Texas Brine Co. v. Occidental Chem. Corp. , 879 F.3d 1224 ( 2018 )


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  •                                                                               FILED
    United States Court of Appeals
    PUBLISH                         Tenth Circuit
    UNITED STATES COURT OF APPEALS                 January 19, 2018
    Elisabeth A. Shumaker
    FOR THE TENTH CIRCUIT                      Clerk of Court
    _________________________________
    TEXAS BRINE COMPANY, LLC,
    Defendant - Appellant,
    and
    OCCIDENTAL CHEMICAL
    CORPORATION,                                              No. 17-6075
    Defendant - Appellee.
    ---------------------------------------
    FRONTIER INTERNATIONAL GROUP,
    LLC,
    Witness.
    –––––––––––––––––––––––––––––––––––
    TEXAS BRINE COMPANY, LLC,
    Defendant,
    and                                                       No. 17-6076
    OCCIDENTAL CHEMICAL
    CORPORATION,
    Defendant - Appellee.
    ---------------------------------------
    FRONTIER INTERNATIONAL GROUP,
    LLC,
    Witness - Appellant.
    _________________________________
    APPEAL FROM THE UNITED STATES DISTRICT COURT
    FOR THE WESTERN DISTRICT OF OKLAHOMA
    (D.C. No. 5:16-CV-01026-D)
    _________________________________
    Martha Y. Curtis, Sher Garner Cahill Richter Klein & Hilbert, LLC, New Orleans,
    Louisiana (James M. Garner, Peter L. Hilbert, Jr., Kevin M. McGlone, Sher Garner
    Cahill Richter Klein & Hilbert, LLC, New Orleans, Louisiana, and Gerald L. Hilsher,
    Julia A. Palmer, McAfee & Taft, APC, Tulsa, Oklahoma, on the briefs), for Defendant-
    Appellant.
    Jeremy K. Beecher (Bethany W. Kristovich with him on the briefs), Munger, Tolles &
    Olsen LLP, Los Angeles, California, for Defendant-Appellee.
    Geren T. Steiner (Anton J. Rupert with him on the briefs), Rupert & Steiner, PLLC,
    Oklahoma City, Oklahoma, for Witness-Appellant.
    _________________________________
    Before LUCERO, BALDOCK, and HARTZ, Circuit Judges.
    _________________________________
    BALDOCK, Circuit Judge.
    _________________________________
    I.
    Defendant Texas Brine Company, LLC (Texas Brine) operates brine wells on
    land owned by Co-Defendant Occidental Chemical Corporation (Oxy) in Louisiana.
    In August 2012, a sinkhole appeared near one of these wells. After the sinkhole
    appeared, Texas Brine began clean-up efforts. To manage this crisis, Texas Brine
    consulted with others.      In December 2012, Texas Brine retained Frontier
    International Group, LLC (Frontier), an Oklahoma-based consulting firm, for
    “emergency management, state and local government relations, community relations,
    litigation settlement strategy, and media communications.” Some time later, Texas
    Brine retained Brooks Altshuler, an attorney and Frontier’s owner, in his individual
    2
    capacity to advise the company on response and remediation efforts and to negotiate
    with government agencies.         Later, Texas Brine retained Frontier as a consulting
    expert for trial preparation.
