Grand Traverse Band of Ottawa v. Blue Cross Blue Shield of Mich.

THE GRAND TRAVERSE BAND OF OTTAWA AND CHIPPEWA INDIANSand ITS EMPLOYEE WELFARE PLANE, Plaintiff, v. BLUE CROSS BLUE SHIELD OF MICHIGAN, Defendant/Third-Party Plaintiff, v. MUNSON MEDICAL CENTER, Third-Party Defendant.

Case No.: 14-11349

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

July 16, 2021

Judith E. Levy United States District Judge

Curtis Ivy, Jr. United States Magistrate Judge

ORDER REGARDING PLAINTIFFS' MOTION TO COMPEL (ECF No. 145)

I. Background

The Grand Traverse Band of Ottawa and Chippewa Indians is a federally recognized Indian tribe. The tribe and its employee welfare plan (collectively "Plaintiffs") brought this action against Blue Cross Blue Shield of Michigan ("BCBSM") and Munson Medical Center alleging violations of ERISA and Michigan's Healthcare False Claims Act. Plaintiffs contracted with BCBSM to provide health insurance to its members. The parties allegedly agreed that Plaintiffs would pay "Medicare-Like Rates," or "MLR," for healthcare. Plaintiffs, however, allege BCBSM fraudulently caused them to pay a rate higher than the agreed upon MLR. The ERISA claims have since been dismissed. (ECF Nos. 90, 122).

To support their Michigan Healthcare False Claims Act claim, Plaintiffs sought internal communications between BCBSM employees related to MLR, BCBSM's presentment of allegedly false claims to plaintiffs, and BCBSM's knowledge of the differential between its network rates and MLR. (ECF No. 145, PageID.3531). According to Plaintiffs, BCBSM produced emails and attachments but withheld many emails or portions of emails improperly asserting attorney-client privilege. This precipitated Plaintiff's motion to compel BCBSM to produce the withheld documents (ECF No. 145), which was referred to the undersigned for hearing and determination (ECF No. 146). The undersigned held a hearing on the matter on July 8, 2021, during which counsel for the moving and opposing parties appeared and gave argument.

Plaintiffs raise arguments attacking both the sufficiency of the privilege log and the propriety of the redactions. Regarding the privilege log, Plaintiffs contend the entries contain insufficient detail to establish attorney-client privilege. A majority of the entries described the privileged material as: "Email reflectingconfidential attorney-client communications with BCBSM Legal Department regarding MLR issues." Plaintiffs maintain this is insufficient. (ECF No. 145, PageID.3540). Plaintiffs also argue BCBSM's redactions were overbroad, capturing communications that are not privileged. Specifically, Plaintiffs' contend BCBSM improperly redacted emails between non-attorney BCBSM employees, improperly redacted emails involving BCBSM employee Matt Case who worked as in-house counsel as well as in other roles, and improperly redacted emails containing business advice or communications, rather than legal advice. (Id. at PageID.3540-49). Among the exhibits attached to the motion are twelve email strings, many of them are strings of the same emails. Some emails that were produced in 2016 have some redaction for attorney-client privileged matter, but the same emails produced in 2020 have more content redacted. Plaintiffs use these examples to demonstrate their contention that BCBSM's redactions are improper and/or overbroad.

In response, BCBSM argues the only emails the court should consider on this motion are those which were attached to the motion—they assert the court cannot use a "sampling" of emails to extrapolate the propriety of the asserted privilege as to all emails withheld under the privilege. BCBSM provided those emails to the court, unredacted, for in camera review. BCBSM maintains the content of those emails speaks for themselves—they contain privilegedcommunications. BCBSM also contends that in the subject emails, attorney Matt Case served only in his capacity as corporate counsel providing legal advice. (ECF No. 151).

II. Legal Standard

Michigan law governs the question of attorney-client privilege in this matter.¹ See Fed. R. Evid. 501 (where state law supplies the rule of decision, state law governs privilege). As noted by plaintiffs, Michigan courts look to "federal precedent for guidance in determining the scope of the attorney-client privilege when a particular issue has been addressed by a federal court." Est. of Nash by Nash v. City of Grand Haven, 909 N.W.2d 862, 867 (Mich. Ct. App. 2017) (citation omitted).

