A Cautionary Tale on How Not to Sponsor a Scientific Study for Litigation

Weitz & Luxenberg P.C. v. Georgia-Pacific

Earlier this month, the First Department of the New York Appellate Division upheld a trial court’s ruling that a former manufacturer of an asbestos-containing product, Georgia-Pacific LLC (G-P), must produce underlying data from eight published research studies, funded by the company.  These studies apparently addressed health outcomes from the use of the company’s product, a joint compound, or from its chrysotile asbestos component.  The trial court had also ordered an in camera review of various other documents on G-P’s privilege log.  Weitz & Luxenberg P.C. v. Georgia-Pacific LLC, 2013 WL 2435565, 2013 NY Slip Op 04127 (June 6, 2013)

The appellate court accepted that G-P had funded the eight studies as part of its legal defense to asbestos personal injury litigation.  The studies at issue involved recreating G-P’s asbestos-containing joint compound to assess biopersistence and pathogenicity of its (past) chrysotile content.  According to the Appellate Division’s opinion, G-P was closely involved in the development of the published articles.  G-P’s Director of Toxicology and Chemical Management, Stewart Holm, became a contractor to provide “consulting services” to G-P’s in-house counsel.  Both Holm and in-house counsel were involved in pre-publication review of the articles.

G-P claimed attorney-client and work-product privilege to resist production of documents that reflected communications with consulting experts or legal staff.  The Special Master directed an in camera review of documents on G-P’s privilege log, and the production of the underlying data and materials from the studies.  The motion court refused G-P’s motions to vacate the Special Master’s recommendations, and to reconsider.

The trial and appellate court rulings seem fairly straightforward except that the appellate court omitted serious consideration of the existence and scope of the privilege, and focused upon the applicability of the crime-fraud exception.  This exception requires that the legal advice, sought to be protected, involves some fraudulent scheme or wrongful conduct, but the court seemed all too willing to engage in an analysis of the applicability of the exception before it considered whether the privilege applied in the first place.   

The Appellate Division held that the plaintiffs had made a sufficient “showing of a factual basis adequate to support a good faith belief by a reasonable person that in camera review of the materials may reveal evidence to establish the claim that the crime-fraud exception applies.” Slip op. at 4.  Here is how the appellate court described the plaintiffs’ claim that the attorney-client privilege had been lost:

Holm co-authorized nearly all of the studies, which were intended to cast doubt on the capability of chrysotile asbestos to cause cancer. On the two articles that he did not co-author, he [*4]and GP’s counsel participated in lengthy ‘WebEx conferences’ in which they discussed the manuscripts and suggested revisions. Despite this extensive participation, none of the articles disclosed that GP’s in-house counsel had reviewed the manuscripts before they were submitted for publication. Two articles falsely stated that ‘[GP] did not participate in the design of the study, analysis of the data, or preparation of the manuscript’. For articles lead-authored by David M. Bernstein, Ph.D., and co-authored by Holm, the only disclosure was that the research was ‘sponsored’ or ‘supported’ by a grant from GP. The articles did not disclose that Holm was specially employed by GP for the asbestos litigation or that he reported to GP’s in-house counsel. Furthermore, there were no grant proposals, and Dr. Bernstein was hired by GP on an hourly basis. Nor did the articles reveal that Dr. Bernstein has been disclosed as a GP expert witness in NYCAL since 2009, that he had testified as a defense expert for Union Carbide Corporation in asbestos litigation, or that he had been paid by, and spoken on behalf of, the Chrysotile Institute, the lobbying arm of the Quebec chrysotile mining industry. Although GP belatedly endeavored to address the inadequacies of certain of its disclosures, its corrections failed to acknowledge its in-house counsel’s participation and did not make clear that Dr. Bernstein’s testimony as an expert witness preceded the publication of the first GP reformulated joint compound article in 2008.”

The court was obviously concerned that G-P in-house counsel was involved in the publication process, and that this involvement was not disclosed. Slip at 4, citing United States v. Philip Morris USA, Inc., 449 F. Supp. 2d 1 (D. D.C. 2006) (applying fraud-crime exception to tobacco industry), aff’d in relevant part, 566 F.3d 1095 (D.C. Cir. 2009), cert. denied, 130 S.Ct. 3501 (2010).

