## Facts

- Stanley M. Neuder, a former senior scientist/engineer, sued his former employer, Battelle Pacific Northwest National Laboratory, asserting wrongful termination and discrimination/retaliation based on age and disability, interference with ERISA benefits, and retaliation for taking sick leave.
- Battelle asserted it terminated Neuder for policy noncompliance, including failure to complete daily time sheets, excessive sick leave, and failure to complete an ethics training course.
- Battelle’s Personnel Action Review Committee (PARC) functioned as the internal body that approved or made termination decisions; Battelle’s senior attorney, David Maestas, attended PARC meetings as a non-voting member under Battelle’s bylaws.
- A discovery dispute arose over documents related to PARC meetings and related communications (including those involving Maestas), which Battelle withheld on attorney–client privilege grounds.
- The magistrate judge conducted an in camera review of the disputed documents and a privilege log, finding a limited set of documents (and portions of an employee’s notes) privileged and ordering production of the remainder.

## Issues

1. Whether PARC-related documents and communications involving in-house counsel were protected by attorney–client privilege or were primarily business communications about employment termination decisions and thus discoverable.
2. What standard governs district-court review of a magistrate judge’s nondispositive discovery rulings under Federal Rule of Civil Procedure 72(a).
3. Whether the record adequately supported the magistrate judge’s ruling as to a particular document (Document No. 524).

## Decision

- The district court applied Rule 72(a)’s “clearly erroneous or contrary to law” standard to the magistrate judge’s discovery rulings.
- The court affirmed the magistrate judge’s privilege determinations for all disputed materials except Document No. 524.
- The court upheld the determination that only certain identified documents (and limited portions of notes) were privileged, and that the remaining PARC-related documents had to be produced.
- The court returned Document No. 524 to the magistrate judge for further review and an articulated explanation supporting the ruling.

## Legal Principles

- Attorney–client privilege in the corporate context protects communications only when their primary purpose is to obtain or provide legal advice.
- The presence or involvement of in-house counsel does not automatically render communications privileged when counsel participates in a process that is primarily business-oriented.
- The party asserting privilege bears the burden to establish privilege on a document-by-document basis; labels (e.g., “confidential” or “privileged”) and routing materials through an attorney are insufficient without supporting substance.
- On review of nondispositive discovery orders, a district court will not modify a magistrate judge’s ruling absent a showing that it is clearly erroneous or contrary to law.

## Conclusion

The court largely sustained discovery into the employer’s termination-committee process, holding that most PARC-related materials were business communications not shielded by attorney–client privilege despite in-house counsel’s attendance, while remanding one document for a clearer, reasoned privilege determination.


Neuder v. Battelle Pac. Nw. Nat’l Lab., 194 F.R.D. 289 (D.D.C. 2000)