kevin s. rosen (sbn 133304) [email protected]...

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Gibson, Dunn & Crutcher LLP

KEVIN S. ROSEN (SBN 133304) [email protected] DOUGLAS FUCHS (SBN 196371) [email protected] MICHAEL H. DORE (SBN 227442) [email protected] GIBSON, DUNN & CRUTCHER LLP 333 South Grand Avenue Los Angeles, CA 90071-3197 Telephone: (213) 229-7000 Facsimile: (213) 229-7520

Attorneys for Defendant Bryan Cave LLP

UNITED STATES BANKRUPTCY COURT

CENTRAL DISTRICT OF CALIFORNIA

NORTHERN DIVISION

In re:

ESTATE FINANCIAL, INC.,

Debtor.

Chapter 11

CASE NO. 9:08-bk-11457-PC Adv. No. 9:11-ap-01147-PC

Assigned to the Hon. Peter H. Carroll

APPENDIX OF UNPUBLISHED AUTHORITIES IN SUPPORT OF MOTION OF BRYAN CAVE LLP TO COMPEL THE PRODUCTION OF DOCUMENTS

[Notice of Motion and Motion; Supporting Memorandum of Points and Authorities, Joint Stipulation pursuant to Local Bankruptcy Rule 7026-1(c), and Declaration of Michael Dore filed concurrently]

Hearing:

Date: April 13, 2017 Time: 10:00 a.m. Place: Courtroom 201

1415 State Street Santa Barbara, CA

THOMAS P. JEREMIASSEN, chapter 11 Trustee,

Plaintiff,

v.

BRYAN CAVE LLP, a professional limited liability partnership, and KATHERINE M. WINDLER, an individual,

Defendants.

In re

ESTATE FINANCIAL MORTGAGE FUND, LLC,

Debtor.

[JOINT CAPTION CONTINUED ON NEXT PAGE]

Case 9:11-ap-01147-PC Doc 124 Filed 03/23/17 Entered 03/23/17 20:26:05 Desc Main Document of 46

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Gibson, Dunn & Crutcher LLP

BRADLEY D. SHARP, CHAPTER 11 TRUSTEE,

Plaintiff,

vs.

BRYAN CAVE LLP, a professional limited liability partnership, and KATHERINE M. WINDLER, an individual,

Defendants.

Pursuant to United States Bankruptcy Court for the Central District of California Local Rule

9013-2(b)(4), Defendant Bryan Cave LLP hereby submits copies of the following unpublished

authorities:

Palmer v. Westfield Ins. Co., 2006 WL 2612168 (M.D. Fla. 2006) ........................................................................... Exhibit 1

In re Lernout & Hauspie Sec. Litig., 2004 WL 3217802 (D. Mass. July 2, 2004) .................................................................. Exhibit 2

Children First Found., Inc. v. Martinez, 2007 WL 4344915 (N.D.N.Y. Dec. 10, 2007) .............................................................. Exhibit 3

Umpqua Bank v. First American Title Ins. Co., 2011 WL 997212 (E.D. Cal. Mar. 17, 2011) ............................................................... Exhibit 4

DATED: March 23, 2017

KEVIN S. ROSEN DOUGLAS FUCHS MICHAEL H. DORE GIBSON, DUNN & CRUTCHER LLP

By: /s/ Kevin S. Rosen Kevin Rosen

Attorneys for Defendant Bryan Cave LLP


EXHIBIT 1

003


Palmer v. Westfield Ins. Co., Not Reported in F.Supp.2d (2006)

2006 WL 2612168, 19 Fla. L. Weekly Fed. D 902

© 2017 Thomson Reuters. No claim to original U.S. Government Works. 1

2006 WL 2612168United States District Court,

M.D. Florida.

Meral PALMER, Plaintiff,v.

WESTFIELD INSURANCE COMPANY,an Ohio corporation, Defendant.

No. 5:05–CV–338–OC–10GRJ.|

June 30, 2006.

Attorneys and Law Firms

J. Pablo Caceres, Butler Pappas Weihmuller Katz Craig,LLP, Tampa, FL, US, Lead Attorney, Attorney to beNoticed, for Westfield Insurance Company, (Defendant).

Gina G. Smith, Butler Pappas Weihmuller Katz Craig,LLP, Tallahassee, FL, US, Lead Attorney, Attorney to beNoticed, for Westfield Insurance Company, (Defendant).

Gregory E. Tucci, Law Office of Gregory E. Tucci, Ocala,FL, for Meral Palmer, (Plaintiff).

Steven Ward Wingo, The Briggs Law Firm, Ocala, FL,Lead Attorney, Attorney to be Noticed, for Meral Palmer,(Plaintiff).

ORDER

JONES, Magistrate J.

*1 Pending before the Court is Westfield's Motion ToQuash Or Modify Plaintiff's Third Party Subpoena DucesTecum To The Division Of State Fire Marshal. (Doc.18.) Defendant requests that the Court quash or modifythe subpoena duces tecum which Plaintiff has servedupon the Florida State Fire Marshal requesting the Stateto produce the investigative file concerning the fire atPlaintiff's home on January 5, 2004. Defendant contendsthat the subpoena is an inappropriate attempt by Plaintiffto obtain privileged documents to which Plaintiff wouldnot otherwise be entitled. After an in camera review ofthe documents in dispute, and for the following reasons,Westfield's Motion To Quash Or Modify Plaintiff's ThirdParty Subpoena Duces Tecum To The Division Of State

Fire Marshal (Doc. 18) is GRANTED, subject to thelimitations outlined below.

I. BACKGROUND AND FACTS

Defendant insured Plaintiff's home at the time of thefire, and upon receiving Plaintiff's claim for benefits,

commenced an investigation into the loss and the claim. 1

On or about July 28, 2004, Lt. Bernie Kleinschmidt ofthe Florida Department of Financial Services, Divisionof State Fire Marshal, Bureau of Fire and ArsonInvestigations, sent a letter to Defendant requestingDefendant to disclose to the State Fire Marshal certain

documents relating to the insurance claim investigation. 2

Pursuant to Fla. Stat. § 633.175, Defendant complied withthis request.

1 Doc. 18, ¶¶ 1–2.

2 See id. ¶ 4.

After concluding its investigation, Defendant deniedPlaintiff's insurance claim on the basis of fraud orconcealment of a material fact in violation of the insurancecontract. On June 24, 2005, Plaintiff commenced thisbreach of contract action against Defendant in the CircuitCourt of the Fifth Judicial Circuit of Florida, in and forMarion County. Defendant removed the action to thisCourt on July 27, 2005. During the current discoveryphase of this case, on or about February 10, 2006,Plaintiff provided Defendant with a notice and copy ofthe subpoena served upon the Custodian of Records forthe Division of State Fire Marshal requesting the State toproduce its investigative file. On March 7, 2006, the Statenotified Defendant that it had received this subpoena and,because its investigation was no longer active, would turnthe file over to Plaintiff. On March 14, 2006, Defendantobjected to the release of that file and the instant motion

was filed shortly thereafter. 3

3 See id. ¶¶ 10–12.

Plaintiff filed its Response to Defendant's Motion ToQuash. (Doc. 19.) In her Response, Plaintiff requestedthat the Court require the Defendant to describespecifically the nature of the documents and theprivilege asserted so that Plaintiff could respond moreappropriately to Defendant's claims of privilege. In anOrder dated April 7, 2006, the Court directed the

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Defendant to file a privilege log and requested that theparties submit supplemental briefs in support of their

positions. (Doc. 20.) Defendant filed a privilege log, 4

and both parties filed a supplemental brief. 5 BecausePlaintiff asserted that she was unable to determine fromthe privilege log sufficient information to address whetherDefendant's claims of privilege were valid or whetherany exceptions applied to her document request, Plaintiffrequested that the Court conduct an in camera inspectionof the documents. In an Order dated May 9, 2006,the Court granted this request. Pursuant to this Order,Defendant submitted and the Court reviewed in camerathirty-nine documents.

4 See Doc. 21.

5 See Docs. 22–23.

II. DISCUSSION

*2 In its privilege log and supplemental brief, Defendantcontends that the documents at issue are confidentialunder Florida Statute § 633.175, protected by the work-product or attorney-client privileges and beyond the scope

of discovery. 6

6 Under Fed.R.Civ.P. 26(b)(1), “[p]arties may obtaindiscovery regarding any matter, not privileged, thatis relevant to the claim or defense of any party ...Relevant information need not be admissible at trialif the discovery appears reasonably calculated to leadto the discovery of admissible evidence.” The 2000amendment to Rule 26(b) narrowed the scope ofdiscovery by changing the focus of discovery frominformation “relevant to the subject matter” involvedin the pending action to information “relevant tothe claim or defense of any party.” As a result,the scope of discovery is still very broad, and theFederal Rules and discovery practices of this Courtplace the burden upon the party objecting to therequested discovery to describe with particularitythe reasons for the objections. See Oleson v. KmartCorp., 175 F.R.D. 560, 565 (D.Kan.1997) (“Theobjecting party has the burden to substantiate itsobjections.”) (internal citation omitted); see alsoMiddle District Discovery at 10(A)(5)(b) & (6)(objections to requests for production must be statedwith specificity). Defendant has not offered anyspecific reasons or argument supporting its suggestionthat the documents are beyond the scope of discovery

and, accordingly, the Court will not address this issuein view of Defendant's failure to meet its burden.

1. Fla. Stat. § 633.175. Investigation of FraudulentInsurance Claims and CrimesDefendant contends that some of the documents containcommunications between it and the State during thecourse of, and in furtherance of the State's criminalinvestigation and are therefore confidential under Fla.Stat. § 633.175(5). Defendant's argument is based upon amisinterpretation of Fla. Stat. § 633.175.

Because the documents were produced by Defendantto the State Fire Marshal, as required by Fla. Stat.§§ 633.175(1), (6), any privilege that applied to thedocuments was not waived or destroyed when Defendant

produced these documents to the State Fire Marshal. 7

However, other than preserving any privilege that mightapply, the statute does not establish a separate privilegesimply because the documents were produced during a

fire investigation. Three of the documents 8 withheldfrom production, inter alia, based upon § 633.175, aremerely transmittal letters from Westfield employees to theState Fire Marshal and therefore are not subject to anyprivilege simply because the documents were producedto the State Fire Marshal. Accordingly, with regard todocuments Bates stamped WFD0529, WFD0512 andWFD0277 Defendant's claim of privilege is overruledand these documents are not protected from productionpursuant to the subpoena duces tecum served upon theState Fire Marshal.

7 Pursuant to Fla. Stat. § 633.175(1):The State Fire Marshal ... who is engaged inthe investigation of a fire loss may request anyinsurance company or its agent .. investigatinga claim under an insurance policy or contractwith respect to a fire to release any informationwhatsoever in the possession of the insurancecompany ... relative to a loss from thatfire. The insurance company shall releasethe available information to and cooperatewith any official authorized to request suchinformation ...

Under Fla. Stat. § 633.175(6):The actions of an insurance company orof its agents ... in complying with thestatutory obligation of this section shallin no way be construed by a court asa waiver or abandonment of any privilege

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or confidentiality of attorney work product,attorney-client communication, or such otherprivilege or immunity as provided by law.

8 WFD 0529, WFD 0512, and WFD 0277. Defendantfiled WFD 0277 with the pending motion, thusmaking it part of the record, and waiving any claimof privilege.

2. Attorney–Client PrivilegeTurning to the documents withheld from disclosurebased upon the attorney-client privilege, the partyinvoking the privilege has the burden of proving that anattorney-client relationship existed and that the particular

communications were confidential. 9 Because this is adiversity action which does not raise a federal question,Florida law governs the application of the attorney-client privilege. This privilege is narrowly construed andcommunications are only protected if at the time they weremade, they were “(1) intended to remain confidential and(2) under the circumstances were reasonably expected and

understood to be confidential.” 10

9 See Bogle v. McClure, 332 F.3d 1347, 1358 (11thCir.2003) ( “The party invoking the attorney-clientprivilege has the burden of proving that an attorney-client relationship existed and that the particularcommunications were confidential.”) (quoting UnitedStates v. Schaltenbrand, 930 F.2d 1554, 1562 (11thCir.1991)).

10 United States v. Noriega, 917 F.2d 1543, 1551 (11thCir.1990) (internal citations omitted). Under Fla.Stat. § 90.502, “A communication between lawyer andclient is ‘confidential’ if is not intended to be disclosedto a third person other than: 1. those to whomdisclosure is in furtherance of the rendition of legalservices to the client; 2. those reasonably necessary forthe transmission of the communication....”

Defendant has only raised the attorney-client privilege

with regard to three of the documents. 11 Thesedocuments consist of two letters and an e-mail betweenclaims analysts and investigators who work for Westfieldand Westfield's outside counsel. The State Fire Marshalis not required to produce these documents because theyare confidential communications between employees ofDefendant and Defendant's outside counsel requesting

legal advice with respect to Plaintiff's insurance claim. 12

Accordingly, Defendant's objection to the production ofthese documents is sustained based upon the attorney-

client privilege and, therefore, the State Fire Marshalis not required to produce pursuant to the subpoenaduces tecum the documents Bates stamped WFD0520,WFD0521 and WFD0604.

11 WFD 0520, WFD 0521 and WFD 0604.

12 Upjohn Co. v. United States, 449 U.S. 383, 395–97(1981).

3. Work–Product Privilege*3 Lastly, turning to Defendant's assertion of the work

product privilege, like the attorney-client privilege, theparty asserting the work-product privilege has the burden

to prove that the document is work-product. 13 Thisprivilege “typically appl[ies] only to documents preparedprincipally or exclusively to assist in anticipated or

ongoing litigation.” 14 The extent of the work-productprivilege is governed by Fed.R.Civ.P. 26(b)(3) whichprovides in relevant part that

13 See AARP v. Kramer Lead Mktg. Group, No. 3:03CV 1033 J 99MCR, 2005 WL 1785199, at *2(M.D.Fla.2005) (internal quotations and citationsomitted).

