Buckley law firm can't shield probe of ex-chairman's conduct from insurer, court says

(Reuters) - Washington, D.C.-based law firm Buckley must comply with its insurer's demand for records of communications relating to alleged misconduct by former Buckley chairman Andy Sandler, the North Carolina Supreme Court ruled Friday.

The decision upholds a lower court's November 2020 ruling that portions of Buckley's communications with its lawyers at Latham & Watkins about their investigation of Sandler must be turned over to Oxford Insurance Co.

The high court rejected Buckley's argument that the communications could be withheld because they contained legal advice sought by the firm.

The court said internal investigations to determine whether employees violated company policy are "ordinary business activities" in today's business world and not necessarily shielded by attorney-client privilege.

Attorneys representing Buckley and Oxford did not immediately respond to requests for comment. Sandler, who is now senior partner at Washington-based boutique Mitchell Sandler, declined to comment.

Buckley has been locked in litigation with Oxford over a $6 million insurance claim it filed under a "loss of key employee" policy after Sandler left the firm in 2018. Oxford has asserted it does not have to cover the claim, alleging that Buckley failed to disclose that Sandler was being investigated for alleged misconduct when he left.

The allegations against Sandler have not been detailed in the litigation. Oxford, in its initial October 2019 complaint against Buckley, said the allegations were "significant enough" to warrant hiring Latham and to potentially lead to Sandler's termination.

The U.S. Chamber of Commerce and the Association of Corporate Counsel backed Buckley's position in a joint amicus brief, arguing that a ruling for Oxford would undermine "the free flow of information and legal advice at the time when companies need it most."

Oxford said Buckley's position would allow organizations to "'launder' communications on non-legal matters through outside counsel and thus prevent their disclosure in litigation."

The case is Buckley LLP v. Series 1 of Oxford Insurance Company NC LLC, North Carolina Supreme Court, No. 219A21-1.

For Buckley: Mark Kinghorn of McGuireWoods

For Oxford Insurance Co: James Cooney and G. Michael Barnhill of Womble Bond Dickinson

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U.S. Chamber, in-house group wade into fight over Buckley records

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