Arthur J. Gallagher & Co. v. Tarantino

Background

Arthur J. Gallagher & Co. sued four former employees after they resigned and began working for Alliant Insurance Services. Alliant was initially a defendant, but the trial judge dismissed all claims against it. During the case, Alliant hired UnitedLex, formerly called Blackstone Discovery, to forensically examine the defendants’ phones and emails as part of what UnitedLex called remediation.

Gallagher sought certain UnitedLex emails that Morgan Lewis, which represented Alliant, the defendants, and UnitedLex in the discovery dispute, claimed were protected by the attorney-client privilege. That privilege protects legal advice from a professional legal adviser unless the protection has been waived.

Issues and Analysis

First, a UnitedLex employee testified at a deposition that he refreshed his recollection during a break by reading an email. UnitedLex agreed to produce that email. Gallagher argued that the agreement supported its position that none of the records were privileged. The court held that producing one email was not a blanket waiver of the privilege.

Second, Gallagher argued that facts and communications about the remediation were not privileged under the primary-purpose doctrine. That doctrine asks whether the primary purpose of a communication was to provide legal advice rather than business advice. The court found that the doctrine did not obviously apply because Morgan Lewis retained UnitedLex to help advise Alliant and the defendants about whether personal devices or email accounts contained Gallagher information.

The court distinguished the withheld legal-advice emails from factual information about the examination. UnitedLex had produced remediation reports, copies of removed information, and chains of custody for each device. Its witness also testified about what forensic and remediation steps were performed, when they were performed, and how they were performed. Morgan Lewis represented that it was withholding only emails reflecting legal advice to the defendants and was not asserting privilege over the facts underlying the examinations or reports resulting from the investigation. The court held that this category of information was protected legal advice, not business advice.

Third, Gallagher argued that UnitedLex waived privilege by producing its privilege log three and a half months after the March 1, 2022 deadline and that the log’s descriptions were too conclusory. The court noted that Gallagher raised the timing and sufficiency issues late: fact discovery had closed on June 30, 2022, the discovery dispute deadline was seven days later, and Gallagher first raised the privilege-log issue in the August 19 version of the parties’ joint letter. The court also noted that nonparties generally should not be burdened in discovery to the same extent as litigants.

Ruling

The court denied Gallagher’s discovery request. Although it said the privilege log was not ideal, it accepted Morgan Lewis’s representation that the withheld communications were created to provide legal advice to the defendants about complying with their contractual duties to Gallagher and that privilege was not being asserted over the underlying facts or investigation reports. Laurel Beeler, United States Magistrate Judge, signed the order.