14 Noriega, 917 F.2d at 1551 (internal quotations andcitations omitted); see also Hickman v. Taylor, 329U.S. 495, 511 (1947).

a party may obtain discovery of documents ...otherwise discoverable ... and prepared in anticipationof litigation or for trial by or for another party orby or for that other party's representative ... onlyupon a showing that the party seeking discovery hassubstantial need of the materials in the preparation ofthe party's case and that the party is unable withoutundue hardship to obtain the substantial equivalent ofthe material by other means. In ordering discovery ofsuch materials when the required showing has beenmade, the court shall protect against disclosure ofthe mental impressions, conclusions, opinions, or legaltheories of an attorney or other representative of a partyconcerning the litigation.

With respect to documents generated incident to a fireinsurance claim, documents that arise out of a routineclaim investigation are not subject to the work-productprivilege. However, documents that are generated by afire insurer after a fire has become suspicious and the

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matter has been referred to a special investigation unitare prepared in anticipation of litigation and, thus, are

subject to the work-product privilege. 15 “Simply becausean investigation occurs before a suit is filed does notmean that it was not done because of the prospect of

litigation.” 16

15 See Lett v. State Farm Fire & Cas. Co., 115 F.R.D.501, 502–03 (N.D.Ga.1987) (determining that “thepoint where the probability of litigating the claimis substantial and imminent” had been reached byJune 12, 1984 when the claim was referred to theSpecial Investigations Unit; any documents preparedafter that point were prepared in anticipation oflitigation); Stampley v. State Farm Fire & Cas. Co.,23 Fed. Appx. 467, 471 (6th Cir.2001) (finding thatthe prospect of litigation could reasonably have beenanticipated when the Michigan Fire Incident Reportnoted that the fire was of a “suspicious nature”); Dunnv. State Farm Fire & Cas. Co., 927 F.2d 869, 875(5th Cir.1991) (documents generated after insurancecompany hired attorneys due to reasonable basis toquestion Plaintiff's insurance claim were generatedin anticipation of litigation and subject to the workproduct doctrine).

16 Stampley, 23 Fed. Appx. at 470 (citing Binks Mfg. Co.v. Nat'l Presto Indus., Inc., 709 F.2d 1109, 1120 (7thCir.1983)).

In this case, counsel for Defendant represents that thisclaim was referred to its Special Investigations Unitfrom the outset of the loss and at the inception of theclaim investigation because of the suspicious nature of

the fire. 17 Plaintiff filed written notice of her claim on

January 7, 2004, 18 and the privilege logs submitted tothe Court reveal that documents were generated duringthe investigation of this claim as early as the date ofthe fire and Defendant's initial notification of the loss,

January 5, 2004. 19 Notably, the parties previously agreedthat various documents dating from January 5, 2004 are

protected by the work-product privilege. 20 Thus, giventhe early involvement of Westfield's Special Investigations

Unit, the majority of the documents 21 generated aspart of this investigation were produced in anticipationof litigation and thus are subject to the work-productprivilege.

17 See Doc. 22 at 5.

18 See Doc. 2, ¶ 9.

19 See Docs. 21 & 23, Ex. 3.

20 These documents include WFD 0393–0460 (describedas “Work Product Activity; Log Notes”), 0259–0264(described as “Rough draft transcription”), 0594–0598 (described as “Handwritten Notes”). See Doc.23 at 3–4 and Ex. 3.

21 WFD 0009–0010, WFD 0011–0012, WFD, 0021–0031, WFD 0039–0044, WFD 0045–46, WFD 0047–0048, WFD 0049–0060, WFD 0061–0071, WFD0073–0081, WFD 0082–0095, WFD 0096–0098,WFD 0099–0103, WFD 0104, WFD 0159–0166,WFD 0167–0168, WFD 0234, WFD 0235–0236,WFd 0237–0248, WFD 0249–0251, WFD 0265–0274,WFD 0288–0289, WFD 0290–0291, WFD 0292–0293, WFD 0294, WFD 0532, WFD 0536–0538,0653, SFM 120–124, and SFM 125.

There are two additional documents 22 which Defendantseeks to withhold based upon the work-product privilege.Both documents are purported to be replacementcost estimates. One is undated but designates cost of

replacement as of November 2002 23 while the otheris dated February 17, 2000. Neither document appearsto concern the cause of the fire, and both pre-datethe actual fire and investigation by Defendant's SpecialInvestigations Unit. Thus, neither document could havebeen generated in anticipation of litigation, and therefore,neither can be withheld based upon the work-productprivilege.

22 WFD 0850 (the Court inadvertently also requestedWFD 0852 which was a duplicate of WFD 0850) andWFD 0863.

23 WFD 0852.

*4 In addition, in the first privilege log produced tothe Court, Defendant claimed to withhold documentsbased upon the work-product privilege which were Batesstamped numbered SFM 001–002 and also were listedas WFD 0009–0019. The Court requested the documentsby their WFD numbers. However, WFD 0014–0019 isthe Marion County Fire Rescue Incident Report which ispublic record and thus not privileged. The Court assumesit was inadvertently listed in the privilege log. In addition,WFD 0013 also appears to have been inadvertentlyincluded in the privilege log because it, too, does notmatch the given description. This document is the Right

007



























to Search form signed by Plaintiff permitting Defendantto search the premises on January 7, 2004, two days afterthe fire. By virtue of the fact that Plaintiff has alreadyseen it and signed it, it cannot be withheld on the basis ofwork-product privilege. Both documents must, therefore,be produced.

Lastly, in Plaintiff's Supplemental Brief, she raises anissue with respect to cell phone tower records from

Verizon. 24 Because Defendant has established that the

Verizon records 25 in its possession are protected by thework-product privilege, the burden shifts to Plaintiff toprove that, pursuant to Fed.R.Civ.P. 26(b)(3), she has“substantial need of the materials in the preparation ofthe party's case and that the party is unable withoutundue hardship to obtain the substantial equivalent ofthe materials by other means.” Plaintiff has not made arequest to this Court for the Verizon cell tower recordsbased upon substantial need and hardship and so theCourt need not address the issue at this time. However, ifPlaintiff wishes to obtain these documents as an exceptionto the work product doctrine it may attempt to do so byfiling an appropriate motion and providing supportingevidence to establish the “substantial need” for these

records and the “undue hardship” Plaintiff would incur if

she was unable to obtain these records. 26

24 Doc. 23 at 6–7.

25 WFD 0064–0071.

26 Defendant is reminded that it cannot withholdproduction of any document on the basis of privilegeand then seek to use the document as evidence in thiscase.

III. CONCLUSION

Accordingly, for the reasons discussed above, and basedupon the Court's in camera review of the documentsfiled under seal, Westfield's Motion To Quash Or ModifyPlaintiff's Third Party Subpoena Duces Tecum To TheDivision Of State Fire Marshal (Doc. 18) is GRANTEDas limited in this Order. The subpoena duces tecum servedupon the State Fire Marshal is MODIFIED as follows:

(1) the State Fire Marshal shall produce to counselfor Plaintiff copies of the following documents in itsinvestigative file:

Westfield 0013

Westfield 0014–0019

Westfield 0277

Westfield 0512

Westfield 0529

Westfield 0850

Westfield 0863

(2) the State Fire Marshal shall not be required to produceany other documents in its investigative file that may beresponsive to the subpoena duces tecum.

IT IS SO ORDERED.

DONE AND ORDERED.

All Citations

Not Reported in F.Supp.2d, 2006 WL 2612168, 19 Fla. L.Weekly Fed. D 902

End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works.

008




EXHIBIT 2

009


In re Lernout & Hauspie, Not Reported in F.Supp.2d (2004)

2004 WL 3217802


2004 WL 3217802Only the Westlaw citation is currently available.

United States District Court,D. Massachusetts.

In re LERNOUT & HAUSPIESECURITIES LITIGATION

Gary B. FILLER, et al., Plaintiffs,v.

Jo LERNOUT, et al, Defendants.STONINGTON PARTNERS, INC., et al, Plaintiffs,

v.Carl DAMMEKENS, et al., Defendants.

Paul G. BAMBERG, et al., Plaintiffs,v.

KPMG, LLP, et al., Defendants.Janet BAKER, et al., Plaintiffs,

v.KPMG, LLP, et al., Defendants.

No. CIV.A. 00–CV–11589–P, CIV.A.02–CV–10302–P, CIV.A. 02–CV–10303–P, CIV.A. 02–CV–10304–P.

|July 2, 2004.


Vincent M. Amoroso, Posternak, Blankstein & Lund,Boston, for KPMG Belgium, Paul Behets, ConsolidatedDefendants.

Jennifer Ancona Semko, Baker & McKenzie,Washington, DC, for Mercator & Noordstar NV,Consolidated Defendant.

Bruce A. Baird, Covington & Burling, Washington, DC,for Microsoft Corporation, Defendant.

Jeffrey Barist, Milbank, Tweed, Hadley & McCloy, NewYork, NY, for Milbank, Tweed, Hadley & McCloy LLP,Interested Party.

Jeffrey C Block, Berman DeValerio Pease TabaccoBurt & Pucillo, Boston, for Gabriel, Inc. Pension andProfit Sharing Plan, Anthony Drummond, Attilio Po,Daniel J. Perrington, Gary C. Downey, Hans A. Quaak,Karl Leibinger, Larry A. Rosenmann, Lee Herskowitz,

Matthias Weis, Samer M. Ali, Stephen N. Maskaleris,Steven Roskin, Class Plaintiffs, All Plaintiffs, Plaintiffs.

James P. Bonner, Shalov Stone & Bonner, New York, NY,for Sandra Balan, Plaintiff.

Curtis L. Bowman, Cauley Geller Bowman & Coates,LLP, Little Rock, AR, for Sandra Balan, Plaintiff.

David H. Braff, Sullivan & Cromwell, New York, NY, forKPMG UK, Consolidated Defendant.

Michael P. Carroll, Davis, Polk & Wardwell, New York,NY, for KPMG LLP, Defendant.

Gene Cauley, Cauley & Geller LLP, Little Rock, AR, forHans A. Quaak, Consolidated Plaintiff.

Steven E. Cauley, Cauley Geller Bowman & Coates, LittleRock, AK, for Attilio Po, Karl Leibinger, Sandra Balan,Plaintiffs.

Donald Chase, Morrison Cohen Singer & Weinstein,LLP, New York, NY, for L & H Investment CompanyN.V., Nico Willaert, Pol Hauspie, Defendants.

Andre K. Cizmarik, Solomon Zauderer, EllenhornFrischer etal, New York, NY, for Paul Behets,Consolidated Defendant.

Robert M. Cohen, Cohen & Fierman, LLP, Boston, forMercator & Noordstar NV, Consolidated Defendant.

Gus P. Coldebella, Goodwin Procter, LLP, Boston, for JoLernout, Consolidated Defendant.

Michael A. Collora, Dwyer & Collora, LLP, Boston, forL & H Investment Company N.V., Defendant.

Michael P. Connolly, Murtha Cullina LLP, Boston, forEllen Spooren, Defendant.

Nicholas W.C. Corson, Hogan & Hartson, LLP, NewYork, NY, for KPMG Belgium, Consolidated Defendant.

Rachelle L. DeGregory, Morrison Cohen Singer &Weinstein, LLP, New York, NY, for L & H InvestmentCompany N.V., Nico Willaert, Defendants.

Glen DeValerio, Berman DeValerio Pease Tabacco Burt& Pucillo, Boston, for Sandra Balan, Gabriel, Inc. Pensionand Profit Sharing Plan, Anthony Drummond, Attilio Po,Daniel J. Perrington, Gary C. Downey, Hans A. Quaak,

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2004 WL 3217802


Karl Leibinger, Larry A. Rosenmann, Lee Herskowitz,Matthias Weis, Samer M. Ali, Stephen N. Maskaleris,Steven Roskin, Consolidated Plaintiffs.

Michael D. Donovan, Donovan Searles, LLC,Philadelphia, PA, for Anthony Drummond, ConsolidatedPlaintiff.

Alicia M. Duff, Bernstein, Litowitz, Berger & GrossmannLLP., San Diego, CA, for Attilio Po, Daniel J. Perrington,Hans A. Quaak, Karl Leibinger, Stephen N. Maskaleris,Consolidated Plaintiffs.

Thomas L. Earp, Earp Cohn P.C., Westmont, NJ, forAnthony Drummond, Consolidated Plaintiff.

Theodore Edelman, Sullivan & Cromwell, for KPMGUK, Consolidated Defendant.

Patrick T. Egan, Berman DeValerio Pease Tabacco Burt& Pucillo, Boston, for All Plaintiffs, Class Plaintiffs,Sandra Balan, Plaintiffs.

David N. Ellenhorn, Proskauer Rose LLP, New York,NY, for Paul Behets, Consolidated Defendant.

Thomas W. Evans, Cohen & Fierman, LLP, Boston, forMercator & Noordstar NV, Consolidated Defendant.

Anthony M. Feeherry, Goodwin Procter, LLP, Boston,for Jo Lernout, Consolidated Defendant.

William Fenrich, Davis Polk & Wardwell, New York,NY, for KPMG LLP, Defendant.

Janet B. Fierman, Cohen & Fierman, LP, Boston, forMercator & Noordstar NV, Consolidated Defendant.

Marvin L. Frank, Rabin, Murray & Frank LLP, NewYork, NY, for Sandra Balan, Plaintiff.

Robert P. Frutkin, Office of Bernard M. Gross, PC,Philadelphia, PA, for Irene Godfrey, Marguerite J.Cammann, Martin E. Kofman, Dirk Cauwelier, MarcDePauw, Defendants.

Paul J. Geller, Cauley Geller Bowman & Rudman LLP,Boca Raton, FL, for Attilio Po, Hans A. Quaak, KarlLeibinger, Matthias Weis, Consolidated Plaintiffs.

Victoria Milda Genys, Kirkpatrick & Lockhart, Boston,for SG Cowen Securities Corporation, Defendant.

Edward P. Gilbert, for Nico Willaert, Pol Hauspie,Defendants.

John A.D. Gilmore, Piper Rudnick LLP, Boston, forBernard Vergnes, Consolidated Defendant.

