Radical incursions on privilege law approved in the Minnesota tobacco litigation may be used against other companies and counsel to deny traditional protections
IF YOU follow what plaintiffs' counsel have been saying in the popular press and law review articles, the tobacco industry is unique in the annals of American litigation. According to them, challenges to privilege claims and crime-fraud proceedings mounted in tobacco cases pose no threat to other industries.(1) Not so.
Courts have not limited their intrusions on traditional privilege doctrine to tobacco litigation. The precedent being established is fully applicable to any industry that manufactures consumer goods that are alleged to cause human injury. The plaintiffs' success in these cases--which derives less from obtaining privileged documents than from generating enormous bias against the defendants in the public arena and in the courts--almost guarantees that similar tactics will be employed in litigation against other corporate defendants.
In the tobacco cases, as in so many mass tort and product liability cases today, the plaintiffs do not limit their complaints to allegations that the product was defective or that there was a failure to warn. Rather, they include counts for negligence, misrepresentation, fraud and, increasingly, violations of consumer protection and antitrust statutes. In the Minnesota litigation, as in other tobacco cases, these causes of action purportedly were supported by a number of "factual" allegations. Among these is the argument that the defendants falsely promised to conduct and disclose research on smoking and health to the public but, in fact, either refused to conduct research or refused to publish the research findings. As a result, the plaintiffs alleged that the state, Blue Cross Blue Shield of Minnesota, and consumers were defrauded.
This article describes the privilege challenges and crime-fraud proceedings in the Minnesota attorney general action against the tobacco industry. To set the stage for a full appreciation of the potential impact of the precedent created in the Minnesota action, this article begins with a brief discussion of the history of privilege challenges in tobacco litigation, illustrating the unique turn that those challenges took in Minnesota. It then describes the privilege proceedings in Minnesota, the unprecedented procedures adopted by that court, and the results of those proceedings. Discussed finally is the potential impact of the Minnesota proceedings (and continuing litigation of privilege issues in other tobacco cases) on other corporate defendants, particularly those embroiled in mass tort actions.
CRIME-FRAUD EXCEPTION: ITS NATURE AND SCOPE
Most lawyers are familiar with the attorney-client privilege, the work product doctrine, as well as the joint defense privilege.(2) Many may be less familiar with the crime-fraud exception to those privileges.
In our legal system, the attorney-client privilege has been jealously guarded. Courts have long recognized that individuals and corporations need freedom to consult with counsel without fear that those communications would be used against them.(3) Today, courts are highly conscious that corporations need to consult continuously with counsel in order to comply with the mass of state and federal laws and regulations that govern corporate conduct.(4)
The privilege, however, is not absolute. Courts recognize that the privilege conflicts with discovery rules favoring full disclosure and that it is an impediment to the search for truth.(5) Moreover, the policy behind the privilege--permitting clients to confer with counsel in order to comply with the law--would be subverted were clients to confer with counsel in order to find creative ways to violate the law. Courts have been justifiably unwilling to convert a license to practice law into a license to facilitate crimes and frauds under the shield of an inviolable privilege. …