District Court Holds that Emails Between Litigators and Their Environmental Consultants Are Not Always Priveleged
By Don Snemis, Ice Miller LLP
In Valley Forge Insurance Company v. Hartford Iron & Metal, Inc., 2017 WL 1361308 (N.D. Ind. 2017), Magistrate Judge Susan Collins for the U.S. District Court for the Northern District of Indiana held that emails between Hartford and the environmental consultants hired by its attorney were not protected by the attorney-client privilege, and enjoyed only limited protection by the work product privilege. This ruling reminds the environmental bar to be careful about the role of consultants and the way we communicate with them before and during litigation.
Valley Forge is the most recent order in a complicated, contentious dispute between Hartford and Valley Forge. Two underlying issues are involved: a dispute between Hartford and IDEM over alleged contamination and storm water treatment at Hartford’s recycling operation in Hartford City, and Hartford’s dispute with Valley Forge over coverage for the contamination and IDEM’s claims. Hartford’s position was that it retained Keramida and CH2M during the course of these disputes to aid its attorney in providing legal advice and to preparing for litigation, while Valley Forge claimed the primary purpose of the retention was simply to design and build a storm water remediation system at the site. The judge recognized that the attorney-client privilege extends to communications with a consultant hired by an attorney on behalf of a client. However, where the primary purpose of the consultant is not to assist the lawyer in providing legal advice, but to provide the client environmental advice, the communications are not protected. The judge accepted Valley Forge’s argument that Keramida and CH2M were primarily retained to provide environmental advice and services to Hartford, not to assist Hartford’s lawyer in providing legal advice, and found that the communications between Hartford’s counsel and its consultants were not protected by the attorney-client privilege. Interestingly, the court noted that Hartford’s attorney had experience as an environmental consulting geologist prior to practicing law, and her role “appeared to morph into that of an environmental consultant” during the engagement. This bolstered the court’s finding that the purpose of retaining the consultants was not because the attorney needed help understanding technical issues to render legal advice.
In ruling on the applicability of the work product privilege, the judge found that Hartford’s attempts at remediation were intertwined with the threat of litigation from IDEM and its dispute with its insurers, and recognized that the emails were created after those disputes arose. That said, even when litigation is imminent or already in existence, if the documents were prepared in the ordinary course of business, rather than for litigation purposes, the work product doctrine does not apply. Accordingly, pursuant to an in camera review, the judge held that some of the documents were protected by the privilege, while many others (such as mere transmittal letters or communications dealing only with administrative, logistical or scheduling matters) were not.
During the course of litigating disputes over environmental issues, attorneys retain environmental consultants for a number of overlapping reasons. They can help counsel understand complex technical issues and therefore assist counsel in advising a client. Consultants can formulate and issue expert opinions in order to carry or rebut the elements of a claim, such as causation or the reasonableness and necessity of past or future remediation efforts, which could include formulating remediation plans and techniques. Consultants can help evaluate settlement offers to determine whether, and to what extent, the offer will cover future remediation expenses. Valley Forge is a reminder that the attorney-client and work product privileges do not protect all communications between environmental consultants and the lawyers who retain them, even if the retention is by an attorney in the course of litigation. Practitioners need to draw a bright line between litigation support services and environmental consulting services, and everyone involved need to recognize that communications pertaining to the latter subject are likely not privileged. In some cases, it may even be advisable to retain two consultants: one for litigation support and expert opinion testimony, and another for environmental services.
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