Teresa A. Gonsalves, Solomon, Zauderer Ellenhorn,Frischer & Sharp, New York, NY, for Paul Behets,Consolidated Defendant.

Andrew Good, Good & Cormier, Boston, for Louis H.Verbeke, Defendant.

Philip L. Graham, Jr., Sullivan & Cromwell, New York,NY, for KPMG UK, Consolidated Defendant.

Bernard M. Gross, Law Offices of Bernard M. Gross,P.C., Philadelphia, PA, for Marguerite J. Cammann,Consolidated Plaintiff.

Deborah R. Gross, Law Office of Bernard M. Gross,PC, Philadelphia, PA, for Marguerite J. Cammann,Consolidated Plaintiff.

Jonathan I. Handler, Day, Berry & Howard LLP, Boston,for Microsoft Corporation, Defendant.

Bradley A. Harsch, Sullivan & Cromwell, New York, NY,for KPMG UK, Consolidated Defendant.

Douglas W. Henkin, Milbank, Tweed, Hadley & McCloy,New York, NY, for Milbank, Tweed, Hadley & McCloyLLP, Interested Party.

Michael L. Hirschfeld, Milbank, Tweed, Hadley &McCloy, New York, NY, for Milbank, Tweed, Hadley &McCloy LLP, Interested Party.

Tara J. Holubar, Dickstein Shapiro Morin & Oshinsky,LLP, Washington, DC, for Ellen Spooren, Defendant.

William D. Iverson, Covington & Burling, Washington,DC, for Microsoft Corporation, Defendant.

Gordon M. Jones, Nixon Peabody, LLP, Boston, for PolHauspie, Defendant.

Robert J. Kaler, Gadsby & Hannah LLP, Boston, forFlanders Language Valley Fund N.V., ConsolidatedDefendant.

David C. Katz, Weiss & Yourman, New York, NY, forGerhard Heitmann, Interested Party.

011




























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2004 WL 3217802


Emily F. Klineman, Ropes & Gray LLP, Boston, forKPMG UK, Consolidated Defendant.

Sean C. Knowles, Davis, Polk & Wardwell, New York,NY, for KPMG LLP, Defendant.

Michael G. Lange, Berman DeValerio Pease TabaccoBurt & Pucillo, Boston, for Sandra Balan, Gabriel, Inc.Pension and Profit Sharing Plan, Anthony Drummond,Attilio Po, Daniel J. Perrington, Gary C. Downey, HansA. Quaak, Karl Leibinger, Larry A. Rosenmann, LeeHerskowitz, Matthias Weis, Samer M. Ali, Stephen N.Maskaleris, Steven Roskin, Consolidated Plaintiffs.

Kevin J. Lesinski, Seyfarth Shaw, LLP, Boston, forKPMG LLP, Defendant.

Jason A. Levine, Covington & Burling, Washington, DC,for Microsoft Corporation, Defendant.

Richard A. Lockridge, Lockridge, Grindal, Nauen& Holstein, Minneapolis, MN, for Matthias Weis,Consolidated Plaintiff.

Erik Lund, Postemak, Blankstein & Lund, Boston, forKPMG Belgium, Paul Behets, Consolidated Defendants.

Ellen D. Marcus, Debevoise & Plimpton, Washington,DC, for Dirk Cauwelier, Fernand Cloet, GerardVanAcker, Hubert Detremmerie, Jan Coene, MarcDePauw, Defendants.

Michael T. Matraia, Berman DeValerio Pease TabaccoBurt & Pucillo, Boston, for Class Plaintiffs, Plaintiff.

Amy M. McNamer, Zuckerman Spaeder LLP,Washington, DC, for Louis H. Verbeke, Defendant.

Douglas H. Meal, Ropes & Gray LLP, Boston, forKPMG UK, Consolidated Defendant.

Arnold P. Messing, Choate, Hall & Stewart, Boston, forKPMG LLP, Defendant.

John B. Missing, Debevoise & Plimpton, Washington,DC, for Dirk Cauwelier, Fernand Cloet, GerardVanAcker, Hubert Detremmerie, Jan Coene, MarcDePauw, Defendants.

Julian J. Moore, Davis Polk & Wardwell, New York, NY,for KPMG LLP, Defendant.

William R. Moorman, Craig & Macauley, P.C., Boston,for Gaston Bastiaens, Defendant.

Kirsten M. Nelson, Piper Rudnick LLP, Boston, forBernard Vergnes, Consolidated Defendant.

Eric Neyman, Gadsby & Hannah LLP, Boston, forFlanders Language Valley Fund N.V., ConsolidatedDefendant.

Diem–Suong T. Nguyen, Davis Polk & Wardwell, NewYork, NY, for KPMG LLP, Defendant.

Gerald A. Novack, Kirkpatrick & Lockhart, New York,NY, for SG Cowen Securities Corporation, Defendant.

David M. Osborne, Dwyer & Collora, LLP, Boston, for L& H Investment Company N.V., Defendant.

Brian E. Pastuszenski, Testa, Hurwitz & Thibeault,LLP, Boston, for Francis Vanderhoydonck, ConsolidatedDefendant.

David A. Piedra, Morrison Cohen Singer & Weinstein,LLP, New York, NY, for L & H Investment CompanyN.V., Pol Hauspie, Defendants.

Barbara A. Podell, Savett, Frutkin, Podell & Ryan, P.C.,Philadelphia, PA, for Thomas H. Bown, II, ConsolidatedPlaintiff.

John W. Polk, Baker & McKenzie, Washington, DC, forMercator & Noordstar NV, Consolidated Defendant.

John A. Redmon, Hogan & Hartson, LLP, New York,NY, for KPMG Belgium, Consolidated Defendant.

Kenneth A. Ricken, Shalov Stone & Bonner, New York,NY, for Hans A. Quaak, Consolidated Plaintiff.

Christopher F. Robertson, Seyfarth Shaw, LLP, Boston,for Francis Vanderhoydonck, Consolidated Defendant.

Patrick L. Rocco, Shalov, Stone & Bonner, New York,NY, for Hans A. Quaak, Karl Leibinger, ConsolidatedPlaintiffs.

Lisa J. Rodriguez, Rodriguez & Richards, LLC,Haddonfield, NJ, for Anthony Drummond, ConsolidatedPlaintiff.

Frank Rozzano, Dickstein Shapiro Morin & Oshinsky,LLP, Washington, DC, for Ellen Spooren, Defendant.

012































































2004 WL 3217802


Steven M. Salky, Zuckerman Spaeder LLP, Washington,DC, for Louis H. Verbeke, Defendant.

George A. Salter, Hogan & Hartson, LLP, New York,NY, for KPMG Belgium, Consolidated Defendant.

Reshma M. Saujani, Davis Polk & Wardwell, New York,NY, for KPMG LLP, Defendant.

Sherrie R. Savett, Berger & Montague, P.C., Philadelphia,PA, for Gerhard Heitmann, Interested Party.

Stuart H. Savett, Savett Frutkin Podell & Ryan, PC,Philadelphia, PA, for Thomas H. Bown, II, ConsolidatedPlaintiff.

Paul W. Schmidt, Covington & Burling, Washington, DC,for Microsoft Corporation, Defendant.

David A. Searles, Donovan Searles, LLC, Philadelphia,PA, for Anthony Drummond, Consolidated Plaintiff.

Lee S. Shalov, Shalov Stone & Bonner LLP, New York,NY, for Hans A. Quaak, Karl Leibinger, ConsolidatedPlaintiffs.

Sara Jane Shanahan, Griesinger, Tighe & Maffei, LLP,Boston, for Alex Vieux, Consolidated Defendant.

Jonathan Shapiro, Stern, Shapiro, Weissberg & Garin,Boston, for Gerhard Heitmann, Interested Party.

Thomas G. Shapiro, Shapiro Haber & Urmy LLP,Boston, for Thomas H. Bown, II, Consolidated Plaintiff.

Robert P. Sherman, Nixon Peabody LLP (BOS), Boston,for Pol Hauspie, Defendant.

William Shields, Day, Berry & Howard, Boston, forMicrosoft Corporation, Defendant.

Michael L. Simes, Davis Polk & Wardwell, New York,NY, for KPMG LLP, Defendant.

Louis M. Solomon, Proskauer Rose LLP, New York, NY,for Paul Behets, Consolidated Defendant.

Jay R. Speyer, Morrison Cohen Singer & Weinstein,LLP, New York, NY, for Nico Willaert, Pol Hauspie,Defendants.

Nicole Robbins Starr, Berman DeValerio Pease TobaccoBurt & Pucillo, Boston, for Class Plaintiffs, Plaintiff.

Amy Stoken–Dunn, Davis POlk & Wardwell, New York,NY, for KPMG LLP, Defendant.

Michael J. Stone, Peabody & Arnold LLP, Boston, forKPMG Belgium, Paul Behets, Consolidated Defendants.

Ralph M. Stone, Shalov Stone & Bonner LLP, New York,NY, for Hans A. Quaak, Karl Leibinger, ConsolidatedPlaintiffs.

Jennifer A. Sullivan, Shalov Stone & Bonner, LLP, NewYork, NY, for Class Plaintiffs, Plaintiff.

Herbert Thomas, Debevoise & Plimpton, Washington,DC, for Dirk Cauwelier, Fernand Cloet, GerardVanAcker, Hubert Detremmerie, Jan Coene, MarcDePauw, Defendants.

Daniel P. Tighe, Griesinger, Tighe & Maffei, LLP,Boston, for Alex Vieux, Consolidated Defendant.

W. Todd Ver Weire, Cauley Geller Bowman & Coates,LLP, Little Rock, AR, for Sandra Balan, Plaintiff.

Stephen Wald, Craig & Macauley, P.C., Boston, forGaston Bastiaens, Defendant.

Sarah E. Walters, Nutter, McClennen & Fish, LLP,Boston, for Jo Lernout, Consolidated Defendant.

Peter D. Weinstein, Morrison Cohen Singer & Weinstein,LLP, New York, NY, for L & H Investment CompanyN.V., Defendant.

Joseph H. Weiss, Weiss & Yourman, New York, NY, forGerhard Heitmann, Interested Party.

Franklin R. Weissberg, Morrison Cohen Singer &Weinstein, LLP, New York, NY, for L & H InvestmentCompany N.V., Defendant.

Stephanie G. Wheeler, Sullivan & Cromwell, New York,NY, for KPMG UK, Consolidated Defendant.

Roger E Zuckerman, Zuckerman Spaeder LLP,Washington, DC, for Louis H. Verbeke, Defendant.

Jack I. Zwick, Weiss & Yourman, New York, NY, forGerhard Heitmann, Interested Party.

013





























































2004 WL 3217802


AMENDED ORDER

SARIS, D.J.

*1 The Court hereby amends its Order of June 23, 2004(Docket No. 801) to correct a clerical error. The Courtoverrules the objections to the Order of the magistratejudge dated November 13, 2003. Pursuant to Fed.R.Civ.P.37, the Court orders KPMG–B to produce copies of itsaudit papers for the years 1998–2001 and all requestedaudit manuals within 14 days of the original order. UnderArticle 458 of the Belgian Criminal Code, this Court finds

that “the law obliges such secrets to be made known”because the documents are related to court proceedings,specifically testimony KPMG will be called upon torender in these proceedings, and its possible defenses. Thedocuments shall be produced pursuant to a protectiveorder preventing disclosure to the public except uponorder of the Court. Just as the disclosure of documentsin the Belgian criminal file does not make the documentspublic, the documents produced pursuant to a protectiveorder will not lose their confidential character.

All Citations

Not Reported in F.Supp.2d, 2004 WL 3217802


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EXHIBIT 3

015


Children First Foundation, Inc. v. Martinez, Not Reported in F.Supp.2d (2007)

2007 WL 4344915


KeyCite Yellow Flag - Negative Treatment

Distinguished by Delaware Riverkeeper Network v. Delaware River

Basin Com'n, D.N.J., June 9, 2014


United States District Court,N.D. New York.

The CHILDREN FIRST FOUNDATION, INC.,a New York non-profit organization, Plaintiff,

v.Raymond P. MARTINEZ, individually; David J.Swartz, in his official capacity as Commissionerof the New York Department of Motor Vehicle;

Jill A. Dunn, individually; Neal Schoen, inhis official capacity as Deputy Commissionerand Counsel for the New York Department of

Motor Vehicles; George E. Pataki, individually,and Eliot Spitizer, in his official capacity as

Governor of the State of New York, Defendants.

Civ. No. 1:04-CV-0927 (NPM/RFT).|

Dec. 10, 2007.


Alliance Defense Fund, Brian W. Raum, Esq., ofCounsel, Scottsdale, AZ, Alliance Defense Fund, JamesM. Johnson, Esq., of Counsel, Shreveport, LA, AllianceDefense Fund-DC Office, Jeffrey A. Shafer, Esq.,of Counsel, Washington, D.C., for Children FirstFoundation, Inc.

Hiscock & Barclay, LLP, Linda J. Clark, Esq., Michael J.Grygiel, Esq., of Counsel, Albany, NY, for Jill A. Dunn,individual capacity.

Houguet, Newman Law Firm, Ira J. Lipton, Esq.,Elizabeth A. Musella, Esq., of Counsel, New York, NY,for George Pataki, individual capacity.

Harris Beach PLLC, Mark J. McCarthy, Esq., of Counsel,Albany, NY, for Raymond Martinez, individual capacity.

Hon. Andrew M. Cuomo, Attorney General for theState of New York, Senta B. Siuda, Esq., Asst. AttorneyGeneral, of Counsel, Albany, NY, for Neal Schoen, EliotSpitzer, and David J. Swartz, in their official capacities.

MEMORANDUM-DECISION AND ORDER

RANDOLPH F. TREECE, United States MagistrateJudge.