    Litigation began soon after the sinkhole appeared, with multiple plaintiffs
    suing Texas Brine and Oxy in the Eastern District of Louisiana. In that suit, the
    plaintiffs alleged the negligent operation of a brine well resulted in the sinkhole and
    caused damage to the plaintiffs’ properties. In this underlying litigation, Texas Brine
    filed a cross-claim against Oxy seeking indemnity for $100 million spent responding
    to the sinkhole crisis, $6.5 million of which Texas Brine claims is for the work
    Frontier performed. To verify the work Frontier performed and the cost of such
    work, Oxy issued a subpoena duces tecum to nonparty Frontier, requesting
    production of eight categories of documents related to services Frontier provided
    Texas Brine.1 In response, Texas Brine filed a motion to quash the subpoena in the
    1
    The eight categories requested are:
    1. Documents concerning the Napoleonville Salt Dome in Louisiana;
    2. Documents concerning the sinkhole occurrence in 2012;
    3. Documents concerning the events leading up to the sinkhole occurrence;
    4. Communications with Texas Brine concerning the sinkhole occurrence and any
    aspect of the ongoing litigation pertaining to the sinkhole occurrence;
    5. Communications with Sonny Cranch or any employee of Cranch Hardy &
    Associates concerning the sinkhole occurrence and any aspect of the ongoing
    litigation pertaining to the sinkhole occurrence;
    6. Communications with members of the media or public concerning the sinkhole
    occurrence and the ongoing litigation pertaining to the sinkhole occurrence;
    7. Public statements generated by or on behalf of Texas Brine or any other entity
    in connection with the sinkhole occurrence and any aspect of the ongoing
    litigation pertaining to the sinkhole occurrence; and
    3
    Western District of Oklahoma, the district where compliance is required. See Fed. R.
    Civ. P. 45(d)(3)(A). Proceeding under the uncontested assumption that Louisiana
    law applied, Texas Brine first claimed the attorney-client privilege protected the
    subpoenaed communications.
    In a written order, the district court granted the motion in part and denied it in
    part. Leblanc v. Texas Brine Co., No. 16-1026, 
    2017 WL 913801
    , at *1 (W.D. Okla.
    Mar. 7, 2017). In its order, the court noted that Texas Brine failed to comply with
    Fed. R. Civ. P. 45(e)(2)(A), which requires a person moving to quash a subpoena
    under the claim of privilege to “describe the nature of the withheld documents,
    communications, or tangible things in a manner that, without revealing information
    itself privileged or protected, will enable the parties to assess the claim.” Instead,
    Texas Brine asserted a “blanket claim of privilege.” Leblanc, 
    2017 WL 913801
    , at
    *4. Only in the context of Texas Brine’s claim of a blanket privilege did the court
    address whether Louisiana’s attorney-client privilege statute extends the privilege to
    a public relations firm and its agents.2 As Louisiana courts have not addressed this
    8. Any interview transcripts, video footage, newspaper clippings, online articles,
    or other published, printed or distributed media concerning the sinkhole
    occurrence and any aspect of the ongoing litigation pertaining to the sinkhole
    occurrence.
    2
    Louisiana’s attorney-client privilege statute, in relevant part, protects
    “confidential communication[s], whether oral, written, or otherwise, made for the
    purpose of facilitating the rendition of professional legal services to the client,”
    including communications with a “representative of a lawyer.” La. Code Evid. Ann.
    art. 506(B) (2017). A “representative of a lawyer” is “a person engaged by the
    lawyer to assist the lawyer in the lawyer’s rendition of professional legal services.”
    
    Id. 506(A)(4). 4
    exact issue, the court looked to Wigmore’s definition of attorney-client privilege,
    which protects “legal advice.” 
    Id. (quoting 8
    J. Wigmore, Evidence in Trials at
    Common Law § 2292, at 554 (J. McNaughton rev. ed. 1961)). Without a privilege
    log before it, the court concluded that much of the work Frontier performed for Texas
    Brine did not constitute “legal advice” and, thus, was not protected by the attorney-
    client privilege. The court finished its discussion on attorney-client privilege by
    stating: “the Court denies Texas Brine’s Motion as to attorney-client privilege, absent
    a specific showing of the legal nature of each withheld communication.”             
    Id. (emphasis added).
    Texas Brine also argued the work product doctrine governed the subpoenaed
    communications. The court reached a similar conclusion regarding this argument,
    stating the work product doctrine does not protect a public relations firm’s written
    materials regarding business advice or an attorney’s non-litigation activity. Again,
    the court emphasized much of the communications were not protected, “absent a
    specific showing of the legal nature of each withheld communication, and that it was
    specifically created in anticipation of litigation.” 
    Id. at *5
    (emphasis added).
    The district court concluded its order by again emphasizing “Texas Brine’s
    conclusory, blanket assertions of privilege are insufficient to quash the subpoena.”
    
    Id. (emphasis added).
