Case Information
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK 10/6/21 CASSANDRA SHIH,
Plaintiff, 18-CV-5495 (JFK) (BCM) -against- ORDER PETAL CARD, INC., f/k/a CREDITBRIDGE,
INC., et al.,
Defendants. BARBARA MOSES, United States Magistrate Judge.
The Court conducted a discovery conference on August 17, 2021, with respect to plaintiff's letter-motion to compel the production of certain communications to or from defendant Jason Gross (who was once a lawyer admitted to practice in New York), which were withheld or redacted by defendants on attorney-client privilege grounds, see Pl. Letter dated July 28, 2021 (Pl. July 28 Ltr.) (Dkt. No. 177); and (2) defendants' letter-motion to compel the production of certain communications to or from Lane Kauder (who is now plaintiff's husband and a lawyer admitted to practice in New York), which were withheld by plaintiff on work product, spousal privilege, and/or attorney-client privilege grounds. Def. Letter dated July 28, 2021 (Def. July 28 Ltr.) (Dkt. No. 176.) Thereafter, in compliance with this Court's Corrected Order dated August 20, 2021 (Aug. 20 Order) (Dkt. No. 196), the parties submitted certain exemplar documents, as to which privilege was claimed, for in camera review, along with revised privilege logs. (Dkt. Nos. 198, 199.) The Court has carefully reviewed the exemplar documents, as well as the parties' legal arguments. For the reasons that follow, plaintiff's motion will be granted in part and denied in part, while defendants' motion will be denied. I. BACKGROUND
Plaintiff Cassandra Shih alleges that she entered into an enforceable oral joint venture agreement with her friend Andrew Endicott (a Harvard Law School graduate then working as an investment banker in New York) to develop a novel business concept – originated by her and shared with him as her prospective co-founder – for a "credit bridging" company, to be called CreditBridge, which would meet the credit needs of new immigrants and migrants to the United States. Opinion and Order dated September 23, 2020 (Op. & Order) (Dkt. No. 116) at 2-12. In May 2015, after Shih "expressed reservations" about bringing in a third co-founder, Endicott agreed not to give away any equity in CreditBridge without her approval. Id . at 9-10. In July of that year, however, Endicott stopped responding to Shih's messages and began working with defendant Elliot Gross (Endicott's Harvard Law School classmate) to finalize the CreditBridge "pitch" materials that he previously worked on with Shih. Id . at 13-14. By August, Endicott and Gross were meeting with venture capitalists and describing themselves as the co-founders of the new business, "without ever mentioning" Shih. Id . at 14.
In February 2016, Endicott and Gross incorporated their business under the name CreditBridge, Inc., and Endicott locked Shih out of the shared Dropbox account that the two of them had used while developing the initial CreditBridge pitch materials and related work product. Op. & Order at 15-16. On February 16, 2016, Shih sent an email to Endicott, with a copy to Gross, in which she reminded Endicott that it was "my business idea," shared "on the mutual understanding that we would pursue its development in partnership," and accused him of "cut[ing] me out of the business which I conceived of and pursued in good faith with you, and to which I am entitled to 50 per cent ownership." Id . Neither Endicott not Elliot responded at that time. Id . at 16. But on March 23, 2016 (after Shih followed up several times), Endicott sent her an email claiming that the new company was "not based on any of your business ideas." Id . at 17.
In September 2016 the company changed its name to Petal Card, Inc. (Petal), and in December of that year Endicott and Gross raised $3.4 million from investors. Op. & Order at 19. In October 2018 Petal formally launched "a credit card product targeting young adults, students, immigrants, and minorities who have not yet had the opportunity to build credit in the United States." Id . By the time Shih filed her Second Amended Complaint (SAC) (Dkt. No. 93) against Endicott, Gross, and Petal, the company had raised $80 million and was "self-valued at more than $200 million." Op. & Order at 19.
On September 23, 2020, the Honorable John F. Keenan, United States District Judge, denied, in substantial part, defendants' motion to dismiss the SAC, holding that:
[T]he SAC plausibly alleges, at a minimum, an oral joint venture agreement between Shih and Endicott, which Endicott subsequently breached by abruptly and surreptitiously cutting Shih out of the "CreditBridge" enterprise that, consistent with the terms of their partnership, he began pitching to potential investors in July 2015, and later incorporated as CreditBridge, Inc.