*1 The State Defendants served upon Children FirstFoundation (CFF) a privilege log. See Dkt. No. 114-13,Privilege Log. After engaging in conferences with theother parties and the Court about the State Defendants'asserted privileges and their impact upon future disclosureand depositions, CFF filed a Motion to Compel thedisclosure of approximately 374 pages of documents,which the the State Defendants claim are privileged undervarious legal doctrines. Dkt. No. 113, Pl's. Mot. toCompel, dated June 1, 2007. The State Defendants opposeCFF's Motion and, in doing so, provided a privilegelog and submitted to the Court for an in camera review

those documents designated as privileged. 1 Dkt. No. 114.Defendant Pataki joins the State Defendants in opposingthe Motion to Compel. Dkt. No. 118, Ira J. Lipton, Esq.Decl., dated July 20, 2007. Other than recognizing that theprivileges were properly asserted by the State Defendants,Defendant Martinez takes no further position with respectto the pending Motion. Dkt. No. 122, Mark J. McCarthy,Esq. Decl., dated July 20, 2007. As to Defendant Dunn,she filed, under seal, a Response to Plaintiff's Motion toCompel which, in essence, is a Cross Motion assertingthat the privileges cloaking selected documents shouldbe waived. Dkt. No. 116, Linda J. Clark, Esq. Decl.,dated July 19, 2007, & Dkt. No. 117, Dunn's Mem. ofLaw, dated July 19, 2007. Because of the complexityof the Motions, the Court granted CFF and the StateDefendants the opportunity to file a Reply and Sur-Reply,respectively. On July 20, 2007, CFF filed a Reply tothe State Defendants' Opposition (Dkt. No. 121), andthe State Defendants filed their Reply (Dkt. No. 147) toDunn's Cross Motion on September 20, 2007.

1 The lineup of Defendants and their respective legalrepresentation has changed since the inception ofthis case. At the moment the State Defendantsserved and filed their Opposition to the Motionto Compel, they were Commissioner David Swartz,Deputy Commissioner and Counsel Jill A. Dunn,and Governor Eliot Spitzer, all represented by theAttorney General's Office in their official capacities.Former Governor George E. Pataki, Jill A. Dunn,and former Commissioner Raymond P. Martinez

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2007 WL 4344915


were sued in their individual capacities as well andhave their own independent counsel. Shortly afterthe State Defendants filed their Opposition, Jill A.Dunn was terminated from her employment and NealSchoen replaced her as Deputy Commissioner andCounsel. Thus, Schoen appears in this action in hisofficial capacity and Dunn solely in her individualcapacity.

I. BACKGROUND

Even though familiarity with the facts could be presumed,

a brief recitation of the case history is warranted. 2

2 For a complete recitation of the facts, this Court refersthe reader to the Memorandum-Decision and Order,dated August 3, 2007. Dkt. No. 128.

A. CFF's ComplaintPursuant to New York's Vehicle and Traffic Law§ 401 et seq., the Commissioner of the Departmentof Motor Vehicles (hereinafer “DMV”) was grantedauthority to establish three distinct categories of customlicense plates: “Historical and Vintage Plates,” “SpecialNumber Plates,” and “Picture Plates.” Dk. No. 49, First

Am. Compl. at ¶¶ 10-13. 3 Basically, picture plates arecommonly known as logo plates which permit a pictureor logo in addition to an identification plate number.Id. at ¶ 16. As a part of the picture plate program,there are several sub-categories, which include, inter alia,“Organizations and Causes.” Id. at ¶ 17. A significantfeature of this program permits picture plates to beused to raise funds for non-profit agencies. Althoughmany of these “Organizations and Causes” picture plateshave already been approved by the State Legislature, themajority are approved by the New York Department ofMotor Vehicles (DMV). Id. at ¶¶ 21-27.

3 Originally, the Complaint was filed on August 4,2004. Dkt. No. 1. The First Amended Complaintwas filed on September 8, 2006, after the SecondCircuit dismissed the the State Defendants' Appealof their First Motion to Dismiss. See Dkt. No. 35,Second Circuit Mandate; Children First Foundation,Inc., et. al. v. Martinez, et. al., 169 Fed. Appx. 637 (2dCir.2006).

CFF, a New York not-for-profit corporation, submittedan application to the DMV for a picture plate thatwould have the tag line “Choose Life.” Id. at ¶ ¶

33, 39 & 50-55. CFF's application for this plate wasrejected repeatedly by the Commissioner of the DMV,modifications notwithstanding. Id. at ¶¶ 50-70, Exs. toAm. Compl.

*2 On August 4, 2004, CFF filed a civil rights action,pursuant to 42 U.S.C. § 1983, against the Defendants intheir various capacities alleging that they violated CFF'sconstitutional rights to freedom of speech, due process,and equal protection of the law. Dkt. Nos. 1, Compl., &49, First Am. Compl. The crux of CFF's Complaint isthat the rejections of their proposed picture plate with thetag line “Choose Life” were content-based and constitutedviewpoint discrimination. First Am. Compl. at ¶ 109.

Rather than serve an Answer, Defendants filed a Motionto Dismiss, pursuant to FED. R. CIV. P. 12(b)(6). Dkt.No. 7, Defs.' Mot. to Dismiss, dated Nov. 15, 2004.Among the many issues presented to the Honorable NealP. McCurn, Senior District Judge, were the doctrineof qualified immunity and whether Defendants' actions,particularly Martinez's, were reasonable and viewpointneutral. After hearing oral arguments, Judge McCurnruled that CFF had sufficiently alleged violations of theFirst and Fourteenth Amendments to the United StatesConstitution, though claims for money damages againstDefendants in their official capacities were dismissed. Dkt.Nos. 16, Min. Entry, dated Jan. 4, 2005, 17, & Hr'g Tr.at pp. 70-73. In terms of Defendants' qualified immunitydefense, Judge McCurn decided not to consider thequalified immunity defense under a Rule 12(b)(6) motionto dismiss analysis and suggested that this affirmativedefense could be asserted within an answer and raised laterduring a motion for summary judgment. Hr'g Tr. at p. 76.

Shortly thereafter, the State Defendants filed a Motion forReconsideration of the January 4, 2005 Ruling and Order,pursuant to FED. R. CIV. P. 54(b), primarily raising thematter of qualified immunity again and arguing that suchdefense should be addressed within a motion to dismisscontext. Dkt. No. 18, Defs.' Mot. to Recons. In addressingthis issue, Judge McCurn found that “[D]efendants havenot established that the facts on the face of the [C]omplaintsupport a qualified immunity defense.” Dkt. No. 31,Mem.-Decision & Order, dated Mar. 14, 2005, at p. 5(citations omitted). Defendants immediately filed a Noticeof Appeal as to both the January 5 and March 14, 2005Orders. Dkt. Nos. 23 & 32.

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2007 WL 4344915


On March 6, 2006, the Second Circuit issued a SummaryOrder dismissing Defendants' appeal. Dkt. No. 35, SecondCircuit Mandate; Children First Foundation, Inc., et. al.v. Martinez, et. al., 169 Fed. Appx. 637 (2d Cir.2006).“Because the facts supporting the defense of qualifiedimmunity do not appear on the face of the complaint,” theSecond Circuit decided it lacked appellate jurisdiction toaddress this defense at that juncture. Id. Accordingly, theSecond Circuit remanded the action back to the DistrictCourt.

As noted above, the First Amended Complaint was filedon September 8, 2006 (Dkt. No. 49; see supra note1), and an Answer to the Amended Complaint wasfiled on October 11, 2006 (Dkt. No. 51). Within thatAnswer, and in addition to denials of the allegations, theState Defendants pled affirmative defenses, including thequalified immunity defense. Dkt. No. 51 at ¶ 131 (“Atall relevant times, defendants acted under the reasonablebelief that their conduct was in accordance with clearlyestablished law. They are, therefore, protected under the

doctrine of qualified immunity.”). 4

4 Immediately after the the State Defendants hadfiled their Motion for Reconsideration (Dkt. No.18), the State Defendants filed an Answer andtherein preserved the qualified immunity defense forDefendants Martinez, Dunn, and Pataki, who weresued in their individual capacities as well. Dkt. No.21, Ans., dated Feb. 1, 2005, at ¶ 152.

*3 From this lawsuit's inception until approximatelyJanuary 31, 2007, Defendants have had only one attorney,the Attorney General. However, on January 31, 2007,the law firm of Houguet Newman & Regal, LLP, Ira J.Lipton, Esq., of counsel, filed a Notice of Appearanceon behalf of George E. Pataki in his individual capacity.Dkt. No. 59. A month later, the law firm of Hiscock &Barclay, Linda J. Clark, Esq., of counsel, filed a Notice ofAppearance on behalf of Jill A. Dunn, in her individualcapacity. Dkt. No. 61. And most recently, the law firm ofHarris Beach PLLC, Mark J. McCarthy, Esq., of counsel,filed a Notice of Appearance on behalf of Raymond P.Martinez in his individual capacity. Dkt. No. 106. Shortlyafter Dunn was represented in her individual capacity bya private firm, she sought to amend her Answer to addthe government speech doctrine and establishment clauseneutrality defense as affirmative defenses in this action.Dkt. No. 67, Dunn's Mot. to Amend Answer, dated Mar.22, 2007. On August 3, 2007, this Court granted Dunn

the right to amend her Answer to add the establishmentclause neutrality defense but denied her the right to pleadthe government speech doctrine. Dkt. No. 128, Mem-

Decision & Order. 5

5 Dunn has not filed an Amended Answer becausethere are Cross Appeals as to this Court's August3rd Memorandum-Decision and Order. See Dkt.Nos. 130, Pl's. Appeal, dated Aug. 17, 2007, & 131,Dunn's Mot. to Vacate (Appeal), dated Aug. 17, 2007.Oral arguments were heard by Senior District JudgeMcCurn on September 25, 2007, and he has reserveddecision. Dkt. No. 150, Min. Entry.

B. Pending MotionsWe are uncertain when the State Defendants' served theirprivilege log (Dkt. No. 114-13), wherein they asserted thedeliberative process privilege, the attorney-client privilege,and the work product doctrine, upon all other parties. Butwe do know that the service of the log did not initiallytrigger either a motion to compel from opposing partiesnor a motion for protective order from the the StateDefendants. It appears likely that the current wave ofmotions were triggered by the State Defendants' Letter-Brief, dated March 23, 2007 (Dkt. No. 70), that eventuallysegued into a Discovery Hearing held on March 30, 2007.See Dkt. No. 154, Hr'g Tr. Several complex and sensitiveissues related to the State Defendants' asserted privilegeswere discussed during this Discovery Hearing. Yet, themost sensitive and prominent topic discussed during theHearing involved Dunn and whether she could pierceher client's (DMV) and the State Defendants' assertedprivileges in order to defend herself. Such piercing, ofcourse, would be compounded by the matter of anattorney's ethical obligations to her client. Based upon thenature and complexity of these issues, we issued an Ordergranting Dunn permission to file a Motion for a PrivilegeRuling. Dkt. No. 83, Order, dated Mar. 30, 2007. Becausethe parties would be delving into sensitive issues and facts,the Court also directed, in accordance with In re New YorkTimes Co., 828 F.2d 110 (2d Cir.1987) and Lugosch v.Pyramid Co. of Onondaga, 435 F.3d 110 (2d Cir.2006),that the motions be filed under seal, with redactedmemoranda of law to be filed on the Court's Docketand served on Plaintiff's and Pataki's counsel. Id. at pp.2-3. Furthermore, the documents and communications atissue with respect to the asserted privileges, along withsupporting affidavits providing, inter alia, an explanationof why the specific document is protected by one of the

018















2007 WL 4344915


privileges, were to be filed under seal for an in camera

review. Id. at p. 3. 6

6 This Order is consistent with the Court's Ruling at theMarch 30th Discovery Hearing:

The Court: Because of the sensitive nature of thecommunication, Ms. Clark, on behalf of Ms.Dunn, [and] Mr. McCartin, on behalf of the theState Defendants, will be presenting to the Courtthe confidential documents in issue, they willbe providing a sealed declaration of facts thatwould support their claim as to those privileges ...[and] there will be two memorandum of lawcoming from both of them. There would be onememorandum of law that will be discussing thelaw and possibly those facts that are revealed inthe declaration.... Mr. Raum, Mr. Shafer ... Mr.Lipton [and] Miss Musella, ... will be receivinga redacted memorandum of law with only thediscussion of the law. All other parties will havean opportunity to file a memorandum of lawbased upon what they receive....

Mr. Shafer: You're suggesting that we'll be ableto participate in the briefing of the legal issues,but we not be permitted to know about theunderlying facts, is that correct?

The Court: That's correct[.].Hr'g Tr. at pp. 102-03.To the extent there was any confusion as to whatmust be served and filed, that confusion wasresolved at a recent conference. See Dkt. No. 156,Min. Entry, dated Nov. 20, 2007.

*4 At the time this Order was issued, we were underthe impression that only Dunn was anxious to addressthe privilege issues and our briefing schedule reflectedthat belief. Id. at pp. 3-4. However, Dunn submitted aLetter Motion mentioning that the normal sequence ofa motion that pertains to privileged documents shouldbe commenced by the Plaintiff as well as raising reasonswhy Dunn should not take the lead on such a motionbecause of attorney-client ethical considerations. Dkt. No.85. Shortly thereafter the parties submitted a new briefingstipulation (Dkt. No. 89), which was granted. Dkt. No. 90,

Text Order, dated Apr. 16, 2007. 7

7 For various reasons, the briefing schedule wasamended several times. See Dkt. No. 112, Order,dated May 15, 2007, Text Order, dated July 30, 2007,& Text Order, dated Aug. 24, 2007.

There are 374 pages of documents that the StateDefendants assert are protected by one or more privileges,which were submitted for an in camera review. Dkt. No.114-13, Privilege Log. CFF filed its Motion to Compeland, obviously, not being privy to the documents claimedto be privileged, CFF was relegated to discussing the legalissues broadly. Dkt. No. 113-2, Pl.'s Mem. of Law. Inturn Dunn, seeking disclosure of privileged documentsand permission to testify accordingly in order to defendherself, raises two grounds in her Cross Motion namelythat such disclosure is permitted pursuant to (1) New YorkDisciplinary Rule 4-101(C)(4) (attorney may pierce theattorney-client privilege in order to defend herself) and (2)an “at issue” waiver has resulted from the assertion of thequalified immunity affirmative defense. Dkt. Nos. 116 &117. The State Defendants oppose both Applications andhave submitted the requisite affidavit elaborating on thenature and the circumstances of the asserted privileges.Dkt. Nos. 114 & 147.

