Numerous Privilege Points have described cases concluding that advertising agencies are outside privilege protection but inside work product protection (although they normally cannot themselves create protected work product). There is another possible argument for privilege protection covering communications with such outsiders, but it usually fails.
In PUMA SE v. Brooks Sports, Inc., Case No. 2:23-cv-00116-LK, 2024 U.S. Dist. LEXIS 186361 (W.D. Wash. Oct. 11, 2024), defendant claimed privilege protection for communications with its advertising agencies. Defendant argued that the advertising agencies’ employees were the “functional equivalent” of its own employees. That important doctrine can expand privilege protection, but it is very difficult to satisfy. Like most courts, the PUMA court found that there was nothing “particularly unique about its relationship with the third-party agencies that differed from an ordinary third-party consulting or contractual relationship.” Id. at *20. In fact, the court added another requirement that not all courts demand — that such an outsider possess information that would “assist the company’s attorneys in rendering legal advice” (quoting another court’s standard). Id. at *14-15.
The “functional equivalent doctrine” represents a welcome expansion of protection in the corporate setting, but it can be very difficult to successfully apply.