The attorney-client privilege "is the oldest of the privileges for confidential communications known to the common law." Upjohn Co. v. United States, 449 U.S. 383, 389, (1981) (citations omitted). "Its purpose is to encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice." Id.; Hunt v. Blackburn, 128 U.S. 464, 470 (1888). The privilege exists to protect not only the professional advice by the lawyer but also the provision of information by the client to enable the lawyer to give sound and informed advice to the client.Upjohn, 449 U.S. at 390. Under Michigan law, "[t]he scope of the [attorney-client] privilege is narrow: it attaches only to confidential communications by the client to its adviser that are made for the purpose of obtaining legal advice." Fruehauf Trailer Corp. v. Hagelthorn, 528 N.W.2d 778, 780 (Mich. Ct. App. 1995); AMI Stamping LLC v. ACE Am. Ins. Co., 2015 WL 12990251, at *3 (E.D. Mich. Oct. 7, 2015), order rejected in part on other grounds, 2015 WL 7252479 (E.D. Mich. Nov. 17, 2015) ("In order to be a protected communication, it must be intended to be confidential and it must be provided to an attorney for the purpose of obtaining legal advice."). "Confidential client communications, along with opinions, conclusions, and recommendations based on those communications, are protected by the attorney-client privilege because they 'are at the core of what is covered by the privilege.'" McCartney v. Attorney General, 587 N.W.2d 824 (Mich. Ct. App. 1998) (citation omitted).

"In the corporate context, the attorney-client privilege extends to communications, between non-attorney employees, made to obtain or relay legal advice." McCall v. Procter & Gamble Co., 2019 WL 3997375, at *4 (S.D. Ohio Aug. 22, 2019) ( (collecting cases); Ajose v. Interline Brands, Inc., 2016 WL 6893866, at *8 (M.D. Tenn. Nov. 23, 2016) (citing Broessel v. Triad Guar. Ins. Corp., 238 F.R.D. 215, 219 (W.D. Ky. 2006)) ("In the corporate context, the attorney-client privilege may extend to communications between employees thatconvey legal advice given by an attorney to the corporation."); see also Leibel v. Gen. Motors Corp., 646 N.W.2d 179, 183 (Mich. Ct. App. 2002) (quoting Reed Dairy Farm v. Consumers Power Co., 576 N.W.2d 709 (Mich. Ct. App. 1998) ("Where an attorney's client is an organization, the privilege extends to those communications between attorneys and all agents or employees of the organization authorized to speak on its behalf in relation to the subject matter of the communication.")).

The party asserting the privilege—BCBSM—has the burden of proving each element of the claim. United States v. Dakota, 197 F.3d 821, 825 (6th Cir. 1999). The claim of privilege must be made and assessed on a document-by-document basis. Pearlshire Capital Grp., LLC v. Zaid, 490 F. Supp. 3d 1299, 1307 (N.D. Ill. 2020) (citing Shaffer v. AMA, 662 F.3d 439, 446 (7th Cir. 2011)). The information or documents submitted in support of the privilege must be sufficient to establish the privileged nature of the material sought. Am. Nat'l Bank & Trust Co. of Chi. v. Equitable Life Assurance Soc'y of the U.S., 406 F.3d 867, 879-80 (7th Cir.2005) (holding that a court must review all of the documents claimed as privileged and cannot rely on a "random sampling" of documents to determine privilege).

III. Analysis

Preliminarily, BCBSM's assertion that the only emails at issue are those attached to Plaintiffs' motion is incorrect. There is no support for the position thatthe party contesting privilege must attach every redacted document in question to be considered by the Court. Plaintiffs sufficiently raised their argument the privilege log is insufficient to establish the privilege, and that the Court's review is not limited to the examples attached to their motion. The Court, however, agrees with BCBSM's position that using a "sampling" of contested redactions to extrapolate from those emails the propriety of redactions in other unrelated documents is improper and will not be done here.

A. Sufficiency of Privilege Log

Pursuant to Federal Rule of Civil Procedure 26(b)(5), when a party withholds information otherwise discoverable on the basis the information is privileged, that party must expressly make the claim and "describe the nature of the documents, communications, or tangible things not produced or disclosed—and do so in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the claim." BCBSM cites Carhartt, Inc. v. Innovative Textiles, Inc., 333 F.R.D. 118 (E.D. Mich. 2019), which discussed the information that must be contained in a privilege log. The more succinct description used in Carhartt is as follows: "'[E]ach document in a privilege log should contain details including: date, author and all recipients of the document, subject matter, and an explanation as to why the document should be privileged and not produced in discovery.'" Id. at 120 (quoting Clark Const. Grp., Inc. v.City of Memphis, 2005 WL 6187896 (W.D. Tenn. Feb. 9, 2005)). In Clark, the privilege log was deficient because the proponent only used general categories of persons and entities without identifying anyone by name and position, and provided vague descriptions. Id. The required showing is not "onerous and may be satisfied by as little as a statement in the privilege log explaining the nature of the legal issue for which...