Op & Order at 32. Judge Keenan likewise held that the SAC states a claim against Endicott for breach of the covenant of good faith and fair dealing, id . at 32-33; breach of fiduciary duty, id . at 33-37; misappropriation of business idea, id . at 37-40; unfair competition; promissory estoppel; and unjust enrichment, id . at 42; and against Gross for aiding and abetting Endicott's breach of fiduciary duty, id . at 43-44; breach of his own fiduciary duty as Petal's promotor and officer, id . at 44-45; and unjust enrichment. Id . at 46-47. As to Petal itself, Judge Keenan sustained Shih's claims for breach of contract (to issue to her a 50% ownership interest) and to hold Petal vicariously liable for the tortious conduct of Endicott and Gross. Id . at 50-53. He also found that she plausibly alleged claims for declaratory judgment and specific performance. Id . at 55, 58.
On October 27, 2020, I issued a supplemental scheduling order (Dkt. No. 122) directing the parties to substantially complete party document production by February 26, 2021; to commence depositions (which had been stayed pending decision on the motion to dismiss, see Dkt. No. 62); and to complete fact discovery by June 15, 2021. However, discovery has been contentious, requiring the Court to resolve numerous disputes, and the schedule has been revised several times. See Dkt. Nos. 134, 137, 150, 155, 160, 165, 196, 197. [1] Under the current scheduling order (Dkt. No. 165), party depositions will commence on October 10, 2021, and all depositions will be completed by December 10, 2021.
II. PLAINTIFFS' MOTION
Defendants withheld or redacted over 1100 documents on privilege grounds. Pl. July
28 Ltr. at 1. As to many of the redacted or withheld documents, including emails and other
communications between Endicott and Gross, as well as their attachments, defendants invoke the
attorney-client privilege, asserting that Gross was acting as counsel to Petal and its personnel
(including Endicott).
Id
. Ex. A. Plaintiff challenges the assertion of privilege over these
documents, noting that business communications do not become privileged simply because one or
more or the participants is a lawyer.
Id
. at 2 (citing
In re Cnty. of Erie
,
Defendants respond that "between 2015 and 2017," Gross served not only as a co-founder and officer (ultimately CEO) of the company, but as its "general counsel." Def. Opp. Letter dated Aug. 2, 2021 (Def. Aug. 2 Ltr.) (Dkt. No. 178) at 1. They further assert that they have only withheld (or redacted) documents (or portions of documents) discussing legal advice. Id . As support for their contention that Gross was the company's general counsel for a period of time, defendants attach his declaration, which states, in pertinent part: "Between 2015 and 2017, I acted as general counsel and provided legal advice to the company that eventually became Petal, and to its employees and co-founders." Gross Decl. (Dkt. No. 178-1) ¶ 3. Gross provides no further description of his legal role. He does note that in July 2017 he voluntarily resigned from the New York bar, id . ¶ 2, and that in "December 2018," Petal "hired Shiri Wolf to serve as general counsel." Id . ¶ 4. [2]
There is very little corroboration, in the record before the Court, for the claim that Gross served, for a period of time, as counsel to Petal ("and to its employees and co-founders"). Defendants were unable to identify any documents in which the company (or Gross himself) held Gross out to the public or third parties as Petal's counsel. [3] To the contrary: in July 2016, in email conversations with Petal's prospective Head of Growth David Ehrich, Gross repeatedly described Ehrich's draft employment agreement and related documents as having been prepared by and/or discussed with "our lawyers." Pl. Aug. 4 Ltr. Ex. 2. Consequently, plaintiff argues, defendants are not entitled to withhold or redact any documents on attorney-client privilege grounds where the claim of privilege rests on the assertion that Gross was acting as counsel to the business and its personnel. Id . at 1-2.
Plaintiff is largely, but not entirely, correct. A. Standards
"In diversity cases such as this, where state law governs the claims, the Court looks to state
law for determining privilege."
Kleeberg v. Eber
,
The purpose of the attorney-client privilege is to "promot[e] full and frank communications
between attorneys and their clients," thereby encouraging "observance of the law" and aiding "in
the administration of justice."
Commodity Futures Trading Comm'n v. Weintraub,
An attorney-client relationship arises only when the client "contacts an attorney in his
capacity as such," for the “purpose of obtaining legal advice or services.”
