Georgia-Pacific Corp. v. GAF Roofing Manufacturing Corp.

Georgia-Pacific Corporation (GP) (plaintiff) entered into an agreement to sell certain assets to GAF Roofing Manufacturing Corporation and G-I Holdings, Inc. (GAF) (defendants). Before the agreement was executed, GAF’s in-house environmental counsel reviewed the proposed agreement, met with GP’s environmental lawyers to negotiate the environmental issues, and made negotiating recommendations to a senior GAF executive and GAF’s in-house counsel. The asset-purchase agreement was signed, but the closing of the transaction was conditioned on the execution of an environmental remediation and indemnification agreement that was to be entered into after GAF had conducted an environmental audit and GP and GAF had agreed on the environmental conditions to be included. An issue arose as to GP’s obligation to remediate a certain hazardous condition. GAF’s environmental in-house counsel met with GP’s environmental lawyers and thereafter reported to GAF management what had been discussed at the meeting. The environmental lawyers continued to speak and scheduled an additional meeting, but GAF terminated the agreement before the meeting occurred. GP then brought an action against GAF for breach of contract. GAF’s in-house environmental counsel was deposed and asserted the attorney-client privilege in response to questions about negotiating recommendations he had made to GAF management prior to execution of the agreement and any negotiating strategies he had recommended after the second meeting with GP. GP moved to compel answers to those questions.