What Appellate Division appeared to overlook is whether the attorney-client privilege applied in the first place.  In her initial recommendation, Special Master Laraine Pacheco gave careful consideration to the logically prior question whether the disputed materials were “legal” such that any privilege even attached to the disputed materials in the first place. See Recommendation of Special Master at 3, citing United States Postal Serv. v. Phelps Dodge Ref. Corp., 852 F. Supp. 156, 160 (E.D.N.Y. 1994) (“Defining the scope of the privilege for in-house counsel is complicated by the fact that these attorneys frequently have multi-faceted duties that go beyond traditional tasks performed by lawyers. . . . Needless to say, the attorney-client privilege attaches only to legal, as opposed to business, services. The communication must be made to the attorney acting in her capacity as counsel. If the communication is made to the attorney in her capacity as a business adviser, for example, it ought not be privileged”); In re Grand Jury Subpoena, 599 F.2d 504, 511 (2d Cir. 1979) (“Participation of the general counsel does not automatically cloak the investigation with legal garb”). The Special Master seemed to think that there was no privilege, which stood in need of an exception.

The Special Master also noted that no privilege attaches to materials that were intended for ultimate publication: 

 “New York of course accepts the unremarkable proposition that if a client communicates to the lawyer with the intent that the communication is to be released to the public, that communication is not privileged.”

Recommendation at 3, citing In re New York Renu with Moistureloc Prod. Liability Litig. , 2008 U.S. Dist. LEXIS 88515, at *5, 14 (D.S.C. May 8, 2008) (applying New York law) (relying on Michael M. Martin, et al., New York Evidence Handbook  318 (2d ed. 2002)).  Furthermore, there was a question whether G-P had waived its privilege claim by selectively producing some documents that it wanted to put into the record of the case.  Id.  The Special Master’s points appear important and persuasive, but the Appellate Division skipped over them in order to address the exception, which assumes that the privilege applies in the first place.

American Law Institute (ALI), The Law Governing Lawyers § 68 (1998). The mere participation of in-house counsel is not dispositive of the question.  The privilege applies to communications made for the purpose of obtaining legal advice. In-house lawyers are often consulted for advice on non-legal issues.  Courts have thus been drawn in to controversies over sorting out whether the communication was engaged in for purpose of obtaining “legal assistance.” ALI § 72. The law acknowledges that communications may have multiple purposes and motives, but the predominant function of the communication must relate to legal advice if it is to retain its privileged status. ALI § 72, comment c.

In Burton v. R.J. Reynolds Tobacco Co., both the magistrate and district judges accepted, as a general principle:

 “An analysis of scientific data may be the subject of a privileged communication. To establish that such communications are protected by the attorney-client privilege there must be a connection between the scientific information which is the subject of the communication and the rendering of legal advice.”

200 F.R.D. 661, 668 (D. Kan. 2001). The court, however, proceeded to analyze the disputed claims of privilege and rejected most of them on grounds that the attorney communications were not in response to requests for legal advice. For instance, the court rejected the claim of privilege for a memorandum, written by an RJR scientist who assisted RJR patent lawyers as a scientific paralegal. The RJR scientist commented on “patentability,” but the court found that the document primarily concerned scientific research with no connection to the rendering of legal advice. Id. at 670. Even stingier was the court’s interpretation of a memorandum from RJR’s CEO to its general counsel, which discussed outside counsel’s recommendation that the company “should fund additional medical research in order to gain additional facts that [it]] can use to defend [itself] against [its] critics.” The court characterized the referenced advice as relating to public relations advice, not legal counsel. Id. at 672.

In the Vioxx MDL, Judge Fallon struggled with the issue whether many of activities of in-house counsel were truly “legal,” especially when the attorney communications were comments and edits of “scientific reports, articles accepted for publication in noted journals, and research proposals,” or word choice comments in scientific articles and study proposals. In re Vioxx Prods. Liab. Litig., 501 F.Supp. 2d 789, 800, 802 (E.D.La. 2007)(“We could not see the legal significance of these comments… .”).

Merck advanced a theory that the pharmaceutical industry was so pervasively regulated that the court should assume that its in-house lawyers were providing legal advice in making such comments and edits. Special Master Rice, a noted privilege scholar appointed to review the privilege claims, and Judge Fallon, never accepted Merck’s blanket rationale, although they did acknowledge that some service, initially appearing to be non-legal (such as “commenting upon and editing television ads and other promotional materials”) could in fact be legal advice when understood in the context of the pharmaceutical industry’s regulatory framework. Id. (citing Vodra et al., “The Food and Drug Administration’s Evolving Regulation of Press Releases: Limits and Challenges,” 61 Food & Drug L.J. 623 (2006)).

