Deutsche Bank

Fifth Circuit Judge Kyle Duncan is Transparent as the Burkes’ Watch His Moves. He’s [Currently] Been Assigned to the Burke v Hopkins Panel (20-20209)

Judge Dennis dissents quoting that the case majority (Judges Duncan and Elrod) relies upon was decided under Mississippi state law, rather than, as here, the federal common law.

LIT COMMENTARY

The Burkes were brought up in the most sectarian city in the world as Roman Catholics by their parents. The family is full of priests and even a Bishop. There’s no secrets or secret society (Knights of St Columbus) that Kyle Duncan could ever be a part of that would even come close to the Burkes’ knowledge of the faith, nor connections.

The Burkes are watching his cases and his scheming, but it’s transparent, even the altar boys would be snickering. Or, as Judge Dennis recognizes in his dissent, this decision is for personal vendettas and most certainly NOT based on the law(s).

Trump Judge Casts Deciding Vote to Block Discovery of Important Information in Overtime Eligibility Case: Confirmed Judges, Confirmed Fears

July 17, 2020

DUNCAN, STUART K.

ELROD, JENNIFER W.

DENNIS, JAMES L.

Trump Fifth Circuit judge Kyle Duncan cast the deciding vote to stop a district court from even allowing discovery of important information about an employer’s failure to classify a number of employees as eligible for overtime pay under the Fair Labor Standards Act (FLSA). The June 2020 case is In re Schlumberger Technology Corp.

A lawsuit was filed against Schlumberger Technology Corporation (STC), a large oilfield services company, for violating the FLSA and Louisiana law by failing to classify a number of its employees as eligible for overtime pay. As part of pretrial discovery, a deposition was taken of James Hanley, a former STC consultant who later went to work for STC’s outside law firm. At his deposition, Hanley testified about the contents of a report to STC participated in by attorneys from the firm that concerned the FLSA status of the positions at issue. The plaintiffs followed up by subpoenaing three such classification reviews that Hanley was involved in, but STC moved to quash the subpoenas and to strike the parts of his deposition transcript where he discussed such reviews, arguing that the information violated attorney-client privilege even though STC had allowed Hanley to testify.

The district court denied STC’s motion and sided with the plaintiffs on the requested discovery, determining that STC had waived the privilege by claiming that it had made good faith efforts to comply with FLSA. STC went straight to the Fifth Circuit court of appeals even while the case was still pending, seeking the unusual remedy of a writ of mandamus to compel the district court to grant its motion, strike part of Hanley’s deposition, and forbid disclosure of the classification reports.

In a 2-1 decision in which Duncan provided the deciding vote, the Fifth Circuit granted STC a writ of mandamus. The majority claimed that STC had a “clear and indisputable” right to such relief because, based on a previous Fifth Circuit case, STC had not waived the attorney-client privilege since it did not specifically mention communication with attorneys in arguing that it had acted in good faith concerning the FLSA.

Judge James Dennis dissented. He pointed out that the previous Fifth Circuit decision relied on by the majority was decided under Mississippi law, not federal common law as in this case. The prior case was thus not “binding” on the district court, and other cases had found an implied waiver in such circumstances. Accordingly, Dennis concluded that STC had not shown that it had a “clear and indisputable” right to the extraordinary relief of mandamus that it was seeking.

As a result of Duncan’s deciding vote, however, the potentially important information sought from STC and already provided by a witness cannot be used in the FLSA claim against it. This will likely make it harder to prove that STC has improperly deprived workers of overtime pay.

IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

No. 20-30236

In re: SCHLUMBERGER TECHNOLOGY CORPORATION,

Petitioner

Petition for a Writ of Mandamus to the United States District Court
for the Western District of Louisiana

No. 20-30236

JAMES L. DENNIS, Circuit Judge, dissenting:

I respectfully dissent from the grant of mandamus relief. The majority relies on In re Itron, Inc., 883 F.3d 553 (5th Cir. 2018) to conclude that the district court clearly and indisputably erred. But that case was decided under Mississippi state law, rather than, as here, the federal common law. See FED. EVID. 501 (“The common law—as interpreted by United States courts in the light of reason and experience—governs a claim of privilege,” except “in a civil case” in “which state law supplies the rule of decision”); Alldread v. City of Grenada, 988 F.2d 1425, 1433–34 (5th Cir. 1993) (applying federal, rather than state, law, in analyzing waiver of  attorney-client  privilege  in  FLSA action). Itron is thus merely persuasive authority, and in no event binding on the district court. I do not believe a petitioner can show a clear and indisputable right to mandamus relief in such circumstances. See Cheney v. U.S. Dist. Court for D.C., 542 U.S. 367, 381 (2004).

Before DENNIS, ELROD, and DUNCAN, Circuit Judges. PER CURIAM:*

Schlumberger Technology Corporation (“STC”) petitions for a writ of mandamus to vacate the district court’s order compelling STC to disclose testimony and documents STC argues are attorney-client privileged. Because STC identifies a “clear and indisputable error” by the district court that cannot be remedied otherwise, we grant the writ. In re Itron, Inc., 883 F.3d 553, 567 (5th Cir. 2018) (quoting Cheney v. U.S. Dist. Court for Dist. of Columbia, 542 U.S. 367, 380–81 (2004)) (cleaned up).

I.

The operative complaint alleges that STC violated the Fair Labor Standards Act (“FLSA”) and Louisiana law by failing to classify some of its

 

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4.

No. 20-30236

employees as eligible for overtime pay. STC’s answer raises an affirmative defense that it made good-faith efforts to comply with the FLSA. See 29 U.S.C. 259(a). Specifically, STC asserts that any violations “were not willful,” and that it relied in good faith “on applicable law, administrative regulations, orders, interpretations and/or administrative practice or policy enforcement.”

During discovery, James Hanley, a former STC human-resources consultant, was deposed. After retiring from STC, Hanley was retained by STC’s legal counsel to help review the FLSA status of the positions at issue in this lawsuit. In his deposition, Hanley revealed contents of the attorney-led review team’s report to STC’s management. After Hanley’s deposition, the plaintiffs subpoenaed FLSA classification reviews Hanley helped complete in 2004, 2008, and 2015.

STC moved to quash the subpoena and to strike portions of Hanley’s deposition, arguing Hanley had revealed privileged communications between STC’s attorneys and its management. The magistrate judge recommended denying STC’s motions on the basis that STC had waived the privilege by raising good faith as an affirmative defense to the FLSA claims. STC objected, but the district court overruled its objection in relevant part. The court thus denied STC’s motion to quash Hanley’s subpoena, granted Plaintiffs’ motion to continue his deposition, and granted Plaintiffs’ motion to compel discovery of FLSA classification reviews Hanley completed in 2004, 2008, and 2015.

STC now petitions for a writ of mandamus, arguing the district court erred in light of our decision in Itron, which held a party does not waive attorney-client privilege unless it affirmatively invokes and relies on the privileged communications, 883 F.3d 553.

II.

To decide whether mandamus is warranted, “we ask (1) whether the petitioner has demonstrated that it has no other adequate means to attain the

 

No. 20-30236

relief it desires; (2) whether the petitioner’s right to issuance of the writ is clear and indisputable; and (3) whether we, in the exercise of our discretion, are satisfied that the writ is appropriate under the circumstances.” Id. at 567 (quoting Cheney, 542 U.S. at 380–81) (cleaned up).

A.