Priest v. Hennessy
, 51
N.Y.2d 62, 68-69,
Even where an attorney-client relationship exists, the client may not reflexively withhold
every communication with its attorney as privileged. "[N]ot all communications to an attorney are
privileged. In order to make a valid claim of privilege, it must be shown that the information sought
to be protected from disclosure was a 'confidential communication' made to the attorney for the
purpose of obtaining legal advice or services."
Priest
,
B. Application
Here, defendants have failed to demonstrate that Gross was serving on any regular or
sustained basis as legal counsel for Petal or its personnel. His summary declaration is not enough
to establish his role. The burden of showing that the attorney-client privilege was properly invoked
"can be met only by an evidentiary showing based on competent evidence . . . and cannot be
discharged by mere conclusory or ipse dixit assertions."
Charlestown Cap. Advisors
, 2020 WL
757840, at *7 (S.D.N.Y. Feb. 14, 2020) (quoting
Bowne of New York City, Inc. v. AmBase Corp.
,
Having reviewed the exemplar documents submitted
in camera
(including those selected
by defendants, presumably because they made the strongest case for invocation of the privilege),
I conclude that – with a few exceptions – the content of the communications to or from Gross do
not "set[ ] him apart as a legal advisor in the discussion."
Saran
,
Another redacted communication is a November 16, 2015 email chain between the two co-
founders (PETAL 92351), in which they discussed how to present certain documents, including a
potential stock grant, to an individual serving as an "advisor" to the new business. In the redacted
portion, Endicott asked whether "we should diligence his MIT docs?" Nothing about the redacted
passage marks it as a legal rather than a business question. The same is true of a later series of
communications, dated May 11, 2016 (PETAL 30012), in which Endicott and Gross spent
approximately an hour fine-tuning the language of an employment agreement for the same
individual. Among other things, Endicott and Gross discussed whether the document used "the
right title," whether they had made it "clear that we don't expect him to start making cold calls or
doing the other biz dev things you and I do," and whether they had appropriately expressed their
"dedication to creating the best credit scoring company on the planet or something." At most, one
small segment of this conversation (during which the individual defendants discussed how to
characterize the document and Gross gave his opinion "as de facto GC") "set[ ] [Gross] apart as a
legal advisor in the discussion."
Saran
,
To be sure, some of the communications between Gross and Endicott included discussions of regulations or regulatory developments relevant to their prospective business (PETAL 42167, 92372), but such conversations, which take place commonly among senior executives in regulated industries, are not the province of lawyers alone. In one email conversation, dated January 6, 2016, Gross and Endicott discussed when to retain outside counsel, and Gross (who seemed less eager than Endicott to spend money on lawyers) wrote, "But we're being lazy. Let's do all the research we can ourselves (we went to law school, remember?) and reach out when it's absolutely necessary." (PETAL 107638.) At best, this passage (which defendants redacted as privileged) reflects a discussion as to whether one (or both) of them will perform legal services for the enterprise. It does not, however, qualify as "a communication made within the context of [the attorney-client] relationship for the purpose of obtaining legal advice." Bowne II , 161 F.R.D. at 264, and therefore must be produced.
The most difficult questions presented by the documents submitted for in camera review arise from Gross's work in preparing various corporate documents necessary to transform the business into a Delaware corporation. On November 10, 2015, Gross emailed a set of draft documents to Endicott with a cover note stating, "I've drafted everything we need to get the corporation up and running," and advising that copies were in the "'Legal folder of the DB also." (PETAL 41871.) [4] The attachments include draft versions of a Stock Plan (with a Summary of Stock Grants), an Advisor Agreement, an Action by Consent of Sole Incorporator, an Action by Unanimous Written Consent, a set of Bylaws, a Capitalization Table, a Certificate of Incorporation, two Stock Purchase Agreements (one for Endicott and one for Gross), and an Action by Written Consent of the Stockholders. (PETAL 41872-41882.) Although the drafts were incomplete – blanks were left for dates and certain other information to be added later – they did not include any note, comment, question or interlineation identifiable as a request for or the provision of legal advice. [5] Later, however, in a January 19-21, 2016 email chain (PETAL 107710), Endicott and Gross discussed "the legal docs" (presumably either the drafts circulated in November or updated versions) and Gross provided his opinion as to certain interpretation and enforcement issues, after which Endicott agreed to sign the documents, once Gross completed a "final review."
