McMaster's communication with NAAG kept confidential

John O'Brien Apr. 13, 2010, 12:37pm


COLUMBIA, S.C. (Legal Newsline) - Communication among the nation's state attorneys general can be kept confidential under the attorney-client privilege, the South Carolina Supreme Court has ruled.

The justices overturned a lower court decision Monday in a case involving South Carolina Attorney General Henry McMaster and a tobacco company that wanted access to certain documents. South Carolina is one of the 46 states that signed 1998's Tobacco Master Settlement Agreement.

McMaster apparently sought advice on the case from the National Association of Attorneys General.

"As the (administrative law court) noted, the AG has not 'retained' the NAAG attorneys in this matter or with respect to the disputed documents," Chief Justice Jean Hoefer Toal wrote.

"However, the AG is a paid member of the NAAG, and NAAG staff attorneys are available to provide legal advice relating to the MSA and tobacco regulation and enforcement.

"Thus we hold that the attorney-client privilege may apply to this very narrow factual scenario because the AG, as a paid member, has solicited the NAAG attorneys for legal advice and consultation on matters relating to the tobacco litigation, the MSA, subsequent enforcement of the MSA, and tobacco regulation."

Forty-six states signed the MSA, which requires tobacco companies to make annual payments to the states to compensate for costs associated with health problems caused by smoking. It has an estimated worth of $246 billion over its first 25 years.

The South Carolina case involves Tobaccoville, an importer and distributor of Seneca brand cigarettes. It was the excluse off-reservation importer of Seneca, while Native Wholesale Supply was the exclusive on-reservation importer.

In 2007, McMaster concluded that Native Wholesale Supply was selling Seneca cigarettes off-reservation and told Tobaccoville that it no longer qualified as a tobacco product manufacturer under the terms of the MSA.

McMaster told Grand River Enterprises Six Nations, the maker of Seneca, that it would have to be certified as a TPM instead. Tobaccoville appealed that decision.

During the ALC proceeding, McMaster appealed a ruling that required him to turn over what he felt were confidential documents.

The state Supreme Court agreed with two of his arguments, the attorney-client privilege and the common interest doctrine, and remanded the case.

"We find the AG has a common interest with the other settling state attorneys general in matters relating to the MSA and tobacco regulation and litigation," Toal wrote.

"The settling state attorneys general and the NAAG are working together to have uniform tobacco regulations and enforcement of the MSA. Accordingly, if the documents were privileged and thus exempt from production, that privilege was not waived when the AG shared the information with other state attorneys general."

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