In Re: Schlumberger Tech

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

No. 20-30236

In re: SCHLUMBERGER TECHNOLOGY CORPORATION,

Petitioner

Petition for a Writ of Mandamus to
the United States District Court
for the Western District of Louisiana

Before DENNIS, ELROD, and DUNCAN, Circuit Judges.
PER CURIAM:*
Schlumberger Technology Corporation (“STC”) petitions for a writ of
mandamus to vacate the district court’s order compelling STC to disclose
testimony and documents STC argues are attorney-client privileged. Because
STC identifies a “clear and indisputable error” by the district court that cannot
be remedied otherwise, we grant the writ. In re Itron, Inc., 883 F.3d 553, 567
(5th Cir. 2018) (quoting Cheney v. U.S. Dist. Court for Dist. of Columbia, 542
U.S. 367, 380–81 (2004)) (cleaned up).
I.
The operative complaint alleges that STC violated the Fair Labor
Standards Act (“FLSA”) and Louisiana law by failing to classify some of its

*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5
TH
CIR. R. 47.5.4.
United States Court of Appeals
Fifth Circuit
FILED
June 4, 2020

Lyle W. Cayce
Clerk
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employees as eligible for overtime pay. STC’s answer raises an affirmative
defense that it made good-faith efforts to comply with the FLSA. See 29 U.S.C.
§ 259(a). Specifically, STC asserts that any violations “were not willful,” and
that it relied in good faith “on applicable law, administrative regulations,
orders, interpretations and/or administrative practice or policy enforcement.”
During discovery, James Hanley, a former STC human-resources
consultant, was deposed. After retiring from STC, Hanley was retained by
STC’s legal counsel to help review the FLSA status of the positions at issue in
this lawsuit. In his deposition, Hanley revealed contents of the attorney-led
review team’s report to STC’s management. After Hanley’s deposition, the
plaintiffs subpoenaed FLSA classification reviews Hanley helped complete in
2004, 2008, and 2015.
STC moved to quash the subpoena and to strike portions of Hanley’s
deposition, arguing Hanley had revealed privileged communications between
STC’s attorneys and its management. The magistrate judge recommended
denying STC’s motions on the basis that STC had waived the privilege by
ra ising good faith as an affirmative defense to the FLSA claims. STC objected,
but the district court overruled its objection in relevant part. The court thus
denied STC’s motion to quash Hanley’s subpoena, granted Plaintiffs’ motion to
continue his deposition, and granted Plaintiffs’ motion to compel discovery of
FLSA classification reviews Hanley completed in 2004, 2008, and 2015.
STC now petitions for a writ of mandamus, arguing the district court
erred in light of our decision in Itron, which held a party does not waive
attorney-client privilege unless it affirmatively invokes and relies on the
privileged communications, 883 F.3d 553.
II.
To decide whether mandamus is warranted, “we ask (1) whether the
petitioner has demonstrated that it has no other adequate means to attain the
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relief it desires; (2) whether the petitioner’s right to issuance of the writ is clear
and indisputable; and (3) whether we, in the exercise of our discretion, are
satisfied that the writ is appropriate under the circumstances.” Id. at 567
(quoting Cheney, 542 U.S. at 380–81) (cleaned up).
A.
The first prong requires STC to show inadequacy of relief by other
means. “[T]his requirement is ‘often . . . met in cases where a petitioner claims
that a district court erroneously ordered disclosure of attorney-client privileged
documents.” Id. (quoting In re Kellogg Brown & Root, Inc., 756 F.3d 754, 760–
61 (D.C. Cir. 2014)); see, e.g., In re Burlington N., Inc., 822 F.2d 518 (5th Cir.
1987); In re City of Houston, 772 F. App’x 143 (5th Cir. 2019); In re EEOC, 207
F. App’x 426 (5th Cir. 2006). Because the district court denied STC’s motion to
certify an interlocutory appeal, mandamus is its only means of protecting the
