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Ewald v. Royal Norwegian Embassy

United States District Court, D. Minnesota

March 7, 2014

Ellen S. Ewald, Plaintiff,
Royal Norwegian Embassy, Defendant.

Sheila A. Engelmeier, Susanne J. Fischer, Thomas E. Marshall, Esqs., Engelmeier & Umanah, P.A., 12 South Sixth Street, Suite 1230, Minneapolis, Minnesota 55402, for Plaintiff.

John B. Gordon, Daniel G. Wilczek, Joel P. Schroeder, Sean R. Somermeyer, Esqs., Faegre Baker Daniels LLP, 90 South Seventh Street, Suite 2200, Minneapolis, Minnesota 55402, for Defendant.


STEVEN E. RAU, Magistrate Judge.

The above-captioned case comes before the undersigned on Defendant Royal Norwegian Embassy's (the "Embassy") letter dated December 17, 2013, requesting an order regarding the privilege status of two documents (Letter to Mag. Judge Rau, Dec. 17, 2013, the "Privilege Letter, " Ex. C, Attached to Aff. of Thomas E. Marshall) [Doc No. 174-1 at 7-8]; the Embassy's Motion to Enforce Compliance with and Provide Sanctions for Violation of Rule 26(b)(5)(B) (the "Embassy's Motion for Rule 26 Sanctions") [Doc. No. 167]; and Plaintiff Ellen S. Ewald's ("Ewald") Motion for Sanctions Due to Spoliation of Evidence ("Ewald's Motion for Spoliation Sanctions") [Doc. No. 184].[1] This matter has been referred to the undersigned for resolution of pretrial matters pursuant to 28 U.S.C. § 636(b)(1)(A), (B), and (C), and District of Minnesota Local Rule 72.1. For the reasons set forth below, this Court finds the documents submitted with the Privilege Letter are not privileged, denies the Embassy's Motion for Rule 26 Sanctions, and recommends that Ewald's Motion for Spoliation Sanctions be denied.[2]


The specific details of this employment discrimination action have been described in various other orders. See, e.g., (Mem. Op. & Order Dated Jan. 26, 2012) [Doc. No. 18 at 2-4].

A. Relevant Factual History

The Embassy hired Ewald to work at the Honorary Norwegian Consulate in Minneapolis, Minnesota (the "Consulate") and paid her $40, 000 less per year than Anders Davidson ("Davidson"), a male comparator, was paid. (Am. Compl.) [Doc. No. 104 ¶¶ 2, 15, 73]. Ewald's position was one of four positions at the Consulate. ( Id. ¶ 11). After complaining about the pay disparity, Ewald's contract was not renewed. ( Id. ¶ 59). Ewald alleges that before and after the completion of her contract term, she was retaliated against and bullied at work. See, e.g., ( id. ¶¶ 5, 40, 53, 59). Ewald asserts that Minnesota, federal, and Norwegian law support her claims. ( Id. ¶¶ 60-117).[3]

B. Relevant Procedural History

The matters presently before this Court arise out of this Court's Order on Ewald's Motion to Compel Discovery ("Motion to Compel"). (Mot. to Compel) [Doc. No. 106]; (Order Dated Oct. 8, 2013, "Oct. 2013 Order") [Doc. No. 129].[4] In that Order, this Court ruled on several discovery issues. See (Oct. 2013 Order). Two of these discovery matters are relevant to the Privilege Letter and Motions for Sanctions discussed in this Order:[5] (1) Ewald's challenges to the Embassy's privileged documents, and (2) Ewald's request for production or inspection of mobile phones and laptops. See (Oct. 2013 Order at 9, 10-11).

1. Privilege Issues

In her Motion to Compel, Ewald challenged the Embassy's privilege claim on several documents the Embassy produced during discovery. See (Ewald's Mem. in Supp. of Mot. to Compel Disc., "Ewald's Mem. in Supp. of Mot. to Compel") [Doc. No. 109 at 22-25]. These challenged documents included two emails, Bates numbered RNE 363-64 ("RNE 363") and RNE 63100-03 ("RNE 63100"), that are now the subject of the Privilege Letter. See ( id. ); (Privilege Letter). In denying Ewald's Motion to Compel, this Court ordered the Embassy to produce a privilege log, required the parties to meet and confer regarding any remaining privilege disputes, and required the Embassy to submit unredacted versions of any remaining documents in dispute for in camera review. (Oct. 2013 Order at 11-12).

