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Hudock v. LG Electronics U.S.A., Inc.

United States District Court, D. Minnesota

November 4, 2019

Hudock et al., Plaintiff,
v.
LG Electronics U.S.A., Inc., et al., Defendants. This document relates to All actions

          ORDER

          Katherine Menendez United States Magistrate Judge

         This matter is before the Court on the Plaintiffs' Motion to Compel Defendants to Produce Documents Improperly Withheld as Privileged. [Pls.' Mot., ECF No. 186.] When the Plaintiffs originally filed their motion, the challenge to the privilege claims asserted by LG Electronics U.S.A., Inc. (“LG”) and Best Buy Co., Inc., were expansive. The Court held a hearing on the motion on June 13, 2019, and a subsequent telephone conference with the parties resulted in a significant narrowing of the issues in dispute.[1]

         On August 8, 2019, the Plaintiffs submitted a supplemental letter brief concerning the remaining areas of disagreement. The Plaintiffs no longer challenge the privilege claims regarding any documents on Best Buy's privilege log and have narrowed their dispute to only 31 documents from LG's privilege log. LG argues that the communications at issue are protected by the attorney-client privilege.[2] The parties agreed to submit a sample of the disputed documents to the Court for in camera review. Based on the Court's review, the Plaintiffs' modified motion to compel is granted in part and denied in part.

         I. Background

         In this putative consumer class action[3] the Plaintiffs allege that LG and Best Buy falsely represented the refresh rates of LG's high definition televisions. The Plaintiffs claim that even though LG's televisions had a refresh rate of, for example, 60 Hz, the marketing materials provided to consumers indicated that the refresh rate was 120 Hz. They contend that LG and Best Buy thereby misrepresented the quality of the televisions, causing consumers to pay higher prices than they would have if the refresh rates had been accurately disclosed.[4]

         The privilege issues raised by the Plaintiffs' motion involves a third-party advertising company called HS Ad America (“HSAA”). LG developed the marketing materials for the televisions at issue in this case with HSAA, and those materials were later provided to retailers like Best Buy. HSAA and LG are separate legal entities, but they are affiliated. HSAA was formerly known as “LG Ad” and only provides services to LG companies. [Decl. of Louis Giagrande (“Giagrande Decl.”) ¶¶ 1-2.] The companies' offices are currently located close to one another and HSAA plans to move its corporate offices into LG's new headquarters when it opens. [Id. ¶ 2.] According to HSAA's Chief Operating Officer, Louis Giagrande, it is common practice for companies like LG to use legally distinct, but affiliated advertising companies and for such entities to treat their employees as an integrated team. [See Id. ¶¶ 3-5.]

         The Plaintiffs challenge LG's claims of attorney-client privilege over several communications between LG and HSAA non-attorney employees. As noted, LG submitted a sampling of the challenged documents for the Court's in camera review. In camera Exhibit 1 includes three April 2015 emails between LG and HSAA employees (“the 2015 Emails”). The 2015 Emails are in a reverse chronological thread. The first of these emails is from one LG employee, David Park, to another LG employee, Alfred Lee, and Sarah Kim (an HSAA employee) is copied on the message. In the second email, Alfred Lee forwards Mr. Park's message to Christina Park, another HSAA employee. The third email is from Mr. Lee to Ms. Park, copying Ms. Kim. Attached to these three challenged emails are almost twelve pages of communications involving both in-house LG attorneys and external counsel from the law firm Wilson Sonsini Goodrich & Rosati. The Plaintiffs' challenge does not request production of the attached communications involving the attorneys. However, they do ask the Court to compel LG to produce the three 2015 Emails between non-attorney LG and HSAA employees.

         The remaining sample documents comprise in camera Exhibits 2 through 9. These Exhibits contain email threads from 2017 that were partially redacted based on LG's privilege claims (“the 2017 Emails”). The 2017 Emails are also communications between non-attorney LG and HSAA employees. In the unredacted portions of these communications, LG and HSAA employees discuss changes to how LG's consumer-facing marketing materials represent the Hz refresh rate in connection with “TruMotion” branded televisions. LG redacted significant portions of these email threads when they produced them to the Plaintiffs, claiming that the undisclosed portions of the messages convey advice from LG's legal department regarding pending litigation.

         II. Discussion

         The Plaintiffs assert that LG improperly withheld the 2015 Emails and the redacted portions of the 2017 Emails. They argue that the communications reflect business advice, rather than legal advice. Similarly, they argue that the emails reflect nothing more than the implementation of legal advice. The Plaintiffs assert that neither business advice nor implementation of legal advice is privileged. In addition, the Plaintiffs argue that even if the communications reveal legal advice, LG's disclosure of that advice to HSAA personnel waives the attorney-client privilege. As explained below, the Court concludes that LG has not waived the privilege by inclusion of HSAA team members and that the majority of the communications at issue are protected. However, the Court finds that two of the sample items LG withheld must be disclosed to the Plaintiffs. Given that the nine exhibits addressed below are a sample selected from 31 items in dispute, the Court expects the parties to act in good faith to apply the lines drawn in this Order to the remaining 22 documents.

         A. Attorney-Client Privilege

         The attorney-client privilege applies under the following circumstances:

(1) Where 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 v. Univ. of Minnesota, 574 N.W.2d 436, 440 (Minn. 1998) (quoting 8 John Henry Wigmore, Evidence § 2292, at 554 (McNaughton rev. 1961)).[5] “[T]he party resisting disclosure bears the burden of presenting facts to establish the privilege's existence.” Id.

         The privilege applies to corporations as well as individuals if certain criteria are met:

(1) the communication was to secure legal advice, (2) the employee made the communication at the direction of his or her corporate superior, (3) the superior's request was to seek legal advice for the corporation, (4) the subject matter of the communication is within the employee's corporate duties, and (5) the communication was not disseminated beyond people who need to know its contents because of the corporate structure.

Inline Packaging, 2017 WL 9325027, at *4 (citing Leer v. Chicago, M., St. P & P. Ry. Co., 308 N.W.2d 305, 308-09 ...


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