By the Court, GIBBONS, C.J.:
In this opinion, we consider whether a former chief executive officer of a corporation, who is now suing his former employer, is within a "class of persons" entitled to access the corporation's privileged documents for use in the litigation. We conclude that a corporation's current management is the sole holder of its attorney-client privilege, and thus, Nevada law does not allow for a judicially created class of persons exception to attorney-client privilege. Accordingly, we grant petitioners' request for a writ of prohibition in part to prevent real party in interest from using the purportedly privileged documents in the underlying litigation.
This matter arises out of real party in interest Steven C. Jacobs's termination as president and chief executive officer of Sands China Ltd. On or near the same day he was terminated, Jacobs gathered approximately 40 gigabytes of documents in the form of e-mails and other communications (the documents), which Jacobs continues to possess.
Approximately three months after his termination, Jacobs filed a complaint against petitioners Las Vegas Sands Corp. (LVSC) and Sands China Ltd., as well as nonparty to this writ petition, Sheldon Adelson, the chief executive officer of LVSC (collectively, Sands). In the complaint, Jacobs alleged that Sands breached his employment contract by refusing to award him promised stock options, among other things.
Almost nine months after filing his complaint, Jacobs disclosed, as an update on the status of document production, that he possessed the documents at issue in this writ petition. Shortly thereafter, the parties met and conferred regarding the documents, and Sands asserted that the material may be subject to Sands's attorney-client privilege and demanded that Jacobs return the documents. Jacobs, however, refused to return the documents.
Approximately one month after Jacobs disclosed that he possessed the documents, LVSC filed a motion for a protective order and for return of the documents.
The district court expressed concern that it could not consider LVSC's motion in light of the stay that this court had imposed on
Subsequently, LVSC filed a complaint (the second action) against Jacobs in the district court claiming theft/conversion of the documents and seeking preliminary and permanent injunctive relief. LVSC simultaneously filed a motion in the second action for a temporary restraining order and preliminary injunction or, in the alternative, for a protective order, again arguing that Jacobs took company documents containing attorney-client privileged communications without the authority to do so. The district court granted injunctive relief, prohibiting Jacobs from disseminating the documents to third parties for 14 days, in order to allow Sands to return to the original action and file an emergency writ petition with this court requesting a "carve out" from the underlying stay.
Six days after the hearing in the second action, LVSC filed an emergency writ petition with this court requesting a limited lift of the stay in order to pursue a protective order barring the use of the privileged documents and requiring their return. This court denied LVSC's emergency writ petition.
At a subsequent hearing in the second action, the district court made the determination that the subject matter was purely a jurisdictional discovery dispute that could be resolved in this case. Therefore, the district court dismissed the second action without prejudice,
The district court subsequently ordered the parties to establish an electronically stored information (ESI) protocol in the instant action that (1) directed Jacobs to turn over copies of the documents to an independent ESI vendor,
After extensive motion practice, the district court entered a formal ESI protocol in which it appointed an independent ESI vendor, and ordered Jacobs to provide the ESI vendor a full mirror image of the documents. Pursuant to the ESI protocol, Sands received the documents from the independent ESI vendor, reviewed the documents for privileges, and completed a privilege log. Shortly after receiving Sands's privilege log, Jacobs
In opposition, Sands argued that pursuant to NRS 49.045 and 49.095, Sands was the sole holder of the attorney-client privilege, and it had not waived that privilege.
The district court grants Jacobs's motion, ruling that Jacobs is among the "class of persons" legally entitled to view and use privileged documents that pertain to his tenure at Sands China
The district court granted Jacobs's motion to return the documents from the independent ESI vendor based on the legal conclusion that Jacobs was within a class of persons legally allowed to view and use the purportedly privileged documents. The district court order stated that it did not need to address "whether any of the particular documents identified by [Sands] are subject to some privilege ..., whether Jacobs has the power to assert or waive any particular privileges that may belong to [Sands] ... or whether [Sands] waived the privilege." Rather, the district court ruled:
Based on this "class of persons" exception, the district court granted Jacobs's motion to return the remaining documents from the independent ESI vendor. Two days later, Sands filed this original petition for writ of prohibition or mandamus, asking that this court direct the district court to vacate its order permitting Jacobs to use the documents in the underlying litigation.
As a preliminary matter, Jacobs argues that writ relief is unavailable because Sands failed to appeal the district court's ruling in the second action. Jacobs argues that a district court's refusal to grant an injunction is immediately appealable and that "writ relief is not available to correct an untimely notice of appeal." Pan v. Eighth Judicial Dist. Court, 120 Nev. 222, 224-25, 88 P.3d 840, 841 (2004); see also Bradford v. Eighth Judicial Dist. Court, 129 Nev. ___, ___, 308 P.3d 122, 123 (2013).
