The work-product doctrine after McCarthy v. Slade Associates

Issue February 2013 February 2013 By Euripides Dalmanieras

Attorneys generally like to think of their work product as being sacrosanct and immune from discovery. Although the work-product doctrine, as codified in Mass. R. Civ. P. 26(b)(3), provides only qualified protection for materials prepared in anticipation of litigation or trial, there are relatively few decisions ordering the disclosure of bona fide work product. That is, in part, because courts have been instructed that protecting work product "enhance[s] the vitality of an adversary system of litigation by insulating counsel's work from intrusions, interferences, or borrowings by other parties."1

The recent decision by the Supreme Judicial Court (SJC) in McCarthy v. Slade Associates, Inc., 463 Mass. 181 (2012), however, is a sobering reminder of the work-product doctrine's limits. In this opinion, the SJC held that because plaintiff had invoked the discovery rule in response to the defendants' statute of limitations and other defenses, the defendants were entitled to discover attorney and other work product concerning when the plaintiff and one of her law firms first learned that plaintiff's causes of action had accrued. As a result, not only was the law firm ordered to produce its billing records and several categories of written work product, one of the firm's lawyers was also ordered to answer written questions under oath about the scope of his firm's work for plaintiff.

This is an important decision that promises to be widely invoked in discovery disputes over the production of work product.

Background Facts And Procedural History

In 1990, Regan McCarthy purchased a vacant, land-locked parcel of land in Truro, on Cape Cod, at a foreclosure sale. Based on the description in the foreclosure sale notice, McCarthy believed that the parcel abutted a property that she had vacationed on for years. She engaged an attorney to assist her with the acquisition, and the attorney hired a title examiner to conduct a title search. McCarthy also retained a surveyor to provide an opinion on the parcel's boundaries.

To finance the purchase, McCarthy obtained a mortgage from the bank that foreclosed on the property, and the bank issued a foreclosure deed. McCarthy never built anything on the land that she thought that she had acquired.

In 2003 and 2004, McCarthy retained a different attorney to advise her about whether she could obtain access to a public way from her land-locked parcel. This attorney also advised her in connection with the refinancing of the mortgage on the parcel. The attorney did not identify any discrepancies involving the location of the property.

Later in 2004, McCarthy, now represented by a third counsel, the law firm Burns & Levinson LLP (B&L), filed a Land Court action against abutters to the parcel that she believed she had owned since 1990. McCarthy asserted a trespass claim, requested a declaratory judgment regarding the boundary line, and sought to enjoin the abutters from obtaining access to what she believed was her land.

On Jan. 27, 2005, the abutters in the Land Court action produced a title report which established that McCarthy did not own the property that she thought she had purchased in 1990. Rather, the report showed that McCarthy had purchased a different parcel, which was located entirely within the Cape Cod National Seashore, and could not be developed. McCarthy alleged that this was the first time that she learned that she did not own the property at issue.2

Superior Court Litigations

McCarthy subsequently filed three separate Superior Court actions against the bank that had sold her the parcel, and the various lawyers and other professionals that she had retained between 1990 and 2003. She asserted claims for breach of contract, professional negligence, negligent misrepresentation, and violations of G.L. c. 93A. In 2006, she sued the surveyor that had issued an opinion in 1990 regarding the parcel's alleged boundaries. Then, in January 2008, she sued the lawyer who represented her in the 1990 transaction. Also in January 2008, she sued the bank that had foreclosed on the property, as well as the lawyer she engaged in 2003 to investigate obtaining access to a public way. She did not sue B&L.

The three actions were ultimately consolidated. The various defendants moved to dismiss the complaints on statute of limitations grounds, contending that McCarthy was on notice of her claims has accrued as early as 1990, but in any event beyond the applicable three-year limitations period for tort claims and the four-year limitations period for c. 93A claims. The trial court denied the motions to dismiss, ruling that McCarthy had adequately invoked the discovery rule by pleading facts that plausibly suggested that her causes of action accrued in late January 2005, when the defendants "'in the Land Court litigation furnished her with a report evincing the defect.'"3

The Trial Court's Discovery Orders

The defendants sought to test McCarthy's invocation of the discovery rule. They requested that B&L produce large amounts of documentation from the Land Court action, including time sheets; correspondence between McCarthy and her attorneys, land surveyors, title abstractors, and title examiners; and any and all documents concerning the property at issue. B&L produced some documents relating to the Land Court action, and withheld other documents as protected by the attorney-client privilege and work-product doctrine. A B&L attorney was deposed, but declined to answer certain questions on privilege and work-product grounds. Defendants moved to compel B&L to produce the withheld documents and to answer proposed written questions.

