Zavislak v. Netflix, Inc.

Background

Mark Zavislak brought claims for monetary damages and injunctive relief, alleging that Netflix failed to provide information requested under section 104(b)(4) of the Employee Retirement Income Security Act of 1974 (ERISA). The district court had referred discovery matters to Magistrate Judge Nathanael Cousins.

Judge Cousins permitted Zavislak to depose Netflix’s in-house counsel, Jon Hicks, as a fact witness, while allowing Netflix to object to questions seeking privileged information. During the deposition, Netflix’s counsel asserted attorney-client privilege and instructed Hicks not to answer certain questions. The parties then disputed whether the ERISA fiduciary exception applied to Netflix’s privilege claims concerning the deposition and certain documents.

Judge Cousins denied Zavislak’s requests to compel a further deposition of Hicks and an additional search and document production responding to a particular document request. Judge Cousins declined to apply the fiduciary exception, reasoning that the parties’ arguments were unpersuasive and that difficult privilege questions should be resolved in favor of preserving the privilege.

Motion and Legal Standard

Zavislak sought relief from Judge Cousins’s nondispositive pretrial discovery order. He asked the district court to compel production of pre-litigation communications with Netflix’s in-house and outside counsel concerning ERISA document production and Netflix’s handling of his request, as well as a further deposition of Hicks about those communications.

Under the governing standard, a district court may reconsider a magistrate judge’s ruling on a nondispositive pretrial matter only if the ruling is clearly erroneous or contrary to law. A clearly erroneous finding is one that leaves the reviewing court with a definite and firm conviction that a mistake was made. The district court may not simply substitute its judgment for the magistrate judge’s judgment.

Discussion

The court rejected Zavislak’s argument concerning his reliance on Wit v. United Behavioral Health because the arguments and explanations he presented about that case to the district court had not been presented to Judge Cousins. The court therefore could not conclude that Judge Cousins’s decision on that point was clearly erroneous or contrary to law.

The court explained that United States v. Mett provides guidance on the ERISA fiduciary exception. Generally, an employer acting as an ERISA fiduciary cannot assert attorney-client privilege against plan beneficiaries concerning plan administration. But the privilege remains available when a plan fiduciary obtains legal advice to defend against the beneficiaries or the government. The exception therefore depends on the nature of each particular attorney-client communication.

The court found that the record did not reveal whether the communications at issue concerned only plan administration, such as determining which documents were needed to answer Zavislak’s request, or defensive advice obtained in anticipation of litigation. Because the record was insufficient to decide whether the requested relief was warranted, the court directed Judge Cousins to examine the nature of the communications.

Disposition

The court REMANDED the issue to Judge Cousins for consideration of whether the communications and information sought implicated Netflix’s role as an ERISA fiduciary or as a potential litigant. The opinion did not order the additional production or deposition itself.