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SUPER TIRE ENGG. CO. v. BANDAG INC.

April 26, 1983

SUPER TIRE ENGINEERING COMPANY
v.
BANDAG INCORPORATED



The opinion of the court was delivered by: POLLAK

 LOUIS H. POLLAK, District Judge.

 This is a diversity action in which plaintiff, Super Tire Engineering Company, seeks to recover damages from defendant, Bandag Incorporated, for defendant's alleged breach of the parties' franchise agreement. Plaintiff has moved to compel the production of certain documents withheld by defendant on the grounds that they are protected from discovery by the attorney-client privilege.

 Under Rule 501 of the Federal Rules of Evidence, a federal court sitting in diversity applies the privilege law that the courts of the forum state would apply. Samuelson v. Susen, 576 F.2d 546, 549 (3d Cir.1978). Because Pennsylvania has adopted the "interest analysis" approach to conflicts of law questions, a Pennsylvania federal court trying a diversity case must look to the privilege law "'of the predominantly concerned jurisdiction, measuring the depth and breadth of that concern by the relevant contacts each affected jurisdiction had with . . . "the policies and interests underlying the particular issue before the court."'" Id. at 551 (quoting Suchomajcz v. Hummel Chemical Company, 524 F.2d 19 (3d Cir.1975)).

 The attorney-client relationship relevant to this case arose in Iowa, the state of Bandag's corporate headquarters. Accordingly, a Pennsylvania court ruling on the question whether these documents are protected would look to the privilege law of Iowa to answer that question. See Petruska v. Johns-Manville, 83 F.R.D. 32 (E.D.Pa.1979).

 The Iowa statute makes privileged "any confidential communication properly entrusted to [the attorney] in his professional capacity, and necessary and proper to enable him to discharge the functions of his office according to the usual course of practice or discipline." Iowa Code Ann. § 622.10 (West 1975). The burden of proof with respect to privilege is on the party asserting it. Bailey v. Chicago, Burlington and Quincy R.R. Co., 179 N.W.2d 560 (Iowa 1970). The privilege does not attach to communications also transmitted to third parties, to communications the attorney is under a duty to make public, or to communications contained in a pleading or other document filed of record or publicized in some other manner on behalf of the client. Id. at 564.

 As the parties have pointed out in their memoranda, Iowa case law on the issues presented here is sparse. But since the Iowa Supreme Court looks to treatises, see, e.g., Bailey, 179 N.W.2d at 563-64, and to non-Iowa decisions, see id.; Olsson v. Pierson, 237 Iowa 1342, 25 N.W.2d 357 (1946), in addressing attorney-client privilege questions not answered by Iowa case law, it is appropriate for this court to look to the same sources in undertaking to determine what an Iowa court would do if this case were being tried there.

 In Barr Marine Products Co. v. Borg-Warner Corp., 84 F.R.D. 631, 634-35 (E.D.Pa.1979), Chief Judge Lord summarized the state of the law with respect to attorney-client privilege in a corporate setting: *fn1"

 First, confidentiality is essential to protected communications. Accordingly, communications made in the presence of or transmitted to third parties are not protected, and legal advice based on facts revealed to the attorney by third parties is not a privileged communication.

 Second, the communication must be between client and the attorney in his or her capacity as an attorney rather than as, for example, a business advisor; the communication's primary purpose must be to gain or provide legal assistance. The privilege is not necessarily lost, however, when some non-legal information is included in a communication seeking or giving legal advice.

 Third, business communications will not be protected from discovery because they were directed to an attorney.

 Applying the standards articulated above to the documents submitted for in camera examination, I have divided them into three categories -- privileged, ...


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