Court Opinion

ID: 1033978
Source: CourtListenerOpinion
Date Created: 2013-07-16 22:28:51.53864+00
Date Added: 2024-06-11T15:16:08.847441
License: Public Domain

SUPREME COURT OF ARIZONA
                             En Banc

BRADFORD D. LUND, an individual;   )   Arizona Supreme Court
WILLIAM S. LUND, and SHERRY L.     )   No. CV-12-0349-PR
LUND, husband and wife,            )
                                   )   Court of Appeals
                      Petitioners, )   Division One
                                   )   No. 1 CA-SA 12-0027
                  v.               )
                                   )   Maricopa County
THE HONORABLE ROBERT D. MYERS,     )   Superior Court
JUDGE OF THE SUPERIOR COURT OF     )   No. PB2009-002244
THE STATE OF ARIZONA, in and for )
the County of Maricopa,            )
                                   )
                 Respondent Judge, )   O P I N I O N
                                   )
                                   )
MICHELLE A. LUND, DIANE DISNEY     )
MILLER, KRISTEN LUND OLSON, and    )
KAREN LUND PAGE,                   )
                                   )
        Real Parties in Interest, )
                                   )
__________________________________)
                                   )
JENNINGS, STROUSS & SALMON,        )
P.L.C.,                            )
                                   )
                       Intervenor. )
                                   )
__________________________________)

        Appeal from the Superior Court in Maricopa County
               The Honorable Robert D. Myers, Judge

                      VACATED AND REMANDED
________________________________________________________________

          Opinion of the Court of Appeals, Division One
             230 Ariz. 445, 286 P.3d 789 (App. 2012)

                            VACATED
________________________________________________________________
JONES, SKELTON & HOCHULI, P.L.C.                                    Phoenix
     By   A. Melvin McDonald

And

SHUMWAY LAW OFFICES, P.L.C.                                      Scottsdale
     By   Jeff A. Shumway
Attorneys for Bradford D. Lund

MEYER HENDRICKS, PLLC                                               Phoenix
     By   Ed F. Hendricks, Jr.
          Brendan A. Murphy
          W. Douglas Lowden
Attorneys for William S. Lund and Sherry L. Lund

BURCH & CRACCHIOLO, P.A.                                 Phoenix
     By   Daryl Manhart
          Bryan F. Murphy
          Jessica Conaway
Attorneys for Michelle A. Lund, Diane Disney Miller, Kristen
Lund Olson, and Karen Lund Page

JENNINGS, STROUSS & SALMON, P.L.C.                       Phoenix
     By   John J. Egbert
          J. Scott Rhodes
Attorneys for Jennings, Strouss & Salmon, P.L.C.
________________________________________________________________

B R U T I N E L, Justice

¶1          We address when a trial court, in deciding issues of

privilege and waiver, may review in camera allegedly privileged

documents   that   were   inadvertently    disclosed.1      We   hold     that

before reviewing a particular document, a trial court must first

determine   that   in   camera   review   is   necessary   to   resolve   the

privilege claim.

1
     For ease of reference, we refer to all documents at issue
in this case as “privileged” even though some documents are
claimed only to be protected trial-preparation material.

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                                             I.

¶2            This    litigation       began      in    2009,     when     relatives       of

Bradford      Lund    (the    real     parties     in     interest       in    this     case,

collectively, “Miller”) sought the appointment of a guardian and

conservator to manage Bradford’s assets.                       Bradford, his father,

and    his    stepmother      (collectively,            “the    Lunds”)       opposed     the

appointment.

¶3            In September 2011, Miller’s counsel, Bryan Murphy of

Burch & Cracchiolo (“B&C”), served the law firm Jennings, Strouss

& Salmon (“JS&S”), which had previously represented Bradford in

petitioning for the appointment of a guardian, with a subpoena

duces tecum requesting all non-privileged information relating to

Bradford.      Mistakenly believing that Murphy represented Bradford,

a    JS&S    attorney   responded       to   the       subpoena   by     delivering       the

entire client file to Murphy without reviewing it for privileged

information.

¶4            Early in October, Bradford’s attorney, Jeff Shumway,

learned that JS&S had given Bradford’s file to Murphy.                             Shumway

told Murphy by email that he believed the file contained at least

two privileged documents that should be returned.                         Murphy replied

that he would wait to hear from Shumway, who responded he would

inform       Murphy   if     further     review        revealed    other       privileged

documents.       After not hearing further from Shumway for three

weeks, Murphy distributed the entire file to all other counsel in

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the case, as well as a court-appointed investigator, as part of

Miller’s second supplemental disclosure statement.

¶5          On November 14, the Lunds filed a motion to disqualify

Murphy and B&C on the ground that they had “read, kept, and

distributed” privileged materials.        The next day, JS&S moved to

intervene to file a motion to compel Murphy and B&C to comply

with the rules applicable to inadvertent disclosure, Ethical Rule

4.4(b) and Arizona Rule of Civil Procedure 26.1(f)(2).

