One of the finest lines that environmental attorneys walk is in protecting communications between counsel and a retained environmental consultant from disclosure in litigation. In a recent case out of the Northern District of Indiana, Valley Forge Ins. Co. v. Hartford Iron & Metal, Inc., No. 1:14-cv-00006 (N.D. Ill. Apr. 14, 2017), the Court found that communications between counsel and consultants retained by the counsel were not protected by the attorney-client privilege, in large part because the consultants also performed remedial work. However, as the work was done "in anticipation of litigation" with, among others, the Indiana Department of Environmental Management (IDEM) and EPA, substantive communications were protected by the attorney work product doctrine.
Defendant Hartford Iron operates a scrap metal recycling facility in Indiana. In connection with certain enforcement actions by IDEM and EPA, Hartford had entered into two settlement agreements with its insurer, Plaintiff Valley Forge. The second settlement agreement included provisions by which Valley Forge agreed to appoint counsel to represent Hartford and to replace the existing environmental consultant with a new consultant, August Mack, who designed and installed a stormwater management system to partially address the issues raised by the enforcement actions. The lawyer Valley Forge appointed, Jamie Dameron, had, prior to becoming an attorney, worked as an environmental consulting geologist.
In the course of representing Hartford, Dameron discovered that the stormwater system was failing, resulting in noncompliance with an existing remediation order entered into between IDEM and Hartford. Thus, Dameron hired consultant Keramida to inspect and evaluate the failing and defectively-designed system and, eventually, Hartford retained Keramida to redesign and oversee construction of a replacement system, which was approved by the IDEM in connection with resolving NOVs issued as a result of the failure of the first system. A second consultant, CH2M, was retained, again by Dameron, to test and then excavate PCB impacted soils.
In litigation between the Valley Forge and Hartford, Valley Forge sought communications between Dameron and Keramida and CH2M, disputing Dameron's claim of both the attorney-client privilege and the attorney work product protection. In resolving the discovery dispute, and after an in camera review of the documents at issue, the Court held that, notwithstanding the fact that the consultants had been retained by Dameron, the communications were not protected by the attorney-client privilege because they did not primarily relate to “legal assistance;” rather they related to environmental remediation at the Site. The Court also opined that the privilege was not applicable because Dameron, at least with respect to the remediation, appeared to be acting more like an environmental consultant (which he has been) than an attorney, raising further doubt as to whether these communications truly involved legal assistance.
On the other hand, the Court did find that substantive communications were protected by the attorney work product doctrine as the threat of litigation by IDEM and EPA were the driving force in the consultants’ work. The Court held that even a document that has dual purposes, only one of which is in anticipation of litigation (e.g. a remediation work plan), may be protected by the work product doctrine. On the other hand, the Court noted that not all documents prepared during or in advance of litigation fall within the doctrine’s protection. According to the Court, non-protected documents included transmittal letters and billing records.