Jiaxing Super Lighting Electric Appliance Co., LTD. v. Lunera Lighting, Inc.

Background

Jiaxing and non-party John Bruggeman filed a joint discovery letter concerning Bruggeman’s assertions of attorney-client privilege. Bruggeman was Lunera’s former chief executive officer and a former board member. Jiaxing subpoenaed him while investigating Lunera’s affairs and the conduct of its former officers and directors in connection with collecting a $14.4 million judgment against Lunera.

Bruggeman had redacted many documents based on a privilege he said belonged to Lunera, rather than to him personally. Jiaxing did not challenge redactions concerning the underlying arbitration or unrelated litigation involving Lunera. It challenged other redactions concerning topics such as transfers of Lunera’s assets, Lunera’s debt, and board meetings and minutes involving those subjects. Jiaxing also challenged redactions that did not provide enough information to evaluate the privilege claim.

Arguments

Jiaxing argued that Lunera no longer possessed a valid attorney-client privilege because it was dissolved and defunct. Jiaxing also argued that Bruggeman could not assert the privilege in his personal capacity to protect his own interests as a former director. Bruggeman argued that he remained bound by fiduciary duties to protect Lunera’s privilege and that Delaware law continued Lunera’s existence after dissolution.

Court’s analysis

The court stated that attorney-client privilege generally does not survive the death of a corporation and that courts determine whether a corporation has effectively “died” by looking at practical business realities rather than technical legal status. The court found that Lunera dissolved on July 25, 2019; its directors resigned as part of the dissolution; its officers had already resigned; and it no longer existed or conducted business. The court also noted that prior proceedings had recognized that no one could respond to discovery or attend a judgment-debtor examination on Lunera’s behalf.

The court rejected Bruggeman’s reliance on Delaware Corporations Code § 278. That provision continues a dissolved corporation’s legal existence for limited purposes, including prosecuting and defending proceedings, winding up its affairs, paying liabilities, and distributing remaining assets. The court concluded that this continued legal existence did not preserve Lunera’s attorney-client privilege because the privilege analysis turns on practical reality, not technical legal status. The court described Bruggeman’s reliance on § 278 as an unpersuasive reliance on technical status.

Ruling

The court overruled Bruggeman’s claims of attorney-client privilege. The order did not state an additional disposition concerning production of the redacted documents.