Enjoy the “Experts & Witnesses” issue of COMMUNIQUÉ, the official publication of the Clark County Bar Association today. Read featured content from our June/July issue online now:
- “Designating Your Employee as a Non-Retained Expert – Are You Waiving the Attorney-Client Privilege?” By John M. Naylor, Esq. —Special CLE Credit Offer**
- “Local Rules – Read Them or Weep” By Brenoch Wirthlin, Esq.
- “Lessons I Have Learned About Working With Experts” By Tracey L. Heinhold Keith, Esq.
Find more content in our 48-page double-issue (published in print and PDF versions), including the following columns and highlights:
- “Outline of My Goals as the New Chief Judge of the Eighth Judicial District Court” By Judge Linda Marie Bell
- “The Meet Your Judges Mixer” By CCBA President John P. Aldrich, Esq.
- “Nevada Appellate Court Summaries” By Joe Tommasino, Esq.
- “Highlights from 28th Annual Meet Your Judges Mixer
- “CCBA New Lawyers Committee at Work” By Amanda Stevens, Esq. and Jason Close, Esq.
- “CCBA Community Service Committee at Work” By Steph Abbott
- “Attorneys and Judges Beat Doctors in Annual Tennis Tournament” By Mary Ann Price
- “2018 Liberty Bell Award Ceremony and Community Celebration” By Patrick Montejano
- “Departments: Bar Business, Member Moves, New Members, and Court Changes”
© 2018 The content on this page was originally published in COMMUNIQUÉ*, the official publication of the Clark County Bar Association. (June/July 2018). All rights reserved. For permission to reprint this content, contact the publisher Clark County Bar Association, 717 S. 8th Street, Las Vegas, NV 89101. Phone: (702) 387-6011.
Designating Your Employee as a Non-Retained Expert – Are You Waiving the Attorney-Client Privilege?
By John M. Naylor, Esq.
For a variety of reasons, it is not unusual for an attorney to consider designating a client, whether an individual or an employee of a corporate client, as a non-retained, testifying expert. Doing so in state court litigation, however, poses the risk of having to disclose information that is otherwise protected by the attorney-client privilege, where the litigation is in the state court. Typically, under the Nevada discovery rules, all communications between a retained expert and the attorneys are discoverable. To what extent, if any, does that apply to non-retained experts? The issue is unresolved under Nevada law, but a recent Supreme Court of Nevada decision may offer some clues. Additionally, the proposed changes to the Nevada Rules of Civil Procedure will, if adopted, most likely make the analytical framework used by the federal courts to decide this issue far more relevant and applicable to state court cases.
Types of experts
Expert witnesses fall into one of two categories: retained experts and non-retained experts. NRCP 16.1 does not use those terms, but rather classifies those who are offering expert testimony into two groups, those that must prepare comprehensive written reports (sometimes referred to in the caselaw as “reporting experts”) and those who do not (sometimes referred to as “non-reporting experts”).
Experts who must prepare reports are those who are “retained or specially employed to provide expert testimony in the case or whose duties as an employee of the party regularly involve giving expert testimony.” NRCP 16.1(a)(2)(B) (first paragraph). These types of experts are required to prepare a written report that contains (i) a complete statement of all opinions to be expressed and the basis and reasons for the opinion; (ii) the data or other information considered by the witness in forming the opinions; (iii) any exhibits to be used as a summary of or support for the opinions; (iv) the qualifications of the witness, including a list of all publications authored by the witness within the preceding 10 years; (v) the compensation to be paid for the study and testimony; (vi) and a listing of any other cases in which the witness has testified as an expert at trial or by deposition within the preceding four years. Id. While the federal rules have protected some communications between counsel and experts since 2010 (see FRCP 26(b)(4)), in state court, there is generally no dispute that communications between a testifying, retained expert and counsel must be produced and are not shielded by either the work product doctrine or the attorney-client privilege. Aaron Gruber and David Bones, Nevada Civil Practice Manual § 16.06 (2016); In re Christus Spohn Hosp. v. Kleberg, 22 S.W.3d 434, 441-44 (Tex. 2007) (reviewing cases and concluding that the general rule is that everything considered by an expert, including attorney-client privileged material, is subject to discovery).