Pursuant to this Court's October 2013 Order, the Embassy produced its privilege log on November 7, 2013. (Embassy's Mem. of Law in Supp. of Mot. to Enforce Compliance with & Provide Sanctions for Violation of Rule 26(b)(5)(B), "Embassy's Mem. in Supp. of Rule 26 Sanctions") [Doc. No. 170 at 3]. The parties met and conferred on December 6, 2013, but were unable to resolve the disputed privilege issues with respect to RNE 363 and RNE 63100. (Letter to Mag. Judge Dated Dec. 10, 2013) [Doc. No. 166]. The parties then submitted those documents to this Court for in camera review and a determination of the privilege issue on December 17, 2013. (Privilege Letter).[6]

In the interim, on November 26, 2013, the Honorable Susan Richard Nelson heard oral argument on the Embassy's Motion for Summary Judgment. (Minute Entry Dated Nov. 26, 2013) [Doc. No. 162]. During the oral argument, Ewald's counsel, Sheila Engelmeier, read a portion of document RNE 88231-35 ("RNE 88231") out loud and into the record. (Tr. of Mot. Hr'g on the Embassy's Mot. for Summary J., "MSJ Tr.") [Doc. No. 164 at 34:3-24].[7] RNE 88231 is nearly identical to RNE 63100, and the Embassy had likewise claimed that part of RNE 88231-the part that Ewald's counsel read into the record during the Motion for Summary Judgment oral argument-was privileged. (Embassy's Mem. in Supp. of Rule 26 Sanctions at 2); (Ewald's Mem. in Opp'n to Rule 26 Sanctions at 5). The Embassy notified Judge Nelson of its claim about the document's privilege status and that the Embassy previously asked Ewald to return the document. (MSJ Tr. at 73:12-74:1). Ewald's use of RNE 88231 at the Motion for Summary Judgment hearing is now the subject of the Embassy's Motion for Rule 26 Sanctions. See (Embassy's Mem. in Supp. of Rule 26 Sanctions).

2. Gandrud's Mobile Phone and Ewald's First Laptop

Ewald's Motion to Compel also requested production of the mobile phone of Gary Gandrud ("Gandrud") and the first laptop the Embassy provided to Ewald ("Ewald's First Laptop"), among other items. See (Ewald's Mem. in Supp. of Mot. to Compel at 18, 21). When Ewald worked for the Embassy, Gandrud was the Honorary Consul for Norway, and was employed by the law firm of Faegre & Benson LLP ("Faegre").[8] (Am. Compl. ¶ 3); (Letter to District Judge Dated Dec. 23, 2013, "Embassy's Dec. 23, 2013 Letter") [Doc. No. 179 at 2]. This Court denied the Motion to Compel, including denying these specific requests. (Oct. 2013 Order at 9). On Ewald's objection, Judge Nelson affirmed this Court with respect to Ewald's First Laptop. (Nov. 2013 Order at 16-17). But Judge Nelson reversed this Court with respect to mobile phones issued by the Embassy to Gandrud and Ewald. ( Id. at 17-21). Since filing her Motion to Compel, Ewald has learned that the Embassy did not provide Gandrud with a mobile phone, that the mobile phone Gandrud used at the time (provided by Faegre) has been recycled, and that the Embassy does not have Ewald's First Laptop. (Email from Joel Schroeder (the Embassy), to Sheila Engelmeier (Ewald) (Dec. 1, 2013, 10:02 a.m.), "Schroeder Dec. 1, 2013 Email, " Ex. D, Attached to Affidavit of Susanne J. Fischer, "Fischer Aff.") [Doc. No. 187-4 at 1];[9] (Embassy's Dec. 23, 2013 Letter at 1); (Email from Joel Schroeder (the Embassy), to Sheila Engelmeier (Ewald) (Nov. 17, 2013, 5:21 p.m.) "Schroeder Nov. 17, 2013 Email", Ex. J, Attached to Fischer Decl.) [Doc. No. 187-10 at 2].[10] As a result, Ewald now moves for sanctions against the Embassy for spoliation of Gandrud's mobile phone and Ewald's First Laptop, as well as documents from Innovation Norway.[11] (Ewald's Mem. of Law in Supp. of Her Mot. for Sanctions Due to Spoliation of Evidence, "Ewald's Mem. in Supp. of Spoliation Sanctions") [Doc. No. 186 at 1].

This Court heard oral argument on the Motions for Sanctions on January 30, 2014. (Minute Entry Dated Jan. 30, 2014) [Doc. No. 194].


