Last week's Privilege Point described a court's rejection of a work product claim based, in part, on an in-house lawyer's lack of involvement in creating the withheld documents. Phoenix Technologies Ltd. v. VMware, Inc., Case No. 15-cv-01414-HSG (DMR), 2016 U.S. Dist. LEXIS 86210 (N.D. Cal. July 1, 2016). The court also pointed to three other factors in denying Phoenix's work product claim.
First, two days before the date Phoenix claimed that it anticipated litigation, the company "was still internally referring to the dispute [with VMware] as employing the 'same process'" as used in another negotiation. Id. at *27. Second, one day later "Phoenix's Vice President of Sales communicated with VMware, seeking data and noting that VMware legal had agreed to 'move forward on resolving this licensing situation amicably.'" Id. Third, "Phoenix did not issue a litigation hold notice until February 17, 2015" — thirteen days after the company claimed it anticipated litigation. Id. The court pointed to these factors (and the lack of the in-house lawyers' involvement) as tending to show "that Phoenix did not reasonably anticipate that this matter would result in a lawsuit until after the date of the disputed documents." Id. at *27-28.
The Phoenix case provides several good lessons. Corporations anticipating litigation should (1) involve their lawyers, which tends to show that they were not acting in the ordinary course of business; (2) alert their business folks about the possible litigation, so that their internal communications do not undercut a later work product claim if the court reviews them in camera; and (3) quickly put a litigation hold in place. However, it seems wrong for courts to rely on external communications' laudable cordiality as evidence that the sender did not anticipate litigation.