Experts who do not have to produce reports include any witness providing expert testimony who does not meet the definition in the first paragraph of the rule. NRCP 16.1(a)(2)(B) (second paragraph). While these expert witnesses, traditionally called non-retained experts or non-reporting experts, do not have to produce a written report, there are still some disclosure requirements. Id.
Whether those disclosure requirements include materials that would normally be covered by the attorney-client privilege is an unsettled issue under Nevada law. Typically, this issue arises when a corporate entity designates one of its employees as a non-retained, expert witness. This can arise for various reasons, e.g., the client wants to save money or the witness is well suited to provide expert testimony due to his knowledge of the industry or facts.
The problem is particularly acute when the witness has participated in conversations or meetings with the attorneys to discuss the merits of claims or defenses, and discuss overall legal strategy. For example, what happens when the president of the company is offering expert testimony? Does that open the door to disclosure of all discussions that the president has had with attorneys regarding the lawsuit?
The case for disclosure
The case for disclosure centers on the NRCP 16.1(a)(2)(B)’s requirement that a retained expert witness must produce a report disclosing “the data or other information considered by the witness in forming the opinions.” Courts take a broad view of “considered,” generally holding that it is everything that the expert saw or talked to anyone about, regardless of whether it ultimately impacted the opinion that they rendered. Wright, Miller & Cane, 8 Fed. Prac. & Proc. Civ. § 2016.5 (3d ed. 2014) (citing Elm Grove Coal Co. v. Director, O.W.C.P., 480 F.3d 278 (4th Cir. 2007) and numerous other authorities). The source of this rule is that courts generally consider it important for a party to find out how an expert arrived at their opinion. Residential Constructors, LLC v. Ace Prop. & Cas. Ins. Co., Case No. 2:05-cv-01318-BES-GWF, 2006 WL 3149362, at *15 (D. Nev. Nov. 1, 2006).
Thus, the case could be made that designation of an employee waives the attorney-client privilege with respect to anything that the witness saw or heard during discussions or strategy sessions with the attorneys. Given the broad approach to what a witness may have “considered,” i.e., anything that they saw regardless of whether it impacted their opinions, it would be hard to find anything that was protected. Protecting information would require a party to prove that it was not “considered,” which would be an extremely difficult task.
The case for non-disclosure
The case for non-disclosure centers on the strict language of NRCP 16.1. The first paragraph of subsection (a)(2)(B), relating to retained experts, specifies that they must prepare a report that identifies everything that they considered. The second paragraph, which lists the required disclosures for non-retained experts, does not specifically include the language requiring the disclosure of “the data or other information considered by the witness in forming the opinions…” Thus, the intent of the drafters of the rule was to treat retained and non-retained experts differently with respect to this point. Requiring non-retained experts to make disclosures would essentially be adding the word “considered” to the rule, which a court may not do under the traditional rules of statutory construction. Berkson v. LePome, 126 Nev. 492, 502, 245 P.3d 560, 567 (2010) (courts may not read absent language into unambiguous statute).
Additionally, the plain language of NRCP 16.1 does not expressly create a waiver of the attorney-client privilege. NRS 49.385(1) states that the attorney-client privilege is waived if the holder (in this case the client) “voluntarily discloses or consents to disclosure of any significant part of the matter.” Generally, a “waiver requires the intentional relinquishment of a known right,” which essentially means that the waiver must be a voluntary and express act. Nevada Yellow Cab Corp. v. Dist. Ct., 123 Nev. 44, 49, 152 P.3d 737, 740 (2007). Thus, courts have held that the waiver of an important right such as the attorney-client privilege “must be a voluntary and knowing act done with sufficient awareness of the relevant circumstances and likely consequences.” Roberts v. Superior Court, 508 P.2d 309, 317 (Cal. 1973).
Thus, the argument is that nothing in NRCP 16.1 expressly requires the disclosure of attorney-client privileged materials with respect to non-retained experts, and a court cannot read such a requirement into the plain language of the rule. Without a specific waiver, attorney-client information remains protected even if considered by the witness.