While this is generally a correct statement, in this case, the district court's interim order actually granted relief by prohibiting Jacobs from disseminating the documents to third parties for 14 days. This afforded Sands the time to use the ESI protocol in the underlying action to review the documents and assert any applicable privileges. In addition, the district court's ruling in the second action did not reach the merits of the "class of persons" exception to the corporate attorney-client privilege issue raised in this writ petition; it instead ruled that Sands needed to pursue its privileges in this case. Thus, any appeal of the district court's ruling in the second action would not preclude this current writ petition. As a result, we are not persuaded by Jacobs's argument that Sands should be estopped from filing this writ petition.
Additionally, even if we were to construe the district court's order as adverse to Sands, the district court had not consolidated the
"A writ of prohibition may issue to arrest the proceedings of a district court exercising its judicial functions when such proceedings are in excess of the jurisdiction of the district court." Club Vista Fin. Servs., L.L.C. v. Eighth Judicial Dist. Court, 128 Nev. ___, ___ & n. 6, 276 P.3d 246, 249 & n. 6 (2012) (explaining that discovery excesses are more appropriately remedied by a writ of prohibition than mandamus). Although this court will generally decline to review issues involving discovery disputes, this court has elected to intervene in discovery matters when (1) the trial court issues a blanket discovery order without regard to relevance, or (2) a discovery order requires disclosure of privileged information. Valley Health Sys., L.L.C. v. Eighth Judicial Dist. Court, 127 Nev. ___, ___, 252 P.3d 676, 679 (2011).
Although Jacobs already possesses the purportedly privileged documents, this case nevertheless presents a situation where, if Jacobs were improperly permitted to use the documents in litigation, "the assertedly privileged information would irretrievably lose its confidential and privileged quality and petitioners would have no effective remedy, even by a later appeal." Wardleigh v. Second Judicial Dist. Court, 111 Nev. 345, 350-51, 891 P.2d 1180, 1183-84 (1995). Thus, we choose to exercise our discretion to consider this writ petition because the district court order at issue permits adverse use of purportedly privileged information. See Valley Health, 127 Nev. at ___, 252 P.3d at 679; see also Aspen Fin. Servs., Inc. v. Eighth Judicial Dist. Court, 128 Nev. ___, ___, 289 P.3d 201, 204 (2012) ("[W]rit relief may be available when it is necessary to prevent discovery that would cause privileged information to irretrievably lose its confidential nature and thereby render a later appeal ineffective."). Accordingly, we now turn to the merits of Sands's petition.
Generally, discovery issues "are within the district court's sound discretion, and [this court] will not disturb a district court's ruling regarding discovery unless the court has clearly abused its discretion." Club Vista, 128 Nev. at ___, 276 P.3d at 249. But here, the parties dispute the proper scope of the attorney-client privilege, which, in Nevada, is governed primarily by statute. See NRS 49.035-.115. Statutory interpretation is a question of law subject to our de novo review, even when arising in a writ proceeding. Int'l Game Tech., Inc. v. Second Judicial Dist. Court, 124 Nev. 193, 198, 179 P.3d 556, 559 (2008); see also United States
"Generally, when a statute's language is plain and its meaning clear, the courts will apply that plain language." Leven v. Frey, 123 Nev. 399, 403, 168 P.3d 712, 715 (2007). But when a statute is susceptible to more than one reasonable interpretation, it is ambiguous, and this court must resolve that ambiguity by looking to legislative history and "construing the statute in a manner that conforms to reason and public policy." Great Basin Water Network v. Taylor, 126 Nev. 187, 196, 234 P.3d 912, 918 (2010).
Here, Sands argues that the plain language of NRS 49.095 unambiguously guarantees a client the right "to prevent any other person from disclosing" privileged communications. Thus, Sands argues that given the broad language used in the statute, Nevada law does not allow for a "class of persons," other than the client itself, to use or disclose privileged documents over a client's assertion of privilege. While we agree that NRS 49.095 unambiguously guarantees a client the right "to prevent any other person from disclosing" privileged communications, we note that this right belongs to the client — a term defined by NRS 49.045.
NRS 49.045 defines "client" as "a person, including a public officer, corporation, association or other organization or entity, either public or private, who is rendered professional legal services by a lawyer, or who consults a lawyer with a view to obtaining professional legal services from the lawyer." (Emphasis added.) In a corporate context, a client corporation is not a living entity that can make decisions independently — people have to make decisions on its behalf. Thus, the issue we are faced with is the appropriate scope of persons who have the authority to assert a corporation's privilege and whether an exception should exist when a corporation's current management attempts to assert the attorney-client privilege against a former officer or director. Other courts have addressed this issue, with varying results.