    The court required Texas Brine to produce a privilege log for
    any communications that it believed were protected.         With respect to the eight
    categories of subpoenaed documents, the court ruled as follows: Frontier need not
    produce category (1) because the request was overbroad; Frontier must produce the
    5
    documents requested in categories (2), (3), (4), (5), and (7) “subject to privilege
    screening and production of a log consistent with Fed. R. Civ. P. 26(b)(5)(A)”; and
    Frontier must produce the documents requested in categories (6) and (8).3              
    Id. (emphasis added).
    Texas Brine filed a timely notice of appeal.4 Texas Brine then filed a motion
    to stay the district court’s order pending these proceedings, which the district court
    denied.   Frontier complied with the district court’s order and has, at this point,
    produced around 20,000 documents and a privilege log regarding the confidentiality
    of the withheld documents.
    3
    A log consistent with Fed. R. Civ. P. 26(b)(5)(A) is the same log as required
    by Fed. R. Civ. P. 45(e)(2)(A). The difference is that Fed. R. Civ. P. 26 governs
    discovery in general, while Fed. R. Civ. P. 45 governs subpoenas specifically.
    4
    After the district court’s ruling, Frontier filed a notice of appearance in the
    district court and also sought to appeal the court’s order. Under these circumstances,
    Frontier, a nonparty to this suit, cannot appear for the first time on appeal. In
    general, only parties to a lawsuit or those who properly become parties may appeal an
    adverse judgment. Marino v. Ortiz, 
    484 U.S. 301
    , 304 (1988). The exception to this
    rule is “where the nonparty [1] has a unique interest in the litigation and [2] becomes
    involved in the resolution of that interest in a timely fashion both at the district court
    level and on appeal.” Abeyta v. City of Albuquerque, 
    664 F.3d 792
    , 796 (10th Cir.
    2011) (emphasis added). Regardless of whether Frontier has a unique interest in this
    litigation, it plainly fails to meet the second prong of this test. Even though Frontier
    could have filed a motion to quash pursuant to Fed. R. Civ. P. 45(d)(3), it did not.
    We acknowledge that, in an affidavit attached to Texas Brine’s motion to quash the
    subpoena, Altshuler stated that Frontier objected to the subpoena. This statement
    falls short of what Fed. R. Civ. P. 45(d)(3) requires of Frontier. As such, Frontier did
    not become involved in this case in a timely fashion at the district court level, and
    this Court lacks jurisdiction to review Frontier’s challenge to the district court’s
    order. See 
    id. at 797.
                                                6
    II.
    At the outset, Oxy claims this dispute is not ripe for adjudication because the
    district court did not actually order production of any allegedly privileged material.
    Instead, the court ordered production of non-privileged material to Oxy subject to a
    privilege log. Until the district court orders production of privileged material, Oxy
    forcibly argues, there is no dispute to resolve. In response, Texas Brine asserts the
    court erred in defining the scope of the privilege too narrowly and “order[ing]
    production of documents that are arguably privileged communications.” Appellant
    Reply Brief, 2.    In other words, Texas Brine argues in a vacuum that the court
    construed Louisiana law too narrowly.
    But the court has yet to apply Louisiana law to any contested document. We
    will not resolve a dispute “if it rests upon ‘contingent future events that may not
    occur as anticipated or indeed may not occur at all.’” United States v. Bennett, 
    823 F.3d 1316
    , 1326 (10th Cir. 2016) (quoting Texas v. United States, 
    523 U.S. 296
    , 300
    (1998)). This principle—the ripeness doctrine—derives from both constitutional and
    prudential concerns. 
    Id. at 1325.
    The purpose of the ripeness doctrine is to prevent
    the premature adjudication of abstract claims. New Mexicans for Bill Richardson v.
    Gonzales, 
    64 F.3d 1495
    , 1499 (10th Cir. 1995). To determine whether a dispute is
    prudentially ripe, this Court “balance[s] the fitness of the issue for judicial review
    with the hardship to the parties from withholding review.” 
    Bennett, 823 F.3d at 1326
    .