II. DISCUSSION

A. Privilege LogPlaintiff stakes the position that these Logs fail tocomport with statutory requirements and because ofthe inadequacy of the Logs this Court should deem allof the privileges listed therein waived for all purposes.Controverting Plaintiff's position, Defendants defend theadequacy of the Logs, however, if the adequacy of theLogs is found to be unsatisfactory, Defendants arguevociferously that the suggested remedy of a wholesalewaiver is drastic, unwarranted, and untenable. In termsof the adequacy of the Logs, we agree with the Plaintiff'sassessment.

A proponent of a privilege log must “expressly makethe claim and describe the nature of the documents,communications, or tangible things not produced ordisclosed and do so in a manner that, without revealinginformation itself privileged or protected, will enable otherparties to assess the claim.” FED. R. CIV. P. 26(b)(5)(A)

(i) & (ii). 8 In this respect, and in order to evaluate andfacilitate the determination of whether a privilege exists,courts generally require compliance with this statutorymandate that an adequately detailed privilege log beprovided. United States v. Constr. Prod. Research, Inc., 73F.3d 464, 473 (2d Cir.1996) (citations omitted). Withoutan adequately detailed privilege log, the opposing party

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and even the courts are hamstrung in their attempt todecipher the presence and the extent of the claimedprivilege. An acceptable privilege log, at a minimum,should provide facts that would establish each element ofthe claimed privilege as to each document, and “identifyeach document and the individuals who were partiesto the communications, providing sufficient detail topermit a judgment as to whether the document is atleast potentially protected from disclosure. Other requiredinformation, such as the relationship between individualsnot normally within the privileged relationship, is thentypically supplied by affidavit or deposition testimony.”Trudeau v. New York State Consumer Prot. Bd., 237F.R.D. 325, 334 (N.D.N.Y.2006) (quoting United Statesv. Constr. Prod. Research, Inc., 73 F.3d at 473 &citing Strougo v. BEA Assoc., 199 F.R.D. 515, 519(S.D.N.Y.2001)). In determining the asserted privileges,courts have broad discretion as to how to proceed andcan use an adequately detailed privilege log along with“evidentiary submissions to fill in any factual gaps.”Bowne of New York City, Inc. v. AmBase Corp., 150F.R.D. 465, 474 (S.D.N.Y.1993); see also In re GrandJury Subpoenas Duces Tecum, 798 F.2d 32 (2d Cir.1986)(affidavit and documents submitted in camera ); In re John

Doe Corp., 675 F.2d 482 (2d Cir.1982) (same). 9 When aparty fails to comply with the requirements of Rule 26(b)(5) by submitting a privilege log that is inadequate byvirtue of not providing sufficient support of the privilege,the claim of privilege may be denied. Johnson v. BrycoArms, 2005 WL 469612, at *3-4 (E.D.N.Y. Mar. 1, 2005)(citing United States v. Constr. Prod. Research, Inc., 73F.3d at 474).

8 Since the State Defendants are asserting theprivileges, it is their burden to provide the necessaryinformation to support their assertions.

9 In our Order, dated March 30, 2007, we directedthe the State Defendants to provide an affidavitby a person with particular knowledge setting forththose details identified as crucial for any analysisof the privilege in compliance with United Statesv. Const Prod. Research, Inc., 73 F.3d 464 (2dCir.1996). Defendant Neal Schoen who is DMV'sDeputy Commissioner and Counsel provided such anaffidavit, under seal.

*5 CFF challenges the sufficiency of the Log, claimingfurther that it is devoid of any factual indications tosupport that a specifically referenced document's contentis indeed privileged. Dkt. No. 113-2, Pl.'s Mem. of Law

at pp. 6-7, & 9-10. Similarly, CFF notes that the StateDefendants have failed to describe the nature of thedocuments in a manner such that a reasonable personcould discern whether the privilege is properly asserted.Consequently, the paucity of information has caused CFFto make a blanket challenge to all of the documents listed.Id. at p. 7. In viewing the Log, we agree with CFF thatthe “subject matter” substance is not detailed enough topermit a reasonable judgment on the specific documents.Considering the deficiencies of the State Defendants'Log, it would, nonetheless, be too austere a remedyto deny the asserted privileges when the deficiencieshave been readily rectified by a more comprehensive,sealed affidavit. Export-Import Bank of United Statesv. Asia Pulp & Paper Co., Ltd ., 232 F.R.D. 103, 111(S.D.N.Y.2005) (directing the proponent of a privilegewhat other specificity is required). Although CFF remainsat a disadvantage, the Court, relying upon the sealedaffidavit, has ample information to fully appreciate thedisputation on the privileges. Trudeau v. New York StateConsumer Prot. Bd., 237 F.R.D. at 335.

Conversely, it is unfair for the State Defendants to chastiseCFF for making nonspecific blanket objections to the Logand it is also unreasonable for them to protest that CFF'sobjections are not sufficiently focused in order to compeldisclosure. Dkt. No. 114-2, State Defs.' Mem. of Law atpp. 3-4. CFF cannot be held solely responsible for thebrevity or lack of specificity with its objections because theLog is relatively sparse as to the nature of the documentsand why one or more privileges may attach thereto, and,additionally, CFF was not privy to the documents inquestion. Considering the quantity and quality of theinformation provided in the Log, CFF was still able todiscuss reasonably well a number of documents and whythe privileges should not survive and further discuss thelegal standard upon which the various privileges may rest.Dkt. No. 113-2 at pp. 9-16. The Court will set asidethe State Defendants' complaints and weigh accordinglyCFF's objections.

B. Deliberative Process PrivilegeThe State Defendants claim a mass of documents

as protected by the deliberative process privilege. 10

Dkt. No. 113. Many, if not all, of these documentsare purportedly and additionally cloaked by eitherthe attorney-client privilege or the work productdoctrine. CFF complains that “Defendants engaged

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in and facilitated content-based and viewpoint-baseddiscrimination and the exercise of unbridled discretionduring the course of their review and ultimate denial of therequested plate designs.” Dkt. No. 49, Am. Compl. at ¶112. CFF further charges that Defendants “rel[ied] uponvague and overbroad policies ... [and] enforced [those]policies in an ad hoc and arbitrary manner.” Id. at ¶¶ 119 &120. In making these incriminations, CFF complains thatthe Defendants' violated its First Amendment rights to befree of prior restraints on its speech, and its FourteenthAmendment rights of due process and equal protection. InCFF's view, the deliberation process that led to the denialof its applications is one of the issues in this litigation and,hence, the deliberative process privilege cannot stand.

10 Those documents are designated as P 5-8,10-11, 24-38, 51-58, 61-62, 65, 67, 70-84, 89-96,105, 112-113, 116-125, 127-151, 193-202, 215-263,286-288, 289-293, 295-297, 299-318, 321-324, 331,335-336, 339, 346-349, 351-352, 366, 367, 374.

*6 The deliberative process privilege is a sub-speciesof the work product doctrine that covers documentsreflecting advisory opinions, recommendations, draftdocuments, proposals, suggestions, and any othersubjective documents that reflect the personal opinionsof the writer rather than the agency and deliberationscomprising part of a process by which governmental

decisions and policies are formulated. 11 Tigue v. UnitedStates Dep't. of Justice, 312 F.3d 70, 76 & 80 (2d Cir.2002);A. Michael's Piano, Inc. v. F.T.C ., 18 F.3d 138, 147(2d Cir.1994) (stating that the privilege “protects thedecisionmaking processes of the executive branch in orderto safeguard the quality and the integrity of governmentaldecisions” (citation omitted)). In order for a document tobe protected by this privilege, it must be an inter-agencyor intra-agency document which is both predecisional anddeliberative. Grand Cent. P'ship, Inc. v. Cuomo, 166 F.3d473, 482 (2d Cir.1999) (citing, inter alia, Renegotiation Bd.v. Grumman Aircraft Eng'g Corp., 421 U.S. 168, 184-85(1975)). Post decisional memoranda which sets forth thereason for the agency's decision are not protected underthis doctrine. A Michael's Piano, Inc. v. F.T .C., 18 F.3dat 147. An inter-agency or intra-agency document may bewithheld from the public purview if it is prepared in orderto assist an agency in arriving at its decision and actuallyrelated to the process by which policies are formulated.Nat'l Council of La Raza v. Dept. of Justice, 411 F.3d 350,356 (2d Cir.2005). Intra-agency documents are those thatremain within a single agency's walls while inter-agency

documents are those that pass from one governmentalagency to another; but in terms of this privilege, they aretreated the same. Tigue v. United States Dep't. of Justice,312 F.3d at 77-78. Generally speaking, the efficiency ofgovernment would be clearly hamstrung if it was notfor such protection. Hopkins v. United States of Hous. &Urban Dev., 929 F.2d 81, 84 (2d Cir.1991).

11 The State Defendants exhort the Court to considerthe “constitutional” dimension of the deliberativeprocess privilege, which in their view derives fromthe separation of powers of the United StatesConstitution, particularly Article II, citing UnitedStates v. Nixon, 418 U.S. 683 (1974). Dkt. No. 114-2,Defs.' Mem. of Law at pp. 5-7. We suppose thatthey have cast the privilege as constitutional in orderto give the debate more gravitas. In support of thisnotion, they quote the Supreme Court as stating that“[c]ertain powers and privileges flow from the natureof the enumerated powers; the protection of theconfidentiality of [executive branch] communicationshas similar constitutional underpinnings,” id. at p.6 (quoting United States v. Nixon, 418 U.S. at705), but we note that the alteration in quote,which is material, struck the specific reference tothe “President.” The crucible of the Nixon case wasthe expectation of a President, as he exercises hisArticle II enumerated powers, to have confidentialityto his conversations and correspondences as may existunder Article II of the United States Constitution.The Nixon case seems to have narrowly tailored thisexquisite privilege to those conversations between thePresident and his staff which are “fundamental tothe operation of Government and inextricably rootedin the separation of powers under the Constitution.”Id. at 708. We do not agree that this PresidentialCommunication Privilege, as it is generally called,extends broadly to every executive agency that isnot communicating directly with the President or hisexecutive staff. Nixon recognizes that the PresidentialCommunication Privilege belongs exclusively anduniquely to the President of the United States andno other entity. Hobley v. Chicago Police CommanderBurge, 445 F.Supp.2d 990, 998 (N.D.Ill.2006) (citingCheney v. United States Dist. Ct. of Dist. of Columbia,542 U.S. 367, 381-82 (2004)); Bennett v. City ofBoston, 54 F.3d 18, 20 (1st Cir.1995) (surveyingother circuits that have stated that Nixon was “notmeant to extend ... to any other government officialother than the President himself”). There is, however,a distinct federal deliberative process privilege forexecutive branch agencies which has a “different

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scope” from the President's Communication Privilegethat rests solely upon Article II and the separationof powers. Hobley, 445 F.Supp.2d at 997-98. Andthis leads to a more poignant observation: thatthe President's separation of powers and relatedexecutive privileges as derived from the United StatesConstitution do not inure to the benefit of any stateexecutive, such as those in New York. No wheredoes Article II refer to state governance nor thatstate governor possess this unique communicationprivilege. Even under the most fantastical reading ofArticle II, it would be incredulous for someone tofind any empowerment or protection for any stateofficial or employee under this Article of the UnitedStates Constitution. It would be the individual state'sconstitutional and legislative provisions that woulddefine the parameters of its chief executive and/orits executive agencies' confidentiality privileges. Id. at998 (No federal court has “recognized the assertionof the presidential communication privilege by a stategovernor” or agency.). Under our current scheme,the deliberative process privilege, as we know it, wasdeveloped by virtue of both the federal's and state'sFreedom of Information Acts.

Nonetheless, the Supreme Court in Nixon rejectedthe Presidential Executive Privilege as beingabsolute and unqualified and further determinedthat the privilege may have to be set aside whenconfronted by other constitutional rights such asdue process. Nixon, 418 U.S. 713; see also Cheney v.United States Dist. Court of Dist. of Columbia, 542U.S. 367.

The deliberative process privilege “does not operateindiscriminately to shield all decision-making by publicofficials.” Schiller v. City of New York, 2007 WL 136149,at *10 (S.D.N.Y. Jan. 19, 2007) (quoting Grossmanv. Schwartz, 125 F.R.D. 376, 381 (S.D.N.Y.1989)). Asa general rule, the privilege does not cover purelyfactual matters. Grand Cent. P'ship, Inc. v.. Cuomo, 166F.3d at 482 (quoting Envt'l Prot. Agency v. Mink, 410U.S.73, 87-88 (1973) for the proposition that “memorandaconsisting only of compiled factual material or purelyfactual material contained in deliberative memoranda andseverable from its context would generally be availablefor discovery”) & Local 3, Int'l Bhd. of Elec. Workers,AFL-CIO v. N.L.R.B., 845 F.2d 1177, 1180 (2d Cir.1988)(“Purely factual material not reflecting the agency'sdeliberative process is not protected.”)); Cipolla v. Countyof Rensselaer, 2001 WL 1223489, at *2 (N.D.N.Y. Oct. 10,2001). Nor does it protect documents which are peripheralto the policy formulation. Grand Cent. P'ship, Inc. v.

Cuomo, 166 F.3d at 482. Furthermore, if an agency hasadopted or incorporated by reference a pre-decisionalmemorandum into the final decision, that memorandummust be disclosed. Wood v. FBI, 432 F.3d 78, 83 (2dCir.2005) (citations omitted). And lastly, the privilege isnot absolute but rather qualified. Ebbert v. Nassau County,2007 WL 674725, at * 11 (E.D.N.Y. Mar. 5, 2007); Schillerv. City of New York, 2007 WL 136149, at *8 (“Theprivilege is a qualified one, requiring courts to balancethe agency's interest in non-disclosure against the publicinterest in opening for scrutiny the government's decision-making process.” (internal quotations and citationsomitted)).