"The rule in New York appears to be that a draft document prepared by an attorney is
privileged if it contains information provided in confidence by the client and subsequently
maintained in confidence."
Bowne I
,
Here, as in
Bowne I and Beacon Hill Asset Mgmt
., nothing in defendants' privilege log, the
Gross declaration, or the documents themselves shows that the drafts contain any "client
confidences." Indeed, the documents in draft form are "generic corporate documents," as to which
some courts hold that the attorney-client privilege simply does not apply. ,
e.g
.,
Oasis Int'l
Waters, Inc. v. United States
,
As to the exemplars, then: defendants have properly withheld PETAL 107710, and may redact the portion of PETAL 30012, time-stamped 3:45-56 to 4:10:11, in which Gross spoke "[a]s de facto GC." The remaining documents are not protected by the attorney-client privilege and must be produced.
Defendants are to apply the rulings incorporated in this decision to all of the communications between Endicott and Gross that were withheld as privileged on the basis that Gross was acting as counsel for Petal or its personnel. Unless (i) the parties to the communication affirmatively indicate their understanding that Gross is speaking in his capacity as counsel ("de facto" or otherwise), or (ii) the content of the communication is such that it could not reasonably be expected to take place except between attorney and client, the document must be promptly produced.
III. DEFENDANTS' MOTION
Plaintiff withheld over 1,000 emails and other communications with Kauder, relying on the work product doctrine (461 documents), the spousal privilege (854 documents), and the attorney-client privilege (391 documents). See Def. Jul. 28 Ltr. at 1-3; id . Ex. A (Pl. Priv. Log Excerpts); see also Pl. Opp. Letter dated Aug 2, 2021 (Pl. Aug. 2 Ltr.) (Dkt. No. 179), at 1. [7] Additionally, plaintiff withheld, as attorney-client privileged, another approximately 500 emails and other communications involving (i) plaintiff, (ii) Kauder, and (iii) plaintiff's litigation counsel of record. Pl. Aug. 2 Ltr. at 1 n.1. These documents did not initially appear on plaintiff's privilege log; however, plaintiff undertook to list them in a supplemental log. Id .
The dates of the withheld documents range from February 8, 2016 through November 23, 2020. During that period, three significant events occurred. In May 2017, plaintiff and Kauder were married. See Pl. Aug. 2 Ltr. at 1. Kauder was at that time a law student. On January 14, 2019, Kauder was admitted to the New York bar. Def. July 28 Ltr. at 2; Pl. Aug. 2 Ltr. at 3. Approximately five months later, on June 24, 2019, plaintiff, her counsel of record Peter S. Dawson, and Kauder signed a written engagement letter confirming that Kauder was retained by Dawson's firm, Wise & Wiederkehr, LLP (W&W), as a "consulting attorney" reporting directly to W&W in connection with this action. Eng. Ag. (Dkt. No. 199-2) at 1. The letter further provided that "all communications between [Kauder] and the client or [Kauder] and [W&W] shall be confidential, and shall be made solely for the purpose of assisting [W&W] in our representation of the client." Id . Kauder also agreed to be bound by the Protective Order previously issued by the Court. Id . at 2.
On August 20, 2021, I directed plaintiff to produce the withheld documents dated prior to her marriage, ruling that no privilege applied. Aug. 20 Order ¶ 2(a). Additionally, I directed the parties to submit a total of nine exemplar documents withheld on privilege grounds, all dating from the period January 14-June 24, 2019, for in camera review. Id . ¶ 2(b).
As to the post-marriage documents, defendants mount three challenges to Shih's privilege claims. First, they argue that Kauder's communications with her, even if prepared in anticipation of or for purposes of this litigation, cannot be protected by the work product doctrine because the doctrine does not protect communications among family members "without an attorney to direct the work." Def. July 28 Ltr. at 2. Second, they contend that communications between plaintiff and her husband during the summer of 2017, when he was a summer associate at Buckley Sandler LLP, are not protected by spousal privilege to the extent they were sent via his "buckleysandler.com" email account, as to which he had no expectation of confidentiality. Id. Third, they claim that communications involving Kauder cannot be protected by the attorney-client privilege, because (i) he was not plaintiff's attorney; and (ii) to the extent the communications also included one or more of plaintiff's attorneys of record, Kauder's presence constituted a waiver of the attorney-client privilege that would otherwise protect those communications from discovery. Id. at 3-4; see also Def. Reply Letter dated Aug. 4, 2021 (Def. Aug. 4 Ltr.) (Dkt. No. 181) at 2 ("[T]he presence of Mr. Kauder on otherwise-privileged communications destroys any applicable privilege.").
