AMENDED ORDER GRANTING NON-PARTY TEXAS PACIFIC GROUP, INC.’S MOTION TO QUASH; AND GRANTING DEFENDANTS’ MOTION TO QUASH
In connection with the above-referenced case, Plaintiff Nidec Corporation served, on May 2, 2007, a subpoena on a nonparty by the name of Texas Pacific Group, Inc. (“TPGI”). Currently pending before the Court are TPGI’s motion to quash the subpoena, see Docket No. 677, and Defendants’ motion to quash the subpoena. See Docket Nos. 672, 693. TPGI has also filed a motion to change time, which is now moot. See Docket No. 681.
Having reviewed the parties and TPGI’s briefs and accompanying submissions, and having considered the oral argument of counsel, the Court hereby GRANTS both motions to quash.
Nidec has filed suit against Defendants, asserting infringement of four patents related to spindle motor technology. Defendants in turn have filed a counterclaim for patent infringement. In or about the spring of 2007, JVC’s largest shareholder, Matsushita Corporation, solicited bids from third parties to purchase Matsushita’s shares (which constituted a majority interest in JVC). Nidec believed one of the third-party bidders to be TPGI, and subsequently served a subpoena on TPGI in May 2, 2007. See Young Decl. U 3 & Ex. A (subpoena).
In response, both TPGI and Defendants moved to quash the subpoena that was served. According to TPGI, the subpoena should be quashed because TPGI is not the proper third party to be served — ie., the third-party bidder for the majority interest in JVC was a Texas Pacific Group (“TPG”) fund which is an entirely different legal entity from TPGI. Defendants contend that the subpoena should be quashed because it is untimely and, moreover, seeks production of privileged documents.
II. DISCUSSION
Defendants contend, as a preliminary matter, that the subpoena should be quashed because it is untimely: fact discovery closed on January 10, 2007, but Nidec did not serve the subpoena until almost four months later. Nidec, in turn, argues that the subpoena is not untimely because it is related to the issue of willfulness, and willfulness discovery did not close until May 31, 2007, ie., several weeks after the subpoena was served.
The Court finds that the subpoena was not targeted to willfulness discovery. The documents subpoenaed were very broad in scope, and can only be fairly characterized as general fact discovery. That being said, Nidec has demonstrated that it was not possible to serve the subpoena prior to the fact discovery cut-off because only recently did a TPG fund bid to purchase a majority interest in JVC. The proper question therefore is whether there is good cause to permit this belated discovery on a nonparty.
In determining whether the subpoena should be enforced, the Court is guided by not only Federal Rule of Civil Procedure 45(c)(3)(A)(iv) which protects subpoenaed parties from “undue burden” but also Rule 26, which provides, inter alia, that a court may limit discovery if “the discovery sought ... is obtainable from some other source that is more convenient, less burdensome, or less expensive” or if “the burden or expense of the proposed discovery outweighs its likely benefit.” Fed.R.Civ.P. 26(b)(2)(C). Here, the vast majority of the discovery sought from TPGI is discovery obtainable from a source more direct, convenient, and less burdensome — namely, from Defendants. Notably, at the hearing on the motions to quash, counsel for Nidec represented that the discovery at issue consisted of, in essence, documents provided by Defendants to third parties — potential bidders for the shares of JVC stock — regarding Defendants’ assessment about the patents at issue and the instant litigation. There is simply no reason to burden nonparties when the documents sought are in possession of the party defendant.
Nidec points out that there is at least one document that Defendants do not have in their possession, custody, or control — ie., notes that a TPG fund attorney made during a meeting with a JVC representative (Tetsuro Fuse). But this document is likely to be of marginal value. It is unlikely that Mr. Fuse would have conveyed information substantially different from that conveyed in the documents provided to the TPG fund attorney. The burden on the third party (whether the proper third party is TPGI or another TPG entity) outweighs the likely benefit of the subpoena at least in the absence of a convincing showing that the subpoena is likely to yield unique and material evidence from the third party. Accordingly, the Court grants both TPGI and Defendants’ motions to quash the subpoena.
To assist the parties in their meet and confer, the Court provides the following guidance on the issue of the application of privileges to documents provided to potential bidders. Under the attorney-client privilege, it is a general rule that attorney-client communications made “in the presence of, or shared with, third-parties destroys the confidentiality of the communications and the privilege protection that is dependent upon that confidentiality.” 1 Paul R. Rice, Attorney-Client Privilege in the United States § 4:35, at 195 (1999 ed.). Similarly, as discussed below, the work-product privilege may be waived by disclosure to third parties which results in disclosure to an adversary party.
However, there is an exception to the waiver rule. Participants in a joint or common defense or individuals with a community of interests
may communicate among themselves and with the separate attorneys on matters of common legal interest, for the purpose of preparing a joint strategy, and the attorney-client privilege will protect those communications to the same extent as it would communications between each client and his own attorney.
Id. at 192. The joint defense and common interest doctrines are not privileges in and of themselves. Rather, they constitute exceptions to the rule on waiver where communications are disclosed to third parties. See United States v. Bergonzi,
“The common interest doctrine has its origins in situations where one attorney acts for two clients.” Edna Selan Epstein, Attorney-Client Privilege & Work-Product Doctrine 196 (4th ed.2001). It has been applied beyond the joint client context to the joint defense context — for instance, when the defendants are co-defendants in the same action or are defendants in separate actions sued by the same plaintiff. See B.E. Meyers & Co., Inc. v. United States,
The Court does not find Defendants’ argument persuasive. First, though Judge Brazil’s opinion in Hewlett-Packard is thoughtful, well reasoned, and has been adopted by other courts, see, e.g., Britesmile, Inc. v. Discus Dental, Inc., C 02-3220 JSW (JL),
Properly read, Hewlett-Packard did not take issue with the basic requirement of the common interest exception that the parties must have “a common legal, as opposed to commercial, interest.” Bank Brussels Lambert,
Moreover, as noted above, even if there were a common legal interest, the common interest exception requires that the communication at issue be “designed to further that [legal] effort.” Bergonzi,
To the extent Hewlett-Packard implies that policy consideration such as removing barriers to business deals expands to common interest doctrine and obviates the requirement that the protected communication must be intended to further the specific legal effort in which they hold a joint interest, the Court disagrees. Such an exception would remove the common interest doctrine far from its historical antecedent, the joint defense doctrine.
Finally, the Court notes that, although the common interest exception to waiver requires that a disclosure be made in furtherance of a common legal interest in order to preserve the attorney-client privilege, the disclosure to a third party does not necessarily constitute a waiver of the work product privilege. For work product, “protection is waived where disclosure of the otherwise privileged documents is made to a third party, and that disclosure enables an adversary to gain access to the information.” Bergonzi,
II. CONCLUSION
For the foregoing reasons, both TPGI and Defendants’ motions to quash are granted. The parties are ordered to meet and confer as to discovery from JVC in light of the guidance provided herein.
This order disposes of Docket Nos. 672, 677, and 681.
IT IS SO ORDERED.
Notes
. As to TPGI’s motion to quash on the ground that it is only a shell corporation and had no control over the TPG fund(s) actually involved in the JVC transaction and thus no custody, control or possession over the subpoenaed documents, the Court finds Nidec has failed to establish a prima facie case that TPGI was a properly named party in the subpoena. While the Court does not condone the "hide the ball” tactics of TPGI in refusing to identify the properly named TPG fund, the lack of a prima facie showing compels the Court to quash the subpoena issued to TPGI.