The first prong requires STC to show inadequacy of relief by other means. “[T]his requirement is ‘often . . . met in cases where a petitioner claims that a district court erroneously ordered disclosure of attorney-client privileged documents.” Id. (quoting In re Kellogg Brown & Root, Inc., 756 F.3d 754, 760– 61 (D.C. Cir. 2014)); see, e.g., In re Burlington N., Inc., 822 F.2d 518 (5th Cir. 1987); In re City of Houston, 772 F. App’x 143 (5th Cir. 2019); In re EEOC, 207 App’x 426 (5th Cir. 2006). Because the district court denied STC’s motion to certify an interlocutory appeal, mandamus is its only means of protecting the privilege.

B.

To satisfy the second prong, STC must show that its “right to the issuance of the writ is . . . clear and indisputable.” Itron, 883 F.3d at 568 (quoting In re Volkswagen, 545 F.3d 304, 311 (5th Cir. 2008) (en banc)). A petitioner has a clear and indisputable right only when there has been a “usurpation of judicial power” or “a clear abuse of discretion that produces patently erroneous results.” In re JPMorgan Chase & Co., 916 F.3d 494, 500 (5th Cir. 2019) (cleaned up). “[B]y definition, a district court abuses its discretion when it makes an error of law or applies an incorrect legal standard.” Itron, 883 F.3d at 568 (quoting Klier v. Elf Atochem N. Am., Inc., 658 F.3d 468, 474 (5th Cir. 2011)). Here, the district court applied an incorrect legal standard by failing to follow Itron.

In that case, Itron, Inc., sued three individuals for negligent misrepresentation under Mississippi law, alleging the defendants’

 

No. 20-30236

misrepresentations “caused it to unwittingly assume liability” under a settlement agreement. 883 F.3d at 556 (cleaned up). The defendants moved to compel production of various privileged documents, arguing that by claiming it had been misled, Itron had “waived its attorney-client privilege as to all communications with counsel concerning potential exposure.” Id. Itron invoked the privilege and stipulated it would not use any such privileged communications in its defense. Id. at 557. After the magistrate judge compelled production of the privileged materials, we granted mandamus. Id. at 569.

We held that “a client waives the privilege by affirmatively relying on attorney-client communications to support an element of a legal claim or defense—thereby putting those communications ‘at issue’ in the case.” Id. at

558 (citations omitted). Put differently, when a client “uses confidential information against his adversary,” it cannot simultaneously use the privilege as a shield. Id. (citing Willy v. Admin. Review Bd., 423 F.3d 483, 497 (5th Cir. 2005)). At the same time, however, we cautioned that asserting a claim to which privileged material is merely relevant does not waive the privilege. Instead, the client “must rely on privileged advice from his counsel to make his claim or defense.” Id. at 561 (quoting In re Cty. of Erie, 546 F.3d 222, 229 (2d Cir. 2008); citing Rhone-Poulenc Rorer Inc. v. Home Indem. Co., 32 F.3d 851, 863 (3d Cir. 1994)) (emphasis in original). While we applied Mississippi privilege doctrine, we noted that Mississippi has adopted the general approach to this question. Id. (citing Jackson Med. Clinic for Women, P.A. v. Moore, 836

 

No. 20-30236

So.2d 767, 773 (Miss. 2003)). Accordingly, our decision relied on treatises,1 our cases,2 and out-of-circuit federal cases3 to support its holding.

Our holding in Itron controls here. STC’s answer claimed only that it relied in good faith “on applicable law, administrative regulations, orders, interpretations and/or administrative practice or policy enforcement.” STC did not claim that counsel advised it that its decisions complied with the FLSA. Indeed, its answer did not allude to advice of counsel at all. While privileged communications may have some bearing on STC’s beliefs about its compliance, STC has not “rel[ied] on attorney-client communications” to establish its good- faith defense. 883 F.3d at 558; accord McKee v. PetSmart, Inc., 71 F. Supp. 3d 439, 443 (D. Del. 2014) (no waiver of privilege by invoking FLSA good-faith defense).