The potential impact of Wynn Resorts
The Supreme Court’s decision in Wynn Resorts, Limited v. Eighth Judicial Dist. Ct., 133 Nev. Ad. Op. 52, 399 P.3d 334 (July 27, 2017) offers some clues as to how the issue might be resolved. In Wynn Resorts, the Supreme Court of Nevada looked at the issue of whether attorney-client privileged material must be disclosed when a party asserts the business judgment rule as a defense. The Board of Wynn Resorts had, over time, developed concerns about the suitability of one of its members, Kazuo Okada. Based on those concerns, the Board forced the redemption of Okada’s stock. Okada sued, and one of the Board’s defenses was the business judgment rule. Prior to making its decision, the Board commissioned the Freeh Group to investigate the activities of Okada and prepare a written report of its finding. Based on that report and the advice of two law firms, the Board made its decision to remove Okada.
Okada moved to compel the production of documents relating to the advice that the law firms had rendered. The district court granted the motion, and the Board filed a writ petition on the issue. The Supreme Court reversed that decision, reasoning that the business judgment rule prevented a court from looking into the substantive reasons for the decision at issue, holding that “[w]e agree that it is the existence of legal advice that is material to the question of whether the board acted with due care, not the substance of that advice.” Wynn Resorts, 133 Nev. Ad. Op. 52 at *18, 399 P.3d at 345 (citing In re Comverge, Inc., Shareholders Litig., No. 7368-VCP, 2013 WL 1455827, at *4 (Del. Ch. April 10, 2013)) (internal quotations removed).
The Supreme Court also looked at the issue of waiver and determined that nothing in the plain language of the business judgment rule, codified at NRS 78.138(2)-(3), indicated that there was a waiver of the attorney-client privilege. While the Supreme Court has previously held that the attorney-client privilege must be strictly construed, it was not willing to read a waiver into the business judgment rule. Whitehead v. Nevada Comm’n on Judicial Discipline, 110 Nev. 380, 415, 873 P.2d 946, 968 (1994). This would seem to suggest that NRCP 16.1 should be similarly construed, i.e., the rule does not contain an express waiver, and therefore, attorney-client privileged material should be protected with respect to non-testifying experts.
The Supreme Court noted, however, that the “at-issue doctrine” can result in a waiver. The at-issue doctrine holds that the attorney-client privilege is waived if a party places “at-issue the subject matter of privileged material” or “seeks an advantage in litigation by revealing part of a privileged communication.” Wardleigh v. Second Judicial Dist. Ct., 111 Nev. 345, 354, 891 P.2d 1180, 1186 (1995) (emphasis added). In other words, a party waives the attorney-client privilege by expressly or impliedly introducing his or her attorney’s advice into the case. Bertelsen v. Allstate Ins. Co., 796 N.W.2d 685, 703 (S.D. 2011). The Supreme Court recognized that the waiver was narrow and applied if the substance of one privileged document is disclosed. Wynn Resorts, 133 Nev. Ad. Op. 52 at 20, 399 P.3d at 345 (citing Texaco Puerto Rico, Inc. v. Dep’t of Consumer Affairs, 60 F.3d 867, 883-84 (1st Cir. 1995)); Wardleigh, 111 Nev. at 354-55, 891 P.2d at 1186.
Using Wynn Resorts as an analytical framework, it would seem that designating an employee as a non-testifying expert does not automatically result in a waiver of privilege. Wynn Resorts suggests that absent an express statutory or rule-based waiver, the privilege still applies in these situations. Depending on the nature of the testimony, however, the at-issue waiver may apply. It is worth noting that in Wynn Resorts, the Supreme Court held merely because a party asserts that it acted in good faith or denies acting in bad faith does not automatically implicate attorney advice and therefore does not result in the automatic waiver of the privilege. Wynn Resorts, 133 Nev. Ad. Op. 52 at *19, 399 P.3d at 345. Thus, the holding suggests that designating an employee as a non-retained expert, while not automatically resulting in a waiver, could result in one if the witness directly implicates attorney advice.
