ORDER RE DISCOVERY DISPUTE
Now before the Court is the parties’ discovery dispute regarding the applicability of the attorney-client privilege and work-product protection to the documents listed in Gregory Village Partners, LP and VPI, Inc.’s (collectively, “Gregory Village”) privilege log. See ECF No. 104. Having carefully reviewed the documents in camera and considered the arguments and evidence presented by the parties, the Court finds that certain documents identified by Gregory Village as privileged are not and orders Gregory Village to produce those documents to Plaintiffs.
A. Factual History
In June 2011, Plaintiffs brought this action against multiple defendants, seeking to remediate contamination at the site of their home. ECF No. 1-1. Gregory Village is the current owner of a property from which some of that contamination allegedly flowed. Id. at 2-4.
VPI, Inc.’s Vice President, Mary Haber, also serves as Gregory Village’s in-house general counsel. Deck of Mary Haber in Supp. of Gregory Village Br. that Communications with Tracy Craig Are Privileged, ¶¶ 1, 2 (“Haber Declaration”); ECF No. 118 at 4. According to Haber, VPI, Inc. and Gregory Village are “associated entities.” Haber Decl. ¶ 1. Plaintiffs contend that it is not clear when Haber is acting in her role as general counsel as opposed to her role as a businesswoman, as she “wears multiple hats” in her work for the companies, and signs various documents pertinent to this litigation either as Vice President of VPI, Inc., as general counsel to Gregory Village, or both. ECF No. 118 at 4,11.
In February 2009, Gregory Village hired Tracy Craig and her company, Craig Communications, as public relations consultants. ECF No. 118 at 3 & Ex. 3. At that time, the Regional Water Quality Control Board (“Board”) was working with Gregory Village regarding possible contamination from its property and to determine what steps should be taken toward remediation. Id. Ex. 4. Craig and her company’s official responsibilities included: (1) conducting “community research,” identifying “key contacts,” and developing a “key contact list with representative names, addresses,” etc.; (2) meeting with Gregory Village and the Board to “develop initial outreach strategy and short-term outreach goals,” and following-up to “refine key messages and project strategy”; (3) developing a one-page fact sheet summarizing “main project points to provide to elected officials and key community representatives”; (4) scheduling and attending “ten meetings with key stakeholders”; and (5) preparing a short report summarizing “community characteristics and composition, key social and community organizations, preferred methods to communicate with various segments of the community, [and] information gathered from outreach meetings and recommended outreach tasks.” Id. at 3 & Ex. 3.
Craig participated in public meetings before the Board and the City of Pleasant Hill with Ed Firestone, an outside attorney working for Gregory Village. Haber Deck ¶¶ 5, 20. Craig also went door-to-door in neighborhoods potentially affected by contamination from the Gregory Village property to meet neighbors and, in some cases, seek to secure access agreements to permit Gregory Village’s environmental consultants to perform sampling as required by the Board. Id. She also met with neighbors, including the Plaintiffs, to persuade them to agree to the installation of depressurization systems under their homes as a mitigation measure. Id. ¶ 21.
B. Procedural History
On May 16, 2012, Plaintiffs requested production from Gregory Village of various documents related to this litigation. ECF No. 118 at 1. Gregory Village responded to Plaintiffs’ request on June 29, 2012, and on November 5, 2012, served on Plaintiffs a privilege log, claiming attorney-client privilege or work-product protection for more than one thousand documents encompassing thousands of pages. Id. The parties met and conferred regarding the request for production and the privilege log, and Gregory Village has since modified versions its privilege log three times. Id. Plaintiffs continue to object to Gregory Village’s claims of privilege for the doc
On October 6, 2014, the Court ordered Gregory Village to review its privilege log and to verify that it continues to assert the privilege or work-product protection as to every item on it. Id. at 3. To the extent Gregory Village, after review, no longer asserted the privilege for certain log entries, it was ordered to revise its privilege log and submit it to Plaintiffs by October 16, 2014. Id. The Court also ordered Gregory Village to ensure that the descriptions of documents contained in the log were accurate, and to file a brief in support of its claims of privilege. Id.
