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Doe v. USD No. 237

United States District Court, D. Kansas

August 23, 2019

JANE DOE, and ANGELA HARRISON, Plaintiffs,
v.
USD No. 237, THE SMITH CENTER SCHOOL DISTRICT, et al., Defendants.

          MEMORANDUM AND ORDER

          TERESA J. JAMES, U.S. MAGISTRATE JUDGE

         Before the Court is Defendant Unified School District No. 237's Response to the Court's Memorandum and Order (ECF No. 189).[1] The matter is fully briefed and the Court is ready to rule. For the reasons discussed below, the Court denies the relief requested in the Response and once again orders Unified School District No. 237 to produce its May 2016 pre-suit investigative report.

         I. Background

         The Court has set out the factual background of this case in considerable detail in prior orders and will not do so again here.[2] The Court previously concluded that Unified School District No. 237 (“the School District”) had waived its attorney-client privilege and ordered it to produce the May 2016 pre-suit investigative report that is the subject of this order (“the Report”) in its entirety.[3] The School District filed an objection to this Court's ruling, which District Judge Lungstrum overruled in the June 26, 2019 Memorandum and Order (the “Order”)[4] that elicited the Response filed by the School District at issue here.[5] The Order also directed the School District to produce the Report to Plaintiff or “file a motion for leave to amend its answer to [withdraw or limit the application of its Faragher defense], in which defendant should explain why its limitation or withdrawal means that the privilege should not be deemed waived with respect to the report.”[6] In addition, the Order directed that any such motion should address whether the Report contains any matter not covered by the attorney-client privilege and “the extent to which the privilege could again be waived if defendant at trial were to rely on its investigation or its actions based on the investigation in defending against plaintiffs' affirmative claim that defendant acted with deliberate indifference.”[7] The Order concluded with the following directive: “By July 5, 2019, [the School District] shall produce the report at issue to plaintiff or file a motion as described herein.”[8]

         Before the Order was entered, the Court (that is, the undersigned magistrate judge) conducted a pretrial conference with the parties, on June 20, 2019. During the conference, the Court discussed the parties' proposed pretrial order with them in detail and requested the parties make several changes to the order. In accordance with the Court's instructions, the parties did not return the revised proposed pretrial order for filing until July 8, 2019. In the interim, Judge Lungstrum entered the above-described Order. Also in the interim, on July 5, 2019, the School District filed its Response to the Order, stating it “withdraws the [Faragher] affirmative defense raised in its Answer, ” and that it would not include this affirmative defense in the pretrial order to be submitted on July 8, 2019.[9] In the revised proposed pretrial order returned by the parties for filing on July 8, the School District removed the Faragher defense from its list of defenses.[10]

         II. Analysis

         The Order required if the School District elected not to produce the Report to Plaintiffs, it must: (1) file a motion for leave to amend its answer to withdraw or limit the application of its Faragher defense; (2) explain in the motion why its limitation or withdrawal means that the privilege should not be deemed waived with respect to the Report; (3) address in the motion whether the Report contains any matter not covered by the attorney-client privilege, and (4) address in the motion the extent to which the privilege could again be waived if the School District at trial were to rely on its investigation or its actions based on the investigation in defending against Plaintiffs' affirmative claim that the School District acted with deliberate indifference. The Court discusses each of these requirements in turn below.

         A. The School District failed to file a motion for leave to amend in accordance with the Order. [11]

         The School District does not request leave to amend or discuss at all the requirements for amending pleadings in its Response; rather, it simply states in the Response that it “withdraws” its Faragher defense.[12] Plaintiffs filed a brief in opposition, [13] arguing that the School District failed to file a motion for leave to amend in compliance with the Order and instead improperly presumes leave has been granted. Plaintiffs argue even if the response is considered a motion to amend the answer, the motion should be denied because the School District has not shown good cause for the amendment, pursuant to Fed.R.Civ.P. 16(b), and because of the School District's undue delay, undue prejudice to Plaintiffs, bad faith and/or dilatory motive of the School District, or futility of amendment, pursuant to Fed.R.Civ.P. 15(a).

         In its Reply, the School District argues it is not entirely clear that the Federal Rules of Civil Procedure or applicable case law require filing of a motion or an order granting leave to withdraw a claim or defense, “particularly at the pretrial stage where all such amendments are reflected in the subsequently entered Pretrial Order.”[14] It notes that Plaintiffs withdrew certain previously asserted claims and the Defendants withdrew several affirmative defenses in addition to the one at issue here, by simply not including them in the Pretrial Order in this case.[15] The School District argues to the extent Rule 15 is applicable, leave of court still was not required because the parties consented to such amendments in writing by submission of their jointly proposed pretrial order. Finally, it argues if the Court concludes the Faragher defense was not properly withdrawn and that leave of Court is required, the Court should “freely grant” such leave pursuant to Rule 15(a)(2) or 16(c)(2) and (d).

