Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_04-cv-04082/USCOURTS-cand-3_04-cv-04082-6/pdf.json

Parties Involved:
Atmel Corporation
Counter-defendant
Royal Indemnity Company
Miscellaneous
St. Paul Fire & Marine Insurance Company
Counter-claimant

Document Text:

United States District Court

For the Northern District of California

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1 Defendant filed its motion on August 1, 2005. Atmel responded on August 8, 2005. Defendant

replied on August 9, 2005.

2

 Therefore, the Court DENIES without prejudice St. Paul’s pending motion to compelagainst ABD,

AIG, and Royal Indemnity Company, which the Court has already heard argument on. Instead, it may raise

any requests to compel through letter briefs, as it has already done.

United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

ATMEL CORPORATION,

Plaintiff,

 v.

ST. PAUL FIRE & MARINE INSURANCE

COMPANY, 

Defendant.

 /

No. C 04-4082 SI

ORDER RE: ABD DOCUMENTS

By letter briefs,1the parties bring before the Court a dispute regarding the production of third-party

documentsthatAtmelclaims are protected under the attorney-client privilege and work product doctrine. This

issue was previously raised by defendant’s motion to compel and the Court held a hearing on that motion on

July 1, 2005. The Court ordered the parties to meet and confer, in order to allow Atmel to produce additional

information about its privilege claim.2 After the meet-and-confer, St. Paul has renewed its request to compel

production of documents through this letter brief. 

At issue in this motion are approximately 80 documents in ABD’s possession that Atmel has asked

ABD to withhold on the grounds ofthe attorney-client and work product privilege. St. Paul claims thatAtmel

waived any privilege when these documents were provided to ABD, its insurance broker.

Disclosure of an attorney-client communicationto a third party does not automatically waive privilege.

Instead, the privilege remains intact if disclosure occurs to “no third persons other than those who are present

Case 3:04-cv-04082-SI Document 200 Filed 08/31/05 Page 1 of 6
United States District Court

For the Northern District of California

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3 St. Paul cites SR InternationalBusinessIns. Co., Ltd v. World Trade Center Properties LLC, 2002

WL 1334821 (S.D.N.Y. 2002). That case did not describe the relationship between the insurance broker and

the insured, and did not discuss the necessity of the communications or of the broker’s involvement, as is

required under California law. Further, the case involved deposition preparation of the broker’s employees

by counsel for the insured, which has not occurred in this case.

2

to further the interest of the client in the consultation or those to whom disclosure is reasonably necessary for

the transmissionofthe information. . . .” Cal. Evid. Code § 952. St. Paul argues that ABD, as an independent

insurance broker, does not satisfy the requirements of § 952. In support, St. Paul cites McKesson HBOC,

Inc v. Superior Court, 115 Cal.App.4th 1229, 1236 (2004). However, in McKesson, the company provided

the document in question to the SEC and the U.S. Attorney for use in their investigations. This is clearly not

the situation in this case, as ABD represented Atmel in communications with insurance carriers.

St. Paul argues that insurance brokers are independent contractors, relying on Rios v. Scottsdale Ins.

Co., 119 Cal.App.4th 1020, 1026 (2004). St. Paul misstates the case law, asserting that brokers “do not act

as a generalagent for either insurer orinsured.” Mot. at 6. However, the court in Scottsdale clearly states that

“[the broker] was an agent for the insured and not an agent of the insurer.” Id. at 1026.

Atmelasserts thatABD negotiated insurance policies with Royal, AIG and St. Paul on its behalf. After

the policies were purchased, ABD served as a “necessary advisor for both general coverage questions and

regarding specific claims tendered to carriers.” Therefore, ABD served as a conduit of information between

Atmel and the insurers. Atmel and ABD worked together to provide relevant information about litigation or

claims to the insurers. Atmel contends that ABD’s expertise was necessary to understand general liability,

coverage and litigation issues.

Given the relationship between ABD and Atmel, the attorney client privilege was not waived because

ABD was present to further Atmel’s interests and disclosure to ABD was reasonably necessary to provide

information to the insurers. The factual situation here is similar to that in Royal Surplus Lines Ins. Co v.

