Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_09-cv-00726/USCOURTS-azd-2_09-cv-00726-1/pdf.json

Nature of Suit Code: 362
Nature of Suit: Medical Malpractice
Cause of Action: 28:1332 Diversity-Medical Malpractice

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Bickler, et al., 

Plaintiffs, 

vs.

Senior Lifestyle Corp., 

Defendant.

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No. CV-09-00726-PHX-DGC

ORDER

Defendant operates an assisted living home and skilled nursing center known as

Fountain View Village. In this diversity case, Plaintiffs assert negligence, medical

malpractice, and other claims against Defendant for injuries suffered by Charlotte Bickler

and Thelma Raymond while in the care of Defendant. Dkt. #1-2. Plaintiffs claim that Ms.

Bickler and Ms. Raymond were pushed to the ground and injured by another resident of the

facility, referred to in this litigation as “BW,” due to negligence and improper supervision

by Defendant. Id.

Shortly after the incident in which Ms. Bickler and Ms. Raymond were injured,

Defendant conducted an investigation. The investigation was undertaken at the direction of

in-house counsel and was performed by Christa Bowman of Defendant’s human resources

department, under the direction of Terry Troxell, executive director of the nursing home.

Eighteen employees were contacted during the investigation. The employees responded to

questions posed during interviews, with their answers being summarized on a form that

included the questions. Each employee also provided a written statement. A short summary

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of the interviews and a time-line of relevant events were created. Ms. Troxell then prepared

a document and forwarded it and the other materials to in-house counsel. Dkt. #124-1 at 2-5.

Plaintiffs ask the Court to compel production of all of the investigative documents.

Dkt. #117. Defendant has responded (Dkt. #124) and Plaintiffs have replied. Dkt. #125. For

the following reasons, the Court will grant the motion in part and deny it in part.

I. Attorney-Client Privilege.

Because Arizona law provides the rule of decision in this diversity case, privilege

issues must be decided under Arizona law. See Fed. R. Evid. 501; Star Editorial, Inc. v. U.S.

Dist. Court for the Cent. Dist. of Cal., 7 F.3d 856, 859 (9th Cir. 1993). The Arizona

attorney-client privilege for corporations in civil actions is found in A.R.S. § 12-2234(B).

The statute protects communications “between an attorney for a corporation” and “any

employee, agent, or member” of the corporation. A.R.S. § 12-2234(B).

A. Are the Investigative Documents Privileged?

Of the materials described above, the only document that constitutes a communication

with an attorney is Ms. Troxell’s document addressed to in-house counsel. All other

documents constitute communications between employees and Ms. Bowman, or Ms.

Bowman and Ms. Troxell. Those communications were not “between an attorney” and an

employee of the corporation and therefore do not fall within the specific language of the

statute. Defendant has cited no Arizona authority suggesting that communications with a

fellow employee who is not a lawyer fall within the statute. Defendant does cite Upjohn Co.

v. United States, 449 U.S. 383 (1981), but the interviews in Upjohn were conducted by

lawyers. Id. at 386.

The party asserting the existence of a privilege has the burden of establishing it. State

ex rel. Corbin v. Weaver, 680 P.2d 833, 839 (Ariz. App. 1984). Courts have held that when

a party seeks to cloak third-person communications with the attorney-client privilege, the

proponent of the privilege must show with “reasonable certainty” that the privilege applies.

F.T.C. v. TRW, Inc., 628 F.2d 207, 213 (D.C. Cir. 1980). Defendant has cited no Arizona

authority showing that § 12-2234(B) applies to communications with fellow non-lawyer

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employees, and has cited no authority from other jurisdictions in support of that argument.

Defendant therefore has not shown that the written communications in question – other than

Ms. Troxell’s document addressed to in-house counsel – are privileged under the statute.

B. Was the Privileged Waived?

Plaintiffs contend that even Ms. Troxell’s communication lost its privilege when

Defendant shared the investigative materials with the Arizona Department of Health Services

(“DHS”). The Court does not agree. In Danielson v. Superior Court, 754 P.2d 1145 (Ariz.