         The Court finds that Judge Lungstrum's Order is clear and unambiguous. It explicitly ordered the School District, by July 5, 2019, to either produce the Report to Plaintiffs or file a motion for leave to amend its answer to withdraw or limit the application of its Faragher defense. The School District did neither. Instead, it filed a “Response” to the Order (even though there is no rule, federal, local, or otherwise, that provides for a response to such an Order), stating that it “withdraws the [Faragher] affirmative defense raised in its Answer.” This was both presumptuous and clearly not in compliance with the Order, which contemplated that the School District must file a motion requesting leave to withdraw or limit its Faragher defense.

         The School District is correct that a number of Plaintiffs' claims and Defendants' defenses, aside from the one at issue here, were simply not included by the parties in the Pretrial Order and thus were withdrawn. It is also true that it is not uncommon for parties to remove and withdraw claims or defenses at the time of pretrial from the pretrial order without filing motions to amend, when there is no objection or dispute over the claim or defense being withdrawn. But that is not the case here, where the defense at issue is and was at the time of the pretrial conference and entry of the Pretrial Order the subject of a major dispute between the parties. The Court rejects the School District's argument that because “Plaintiffs' counsel did not object and, instead, agreed to the proposed pretrial order submitted to the Court on July 8, 2019, ” Plaintiffs necessarily did not object to the School District's purported withdrawal of the Faragher defense without a motion for leave to amend. At the time of the pretrial conference, the Order had not been entered, so Plaintiffs clearly did not agree during the conference that the School District could withdraw its Faragher defense from the proposed pretrial order in lieu of complying with the Order. With regard to the parties' subsequent submission of their revised proposed pretrial order, they complied with the Court's instructions at the conclusion of the pretrial conference to jointly submit the revised document by July 8, 2019. The Court does not find that Plaintiffs' compliance with the Court's instructions constitutes their agreement with the School District's position that it could withdraw the Faragher defense without filing a motion as directed in the Order.

         The Court finds that under the specific facts of this case, the School District should have filed a motion for leave to amend. Its Response does not request leave to amend or address the issue at all. And, the Court will not consider the arguments on this issue raised by the School District for the first time in its Reply.[16] The Court therefore also finds that the School District has not satisfied the requirements of Rule 15 or 16 to amend its answer to withdraw the Faragher defense. Finally, the Court finds, in accordance with Rule 1 and in the interest of judicial economy, that the School District should not be allowed to amend to withdraw the defense given (a) the Court's ultimate conclusion below that the School District has waived its Faragher defense, despite its purported withdrawal of the defense, and must produce the privileged document at issue (the Report); and (b) the School District's expressed intent to reserve its “right to seek leave to amend and reassert [the Faragher] affirmative defense should the Court order the privileged document at issue . . . produced….”[17]

         B. The School District has not provided a compelling explanation for why its purported withdrawal of the Faragher defense means that the privilege should not be deemed waived with respect to the Report.

         As noted above, the Order directed that if the School District chose to withdraw or limit application of its Faragher defense, it “should explain why its limitation or withdrawal means that the privilege should not be deemed waived with respect to the Report.” The School District's Response offers two such explanations. Even though the Court has found the School District has not properly moved for leave to amend its answer, the Order contemplates that the Court address the remaining issues raised in the Order. Thus, the Court considers now whether the “purported” withdrawal of the Faragher defense means the privilege should not be deemed waived.

         1. The six cases cited by the School District are not supportive of its position.

         First, the School District provides a string citation of six cases with a brief quote or parenthetical statement regarding each case.[18] However, the School District does not include any discussion of the underlying facts or any discussion regarding how the cited cases relate to this case. As discussed below, in four of the cited cases, the defendants had not withdrawn the affirmative defense at issue, so the courts did not address the issue presented here. None of the cited cases provides the explanation the School District desires as to why the withdrawal of its Faragher defense means that the privilege should not be deemed waived with respect to the Report.[19] And, two of the cases, Pollitt and Robinson, cut against the School District's position here.