Concerned that such a blanket justification would seriously curtail discovery, the Special Master and the MDL Court insisted that Merck, in claiming a privilege, carry its burden to show that each document was, in fact, a confidential communication of legal advice. Id. The Special Master professed to be receptive to Merck’s evidence that, in the context of the highly regulated pharmaceutical industry, in-house counsel’s extensive changes and commentary to technical and scientific matters were legal services. Id. at 811-12.  Judge Fallon, quoting from the Special Master Rice’s report, noted that:

 “The responsive communication from the attorney is protected only to the extent that the response reveals the content of the client’s prior confidential communication.”

In re Vioxx Prods. Liab. Litig., 501 F.Supp. 2d 789, 795 (E.D.La. 2007).  As a result, an attorney’s transmission to the client of information obtained from third-parties is not privileged. Id. at 796. Similarly, the derivative nature of the privilege may lead to a refusal to apply it to in-house lawyers’ line edits of a non-privileged document, which was circulated to other corporate employees outside the legal department. Id.

The Vioxx analysis shows that the presumption that in-house or outside (or out-house) counsel are writing to provide legal advice, in response to client communications can be lost.  When the communications at issue are not for the purpose of providing legal advice, there may well be no protection under the attorney-client privilege.  In re Vioxx Prods. Liab. Litig., 501 F.Supp. 2d 789, 797 n. 12 (E.D. La. 2007)(quoting Special Master Rice, who was quoting from his treatise at § 7.28). See also . In re Seroquel Prods. Liab. Litig., 2008 WL 1995058, at* 6- 7 (M.D. Fla. 2008) (rejecting “pervasive regulation” theory, and relying heavily upon Judge Fallon’s analysis in Vioxx).

The Appellate Division’s enthusiasm for accepting the existence of the privilege in Georgia-Pacific, and to except its application by the crime-fraud exception, is deeply troubling because the court left unclear exactly what G-P’s crime or fraud was.  Perhaps G-P had failed to disclose some of the above-quoted facts in its discovery, but the anemic disclosures are all-too-common in most publications.  They are hardly a crime.  No provision of the penal code was cited.  Although some of the suggested conduct is unseemly, it is not clearly a fraud.

The only supposed falsehood was that “[t]wo articles falsely stated that ‘[GP] did not participate in the design of the study, analysis of the data, or preparation of the manuscript’.”  Slip op. at 4.  The recited “good faith” belief does not suggest that G-P designed or analyzed the studies.  It is unclear whether G-P’s in-house counsel’s participation in a Webex conference realistically could be considered “preparing” a manuscript.  The court’s vague accusations leave unclear exactly what G-P did to design the study, analyze the data, or prepare the manuscript.  Such vague accusations would hardly pass the strictures of Federal Rule of Civil Procedure 9(b) (“Fraud or Mistake; Conditions of Mind. In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.”)

Work Product Protection

The Appellate Division’s decision was on firmer ground with respect to rejecting G-P’s asserted work-product protection for attorney mental impressions, writings, trial preparation materials, and the like.  As the court noted, there is a strong public interest in having disputes resolved on the basis of complete, accurate information.  Slip op. at 6, citing In re American Tobacco Co., 880 F.2d 1520, 1529 (2d Cir 1989).  Of course, in the American Tobacco case, the Second Circuit upheld a subpoena (previously quashed by New York state courts) against Dr. Selikoff’s Environmental Sciences Department, at the Mt. Sinai School of Medicine.

In the case on appeal, the court noted that G-P had admitted to commissioning the studies in anticipation of litigation, and to having its trial counsel or its expert witnesses use the studies at trial.  Slip op. at 6.  The appellate court also held that the plaintiffs’ substantial need for the underlying data and related materials, and the prejudice from being denied access, were obvious.  The appellate court cast a broad, but not an unlimited net, for materials that would have to be produced.  “[T]he data, protocols, process, conduct, discussion, and analyses underlying these studies” must be produced, but not “any internal communications that portray its attorneys’ or consultants’ notes, comments or opinions.” Slip op. at 7.  The court identified the rationale for requiring production:

 “A significant expenditure of time and money would be required to duplicate the studies, if they could be exactly duplicated at all, whereas scrutiny of the underlying data may provide a permissible manner in which to attack the findings that would be consistent with the intent of the CMO to minimize the cost of and streamline discovery.”