Sofamor Danek Group, Inc., 190 F.R.D. 463, 471 (W.D. Tenn. 1999), which upheld the attorney-client

privilege. Section 952 clearly recognizes a third-party exception, and this exception includes “business

associates,” along the lines of Atmel and ABD’s relationship. See Insurance Co. ofNorth America v. Superior

Court, 108 Cal.App.3d 758, 771 (1980).3

Therefore, the Court finds that communications between ABD and Atmel are entitled to protection

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United States District Court

For the Northern District of California

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under the attorney-client privilege under § 952 because ABD was present to further the interests of Atmel and

the disclosure was reasonably necessary for the transfer of necessary information to the insurers.

St. Paul also contends thatAtmelis not entitled to the work product privilege. St. Paul asserts that the

documents were not prepared inanticipationoflitigationortrial, but instead contain communications about facts

relating to Atmel’s various insurance providers. St. Paul provides a lengthy discussion of National Congress

for Puerto Rican Rights v. City of New York, 194 F.R.D. 105 (S.D.N.Y. 2000). That case involved the

disclosure of statistical analyses of personnel information and arrests by police officers prepared for a public

hearing. Id. at 109. It is unclear to the Court the relationship between City of New York and the current case.

The current case does not involve a lengthy fact-based analysis prepared for public dissemination. Nor can

St. Paul claim that it has no other source to obtain this information. St. Paul has received massive amounts of

discovery in this case from a wide variety of sources, and only 80 documents are at issue here. Therefore,

Atmel is entitled to withhold documents that contain the “mental impressions, conclusions, opinions, or legal

theories of an attorney or other representative of a party concerning the litigation.” Fed.R.Civ.P. 26(b)(3).

Although Atmel has properly asserted the attorney-client and work product privilege for many of the

documents in its privilege log, Atmelalso asserts privilege for communications between non-attorneys. See Ex.

A, entries 19, 70, 76-85. It is unclear to the Court how these communications can be privileged; therefore,

the parties are instructed to meet an confer on this issue, taking into consideration this Order.

IT IS SO ORDERED.

Dated: August 31, 2005

 

SUSAN ILLSTON

United States District Judge

Case 3:04-cv-04082-SI Document 200 Filed 08/31/05 Page 3 of 6
United States District Court

For the Northern District of California

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1 Defendant filed its motion on August 1, 2005. Atmel responded on August 8, 2005. Defendant

replied on August 9, 2005.

2

 Therefore, the Court DENIES without prejudice St. Paul’s pending motion to compelagainst ABD,

AIG, and Royal Indemnity Company, which the Court has already heard argument on. Instead, it may raise

any requests to compel through letter briefs, as it has already done.

United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

ATMEL CORPORATION,

Plaintiff,

 v.

ST. PAUL FIRE & MARINE INSURANCE

COMPANY, 

Defendant.

 /

No. C 04-4082 SI

ORDER RE: ABD DOCUMENTS

By letter briefs,1the parties bring before the Court a dispute regarding the production of third-party

documentsthatAtmelclaims are protected under the attorney-client privilege and work product doctrine. This

issue was previously raised by defendant’s motion to compel and the Court held a hearing on that motion on

July 1, 2005. The Court ordered the parties to meet and confer, in order to allow Atmel to produce additional

information about its privilege claim.2 After the meet-and-confer, St. Paul has renewed its request to compel

production of documents through this letter brief. 

At issue in this motion are approximately 80 documents in ABD’s possession that Atmel has asked

ABD to withhold on the grounds ofthe attorney-client and work product privilege. St. Paul claims thatAtmel

waived any privilege when these documents were provided to ABD, its insurance broker.

Disclosure of an attorney-client communicationto a third party does not automatically waive privilege.

Instead, the privilege remains intact if disclosure occurs to “no third persons other than those who are present

Case 3:04-cv-04082-SI Document 200 Filed 08/31/05 Page 4 of 6
United States District Court

For the Northern District of California

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3 St. Paul cites SR InternationalBusinessIns. Co., Ltd v. World Trade Center Properties LLC, 2002

WL 1334821 (S.D.N.Y. 2002). That case did not describe the relationship between the insurance broker and

the insured, and did not discuss the necessity of the communications or of the broker’s involvement, as is

required under California law. Further, the case involved deposition preparation of the broker’s employees

by counsel for the insured, which has not occurred in this case.