In any case, Wynn Resorts only offers clues and does not fully resolve the issue. Therefore, counsel should exercise caution when designating a client or client representative as a non-retained expert.
The potential impact of the proposed rule changes
In 2017, the Supreme Court created the Nevada Rules of Civil Procedure Committee to review possible changes to the rules. ADKT 0522. The proposed changes under consideration as of May 2018 cover certain aspects of NRCP 16.1, but do not address the issue of whether non-retained experts must disclose attorney-client privileged material.
Other proposed changes, however, bring NRCP 26 in line with FRCP 26. These proposed changes offer some clarification as to what must be disclosed when designating an expert, and they make consideration of federal case law, such as United States v. Sierra Pacific Indus., Case No. Civ. S-09-2445-KJM-EFB, 2011 WL 2119078 at *2 (E.D. Cal. May 26, 2011), more important to those practicing in state court.
Prior to the 2010 amendment of FRCP 26, federal courts generally agreed that this requirement to disclose all things considered by the witness included matters that would normally be protected by the attorney-client privilege. See, e.g., Ecuadorian Plaintiffs v. Chevron Corp., 619 F.3d 373, 378 (5th Cir. 2010), holding that designation of a witnesses as a testifying expert waives any privileges. This changed with the 2010 amendments. For example, Sierra Pacific recognized that the 2010 amendment to FRCP 26 “explicitly protects communications between a party’s attorney and reporting experts,” but did not do the same for non-retained experts. Sierra Pacific at *5. (citing 2010 Advisory Committee Note to FRCP 26).
Sierra Pacific’s focus was on a scenario that can crop up quite frequently, and that is the employee who is both a fact witness and a designated non-retained expert. While Sierra Pacific recognized that the 2010 amendment did not expressly protect non-retained experts, it also noted that the new rule did not abrogate any existing protections such as a federal common law attorney-client privilege. Id. at *7. The court went on to find that there was no blanket, bright-line rule that could be applied to all non-retained experts. Id. at *9 and *10. Instead, the court determined that each situation must be individually reviewed, looking at factors such as the extent to which the witness was a “hybrid fact and expert opinion” witness. Id. at *10.
If adopted as proposed, the changes to NRCP 26 will go a long way to help clarify the extent to which designating an employee as a non-reporting expert affects the attorney-client privilege. While Nevada courts regularly look to federal cases for interpreting the Nevada Rules of Civil Procedure, this has been one area where they are of little help. Adoption of the proposed rule changes will most likely change that, and therefore, counsel will need to be familiar with the analytical framework of the federal case law.
John M. Naylor has been licensed for 30 years and is a cofounder of Naylor & Braster, a Las Vegas law firm specializing in business litigation. Prior to founding the firm, he was a partner at Lionel Sawyer & Collins. Between 1995 and 1999, he was a judge advocate in the U.S. Air Force. Contact John at 702-420-7000.
**EDITOR’S NOTE FOR NEVADA LAWYERS: Want to read this article and complete the test for 1 Ethics CLE Credit? Learn more about this opportunity to earn alternative continuing legal education (CLE) from print and PDF versions of the June/July 2018 issue of COMMUNQUÉ. Download article & test (PDF) now: 2018-6-Communique-CCBA-CLE-Article-2-pp-22-28
Local Rules – Read Them or Weep
By Brenoch Wirthlin, Esq.
Every litigator is well aware of the dangers of attempting to bring the same claims twice on behalf of the same plaintiffs. Under the doctrine of claim preclusion, a party cannot simply re-file an action after an adverse decision, hoping for another judge to take a different look at the case. The three-part test for nonmutual claim preclusion is as follows: (1) the final judgment is valid, (2) the subsequent action is based on the same claims or any part of them that were or could have been brought in the first case, and (3) the parties or their privies are the same in the instant lawsuit as they were in the previous lawsuit, or the defendant can demonstrate that he or she should have been included as a defendant in the earlier suit and the plaintiff fails to provide a “good reason” for not having done so. Weddell v. Sharp, 131 Nev. Adv. Op. 28, 350 P.3d 80, 85 (2015) (citation omitted); see also Alcantara ex rel. Alcantara v. Wal-Mart Stores, Inc., 130 Nev. Adv. Op. 28, 321 P.3d 912, 915 (2014) (“Generally, all claims ‘based on the same facts and alleged wrongful conduct’ that were or could have been brought in the first proceeding are subject to claim preclusion.”).