*7 The deliberative process privilege is fashioned insuch a way that it protects the government's deliberativeprocess from inquiry if it is collateral to the litigationitself. However, if the party's cause of action is directedat the government's intent in rendering its policydecision and closely tied to the underlying litigationthen the deliberative process privilege “evaporates.” Inre Subpoena Duces Tecum Served on the Office of the

Comptroller, 145 F.3d 1422, 1424 (D.C.Cir.1998) 12 (citedin State of New York v. Oneida Indian Nation of NewYork (Oneida II), 2007 WL 2287878, at *14 (N.D.N.Y.Aug. 7, 2007)); McPeek v. Ashcroft, 202 F.R.D. 332, 335(D.D.C.2001) (“It is certainly true that this privilege yieldswhen the lawsuit is directed at the government's subjectivemotivation in taking a particular action.”). The historicaland overwhelming consensus and body of law within theSecond Circuit is that when the decision-making processitself is the subject of the litigation, the deliberative processprivilege cannot be a bar to discovery. Ebbert v. NassauCounty, 2007 WL 674725, at *11 (finding that when thedeliberations are “among the central issues in the case”or “when the subject of the lawsuit is the very natureof the decision making process, the privilege should notforeclose the production of critical information”) (internalquotations and citations omitted); Mitchell v. Fishbein,227 F.R . D. 239, 250 (S.D.N.Y.2005 (surveying caseson the waiver); State of New York v. Oneida IndianNation of New York (Oneida I), 2001 WL 1708804, at*6 (N.D.N.Y. Nov. 9, 2001) (finding that the privilegemust give way when the decision making process is thesubject of the litigation) (citing Marisol A v. Giuliani,1, 1998 WL 132810, at *7-8 (S.D.N.Y. Mar. 23, 1998));Mr. and Mrs. B. v. Bd. of Educ. of Syosset Cent. Sch.Dist, 35 F.Supp.2d 224, 230 (E.D.N.Y.1998) (when theagency's position is “pivotal to the lawsuit”); Dep't of

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Econ. Dev. v. Arthur Andersen & Co., 139 F.R.D. 295, 299(S.D.N.Y.1991) (“Where the deliberations of governmentare genuinely at issue, privileges designed to shield thedeliberative process from public scrutiny ‘may not beraised as a bar against disclosure.’ ”) (quoting Burkav. New York City Trans. Auth., 110 F.R.D. 660, 667(S.D.N.Y.1986) & citing Grossman v. Schwarz, 125 F.R.D.376, 385 (S.D.N.Y.1989)). Even “when the factors shapingthe decisions made by governmental officials are at issue,”the privileges may not be raised to prevent disclosure.Natural Res. Defense Council v. Fox, 1998 WL 158671, at*5 (S.D .N.Y. Apr. 6, 1998).

12 Many cases cite to this District of Columbia CircuitCourt ruling in establishing the principle upon whichthe deliberative process privilege may be waived.However, this same Circuit revisited the matter in thesame case and modified its holding as follows: “Andour holding that the deliberative process privilegeis unavailable is limited to those circumstances inwhich the cause of action is directed at the agency'ssubjective motivation.” In re Subpoena Duces TecumServed on the Office of the Comptroller, 156 F.3d1279-80 (D.C.Cir.1998).

On all accounts, the crux of CFF's case is the deliberativeprocess employed by the Defendants in rejecting CFF'sapplications for a custom license plate. CFF is challengingthe process by which Defendants made their decision,claiming that it was viewpoint-based censorship. Byclaiming that Defendants acted in an arbitrary mannerand exercised an unbridled discretion in rendering theirpolicy decision, which allegedly denied CFF due processand equal protection of the law, has made the processthe cornerstone of this litigation. Stated another way,in alleging that Defendants engaged in and facilitatedcontent-based and viewpoint-based discrimination whenrejecting its application and in charging Defendants actedupon a policy wrought with vagaries and overbroadness,CFF has identified the deliberative process as thefulcrum of this litigation. For all purposes, there isnot doubt that the sum of CFF's causes of action isdirected at Defendant's purported subjective motives andthus a subject matter of the litigation. In this regard,the deliberative process privilege that has shielded, insignificant respects, the State Defendants documents frompublic scrutiny must now disappear.

*8 We disagree with the State Defendants' assessmentthat the documents CFF seeks are “utterly unrelated to

plaintiff's claims.” Dkt. No. 114-2, Mem. of Law at p.10. The equal protection and due process claims haveeverything to do with the deliberative process and thosedocuments which were an integral part of the process maylend support to CFF's claims. And we further dismissthe State Defendants' overture that this is a “routineintrusion” of the deliberative process; it is nothing of thesort. Although the State Defendants cast CFF's interestin discovering these documents as “negligible,” the recordbefore this Court proves otherwise.

Notwithstanding the consistent thread of precedents thathave pierced the deliberative process privilege when thedeliberative process is closely tied to the litigation, theState Defendants press this Court to subject its documentsto a “balancing test, not a rule of per se waiver.” Id. at p.9 (emphasis in original). Because the deliberative processprivilege is a qualified privilege, courts have recognizeda balancing test between the interest of the litigant andthe public's need to know and the government's needto protect frank discussion and to prevent injury to thequality of the agency's decision. The factors supportingthis balancing test are (i) the relevance of the evidencesought to be protected; (ii) the availability of otherevidence; (iii) the seriousness of the litigation and theissues involved; (iv) the role of the government in thelitigation; and (v) the possibility of future timidity bygovernment employees who will be forced to recognizethat their secrets are violable. In re Subpoena Duces TecumServed on Office of Comptroller, 145 F.3d at 1424; Dep'tof Econ. Dev. v. Arthur Anderson, 139 F.R.D. at 298-299;In re Franklin Nat'l. Bank Sec. Litig., 478 F.Supp. 577,583 (E.D.N.Y., 1979). Of all of the cases cited above thatwaived the privilege when the deliberative process was thesubject matter of the litigation, none of them engaged inthe balancing test. See e.g. In re Subpoena Duces Tecum,145 F.3d at 1425 (after finding that the process was acentral issue in the litigation, the court further found“no need to engage in the balancing test”). And in thosecases cited by The State Defendants where the balancingtest occurred, the deliberative process was not pivotal tothe litigation. See In re Franklin Nat'l. Bank Sec. Litig.,478 F.Supp. 577 & Resolution Trust Corp. v. Diamond,137 F.R.D. 634 (S.D.N.Y.1991). Accordingly, the Courtstands by its ruling above and finds no need to engage ina balancing test.

Just because we have found that the deliberative processevaporates in this case, it does not necessarily follow that

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all of those documents identified as such (see supra note10) have lost all of their protections. It appears that someof these documents may have an additional, independentprotection from disclosure. We note that all but four ofthe documents that have been identified as protected bythe deliberative process privilege are also identified asprotected by either the attorney-client privilege, the workproduct doctrine, or both. There is a caveat to presumingthat these independent protections, whether attorney-client privilege or work product or both, generally andinextricably protect those documents that have lost theirprotection under the deliberation process privilege. Muchlike the deliberative process privilege, “the attorney-clientprivilege may not be invoked to protect a documentadopted as, or incorporated by reference into, an agencypolicy.” Nat'l Council of La Raza v. Dep't. of Justice,411 F.3d 350, 360 (2d Cir.2005). However, where anagency does not adopt a legal memorandum's conclusionand just merely relies on the document's conclusion, thememorandum does not lose the insulation afforded it byother privileges. Wood. v. F.B.I., 432 F.3d 78 (2d Cir.2005)(continued to be protected by the work product doctrine).

*9 This Court has examined all of the documents allegedto be privileged under the deliberative process privilegeas well as either the attorney-client privilege or the workproduct doctrine and found none of them were adoptedor incorporated into the DMV's decision to reject CFF'sapplication for a custom license plate. Thus it is not readilyapparent that any waiver has occurred under this scenario.See Raba v. Suozzi, 2007 WL 128817 (E.D.N.Y. Jan. 11,2007) (discussing In re County of Erie, 473 F.3d 413 (2dCir.2007)). Therefore, each of these documents will haveto be scrutinized under the law applicable to those otherprivileges.

C. Attorney-Client Privilege and the Work ProductDoctrine

1. Attorney-Client PrivilegeThe attorney-client privilege is a longstanding, commonlaw privilege recognized in New York and by thefederal courts under FED.R.EVID. 501. This privilegeencourages full engagement between a party and herattorney so that full and frank communication existsto impart all the information an attorney may need inorder to give sage and cogent advice on the matter.Swidler & Berlin v. United States, 524 U.S. 399, 403(1998); United States v. Schwimmer, 892 F.2d 237, 243

(2d Cir.1989) (“[The] communications between attorneyand client endure as the oldest rule of privilege knownto the common law.”). Accordingly, its essential purposeis to encourage clients to be fully forthcoming with theirattorney and to receive, in return, advice which will protectthe clients' legal rights. Upjohn Co. v. United States,449 U.S. 383, 389 (1981); United States v. Const. Prod.Research, Inc., 73 F.3d 464, 473 (2d Cir.1996); UnitedStates v.. Blizerian, 926 F.2d 1285, 1292 (2d Cir.1991);see also NXIVM v.. O'Hara, 241 F.R.D. 109, 124-26(N.D.N.Y.2007).

When determining if there is in fact an attorney-clientprivilege present to cloak both the client's communicationand the corresponding legal advice, a court needs toascertain that this safety net attaches to only thosecommunications (1) where legal advice of any kind issought, (2) from a professional legal advisor in his or hercapacity as such, (3) the communication relates to thatpurpose, (4) made in confidence, (5) by the client, and (6)is at his or her insistence permanently protected, (7) fromdisclosure by the client or the legal advisor, (8) except ifthe protection is waived. In re County of Erie, 473 F.3d413, 419 (2d Cir.2007) (citing United States v. Constr.Prod. Research, Inc., 73 F.3d at 473) (listing the elementsthat include that the communication is made “for thepurpose of obtaining or providing legal advice”); UnitedStates v. Int'l Bhd. of Teamsters, 119 F.3d 210, 214 (2dCir.1997) (citing In Re Grand Jury Subpoena Duces Tecum,731 F.2d 1032, 1036 (2d Cir.1984)); In re Six Grand JuryWitnesses, 979 F.2d 939, 943-44 (2d Cir.1992); Madanesv. Madanes, 199 F.R . D. 135, 143 (S.D.N.Y.2001) (citing,inter alia, In re Richard Roe, Inc., 68 F.3d 38, 39-40 (2dCir.1995) & quoting United States v. Kovel, 296 F.2d 918,921 (2d Cir.1961)); see also 8 WIGMORE, EVIDENCE§ 2292 (McNaughton rev. ed.1961). It is axiomatic thatthe burden of proving each element of the privilege restson the party claiming the protection. In re County of Erie,473 F.3d at 418 (citing In re Grand Jury Proceedings, 219F.3d 175, 182 (2d Cir.2000) & United States v. Int'l Broth.of Teamster Chauffeurs, Warehousemen and Helpers ofAm. AFL-CIO, 119 F.3d 210, 214 (2d Cir.1997)); In reHorowitz, 482 F.2d 72, 82 (2d Cir.1973).

*10 Contrary to modern yet ill-informed perceptions,the attorney-client privilege is often “[n]arrowly defined,riddled with exceptions, and subject to continuingcriticism.” United States v. Schwimmer, 892 F.2d at 243.The attorney-client privilege is not given broad, unfettered

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latitude to every communication with a lawyer, but is to benarrowly construed to meet this narrowest of missions. Inre County of Erie, 473 F.3d at 418 (quoting Fisher v. UnitedStates, 425 U.S. 391, 403 (1976) (The privilege “appl[ies]

only where necessary to achieve its purpose”)); 13 seealso In re Horowitz, 482 F.2d at 81 (privilege ought tobe “strictly confined within the narrowest possible limitsconsistent with the logic of its principle”) (quoting 8WIGMORE § 2292 at 70); United States v. Int'l Bhd. ofTeamsters, 119 F.3d at 214.

13 There is the general maxim that the public,particularly within the judicial forum, is entitled tobe exposed to “everyman's evidence.” 8 WIGMORE,EVIDENCE § 2317 (McNaughton rev. ed.1961).The quest is for the truth of the matter to flowforward before the court, and “[t]he suppression oftruth is a grievous necessity at best ... [only justified]when the opposed private interest is supreme.” Inre Megan-Racine Assocs., Inc., 189 B.R. 562, 570(Bankr.N.D.N.Y.1995) (quoting McMann v. Sec. andExch. Comm'n, 87 F.2d 377, 378 (2d Cir.1937)).But since the attorney-client privilege “stands inderogation of the public's right to everyman'sevidence, ... it ought to be strictly confined within thenarrowest possible limits consistent with the logic ofthe principle.” In re Grand Jury Proceedings v. JohnDoe, 219 F.3d 175, 182 (2d Cir.2000) (citing UnitedStates v. Int'l Bhd. of Teamsters, 119 F.3d at 214).

In today's world, an attorney's acumen is sought atevery turn, even average attorneys mix legal advice withbusiness, economic, and political advice. NXIVM v.O'Hara, 241 F.R.D. at 126 (citing In re County of Erie, 473F.3d at 419-20). Since government has an equal claim forthe protection of attorney-client privilege communicationas any other legal entity, the same situation appliesto government attorneys who are obligated to providelegal advice to “officials responsible for formulating,implementing and monitoring governmental policy” evenwhen they may or may not have policy duties. In reCounty of Erie, 473 F.3d at 419 (citing Upjohn Co. v.

