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Guardant Health, Inc. v. Foundation Medicine, Inc.

United States District Court, D. Delaware

November 26, 2019

GUARDANT HEALTH, INC., Plaintiff,
v.
FOUNDATION MEDICINE, INC., Defendant. GUARD ANT HEALTH, INC., Plaintiff,
v.
PERSONAL GENOME DIAGNOSTICS, INC., Defendant.

          MEMORANDUM ORDER

          CHRISTOPHER J. BURKE UNITED STATES MAGISTRATE JUDGE

         In these patent infringement actions, Plaintiff Guardant Health, Inc. ("Guardant") moves to compel (the "Motion") Defendants Foundation Medicine, Inc. ("FMI") and Personal Genome Diagnostics, Inc. ("PGDx" and collectively with FMI, "Defendants") to destroy a communication drafted by Maya Skubatch of Wilson, Sonsini, Goodrich & Rosati, P.C., counsel for Guardant (the "Skubatch communication"); the communication was ultimately transmitted to Guardant's current Chief Executive Officer ("CEO"), Dr. Helmy Eltoukhy, in 2012 while he was employed by a third party, Illumina, Inc. ("Illumina"). (Civil Action No. 17-1616-LPS-CJB, D.I. 203; Civil Action No. 17-1623-LPS-CJB, D.I. 349)[1] For the reasons set forth below, the Court GRANTS Guardant's Motion.

         I. BACKGROUND

         Dr. Eltoukhy was employed by Illumina from August 2008 until January 2013. (D.I. 364 at ¶ 4) Dr. AmirAli Talasaz was employed by Illumina from March 2009 until June 2012. (Id. at ¶ 5) During the second half of 2012, Dr. Eltoukhy and Dr. Talasaz co-founded Guardant. (See D.I. 238 at ¶ 1) When Dr. Eltoukhy left Illumina, he became CEO of Guardant. (D.I. 238 at 1; D.I. 353 at 1)

         In connection with Guardant's Motion, Ms. Skubatch submitted a declaration stating that the Skubatch communication is part of correspondence that she had "with Guardant []" in the summer of 2012, when Guardant had engaged Ms. Skubatch's law firm to provide legal services and advice. (D.I. 353, ex. B at ¶ 3) The Skubatch communication, dated August 8, 2012, includes a set of draft patent claims with comments and questions directed (at least on their face) to Dr. Talasaz. (Id., ex. A; id, ex. B at ¶ 4) Ms. Skubatch confirmed that she emailed a version of the Skubatch communication "to Guardant" on August 10, 2012, and that she intended the Skubatch communication to remain in confidence. (Id., ex. B at ¶¶ 3-4)

         In response to subpoenas served on Illumina by Defendants in connection with these actions, Illumina conducted a search for documents. In doing so, Illumina discovered the Skubatch communication on Illumina's email system, in Dr. Eltoukhy's Illumina email files. (D.I. 364 at ¶¶ 7-9) The Skubatch communication was attached to an email from Dr. Eltoukhy's Illumina email address that was sent on December 15, 2012; the email cover sheet does not indicate to whom the communication was sent. (Id. at ¶¶ 8-9; D.I. 362, exs. 5-6)

         On May 29, 2019, Illumina produced to Defendants nearly 50, 000 pages of documents, including the Skubatch communication. (D.I. 353 at 1; D.I. 364 at ¶¶ 7-9)[2] On August 6, 2019, Illumina attempted to claw back the Skubatch communication pursuant to Section 14 of the Protective Order entered in these cases. (D.I. 353, ex. C) Guardant joined the request the next day, asserting that the Skubatch communication is protected by the attorney-client privilege. (Id.)[3] Defendants have not complied with Guardant's claw back request and have not destroyed the communication. (D.I. 353 at 1)

         On August 29, 2019, Guardant filed the instant Motion. (D.I. 349) The parties submitted letter briefs and related materials, (D.I. 353; D.I. 362; D.I. 364; D.I. 366; D.I. 367; D.I. 369), and the Court heard telephonic argument on the Motion on September 16, 2019, (D.I. 396; hereinafter, "Tr.").