         In Koumoulis, the court noted in dicta the general principal that “a party may withdraw a claim or defense in order to preserve a privilege that would otherwise be forfeited.”[20] But, the defendants had not sought to withdraw their Faragher defense, so the court had no reason to address and did not address the issue presented here - namely, why (or whether) the withdrawal of the defense meant the privilege should not be deemed waived with respect to the privileged document or material at issue.[21] Similarly, in Nelson, the court stated the defendant would need to seek leave to amend its pleadings to eliminate its affirmative defense; however, the defendant had not yet requested leave to amend and thus the issue presented in this case had not yet been presented to the court.[22]

         The issue before the court in Edwards, a Fair Labor Standards Act (FLSA) case, was whether the defendant waived its privilege with regard to attorney-client communications concerning its classification of exempt outside salespeople by asserting good faith defenses.[23]The court concluded that the defendant had waived its privilege, subject to certain specified exceptions. Recognizing the “line-drawing” challenges this might create, the court noted in dicta that the defendant “might elect to withdraw its good faith defenses, in which case the privilege would still attach.”[24] But, again, the defendant in Edwards had not attempted to withdraw its good faith affirmative defenses and that issue was not before the court.

         Again in Sealy, the defendants had not withdrawn or requested to withdraw their affirmative defense; rather, the court noted the defendants had not been entirely clear that they were dropping the Faragher defense.[25] The court opined that if the defendants intended to put on testimony that placed in issue the substance of the communications made as part of their investigation, then the plaintiff would be entitled to the documentation prepared by all participants to the interviews, because those documents might shed additional light on the thoroughness of the interviews and the nature of the information unearthed by the interviewer.[26]The court ordered defendants to either “unambiguously” withdraw the defense or produce the requested documents within seven days.[27]

         In Pollitt and Robinson, the defendants did stipulate that they would not rely upon their investigations as defenses. The School District relies upon these cases for the proposition that, “Where employers disavow reliance upon their investigations as a defense, the attorney-client privilege is not waived.”[28] But, unlike the defendants in Pollitt and Robinson, the School District purports to withdraw its Faragher defense but does not disavow reliance upon its investigation. To the contrary, in its factual contentions in the Pretrial Order, the School District references Plaintiff Harrison's complaints regarding Hutchinson's behavior, including a May 11, 2016 email to the school principal, after which, “[The School District] issued a written reprimand to Hutchinson.”[29] The written reprimand states that the administration was made aware of several concerns involving Hutchinson on or about May 11, 2016, which resulted in an investigation into the allegations.[30] The written reprimand notes that the School District requested that an attorney, Sara Loquist, investigate these concerns.[31] The written reprimand mentions the investigation repeatedly, references certain findings of the investigation, and makes recommendations and issues directives to Hutchinson, “[b]ased upon information obtained during the course of the investigation.”[32] The School District's contentions in the Pretrial Order indicate its intent to rely upon the investigation of Plaintiffs' complaints conducted by its attorney and her recommendations and findings. The Report at issue is the report of the School District's attorney regarding this investigation.

         The School District's reliance on the written reprimand and hence its attorney's investigation and Report is a point of emphasis in Plaintiffs' Opposition. Plaintiffs argue that the “School District continues to rely upon a reprimand issued to Defendant Hutchinson prompted by the investigation at issue.”[33] They note that the School District “continues to rely upon a reprimand that spells out the details of the investigation as a justification for the reprimand.”[34] They argue with regard to deliberate indifference that, “by producing the reprimand - which refers to and references the investigative report - [the School District] has waived privilege as it specifically references the investigation as the basis for its conclusion substantiating Plaintiffs' report.”[35] Finally, Plaintiffs point out that the School District argues in its pending motion for summary judgment that “Hutchinson was disciplined as a result of the determination made by [the School District] that he had engaged in unprofessional verbal discussions with students during the school day. . .”[36]

         Plaintiffs' argument is compelling; the School District relies upon the reprimand in its summary judgment briefing and in its contentions in the Pretrial Order. Despite Plaintiffs' emphasis in its opposition on the School District's reliance on the reprimand given to Hutchinson and by extension the investigation and Report that resulted in the reprimand, the School District does not address the reprimand at all in its reply. The Court finds the School District has not disavowed reliance on its attorney's investigation as a defense; instead, it continues to rely upon it.