United States, 449 U.S. at 389). 14 However, when agovernment lawyer may have a dual role encompassingboth legal and policymaking, as possibly Dunn may

have, 15 “[s]o long as the predominant purpose of thecommunication is legal advice” the privilege prevails. Id.at 420 (emphasis added); E.B. v. New York City Bd.of Educ., 2007 WL 2874862, at *2 (E.D.N.Y. Sept. 27,2007) (noting that the “communication must be to render

or solicit legal advice as opposed to business or policyadvice”); NXIVM Corp. v. O'Hara, 241 F.R.D. at 126. Tothis extent, documents, such as memoranda and emailsthat were prepared and sent for the predominant purposeof soliciting or rendering legal advice, may be protected bythe attorney-client privilege. E.B. v. New York City of Bd.of Educ., 2007 WL 2874862, at *3 (citing In re County ofErie, 473 F.3d at 422-23). This predominant purpose mustbe assessed “dynamically and in light of the advice beingsought or rendered, as well as the relationship betweenthe advice that can be rendered only by consulting withthe legal authorities and advice that can be given by anon-lawyer[.]” Raba v. Suozzi, 2007 WL 128817, at *2(quoting In re County of Erie, 473 F.3d at 420-21). “Whena lawyer has been asked to assess compliance with a legalobligation, the lawyer's recommendation of a policy thatcomplies (or better complies) with the legal obligation-or that advocates and promotes compliance, or overseesimplementation of compliance measure-is legal advice.” Inre County of Erie, 473 F.3d at 422 (quoted in MacNamarav. City of New York, 2007 WL 755401, at *7 (S.D.N.Y.Mar. 14, 2007)).

14 The Second Circuit recognized that a government“lawyer's lack of formal authority to formulate,approve or enact policy does not actually prevent therendering of policy advice to officials who do possessthat authority.” In re County of Erie, 473 F.3d 413,421 (2d Cir.2007). Moreover,

[i]t is to be hoped that legal considerationswill play a role in governmental policymaking.When a lawyer has been asked to assesscompliance with a legal obligation, the lawyer'srecommendation of a policy that complies(or better complies) with the legal obligation-or that advocates and promotes compliance,or oversees implementation of compliancemeasures-is legal advice. Public officials whocraft policies that may directly implicate thelegal rights or responsibilities of the publicshould be “encouraged to seek out and receivefully informed legal advice” in the course offormulating such policies. In re Grand JuryInvestigation, 399 F.3d 527, 534 (2d Cir.2005).

Id. at 422; see also E.B. v. New York City Bd. ofEduc., 2007 WL 2874862, at *7 (E.D.N.Y. Sept. 27,2007) (noting that legal considerations play a rolein governmental policymaking).

15 Dunn denies that she had any “policy-makingauthority or administrative responsibility for the

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sponsorship plate program at DMV.” Dkt. No. 117,Dunn's Mem. of Law at p. 1.

2. Work Product Doctrine*11 The State Defendants assert that CFF threatened to

initiate litigation against them on at least two occasionsduring their deliberative process. On March 22, 2002,DMV was notified that Attorney Raum was retainedby CFF to represent its interest. On May 8, 2002,CFF's attorney threatened to seek judicial interventionif he did not receive a satisfactory response on theapplication. Dkt. No. 114-2, at p. 22. Further, onFebruary 19, 2004, Attorney Raum repeated his threat.Based upon CFF's Counsel's letters, the State Defendantsrightfully believed that litigation over the denial ofthe custom license plate was imminent. Id. AssessingCFF's threats and considering, inter alia, the prolific andubiquitous litigation history surrounding “Choose Life”custom license plates, the State Defendants aver thatthey anticipated litigation with CFF over its applicationand thus began preparing their defense. Accordingly, theState Defendants declare work product doctrine covers asignificant portion of the documents that they alleged tobe privileged.

The work product privilege is more broad than theattorney-client privilege, In re Grand Jury Proceedings,219 F.3d 175, 190 (2d Cir.2000), and it exists to protectattorneys' mental impressions, opinions, and/or legaltheories concerning litigation, Horn & Hardart Co. v.Pillsbury Co., 888 F.2d 8, 12 (2d Cir.1989). Indeed,the work product privilege is designed to protect anadversarial system of justice and has been analyzed in thatcontext by the Supreme Court in Hickman v. Taylor, 329U.S. 495, 510-11 (1947). This doctrine establishes a “zoneof privacy” in which a lawyer can prepare and developtheories and strategies with an eye towards litigation freefrom unnecessary intrusion by his or her adversaries.United States v. Adlman (“Adlman I”), 68 F.3d 1495,1500-01 (2d Cir.1995) (citing United States v. Nobles, 422U.S. 225, 238 (1975) & Hickman v. Taylor, 329 U.S. at516);. United States v. Am. Tel. & Tel. Co., 642 F.2d 1285,1299-1300 (D.C.Cir.1980) (The purpose “is to protecta material from an opposing party in litigation.”). Ofcourse the burden, albeit not a heavy one, of establishingthat the work product doctrine applies rests with thatparty's attorney who is claiming the protection. The workproduct doctrine, like the attorney-client privilege, “doesnot extend to every document generated by the attorney; it

does not shield from disclosure everything a lawyer does.”Rattner v. Netburn, 1989 WL 223059, at *6 (S.D.N.Y. Dec.7, 2005). Omnipresent is the concern that revelation of theattorney's mental processes is real and not just speculative.Gould Inc. v. Mitsui Mining & Smelting Co., Ltd., 825 F.2d676, 680 (2d Cir.1987).

FED. R. CIV. P. 26(b)(3)(A) and (B) provides a relevantrule on the discovery of work product material. It readsin part:

Ordinarily, a party may not discover documents andtangible things that are prepared in anticipation oflitigation or for trial by or for another party or itsrepresentative (including the other party's attorney,consultant, surety, indemnitor, insurer, or agent). But,subject to Rule 26(b)(4), those materials may bediscovered if:

*12 (i) they are otherwise discoverable under Rule26(b)(1); and

(ii) the party shows that it has substantial need forthe materials to prepare its case and cannot, withoutundue hardship, obtain their substantial equivalentby other means.

If the court orders discovery of those materials,it must protect against disclosure of the mentalimpressions, conclusions, opinions, or legal theories ofa party's attorney or other representative concerning the

litigation. 16

16 This Federal Rule was amended becoming effectiveon December 1, 2007. Although this particular Rule'sformat has been modified and there has been slightalteration of the statutory text, the content andcontext have remained virtually unchanged. TheAdvisory Committee Notes for 2007 do not noteany material change to this provision of the law.Thus, those court precedents as stated above remainapplicable.

It is important to note that the work product doctrineclassifies documents into two categories: “non-opinion”work product and “opinion” work product. Thedistinction between these two categories turns on theeffort employed in obtaining disclosure pursuant to Rule26(b)(3). For “non-opinion” work product, the partyseeking this information must show a substantial needfor the document and undue hardship to acquire the

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document or its substantial equivalent by other means.On the other hand, “opinion” work product requires ahigher protection to the extent that the requesting partyhas to demonstrate extraordinary justification before thecourt will permit its release. Strougo v. BEA Assocs., 199F.R.D. 515, 521 (S.D.N.Y.2001) (citing In re Sealed Case,676 F.2d 793, 809-10 (D.C.Cir.1982)); see also UpjohnCo. v. United States, 449 U.S. at 401. At a minimum,such “opinion” work product should remain protecteduntil and unless a highly persuasive showing is made.In re Grand Jury Proceedings, 219 F.3d at 191; UnitedStates v. Adlman (“Adlman II”), 134 F.3d 1194, 1204(2d Cir.1998). In a similar vein, in most instances, thework product doctrine extends to facts but those facts canbe readily revealed, as stated above, upon a showing ofsubstantial need and undue hardship. In re Grand JurySubpoena Dated Oct. 22, 2001, 282 F.3d 156, 161 (2dCir.2002) (citing FED. R. CIV. P. 26(b)(3)). Nonetheless,non-privileged facts that are in the sole possession of anadversary, and not readily available to the party seekingthe information, should be freely discoverable. NXIVMCorp. v. O'Hara, 214 F.R.D. at 127.

“[W]here a party faces the choice of whether to engage ina particular course of conduct virtually certain to resultin litigation and prepares documents analyzing whetherto engage in the conduct based on its assessment ofthe likely result of the anticipated litigation, [it shouldbe] conclude[d] that the preparatory documents shouldreceive protection under Rule 26(b)(3) .” Adlman II, 134F.3d at 1196. The crux being that a document which hasbeen prepared because of the prospect of litigation will notlose its protection under the work product doctrine, eventhough it may assist in business or policy decisions. E.B.v. New York City Bd. of Educ., 2007 WL 2874862, at *5;Strougo v. BEA Assocs ., 199 F.R.D. at 521 (“Where adocument is created because of the prospect of litigation,analyzing the likely outcome of that litigation, it does notlose protection under this formulation merely because it iscreated to assist with a business decision.” (citing AdlmanII, 134 F.3d at 1202)); Adlman I, 68 F.3d at 1502. But thisprotection will not be extended, under any circumstances,to records that are prepared in the ordinary course ofbusiness. Adlman II, 134 F.3d at 1202; Adlman I, 68 F.3d1502. Even though the work product doctrine protectsthe impressions, opinions, theories, and strategies of anattorney, Rule 26(b)(3) makes clear that the document atissue, either obtained or prepared by or for a party, or byor for his representative, may be cloaked by this doctrine

as well. Id.; E.B. v. New York City Bd. of Educ., 2007 WL2874862, at *5 (citing, inter alia, Lugosch v. Congel, 2006WL 931687, at *16 (N.D.N.Y. Mar. 7, 2006)). This maximmakes sound sense considering how complex litigationcan be and the undeniable need for others to assist indeveloping all that is necessary to prosecute or defenda lawsuit. Obviously, impressions and strategies are notalways created in a vacuum, but, rather are generated incogent discourse with others, including the clients andagents. Further, the exchange of such documents andideas with those whose expertise and knowledge of certainfacts can help the attorney in the assessment of any aspectof the litigation does not invoke a waiver of the doctrine.United States v. Nobles, 422 U.S. at 239; Adlman I, 68 F.3dat 1502.

3. Common Interest Doctrine*13 In this case, New York State's Executive Chamber,

the seat of the executive branch, is implicated as indicatedby the former Governor being sued individually andthe current Governor in his official capacity. As tothe matter before us, DMV's Deputy Counsel andLegal Department corresponded and communicatedregularly with Governor's Counsel and staff about CFF'sapplications and the policy and legal ramificationsthereof. And, in this context, The State Defendants claimthat all of these communications are protected under thecommon interest doctrine.

Often the common interest doctrine and the joint defenseprivilege are intertwined and deemed synonymous.Lugosch v. Congel, 219 F.R.D. 220, 236 n.10(N.D.N.Y.2003) (noting that common interest doctrineand joint defense doctrine are synonymous while thecommon interest arrangement and pooled informationdoctrines, which may be broader, are distinguishable).They are nonetheless an extension of the attorney-clientprivilege and the work product doctrine. Gulf IslandsLeasing Inc. v. Bombardier Capital, Inc., 215 F.R.D. 466,472 (S.D.N.Y.2003). The common interest doctrine andthe joint defense privilege are best summarized in UnitedStates v. Schwimmer,:

The joint defense privilege, more properly identified asthe “common interest rule,” see generally Capra, TheAttorney-Client Privilege In Common Representations,20 Trial Lawyers Quarterly, Summer 1989, at 20,has been described as “an extension of the attorneyclient privilege,” Waller v. Financial Corp. of Am., 828

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F.2d 579, 583 n.7 (9th Cir.1987). It serves to protectthe confidentiality of communications passing fromone party to the attorney for another party where ajoint defense effort or strategy has been decided uponand undertaken by the parties and their respectivecounsel. See United States v. Bay State Ambulance andHosp. Rental Serv., 874 F.2d 20, 28 (1st Cir.1989).Only those communications made in the course of anongoing common enterprise and intended to furtherthe enterprise are protected. Eisenberg v. Gagnon, 766F.2d 770, 787 (3d Cir.1985), cert. denied, 474 U.S.946, 106 S.Ct. 342, 88 L.Ed.2d 290 (1985); Matter ofBevill, Bresler & Schulman Asset Management Corp.,805 F.2d 120 (3d Cir.1986). “The need to protect thefree flow of information from client to attorney logicallyexists whenever multiple clients share a commoninterest about a legal matter,” Capra, 20 Trial LawyersQuarterly, at 21 (citation omitted), and it is thereforeunnecessary that there be actual litigation in progressfor the common interest rule of the attorney-clientprivilege to apply, United States v. Zolin, 809 F.2d 1411,1417 (9th Cir.1987), vacated in part on other grounds,842 F.2d 1135 (9th Cir.1988) (en banc), af'd in part andvacated in part on other grounds, 491 U.S. 554, 109 S.Ct.2619, 105 L.Ed.2d 469 (1989). Neither is it necessaryfor the attorney representing the communicating partyto be present when the communication is made to theother party's attorney. Matter of Grand Jury Subpoena,406 F.Supp. 381 (S.D.N.Y.1975); cf. Hunydee v. UnitedStates, 355 F.2d 183 (9th Cir.1965).

*14 892 F.2d 237, 243-44 (2d Cir.1989).

In order then for documents and communications sharedamongst those who may participate in a joint defense orcommon interest scheme to be considered confidential,there must exist an agreement, though not necessarily inwriting, embodying a cooperative and common enterprisetowards an identical legal strategy. Shamis v. AmbassadorFactors Corp., 34 F.Supp.2d 879, 893 (S.D.N.Y.1999)(citation omitted); United States v. Weissman, 1996 WL737042, at *10 (S.D.N.Y. Dec. 26, 1996) (survey of cases).Paramount to the common interest doctrine, there mustbe a commonality of interest amongst the members to theagreement and each party must reasonably understandthat the communications are provided in confidence.United States v. Weissman, 195 F.3d 96, 99 (2d Cir.1999);Bank Brussels Lambert v. Credit Lyonnais Suisse S.A.,160 F.R.D. 437, 447 (S.D.N.Y.1995) (commonality ofinterest is more than concurrent interest). And “[o]nly

those communications made in the course of ongoingcommon enterprise and intended to further the enterpriseare protected.” United States v. Weissman, 195 F.3d at 99;see generally Lugosch v. Congel, 219 F.R.D. at 235-39.

