Key Business Court Decisions

Merely FYI’ing Your Attorney Does Not Trigger Privilege Protection

Where a business claims emails were privileged because they had been forwarded to its in-house and outside counsel, the Business Court will examine whether the business sought legal advice from its lawyer based upon the contents of the cover email sent to the lawyer.  Window World of Baton Rouge, LLC, et al. v. Window World, Inc., 2019 NCBC 53 (J. Bledsoe).  As a result, where the forwarding message to the lawyer merely contained entries like “FYI” or no entry at all, such communications did not seek legal advice from the lawyer and were therefore not protected from production by any legal privilege.

Defendant Window World, Inc. (“WW”) is in the business of selling and installing windows, doors and siding.  WW is a franchisor to a number of franchisees throughout the country.  WW did not always treat their franchisees as such, but for a number of years treated them as licensees instead.  By doing so, WW allegedly violated various state and federal laws related to franchisor/franchisee relationships.  WW has been embroiled in litigation with a number of its franchisees for more than four years.  During the course of the litigation, WW refused to produce internal company emails based upon either the attorney-client privilege or the work product privilege.  In this decision, the Business Court addressed a number of privilege assertions made by WW, many of which provide guidance to companies on how to maintain legal privileges over communications that might become relevant in a legal dispute: 

  • For a company to avail itself of the attorney-client privilege, the attorney must be acting as a legal adviser to the company when the communication is made, and providing business advice does not satisfy the necessary prerequisite to invoke the privilege.  (Opinion, ¶¶ 90-92).
  • The mere finding that an employee is a company’s “agent” does not compel a finding that communications to that agent are privileged.  (Opinion, ¶ 93).
  • Merely forwarding an otherwise non-privileged email to in-house or outside counsel containing either nothing in the cover email or only “FYI” in the body of the forwarding email does not transform the email chain into a privileged document, and thus the email chain must be produced.  (Opinion, ¶¶ 97-101).
  • While a document disclosed to a third party is not privileged (Opinion, ¶ 103), any portions of a draft of the document sent by or to counsel that do not appear in the final, published version may be privileged.  (Opinion, ¶¶ 106-107).
  • A privilege log not providing enough information from which a determination about the appropriate applicability of the asserted privilege can be made waives any asserted privilege.  (Opinion, ¶ 118).
  • A privilege log that makes general descriptions of “related to legal advice” is insufficient.  (Id., ¶ 119).
  • A business cannot withhold documents on baseless privilege grounds, describe the document in broad and inaccurate ways, then agree to produce only after an in-camera review is underway and avoid sanctions.  (Id., ¶ 121).
  • A business cannot assert one privilege at one time and then later assert another privilege after the deadline to object has run.  (Id., ¶ 131).
  • The Business Court will consider Federal Rule of Evidence 502 when dealing with inadvertently produced documents and attempts to claw back such documents. (Opinion, ¶ 40).
  • When determining the extent of waiver of otherwise privileged communications/documents by the voluntary production of other privileged documents on the same subject matter, the Business Court will take a “balanced approach” to determine the extent of waiver and will find a waiver whenever a partial production provides a litigation advantage to the producing party.  (Opinion, ¶¶ 54-56). 
  • The crime-fraud exception to the attorney-client privilege applies to instances more than just those that involve a “criminal act, per se.”  (Opinion, ¶ 61). 
  • In order to invoke the crime fraud exception to defeat the attorney-client privilege, the party seeking the exception must prove by a preponderance of the evidence that the opposing party was committing or intending to commit a crime or fraud, and that the attorney-client communication was used in furtherance thereof.  (Opinion, ¶ 64).

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