Smoke and Mirrors?

Oftentimes, litigants find themselves in discovery battles in which one party simply refuses to produce documents to the other. In cases involving products, most defendants are unwilling to produce documents to a plaintiff that is on a fishing expedition. Some documents contain vital company secrets, engineering specifications or e-mails that the writer wishes were never sent. In these circumstances, the question of whether to produce or not produce turns upon whether an actual privilege attaches to the document in question. Many times, a party will assert each and every privilege or protection imaginable with the hope of creating enough smoke and mirrors to make the other party give up on obtaining the requested documents. In a very recent case handed down just this past Monday, the South Carolina Supreme Court opined that the South Carolina Attorney General’s assertion of the attorney-client privilege may apply to certain documents that were requested by a tobacco company.

In Tobaccoville USA, Inc., v. McMaster, No. 26799, 2010 WL 1439108 (S.C. April 12, 2010) the South Carolina Supreme Court heard a certified appeal in which the attorney general was in a discovery dispute with a tobacco company. The dispute stemmed from the attorney general’s assertion that various privileges applied to Tobaccoville’s request for documents. The actual documents themselves were not identified in the opinion. However, based upon the references to the Master Settlement Agreement (MSA), one can reasonably conclude that Tobaccoville was seeking disclosure of documents relating to either the MSA itself or documents relating to the underlying litigation that was resolved by the MSA. In 1998, South Carolina, like many other states, entered into the MSA with the tobacco companies to settle litigation brought by the states to recover health care expenses that were allegedly related to tobacco use.

The court reviewed the various privileges and doctrines asserted by the attorney general including the attorney-client privilege, the attorney work product doctrine, the deliberative process privilege, and the common interest doctrine. The court disagreed with the administrative law judge’s determination that the attorney-client privilege did not apply to this particular situation. The administrative law court found that the privilege did not apply since neither the National Association of Attorneys General (NAAG) nor the other states’ attorney generals were retained as counsel. Based on this determination the administrative law court reasoned that there could not be an attorney-client relationship upon which to base the privilege. However, the supreme court reasoned that since the attorney general is a paid member of NAAG and that NAAG staff attorneys are available to provide legal advice concerning the MSA and tobacco regulation and enforcement, the privilege may apply to the documents in question.

The supreme court remanded the case to the administrative law court for a determination of whether the alleged privileged documents are indeed confidential communications pertaining to the underlying litigation. The court also relied upon a Southern District of New York case for the proposition that the similar documents between an attorney general and the NAAG were protected by the attorney-client privilege. See Grand River Enterprise Six Nations, Ltd. v. Pryor, No. 02 Civ. 5069(JFK)(DFE), 2008 WL 1826490 (Apr. 18, 2008 S.D.N.Y.). Coincidentally, or maybe not so coincidentally, Grand River is the same manufacturer of cigarettes at issue in Tobaccoville USA, Inc. v. McMaster. It appears that the administrative law judge will now have to perform an in camera inspection of the documents to determine whether the attorney-client privilege actually applies to the disputed documents.

He or she will be further assisted by the supreme court’s direction that the attorney work product doctrine does not apply to this situation and that South Carolina has declined to adopt the deliberative process privilege. As such, whether the attorney general’s assertions of privilege to the documents actually apply will now by thoroughly examined by the administrative law court.

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