TC HEARTLAND LLC v. SCHIFFMAN

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
TC HEARTLAND LLC, )
)
Plaintiff and counter- )
claim defendant, )
)
v. ) 1:23CV665
)
SUSAN S. SCHIFFMAN, )
)
Defendant and counter- )
claim plaintiff. )
ORDER AND MEMORANDUM OPINION
OF UNITED STATES MAGISTRATE JUDGE
This lawsuit was brought by plaintiff
and counter-claim defendant TC
Heartland LLC (“Heartland”) against
defendant and counter-claim plaintiff
Susan Schiffman (“Schiffman”).
Heartland, the producer of Splenda
sweetener, alleges that Schiffman, a
scientist at North Carolina State
University (“NCSU”), made false and
defamatory statements about
Splenda’s health effects. Docket Entry
126 ¶¶ 1–4, 27, 36.
This matter comes before the Court
on Heartland’s motion to compel
production of documents withheld on
the basis of privilege. Docket Entry
35. Specifically, Heartland seeks
production of two sets of emails.
Docket Entry 135-1 at 5. The first is an
email between Schiffman, two NCSU
attorneys, and NCSU
Communications Lead Matt
Shipman. See Docket Entry 135-1 at
10; Docket Entry 138 at 4–5. The
second is a set of emails between
Schiffman, Avazyme representatives,
and Arnall Golden Gregory LLP
(“AGG”) representatives. Docket
Entry 138-3 ¶ 8. Avazyme is a
laboratory with whom Schiffman
previously worked; AGG is a law firm
that represents both Schiffman and
Avazyme. Docket Entry 135-1 at 6;
Docket Entry 138-3 ¶ 8. Schiffman
claims attorney-client privilege
protects both sets of emails. Docket
Entry 138 at 4. The Court grants
Heartland’s motion with respect to
the NCSU email but denies it with
respect to the Avazyme emails, as set
forth below.
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I. DISCUSSION
It is well-settled that “in a diversity
action the availability of an
evidentiary privilege is governed by
the law of the forum state.” Ashcraft
v. Conoco, Inc., 218 F.3d 282, 286
(4th Cir. 2000) (citing Fed. R. Evid.
501); accord LaBudde v. Phoenix Ins.
Co., No. 7:21-CV-197-FL-BM, 2025
WL 52010, at *11 (E.D.N.C. Jan. 8,
2025). North Carolina uses a five-
element test for attorney-client
privilege, asking whether:
(1) “[T]he relation of attorney and
client existed at the time the
communication was made”;
(2) “[T]he communication was
made in confidence”;
(3) “[T]he communication relates
to a matter about which the
attorney is being professionally
consulted”;
(4) “[T]he communication was
made in the course of giving or
seeking legal advice for a
proper purpose although
litigation need not be
contemplated”; and
(5) “[T]he client has not waived the
privilege.”
State v. Murvin, 284 S.E.2d 289, 294
(N.C. 1981); accord Howard v.
IOMAXIS, LLC, 887 S.E.2d 853, 857
(N.C. App. 2023).
“The party asserting the privilege has
the burden of establishing each of the
essential elements of a privileged
communication.” State v. McNeill,
813 S.E.2d 797, 824 (N.C. 2018). “This
burden may not be met by mere
conclusory” allegations; “[r]ather,
sufficient evidence must be adduced,
usually by means of an affidavit or
affidavits, to establish the privilege
with respect to each disputed item.”
Id. (citation modified); see also
Berens v. Berens, 785 S.E.2d 733, 741
(N.C. App. 2016) (finding privilege
based in part on an affidavit alleging
an agency relationship).
A. An Attorney-Client Relationship
Existed.
Schiffman has demonstrated that an
attorney-client relationship existed
between her and the attorneys on
both sets of emails. Whether an
attorney-client relationship exists is a
“fact-sensitive” determination, see
Howard, 887 S.E.2d at 857, and may
arise even when no fees are paid and
no formal contract is formed, such as
in a free consultation, see Ferguson v.
DDP Pharmacy, Inc., 621 S.E.2d 323,
327 (N.C. App. 2005). The fact that an
attorney directs a client to retain a
second attorney does not prevent the
first attorney from forming a
relationship with the client. See
Raymond v. N. Carolina Police
Benevolent Ass’n., Inc., 721 S.E.2d
923, 927 (N.C. 2011). North Carolina
business courts have repeatedly found
that “[a]n important factor in
determining the existence of the
relationship is the client’s subjective
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belief.” E.g., In re Se. Eye Ctr.-
Pending Matters, No. 15 CVS 1648,
2019 WL 2051336, at *10 (N.C. Super.
May 7, 2019).
Here, Schiffman has submitted a
declaration under penalty of perjury
alleging that she sent the NCSU email
to the two NCSU attorneys “for the
purpose of obtaining legal advice and
assistance, including about how to
respond to [Heartland’s] legal
allegations and demands and how to
handle issues related to university
records referenced in the demand.”
See Docket Entry 138-3 ¶¶ 2–7
(“Schiffman Dec.”). Although the
NCSU attorneys told Schiffman that
she should retain personal counsel,
they also indicated that they would
“work with,” “coordinate with,” and
“assist” her. See id. ¶ 6. This is
sufficient to create an attorney-client
relationship.
Similarly, Schiffman states that the
purpose of the Avazyme emails was to
“facilitate legal representation” from
AGG after Schiffman and Avazyme
received a letter from Heartland’s
attorney. Id. This, too, is sufficient to
create an attorney-client relationship.
B. Schiffman Maintained
Confidentiality as to the Avazyme
Emails, But Not the NCSU Emails.
Schiffman disclosed both sets of
emails to a non-attorney third party:
NSCU Communications Lead Matt
Shipman and Avazyme
representatives, respectively.