What some lawyers in the Eighth Judicial District may be less aware of, however, are the limitations on “judge shopping” built into the EDCR. Anyone who has ever filed a lawsuit knows that decisions regarding whether to seek relief in state or federal court – assuming federal court is an appropriate forum – are always important decisions in commencing a lawsuit. Similarly, if the appropriate or chosen forum is state court in Clark County, additional considerations must be addressed in determining how exactly to bring a client’s claim. Is it a matter appropriate for business court and, if so, is that in the best interests of the client? Further, once the matter is filed, the question becomes whether to exercise a peremptory challenge. Once that decision is made, it will have lasting consequences for the case.
While everyone with a valid claim is entitled to their day in court, what the local rules of the Eighth Judicial District Court clearly prohibit is “judge shopping.” EDCR 7.10(b) provides in pertinent part:
When any district judge has begun a . . . hearing of any cause, proceeding or motion, or made any ruling, order or decision therein, no other judge may do any act or thing in or about such cause, proceeding or motion, unless upon the request of the [first] judge[.]
Further, EDCR 7.12 provides in pertinent part:
Multiple application prohibited. When an application or a petition for any writ or order shall have been made to a judge and . . . has been denied by such judge, the same . . . may not again be made to the same or another district judge, except in accordance with any applicable statute and upon the consent in writing of the judge to whom the application, petition or motion was first made.
Thus, once a state court judge is assigned to your case, if a peremptory challenge is not exercised, and no basis for recusal exists, that judge will remain the judge on that case through trial barring unforeseen circumstances requiring reassignment of the case. Once that judge begins the “hearing of any cause, proceeding or motion” or makes any “ruling, order or decision” in the case, the party may not decide to “roll the dice” and try to get a more favorable ruling from a different state court judge in that case. It is critical that these decisions be addressed before the “hearing of any cause, proceeding or motion” in accordance with local rules and Supreme Court of Nevada case law.
Brenoch Wirthlin is a Director in Fennemore Craig’s Las Vegas office and practices primarily in the areas of commercial and construction litigation, as well as general civil litigation. He also practices in the areas of bankruptcy law and creditors’ rights and civil litigation. He can be contacted directly via email at firstname.lastname@example.org.
Lessons I Have Learned About Working With Experts
By Tracey L. Heinhold Keith, Esq.
A professional lifetime of working with experts of all sorts of specialties, in virtually every case I have handled, has shown me that an expert can be your best friend—if you do your homework and do what you can to create the conditions for your expert to best assist you in presenting your case. Of the many lessons I have learned:
Hire your expert as early as possible
When you make the effort to identify the best possible expert for your case, nothing is worse than hearing the expert is not available. This usually happens to me when I wait too long to hire experts (which can happen for many reasons, some of which are not my fault). Unfortunately, your choice experts are not waiting around for your call. Many hard lessons have taught me that even if you do not have documents or information to give the expert, retain the expert, have her do a conflict check, and let her know the applicable deadlines in your case so that she can ensure she will have the availability when you need her. This is especially true if you will need the expert to conduct any testing or examinations, perform a site inspection, or the like.
Educate yourself on your expert’s qualifications
Carefully review your expert’s c.v., fee schedule, and testimony list with an eye towards identifying any potential problems that may arise as a result of the information contained in those documents. If the documents contain any errors, have him correct them before the expert is disclosed. What is obvious to you is not to non-lawyers. I have found it is best to prepare an expert to address any issues which I think opposing counsel may ask about, such as board certifications, content of publications (read them, or at least ask your expert about them), the type of parties who tend to retain this expert, and the contents of prior testimony (see also below).
