Emails between a clothing company, its attorneys, and a public relations firm related to a trademark case against
The PR firm used by Universal Standard Inc. wasn’t necessary to the communications, wasn’t an agent of the company, and wasn’t hired to aid in legal tasks, the U.S. District Court for the Southern District of New York ruled May 6.
The ruling demonstrates the narrowness of circumstances in which a company can maintain privilege after sharing information with third parties. The court rejected as inapplicable to the case multiple precedents cited by Universal Standard where third-party disclosure didn’t waive privilege.
Universal Standard makes “women’s apparel in inclusive sizes.” Universal Standard accused Target of willfully infringing its trademarks with its “Universal Thread” line of women’s clothing in a 2018 complaint. Aside from use of “universal,” Target’s brand also copied the “brand concept” by stating it goes to “great lengths to perfect every fit, in every piece, in every size,” the clothier said.
During a deposition, Target’s attorney questioned a witness about emails sent between Universal Standard, its lawyers, and public relations firm BrandLink. Universal Standard argued the emails were privileged.
The court ruled the emails aren’t protected by attorney-client privilege based on the general rule that disclosure to a third party eliminates the privilege. None of three exceptions to the rule argued by Universal Standard applied, the court said.
Courts have held information shared with a third party with specialized knowledge required to facilitate understanding between attorney and client—such as an accountant or translator—can retain protection. The court said the emails in question involved discussion of a public relations strategy regarding the lawsuit. Universal Standard could have relayed such discussions directly to attorneys themselves without looping in BrandLink, the court said.
Independent contractors have qualified for exceptions in cases where they are the “functional equivalent” of an employee, but BrandLink wasn’t one, the court said. BrandLink had limited decision-making power and no information the company didn’t also have, it said. It didn’t represent the company to third parties, maintain an office at the company, or seek legal advice from Universal Standard’s counsel—all other factors that figure in a “functional equivalent” analysis.
Information has been shared with public relations firms without the client waiving privilege, the court said. But those cases generally involved counsel—not the company—hiring the firm to implement a legal strategy, whereas BrandLink was hired for business purposes, the court said.
The privilege would have been waived, regardless, because Universal Standard failed to identify the emails adequately in its privilege log, the court said. Universal Standard omitted BrandLink employees’ names from the email chains in the log, making it impossible for Target to see that it had a potential waiver argument based on third-party communications.
The court said the omission strongly suggested a “flagrant” violation of local rules, but declined to reach the question because of its conclusion on the merits that the emails weren’t privileged.
The emails also aren’t protected by the work product doctrine. Universal Standard provided only a “conclusory” argument “confined to a single sentence” that the emails were documents prepared in anticipation of litigation, the court said.
Counsel for Target declined to comment. Counsel for Universal Standard didn’t respond to a request for comment.
Judge Gabriel W. Gorenstein wrote the opinion.
Harder Mirell & Abrams LLP and Blakely Law Group represent Universal Standard. Proskauer Rose LLP and Storch Amini & Munves P.C. represent Target.
The case is Universal Standard Inc. v. Target Corp., S.D.N.Y., No. 18 Civ. 6042, 5/6/19.
(Updated with additional reporting)