Many years ago, we represented a client in a quandary. (We know, we know: that’s pretty much always the case.) The product had been sold for many decades, the early history was important in marshalling a defense, and there were no employees around who were percipient witnesses. What was the solution? We made an employee an expert on the history of the product. Voila! The good part of that approach is that the witness would be free to talk about product issues predating his involvement (or, indeed, his birth). The bad part was that much of the preparation work with the now-expert might no longer be shielded by the attorney-client privilege.

Federal Rule of Civil Procedure 26(a)(2) addresses that odd creature of the expert witness who was not retained or specially employed to provide expert testimony. Think of, as in the instance mentioned above, a company employee whose job is mostly not devoted to rendering expert testimony. Or think of treating physicians. Rule 26(a)(2)(B) provides that an expert witness must provide an expert report “if the witness is one retained or specially employed to provide expert testimony in the case or one whose duties as the party’s employee regularly involve giving expert testimony.” By contrast, Rule 26(a)(2)(C) provides that for witnesses who are not required to provide a written report – i.e., those not included in Rule 26(a)(2)(B) – the proffering party need only disclose the subject matter of testimony and “a summary of the facts and opinions to which the witness is expected to testify.” We all know that treating physicians do not need to provide expert reports. We couldn’t make them do it. We probably could make employee/experts do a report, but under Rule 26(a)(2)(B), we don’t need to do that. But to what extent does the attorney-client privilege shield our prep work with that employee/expert under that rule?

According to Luminara Worldwide, LLC v. RAZ Imports, Inc., 2016 U.S. Dist. LEXIS 158183 (D. Minn. November 15, 2016), the answer is: not very much. The case involves a patent dispute, and ordinarily we try to stay far from those cases. Those cases are alternately boring and baffling, at least to our liberal arts-majoring eyes. (Plus, our clients could be on either side of a patent case. Or we could have two clients facing each other. Anything we might say in this blog could be used against us. We grow weak-kneed just thinking about it.) But the Luminara court limited the scope of the attorney client privilege for working with employee/experts, so it highlights a potential trap for the wary. The plaintiff in Luminara designated one of its employees as a non-reporting, testifying expert witness pursuant to Rule 26(a)(C). That employee/expert was an inventor of five of the asserted patents underlying this action. He was also a paid consultant to Luminara, providing expertise ranging from design and development of new products to development of patent strategy.

Earlier in the case, the defendant had listed that same employee in its Rule 26(a)(1)(A) disclosure as an individual “likely to have discoverable information” – a fact witness. The defendants responded by requesting documents from that witness and deposing him. The plaintiff objected to every one of the document requests on privilege grounds, and then repeatedly instructed the witness not to answer certain questions during his deposition. Again, the attorney-client privilege was asserted. So far, so good. But then the plaintiff made a Rule 26(a)(2)(C) disclosure, identifying the employee as a proposed non-reporting expert witness. As if to tie things up in neat, privilege-jeopardizing package, the plaintiff stated that the employee would render expert testimony on several of the issues covered in the fact deposition – you know, the one where the plaintiff had invoked the privilege to shut down testimony.

Guess what the defendants did next? It was actually a clever, two-staged maneuver. First, they asked the magistrate judge to require the employee/expert to submit an expert report pursuant to Rule 26(a)(2)(B). The court rejected this request, so the defendants lost, right? Not really, because the defendants then followed up with a motion for an order overruling the privilege objections to the earlier discovery requests. According to the defendants, by putting the employee forward as a non-reporting expert witness under Rule 26(a)(2)(C), the plaintiff waived the attorney-client privilege with regard to materials and communications provided to the employee in connection with his testimony. The plaintiff opposed the motion, arguing that the 2010 amendments to the Federal Rules of Civil Procedure –which created the distinction between reporting and non-reporting expert witnesses – did not contemplate waiver of the attorney-client privilege for non-reporting witnesses.

The magistrate agreed with the defendants, and so did the district judge. The attorney-client privilege did not protect the preparation of the employee/expert. The court reasoned that prior to the 2010 amendments, “courts generally held that all documents and information disclosed to any testifying expert in connection with his testimony, including any communications with attorneys, were discoverable by the opposing party.” Did the 2010 amendments change this troublesome rule? Yes and no. Yes, Rule 26(b)(4)(C) provides explicit protection for some communications between a party’s attorney and reporting experts. But the new Rule 26 is silent as to whether communications with a non-reporting expert are similarly protected. The court looked to the advisory committee notes for the 2010 amendments and saw no hint that the drafters intended to “change any existing precedent regarding privilege waiver of non-reporting experts that existed prior [to 2010].” Consequently, the plaintiff was ordered to produce ”any documents and information considered” by the employee-expert.

That did not end the dispute. The plaintiff produced additional documents, but limited those documents to ones actually used/relied upon by the employee-expert. The defendants wanted more. They wanted everything “considered” by the employee-expert, even if not actually relied upon or used. They wanted everything that the employee-expert “generated, saw, read, reviewed, and/or reflected upon.” Once again, the defendants won. The court interpreted the term “considered” broadly, and concluded that “the scope of waiver is not limited by subjective questions of whether the expert actually relied on or used the documents and information to which he was exposed in crafting his opinion. What matters is simply that he was exposed to those materials in the first place.” This ruling is grounded in the notion that “the purpose of expert discovery is to discover not just the information that the expert used in reaching his conclusions, but also what information he ignored or failed to properly incorporate into his analysis.”

The quandary we faced so long ago has not gone away. There might be times when one needs an employee/expert, but there is a good chance that the prep work will be freely and broadly discoverable.

This must be our week for fretting over frailties of the attorney-client privilege. On Monday, Bexis wrote about privilege problems when dealing with ex-employees. Sometimes, it feels as if our main job as lawyers is to worry over things. Perhaps the holiday season is arriving just in the nick of time.