Paulus v. J-M Manufacturing (Cal. App. Second District, Division Four) June 8, 2017

William Paulus’ representatives sued J-M Montgomery (J-MM) for asbestos related wrongful death from products J-M Montgomery manufactured.  In opposing J-MM’s motion for summary judgment, Paulus’ attached a confidential memorandum from J-MM’s counsel to a J-MM Executive discussing J-MM’s exposure from asbestos containing products. The trial court refused to seal the records and noted that the attorney client privilege attached to the memorandum in Paulus’ submission even if the records were not sealed.

The memorandum from J-MM’s counsel soon appeared in a number of cases.  It may have been inadvertently produced or may have been taken by plaintiffs, according to J-MM”s counsel.

J-MM offered that it had done all it could to protect the privilege, including moving to seal the California Court records three years after settlement.  

Plaintiffs throughout the United States argue that the availability of the document through the docket in the Paulus case constitutes a waiver of the privilege, particularly as the document is available publicly through commercial legal research services.

Considering J-MM’s three years’ post-settlement motion to seal, the trial court noted that the First Amendment’s judicial access principles generally preclude withholding from public view documents and records relating to civil litigation.  This is not true of privileged material but here, the disclosure of the privileged material had been known for several years, but J-MM took no steps toward remediation.

The trial court concluded that proceedings to seal motions cannot be delayed nor can they be utilized to seal materials already in the public record. J-MM’s better course is to move for protective orders in the cases where the memorandum is introduced.

On appeal, the court noted that the trial court ruled on the merits of the settlement motion to seal but did not considers its jurisdiction, which it lacked. The motion was post settlement and was not in aid of settlement enforcement, which was, at the time, the only remaining jurisdiction that the trial court had.

Nonetheless, the appellate court found no abuse of discretion in the trial court’s post-settlement ruling.  Privileged materials may retain protection when steps to ensure that protection are timely taken.  No action was taken at the  time of initial discovery of the disclosure and no further action was taken until three years after settlement, although at the time of settlement it was known that the document had been widely disseminated and was in use in other litigation.  

Paulus v. J-M Mfg. Co. (Cal. App., 2017)

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