Sands argues that the district court erred because the attorney-client privilege belongs exclusively to the client corporation's current management, and thus Jacobs's status as former CEO alone does not entitle him to access and use Sands's privileged communications in litigation. See Commodity Futures Trading Comm'n v. Weintraub, 471 U.S. 343, 348-49, 105 S.Ct. 1986, 85 L.Ed.2d 372 (1985); Montgomery v. Entreppid Techs., L.L.C., 548 F.Supp.2d 1175, 1187 (D.Nev. 2008). Sands contends that the district court's order is inconsistent with the purpose of attorney-client privilege because allowing former employees to use the company's privileged documents against it in litigation would chill officers' and directors' willingness to communicate candidly with counsel. See Upjohn Co. v. United States, 449 U.S. 383, 389, 101 S.Ct. 677, 66 L.Ed.2d 584 (1981); Dexia Credit Local v. Rogan, 231 F.R.D. 268, 277 (N.D.Ill.2004) ("To rule otherwise would defeat that expectation, and could chill the willingness of control group members to speak candidly on paper (or, these days, in electronic media) about privileged matters, knowing that some day one of their number may leave the control group and become adverse (whether through litigation or business activity) to the corporation.").
The collective corporate client exception to corporate attorney-client privilege is based
Jacobs argues that the district court's decision is amply supported by caselaw adopting the collective corporate client exception to corporate attorney-client privilege. Jacobs primarily relies on People v. Greenberg, 50 A.D.3d 195, 851 N.Y.S.2d 196, 200-02 (App. Div.2008). In Greenberg, the New York Attorney General's office filed a complaint against AIG and its former CEO and CFO for their involvement in alleged sham insurance transactions. The former CEO and CFO served document requests on AIG seeking documents created during their tenure as officers and directors of AIG for use in their defense. Id. at 197-98. In evaluating the issue, the court separated attorney-client communications into "two categories: general business matters and the four transactions at the heart of this action." Id. at 200. The court found that while the corporation's current board of directors controlled the attorney-client privilege regarding "general business matters," a former director may inspect records that are "necessary to protect their personal responsibility interests." Id. at 201. Thus, the court found that former executives were "within the circle of persons entitled to view privileged materials without causing a waiver of the attorney-client privilege" because they were "privy to, and on many occasions actively participated in, legal consultations regarding the four subject transactions...."
Sands primarily cites two cases for its proposition that the corporation's current management is the sole holder of the attorney-client privilege: Weintraub, 471 U.S. 343, 105 S.Ct. 1986, and Montgomery, 548 F.Supp.2d 1175. In Weintraub, the Supreme Court considered whether managers of a bankrupt corporation could assert the attorney-client privilege on behalf of the corporation or if, instead, the right to assert and waive the privilege passed to the bankruptcy trustee. 471 U.S. at 349, 105 S.Ct. 1986. The Court framed the issue before it as "which corporate actors are empowered to waive the corporation's privilege."
Similarly, in Montgomery, the federal district court for the district of Nevada found that a former officer may not access his former employer's privileged communications for use in his lawsuit against his former employer. 548 F.Supp.2d at 1187. Dennis Montgomery, the plaintiff, who was a member
Id. at 1187.
It appears that the modern trend in caselaw follows the Weintraub, Milroy, and Montgomery line of cases. See Montgomery, 548 F.Supp.2d at 1186 (noting that "many more courts have rejected the reasoning in Gottlieb than in Milroy"); Nunan v. Midwest, Inc., No.2004/00280, 2006 WL 344550, at *7 (N.Y.Sup.Ct. January 10, 2006) ("Although there is discredited authority to the contrary ... most of the more recent cases embrace the view that, when a former officer or director is suing the company for his or her own personal gain, the privilege belongs to the corporation and if asserted is effective to prevent disclosure to the former officer or director." (internal citations omitted)).
More importantly, we are persuaded by the policy behind the Weintraub, Milroy, and Montgomery line of cases and conclude that it is consistent with Nevada privilege law. Allowing a former fiduciary of a corporation to access and use privileged information after he or she becomes adverse to the corporation solely based on his or her former Fiduciary role is entirely inconsistent with the purpose of the attorney-client privilege.
Thus, we conclude that the district court erred when it applied the collective corporate client approach to find that Jacobs was within a class of persons legally allowed to use Sands's purportedly privileged documents in the prosecution of his claims. We therefore grant Sands's petition for a writ of prohibition in part and direct the district court to vacate its June 19, 2013, order granting the return of the documents from the independent ESI vendor. We note that the district court has yet to make a determination as to
We conclude that a corporation's current management controls the privilege "to refuse to disclose, and to prevent any other person from disclosing, confidential communications." This precludes a finding that there is a class of persons outside the corporation's current officers and directors who are entitled to access the client's confidential or privileged information over the client's objection for use in litigation. Therefore, we conclude that the district court erred when it employed the collective corporate client exception to corporate attorney-client privilege in ruling that Jacobs, solely based on his former executive position with Sands China, was legally allowed to use the purportedly privileged documents over of Sands's claim of privilege.
We therefore grant Sands's writ petition in part and direct the clerk of this court to issue a writ of prohibition ordering the district court to halt the return to Jacobs of the purportedly privileged documents.
We concur: HARDESTY, DOUGLAS, CHERRY and SAITTA, JJ.