Update (November 11, 2019): Linked here is the defendants’ response to the plaintiff’s efforts to obtain documents and testimony withheld from discovery on claims of attorney work product doctrine (discussed below). It is strong advocacy; given our experience of rather broad and deferential treatment of privilege claims, we predict these defenses will win the day. (If not total victory, we predict that the privilege claims will generally be upheld.)
Original post (November 8, 2019): If you stop and think about it for even a second or two, you will recognize the significant challenge that germs and bugs present to manufacturers of food products. As we all know, it is hard enough keeping a kitchen sink and countertop pristine. It is undoubtedly a relentless and expensive challenge for a company like S.T. Specialty Foods (STSF), which presumably has large industrial facilities. (STSF makes macaroni and cheese dinners, pasta, and rice side dishes and other packaged meals for the retail grocery and foodservice channels.)
And when STSF hired Wil-Kil Pest Control Company, Inc. to deal with the ever-present pestilential challenge in STSF’s facility, perhaps the greatest worry STFS might have had was making sure that Wil-Kil’s fumigation processes worked on the bugs but spared its food products and its workers.
To STSF’s shock and surprise, however (according to the company), whatever Wil-Kil did in STSF’s facility caused:
sudden and calamitous damage to, inter alia, the electrical components of its manufacturing equipment, forklifts, printers, computer servers, phone systems, air conditioner units and systems, Wi-Fi, vending machines and many other devices and fixtures throughout the entire Facility, including in areas outside the fumigation area.
(“[I]ncluding areas outside the fumigation area”???)
Indeed, STSF alleges that Wil-Kil’s fumigation process shut down six of STSF’s seven production lines in the STSF facility.
When STSF notified Wil-Kil (and Defendant Copesan, its corporate parent) of its concern that Wil-Kil’s work was lethal to STSF’s business (along with the bugs, we assume), would one assume that Wil-Kil and Copesan might have seen the menacing thunderheads of litigation on the horizon? How about their insurance company, when it investigates the insurance claim?
We would think so.
This might tilt in favor of a broader reading of the attorney work product doctrine to cover some or all of the insurance company’s communications about its post-incident investigation. That is, the insurer’s work was presumably performed with an awareness of a substantial likelihood of litigation in the near future. (Under the case law, there is some ambiguity of just how “substantial” the likelihood must be. Must a “specific threat” of litigation became “palpable”? (see here at p. 11))
On the other hand, among many other things, in support of a narrower reading, STFS points out that the insurer and insureds appear not to have hired an outside lawyer for several months during which the insurer and insureds collected information about the incident over which they now claim a privilege. (It is the attorney work product doctrine, after all.) Further, there is case law highlighting that courts “refuse to afford broad work-product protection to factual investigations conducted by insurance companies” (here at p. 13).
The issue raised in STSF v. Wil-Kil et al. is a critical issue in many “accident cases.” (Also, STSF served third-party subpoenas on insurance company employees who failed to respond, object, or move to quash. STSF argues that any privilege claims have therefore been waived.)
We will be sure to follow how this issue plays out in this case in light of its importance generally to a lot of civil litigation, which very often involves insurance companies behind the scenes. Stay tuned.