A January Hypothetical
Navigating disclosure and public records confidentiality during litigation
Let’s imagine the following hypothetical. An employee has an email account. They do their work through the account. Their employer pays for the account. At the bottom of their email signature is a disclaimer that says all the information contained in the above email is privileged and confidential, and if an unwitting recipient has received the email the disclaimer says to notify the employee. The employee is doing everything right. They even report phishing emails to their IT!
On holiday the employee’s manager calls. The manager is desperate because a deal they are working on is falling through. Their manager tells them that the deal’s obstacle is legal risk. Luckily, the employee still has their phone, they still have the internet, and they still have access to their work email. They stay up ten, twelve hours firing off emails at all hours of the night.
For the sake of the hypothetical, let’s say that the financing is contingent on the title insurance agent’s due diligence. The manager’s concern is that the title insurance agent is not working diligently. The employee corresponds with the title insurance agent. The title insurance agent details what work the title insurance agent performed. The employee confidently tells his company’s side that the legal risk is small. The company proceeds with the deal with the opposing party, etc.
The deal goes through. Most are happy. The client is happy. The other side is happy. The manager gives the employee an “atta boy!” Who isn’t happy is the employee. Bills aren’t paid with atta boy’s. Bills are paid with money, and the employee’s holiday was ruined. But that’s a hypothetical for another time.
Later, but not much later, the employee gets a call from their company’s legal compliance division. There is a question about the title insurance. The employee is still confident. They knew about the issue. They hired a title insurance agent. The employee has the agent’s email in their inbox. The employee explains their understanding of the title’s quality. The employee has an attached report from the insurance agent. “The title is good.”
The employee shows the company’s compliance program that they had sent along their own work product, employee signature and all, and the attached insurance agent report, as part of correspondence with the County Recorder and Clerk’s office. Some documents weren’t matching up and the employee cut the Gordian’s Knot by showing the county. The Recorder’s Office immediately realized it was the Recorder’s Office mistake and confirmed with the employee that the employee was right.
Then, weeks or months later, disaster strikes. An attorney calls.
Fly in the Ointment
The attorney has bad news. The deal fell through after signing, an agreement could not be reached, and litigation was amidst formal discovery. The employee, the attorney says, will be deposed.
The primary issue is the title.
The attorney is also confused. When the opposing party sent their demand letter, they included a screenshot of the employee’s email in the body of the letter. A screenshot of the same email was included again in the complaint, and yet again in the amended complaint. Importantly, the screenshot contains a Bates’ number format common to a particular Recorder’s Office. The opposing party must have received the employee’s email about the title sent to the Recorder’s Office.
The employee is adamant that they did not submit any formal applications or sign any waivers with the Recorder’s Office. Their correspondence was about the insurance agent’s work product, which went no further than correspondence with a clerk in the Recorder’s Office. The employee never sent anything they received from the Recorder’s Office to the opposing party, and the Recorder’s Office was not in the business of filing away miscellaneous correspondence in the deed room.
The employee is deposed. When questioned about the email, counsel for the employee’s company directs the employee not to answer questions about his review of the insurance agent’s report. The company’s attorney asserted the report was “privileged” and the review was “privileged” review. Later the same day, the attorney for the company sent an email requesting to “claw back for privilege” the employee’s email.
Attorneys for both sides start squabbling about the providence of the email. Opposing counsel claims that privilege, if it ever existed, was waived and in the first place there was no privilege between the Recorder’s Office and the employee.
How did this happen, what went wrong, and does anything happen to the employee now?
A Possible Answer
Since we are talking about a county recorder’s office (emphasis on county) let’s use Washington state’s public disclosure law codified at RCW 42.56. Let’s also use a made-up county name for fun. Let’s call it Disclosure County.
How did this happen and why did Disclosure County give up the email?
As implied by the Bates’ numbering, the opposing party filed a Public Records Request on Disclosure County’s Recorder’s Office under RCW 42.56. The search undertaken by the Recorder’s Office produced the emails. The Recorder’s Office never told the employee or the employee’s company.
“But I expected the Recorder’s Office to keep it secret, or at least to tell me!” claims the employee. “How is that legal?”
As it turns out, there is no exception in Washington’s Public Records Act for documents produced by a private party that end up in the hands of a public agency, even if those documents were privileged, or embarrassing, or could be used against the person who made them. There is also not an exception even if the documents were received or prepared in preparation for litigation.
There is also no statutory obligation for the opposing party or county to notify that the public disclosure request happened. First, an agency has the "option" to notify or not (unless notice is required by law). RCW 42.56.540. Second, if the agency acted in good faith, an agency cannot be held liable for its failure to notify enough people under the act. RCW 42.56.060.
