565 F.Supp.3d 557
S.D.N.Y.2021Background
- Plaintiff Cassandra Shih alleges an oral joint venture with Andrew Endicott; Endicott and Jason (Elliot) Gross later incorporated the business (CreditBridge → Petal) and excluded Shih, giving rise to this litigation.
- Defendants withheld/redacted ~1,100 documents as attorney-client privileged on the ground that Gross (a lawyer who later resigned from the NY bar) acted as Petal’s general counsel from 2015–2017; plaintiff challenged those assertions.
- Plaintiff withheld >1,000 communications with her husband Lane Kauder (a law student, later admitted to the NY bar, and later retained as consulting counsel), invoking work product, spousal privilege, and/or attorney-client privilege; defendants challenged those assertions.
- The magistrate judge conducted in camera review of exemplar documents and reviewed revised privilege logs; the opinion resolves which categories of documents must be produced and which remain protected.
- Rulings summarized: many Gross–Endicott communications are not privileged because they are business, not legal, in nature (with narrow exceptions); Shih–Kauder communications dated after Kauder’s bar admission or after engagement as consulting counsel qualify as work product; spousal privilege is unavailable for emails sent via Kauder’s employer account but those specific messages remain protected as work product; Kauder’s presence did not waive the attorney-client privilege as to Shih’s communications with her counsel because he functioned as her agent.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether communications between Endicott and Gross are protected by attorney-client privilege because Gross acted as Petal’s general counsel | Gross acted as counsel and any legal portions are privileged; defendants redacted only legal content | Gross was not shown by competent evidence to be serving as sustained counsel; many communications are business, not legal | Majority of Endicott–Gross communications are not privileged; produce unless (1) parties show Gross spoke in counsel capacity or (2) content could only occur between attorney and client; narrow exceptions where legal advice predominates allowed to be withheld (e.g., PETAL 107710) |
| Whether drafts and corporate documents prepared by Gross are privileged | Drafts were prepared by Gross as counsel and reflect legal advice | Drafts are generic corporate documents and lack evidence of client confidences; mere attorney authorship insufficient | Drafts are not privileged absent evidence they contain confidential client information; certain document-specific legal discussion may be privileged |
| Whether communications between Shih and Kauder qualify as work product and/or attorney-client privileged; whether Kauder’s presence waives privilege between Shih and her counsel | Communications (post-marriage and post-admission) are protected as work product and, where applicable, as attorney-client because Kauder acted as de facto counsel/agent | Kauder’s involvement (and his presence on communications) destroys privilege; work product requires direction by an attorney | Work product applies to Shih–Kauder communications prepared in anticipation of litigation even if not directed by a licensed attorney; Kauder functioned as plaintiff’s agent so his presence did not waive Shih’s privilege with counsel of record |
| Whether spousal privilege shields emails sent over Kauder’s employer email (buckleysandler.com) | Such communications are confidential marital communications | Use of employer email negates any reasonable expectation of privacy and thus spousal privilege | Spousal privilege does not apply to emails sent over the firm account because plaintiff failed to show a reasonable expectation of privacy under Asia Global Crossing factors; however, those emails may still be withheld as work product |
Key Cases Cited
- In re Cnty. of Erie, 473 F.3d 413 (2d Cir. 2007) (business communications do not become privileged solely because a participant is a lawyer)
- Ambac Assur. Corp. v. Countrywide Home Loans, Inc., 27 N.Y.3d 616 (N.Y. 2016) (privilege must be narrowly construed; party asserting privilege bears burden)
- Priest v. Hennessy, 51 N.Y.2d 62 (N.Y. 1980) (attorney-client relationship requires consultation in attorney capacity for legal advice)
- Spectrum Sys. Int'l Corp. v. Chem. Bank, 78 N.Y.2d 371 (N.Y. 1991) (communications must be predominantly legal in character to be privileged)
- Bowne of New York City, Inc. v. AmBase Corp., 161 F.R.D. 258 (S.D.N.Y. 1995) (elements of privilege and treatment of draft documents)
- United States v. Adlman, 134 F.3d 1194 (2d Cir. 1998) (work product: created "because of" anticipated litigation)
- Reserve Fund Sec. & Deriv. Litig., 275 F.R.D. 154 (S.D.N.Y. 2011) (spousal/marital communications privilege; employer-email privacy analysis)
- Rossi v. Blue Cross & Blue Shield of Greater New York, 73 N.Y.2d 588 (N.Y. 1989) (in-house counsel corporate-role guidance affecting privilege)