In response, Plaintiffs were ordered to identify up to fifty documents for which Gregory Village asserted the privilege based on Haber’s participation in the communication contained in the documents (“Haber Documents”), and fifty documents wherein the claim of privilege rested on Craig’s participation in the communication (“Craig Documents”), and to which Plaintiffs objected to the assertion of the privilege. Id. Also, Plaintiffs were to file an opposition to Gregory Village’s brief in support of its privilege claims. Id. Finally, Gregory Village was to lodge with the Court paper copies of the aforementioned documents, and the same documents saved to a CD. Id.
The parties have complied with the Court’s October 6 Order, submitting the documents to each other and to the Court as requested. The privilege log Gregory Village submitted to Plaintiffs and the Court now contains 1,145 entries. Id. Plaintiffs continue to object to Gregory Village’s claims of privilege. See ECF No. 118.
Gregory Village also submitted to the Court
II. LEGAL STANDARD
Where, as here, subject matter jurisdiction is premised on a federal question, federal common law governs privilege issues. Fed.R.Evid. 501; United States v. Ruehle,
(1) Where legal advice of any kind is sought (2) from a professional legal adviser in his capacity as such, (3) the communications relating to that purpose, (4) made in confidence (5) by the client, (6) are at his instance permanently protected (7) from disclosure by himself or by the legal adviser, (8) unless the protection be waived.
Id. The transmission of a communication to a party outside the attorney-client relationship destroys the confidentiality of the communication and therefore the privilegé may not be invoked as to that communication. See Ruehle,
Work-product protection derives from Federal Rule of Civil Procedure 26(b)(3). Under that rule, attorney work-product prepared in anticipation of litigation is protected from disclosure. Fed.R.Civ.P. 26(b)(3); see, e.g., Great Am. Assurance Co. v. Liberty Surplus Ins. Co.,
III. DISCUSSION
A. Application of the Attorney-Client Privilege to Tracy Craig Documents
The parties dispute whether Craig’s communications constitute “communications ... by the client” and whether they were communications for the purpose of providing and receiving legal advice from a professional legal adviser.
1. Tracy Craig as “client”
Gregory Village contends that the attorney-client privilege extends to Craig as Gregory Village’s agent and “functional employee.” Gregory Village Br. Regarding Applicability of Privilege to Tracy Craig Docs., at 6 (“Gregory Village Brief’). Further, Gregory Village contends, “[c]om-munications by third parties ... concerning a client’s legal and litigation interests are no less privileged than if the exchanges were directly between attorney and client.” Id. (citing United States v. Schwimmer,
The underlying basis for Gregory Village’s assertion of privilege of communications with Craig is the decision in Upjohn Co. v. United States,
Gregory Village cites several cases in support of its argument that Craig should be treated as a functional employee. The most relevant here are Graf, In re Bieter Co.,
In Bieter, the court found the privilege applied to communications between an attorney and a consultant working for the client-company, where the consultant was intimately involved in the subject matter of litigation arising from a real estate venture the consultant had been hired to assist in developing, because the consultant was “the functional equivalent of an employee.”
Perhaps the closest case factually to the one now before the Court is Copper Market. There, the court found that the privilege extended to litigation-related communications to and from a public relations firm a corporation hired to respond to anticipated and actual litigation.
Under these precedents, Craig was a “functional employee” of Gregory Village. At the time she was hired, Gregory Village faced regulatory action by the Board in light of possible contamination at the site, as well as potential litigation with neighbors whose properties might have been contaminated. She also interacted with neighbors — potential opponents in litigation, who turned out, at least in this case, to be actual opposing litigants — to gather information from them regarding their concerns about the contamination; to secure access agreements so Gregory Village could perform on-site sampling; to plan and execute sampling on site; and to attempt to avoid litigation on behalf of Gregory Village by offering to install depressurization systems to prevent contaminated vapor particles from entering Plaintiffs’ home. When attending public meetings, interacting with neighbors, and otherwise being the face of the company, Gregory Village’s attorneys counseled her actions. In all these activities, Craig acted as the public face of the company and provided information to Gregory Village’s legal staff that was useful and necessary to evaluate legal strategy for the company going forward. Craig acted as Gregory Village’s functional employee for the purposes of the attorney-client privilege.
