JSH Reporter Fall 2014 - Page 16

ATTORNEYCLIENTPRIVILEGEARTICLE 016 W hether a party has impliedly waived the attorneyclient privilege poses a mixed question of law and fact. Twin City Fire Insurance Co. v. Burke, 204 Ariz. 251, 254, 63 P.3d 282, 285 (2003). In State Farm v. Lee, the Arizona Supreme Court adopted the following criteria, referred to as the Hern test, in determining whether the attorneyclient privilege had been waived when a litigant’s mental state was at issue: (1) [The] assertion of the privilege was a result of some affirmative act, such as filing suit [or raising an affirmative defense], by the asserting party; (2) through this affirmative act, the asserting party put the protected information at issue by making it relevant to the case; and (3) application of the privilege would have denied the opposing party access to information vital to his defense. 199 Ariz. 52, 56, 13 P.3d 1169, 1173 (2000) (quoting Hern v. Rhay, 68 F.R.D. 575, 581 (E.D. Wash. 1975)).1 Under the Hern test, when a litigant advances “a subjective and allegedly reasonable evaluation of the law ... that necessarily incorporates [the advice of counsel],” confidential attorney-client communications relevant to that evaluation are discoverable. Id. at 58, 13 P.3d at 1175; see also Lee at 62, 13 P.3d at 1179 (explaining that no waiver results unless the party asserting the privilege “has asserted some claim or defense, such as the reasonableness of its evaluation of the law, which necessarily includes the information received from counsel.”). The Arizona Supreme Court emphasized in Lee, however, that merely filing an action or denying an allegation does not waive the privilege. Id. at 58, 62, 13 P.3d at 1175, 1179. Rather, the party claiming the privilege must affirmatively “interject the issue of advice of counsel into the litigation.” Id. at 62, 13, P.3d at 1179. In addition, neither the “relevance or pragmatic importance alone [of the information sought] will support a finding that the attorney-client privilege has been waived.” See Twin City, 204 Ariz. at 256, 63 P.3d at 287; see also Lee, 199 Ariz. at 58, 13 P.3d at 1175. Recently, in Empire W. Title Agency, L.L.C. v. Talamante ex rel. Cnty. of Maricopa, 234 Ariz. 497, 323 P.3d 1148 (2014), in an opinion written by Justice Pelander, the Arizona Supreme Court vacated a decision of the Arizona Court of Appeals, Division One, which had found an implied waiver of the attorney-client privilege in a contract case. Reversing the Court of Appeals, the Supreme Court held that merely alleging the reasonableness of one’s beliefs does not, in itself, waive the privilege; rather, the litigant must advance a subjective evaluation or understanding that incorporates the advice of counsel.