privilege.
B.
To satisfy the second prong, STC must show that its “right to the
issuance of the writ is . . . clear and indisputable.” Itron, 883 F.3d at 568
(quoting In re Volkswagen, 545 F.3d 304, 311 (5th Cir. 2008) (en banc)). A
petitioner has a clear and indisputable right only when there has been a
“usurpation of judicial power” or “a clear abuse of discretion that produces
patently erroneous results.” In re JPMorgan Chase & Co., 916 F.3d 494, 500
(5th Cir. 2019) (cleaned up). “[B]y definition, a district court abuses its
discretion when it makes an error of law or applies an incorrect legal
standard.” Itron, 883 F.3d at 568 (quoting Klier v. Elf Atochem N. Am., Inc.,
658 F.3d 468, 474 (5th Cir. 2011)). Here, the district court applied an incorrect
legal standard by failing to follow Itron.
In that case, Itron, Inc., sued three individuals for negligent
misrepresentation under Mississippi law, alleging the defendants’
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misrepresentations “caused it to unwittingly assume liability” under a
settlement agreement. 883 F.3d at 556 (cleaned up). The defendants moved to
compel production of various privileged documents, arguing that by claiming
it had been misled, Itron had “waived its attorney-client privilege as to all
communications with counsel concerning potential exposure.” Id. Itron invoked
the privilege and stipulated it would not use any such privileged
communications in its defense. Id. at 557. After the magistrate judge compelled
production of the privileged materials, we granted mandamus. Id. at 569.
We held that “a client waives the privilege by affirmatively relying on
attorney-client communications to support an element of a legal claim or
defense—thereby putting those communications ‘at issue’ in the case.” Id. at
558 (citations omitted). Put differently, when a client “uses confidential
information against his adversary,” it cannot simultaneously use the privilege
as a shield. Id. (citing Willy v. Admin. Review Bd., 423 F.3d 483, 497 (5th Cir.
2005)). At the same time, however, we cautioned that asserting a claim to
which privileged material is merely relevant does not waive the privilege.
Instead, the client “must rely on privileged advice from his counsel to make his
claim or defense.” Id. at 561 (quoting In re Cty. of Erie, 546 F.3d 222, 229 (2d
Cir. 2008); citing Rhone-Poulenc Rorer Inc. v. Home Indem. Co., 32 F.3d 851,
863 (3d Cir. 1994)) (emphasis in original). While we applied Mississippi
privilege doctrine, we noted that Mississippi has adopted the general approach
to this question. Id. (citing Jackson Med. Clinic for Women, P.A. v. Moore, 836
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So.2d 767, 773 (Miss. 2003)). Accordingly, our decision relied on treatises,
1
our
cases,
2
and out-of-circuit federal cases
3
to support its holding.
Our holding in Itron controls here. STC’s answer claimed only that it
relied in good faith “on applicable law, administrative regulations, orders,
interpretations and/or administrative practice or policy enforcement.” STC did
not claim that counsel advised it that its decisions complied with the FLSA.
Indeed, its answer did not allude to advice of counsel at all. While privileged
communications may have some bearing on STC’s beliefs about its compliance,
STC has not “rel[ied] on attorney-client communications” to establish its good-
faith defense. 883 F.3d at 558; accord McKee v. PetSmart, Inc., 71 F. Supp. 3d
439, 443 (D. Del. 2014) (no waiver of privilege by invoking FLSA good-faith
defense).
The district court distinguished Itron by interpreting Hanley’s testimony
as an implied waiver of attorney-client privilege. The court relied on a pre-Itron
district court decision, Edwards v. KB Home, No. 3:11-CV-00240, 2015 WL
4430998 (S.D. Tex. July 18, 2015). In Edwards, an FLSA defendant invoked
the good-faith defense and conceded that it had communicated with attorneys
regarding its FLSA classification decisions. Id. at *1. The district court held