The trial court granted defendants' motions in part. It found that the documents and information sought by defendants was relevant to their statute of limitations and comparative fault defenses. The trial court concluded that McCarthy had waived any privilege or work-product protection by invoking the discovery rule, and thereby putting at issue the date when she was first on notice that her claims had accrued. It also ordered a B&L attorney to answer seven questions in writing, including identifying the date and substance of communications between McCarthy and B&L regarding any concerns that she or B&L may have expressed regarding the location of her property. McCarthy appealed the orders, as did the defendants who had sought broader relief. The SJC transferred the appeals on its own motion.

There Was No At-Issue Waiver

The SJC first addressed whether McCarthy had implicitly waived the attorney-client privilege by invoking the discovery rule. Citing its decision in Darius v. Boston, 433 Mass. 274 (2001),4 the court re-affirmed that at an at-issue waiver was theoretically possible where there has been an "inject[ion] [of] certain claims or defenses into a case," and that the waiver "might come into play where a statute of limitations defense is met by the plaintiff's reliance on the discovery rule."5 It emphasized, however, that a party claiming an at-issue waiver must show that "'the privileged information sought to be discovered is not available from any other [non-privileged] source.'"6

The SJC held that the defendants had not established an at-issue waiver because they had not exhausted discovery of potential non-privileged sources of the information that they were seeking. In particular, the court stated that defendants had not yet "conducted discovery of documents and materials that are not covered by the attorney-client privilege, but qualify as work product protected under the work product doctrine."7 Put another way, the SJC ruled that an at-issue waiver of the attorney-client privilege will not be found where the information sought can be obtained by piercing the qualified protection of the work-product doctrine.

Piercing Work-Product Protection

In Commissioner of Revenue v. Comcast Corp., the SJC stated that the purpose of the work-product doctrine is to establish a "'zone of privacy for strategic litigation planning … to prevent one party from piggybacking on the adversary's preparation."8 Accordingly, the doctrine protects "documents or tangible things"; (2) "by or for another party or for that party's representative" and (3) "in anticipation of litigation or for trial."9 But this protection is weaker than an evidentiary privilege: "work product shielded by the doctrine is not privileged, but instead 'is given qualified protection from discovery as a concession to the necessities of the adversary system.'"10

Under Rule 26(b)(3), a party may obtain discovery of its adversary's work product upon a showing (1) of "substantial need of the materials in the preparation of his case"; and (2) "that he is unable without undue hardship to obtain the substantial equivalent of the materials by other means." The rule also instructs courts to afford greater protection to "opinion" work product, i.e., "the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation," than for ordinary or "fact" work product.11

The SJC has never enunciated a precise definition of "substantial need," and it did not do so in McCarthy. The court did, however, cite with approval a case that held that substantial need be established where the work product "at issue is central to the substantive claims in litigation."12 Presumably applying that standard, the court held that defendants had established a substantial need for the ordinary work product they sought because McCarthy's "injection of the discovery rule … put[] in play the state of her knowledge about the location of [the property] purchased by her in 1990."13

The court reasoned that the materials being withheld may have shown whether McCarthy and B&L knew or reasonably should have known about the actual location of the property over three years before she commenced her lawsuits, which would defeat the application of the discovery rule.14 The court also found that the defendants could not obtain a substantial equivalent of the materials sought because only the withheld materials potentially contained information about what McCarthy and B&L actually knew about the location of the property, and when they learned that information.15

McCarthy and B&L were ordered to produce several categories of fact work product, including B&L's billing records and documents relating to any title examination commissioned by B&L. A B&L attorney was also ordered to identify in writing (1) every deed, instrument, or other document B&L reviewed to determine the ownership of McCarthy's property before filing the Land Court action; (2) all documents that the title examiner provided to B&L before a certain date; and (3) all documents that B&L received from the title examiner and which it in turn provided to McCarthy. The court held that the mere identity of documents that are reviewed by an attorney, or provided to a client or by consultant, do not constitute opinion work product so long as there was no disclosure of any opinion or impressions formed based on the documents.