The district court distinguished Itron by interpreting Hanley’s testimony as an implied waiver of attorney-client privilege. The court relied on a pre-Itron district court decision, Edwards v. KB Home, No. 3:11-CV-00240, 2015 WL 4430998 (S.D. Tex. July 18, 2015). In Edwards, an FLSA defendant invoked the good-faith defense and conceded that it had communicated with attorneys regarding its FLSA classification decisions. Id. at *1. The district court held

 

 

1 See Itron, 883 F.3d at 558, 560–61 & n.6 (citing 8 Fed. Prac. & Proc. § 2016.6; 2 New Wigmore, § 6.12.4(b); 81 Am. Jur. 2d § 329; 1 McCormick On Evidence § 93; 2 Paul R. Rice et al., Attorney-Client Privilege in the United States § 9:46 (2017–18 ed.); 81 Am. Jur. 2d § 329).
2 See, e.g., id. at 559 nn. 3–4 (citing United States v. Newell, 315 F.3d 510, 525 (5th Cir. 2002); Indus. Clearinghouse, Inc. v. Browning Mfg. Div. of Emerson Elec. Co., 953 F.2d 1004, 1007 (5th Cir. 1992); Conkling v. Turner, 883 F.2d 431, 434–35 (5th Cir. 1989); In re Burlington N., 822 F.2d at 533; United States v. Miller, 600 F.2d 498, 501–02 (5th Cir. 1979).
3 See, e.g., id. at 559 & n.3 (citing Hunt v. Blackburn, 128 U.S. 464, 470–71 (1888); Seneca Ins. Co. v. W. Claims, Inc., 774 F.3d 1272, 1276–77 (10th Cir. 2014); In re Icenhower, 755 F.3d 1130, 1141 (9th Cir. 2014); United States v. Bauer, 551 F.3d 786, 790–92 (8th Cir. 2008); United States v. Workman, 138 F.3d 1261, 1263–64 (8th Cir. 1998); Chevron Corp. v. Pennzoil Co., 974 F.2d 1156, 1162–63 (9th Cir. 1992)); Sedco Int’l, S. A. v. Cory, 683 F.2d 1201, 1206 (8th Cir. 1982).

 

No. 20-30236

that where a defendant relied on counsel’s advice in making classification determinations, the defendant could not shield those communications by disclaiming that reliance. Id. at *2.

Edwards predates Itron and is, in any event, distinguishable. In Edwards, the defendant affirmatively conceded it had relied on the advice of counsel to make its classification decisions. Here, STC made no such concession and instead tailored its pleading so as not to rely on privileged communications.

We also reject Plaintiffs’ argument that STC waived the privilege simply by allowing Henley to testify about the compliance reviews. To comply with plaintiffs’ discovery requests, STC was required to identify, and thus make available for deposition, persons involved in its consultations. See, e.g., In re Application of Chevron Corp., 736 F.Supp.2d 773, 783–84 (S.D.N.Y. 2010). Responding to that request does not amount to “us[ing] confidential information against [STC’s] adversary,” such that STC “implicitly waive[d] its use protectively.” Willy, 423 F.3d at 497.

C.

As to the third prong, STC has shown that mandamus is “appropriate under the circumstances.” Itron, 883 F.3d at 567 (quoting Cheney, 542 U.S. at 380–81) (cleaned up). The purpose of the attorney-client privilege “is to encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice.” Upjohn Co. v. United States, 449 U.S. 383, 389 (1981). These benefits dissipate if clients are not “free from the consequences or the apprehension” that a court might order their confidential communications involuntarily disclosed. Hunt v. Blackburn, 128 U.S. 464, 470 (1888). As STC points out, denying the privilege in FLSA cases may discourage employers from seeking legal input in classifying employees. If the district

 

No. 20-30236

court’s “view of the law were to proliferate, more district courts could mistakenly find waiver” under these circumstances. Itron, 883 F.3d at 568. To prevent this from occurring, correcting this error through mandamus is a proper exercise of our discretion.

* * *

The  mandamus   petition   is   GRANTED.  Petitioners’   accompanying motion to place material under seal is also GRANTED.

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