Become familiar with your expert’s area of expertise
You do not have to be a medical professional to have a basic understanding of medical specialties. Ditto for other fields. After my years of construction defect practice, I knew much more than I ever wanted to know about residential HVAC systems. Properly curated sources can provide you with a general understanding of what your expert does and what she knows (your expert might even be able to point you in the right direction). Once you have that general understanding, talk to your expert. Pay for an hour (or more) of her time and listen. This conversation will also give you an understanding of how well your expert can communicate complicated concepts to a non-expert audience.
Review your expert’s prior transcripts
In addition to actually taking the time to talk to your expert and learn from him, read some of the transcripts of his prior testimony, both deposition and trial, with an eye toward helping your expert improve his performance in your case. Do not assume anyone has ever done this before (they probably have not, if my experience is any guide). What mistakes does the expert make when testifying? Is he overly defensive? Too pedantic? Excessively agreeable? Address and try to correct these tendencies with your expert before he testifies. And most importantly, I have found, explain why this matters in the legal realm.
Give your expert EVERYTHING
Although there is a contrary school of thought on this, that school is wrong. Do not filter the material you provide. Give her all of the document disclosures from both parties. Provide the “raw data:” diagnostic films, test results, or the like. Let your expert USE her expertise to determine what is relevant and do not get caught with your expert having to admit “I didn’t see/know that.”
Study your expert’s reports
I try to have experts submit their reports at least a week before I have to disclose them so that I have time to review them carefully. I want to make sure I understand his opinions. If there is an opinion I thought would be included that is not, I will talk to him and find out why (usually because something I thought was important was not, but sometimes experts miss things). Keep in mind that these conversations may be discoverable, depending on the court. If the expert mentions not having certain information, get it if possible (and it exists) or explain to him why you cannot.
Keep consulting with your expert post-report
Even if there is no need for a supplemental report, you will probably want to have your expert do a rebuttal report addressing the opinions of the opposing side’s experts. That rebuttal report can be useful in preparing to depose the opposing expert, but do not be limited to using just the rebuttal report. Talk to your expert about what he would ask and what he would like to know from this expert. Tell him what you are planning to ask. He is the subject-matter expert and can provide a great deal of guidance.
Prepare your expert for deposition or trial testimony
Do not assume your expert knows what to expect from deposition or trial testimony. She may never have been questioned by this attorney. She certainly does not know what has happened in other depositions (or with prior witnesses) in this case. Tell your expert what areas opposing counsel seems to be interested in/focusing on. Make sure your expert is prepared for questions on those issues. Again, these conversations may be discoverable, so keep that in mind.
Do a post-mortem on any testimony
Talk to your expert after he has testified. Discuss what went well and what did not. Let your expert tell you what he felt comfortable with and what he did not. Even if you never hire this expert again, your fellow lawyers will thank you for helping this expert improve his performance.
Remember that you are your expert’s expert in the law
Your expert, even if she is an experienced expert, is not a legal expert. Experts are often frustrated with the limitations placed on them when they work within the legal system. Although that frustration cannot be completely alleviated, explaining why things are the way they are can, in my experience help. Invite questions about the law in general. Discussions about the case will be guided by whether or not the conversation is discoverable.
After several years as a litigator mostly in the personal injury defense field, Tracey L. Heinhold Keith is now a sole practitioner focusing on legal writing and research and acting as personal counsel for expert witnesses involved in litigation. She can be reached at (702) 277-8103, email@example.com.
COMMUNIQUÉ is published eleven times per year with an issue published monthly except for July by the Clark County Bar Association, P.O. Box 657, Las Vegas, NV 89125-0657. Phone: (702) 387-6011.
© 2018 Clark County Bar Association (CCBA). All rights reserved. No reproduction of any portion of this issue is allowed without written permission from the publisher. Editorial policy available upon request.
COMMUNIQUÉ accepts advertisements from numerous sources and makes no independent investigation or verification of any claim or statement made in the advertisement. All articles, letters, and advertisements contained in this publication represent the views of the authors and do not necessarily reflect the opinions of the Clark County Bar Association.
COMMUNIQUÉ is mailed to all paid members of CCBA, with subscriptions available to non-members for $75.00 per year. For advertising information and editorial policy, please contact Steph Abbott at (702) 387-6011 or firstname.lastname@example.org.