App. 1987), the Arizona Court of Appeals declined to follow the blanket rule that a privilege

is waived when privileged materials are shared with a governmental entity. Id. at 1147-48

& n.2. Danielson held that the physician-patient privilege was not lost when medical

information was shared with the Arizona Board of Medical Examiners (“BOMEX”). The

Court of Appeals noted that Arizona policy, as reflected in Arizona statutes, clearly favored

full communication with this governmental entity: 

In short, the legislature has devised a statutory system which

encourages cooperation with and full disclosure to BOMEX during an

investigation. In order to remain faithful to this legislative intent, there can be

no implied waiver of the physician-patient privilege where medical records are

voluntarily released to BOMEX. In such a situation, a later assertion of the

privilege is consistent with the rationale underlying the doctrine of physicianpatient privilege. Accordingly, we hold that a physician’s voluntary release

of alcohol treatment center records to BOMEX pursuant to an investigation

does not constitute a waiver of the physician/patient privilege.

Id. at 1152.

Although Danielson concerned the physician-patient privilege, the Court of Appeals

specifically noted that analysis of that privilege was similar to analysis of the attorney-client

privilege. Indeed, Danielson relied almost entirely on attorney-client privilege cases for its

decision. Id. at 1147-48. 

Arizona law empowers DHS to license, regulate, and discipline health care

institutions. A.R.S. § 36-401, et seq. DHS is required to investigate allegations of improper

conduct or poor patient care. A.R.S. § 36-409. DHS is obligated to enforce the rules and

regulations relating to health care facilities, §36-406(1)(a), and may obtain access to “books,

records, accounts and any other information of any health care institution,” § 36-406(1)(c).

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Because the policy of Arizona, as reflected in these statutes, favors full disclosure to DHS,

the Court concludes, under Danielson, that Defendant’s disclosure of Ms. Troxell’s

privileged communication to DHS did not waive the privilege.

II. Work Product Doctrine.

Unlike the attorney-client privilege, federal law governs the application of the work

product doctrine in this case. First Pac. Networks, Inc. v. Atl. Mut. Ins. Co., 163 F.R.D. 574,

577 (N.D. Cal. 1995); Great Am. Surplus Lines Ins. Co. v. Ace Oil Co., 120 F.R.D. 533, 539

(E.D. Cal. 1988); Connolly Data Sys., Inc. v. Victor Techs., Inc., 114 F.R.D. 89, 95 (S.D. Cal.

1987); R.R. Salvage of Conn., Inc. v. Japan Freight Consolidators (U.S.A.) Inc., 97 F.R.D.

37, 40 (E.D.N.Y. 1983). 

A. Does Work Product Protection Apply?

Pursuant to Federal Rule of Civil Procedure 26(b)(3), documents prepared in

anticipation of litigation or for trial are protected as attorney work product. This includes

documents prepared by a party or its representative, including the party’s agent. See Fed. R.

Civ. P. 26(b)(3)(A) (protection extends to documents prepared “by or for another party or its

representative (including the other party’s attorney, consultant, surety, indemnitor, insurer,

or agent)”). Thus, work product protection extends to materials created by Ms. Troxell and

Ms. Bowman, as agents for Defendant.

Plaintiffs contend that the investigation was not undertaken in anticipation of

litigation. The Court does not agree. From virtually the moment of the incident in this case,

members of Ms. Bickler’s family created the prospect of litigation. Ms. Bickler’s son arrived

at the facility and told staff that his mother could die from a broken hip. That same night he

demanded that a sheriff’s deputy arrest and charge BW with a crime. Two days later, Ms.

Troxell met with three members of the Bickler family and they appeared angry. Ms.

Bickler’s son claimed in a letter, two days later, than an “assault” had occurred. In light of

these events, Ms. Troxell feared Defendant would be sued. Dkt. #124-1 at 2-5. 

Litigation need not be a certainty for work product protection to arise. Documents are

created in anticipation of litigation if, “‘in light of the nature of the document and the factual

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1

 The work product doctrine extends to questionnaires, witness statements and other

documents like those created in this case. See 8 Charles Alan Wright, Arthur R. Miller &

Richard L. Marcus, Federal Practice & Procedure § 2024.

2

 Plaintiffs contend that Defendant is attempting to use the work product as both a

sword and a shield, using Ms. Troxell and Ms. Bowman to testify that the investigation

revealed no wrongdoing while withholding the details of the investigation. Defendant has

not stated that it intends to use Ms. Troxell and Ms. Bowman in this manner, and in fact has

stated that it does not intend to use the investigation in any manner in this case. Dkt. #124

at 3. If Defendant attempts to use the investigation as evidence, Plaintiffs will be free to file

a motion in limine or object. 

