The court of appeals affirmed a district court judgment. The court held that a purported corporate consultant held no joint attorney-client privilege with the company’s attorney’s where he was a functional employee of the company rather than an independent outside consultant. The court held further that the functional employee held no personal attorney-client privilege over his communications with the corporate attorneys where he failed to show that he sought legal advice in his individual capacity, among other elements necessary to assert the personal privilege.

James Graf was a founder of, and ostensible consultant to, Employers Mutual LLC, a Nevada corporation that purported to provide health care benefits coverage to more than 20,000 plan members. Other founders included William Kokott and Graf’s then-girlfriend, Kari Hanson. All three lived in California, where Graf had been banned from insurance work due to previous misconduct in violation of state insurance laws. Graf was not listed as an employee, officer or director of Employers Mutual or related trade associations that the three formed at approximately the same time.