And because the Court finds that Craig was acting as a functional employee, disclosure of confidential information to her does not destroy the privilege. So to the extent that Plaintiffs assert that certain communications are not privileged because Craig was included in those communications, Plaintiffs’ objections fail.
Plaintiffs assert that various cases show that the Craig Documents should not be protected by the privilege. See, e.g., Calvin Klein,
Calvin Klein, for example, involved the assertion of privilege and work-product protection related to communications with a public relations firm hired by plaintiffs counsel.
Here, unlike in Calvin Klein, Craig communicated directly with the regulatory bodies and neighbors/potential legal adversaries that were the source of Gregory Village’s legal concerns. She collected information from neighbors that she transmitted to Gregory Village’s attorneys for the purpose of assisting counsel to obtain access agreements and negotiate potential disputes in the shadow of possible litigation. She was hired solely to perform those functions, unlike the firm in Calvin Klein, which the company had already retained for general public relations. In contrast to the firm in Calvin Klein, Craig’s duties for Gregory Village were so intertwined with the subject matter for
In short, the Court finds that Craig was Gregory Village’s functional employee. But that finding does not answer the question whether all of her communications with Gregory Village employees were for the purpose of providing or receiving legal advice on behalf of Gregory Village, an element of the privilege that Gregory Village still bears the burden to prove.
2. Communications related to a legal purpose
After review of the Craig Documents, the Court finds that the following documents contain communications for the purpose of providing or receiving legal advice related to potential regulatory action by the Board or litigation by neighbors: 53, 444, 594, 607-09, 617, 621, 634, 652, the portion of 745 for which Gregory Village still asserts the privilege, the portion of 747 that is not an email and draft agenda sent to Board members Kevin Brown and Chuck Headlee, 753, 785, 786, 808, 812, 990, and 1141-45. The Court also finds that the following documents do not contain communications related to a legal purpose: 478, 508-10, 512, 513, 515, 517, 519, the portion of 722 for which Gregory Village continues to claim the privilege, 754, 777, and 1115. Instead, these latter documents contain communications regarding such matters as scheduling, acquiring babysitters, and identifying to which neighbors to give gift cards. With respect to the latter documents, Gregory Village has not carried its burden to show that the documents are privileged. It therefore must produce them to Plaintiffs.
B. Objections to Haber Documents
1. Attorney-client privilege
No party questions that Haber is an attorney. The parties do, however, dispute whether: (1) Haber offered the communications in the Haber Documents in her capacity as a legal advisor, as opposed to her position as the Vice President of VPI, Inc., (2) for the purpose of providing legal advice to her client, Gregory Village, and/or (3) whether those communications were made in confidence — i.e., outside the presence of third parties who would destroy the privilege. In this case, the first two questions collapse into one.
Plaintiffs contend, based on Chevron-Texaco, that Gregory Village has not made the necessary showing to indicate that Haber made the communications in the Haber Documents in her role as legal adviser, rather than in her role as Vice President of VPI, Inc. ECF No. 118 at 1012. In U.S. v. ChevronTexaco Corp., the court explained that when communications for which the privilege has been asserted involve in-house counsel, the entity asserting the privilege “must make a clear showing that the speaker made the communications for the purpose of obtaining or providing legal advice.”
Having reviewed the Haber Documents, the Court finds that Haber engaged in the communications contained in the following documents for the purpose of providing or obtaining legal advice: 12, 17, 18, 20, 21,
Documents 134 and the portion of document 941 that was disclosed to Sylvia Pong are not privileged because they were disclosed to a third party.