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situation in the particular case, the document can be fairly said to have been prepared or

obtained because of the prospect of litigation.’” In re Grand Jury Subpoena, 357 F.3d 900,

907 (9th Cir. 2004) (quoting 8 Charles Alan Wright, Arthur R. Miller & Richard L. Marcus,

Federal Practice & Procedure § 2024 (2d ed. 1994)). In this case, Ms. Troxell has avowed

that the investigation was undertaken at the direction of in-house counsel and because she

and Defendant feared a lawsuit. Once Ms. Bickler and Ms. Raymond were injured and the

family began to ask questions, demand arrests, and refer to the incident as an assault, the

prospect of litigation existed. The Court thus concludes that all of the documents created

under the direction of Ms. Troxell and Ms. Bowman constitute work product.1

 

Plaintiffs contend that the investigation was conducted in the ordinary course of

Defendant’s business, and not in anticipation of litigation. Ms. Troxell’s affidavit shows

otherwise. She talked to corporate counsel twice about the incident, he instructed her to

undertake the investigation, and the investigation was more extensive than inquiries routinely

made after incidents at the nursing home. Dkt. #124-1 at 2-3. Evidence cited by Plaintiffs

does not contradict these assertions.2

B. Was Work Product Protection Waived?

Plaintiffs contend that any work product protection was waived when Defendant

produced the investigation results to DHS. The majority view among federal cases, however,

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3

 The Court looks to federal cases generally because the work product inquiry is

governed by federal law, not Arizona law and the Danielson case. The Ninth Circuit has

established no counterpart to Danielson. Whether a corporation’s disclosure of an internal

investigation to a government agency constitutes a waiver of the attorney-client privilege

remains an open question in this circuit. See United States v. Bergonzi, 403 F.3d 1048, 1050

(9th Cir. 2005); see also Bittaker v. Woodford, 331 F.3d 715, 720 n. 5 (9th Cir. 2003) (en

banc). 

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is that the disclosure of work product to a government agency does not constitute a waiver.3

This is because work product protection does not turn on the same confidentiality

considerations as the attorney-client privilege:

The work product privilege is very different from the attorney-client privilege.

The attorney-client privilege exists to protect confidential communications and

to protect the attorney-client relationship and is waived by disclosure of

confidential communications to third parties. The work product privilege,

however, does not exist to protect a confidential relationship but to promote

the adversary system by safeguarding the fruits of an attorney’s trial

preparations from the discovery attempts of an opponent.

Shields v. Sturm, Ruger & Co., 864 F.2d 379, 382 (5th Cir. 1989); see also 8 Charles Alan

Wright, Arthur R. Miller & Richard L. Marcus, Federal Practice & Procedure § 2024 at 368.

Because work product protects against disclosure to potential adversaries and not the world

in general, courts generally hold that the protection is not lost when work product is disclosed

to a government agency. See Shields, 864 F.2d at 382; Goff v. Harrah’s Operating Co., 240

F.R.D. 659, 661 (D. Nev. 2007); Niagra Mohawk Power Corp. v. Stone & Webster Eng’g

Corp., 125 F.R.D. 578, 587, 590 (N.D.N.Y. 1989). 

Courts have recognized that work product protection may be lost when the disclosure

substantially increases the opportunity for potential adversaries to obtain the information, but

they also “have been willing to preserve the work product protection over documents in

circumstances where the disclosure to a potential adversary was compelled.” Niagra, 125

F.R.D. at 587 (citation omitted). For example, in Transamerica Computer Co. v.

International Business Machines Corp., 573 F.2d 646 (9th Cir.1978), this circuit held that

work product protection was not lost when disclosure had been made under “de facto

compulsion” due to “the imposition of an extremely rigorous schedule for discovery” in

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4

 In 2008, Congress enacted Federal Rule of Evidence 502, which specifically deals

with waivers of the attorney-client privilege and work product. Although the rule addresses

the scope of a waiver when materials are disclosed to a federal agency, it does not decide

whether waiver occurs. As the Explanatory Note makes clear, “the rule does not purport to

supplant applicable waiver doctrine generally.” Fed. R. Evid. 502 explanatory note. Because

the new rule does not address disclosures to state agencies like DHS and does not create new

law on when waiver occurs, the Court has looked to case law to determine the effect of

Defendant’s disclosure of the investigation to DHS.

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earlier litigation. 573 F.2d at 651; see also Simpson v. Braider, 104 F.R.D. 512, 522-23

(D.D.C. 1985) (involuntary disclosure did not waive work product). 

In this case, the Court cannot conclude that disclosure of the investigative materials

to DHS substantially increased the likelihood of their disclosure to Plaintiffs. More

importantly, DHS regulates Defendant. DHS has statutory authority to license, investigate,

and discipline Defendant. Given this relationship, the Court concludes that Defendant’s

production of information to DHS did not constitute a waiver of work product protection.