1
See Itron, 883 F.3d at 558, 560–61 & n.6 (citing 8 Fed. Prac. & Proc. § 2016.6; 2 New
Wigmore, § 6.12.4(b); 81 Am. Jur. 2d § 329; 1 McCormick On Evidence § 93; 2 Paul R. Rice et
al., Attorney-Client Privilege in the United States § 9:46 (2017–18 ed.); 81 Am. Jur. 2d § 329).
2
See, e.g., id. at 559 nn. 3–4 (citing United States v. Newell, 315 F.3d 510, 525 (5th
Cir. 2002); Indus. Clearinghouse, Inc. v. Browning Mfg. Div. of Emerson Elec. Co., 953 F.2d
1004, 1007 (5th Cir. 1992); Conkling v. Turner, 883 F.2d 431, 434–35 (5th Cir. 1989); In re
Burlington N., 822 F.2d at 533; United States v. Miller, 600 F.2d 498, 501–02 (5th Cir. 1979).
3
See, e.g., id. at 559 & n.3 (citing Hunt v. Blackburn, 128 U.S. 464, 470–71 (1888);
Seneca Ins. Co. v. W. Claims, Inc., 774 F.3d 1272, 1276–77 (10th Cir. 2014); In re Icenhower,
755 F.3d 1130, 1141 (9th Cir. 2014); United States v. Bauer, 551 F.3d 786, 790–92 (8th Cir.
2008); United States v. Workman, 138 F.3d 1261, 1263–64 (8th Cir. 1998); Chevron Corp. v.
Pennzoil Co., 974 F.2d 1156, 1162–63 (9th Cir. 1992)); Sedco Int’l, S. A. v. Cory, 683 F.2d
1201, 1206 (8th Cir. 1982).
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that where a defendant relied on counsel’s advice in making classification
determinations, the defendant could not shield those communications by
disclaiming that reliance. Id. at *2.
Edwards predates Itron and is, in any event, distinguishable. In
Edwards, the defendant affirmatively conceded it had relied on the advice of
counsel to make its classification decisions. Here, STC made no such concession
and instead tailored its pleading so as not to rely on privileged
communications.
We also reject Plaintiffs’ argument that STC waived the privilege simply
by allowing Henley to testify about the compliance reviews. To comply with
plaintiffs’ discovery requests, STC was required to identify, and thus make
available for deposition, persons involved in its consultations. See, e.g., In re
Application of Chevron Corp., 736 F.Supp.2d 773, 783–84 (S.D.N.Y. 2010).
Responding to that request does not amount to “us[ing] confidential
information against [STC’s] adversary,” such that STC “implicitly waive[d] its
use protectively.” Willy, 423 F.3d at 497.
C.
As to the third prong, STC has shown that mandamus is “appropriate
under the circumstances.” Itron, 883 F.3d at 567 (quoting Cheney, 542 U.S. at
380–81) (cleaned up). The purpose of the attorney-client privilege “is to
encourage full and frank communication between attorneys and their clients
and thereby promote broader public interests in the observance of law and
administration of justice.” Upjohn Co. v. United States, 449 U.S. 383, 389
(1981). These benefits dissipate if clients are not “free from the consequences
or the apprehension” that a court might order their confidential
communications involuntarily disclosed. Hunt v. Blackburn, 128 U.S. 464, 470
(1888). As STC points out, denying the privilege in FLSA cases may discourage
employers from seeking legal input in classifying employees. If the district
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court’s “view of the law were to proliferate, more district courts could
mistakenly find waiver” under these circumstances. Itron, 883 F.3d at 568. To
prevent this from occurring, correcting this error through mandamus is a
proper exercise of our discretion.
* * *
The mandamus petition is GRANTED. Petitioners’ accompanying
motion to place material under seal is also GRANTED.

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JAMES L. DENNIS, Circuit Judge, dissenting:
I respectfully dissent from the grant of mandamus relief. The majority
relies on In re Itron, Inc., 883 F.3d 553 (5th Cir. 2018) to conclude that the
district court clearly and indisputably erred. But that case was decided under
Mississippi state law, rather than, as here, the federal common law. See F
ED.
R. EVID. 501 (“The common law—as interpreted by United States courts in the
light of reason and experience—governs a claim of privilege,” except “in a civil
case” in “which state law supplies the rule of decision”); Alldread v. City of
Grenada, 988 F.2d 1425, 1433–34 (5th Cir. 1993) (applying federal, rather than
state, law, in analyzing waiver of attorney-client privilege in FLSA
action). Itron is thus merely persuasive authority, and in no event binding on
the district court. I do not believe a petitioner can show a clear and
indisputable right to mandamus relief in such circumstances. See Cheney v.
U.S. Dist. Court for D.C., 542 U.S. 367, 381 (2004).

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