Leer v. Chicago, Milwaukee, St. Paul & Pacific Railway Co.

SCOTT, Justice. The Dakota County District Court certified the following question to this court as important and doubtful: 1 Are witness statements obtained by a defendant from non-managerial employees who were working with plaintiff at the time of his accident discoverable by plaintiff under Rule 26.02(3), Minnesota Rules of Civil Procedure, or are the same protected from discovery under a claim of attorney-client privilege? The appellant, William E. Leer, was employed by respondent railroad as a switch-man in its Wausau, Wisconsin, railroad yards. Although the facts are incomplete and in dispute at this stage of the litigation, it appears that on September 20, 1978, appellant was in the process of executing a railroad car switching movement when he sustained an on-the-job injury. As a result, appellant’s leg was amputated above the knee. Appellant alleges in his complaint, based upon the Federal Employers’ Liability Act (FELA), that the accident resulted from respondent’s negligence, as follows: [S]uch accident was caused by the defendant’s negligence and failure to provide plaintiff with a reasonably safe place to work, failure to exercise reasonable care to provide plaintiff with a reasonably safe and efficient switch mechanism and by further reason of the defendant’s negligence and carelessness by reason of its failure to exercise reasonable care in the execution of the switching movement then and there being carried out. Appellant’s action is against the respondent railroad. No members of the switching crew or other employees of the railroad are named as defendants. An investigator-employee of the railroad obtained statements of the other members of the switching crew on the day of the accident. Appellant served a demand for production of these statements upon respondent pursuant to Minn.R.Civ.P, 26.02(3) and 34.02, 2 along with the summons and complaint, on June 22, 1979. In respondent’s reply to the request for production of documents, it identified the statements of four of its employees, but refused to produce them on the ground that the statements were protected by the attorney-client privilege. 3 The trial court *307 ruled in favor of respondent, and certified the above question. The resolution of the certified question therefore depends upon: (1) Whether the employees whose statements are the subject of this discovery procedure are parties under Minn.R.Civ.P. 26.-02(3); and (2) Whether, in any event, the attorney-client privilege constitutes a bar to discovery. 1. Appellant argues that since the employees were not named parties their statements are discoverable under Rule 26.02(3). The relevant part of this rule states that “[u]pon request, a person not a party, or a party, may obtain without the required showing a statement concerning the action or its subject matter previously made by that person who is not a party.” 4 (Emphasis added.) The Advisory Committee note to Rule 26.02(3) makes clear “that a party, without the necessity of seeking a routine motion, has the right to obtain statements made by non-party witnesses.” Notwithstanding the fact that the employees were not named defendants, respondent argues that they are nonetheless parties since it is their negligence that appellant seeks to impute to respondent and since the employees could be named as parties at any time. In Minnesota, it has been a longstanding rule of construction that words are to be given their ordinary meaning. State v. Marsh, 158 Minn. 111 , 196 N.W. 930 (1924). The meaning of the word “party,” when used in the legal sense, is clear: “party” means only the named plaintiff or defendant. See Black’s Law Dictionary 1010 (5th ed. 1979). It would seem self-evident that a statement by an employee who is neither a named plaintiff nor a defendant is a statement of “a person who is not a party,” and is therefore discoverable. In Chappie v. SC (NEI), Inc., No. 711856 (Minn. 4th Dist.Ct., May 29, 1975), Judge Stone discussed this issue. He stated that: An agent or employee who is neither Plaintiff nor Defendant is a person not a party to the lawsuit and his statement may be obtained under Rule 26.02 without a specific showing of substantial need. Judge Stone’s view is especially instructive, since he served as a member of the 1975 Advisory Committee that recommended this rule change, which deviated from the federal rule. It should also be noted that section IV of the Minnesota Rules of Civil Procedure for the District Courts, entitled “Parties,” provides meaningful guidance as to whether the corporate employees in this case should be considered parties. For example, Minn. R.Civ.P. 19.01 provides in part that “[a] person who is subject to service of process shall be joined as a party * * *.” (Emphasis added.) Furthermore, Rule 19.02 is applicable when “[a] person * * * cannot be made a party.” (Emphasis added.) These provisions make it clear that a “person” becomes a “party” when named in the action. We will continue to follow the construction suggested by our prior cases, as more recently enunciated in Larson v. Independent School District No. 315, 305 Minn. 358, 362 , 233 N.W.2d 744, 747 (1975): [T]he Rules are to be liberally construed so as to serve the interests of justice and so as to discourage reliance on technicalities and form. For the above reasons, we conclude that in the factual setting presented here corporate employees who are not named parties in the litigation are not “parties” within the meaning of Minn.R.Civ.P. 26.