    7
    First, in determining the fitness of the issue for review, this Court considers
    “whether determination of the merits turns upon strictly legal issues or requires facts
    that may not yet be sufficiently developed.” 
    Id. (emphasis added)
    (quoting Kan.
    Judicial Review v. Stout, 
    519 F.3d 1107
    , 1118 (10th Cir. 2008)).          Texas Brine
    characterizes the issue before us as a legal one, arguing the district court interpreted
    Louisiana’s attorney-client privilege statute too narrowly.     Assessing a claim of
    attorney-client privilege, or even a claim of work product doctrine, when a person
    withholds subpoenaed information, however, necessarily requires a sufficient factual
    record. “Only when the district court has been exposed to the contested documents
    and the specific facts . . . can it make a principled determination as to whether the
    attorney-client privilege in fact applies.      Any attempt to make this type of
    determination without this factual foundation amounts to nothing more than a waste
    of judicial time and resources.” Holifield v. United States, 
    909 F.2d 201
    , 204 (7th
    Cir. 1990) (citations omitted). This is why Fed. R. Civ. P. 45(e)(2)(A) requires a
    person or entity withholding information under a claim of privilege or work product
    to “describe the nature of the withheld documents, communications, or tangible
    things in a manner that, without revealing information itself privileged or protected,
    will enable the parties to assess the claim.” Without knowing the nature of the
    documents, neither the requesting party nor the court can possibly assess the claim.
    In this case, Fed. R. Civ. P. 45(e)(2)(A) required the production of a privilege log.
    See In re Grand Jury Subpoena, 
    274 F.3d 563
    , 575–76 (1st Cir. 2001). Prior to
    8
    appealing, Texas Brine did not produce a privilege log regarding the documents
    Frontier withheld.
    While the district court could have ruled otherwise, the court gratuitously
    allowed Texas Brine a second chance to produce a privilege log regarding the
    withheld documents.5 Texas Brine instead appealed, effectively arguing it should not
    have to produce any documents or a privilege log. Why Texas Brine believes it can
    assert a blanket claim of privilege over its communications with Frontier without
    complying with Fed. R. Civ. P. 45(e)(2)(A) or Fed. R. Civ. P. 26(b)(5)(A) is beyond
    us.6 The panel pressed Texas Brine on this subject at oral argument. Texas Brine
    responded that other courts have granted a blanket privilege over communications
    between a client and public relations firm without the benefit of a privilege log or
    viewing the documents in camera. See In re Copper Mkt. Antitrust Litig., 
    200 F.R.D. 213
    (S.D.N.Y. 2001); In re Grand Jury Subpoenas Dated March 24, 2003, 
    265 F. 5
            See, e.g., Fed. R. Civ. P. 45 advisory committee’s note to 1991 amendment
    (“A person claiming a privilege or protection who fails to provide adequate
    information about the privilege or protection claim to the party seeking the
    information is subject to an order to show cause why the person should not be held in
    contempt under subdivision [(g)].”); In re Grand Jury 
    Subpoena, 274 F.3d at 576
    (“A
    party that fails to submit a privilege log is deemed to waive the underlying privilege
    claim.”); Dorf & Stanton Comms., Inc. v. Molson Breweries, 
    100 F.3d 919
    , 923 (Fed.
    Cir. 1996) (affirming the district court’s determination that the attorney-client
    privilege had been waived because the party asserting the privilege failed to comply
    with Fed. R. Civ. P. 45(e)(2)(A) and 26(b)(5)).
    6
    We well understand Texas Brine is not the holder of the documents. But as
    the one asserting attorney-client privilege, Texas Brine has the burden to show the
    documents are privileged. See In re Grand Jury Proceedings, 
    616 F.3d 1172
    , 1183
    (10th Cir. 2010). We do not see why Texas Brine, having retained Frontier’s
    services, could not have obtained a privilege log from Frontier.