Sometimes an agency may decide it must release all or a part of a public record affecting a third party. However, the RCW tells agencies they, the agency, “should have a reasonable belief that the record is arguably exempt.” Exemptions are very narrow, and unlike the Freedom of Information Act there is no free-standing catchall privilege exemption like FOIA’s Exemption 5.
In a very similar case to our hypothetical, an individual at a county jail sued the jail, the jail’s doctor, and the jail’s doctor’s contracting company for medical care the plaintiff received at the county jail’s hospital. The individual’s attorneys found a document submitted by the doctor to the jail explaining that the jail’s health service contractor had done “everything right.” Reading between the lines, the plaintiff’s attorneys wanted to hammer the doctor on how the medical company did “everything right” and the plaintiff still lost a leg.
The trial court reasoned that the doctor’s post-hoc explanation that he expected Pierce County employees would maintain the email's confidentiality was irrelevant. The court found that since there was no evidence that the health company and the county were parties to a common interest agreement there could not have been a reasonable expectation that the confidentiality of the email would be maintained.
In particular, the court wrote,
Given the County's duties under the Public Records Act, NaphCare's disclosure of the e-mail without any indication of its allegedly privileged status to Pierce County introduced a “reasonable probability[] that an opposing party may see the document[.]”
Tapia v. NaphCare Inc., C22-1141-KKE (W.D. Wash. Jan 17, 2024)
A Further Wrinkle
A close reader might notice an important distinction. The doctor in NaphCare Inc. had no “indication” of allegedly privileged status. When our hypothetical employee forwarded the email to Disclosure County, the email’s footer contained direction that confidentiality be maintained. The signature also said that if the recipient was not the intended receiver, then the receiver had to maintain confidentiality. The opposing party was not the intended recipient. The intended recipient was Disclosure County, and Disclosure County in fact received the email.
However, does a simple footer create an agreement that is a sufficient “indication” of confidentiality? Courts in Washington state are divided on the issue and evaluate very closely claims that Party A sending an email footer to Party B creates a commitment for Party B, especially when the two parties do not share a common interest. See, e.g., McKenzie L. Firm, P.A., 333 F.R.D. at 648 (defendant did not obtain any “assurance, commitment, or agreement to maintain the confidentiality of the communications exchanged”).
In other words, sometimes it works and sometimes it doesn’t. In our hypothetical, a footer is not enough because the Recorder’s Office and the due diligence employee share no common interests, and neither side could reasonably expect a shared litigation strategy. As referenced in a very fun case called In re Pac. Pictures Corp., which litigated a very similar footer issue, the court reasoned that even “a shared desire to see the same outcome in a legal matter” is not enough. Instead, “the parties must make the communication in pursuit of a joint strategy in accordance with some form of agreement.” In re Pac. Pictures Corp., 679 F.3d at 1129.
(As a separate point, the throwaway reference to the appearance of the email in the demand letter, the first complaint and the amended complaint is also a strong argument for waiver of privilege either way. Privilege objections have a real ‘use it or lose it’ vibe.)
A Final Possible Answer
The question, then, is how do sophisticated parties keep records confidential that they want confidential knowing that the records are being sent to public agencies that are subject to public record requests?
Here is one possible answer.
During Seattle’s CHOP/CHAZ, a portion of the City went through a prolonged period of upheaval. After CHOP/CHAZ, residents and business owners filed a lawsuit claiming the City’s actions deprived them, the residents and business owners, of money by essentially turning the residents’ portion of the City into a campground. The plaintiffs allege(d) a wide variety of issues, including nuisance and due process violations.
However, the same business owners are sensitive to the public relations aspect of suing the City of Seattle over something many support. For example, in the business owner’s lawsuit, they write:
Plaintiff supports free-speech rights and the efforts of organizations such as Black Lives Matter who, by exercising such rights, are bringing issues such as systemic racism and unfair violence against African Americans by police to the forefront of the national consciousness. [….] Plaintiff has donated to and sponsored fundraisers for Black Lives Matter, including in June 2020 [….]
Rather, this lawsuit is about Plaintiff’s constitutional and other legal rights of which were overrun by the City of Seattle’s decision to abandon and close off an entire city neighborhood, leaving it unchecked by the police, unserved by fire and emergency health services, and inaccessible to the public at large.
So as part of their litigation with the City of Seattle, they asked for and received the following language from the Court that was put in one of the Court’s status orders.
If the City receives a PRA request covering documents produced by Plaintiffs subject to this Protective Order, to the extent reasonably possible, the City agrees to provide Plaintiffs (via their undersigned counsel) at least 30 days' notice prior to producing any such documents, in order to provide Plaintiffs reasonable time to seek an injunction under RCW 42.56.540 prior to the City's production of any such documents to a PRA requestor.
3Pak LLC v. City of Seattle, 2:23-cv-00540-TSZ (W.D. Wash. Jan 17, 2024)
And that’s that!
Super interesting. I’ve always wondered how much power (if any) those little sentences under signature blocks have!