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Summaries and analysis of recent Delaware court decisions concerning business-related litigation.
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Chancery Holds Plaintiffs’ Emails with Counsel on Defendants’ Server Are Privileged Due to Application of Argentine Law
The plaintiff brought suit seeking confirmation that it validly acquired from defendants a majority ownership interest and the concomitant right to manage Grupo Belleville Holdings, LLC (the “Company”), a Delaware limited liability company. The discovery motion at-issue addresses the confidentiality of emails between Plaintiff and his counsel – complicated by the fact that they are stored by a server owned and operated by the defendants. To explain, the defendants had provided the Argentina-based Company and its employees, including the plaintiff, with email addresses for the purpose of executing their job duties. The email addresses and the server on which the emails were stored were not owned by the Company, however; rather, it was known to all involved that they belonged to a separate company of the Defendants. The emails at issue were between plaintiff Lynch and two in-house Company attorneys who also provided legal advice to him on personal matters, distinct from advice they provided him in his capacity as the Company’s manager. In discovery, Lynch sought to vindicate the privilege. He moved to compel the defendants to turn over the emails, but the defendants refused.
Under Delaware Rule of Evidence 502, a communication between an attorney and a client will only be considered privileged if the communication was confidential, which itself depends on the parties’ expectation of privacy. The Court of Chancery first determined that the emails on an employer’s server were not likely to be confidential under the common law test set forth in In re Asia Global Crossing, Ltd., 322 B.R. 247 (Bankr. S.D.N.Y. 2005), which was adopted and developed by the Court in In re Information Management Services, Inc. Deriv. Litig., 81 A.3d 278 (Del. Ch. 2013). However, the Court reasoned that the analysis could not conclude there. Under Information Management, if a controlling jurisdiction has a statute on the confidentiality of work emails, that statute may override the Court’s common law analysis.
The Court held that Argentine law applied because Defendants provided email service to a company located in Argentina and therefore had an obligation to abide by Argentine law. The Court then found that plaintiffs had met their burden of demonstrating that a statutory override existed under Argentine law. The Argentine Constitution protects an individual’s right of privacy in their written communications, and the right is expansive. Argentine law prohibits others from “arbitrarily,” “unduly,” or “improperly” disturbing another’s expectation of privacy in their written correspondence. None of the potential statutory exceptions applied to Defendants. Therefore, the Court granted plaintiff’s motion, finding that plaintiffs had an expectation of privacy under Argentine law, and the emails were privileged to the extent they contained communications relating to Lynch’s personal legal matters.