¶6          On November 16, the Lunds filed an emergency motion to

prevent Murphy from disclosing the file to the court and for an

order that it be returned to JS&S.        At a November 29 hearing, the

trial court permitted Murphy to retain the file, but directed him

to not copy any documents from the file or convey them to anyone.

The court also ordered JS&S to create a privilege log, which JS&S

filed with the court on December 9.              On January 9, 2012, the

court granted JS&S’s motion to intervene.

¶7          In   a   January   13   minute   entry,     the    trial    court

recognized its obligation to determine whether the documents were

in   fact   privileged   and   directed   JS&S    to   file   under    seal   a

detailed explanation of the legal basis for the privilege claim,

attached to each allegedly privileged document.           Each counsel was

to receive a copy of this explanation, including the documents.

After allowing the other parties to respond, the court intended

to review the documents and counsels’ arguments before ruling on

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whether each document was privileged.

¶8          On January 19, the Lunds objected to the trial court

reviewing the documents in camera, arguing that Miller must first

provide    evidence       that     the   documents    are   not     privileged     and

requesting in the alternative that another judge conduct the

review.         JS&S    moved    to    extend   the   deadline     for    filing   the

privilege explanations and documents, but the court denied the

motion and ordered JS&S to file them on January 31.                        The court

stated it would rule on the Lunds’ objection to any in camera

review before reviewing the documents.                  The Lunds then filed a

petition    for        special    action   with   the   court      of    appeals   and

requested a stay of the superior court’s orders.

¶9          The court of appeals accepted jurisdiction and granted

a stay.     Lund v. Myers ex rel. Cnty. of Maricopa, 230 Ariz. 445,

449 ¶ 12, 286 P.3d 789, 793 (App. 2012).                    The court ultimately

held     that    although        the   plain    language    of    Rule    26.1(f)(2)

seemingly placed no limitations on the receiving party’s right to

present the inadvertently disclosed documents to the court under

seal or on the court’s ordering the disclosing party to do the

same, such a broad reading would conflict with the receiving

party’s duty under that rule to “return, sequester, or destroy”

the privileged documents and with Arizona Rule of Civil Procedure

26(g).     Id. at 453 ¶¶ 25–26, 286 P.3d at 797.                 The court reasoned

that the receiving party did not have “an unqualified right to

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file privileged information with the court,” but could obtain in

camera review only after complying with procedural rules and

showing that (a) “specific documents are likely not privileged”

or (b) “the privilege has been waived.”                  Id. ¶ 27.     Finally, the

court concluded that if Miller met this threshold, a judicial

officer not permanently assigned to the case should conduct the

in camera review given the “unique circumstances” of the case.

Id. at 456 ¶ 38, 286 P.3d at 800.

¶10        We granted review to clarify our rules regarding the

inadvertent disclosure of privileged information, a legal issue

of    statewide    importance.         We       have   jurisdiction    pursuant    to

Article 6, Section 5(3) of the Arizona Constitution and A.R.S. §

12-120.24.

                                         II.

¶11        When     a   party   has    inadvertently        disclosed      privileged

information, Rule 26.1(f)(2) outlines the proper procedure for

claiming privilege and resolving any dispute.2                       The party who

claims   that     inadvertently       disclosed        information    is   privileged

should “notify any party that received the information of the

2
     Arizona Rule of Civil Procedure 45(c)(5)(C)(ii) provides
the same procedure for a person who has inadvertently produced
privileged documents in response to a subpoena. While A.R.S. §
12-2234 states that “an attorney shall not, without the consent
of his client, be examined as to any communication made by the
client to him,” the statute does not address inadvertent
document disclosure.

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claim and the basis for it.”                  Ariz. R. Civ. P. 26.1(f)(2).                   Once

the receiving party has been notified of the privilege claim,

that    party     “must     promptly     return,          sequester,       or    destroy     the

specified information . . . and may not use or disclose the

information until the claim is resolved.”                          Id.; accord Fed. R.

Civ. P. 26(b)(5)(B).              Our rule, like its federal counterpart, “is

intended merely to place a ‘hold’ on further use or dissemination

of    an   inadvertently          produced     document       that    is     subject       to   a

privilege claim until a court resolves its status or the parties

agree      to    an     appropriate     disposition.”              Ariz.         R.   Civ.      P.

26.1(f)(2) State Bar committee’s note to 2008 amend.

¶12             Ethical       Rule     4.4(b)        also     addresses           inadvertent

disclosures, providing that a “lawyer who receives a document and

knows      or     reasonably         should        know     that     the        document     was

inadvertently sent shall promptly notify the sender and preserve

the status quo for a reasonable period of time in order to permit

the     sender     to     take     protective        measures.”            Together,       these

provisions emphasize that a receiving party has a duty to suspend

use and disclosure of the allegedly privileged documents until

the privilege claim has been resolved either through agreement or

court ruling.

¶13             The receiving party may contest the privilege claim by

asserting       that    the      documents     are    not    privileged          or   that   the

disclosure has waived the privilege.                        To have the trial court

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resolve       the    privilege      dispute,         the    receiving          party     should

“promptly present the information to the court under seal for a

determination of the claim.”               Ariz. R. Civ. P. 26.1(f)(2).                      This

procedure      allows      the    court    to       act    as    a     repository      for    the

documents while the parties litigate the privilege claim.