A. Privilege Letter

As described above, the Embassy now seeks review of two emails, identified by their respective Bates numbers: RNE 363 and RNE 63100.[12] (Privilege Letter at 1). The Embassy submitted each email in its original form in Norwegian, and provided a certified translation of each email. ( Id. ). The certified translations were highlighted where the redactions appeared. ( Id. ).

Because the privilege issue was briefed in connection with Ewald's Motion to Compel, this Court relies on the parties' arguments in that Motion. The Embassy claims that both documents are legal advice protected by attorney-client privilege. (Embassy's Mem. of Law in Opp'n to Pl.'s Mot. to Compel, "Embassy's Mem. in Opp'n to Mot. to Compel") [Doc. No. 116 at 37]; see also (Privilege Log, Ex. E, Attached to the Aff. of Sean R. Somermeyer, "Somermeyer Aff.-171") [Doc. No. 171-5 at 1-2].

Ewald argues that the Embassy's mere assertion that the documents contain "a discussion of legal advice" does not provide sufficient information to allow the Embassy to claim the redacted portion is privileged. (Ewald's Mem. in Supp. of Mot. to Compel at 24).[13] Ewald also argues that, even if the documents contain privileged information, the Embassy waived the privilege by sending the emails to people who are not attorneys and do not need to know the information. ( Id. ). According to the Embassy, the redacted portions report that the Embassy sought legal advice, and explain its counsel's "assessment and advice." (Embassy's Mem. in Opp'n to Mot. to Compel at 37).[14] The Embassy argues that documents need not be sent or created by an attorney to be protected by attorney-client privilege, and that there was no waiver of the privilege because the documents were shared with high-level officials in the Ministry of Foreign Affairs ("MFA") in Oslo, Norway. ( Id. at 37-38, 39 n.28); see also (Privilege Letter at 1).

1. Legal Standard

The Federal Rules of Civil Procedure permit "discovery regarding any nonprivileged matter that is relevant to any party's claim or defense-including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter." Fed.R.Civ.P. 26(b)(1). A court has broad discretion to decide discovery motions. Pavlik v. Cargill, Inc., 9 F.3d 710, 714 (8th Cir. 1993).

When making a privilege determination, a court uses federal common law unless a relevant federal rule, statute, or constitutional provision applies. Fed.R.Evid. 501. But where state law determines the decision in a civil case, state law governs the privilege issue. Id.; Bituminous Cas. Corp. v. Tonka Corp., 140 F.R.D. 381, 386 (D. Minn. 1992) (FLN). Ewald's claims allegedly arise under both federal and state law. See (Am. Compl. ¶¶ 60-106). Because federal and Minnesota claims survived summary judgment, this Court will analyze the privilege issue under both federal common law and Minnesota law. See, e.g., (Summary J. Order at 19, 25).

Under both federal and Minnesota law, confidential communications between an attorney and his or her client "are absolutely privileged from disclosure against the will of the client." Diversified Indus., Inc. v. Meredith, 572 F.2d 596, 601 (8th Cir. 1977) ( reversed in part on other grounds, 572 F.2d at 606 (en banc));[15] see also Nat'l Texture Corp. v. Hymes, 282 N.W.2d 890, 895 (Minn. 1979). A party invoking privilege bears the burden of proving the factual basis for the assertion. Hollins v. Powell, 773 F.2d 191, 196 (8th Cir. 1985); Kobluk v. Univ. of Minn., 574 N.W.2d 436, 440 (Minn. 1998) (citations omitted).

In the Eighth Circuit, attorney-client privilege applies when a communication is: (1) confidential; (2) between an attorney and client; and (3) for the purposes of obtaining legal services or advice. United States v. Horvath, 731 F.2d 557, 561 (8th Cir. 1984); Diversified Indus., 572 F.2d at 602, reversed in part on other grounds, 572 F.2d at 606 (en banc). In Minnesota, the privilege applies:

(1) [w]here legal advice of any kind is sought (2) from a professional legal adviser in his capacity as such, (3) the communications relating to that purpose, (4) made in confidence (5) by the client, (6) are at his instance permanently protected (7) from disclosure by himself or by the legal adviser, (8) except the protection be waived.

Kobluk, 574 N.W.2d at 440 (internal citations omitted); see also Minn. Stat. § 595.02, subdiv. 1(b) ("An attorney cannot, without the consent of the attorney's client, be examined as to any communication made by the client to the attorney or the attorney's advice given thereon in the course of professional duty; nor can any employee of the attorney be examined as to the communication or advice, without the client's consent.").