However, under the common interest
doctrine, only the former destroys
attorney-client privilege.
Typically, “[c]ommunications do not
merit the attorney-client privilege
when they are made in the presence of
a third party.” See Glob. Textile All.,
Inc. v. TDI Worldwide, LLC, 847
S.E.2d 30, 34 (N.C. 2020). However,
an exception exists when the client
and the third party “(1) share a
common interest; (2) agree to
exchange information for the purpose
of facilitating legal representation of
the parties; and (3) [share only]
information [that] otherwise [is]
confidential.” See Sessions v. Sloane,
789 S.E.2d 844, 854–55 (N.C. App.
2016).
“The linchpin” of the common interest
doctrine “is the finding of a common
legal interest between the attorney,
client, and third party.” Friday Invs.,
LLC v. Bally Total Fitness of the Mid-
Atl., Inc., 788 S.E.2d 170, 176 (N.C.
App. 2016), aff’d as modified on other
grounds, 805 S.E.2d 664 (N.C. 2017).
The client and the third party must
have common legal interests;
common business interests will not
suffice. See Friday Invs., 788 S.E.2d
at 177. Indemnification agreements
satisfy this requirement, see Friday
Invs., 805 S.E.2d at 668–69, as does
coordination of litigation strategy
between two businesses with separate
lawsuits against the same defendant,
see Friday Invs., 788 S.E.2d at 177–
78 (citing SCR-Tech LLC v. Evonik
Energy Servs. LLC, No. 08 CVS
16632, 2013 WL 4134602, at *7 (N.C.
Super. Aug. 13, 2013)).
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Schiffman has not carried her burden
to show that she and Matt Shipman
shared a common legal interest.
While Schiffman states that the NSCU
email discussed Heartland’s letter to
Schiffman accusing her of
defamation, see Schiffman Dec. ¶ 2,
that letter did not mention any claims
against NCSU or Shipman personally,
see Docket Entry 128-1, and
Schiffman does not allege that NCSU
or Shipman expressed concerns that
Heartland might sue them at that
time, see generally Schiffman Dec. In
fact, Schiffman’s only evidence of
common legal interest is that
Heartland’s Amended Complaint
alleges that NCSU “condoned and
encouraged” Schiffman’s defamatory
statements. See Docket Entry 126 ¶¶
157–66. This is too little, too late. The
Amended Complaint does not name
NCSU as a defendant, and Heartland
filed it on December 3, 2025, long
after the June 13, 2023 email. See
Schiffman Dec. ¶ 2.
Schiffman has, however, carried her
burden regarding the Avazyme
emails. Schiffman alleges that she and
Avazyme “agreed to be jointly
represented by Arnall Golden Gregory
LLP because Avazyme and I shared a
common interest because we believed
that we could both be sued by
Heartland based on letters we
received.” Id. ¶ 8. In context, this
makes sense. Heartland sent a letter
1 The Court notes that Avazyme moved
that this Court seal references to this
agreement. See Docket Entry 142. The
Court is denying that request, but will set
to Avazyme employee Stephen
Werness, a coauthor on one of
Schiffman’s papers, advising him that
Heartland might contact him again
regarding the paper’s “numerous
flaws and problems.” See Docket
Entry 138-2 at 2–3. The letter also
represented that Heartland would, “at
the very least,” sue Schiffman for
defamation and that Werness should
therefore preserve not only
documents and communications
related to Schiffman, but also
anything concerning sucralose,
sucralose-6-acetate, and Splenda. See
id. at 3–4.
This letter invited coordination
between Schiffman and with a single
counsel regarding the similar
litigation risks they faced from
Heartland—and North Carolina
courts have long recognized this sort
of coordination against a single
defendant as a common legal interest.
See Friday Invs., 788 S.E.2d at 177–
78 (citing SCR-Tech, 2013 WL at *7).
Further, Schiffman and Avazyme
have an indemnification agreement,
see Docket Entry 135-6 at 7–8,1 which
constitutes clear evidence of a
common interest under North
Carolina law, see Friday Invs., 805
S.E.2d at 668–69. While Heartland
argues that Friday Investments
involved a nonparty indemnitor and
this case involves a nonparty
indemnitee, Docket Entry 135-1 at 13–
forth the reasoning related thereto in a
separate opinion addressing other
pending motions for a protective order
and sealing of materials, respectively.
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14, Avazyme’s status as a nonparty
was not clear at the time the emails
were created, when it reasonably
believed it could be sued. Similarly,
Heartland argues that Avazyme
representatives indicated in
depositions that they do not see
Avazyme’s and Schiffman’s interests
as aligned. Docket Entry 135-1 at 13.
But this represents only those
representatives’ current views of the
instant litigation, not their views at
the time Heartland’s letter arrived.
Schiffman has met the other
requirements for a common interest,
as well: she alleges that the Avazyme
emails were intended to facilitate
AGG’s representation and were not
shared with anyone besides AGG and
Avazyme. See Schiffman Dec. ¶ 8. And
these allegations also meet the
requirements of the remaining
Murvin elements: that the attorney
was being professionally consulted,
that legal advice was sought, and that
Schiffman waived no privilege. See
284 S.E.2d at 531.
Accordingly, the Court denies
Heartland’s motion to compel
discovery regarding the Avazyme
emails but grants it regarding the
NCSU email. The Court orders
Schiffman to provide the NCSU email
to Heartland within seven days of
entry of this Order.
II. CONCLUSION
IT IS HEREBY ORDERED that
Heartland’s motion to compel, Docket
Entries 135, 136, is GRANTED IN
PART AND DENIED IN PART and
Schiffman is ORDERED to provide
Heartland with the requested NCSU
email within seven days of entry of
this Order.
JoAnna Gibson McFadden
United States Magistrate Judge
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