.

Standard of Review

A magistrate judge's ruling on a nondispositive (non-case-ending) pretrial matter may be reversed only if it is "clearly erroneous or contrary to law." 28 U.S.C. § 636(b)(1)(A); Fed. R. Civ. P. 72(a). This is a highly deferential standard.

Joint-Representation Exception

The joint-representation (or co-client) privilege applies when multiple clients hire the same counsel to represent them on a matter of common interest. Judge Brisbois found that the Cliffs parties failed to establish joint representation because their supporting evidence was ambiguous. Specifically, the declaration of Gabriel Johnson — submitted to support the privilege log — stated that the attorneys on the log were engaged by "Northshore, CMSC, or Cleveland Cliffs," using the disjunctive word "or." The court found this language failed to establish that all three entities were jointly represented by any of the listed attorneys and left unclear which attorneys represented which entities.

The Cliffs parties argued this conclusion was clearly erroneous, pointing to other record materials. The court rejected these arguments for two reasons. First, even if other documents supported joint representation, the ambiguity in the Johnson declaration was sufficient to prevent a finding of clear error — because the party asserting the privilege bears the burden of proving it applies. See United States v. Ivers, 967 F.3d 709, 715 (8th Cir. 2020). Second, the other documents the Cliffs parties cited did not in fact unambiguously establish joint representation: a separate declaration confirmed the DeWitt law firm currently represents all three entities but did not state it did so at the time of the logged communications, and said nothing about Jones Day or Cleveland-Cliffs' corporate counsel. Statements in the attorneys' memorandum to the magistrate judge were also insufficient — attorneys' unsworn statements in a brief are not evidence.

The court observed that it would have been straightforward for an attorney to submit an affidavit clearly stating that the attorney or the attorney's firm jointly represented all three entities at the time of the relevant communications, but no attorney did so.

Common-Interest Exception

The common-interest exception applies when two or more separately represented clients with a common interest agree to exchange information concerning that interest. In re Grand Jury Subpoena Duces Tecum, 112 F.3d 910, 922 (8th Cir. 1997).

Whether a Legal Interest Is Required

The Cliffs parties argued that Eighth Circuit precedent does not require the common interest to be legal in nature — it may be "factual or strategic." The court acknowledged that the Eighth Circuit used this language but noted that even applying that "loose standard," the Eighth Circuit itself found the exception inapplicable in the cited case, without needing to resolve whether a purely factual or strategic interest alone would suffice.

More importantly, the court declined to read the Eighth Circuit's language so broadly as to cover purely commercial interests. Doing so would massively expand the attorney-client privilege, which is meant to be narrowly construed and protects only disclosures necessary to obtain legal advice. The privilege does not apply when an attorney acts as a business advisor rather than a legal advisor. See United States v. Spencer, 700 F.3d 317, 320 (8th Cir. 2012). Extending it to cover communications with a third party whose shared interest is purely commercial would be inconsistent with the privilege's narrow scope.

Whether the Cliffs Parties Demonstrated a Shared Legal Interest

The Cliffs parties argued that even if a shared legal interest is required, they met that standard — pointing to Cleveland-Cliffs' interests in having a guaranty with the State of Minnesota extinguished or modified and in being indemnified as an affiliate of Northshore under what the parties call the "Framework Agreement."

The court rejected this argument for two reasons. First, the guaranty interest is specific to Cleveland-Cliffs alone, not a shared interest among all three Cliffs parties. Second, the Johnson declaration stated that the attorneys on the log were engaged to advise on the "Land Agreement" and the "Northshore Conveyance," not the Framework Agreement — which was an agreement between PolyMet and Cliffs Erie L.L.C., a separate entity whose communications are not at issue.

Disposition

Chief Judge Schiltz overruled the Cliffs parties' objection and affirmed Magistrate Judge Brisbois's October 28, 2024 discovery order. The court also lifted a previously entered stay that had paused the Cliffs parties' obligation to comply with the order.