         II. STANDARD OF REVIEW

         The United States Court of Appeals for the Third Circuit has held that in order for the attorney-client privilege to protect a communication, "it must be (1) a communication (2) made between privileged persons (3) in confidence (4) for the purpose of obtaining or providing legal assistance for the client." In re Chevron Corp., 650 F.3d 276, 289 (3d Cir. 2011) (internal quotation marks and citations omitted)). '"Privileged persons' include the client, the attorney(s), and any of their agents that help facilitate attorney-client communications or the legal representation." In re Teleglobe Commc'ns Corp., 493 F.3d 345, 359 (3d Cir. 2007) (citation omitted). Because the privilege militates against the general rule promoting full disclosure of information between parties to a lawsuit, courts must construe it narrowly. Westinghouse Elec. Corp. v. Republic of Philippines, 951 F.2d 1414, 1423 (3d Cir. 1991). In line with the narrow construction that it receives, "[t]he privilege protects only those disclosures-necessary to obtain informed legal advice-which might not have been made absent the privilege." Id. at 1423-24 (emphasis in original) (internal quotation marks and citation omitted).

         The party asserting the privilege bears the burden of establishing the requisite elements. See, e.g., TC Tech. LLC v. Sprint Corp., No. 16-cv-153-RGA, 2018 WL 6584122, at *2 (D. Del. Dec. 13, 2018). Generally, a party's voluntary disclosure to a third party of information purportedly protected by the attorney-client privilege destroys the information's confidentiality, thus obviating the privilege. Westinghouse Elec. Corp., 951 F.2d at 1424.

         III. DISCUSSION

         Because the Skubatch communication was found on the servers of third-party Illumina, within Dr. Eltoukhy's Illumina email account, the main focus of Defendants' challenge to Guardant's claim of privilege is whether Guardant has established that the Skubatch communication was made "in confidence." (D.I. 362 at 2; Tr. at 6, 20-26, 35) The Court will first address this challenge, and will then turn to Defendants' remaining arguments.

         A. Was the Skubatch Communication Made "In Confidence?"

         As noted above, the attorney-client privilege applies only to "confidential communication[s][, ]" with such confidentiality having "both a subjective and objective component; the communication must be given in confidence, and the client must reasonably understand it to be so given." In re Asia Global Crossing, Ltd., 322 B.R. 247, 255 (Bankr. S.D.N.Y. 2005) (emphasis in original). For her part, Ms. Skubatch has declared that when she made the communication at issue, she intended that it remain in confidence. And Dr. Eltoukhy, in a declaration also submitted by Plaintiff, has stated that he understood the communication to be confidential and did not intend to disclose it to a third party. (D.I. 366, ex. 1 at ¶ 3) So the key question here is whether Dr. Eltoukhy's understanding that the communication remained confidential is reasonable, in light of the circumstances at issue (including the fact that the communication resided on Dr. Eltoukhy's work computer at Illumina, and ultimately remained in Illumina's possession for years after Dr. Eltoukhy left the company).

         The parties agree that in order to examine a question like this-i.e., to measure an employee's reasonable expectation of privacy in his computer files and e-mail-the Court should consider at least the factors set out In re Asia Global Crossing Ltd., 322 B.R. 247 (Bankr. S.D.N.Y. 2005) (the "Asia Global factors"). (D.I. 362 at 2; Tr. at 6, 16, 21) The Asia Global factors are: "(1) does the corporation maintain a policy banning personal or other objectionable use, (2) does the company monitor the use of the employee's computer or email, (3) do third parties have a right of access to the computer or emails, and (4) did the corporation notify the employee, or was the employee aware, of the use and monitoring policies?" In re Asia, 322 B.R. at 257-58.[4] Defendants contend that a balancing of these factors demonstrates that Dr. Eltoukhy had no reasonable expectation of privacy in his Illumina computer and email, and that the Skubatch communication was therefore one not made "in confidence." (D.I. 362 at 2) The Court will assess this argument by addressing the Asia Global factors in turn.

         1. Did Illumina Maintain a Policy During the Relevant Time Period Banning Personal or Other Objectionable Use of Email Communications like the Skubatch Communication?

         In addressing the first Asia Global factor-whether Illumina maintained a policy during the relevant time period banning personal or other objectionable use of email communications like the Skubatch communication-Defendants point to two Illumina documents.

         First, Defendants cite to a document entitled "Illumina Code of Conduct[.]" (Id.) This document states that "[c]ompany assets and information[J"-defined to include "[information created, accessed, transmitted, or stored using Company provided technology resources, such as email messages" should "only be used for legitimate business purposes of Illumina. (D.I. 362, ex. 1 at 18) The problem for Defendants is that this document is dated 2016, but the relevant time period (in which Ms. Skubatch sent the communication and in which Dr. Eltoukhy received and stored the communication) is actually many years earlier (2012). (See Tr. at 7-8 (Plaintiffs counsel arguing that "[w]e all know that these [Code of Conduct] policies shift and we all know that they've gotten much stronger over the last five [to] ten years[, ]" such that an earlier-such policy may not be identical to a later-such policy); id. at 27 (FMFs counsel acknowledging that "we don't know ...


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