¶14           Unlike the court of appeals, we do not find that a

receiving party who presents the information under seal to the

court thereby violates Rule 26.1(f)(2) by using the information

and failing to return, sequester, or destroy it.                               See Lund, 230

Ariz. at 453 ¶ 26, 286 P.3d at 797.                             The prohibition in Rule

26.1(f)(2) on the “use” of the documents does not preclude filing

the documents with the court under seal or other conduct allowed

by     the    rules.       See    Fed.     R.       Civ.    P.       26(b)(5)(B)       advisory

committee’s         note   to    2006    amend.      (stating          that    the    receiving

party may not use the information “pending resolution of the

privilege claim,” but that it “may present to the court” the

questions of privilege and waiver).                        Counsel may sequester the

documents, including filing them under seal; make good faith

efforts to resolve the issue with opposing counsel, see Ariz. R.

Civ.     P.    26(g);      and,    if     necessary,            move     for    the     court’s

resolution of the issue.                Although each of these actions involve

a literal “use” of the documents, Rule 26.1(f)(2) contemplates

that the privilege claim may be “resolved” through such use.

¶15           If the allegedly privileged documents are filed under

                                                8
seal with the trial court, the court may not view the documents

until it has determined, as to each document, that in camera

review is necessary to resolve the privilege claim.    Such review

may be required if the receiving party makes a factual showing to

support a reasonable, good faith belief that the document is not

privileged.   Cf. United States v. Zolin, 491 U.S. 554, 572 (1989)

(requiring a threshold showing to be made before the court could

perform in camera review to determine whether the crime-fraud

exception to the privilege applies); Kline v. Kline, 221 Ariz.

564, 573 ¶ 35, 212 P.3d 902, 911 (App. 2009) (holding that a

party must present prima facie evidence to invoke the crime-fraud

exception).   Any documents found to be non-privileged may be used

in the litigation and any documents determined to be privileged

must be returned to the disclosing party or destroyed.

¶16       If the receiving party does not contest the disclosing

party’s claim of privilege, the court need not determine the

privilege issue or review the undisputedly privileged documents

filed under seal.     See Fed. R. Civ. P. 26(b)(5)(B) advisory

committee’s note to 2006 amend.      The receiving party in this

situation must either return or destroy the documents and any

copies.   Ariz. R. Civ. P. 26.1(f)(2).

¶17       With these principles in mind, we consider whether the

trial court in this case abused its discretion in its rulings

regarding the disputed documents.        See State Farm Mut. Auto.

                                 9
Ins. Co. v. Lee, 199 Ariz. 52, 57 ¶ 12, 13 P.3d 1169, 1174

(2000) (noting that discovery rulings relating to privilege are

reviewed for abuse of discretion).                        Here, because the Lunds’

motion     to    disqualify         is    based      on    Murphy’s   disclosure         of

allegedly privileged materials in violation of Rule 26.1(f)(2),

the trial court must determine whether the documents are indeed

privileged.           To that end, the court properly ordered JS&S to

produce    a     privilege        log    and    Miller    and   Bradford     to   file    a

response.

¶18            The trial court, however, erred by ruling that it would

review     all     the      documents          to   determine     whether     they    are

privileged.       The court should have awaited the responses to the

privilege log and considered the parties’ arguments regarding

privilege and waiver to determine whether in camera review was

warranted for particular documents before reviewing them.

¶19            If in camera review is needed, the trial judge should

consider    whether         another      judicial    officer     should     conduct   the

review in light of the possibility that a review of privileged

materials       may    be    so    prejudicial       as   to    require    the    judge’s

recusal.        If the trial judge conducts an in camera review and

upholds the privilege claim, the judge should consider whether

recusal is then necessary, see Ariz. Code of Judicial Conduct

Rule 2.11, and a party who can show actual bias may, of course,

move for the judge’s removal for cause, see Ariz. R. Civ. P.

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42(f)(2); see also A.R.S. § 12-409(B).

¶20        After the trial court rules on the privilege and waiver

issues, the court shall consider the pending motion to disqualify

Murphy and B&C.    Miller has not yet responded to that motion, and

we decline to comment on its merits or on the related issue

whether,   by    seeking   disqualification,        Bradford     waived      the

attorney-client    privilege.       These     issues   are     appropriately

determined by the trial court in the first instance.

                                   III.

¶21        For   the   foregoing   reasons,    we   vacate     the   court    of

appeals’ opinion and the trial court’s January 13, 2012 order and

remand to the trial court for proceedings consistent with this

opinion.

                            __________________________________
                            Robert M. Brutinel, Justice

CONCURRING:

__________________________________
Rebecca White Berch, Chief Justice

__________________________________
Scott Bales, Vice Chief Justice

__________________________________
John Pelander, Justice

__________________________________
Ann A. Scott Timmer, Justice

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