-02(3). 2. In Schmitt v. Emery, 211 Minn. 547 , 2 N.W.2d 413 (1942), this court held that employee statements taken by an employer’s claims agent were protected by the attorney-client privilege. Soon after Minnesota *308 decided Schmitt v. Emery, the United States Supreme Court decided Hickman v. Taylor, 329 U.S. 495 , 67 S.Ct. 385 , 91 L.Ed. 451 (1947). Hickman involved an accident in which a tugboat sank while towing a ferry. An attorney hired by the tugboat owner (a partnership) took the statements of the tugboat crew, who witnessed the accident. In an action against the company on behalf of an employee who drowned, the tugboat owners claimed the statements were protected by the attorney-client privilege and thereby refused to produce them. The court found that they were not privileged, stating: [T]he memoranda, statements and mental impressions in issue in this case fall outside the scope of the attorney-client privilege and hence are not protected from discovery on that basis. 5 Id. at 508 , 67 S.Ct. at 392 . Hickman , having been decided under the federal rule, is not controlling, but was significant in its impact upon the adoption of the Minnesota Rules of Civil Procedure in 1952. Two works on Minnesota civil practice have concluded that Rule 26.02(3) embodies the Hickman decision. 6 Both the case at hand and Hickman portray the investigative scenario of an overwhelming percentage of personal injury litigation. Since Hickman , several cases have considered the attorney-client privilege in the employer/employee setting. One of these cases is Philadelphia v. Westinghouse Electric Corp., 210 F.Supp. 483 (D.C.Pa.1962). The Westinghouse court narrowed the issue to a determination of whether the employee was, at the time, seeking legal advice on behalf of the corporation. If not, employee statements are merely those of witnesses, and are not privileged. To determine whether the employee was seeking legal advice on behalf of the corporation, the court advanced the “control group” test. This test requires that the employee be in a position to control or take a substantial part in a decision about any action to be taken upon the advice of the attorney or that the employee be a member of a group having such authority. In the instant case, it is clear that the switching crew members are not within the “control group.” A second test, “the subject matter test,” was advanced in Harper & Row Publishers, Inc. v. Decker, 423 F.2d 487 (7th Cir. 1970), aff’d per curiam by an equally divided court, 400 U.S. 348 , 91 S.Ct. 479 , 27 L.Ed.2d 433 (1971). In this case, plaintiff sought to discover statements prepared by defense attorneys while debriefing employees (or former employees) after they testified before a federal grand jury. The court held that an employee, though not a member of his employer’s control group, could be sufficiently identified with his employer so that his communication to the corporation’s attorney would be privileged. Such a connection exists where the employee made the communication at the direction of his supervisor and where the subject matter upon which the lawyer’s advice was sought by the corporation and dealt with in the communication was within the performance of the employee’s duties. The court stated that it was— not dealing in this case with the communications of employees about matters as to which they are virtually indistinguishable from bystander witnesses; employees who, almost fortuitously, observe events which may generate liability on the part of the corporation. We express no opinion with respect to communications by employees who fall in that class. Id. at 491. Because the “subject matter” and the “control group” tests have been widely criticized, 7 a third test, the “Weinstein *309 test ” was adopted by the Eighth Circuit in Diversified Industries v. Meredith, Inc., 572 F.2d 596 (1978). The court adopted the suggestion of Judge/Professor Weinstein that the attorney-client privilege should be available to a corporation if all the following requirements are satisfied: (1) [T]he communication was made for the purpose of securing legal advice; (2) the employee making the communication did so at the direction of his corporate superior; (3) the superior made the request so that the corporation could secure legal advice; (4) the subject matter of the communication is within the scope of the employee’s corporate duties; and (5) the communication is not disseminated beyond those persons who, because of the corporate structure, need to know its contents. Id. at 609 . In deciding this case, certain conflicting policy considerations