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Missed the Mark- Attorney/Client Privilege Prior to Litigation: S.D. Ohio

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  • Missed the Mark- Attorney/Client Privilege Prior to Litigation: S.D. Ohio

    In a recent case out of Ohio, I (and more importantly, my boss) believe the Court missed the mark in determining when attorney-client privilege attached. By way of background, Defendant engaged the services of outside counsel immediately after its first denial of Plaintiff's claim. As oppose to retaining counsel's services in the interest of administering the plan "solely in the interests of the participants and beneficiaries," counsel, from the onset, was clearly preparing for the upcoming litigation following a final denial.

    “On either rationale…, it is clear that the fiduciary exception has its limits—by agreeing to serve as a fiduciary, an ERISA trustee is not completely debilitated from enjoying a confidential attorney-client relationship….” Mett, 178 F.3d at 1063.
    How, then, does the fiduciary exception operate?
    In the ERISA arena, the fiduciary exception says, “a fiduciary of an ERISA plan ‘must make available to the beneficiary, upon request, any communications with an attorney that are intended to assist in the administration of the plan.’” Moss, 495 F. App’x at 595 (quoting, in part, Bland v. Fiatallis N. Am., Inc., 401 F.3d 779, 787 (7th Cir. 2005) (other citation omitted). “This is because ‘[w]hen an attorney advises a plan administrator or other fiduciary concerning plan administration, the attorney’s clients are the plan beneficiaries for whom the fiduciary acts, not the plan administrator.’” Id. (quoting, in part, Wildbur v. ARCO Chem. Co., 974 F.2d 631, 645 (5th Cir. 1992) (other citation omitted). “The fiduciary exception generally applies only to communications related to plan administration and not to communications after a final decision or ‘addressing a challenge to the plan administrator in his or her personal capacity.’” Id. at 595-96 (citing Redd v. Bhd. of Maint. of Way Emps. Div. of the Int'l Bhd. of Teamsters, No. 08–11457, 2009 WL 1543325, at *1 (E.D. Mich. June 2, 2009)).
    The present case does not involve communications that occurred after Minnesota Life’s final denial of benefits and does not involve claims against a fiduciary in his or her personal capacity. This narrows the focus to the communications between Minnesota Life’s claims-department personnel and its in-house counsel before Minnesota Life reached its final decision on August 15, 2016. Some of these communications occurred in 2011, at or near the time of Minnesota Life’s initial decision to deny benefits on April 15, 2011; others occurred in 2013 at or near the time of Plaintiff’s pending appeal; and the remaining occurred in 2016 near the date (again, August 15, 2016) Minnesota Life made its final decision to deny benefits.
    Minnesota Life contends that throughout this time period, its in-house counsel assisted in preparing for anticipated litigation, rather than helping to process Ms. Freel’s benefits claim or helping to decide whether to grant or deny her claim. It finds that none of its redacted communications involved the administration of the plan.
    As noted above, the court finds that the privilege only attached after an issuance of a final denial which, given the circumstances, we staunchly disagree with. Furthermore, as a matter of personal opinion, it is my belief that the very act of retaining counsel to prepare for litigation following an ultimate denial is an irrefutable demonstration of bad faith. The entire opinion is attached below.
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