Dimitrios Biller will be able to introduce documents in his arbitration against his former employer, Toyota Motor Sales, U.S.A., Inc., that the company had claimed were privileged. And if that news weren't bad enough for the car manufacturer, a plaintiffs lawyer in Texas thinks the ruling may influence the judge in his case to allow the same documents into his contempt proceeding.
In a long-awaited ruling, the California arbitrator said on Thursday that Biller had made a prima facie showing that the documents, which ordinarily would not be available for him to use in discovery or during the arbitration hearing, qualify under the "crime-fraud" exception.
But the ruling does not mean that Toyota has lost -- nor does it assure Biller a victory.
"The Arbitrator does not rule that a crime or a fraud has taken place," retired federal judge Gary Taylor emphasized in his decision. "The ruling is simply that a prima facia showing has been made, so otherwise-privileged materials may be used in discovery and arbitration."
The ruling does not mean that all of the documents Biller possesses, or even the more than 100 documents that Taylor reviewed, can be released to the public. Though plaintiffs lawyers involved in the many lawsuits Toyota faces have long sought access to them, Taylor wrote that his decision only allows Biller to use the documents in this context. Until he rules otherwise, Taylor added, "such materials will remain confidential within this arbitration, with no public disclosure."
For Biller that was plenty. "Attorney-client privileged information almost never gets to the finder of fact to determine the merits of the case," he told Corpcounsel.com. "I am halfway there. The burden is now on Toyota to prove me wrong."
Toyota responded with a statement: "The arbitrator applied a very low standard, and he specifically noted that this preliminary motion was only to decide whether certain evidence is usable at the final hearing and was not an opportunity for Toyota to present a full contest of Mr. Biller's allegations, although we were prepared to do so.
"We are confident that Toyota will be vindicated once we have the opportunity to fully contest the allegations, and all evidence is considered, at the final hearing." That hearing is now expected to begin on Nov. 15, and a final ruling could come in January.
One lawyer who awaited the decision with uncommon interest was Jeff Embry. A partner at Hossley Embry in Tyler, Texas, Embry represents Pennie Green, who was badly injured after her Toyota Camry was struck by a drunk driver and rolled over. Green, who was 18 at the time, was rendered a quadriplegic by the 2005 accident and settled with the car maker the following year for an undisclosed sum.
Biller, who worked for Toyota from 2003 to 2007, was its national managing counsel in charge of defending litigation brought in rollover accidents. And he personally negotiated the Green settlement. When Embry learned that Biller had brought a lawsuit against his old company in 2009, accusing it of obstructing justice and violating civil racketeering laws by concealing and destroying evidence it was obliged to produce to plaintiffs, he asked the judge in Green's case to hold Toyota in contempt of court.
The Texas judge agreed, and Embry sought to introduce Biller's documents as evidence. Toyota challenged the Texas court's jurisdiction, but late last month the Texas Supreme Court denied Toyota's appeal and allowed the contempt proceeding to resume.
Embry called Taylor's ruling "just more validation that these documents have valuable information that we need to see in the Green case." Noting the fierce battle the company waged to keep them out of the California arbitration, he added: "I think Toyota will try and take a similar tack in our case and say that these documents are all privileged. And I think Judge Taylor's ruling is going to influence our judge."
For a company dealing with angry federal regulators, millions of recalled vehicles, and all those plaintiffs lawyers, this could not have been welcome news.