2. Work-product protection
The Court finds that documents 1119, 1121, 1124, and 1127 reflect Haber’s notes and research related to contamination at the Gregory Village property, and they reveal her mental impressions regarding the Board’s regulatory action and potential litigation by neighbors. They are thus Haber’s attorney work-product, see S.E.C v. Roberts,
C. Gregory Village’s Failure To Comply With the Court’s Order To Review Its Privilege Log
The Court is troubled by Gregory Village’s apparent failure to review its privilege log carefully after the Court specifically ordered it to do so. See swpra note 1 and accompanying text; ECF No. 104 at 3 (“By October 16, 2014, Gregory Village shall review its privilege log to ensure that (a) Gregory Village continues to assert the attorney-client privilege as to each document on the log; and (b) each document description on the log accurately reflects the subject matter of the underlying communication.”). Gregory Village withdrew several of the challenged privilege log entries after it had supposedly re-certified the legitimacy of its privilege log, but before the parties’ dispute was submitted to the Court; documents on the privilege log continued to be mislabeled; and non-privileged documents remained on the privilege log. These facts lead to the conclusion that Gregory Village either did not review its privilege log as required by the Court’s order, or did not take its obligations to the Plaintiffs or the Court seriously when it conducted that review. The Court now has very little confidence in the remainder of Gregory Village’s privilege log. Indeed, it appears likely that Gregory Village’s log is shielding additional relevant, unprivileged documents from production.
This circumstance is frustrating to the Court. The Court has already ordered Gregory Village to review its privilege log, and there would appear to be little benefit in the Court merely repeating its order. It also appears that Gregory Village’s conduct leading up to the submission of the motion may not have been in good faith, and that it may have unnecessarily multiplied the proceedings. Accordingly, Gregory Village is hereby ORDERED TO SHOW CAUSE why monetary sanctions should not be imposed against it pursuant to either Rule 37(a)(5) of the Federal Rules of Civil Procedure, 28 U.S.C. § 1927, or both.
By February 9, 2015, Gregory Village is also ordered to' file a declaration under penalty of perjury, by an attorney of record, that he or she has personally reviewed every entry on the Gregory Village privilege log and affirmatively determined that (a) Gregory Village continues to assert the attorney-client or work product privilege as to each document on the log; and (b) each document description on the log accurately reflects the subject matter of the underlying communication.
CONCLUSION
For the foregoing reasons, the Court orders Gregory Village to produce the documents the Court has identified as not privileged to Plaintiffs within ten days of the date of this Order.
With respect to the documents on the privilege log that are not addressed in this Order, the Court’s prior order, ECF No. 104, contemplated that the parties would meet and confer immediately upon receipt of this Order to narrow or eliminate their differences over the entries on Gregory Village’s privilege log. Given the Court’s doubts regarding the integrity of Gregory Village’s privilege log, the parties’ meet and confer obligation is suspended, although the parties remain free to conduct such discussions if the parties believe they would be helpful.
IT IS SO ORDERED.
Notes
. Presumably because it contained the confidential documents of Gregory Village, and to avoid placing the materials in the public record, the document was lodged with the Court but not filed.
. In its Further Submission, Gregory Village explains that it no longer claims that portions of the following documents are privileged as Craig Documents (for ease, the Court uses the document numbers in Gregory Village's privilege log): 722, 745, 754. Gregory Village still asserts these documents are privileged as Haber Documents. Gregory Village also no longer asserts the privilege with respect to the following Haber Documents: 33, 35, 36, 43, 81, 589, and portions of 1083. Accordingly, the Court finds that Gregory Village must produce these documents, or portions thereof, to Plaintiffs within ten days of the date of this Order. (The Court rejects the argument that these documents are separately protected from disclosure because they involve financing.) Gregory Village also acknowledges that Craig was not included in the communications in documents 519 and 609 on its privilege log, though it listed them as “Craig Documents.” Gregory Village continues to assert the privilege as to these documents, however, as "Haber Documents.” Finally, the Court notes that documents 786 and 1046 also appear to be mislabeled as Craig Documents.
. See, e.g., Grider v. Keystone Health Plan Cent., Inc.,