A Roadmap for Privilege Issues in Federal Court

As I mentioned yesterday at Legal Underground, there was an interesting and useful order issued a few days ago by Judge Fallon in the federal Vioxx MDL: "Order & Reasons dated August 14, 2007" (pdf, link from the Vioxx MDL website).

The ruling concerns defendant Merck's attorney-client-privilege objections on a representative sampling of about 30,000 documents. The ruling is useful for analyzing privilege claims by large corporations, and discusses the following issues:

• General principles re attorney-client privilege, pgs. 10-13;
• Issue: whether the primary purpose of a communication is really legal advice, especially in light of ease of email within corporations, pgs. 13-18;
• Issue: the arguably enlarged scope of legal communications within corporations that are highly regulated by agencies such as the FDA, pgs. 18-23;
• Analysis of the defendant's "reverse-engineering" argument, i.e., that by producing documents not technically privileged, readers would be able to "reverse engineer" the legal advice that preceded the communications, pgs. 23-25;
• Issue: the way in which the choice of a method of organizing a corporation's working units (and the powers it gives its legal department) can affect claims of privilege, pgs. 25-28.

The opinion is also interesting for the procedure the Court used to analyze claims of privilege for the massive set of 30,000 documents, which comprised about 500,000 pages of materials. Rather than analyzing each document, the Court looked at a representative sampling. In his opinion, Judge Fallon noted that he went into "considerable detail" in the hopes that the procedures employed by his Court would serve as a guideline to resolving privilege issues in complex cases "in the dawn of the age of electronic discovery."

A post at the Pharmalot weblog captures the essence of the undertaking--

Fallon called the battle “a time consuming and expensive saga that has spiraled out of control.” The cost to review a sample of 2,000-plus documents exceeded $400,000, which is to be split by Merck and plaintiffs’ lawyers, and took three months.