Transamerica, 573 F.2d at 651.4

C. Have Plaintiffs Shown Substantial Need and Undue Hardship?

Even if full work product protection applies, Plaintiffs contend that they should be

granted access to the investigation because they have “substantial need for the materials” and

“cannot, without undue hardship, obtain their substantial equivalent by other means.” Fed.

R. Civ. P. 26(b)(3)(A)(ii). The Advisory Committee Note to Rule 26 makes clear, however,

that a “special showing” must be made to satisfy this requirement. Fed. R. Civ. P. 26(b)(3)

advisory committee’s note (1970). The special showing may be made with respect to witness

statements where the witness has given a contemporaneous account of the events at issue and

suffers from a lapse of memory later in the litigation. Id.

Plaintiffs have made such a showing with respect to Suzie Ofahengaue. Ms.

Ofahengaue was nearby when the incident occurred, and she provided a witness statement

and answered questions during the investigation. Plaintiffs have provided excerpts from her

deposition showing some loss of memory. Dkt. #117-1 at 25-29. The Court concludes that

Plaintiffs have shown a substantial need for Ms. Ofahengaue’s witness statement and her

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answers to questions, and cannot obtain the substantial equivalent by other means. The Court

will require Defendant to produce to Plaintiffs Ms. Ofahengaue’s witness statement and her

answers to questions. 

Plaintiffs have not made this showing with respect to any other witness. They do not

identify other witnesses as lacking information. Their general assertion that more

information will be revealed by disclosure of the full investigative report is not sufficient to

make the special showing necessary to overcome the protection of work product.

Plaintiffs contend that Communication Notes and Incident Reports created in the

normal course of Defendant’s business are missing from Defendant’s records. If the

investigation materials include Communication Notes or Incident Reports that were created

in the normal course of business, those documents do not become protected work product

merely because they have been included in an investigative report. Defendant will be

required to produce any Communication Notes or Incident Report contained in the

investigation materials.

Plaintiffs make other general arguments regarding their need for information. For

example, Plaintiffs assert that they learned of other incidents involving BW through

depositions. They speculate that additional incidents may be reflected in the investigation.

They also note that the investigation may contain information concerning the behavior and

cognition of BW. Such generalized assertions do not constitute the “special showing”

needed to overcome work product protection.

III. Defendant’s Alleged Non-Disclosure.

Plaintiffs argue that the investigation materials should have been identified as

documents withheld from discovery pursuant to Rule 26(b)(5), and that Plaintiff’s failure to

comply with this rule makes the documents subject to production. Rule 26(b)(5) requires the

identification of information withheld from discovery. Defendant correctly notes that it was

not obligated to disclose the existence of the investigative documents under Rule 26(a)

because that rule applies only to documents the party “may use to support its claims or

defenses.” Fed. R. Civ. P. 26(a)(1)(A)(ii). Defendant asserts that it has no intention of using

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the investigation to support its claims or defenses. In addition, Plaintiffs have identified no

Rule 34 request that called for production of the investigative documents. In the absence of

an obligation to produce the documents pursuant to Rule 26(a) or some other discovery

request, Defendant did not have an obligation to identify the documents under Rule 26(b)(5).

 Finally, the Court notes that Plaintiffs have had reason to know about the investigation

from the outset of this dispute. Ms. Troxell informed Ms. Bickler’s son that an investigation

had been conducted. Dkt. #124-1 at 4. The son wrote a letter on January 17, 2009, thanking

Ms. Troxell for conducting the investigation. Id. at 7. Defendant’s in-house counsel wrote

to the son on January 23, 2009, and stated that an investigation had been conducted. Id. at

5. The son, David Bickler, M.D., is the lead Plaintiff in this case. Clearly, Plaintiffs have

known about the existence of the investigation since shortly after the incident occurred.

They could have sought discovery of the investigative materials long before the investigation

was discussed by Ms. Troxell in her deposition in January of 2010. 

The Court concludes that Defendant did not improperly fail to disclose the existence

of the investigation. The attorney-client privilege and work product protection accorded the

investigation have not been lost on this basis.

IT IS ORDERED that Plaintiffs’ motion to compel (Dkt. #117) is granted with

respect to the witness statement, questions, and question answers of Suzie Ofahengaue, and

with respect to any Communication Notes and Incident Reports contained in the investigation

materials. The motion is denied in all other respects.

DATED this 4th day of March, 2010.

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