JACKSON, Miss. (Legal Newsline) – The Supreme Court of Mississippi has overturned a chancery court’s order that required a medical company to show privileged documents.
Fresenius Medical Care Holdings Inc. and Fresenius USA Inc., which operate dialysis treatment clinics throughout the United States, were facing a lawsuit over allegedly engaging in unfair and deceptive trade practices in connection with a product named GranuFlo, which is used to create a dialysis fluid.
“Because the (DeSoto County Chancery Court) ordered the public relations documents to be produced as a whole without sufficiently analyzing each item and each claim of privilege, we reverse the Chancery Court’s order on the present issue and remand for further consideration and findings,” the opinion stated.
The state of Mississippi brought the lawsuit against Fresenius in 2014, alleging that Fresenius had violated the Mississippi Consumer Protection Act by providing false product information and misrepresenting or concealing the risks associated with GranuFlo.
“Today, a batch of discovery disputes arising between the state and Fresenius reach the court on interlocutory appeal,” the Sept. 9 opinion stated.
According to the Supreme Court, Fresenius argued that the DeSoto County Chancery Court erred in ordering Fresenius to produce privileged documents based on a determination that the documents already provided by Fresenius were inadequate.
The opinion said Fresenius frames the error as “'whether the Chancery Court abused its discretion in imposing the drastic sanction of waiver based on a perceived deficiency in Fresenius’s privilege log.'”
According to the opinion, Fresenius believes the Chancery Court applied the wrong legal standard in evaluating the adequacy of Fresenius’ privilege log as to email chains and attachments and it committed a clear error of judgment by imposing a sanction of waiver because the record does not support any finding of willful misconduct.
The Supreme Court said the Chancery Court ordered Fresenius “'to produce all documents enumerated [in its order] which concern public relations, media management, and customer talking points[.]'”
The Chancery Court argued that Fresenius failed to meet its burden of proving that the public relations documents were privileged, the Supreme Court said.
The Supreme Court said Fresenius argues that the public relations documents are protected by the attorney-client privilege because they are communications between Fresenius employees and Fresenius’ in-house counsel about appropriate public statements for the company to make about GranuFlo.
“Fresenius also argues that the public relations documents also are protected by the work product doctrine because they were prepared in anticipation of litigation involving GranuFlo,” the opinion stated. “Fresenius also argues that the Chancery Court did not address the work product doctrine as to the public relations documents in its order.”
Fresenius described the public relations documents as “emails between Fresenius employees and in-house counsel concerning proposed company statements to third parties to allegations about GranuFlo."
The Supreme Court agreed with the description.
“The documents, some of which were never used, generally consist of three types: drafts of press releases, customer talking points and communications to the non-media, third parties outside Fresenius,” the opinion states.
The Supreme Court said it reverses the Chancery Court’s order with respect to the public relations documents and remands for further proceedings consistent with the opinion, but it affirms the Chancery Court’s judgments in all other respects.