In both jurisdictions, "[t]he privilege only protects disclosure of communications; it does not protect disclosure of the underlying facts by those who communicated with the attorney.'" PaineWebber Grp. Inc. v. Zinsmeyer Trusts P'ship, 187 F.3d 988, 994 (8th Cir. 1999) (quoting Upjohn Co. v. United States, 449 U.S. 383, 395 (1981)); see also Kobluk, 574 N.W.2d at 443. Whether an attorney-client relationship exists, and for what purpose, is not considered privileged under either federal common law or Minnesota law. See Diversified Indus., 572 F.3d at 603 (finding that a memorandum establishing the relationship between a law firm and client, the purpose of the relationship, and the steps the law firm would take to discharge its obligation did not contain confidential information), aff'd in relevant part on reh'g en banc, 572 F.3d at 606; Burris v. Versa Prods., Inc., Civil No. 07-3938 (JRT/JJK), 2013 WL 608742, at *4 (Feb. 19, 2013) (citing Baskerville v. Baskerville, 75 N.W.2d 762, 767 (Minn. 1956); Henderson v. Eckern, 132 N.W. 715, 716 (Minn. 1911)) ("The mere fact that a client has requested an attorney to act as counsel or consulted with counsel is not protected by the privilege.").

Although Minnesota has not established a separate test for corporations, the attorney-client privilege is maintained in an employee's communication within the corporation in the Eighth Circuit if:

(1) the communication was made for the purpose of securing legal advice; (2) the employee making the communication did so at the direction of his corporate superior; (3) the superior made the request so that the corporation could secure legal advice; (4) the subject matter of the communication is within the scope of the employee's corporate duties; and (5) the communication is not disseminated beyond those persons who, because of the corporate structure, need to know its contents.

Diversified Indus, 572 F.2d at 609 (en banc); see also Leer v. Chicago, Milwaukee, St. Paul & P. Ry. Co., 308 N.W.2d 305, 308-09 (Minn. 1981) (reviewing attorney-client privilege tests in the context of corporations but not adopting any of those reviewed). The corporation has the burden to show that these requirements apply to the communication. Diversified Indus., 572 F.2d at 609 (en banc).

Waiver of privilege occurs when the communication is voluntarily disclosed to a third party. United States v. Hyles, 479 F.3d 958, 971 (8th Cir. 2007) (citation omitted); Kobluk, 574 N.W.3d at 443. Under federal law, waiver is governed by the Federal Rules of Evidence. See Fed.R.Evid. 502(a), (b). The scope of any waiver depends on whether the party intentionally waived privilege, or whether the disclosure of privileged information was inadvertent. Id .; see also U.S. SEC v. Welliver, Civil No. 11-cv-3076 (RHK/SER), 2012 WL 8015672, at *4 (D. Minn. Oct. 26, 2012). If the waiver is intentional, the subject-matter waiver doctrine provides that the privilege may be extinguished as to the entire subject matter of the disclosed information. Fed.R.Civ.P. 502(a); Shukh v. Seagate Tech., LLC, 848 F.Supp.2d 987, 990 (D. Minn. 2011) (JRT/JJK). The subject-matter waiver doctrine exists "to prevent a party from using the advice he received as both a sword, by waiving privilege to favorable advice, and a shield, by asserting privilege to unfavorable advice.'" Shukh, 848 F.Supp.2d at 990 (quoting In re EchoStar Commc'ns Corp., 448 F.3d 1294, 1303 (Fed. Cir. 2006)) (other citations omitted).

If, however, a party has inadvertently disclosed privileged information, courts in this District analyze whether an inadvertent disclosure constitutes a waiver of privilege using the five factors first announced in Hydraflow:

(1) the reasonableness of the precautions taken to prevent inadvertent disclosure in light of the extent of document production, (2) the number of inadvertent disclosures, (3) the extent of the disclosures, (4) the promptness of measures taken to remedy the problem, and (5) whether justice is served by relieving the party of its error.

Starway v. Indep. Sch. Dist. No. 625, 187 F.R.D. 595, 597 (D. Minn.1999) (ADM/AJB) (citing Gray v. Bicknell, 86 F.3d 1472, 1484 (8th Cir. 1996); Hydraflow, Inc. v. Enidine Inc., 145 F.R.D. 626, 637 (W.D.N.Y. 1993) (adopting the Hydraflow test). If a court finds that a party waived privilege by inadvertently disclosing privileged information, the waiver is limited to the disclosed information and does not extend to the ...

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