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Heartland Consumer Products LLC v. Dineequity, Inc.

United States District Court, S.D. Indiana, Indianapolis Division

July 25, 2018



          Tim A. Baker United States Magistrate Judge

         I. Introduction

         At issue is Plaintiffs' motion to compel Defendants to produce 46 email exchanges that Defendants withheld as privileged, and in one instance as both privileged and work product. Plaintiffs argue that the email exchanges are neither privileged nor work product, and challenge Defendants' privilege log, arguing it gives inadequate information to establish that the communications are privileged. Plaintiffs also argue Defendants waived the attorney-client privilege by including a third party in their communications. The thrust of Plaintiffs' argument is that Defendants' privilege log describes business issues involving lawyers, rather than the exchange of legal advice.

         As discussed below, Defendants generally carry their burden of establishing that the withheld communications are privileged. However, for nine of the communications it is not clear what role an attorney played in the conversation. The Court will permit Defendants to submit the nine communications for in camera review.[1] Therefore, the Court denies Plaintiffs' motion [Filing No. 76] in part, pending in camera review of the nine communications.

         II. Background

         Plaintiffs Heartland Consumer Products LLC and TC Heartland, LLC, manufacture, market, and sell Splenda, which is a sucralose-based sweetener. As a part of this business, Plaintiffs own various Splenda trademarks. Plaintiffs allege that Defendants require their franchised and company owned stores to provide their customers a non-Splenda sucralose-based sweetener in a yellow packet similar to the yellow packets Plaintiffs use for Splenda. Plaintiffs allege Defendants infringe on their trademarks by confusing patrons at Defendants' stores into believing the sweetener in the yellow packets is Splenda. Plaintiffs contend that Defendants fail to provide sufficient cues that the packets do not contain Splenda, and fail to train their employees to dispel patrons' mistaken beliefs that the packets contain Splenda.

         Defendants[2] own and franchise Applebee's and International House of Pancakes restaurants. Defendants argue Plaintiffs do not and cannot own any trademark in the color yellow in connection with the Splenda mark. Defendants also contend there is no likelihood of confusion because their yellow sweetener packets are branded with the Applebee's and IHOP logos, and even if there were confusion with the Splenda mark, Splenda has become a generic term for sucralose sweetener.

         In their discovery, Plaintiffs have sought information related to Defendants' decision to use yellow packets for their sucralose sweetener. Defendants' response included a privilege log noting that they withheld exchanges with Centralized Supply Chain Services, LLC, claiming the exchanges were protected by attorney-client privilege and that one was also work-product. Plaintiffs and Defendants dispute the clarity of the relationship between CSCS and Defendants. Nonetheless, Plaintiffs and Defendants agree that CSCS is a distinct entity from Defendants and is the only authorized purchasing entity for Defendant DineEquity, Inc.

         CSCS and DineEquity entered into an agreement with non-party Domino for CSCS and Defendants to source sweeteners from Domino, including the yellow-packeted sucralose sweetener at the heart of this suit. Defendants contend that the withheld communications concern legal issues, including licensing and indemnification agreements, arising from negotiations between Domino on the one hand and DineEquity and CSCS on the other.

         Plaintiffs now seek to compel Defendants to produce 46 communications Defendants are withholding.

         III. Discussion

         Plaintiffs make three principal arguments in support of their motion to compel: 1) Defendants failed to provide enough information in their privilege log to show that the exchanges are covered by attorney-client privilege, 2) if the exchanges were privileged, the privilege was destroyed by the presence of a third party with whom Defendants did not have an identical common interest, and 3) the exchange marked as work product was not made in preparation for litigation.

         In discovery, parties are generally entitled to “obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case . . . .” Fed. R. Civ. P. 26(b)(1). Privileged matter may be withheld, but if a party believes that material has been improperly withheld, the party may move for the Court to compel production. See Fed. R. Civ. P. 26(b)(5)(A); Fed. R. Civ. P. 37(a); Local Rule 37-1. The party opposing a motion to compel has the burden to show the discovery requests are improper. Cunningham v. Smithkline Beecham, 255 F.R.D. 474, 478 (N.D. Ind. 2009).

         a. Facial Sufficiency of Defendants' Privilege Log

         Plaintiffs argue that Defendants' privilege log fails to provide enough information to show that the 46 documents contain privileged information. With respect to all 46 communications, Plaintiffs assert that “[t]he information provided does not explain that legal advice was actually solicited or received, who was seeking the legal advice from whom or what the legal advice was regarding.” [Filing No. 77, at ECF p. 9.] Plaintiffs also point to three specific communications for which no attorney is listed in the privilege log as being party to the communication, [3] and nine communications in which Defendants' attorneys were only listed in the “CC” line.[4] Defendants respond that their logs included the necessary information, and in some cases, information was accidentally omitted.

         Attorney-client privilege is a federal common law doctrine that allows people to withhold relevant “confidential communications made for the purpose of facilitating the rendition of professional legal services.” U.S. v. BDO Seidman, LLP, 492 F.3d 806, 815 (7th Cir. 2007) (quoting Proposed Fed.R.Evid. 503(b), 56 F.R.D. 183, 236 (1972)). Attorney-client privilege is a double-edged sword. On one hand, it is necessary because “[o]pen communication assists lawyers in rendering legal advice, not only to represent their clients in ongoing litigation, but also to prevent litigation by advising clients to conform their conduct to the law and by addressing legal concerns that may inhibit clients from engaging in otherwise lawful and socially beneficial activities.” Id. On the other, the privilege necessarily denies courts relevant information “in derogation of the search for the truth.” In re Grand Jury Proceedings, 220 F.3d 568, 571 (7th Cir. 2000). To keep these interests balanced, courts must strictly confine the privilege, and any application of attorney-client privilege must be “consistent with the underlying purposes” of the privilege. Upjohn Co. v. United States, 449 U.S. 383, 395 (1981).

         For a communication to be protected by attorney-client privilege, the communication must have been made “(1) in confidence; (2) in connection with the provision of legal services; (3) to an attorney; and (4) in the context of an attorney-client relationship.” BDO Seidman, 492 F.3d at 815.

         The party resisting production must expressly invoke the privilege 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.” Fed. R. Civ. P. 26(b)(5)(A)(i)-(ii). Parties commonly comply with the requirements for asserting a privilege by providing a privilege log such as described in In re ...

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