2

to further the interest of the client in the consultation or those to whom disclosure is reasonably necessary for

the transmissionofthe information. . . .” Cal. Evid. Code § 952. St. Paul argues that ABD, as an independent

insurance broker, does not satisfy the requirements of § 952. In support, St. Paul cites McKesson HBOC,

Inc v. Superior Court, 115 Cal.App.4th 1229, 1236 (2004). However, in McKesson, the company provided

the document in question to the SEC and the U.S. Attorney for use in their investigations. This is clearly not

the situation in this case, as ABD represented Atmel in communications with insurance carriers.

St. Paul argues that insurance brokers are independent contractors, relying on Rios v. Scottsdale Ins.

Co., 119 Cal.App.4th 1020, 1026 (2004). St. Paul misstates the case law, asserting that brokers “do not act

as a generalagent for either insurer orinsured.” Mot. at 6. However, the court in Scottsdale clearly states that

“[the broker] was an agent for the insured and not an agent of the insurer.” Id. at 1026.

Atmelasserts thatABD negotiated insurance policies with Royal, AIG and St. Paul on its behalf. After

the policies were purchased, ABD served as a “necessary advisor for both general coverage questions and

regarding specific claims tendered to carriers.” Therefore, ABD served as a conduit of information between

Atmel and the insurers. Atmel and ABD worked together to provide relevant information about litigation or

claims to the insurers. Atmel contends that ABD’s expertise was necessary to understand general liability,

coverage and litigation issues.

Given the relationship between ABD and Atmel, the attorney client privilege was not waived because

ABD was present to further Atmel’s interests and disclosure to ABD was reasonably necessary to provide

information to the insurers. The factual situation here is similar to that in Royal Surplus Lines Ins. Co v.

Sofamor Danek Group, Inc., 190 F.R.D. 463, 471 (W.D. Tenn. 1999), which upheld the attorney-client

privilege. Section 952 clearly recognizes a third-party exception, and this exception includes “business

associates,” along the lines of Atmel and ABD’s relationship. See Insurance Co. ofNorth America v. Superior

Court, 108 Cal.App.3d 758, 771 (1980).3

Therefore, the Court finds that communications between ABD and Atmel are entitled to protection

Case 3:04-cv-04082-SI Document 200 Filed 08/31/05 Page 5 of 6
United States District Court

For the Northern District of California

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under the attorney-client privilege under § 952 because ABD was present to further the interests of Atmel and

the disclosure was reasonably necessary for the transfer of necessary information to the insurers.

St. Paul also contends thatAtmelis not entitled to the work product privilege. St. Paul asserts that the

documents were not prepared inanticipationoflitigationortrial, but instead contain communications about facts

relating to Atmel’s various insurance providers. St. Paul provides a lengthy discussion of National Congress

for Puerto Rican Rights v. City of New York, 194 F.R.D. 105 (S.D.N.Y. 2000). That case involved the

disclosure of statistical analyses of personnel information and arrests by police officers prepared for a public

hearing. Id. at 109. It is unclear to the Court the relationship between City of New York and the current case.

The current case does not involve a lengthy fact-based analysis prepared for public dissemination. Nor can

St. Paul claim that it has no other source to obtain this information. St. Paul has received massive amounts of

discovery in this case from a wide variety of sources, and only 80 documents are at issue here. Therefore,

Atmel is entitled to withhold documents that contain the “mental impressions, conclusions, opinions, or legal

theories of an attorney or other representative of a party concerning the litigation.” Fed.R.Civ.P. 26(b)(3).

Although Atmel has properly asserted the attorney-client and work product privilege for many of the

documents in its privilege log, Atmelalso asserts privilege for communications between non-attorneys. See Ex.

A, entries 19, 70, 76-85. It is unclear to the Court how these communications can be privileged; therefore,

the parties are instructed to meet an confer on this issue, taking into consideration this Order.

IT IS SO ORDERED.

Dated: August 31, 2005

 

SUSAN ILLSTON

United States District Judge

Case 3:04-cv-04082-SI Document 200 Filed 08/31/05 Page 6 of 6