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District Court Precludes Deposition of In-House Counsel Who Acted as Part of Trial Team Even Though Counsel Had Relevant, Non-Privileged Conversations Regarding Indemnity

After plaintiff, McAirlaids, requested the deposition of one of Kimberly-Clark’s (“K-C”) in-house litigation counsel, K-C filed a motion for a protective order pursuant to Fed. R. Civ. P. 26(c) to preclude the deposition of its in-house counsel, Vicki Margolis (“Margolis”), who is an active member of its trial team. Counsel for McAirlaids requested the deposition of Margolis largely because she sent and received indemnification correspondence with K-C’s manufacturer, Beijing Beishute (“BB”), which McAirlaids asserted was highly relevant to the case.

The parties disagree as to the proper standard that the district court should apply “when considering a request to depose opposing counsel. K-C asserts that the Eighth Circuit’s decision in Shelton v. American Motors Corp., 805 F.2d 1323 (8th Cir. 1987) is the seminal case setting the legal standard for a party seeking to depose opposing counsel, and has been uniformly followed by courts within the Fourth Circuit. The court in Shelton outlined a three-part test to determine whether to allow the deposition of an opposing party’s attorney, requiring the party seeking the deposition to establish that: 1) no other means exist to obtain the information than to depose opposing counsel; 2) the information sought is relevant and non privileged; and 3) the information is crucial to the preparation of the case. Id. at 1327. The Eighth Circuit later clarified its Shelton ruling in Pamida, Inc. v. E.S. Originals, Inc., 281 F. 3d 726 (8th Cir. 2002), noting that the Shelton standard was intended to ‘protect against the ills of deposing opposing counsel in a pending case which could potentially lead to the disclosure of the attorney’s litigation strategy,’ and holding that it may not apply to attorneys outside of their role as litigation counsel in a pending case. Id. at 730.”

The district court was persuaded by Shelton line of cases that it was appropriate to apply the Shelton test for deposing opposing counsel in this case. “Margolis, though in-house counsel, is unquestionably an active member of K-C’s litigation team in both the trade dress case and in this patent litigation, and McAirlaids’ request to take her deposition invokes the Shelton court’s concern of protecting against the discovery of trial or litigation strategy. Accordingly, McAirlaids must establish that 1) no other means exist to obtain the information it seeks than to depose Margolis; 2) the information it seeks is relevant and non privileged; and 3) the information is crucial to the preparation of the case. Shelton, 805 F.2d at 1327.”

The district court then found that “McAirlaids’ request to depose Margolis centers on correspondence between Margolis and BB during the trade dress case regarding indemnity (‘the indemnity emails’). Information related to the indemnity emails is arguably both relevant and non privileged. However, McAirlaids failed to prove that no other means exist to obtain the information, and that such information is crucial to its preparation of the case.”

The district court further explained that “[t]he indemnity emails were produced in discovery, and Margolis completed an affidavit confirming that she had no other direct communications with BB. Dkt. No. 250-2. McAirlaids had the opportunity to explore the indemnity emails through Rule 30(b)(6) depositions of K-C, both in the trade dress case and in the present litigation. It is unclear what additional non-privileged information exists that McAirlaids can obtain by deposing Margolis.”

The district court also found that the plaintiff had other ways to discover the information. “Regardless, McAirlaids has other means to obtain additional information regarding the indemnity emails, either by seeking discovery from BB officials or through other employees of K-C. Further, permitting the deposition of Margolis would require navigating an invisible line between her dealings with business affairs and her role as litigation counsel, and would risk exposing K-C’s litigation strategy in this case.”

Accordingly, the district court granted the protective order motion.

McAirlaids, Inc. v. Kimberly-Clark Corporation, Case No. 7:13-CV-193 (W.D. Va. Oct. 29, 2014)

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