The SJC also ordered the B&L attorney to identify in writing the date when he became aware that McCarthy did not own or may not have owned the property she thought she bought in 1990. The court, however, shielded B&L from having to disclose any communications with McCarthy, and permitted B&L to redact any opinion work product contained in the documents that were ordered produced. By permitting B&L to redact its opinion work product, the SJC implicitly found that the defendants had not established the "extremely unusual circumstances" necessary to warrant the production of that material.

Ramifications Of McCarthy

Although it remains to be seen to what extent the McCarthy decision will affect discovery practice in Massachusetts, we can make some reasonable predictions. First, in cases where the discovery rule has been invoked, defendants are likely to more aggressively seek the production of work product to attempt to prove that plaintiffs had actual or constructive notice of the accrual of their claims outside the applicable limitations period. This means that work product arising out of any pre-litigation investigations into the existence of potential causes of actions will be targeted.

Parties, their counsel, and other representatives need to be aware that courts will afford privileged communications and opinion work product markedly more protection than fact work product. Thus, it would be advisable to incorporate fact work product into other forms of protected materials and communications wherever possible.

Second, courts will be called upon more often to define the term "substantial need." In McCarthy, the SJC did not enunciate a bright-line definition of that term, but instead appeared to endorse a definition providing that substantial need may be established where the work product "is central to the substantive claims in litigation." Any lawyer worth his or her salt can almost always make a plausible argument that an adversary's work product is central to the substantive claims or defenses in a lawsuit. But it is unlikely that courts will be overly indulgent in ordering a party to turn over work product to an adversary, which would undermine the central purpose of the work product doctrine. Without a clear standard, the issue of what substantial need means will have to be decided on a case-by-case basis.

Third, the cost of discovery will further increase if parties were to file more motions to compel the production of work product. With the proliferation of electronic documents and communications, privilege and work-product logs are becoming ever longer, often times listing hundreds, if not thousands, of entries. Litigants, in response, are seeking to test overly broad and questionable claims of privilege and work-product protection by filing motions to compel the production of documents on such logs. The McCarthy decision should only increase the incentive to file such motions.

1Ward v. Peabody, 380 Mass. 805, 817 (1980).
The abutters in the Land Court action prevailed after a bench trial. McCarthy's appeal of that judgment remains pending in the Appeals Court. SeeMcCarthy, 463 Mass. at 185 n.6.
463 Mass. at 186 (quoting trial court's decision).
The SJC did not "formulate a precise definition of at issue waiver" in Darius, and declined to do so as well in McCarthy. 463 Mass. at 191.
Id. at 191-92.
Id. at 192.
Id. at 193.
453 Mass. 293, 311-12 (2009) (quoting United States v. Adlman, 68 F.3d 1495, 1501 (2d Cir. 1995)).
Mass. R. Civ. P. 26(b)(3).
McCarthy, 463 Mass. at 194 (quoting Greenwald, et al, Testimonial Privileges § 2:1, at 2-3 to 2-4 (2005).
Mass. R. Civ. P. 26(b)(3). In Comcast, the SJC declined to decide whether the protection for opinion work product was absolute, or if opinion work product may be ordered disclosed "in rare or 'extremely unusual circumstances.'" 453 Mass. at 214-15 (citing Reporter's Notes to Rule 26(b)(3)). There is lower-court authority that opinion work product is discoverable in rare circumstances. See Rhodes v. AIG Domestic Claims, Inc., 20 Mass. L. Rptr. 491, 2006 WL 307911, *8 (Mass. Super. Ct. Jan. 27, 2006) (Gants, J.) (holding that opinion work product created by insurance company claims representatives because conduct of these claims representatives is at issue and the need for work product was compelling).
McCarthy, 463 Mass. at 191 (citing Madanes v. Madanes, 199 F.R.D. 135, 150 (S.D.N.Y. 2001)).
B&L's knowledge of the actual location of the property was directly relevant to the application of the discovery rule because an attorney's knowledge is generally imputed to the client. Id. at 196 & n.30.
Id. at 199-200.