As to the work product doctrine, plaintiff responds that under federal law the doctrine can and does apply "without attorney involvement, and certainly does not require communications from an attorney." Pl. Aug. 2 Ltr. at 2. As to the spousal privilege, plaintiff states that the use of Kauder's law firm email account did not waive the privilege because he had a reasonable expectation of confidentiality in his work computer and email. Id. at 3. As to the attorney-client privilege, plaintiff argues (i) that Kauder became her de facto attorney upon his admission to the bar, because she relied on him for legal advice, and thus that her confidential communications with him for that purpose were privileged from January 14, 2019 forward; and (ii) that the privilege protecting her communications with her counsel of record was not waived by Kauder's presence (either before or after he was admitted to the bar) because, to the extent he was not himself acting as plaintiff's attorney, he attended in his capacity as her agent. Id.
Once again, plaintiff is largely correct.
A. Standards
1. Work Product Doctrine
"While state law governs the question of attorney-client privilege in a diversity action,
federal law governs the applicability of the work product doctrine."
Allied Irish Banks v. Bank of
America, N.A.
, 240 F.R.D. 96, 105 (S.D.N.Y. 2007). The work product doctrine protects
"documents and tangible things that are prepared in anticipation of litigation or for trial by or for
another party or its representative." Fed. R. Civ. P. 26(b)(3)(A). The text of Rule 26(b)(3)(A) itself
states that work product protection applies to materials prepared by a party or her "attorney,
consultant, surety, indemnitor, insurer, or agent." Similarly, the case law makes it clear that "it is
not in fact necessary that the material be prepared by or at the direction of an attorney."
Wultz v.
Bank of China Ltd.
, 304 F.R.D. 384, 394 (S.D.N.Y. 2015) (collecting cases).
[8]
Rather, "three
conditions must be satisfied in order to establish work product protection. The material in question
must: (1) be a document or tangible thing, (2) which was prepared in anticipation of litigation, and
(3) was prepared by or for a party, or by or for its representative."
Nat'l Educ. Training Grp., Inc.
v. Skillsoft Corp.
, 1999 WL 378337, at *5 (S.D.N.Y. June 10, 1999) (quoting
Compagnie
Francaise d'Assurance Pour le Commerce Exterieur v. Phillips Petroleum Co.,
2. Spousal Privilege
The spousal privilege – sometimes called the marital communications privilege – is
codified in New York at CPLR § 4502(b) and "protects private and confidential communications
between spouses from disclosure."
In re Reserve Fund Sec. & Deriv. Litig
.,
conflict with Rule 26(b)(3)"). Consequently, like the
Wultz
court, I respectfully "decline to follow
this aspect of
Bice
."
The presumption of confidentiality can be rebutted by a showing that the spousal
communications were transmitted through an email account that "could be 'read[ ] or otherwise
monitored by third parties,'" such that the sending spouse had no "reasonable expectation of
privacy" in his emails.
Reserve Fund Sec. & Deriv. Litig
.,
3. Attorney-Client Privilege in the Presence of a Spouse
In New York, the attorney-client privilege is not waived "[w]here a client discloses a prior
attorney-client communication to a spouse."
Matter of Sosnow
,
The analysis is somewhat more complicated when the disclosure to the spouse is made
instantly; that is, when the spouse is present for the communication between the client and her
attorney. Under New York law, the question in such a case is whether "the spouse is an agent of
the client."
Sosnow
,
1. The Work Product Doctrine Is Not Limited to Work Directed by a Licensed Attorney
Plaintiff is entitled to withhold communications with Kauder that were prepared in
anticipation of this litigation or for trial as work product regardless of whether he himself was
acting as her counsel at the time, and without any showing that another attorney "direct[ed] the
work." Def. July 28 Ltr. at 2. As noted above, there are three elements required to invoke the work
product doctrine: that the material in question be "a document or tangible thing," that it have been
"prepared in anticipation of litigation," and that it have been "prepared by or for a party, or by or
for its representative."
