3rd Circuit: No Waiver of Attorney-Client Privilege for Chevron

The 3rd Circuit U.S. Court of Appeals reversed a lower court ruling last week, sending the case back to U.S. District Judge Jan E. DuBois. The decision involved the disclosure of emails and other confidential communications by the law firm of Kohn, Swift & Graf P.C. in a pollution lawsuit against Chevron, reports The Philadelphia Inquirer.

This isn't your typical motion to compel discovery, however. The case made it to appeals, largely on the issue of fraud. In a case that began in the 1990's as a pollution case, alleging that drilling operations in Ecuador had contaminated the rainforest, the issue of attorney-client privilege became a central issue after the case was transferred to Ecuador in 2003.

Chevron's team is now asking for discovery of several documents, claiming that (1) there was a waiver of attorney-client privilege and (2) that the crime-fraud exception applies to any privileged communications. They claimed that by allowing film makers into "strategy meetings," there was a subject-matter waiver of the attorney-client privilege.

The appeals court, however, failed to hold that there was subject-matter waiver of the attorney-client privilege. They did, however, say that Chevron may be able to raise the crime-fraud privilege.

Writes The Philadelphia Inquirer:

An Ecuadoran court awarded the plaintiffs $18 billion in damages in February, but Chevron, citing outtakes from a documentary film and journal entries from one of the plaintiffs' lawyers, has alleged that the plaintiffs' team committed fraud by falsifying expert witness reports and seeking to intimidate judges.

The documentary film, entitled "Crude" chronicles the Ecuadoran litigation, with appearances made by the plaintiffs' former attorney. As a result, Chevron is seeking to depose Joseph Kohn, who once represented the plaintiffs but withdrew his representation several years back. Chevron's team wants access to the emails and other written communications that may have taken place between Kohn and the plaintiffs' Ecuadoran team.

While Chevron's attorneys alleged fraud, the three-court panel of the Third Circuit found that mere allegations of fraud were not enough to have the appellate court compel discovery of the privileged documents, absent evidence that Kohn wasn't involved in the fraud.

According to the court, "allegations are not factual findings." As such, the case was remanded to the District Court to rule on the issue of whether the crime-fraud exception to attorney-client privilege applies in this case.

Related Resources

• Pennsylvania Motion to Compel Form (FindLaw)
• Free Pennsylvania Court Forms (FindLaw)
• Third Circuit puts up speed bump in Chevron juggernaut (Thomson Reuters News & Insight)