There are certain exclusion arguments that stand out as tending to work more often than others—things like a Rule 702 motion for failure to apportion, a motion to exclude a Doctrine of Equivalents argument offered for the first time in a reply expert report, or a motion to exclude an exhibit not on the exhibit list. It's not that they win every single time, but parties often seem to have an uphill battle against them.
Another argument on that list is "using privilege as a sword and a shield." It's not uncommon for a party to get perfectly relevant and otherwise admissible evidence excluded based on the opposing party's assertion of privilege on a related document. It's a good argument to make, if you have the chance.
We saw something like that again yesterday in Upsher-Smith Laboratories, LLC v. Zydus Pharmaceuticals (USA) Inc., C.A. No. 21-1132-GBW (D. Del. July 18, 2024), where Judge Williams addressed a motion in limine to exclude witness testimony related to a settlement agreement.
The party offering the testiomony had precluded discovery into documents related to the settlement agreement on privilege grounds, but then sought to offer a witness to testify about it:
According to Zydus, USL intends to call Mr. Eilefson to testify regarding the Settlement Agreement despite USL's refusal during discovery to produce any internal correspondence involving Mr. Eilefson on grounds that such documents were privileged attorney-client communications. Id. Thus, Zydus contends that, by calling Mr. Eilefson to testify, USL attempts to use attorney-client privilege as "both a sword and a shield." Id. (citing Pfizer v. Wanrer-Lambert Co., No. Civ. A. 17524, 1999 WL 33236240, at *1 (Del. Ch. Dec. 8, 1999) (finding under Delaware law that "a party cannot take a position in litigation and then erect the attorney-client privilege in order to shield itself from discovery by an adverse party who challenges that position"). Specifically, Zydus argues that USL asserted attorney-client privilege over hundreds of documents involving the Settlement Agreement at the center of this litigation to prevent Zydus from accessing the documents, and now intends to have Mr. Eilefson testify as to USL's internal discussions contained within those very documents.
Unsurprisingly, the Court rejected the opposing party's argument that the witness would testify only as to "factual" material that is not protected by privilege, and not as to the substance of withheld agreements:
USL concedes that Mr. Eilefson will testify to USL's "understandings, interpretations, and expectations regarding the Settlement Agreement." . . . Given Mr. Eilefson's role as Vice President of Legal Affairs, his knowledge of USL's "understanding, interpretations, and expectations" for the Settlement Agreement would necessarily implicate the internal communications and discussions that occurred during USL's negotiation of the Settlement Agreement. . . . While USL contends that Mr. Eilefson will not testify to the substance of any of the withheld documents, the Court agrees with Zydus that Mr. Eilefson's testimony will, at the very least, be based on and draw from his knowledge of the privileged internal communications. This raises clear concerns of prejudice, as Mr. Eilefson's testimony would come at the expense of Zydus who could not be expected to prepare a sufficient response to the testimony without the withheld documents. . . . By refusing to produce documents encompassing USL's internal discussions regarding the Settlement Agreement, USL striped Zydus of any ability "to probe the surrounding circumstances and substance" of Mr. Eilefson's testimony. . . .This, in turn, impedes Zydus' ability to cross-examine Mr. Eilefson on USL's "understandings, interpretations, and expectations" regarding the Settlement Agreement. While excluding Mr. Eilefson from providing any testimony would constitute an extreme form of relief, the prejudice to Zydus can be remedied only if US produces the documents regarding USL's negotiations and understanding of the Settlement Agreement that were previously withheld based on privilege.
The Court resolved the issue in an interesting way. It denied the motion, but gave the moving party the opportunity to re-raise its objection if the opposing party fails to produce the internal communications and offer the witness for an additional deposition:
Thus, it is HEREBY ORDERED that Zydus' motion in limine is DENIED WITHOUT PREJUDICE. If, by July 23, 2024, USL has not produced the privileged documents concerning the Settlement Agreement previously withheld based on privilege and made Mr. Eilefson available for a deposition of at least two (2) hours, Zydus may re-raise its objection.
I bet that will be a tough choice for them -- the strong implication here is that the evidence will be excluded if they don't do it, but I imagine there may be harmful material in there as well.
It's worth keeping in mind that any time you prevent discovery into something based on privilege, and then later rely on it, you may be risking a sword-and-shield motion—and that the motion can often be very effective.
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