    9
    Supp. 2d 321 (S.D.N.Y. 2003). Besides the fact that neither In re Copper Market or
    In re Grand Jury Subpoenas are binding on this Court, the courts in those cases did
    in fact either have a privilege log or inspect the documents in camera. See In re
    Copper Mkt. Antitrust 
    Litig., 200 F.R.D. at 215
    (“Plaintiffs . . . move to compel the
    production of documents listed on the privilege log (the ‘Privilege Log’) produced by
    non-party . . . in response to a subpoena . . . .” (emphasis added)); In re Grand Jury
    
    Subpoenas, 265 F. Supp. 2d at 323
    (“The Court initially required submission of the
    documents withheld by Firm on grounds of privilege for in camera inspection.”).7
    Without the benefit of a privilege log or inspection of documents, we are left with an
    insufficient factual record—the exact problem Fed. R. Civ. P. 45(e)(2)(A) aims to
    prevent. Texas Brine has only itself to blame for the predicament in which it finds
    itself. Without the facts necessary to assess Texas Brine’s claims of attorney-client
    privilege and work product, this dispute is not fit for appellate review.
    While a lack of fitness in itself might not render an appeal unripe, we also
    must consider the hardship to the parties. In determining the hardship to the parties,
    this Court considers whether withholding review will place the parties in “a direct
    and immediate dilemma.” 
    Bennett, 823 F.3d at 1327
    (quoting 
    Stout, 519 F.3d at 7
             Even an attorney subpoenaed to produce documents would have to do more
    than assert a blanket claim of privilege to succeed in its motion to quash. See, e.g., In
    re Grand Jury 
    Proceedings, 616 F.3d at 1182
    –83 (explaining that not all
    communications between attorney and client are privileged and that an attorney must
    do more than “mak[e] a blanket claim”); In re Grand Jury Subpoena, 
    831 F.2d 225
    ,
    227 (11th Cir. 1987) (holding that “an attorney seeking to quash a subpoena must
    assert the attorney-client privilege on a document-by-document basis” rather than a
    blanket claim of privilege).
    10
    1118). Withholding review of the district court’s order in this case will do no such
    thing.    Texas Brine contends the court’s order required it to produce “arguably
    privileged communications.” The order simply did not. It required production of
    materials in (2), (3), (4), (5), and (7) “subject to privilege screening and production
    of a log consistent with Fed. R. Civ. P. 26(b)(5)(A).” Leblanc v. Texas Brine Co.,
    No. 16-1026, 
    2017 WL 913801
    , at *5 (W.D. Okla. Mar. 7, 2017) (emphasis added).
    In other words, the district court allowed Texas Brine to screen the requested
    documents, withhold the “arguably privileged communications,” and produce a
    privilege log describing the nature of the withheld documents “in a manner that,
    without revealing information itself privileged or protected, will enable other parties
    to assess the claim.” See Fed. R. Civ. P. 26(b)(5)(A). This is no hardship. As
    explained above, this is exactly what every “person withholding subpoenaed
    information under a claim that it is privileged or subject to protection as trial-
    preparation material” must do. Fed. R. Civ. P. 45(e)(2)(A). Texas Brine’s hardship
    at this point is that, in response to Frontier’s production of a privilege log, Oxy might
    file a motion to compel production of documents that Frontier has withheld. If this
    happens, the district court might rule in Oxy’s favor on the motion. This possibility
    is far from “a direct and immediate dilemma.”         See 
    Bennett, 823 F.3d at 1327
    (holding multiple contingencies rendered an appellant’s potential injury “a destiny far
    from certain” and, thus, the claim was not ripe for adjudication).
    Because both the factual record is insufficient and the court did not require
    production of protected documents, Texas Brine’s appeal is not ripe for our review.
    11
    Accordingly, Frontier’s appeal, No. 17-6075, is DISMISSED for want of jurisdiction,
    as Frontier did not properly become involved in this litigation at the district court
    level; Texas Brine’s appeal, No. 17-6076, is DISMISSED for lack of ripeness.8
    8
    Pending before this Court are also two motions: Texas Brine’s motion to file
    Volume III of the Appendix under seal in case number 17-6075 and Oxy’s motion to
    file Volume I of the Supplemental Appendix under seal in case number 17-6076. We
    GRANT the motions to seal these limited parts of the record until the conclusion of
    all pending litigation regarding the sinkhole.
    12