         In addition, although the School District relies upon its removal of the Faragher defense from its list of defenses in the Pretrial Order as its withdrawal of the defense, at the same time it left “in” its factual contentions in the Pretrial Order the following:

[The School District] issued a written reprimand to Hutchinson. Plaintiffs elected to enroll Jane Doe in Hutchinson's class for the 2016-17 school year and rejected [the School District's] offer to move her to a different class. Plaintiffs did not report any alleged inappropriate behavior by Hutchinson during the fall of 2016. Jane Doe was voluntarily withdrawn from [the School District] in October 2016 and enrolled in a neighboring school district where she graduated in May of 2017.[37]

         The Court has compared the above factual contention from the Pretrial Order to the Faragher defense language that the School District removed from the Pretrial Order.[38] The factual contention tracks the purportedly withdrawn two-pronged Faragher defense: The contention states that the School District issued a written reprimand to Hutchinson (which indicates it stems from the investigation and recommendations of the School District's lawyer). This appears to be essentially the “exercised reasonable care to prevent and correct promptly any harassing behavior including retaliation” prong of the Faragher defense; and (b) The contention states that Plaintiffs elected to keep Plaintiff Jane Doe in Hutchinson's class and rejected the School District's offer to move her to a different class. This appears to be essentially the “plaintiffs unreasonably failed to take advantage of preventive or corrective opportunities provided by the School District or to avoid harm otherwise” prong of the Faragher defense. Thus, even though it removed the Faragher defense from its list of defenses in the Pretrial Order and it purports to withdraw the defense by name, the Court finds the School District has not unambiguously withdrawn the defense[39] and instead appears to continue to implicitly rely upon it.

         The court made another important point in the Edwards case, discussed above and cited by the School District, which is also significant here.[40] It recognized that drawing a distinction between a good faith defense relying on advice of counsel and one that does not, even though such advice was given, would essentially result in a good faith defense never resulting in waiver of adverse legal advice.[41]

“This ‘heads I win, tails you lose' result-in which a party asserting good faith could use attorney communications that help its cause, but shield the communications when they do not by characterizing the defense as one that does not rely on advice of counsel-would undo, and is at odds with the fairness concerns that animate, the longstanding recognition that asserting a claim or defense that depends on a belief in the lawfulness of one's conduct waives privilege.”[42]

         In Koumoulis, also discussed above and cited by the School District, the court raised a similar “shield and sword” concern, stating:

Both the attorney-client and work-product privileges may be waived if a party puts the privileged communication at issue by relying on it to support a claim or defense. Such a waiver ‘may be implied in circumstances where it is called for in the interests of fairness,' (citation omitted) such as when a ‘party attempts to use the privilege both as a shield and a sword, '(citations omitted). ‘In other words, a party cannot partially disclose privileged communications or affirmatively rely on privileged communications to support its claim or defense and then shield the underlying communications from scrutiny by the opposing party.'[43]

         This Court stated a similar concern in its April 30, 2019 order finding that the School District had waived its attorney-client privilege with regard to the Report.[44] The School District's purported withdrawal of its Faragher defense does not alleviate the Court's concerns. The School District is attempting to use its investigation and the privileged communications of its attorney-investigator as a sword to defend against Plaintiffs' claims through its reliance on the written reprimand to Hutchinson but then to shield the underlying communication from scrutiny by Plaintiffs. Simply put, the School District argues that it reprimanded Hutchinson in accordance with the advice of its counsel but would deny Plaintiffs access to what information the attorney-investigator uncovered during the investigation and what other recommendations the attorney-investigator may have made to the School District that it may or may not have followed. This would be manifestly unfair to Plaintiffs.[45]

         2. The School District's implied waiver argument is not persuasive.

         The School District makes a second brief argument regarding why its withdrawal of the Faragher defense means that the privilege should not be deemed waived with respect to the Report. It argues that, given the importance of the attorney-client privilege, “the court should temper a finding of implied waiver by permitting the party to make the conscious decision to alternatively withdraw the claim or defense, thereby keeping the privilege….”[46] It contends such a balance would be in the interests of justice.[47] But, as indicated by the “sword and shield” and related discussion above, the Court does not agree that the School District's purported withdrawal of the Faragher defense would be in the interests of justice. The School District cites no authority for its argument and, without minimizing the importance of the attorney-client privilege, the Court finds the argument unpersuasive.

         The Order concluded that the School District had waived its privilege and placed the burden on the School District to explain why its withdrawal of the Faragher defense means that the privilege should not be deemed waived with respect to the Report.[48] For the reasons discussed above, the Court finds the School District has not explained why its purported withdrawal of the Faragher defense means that the privilege should not be deemed waived with respect to the Report. Therefore, the Court finds the privilege with respect to the Report is waived notwithstanding the School District's purported withdrawal of the Faragher defense.

         C. The Report contains certain matter not covered by the ...


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