Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—S.D. Ind.: Former franchisee entitled to partial discovery of franchisor’s emails, (Mar 11, 2016)

By Michael Menzhuber, J.D., LL.M.

A former home care franchisee, pursuing wrongful termination litigation against its franchisor, was entitled to partial discovery of email messages and handwritten documents that the franchisor identified in its privilege log, a magistrate judge in the federal district court in Indianapolis has ruled (Elder Care Providers of Indiana, Inc. v. Home Instead, Inc., March 8, 2016, Dinsmore, M.).

In 2006, Elder Care Providers of Indiana entered into a franchise agreement with Home Instead, Inc. to operate a Home Instead franchise that would provide non-medical care to senior citizens. In 2013, Home Instead learned that Elder Care had formed Home Again Senior Care, Inc. (HASC), a medical health care corporation. After determining that Elder Care’s operation of HASC breached the franchise agreement’s restrictive covenant and infringed its trademark, Home Instead terminated Elder Care’s franchise agreement.

Elder Care filed a lawsuit, alleging that the termination breached the franchise agreement and violated the Indiana Deceptive Franchise Practices Act. In response, Home Instead filed counterclaims that alleged breach of contract and trademark infringement.

During litigation, a discovery dispute arose over Home Instead’s privilege log, which identified a number of documents that Elder Care argued did not qualify for protection under either the attorney-client privilege or the work product doctrine. The issue of attorney-client privilege was complicated by the fact that Home Instead employed two in-house attorneys in dual legal and management roles. The court conducted an in camera document-by-document review to determine the status of each document.

The court determined that several of Home Instead’s email strings, despite being forwarded to an in-house attorney, were not privileged because they concerned: (1) primarily a business purpose; (2) an investigation into a business issue; (3) a status update; or (4) a business communication. A handwritten note from Home Instead’s Director of Standards to an in-house attorney, concerning a franchisee, also was not considered to be privileged.

The court further determined that some of Home Instead’s email strings were protected under the attorney-client privilege because they sought and provided legal advice. A handwritten note drafted by one of Home Instead’s in-house attorneys also was protected under the work product privilege because it reflected litigation strategy.

The case is No. 1:14-cv-01894-SEB-MJD.

Attorneys: Andrew M. McNeil (Bose McKinney & Evans LLP) for Elder Care Providers of Indiana, Inc. Adam Arceneaux (Ice Miller LLP) for Home Instead, Inc.

Companies: Elder Care Providers of Indiana, Inc.; Home Instead, Inc.

Cases: FranchisingDistribution IndianaNews