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US Court orders law firm to surrender ‘privileged’ emails

US Court orders law firm to surrender ‘privileged’ emails

IN AN interesting twist to what seems like an ordinary employment stoush before New Zealand’s employment courts, a US federal court has ordered the release of nearly 200 allegedly ‘privileged’…

IN AN interesting twist to what seems like an ordinary employment stoush before New Zealand’s employment courts, a US federal court has ordered the release of nearly 200 allegedly ‘privileged’ emails.

In copying the emails to New Zealand employment advocate Matthew Young of Employment Associates Limited, US District Court Judge Stanley R Chesler held that New Jersey law firm Riker, Danzig, Scherer, Hyland & Perretti LLP (Riker Danzig) had waived attorney-client privilege in respect of their mutual client New Zealander Warren Tobin.

In Stayinfront Inc v Tobin, His Honour upheld the decision of US Magistrate Judge Patty Shwartz ordering Riker Danzig to discover privileged emails subpoenaed by the plaintiffs, Stayinfront Inc and Nap Associates LLC. The emails in question were exchanged between Tobin, Riker Danzig, and Young in respect of a New Jersey case between Tobin and his former employer, Stayinfront.

In 2003, Tobin brought an action against Stayinfront in the Superior Court of New Jersey, Bergen County, seeking to enforce his rights under a stock purchase and severance agreement. The matter appeared to settle in August 2004, but Tobin brought an action against Stayinfront in New Zealand’s Employment Relations Authority (ERA), claiming he was coerced to enter into the settlement agreement. Young, a lay advocate, was engaged by Tobin in relation to the ERA claim.

The matter was dismissed in August 2005, and shortly thereafter, Stayinfront launched its claims against Tobin, Young, and Employment Associates Limited in the Superior Court of New Jersey. It brought a claim against Tobin for breach of contract (it claimed Tobin breached a covenant not to sue contained in the stock purchase and severance agreement), and a claim of tortious interference with contract against Young and Employment Associates on the grounds they had allegedly induced Tobin to bring the New Zealand action. The matter was removed to the US District Court of New Jersey (on diversity grounds), where Tobin filed a motion to dismiss for lack of personal jurisdiction. When Tobin and the other defendants failed to provide court-ordered discovery, the Court entered a default judgment against them as a sanction for their refusal to participate in discovery and in response to their statement that they would no longer participate in the case.

Having obtained a default judgment, Stayinfront sought discovery of documents held by Riker Danzig in order to prove its claim for damages. Riker Danzig refused to release a number of emails on the grounds they were subject to attorney-client privilege.

The issue before the Court was whether the emails sent to Young were still privileged. Under the Employment Relations Act 2000, communications between the party to the proceeding and his or her lay advocate will be privileged. However, the US Court held such privilege was limited to the action before the ERA. The emails related to the New Jersey action and not the New Zealand ERA action. As such, the magistrate judge found that “the failure to assert that these documents are related to the New Zealand employment litigation is fatal to the privilege claim because … the New Zealand lay advocate privilege is limited to communications directly related to issues involved in the New Zealand employment dispute”.

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US Court orders law firm to surrender ‘privileged’ emails
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