Id.  Indeed, the lesson of the American Tobacco case, cited by the court, is that a party’s need and entitlement to underlying data and materials trumps even an independent researcher’s claim of “scholar’s privilege” or proprietary interest in data.  Litigants are entitled to everyman’s and everywoman’s evidence, even if they are scientists.  Courts may have to fashion protection to protect some of the scientists’ interests, but the wholesale denial of access to underlying data from published studies is, and should be, a relic of the past.

It is reflective of the Zeitgeist that the appellate court couched some of its rationale in corporation bashing:

 “Large corporations often invest strategically in research agendas whose objective is to develop a body of scientific knowledge favorable to a particular economic interest or useful for defending against particular claims of legal liability.”

Slip op. at 6, quoting from In re Welding Fume Prods. Liability Litig., 534 F.Supp. 2d 761, 769 n.10 (N.D. Ohio 2008). Well the litigation industry, a.k.a. the plaintiffs’ bar, similarly invests in its research agenda, as evidenced in any number of litigations, including asbestos, silicone, welding cases, etc.  More important, the plaintiffs’ bar has powerful interest proxies, such as support groups, labor unions, so-called public-interest groups, and captured governmental agencies, which are frequently involved in advocacy science.  The need for access to underlying data, protocols, questionnaires, research materials is not limited to plaintiffs or defendants in litigation.

Eight Articles

A Pubmed search turned up exactly eight articles for <S.E. Holm and asbestos>.  Two of the articles at issue did not have Holm as an author, so the following list is not identical to the eight articles at issue.

1. Exposures from chrysotile-containing joint compound: evaluation of new model relating respirable dust to fiber concentrations.

Brorby GP, Sheehan PJ, Berman DW, Bogen KT, Holm SE.

Risk Anal. 2013 Jan;33(1):161-76.

2. More on the dynamics of dust generation: the effects of mixing and sanding chrysotile, calcium carbonate, and other components on the characteristics of joint-compound dusts.

Berman DW, Brorby GP, Sheehan PJ, Bogen KT, Holm SE.

Ann Occup Hyg. 2012 Aug;56(7):852-67.

3. Chamber for testing asbestos-containing products: validation and testing of a re-created chrysotile-containing joint compound.

Sheehan PJ, Brorby GP, Berman DW, Bogen KT, Holm SE.

Ann Occup Hyg. 2011 Aug;55(7):797-809.

4. Quantification of the pathological response and fate in the lung and pleura of chrysotile in combination with fine particles compared to amosite-asbestos following short-term inhalation exposure.

Bernstein DM, Rogers RA, Sepulveda R, Donaldson K, Schuler D, Gaering S, Kunzendorf P, Chevalier J, Holm SE.

Inhal Toxicol. 2011 Jun;23(7):372-91.

5. Potential artifacts associated with historical preparation of joint compound samples and reported airborne asbestos concentrations.

Brorby GP, Sheehan PJ, Berman DW, Bogen KT, Holm SE.

J Occup Environ Hyg. 2011 May;8(5):271-8.

6. The pathological response and fate in the lung and pleura of chrysotile in combination with fine particles compared to amosite asbestos following short-term inhalation exposure: interim results.

Bernstein DM, Rogers RA, Sepulveda R, Donaldson K, Schuler D, Gaering S, Kunzendorf P, Chevalier J, Holm SE.

Inhal Toxicol. 2010 Sep;22(11):937-62.

7. Re-creation of historical chrysotile-containing joint compounds.

Brorby GP, Sheehan PJ, Berman DW, Greene JF, Holm SE.

Inhal Toxicol. 2008 Sep;20(11):1043-53.

8. A biopersistence study following exposure to chrysotile asbestos alone or in combination with fine particles.

Bernstein DM, Donaldson K, Decker U, Gaering S, Kunzendorf P, Chevalier J, Holm SE.

Inhal Toxicol. 2008 Sep;20(11):1009-28.


I thank William Ruskin for calling my attention to this interesting case in his blog post about the Weitz & Luxenberg v. Georgia-Pacific case.

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