Parneros
,
none
of the communications were properly withheld as work product because the work was not
"directed by a licensed attorney." Def. July 28 Ltr. at 2. In fact, since Kauder himself became a
"licensed attorney" on January 14, 2019, any work product that he created thereafter arguably met
the fourth element posited by defendants. The dispositive point, however, is that there is no such
fourth element.
See Wultz
,
Moreover, the face of plaintiff's privilege log shows that the Kauder/Shih communications
withheld on work product grounds were prepared – either
by
the party herself or
for
the party by
her husband Kauder – in anticipation of this litigation or for use in it, thus meeting the test set forth
in
United States v. Adlman
,
I therefore conclude that plaintiff has satisfied her burden of showing that the communications between herself and Kauder that she withheld on work product grounds were properly so withheld.
2. The Spousal Privilege Does Not Protect Emails Sent Via Kauder's Law Firm Email Account
Defendants are correct that the spousal privilege does not protect the emails sent to and
from Kauder in the summer of 2017 over his buckleysandler.com email account.
See
Pl. Priv. Log
Excerpts at ECF page 2-4 (PRIV00013-PRIV00091). Although the confidential nature of a marital
communication may be presumed in the absence of any contrary evidence,
Reserve Fund Sec. &
Deriv. Litig
.,
However, as to each of her communications with Kauder over his buckleysandler.com
email address, plaintiff has also asserted the work product doctrine, which is not so easily lost.
Lapaix
, 2014 WL 11343854, at *2 ("Generally, work product protection is not waived
automatically by disclosure of the work to a third party; rather it is waived only when documents
are used in a manner contrary to the doctrine's purpose, when disclosure substantially increases
the opportunity for potential adversaries to obtain the information." (quoting
Schanfield v. Sojitz
Corp. of Am.,
3. Kauder's Presence Did Not Destroy the Attorney-Client Privilege
Between Shih and her Counsel of Record
As noted above, most New York courts apply a relaxed agency test to the question whether
the participation of a spouse in an otherwise-confidential attorney-client communication destroys
the privilege.
See Sosnow
,
As to the first point, defendants appear to have misinterpreted the (somewhat unclear) language used by one of Shih's attorneys of record during the June 30 hearing, when she explained that Kauder was not "representing the plaintiff in this litigation." Tr. of June 30, 2021 Conf. (Dkt. Nos. 167, 176-2) at 18; see also Pl. Aug. 2 Ltr. at 3 (explaining that although Kauder "is not [11] The communications I have reviewed in camera show that Kauder made considerable efforts to label his communications as confidential, going so far as to call one of them (PRIV 000848) "privileged and confidential super secret comms."
[12] During argument on the motion, plaintiff's counsel represented that "[t]here are no three-way communications" among Shih, her counsel of record, and her husband "until January of 2019," when he was admitted to the bar. Tr. at 55.
representing Plaintiff before the Court in this matter," that "does not mean Plaintiff was not relying on legal advice from her husband"). The documents submitted to me in camera confirm that he did act informally as her counsel from time to time after his admission to the bar on January 14, 2019 (and, more formally, as consulting counsel after June 23, 2019). [13] In any event, the awkward phrasing used by Shih's litigation counsel on June 30 neither waives the attorney-client privilege, if otherwise applicable, nor raises any broader questions about the "quality and credibility" of Shih's remaining privilege assertions. Def. July 28 Ltr. at 1.
Similarly, Kauder's arguably improper
ex parte
contact with Petal employees in April 2019
(after he was admitted) has little bearing on the present motion, which turns (in part) on whether
Shih communicated with Kauder in his capacity as a lawyer, for the purpose of obtaining legal
advice, see
Priest
,
IV. CONCLUSION
Plaintiff's motion (Dkt. No. 177) is GRANTED IN PART. Defendants shall review the Endicott-Gross communications withheld on attorney-client privilege grounds and produce those that do not fall within the categories described in Part II(B) above. Production shall be made within two weeks of today's date.