must be kept in mind. The purpose behind the attorney-client privilege is to promote open and honest discussion between clients and their attorneys. National Texture Corp. v. Hymes, 282 N.W.2d 890 (Minn.1979). On the other hand, Minnesota favors a liberal construction of the discovery rules so as to uncover all relevant matters before trial, even those inadmissible at trial. Anderson v. Florence, 288 Minn. 351, 362 , 181 N.W.2d 873, 879 (1970). As recognized in Kahl v. Minnesota Wood Specialty, Inc., 277 N.W.2d 395 (Minn. 1977), the attorney-client privilege is a barrier to disclosure and tends to suppress relevant facts and, as such, must be strictly construed. After reflecting on these policy factors and considering the three alternative tests, we reverse the trial court. Under any of these tests, the scope of the attorney-client privilege does not encompass communications about events which are within the employee’s knowledge solely because he witnessed an accident. We therefore hold that when an employee is merely a witness to an accident and not a party to a subsequent action, communications made with him in a general investigation do not create an attorney-client relationship. This result is consistent with Hickman, supra, and the three tests cited herein. 8 In so holding, we necessarily overrule Schmitt v. Emery, supra. Reversed. . Minn.R.Civ.App.P. 103.03 provides, in relevant part, as follows: An appeal may be taken to the Supreme Court: * * * * * * (i) If the trial court certifies that the question presented is important and doubtful, from an order which denies a motion to dismiss for failure to state a claim upon which relief can be granted or from an order which denies a motion for summary judgment. This certification did not arise from either of these types of order. Therefore, this action is clearly not appealable as of right per Minn.R. Civ.App.P. 103.03(i). See Price v. Amdal, 256 N.W.2d 461 (Minn. 1977), noted in 4 Wm. Mitchell L.Rev. 245 (1978). However, we grant discretionary review pursuant to Minn.R.Civ. App.P. 105. . Minn.R.Civ.P. 26.02(3) provides in part: Upon request, a person not a party, or a party, may obtain without the required showing a statement concerning the action or its subject matter previously made by that person who ⅛ not a party. (Emphasis added.) Minn.R.Civ.P. 34.02 provides in part: The request may, without leave of court, be served upon the plaintiff after commencement of the action and upon any other party with or after service of the summons and complaint upon that party. .Minn.Stat. § 595.02(2) (1978) provides in part: An attorney cannot, without the consent of his client, be examined as to any communication made by the client to him or his advice given thereon in the course of professional duty * * *. . The Minnesota rule differs from Rule 26(b)(3) of the Federal Rules of Civil Procedure with respect to witnesses’ statements by providing for free discovery of any statements made by persons who are not parties to the litigation. . We need not discuss the work-product rule of the Hickman case, since the Minnesota rule differs from the federal rule. . See IIP. Thompson, Evidence § 501.01 at 188 (1979) (“The Hickman decision is largely codified in Minn.R.Civ.P. 26.02.”) 3 D. McFarland & W. Keppel, Minnesota Civil Practice, § 1506, at 19 (1979). .The “control group” test is criticized as ignoring the realities of corporate life by applying the attorney-client privilege to statements of only the highest level of executives. See Note, Privileged Communications Inroads on the *309 "Control Group” Test in the Corporate Area, 22 Syracuse L.Rev. 759, 767 (1971). On the other hand, the subject matter test is criticized as broadly protecting almost all employee communications. See Note, Attorney-Client Privilege in Corporate Clients; The Control Group Test, 84 Harv.L.Rev. 424, 432 (1970). . Recently, in Upjohn Co. v. United States, - U.S. -, 101 S.Ct. 677 , 66 L.Ed.2d 584 (1981), the United States Supreme Court considered the scope of the attorney-client privilege in a corporate setting. In Upjohn, that corporation, through its general counsel, made an investigation of alleged illegal payments to foreign officials. As part of the investigation, Upjohn’s general counsel interviewed and sent questionnaires to foreign managers. Through an administrative summons, the criminal investigation division of the Internal Revenue Service sought production of the completed questionnaires and the interview notes. Upjohn refused to produce them, arguing that the documents were both work product and protected by the attorney-client privilege. After criticizing the “control group” test, yet without adopting the “subject matter” or any other test, the Supreme Court held that the documents in question were protected by the attorney-client privilege. Upjohn is critically different from the instant case in that the communications in Upjohn regarded a matter within the scope of the employees’ duties. In the instant case the witnessing of an accident was not within the scope of the employees’ duties.