Defendants' motion (Dkt. No. 176) is DENIED. Although plaintiff is not entitled to claim the spousal privilege with respect to emails exchanged with Kauder through his buckleysandler.com email address, the disallowance of this particular privilege claim does not appear to require the production of any additional documents, because the affected communications are also protected by the work product doctrine.
Dated: New York, New York
October 6, 2021
SO ORDERED.
________________________________ BARBARA MOSES United States Magistrate Judge
Notes
[1] Since the motions that are the subject of this Order were filed on July 28, 2021, the parties (or affiliated non-parties) have filed five additional discovery motions: to quash a subpoena sent by defendants to plaintiff's husband's bank, seeking his 2020 home mortgage application (Dkt. No. 184, granted on August 20, 2021, see Dkt. No. 197); to compel plaintiff's husband and two nonparty companies jointly owned by plaintiff and her husband to produce documents withheld as privileged (Dkt. No. 189, pending); to compel plaintiff, the same two nonparty companies, and a nonparty individual employed by one of the companies to produce documents that, according to defendants, may show that plaintiff Shih is less accomplished and that her current businesses are less successful than her recent public statements suggest (Dkt. No. 204, pending); to compel defendants to produce text messages, documents "sourced from" social media accounts and Endicott's creditbridge.com email account, and documents sufficient to "identify the devices" that Endicott and Gross used to communicate with each other ((Dkt. No. 211, pending); and to quash subpoenas sent by plaintiff to Petal's auditors, Ernst & Young and Deloitte (Dkt. No. 219, not yet fully briefed).
[2] During argument on the motion, defendants' litigation counsel informed the Court that the December 2018 date was a typographic error, and that Ms. Wolf was "hired in December of 2017 [and] on-boarded in January 2018." Tr. of Aug. 17, 2021 Disc. Conf. (Tr.) (Dkt. No. 201) at 6. Counsel further represented that defendants did not withhold or redact any responsive documents predicated on Gross's status as an attorney after he was no longer a member of the bar. Id . at 7.
[3] In discovery, defendants produced an undated draft due diligence questionnaire for TAB Bank which identified Gunderson Dettmer Stowe as outside counsel for CreditBridge, Inc. and also stated, "Currently Jason Gross serves as our General Counsel." Pl. Reply Letter dated Aug. 4, 2021 (Pl. Aug. 4 Ltr.) (Dkt. No. 182), Ex. 1. There is no evidence, however, that the questionnaire was ever submitted to TAB Bank in that (or any) form.
[4] The transmittal email does not contain any confidential information or legal advice and hence is
not itself privileged.
Softview Computer Prod. Corp. v. Haworth, Inc.
,
[5] According to defendants' privilege log, each draft "reflect[s]" legal advice regarding the incorporation of the business. After reviewing the documents themselves, and finding no such legal advice contained therein, I surmise that defendants' theory is more subtle: that the drafting choices made in the documents (as Gross put it, "the decisions that I made for the company") were driven, at least in part, by legal considerations, such that when Endicott received the drafts, he was – sub silentio – being given legal advice by Gross. Such a theory sweeps too broadly, as it would tend to make virtually any draft business document privileged, so long as it was prepared by an attorney whose legal training influenced the contents, structure, or wording of the product. As discussed below, that is not the law in New York.
[6] Citing
Kenford v. Cnty. of Erie,
[7] Most of the withheld documents were withheld on more than one ground. Pl. Priv. Log Excerpts at ECF pages 2-7.
[8] In their letter-application, defendants rely on
Bice v. Robb,
[9] The New York courts frequently reach similar results where the third party is the client's adult
child or other close family member.
See
,
e.g
.,
Stroh v. Gen. Motors Corp.
,
[10] During argument on the motion, Shih's counsel claimed that the emails to and from Kauder via his buckleysandler.com email were also attorney-client privileged. Tr. at 54-55. On her log, however, plaintiff does not invoke the attorney-client privilege as to these documents. Pl. Priv. Log Excerpts at ECF pages 2-4.
[13] Kauder could not, of course, act as Shih's counsel before he was admitted to the bar. Thus, to the extent their two-way communications before that date were withheld on attorney-client privilege grounds, the claim of privilege is "derived from Plaintiff's communications with other attorneys, including litigation counsel of record." Pl. Aug.2 Ltr. at 3. In other words, Kauder "is not the attorney whose presence protects the documents from disclosure." Def. July 28 Ltr. at 3.