To the extent that the communications were made inconfidence amongst the agreement's allies, they ought tobe deemed confidential pursuant to the attorney-clientprivilege. In re Grand Jury Subpoena Duces Tecum datedNovember 16, 1974, 406 F.Supp. 381, 392 (S.D.N.Y.1975)(“That a joint defense may be made by somewhat unsteadybedfellows does not in [and of] itself negate the existenceor viability of the joint defense.”). But, and it is worthrepeating, only those communications made in the courseof an ongoing common litigation enterprise with theintent to further the enterprise are protected. United Statesv. Schwimmer, 892 F.2d at 243; In re Bevill, Bresler &Schulman Asset Mgmt Corp., 805 F .2d 120, 126 (3dCir.1986). The Court is persuaded, in light of Schwimmer,that if a joint defense agreement or common interestexists there is an implicit understanding that one attorneyis permitted not only to confer with another attorneybut with the other attorney's party. United States v.Schwimmer, 892 F.2d at 244 (citing In re Grand JurySubpoena, 406 F.Supp. at 391-92 (permitting attorneyinterviews of others without the presence of their ownattorney and in the presence of other co-defendants)); seealso United States v. McPartlin, 595 F.2d 1321, 1336-37(7th Cir.1979) (deeming confidential communications toan investigator for a co-defendant's attorney fell withinthe joint defense privilege); United States v. Walker, 910F.Supp. 861, 865 (N.D.N.Y.1995) (investigator and otheragents). It is clear that the parties conferring amongstthemselves, outside the confines of the group, and not forthe purpose of collecting information in order to obtainlegal advice, does not preserve the privilege because inthat event they are not seeking legal advice or sharinginformation to receive legal advice. Lugosch v. Congel, 219F.R.D. at 238.

*15 The Executive Chamber and state agencies areinextricably interlocked, with a few exceptions, NewYork ex rel. Boardman v. Amtrak, 233 F.R.D. 259,263 (N.D.N.Y.2006), and the nexus, whether policyor legally driven, is utterly obvious. Under Article V,Section 2 of the New York State Constitution and NewYork's Executive Law § 30, all executive departments are

subsumed within the executive branch. 17 The ExecutiveChamber and the state agencies will generally fall within

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the common interest doctrine and, in this respect,communications between Governor's Counsel and staffand DMV's Counsel and legal staff are absolutely andunmistakenly encompassed by this doctrine insofar asthey have an inseparable and abiding common interest inensuring that policies are both legal and constitutional.Thus, there is no waiver of any of the privileges whenDMV shared correspondence, memoranda, documents,and opinions with Governor's staff. We are thereforeobligated to review those communications between theExecutive Chamber and DMV within the prism of thecommon interest doctrine.

17 The New York Executive Law section 30 states[t]here shall continue to be in the stategovernment an executive department. The headof the executive department shall be thegovernor. The governor may appoint suchsubordinates and employees as may be necessaryfor the exercise of his powers and the powersand the performance of his duties as head of theexecutive department, and may prescribe theirduties[.]

see also N.Y. CONST. Art. 4, § 1 (“The executivepower is vested in the governor[.]”).The Department of Motor Vehicles is an executivedepartment with the Commissioner appointed bythe governor. N.Y. VEH. TRAF.. L. § 200.

C. Analysis of the DocumentsWeighing all of the legal instruction cited above, we mustnow embark upon a review of the documents claimedto be privileged for sundry reasons. In doing so, weare also mindful that redaction is available for thosedocuments that may contain legal advice incidental toother nonlegal advice that is the predominant purposeof the communication. In re County of Erie, 473 F.3dat 421, n.8; Raba v. Suozzi, 2007 WL 128817, at *4. Wealso must reiterate that we have pierced the deliberativeprocess in this case, but those documents may also becloaked by either the attorney-client privilege or work

product doctrine and thus may yet be protected. 18 Wenote generally that most of the documents were circulatedamong attorneys in both the Governor's Counsel'sOffice and DMV's Legal Department. In reviewing thedocuments, we find the following:

18 As a component of this Motion, the State Defendantsdisclosed the following documents: P 2, 4, 14-23,39-42, 45-50, 64, 68-69, 97-104, 203-214, 288, and

307. Furthermore, in terms of an analysis of thosedocuments contended to be protected by the workproduct doctrine, CFF has not asserted a substantialneed or undue hardship for those documents that mayembrace facts gathered by the State Defendants and,therefore, will not be considered. See supra Part II.C.2(work product doctrine discussion).

(1) protected by the attorney-client privilege-P 1, 9-11, 19

12-13, 61, 63, 70, 105-110, 126, 160-165, 285, 286-288,305-306, 308-310, 346-349, 354, 363-364, 368-374.

19 P 11 is a part of this series of documents, but if it wasalready sent to CFF's counsel, and it appears that itmay have, the document is waived. Otherwise, if notforwarded to CFF, it remains privileged.

(2) not protected by the attorney-client privilege-P 88,190-192, 298, 353, 365.

(3) attorney-client privileged communication redacted-P 3 (redact the third sentence after “Jill”); 59(redact second paragraph beginning with Kristie's);60 (redact all but first and third paragraphs at theend); 62 (redact paragraph commencing with Bill);89 (redact the top half of the page); 90 (redact thefirst sentence; the balance of the first paragraphsremains; redact the middle portion of the page); 92-96(redact handwriting on pages); 366-367 (redact thefirst paragraph).

(4) protected by either the attorney-client privilegeor the work product doctrine, or both-P 5, 6-8,24-38, 43-44, 51-58, 61, 65-67, 71-74, 75-80,81-84, 112-125, 127-144, 166-173, 174-184, 185-189,193-202, 220-227, 259-284, 289-290, 291-297,299-304, 311-345, 355-362.

*16 (5) facts not protected by any privilege-P 85-87,145-159, 228-258.

(6) P 215-219: The State Defendants claim that thesedocuments are protected by the deliberative processprivilege, the attorney-client privilege, and the workproduct doctrine. The State Defendants maintainthat this document was part of a more comprehensiveexchange between governmental lawyers. That maybe true, however, the document does not appearto fit neatly within an attorney-client privilegeddocument nor has the earmarks of being prepared inanticipation of any litigation. Moreover, it appears

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to be a document that had already existed andcontains facts. Without a broader appreciation ofthe nature of this document, notwithstanding theState Defendants' affidavit attempting to explainthe broader cache of documents, this Court isprepared to disclose it; however, we will allowthe State Defendants' to provide a more definitivecharacterization of the document to save itsprotections. The same task will hold true for P 350.

In terms of CFF's Motion to Compel, it would appearthat we have just defined the scope of the privileges as tospecific documents. There remains, however, a debateamong the Defendants as to whether a Defendant,who served as counsel to a state agency and suedin her individual capacity, may use for her defenseseveral documents already determined to be protectedby either the attorney-client privilege or the workproduct doctrine.

D. Piercing of Privilege Protections by IndividualDefendant who served as an Attorney

As we have noted throughout, Defendant Dunn servedas DMV's Counsel throughout the entire decision makingprocess. See supra note 15. We further know thatshe has been sued in her individual capacity exposingher personally to a judgment and money damages forpurportedly violating CFF's constitutional rights. In orderto adequately defend herself, Dunn contends that sheneeds to pierce her former client's attorney-client privilegeand work product doctrine protections. By piercing the

privileges for seventeen selected documents, 20 Dunnpostulates that she may be able to establish that DMV,and to the extent that her actions and/or decisionsenfolded within DMV's decision to reject CFF's plate,always acted objectively reasonable thus making herqualified immunity defense viable. Dkt. No. 117, Mem.of Law at p. 2. Alternatively, Dunn argues that thesedocuments will prove that she played no role in theultimate decision not to grant CFF's plate application.Id. Her ability to pierce the privileges of these selectdocuments rests upon two legal theorems: (1) her rightto the self defense exception of DR 4-104(c)(1) and (4);and (2) an at issue waiver created by the State Defendants'assertion of the affirmative defense of qualified immunityon behalf of the individual Defendants. Id. at pp. 2-3.

20 These seventeen documents comprise pages P 25-26,27-38, 44-50, 60, 61, 66, 75-78, 79-80, 198-202,

289, 290, 299-300, 301, 302, 303-304, 305-308, and356-362. See Dkt. No. 116, Ex. A, Dunn's PrivilegeList. Furthermore, Exhibit A also provides thespecific reasons for the disclosure of each of thedocuments. We further note that P 45-50, and 307have already been disclosed by the State Defendants.

The State Defendants dismiss, as lacking merit, Dunn'sargument that these select documents are needed for herdefense because the privileges that she wishes to invadebelong solely to her client and, moreover, there is a volumeof non-privileged materials Dunn could use in lieu of thesechosen documents, although these documents are neveridentified. Dkt. No. 147, State Defs.' Reply Mem. of lawat p. 1. By cherry picking certain documents and shieldingothers, the State Defendants argue that Dunn is essentiallyusing the privileges as both a shield and a sword which isimproper. Id. at p. 2.

1. DR 4-104(c)(1) and (4)*17 It is axiomatic that an attorney is required

to preserve a client's confidences and secrets. N.Y.COMP.CODES R. & REGS. tit. 22, § 1200.19 (DR4-101(a) & (b)). But this same Discipline Rule carves outan exception to this axiom and permits a “lawyer to reveal[c]confidences or secrets necessary to establish or collectthe lawyer's fee or to defend the lawyer or his or heremployees or associates against accusation of wrongfulconduct.” Id. (DR 4-101(c)(4)). The State Defendantsintimate that this self defense exception exist only whenan attorney is being sued by her client. Dkt. No. 147,State Defs.' Mem of Law at p. 2. But the broad expanseof common law, at least within the Second Circuit, statesotherwise.

The Second Circuit has embraced DR 4-101(c)(4)and confirmed that a lawyer, when sued, may revealconfidences or secrets necessary to defend herself againstan accusation of wrongful conduct. Meyerhofer v. EmpireFire & Marine Ins. Co., 497 F.2d 1190, 1194-95 (2dCir.1974) (recognizing that an attorney sued by a partyother than his client may be entitled to disclose hisclient's confidences, even though the case did not turnon this point); In re Nat'l Mortgage Equity Corp.Pool Certificates Sec. Litig, 120 F .R.D. 687, 691(C.D.Cal.1988) (identifying Meyerhofer as a seminalcase on this issue and further finding its reasoningpersuasive). Since Meyerhofer was issued, courts withinthe Second Circuit have fully adopted this DisciplineRule to support an attorney's “right to support his

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version of the facts with suitable evidence,” First Fed.Sav. & Loan Ass'n of Pittsburgh v. Owens, 110 F.R.D.557, 562 (S.D.N.Y.1986), which may mean revealing hisclient's confidential communications “in an effort to clearhis or her name.” Stirum v. Whalen, 811 F.Supp. 78,83-84 (N.D.N.Y.1993) (noting that an attorney must bepermitted to defend themselves when accused of wrongful

conduct). 21 It would be a “manifest injustice” to permita client to withhold privileged communications to theattorney's disadvantage, especially when sued, Louima v.City of New York, 2004 WL 2359943, at *70 (E.D.N.Y.Oct. 5, 2004), and it would ill serve the “truth-findingfunction of the litigation process.” First Fed. Sav. &Loan Ass'n of Pittsburgh v. Owens, 110 F.R.D. at 565(noting that such disclosure would be “consistent withthe general principle of narrowly construing evidentiaryprivileges”). The self defense exception is not restricted tofee disputes between the attorney and client nor availableonly when the client sues her attorney. The DisciplineRule encompasses all of those circumstances when anattorney has been accused of misconduct, even whensued by someone other than the client. Id. at 562; Trepelv. Dippold, 2005 WL 2206800, at *3 (S.D.N.Y. Sept.12, 2005) (when discussing whether attorney party couldreveal confidences, the court cited Meyerhofer for theproposition that an attorney has the right to defendhimself even when the wrongdoing is made by someoneother than the client); Morin v. Turpin, 728 F.Supp. 952,956 (S.D.N.Y.1989) (finding that when an attorney alongwith others was sued for securities fraud, that attorneyhad a right to disclose confidential communications withrespect to his role in the matter); Sec. Exch. Comm. v.Forma, 117 F.R.D. 516, 524 (S.D.N.Y.1987) (stating thatformal charges need not be issued in order for the selfdefense exception to apply and further noting that “itwould be senseless to require the stigma of an indictmentto attach before allowing the lawyer to invoke the self-defense doctrine”). Under this self defense exception,however, disclosure of confidences can only be made in“the narrow context of [the attorney's] own defense .”Housler v. First Nat'l Bank of East Islip, 484 F.Supp. 1321,1323 (E.D.N.Y.1980).

21 The State Defendants argue that Stirum v. Whalen,811 F.Supp. 78 (N.D.N.Y.1993) is inapplicablebecause the case was decided on the basis of thecrime-fraud exception to the attorney-client privilege.Dkt. No. 147 at p. 3, note 2. We agree thatsome of the privileged documents in that case were

released because of the crime-fraud exception, buthad the the State Defendants read further theywould have noted that the attorneys, who weresued along with their client, requested to revealconfidential communications. Because there werenumerous allegations of wrongdoing by the law firm,the Stirum court granted the defendant attorneysauthority to disclose confidential documents andtestify about their role in all aspects of the events.Stirum v. Whalen, 811 F.Supp. at 83-84.

*18 We are persuaded by the precedents stated abovethat Dunn's interest in defending herself is so compellingthat it outweighs the State Defendants' interest inmaintaining confidentiality. First Fed. Sav. & Loan Ass'nof Pittsburgh v. Owen, 110 F.R.D. at 565. Dunn has beensued individually and subject to money damages; underthese circumstances, she is entitled to present her versionof the facts with suitable evidence of her choosing. TheState Defendants attempts to circumnavigate the scopeof the precedents cited above and their arguments are faradrift from these well reasoned and consistent decisions.They also bemoan Dunn's intent to use seventeenprivileged documents when she could alternatively utilizeapproximately 1300 pages of other documents thathave already been released in discovery (some of thempreviously considered privileged document) and that theseselect privileged documents are irrelevant and unnecessaryfor her defense. Dkt. No. 147 at pp. 4-5. Essentially,the State Defendants' complaint, if granted, would serveto dictate how another Defendant may quantitativelyand qualitatively pursue her defense, notwithstandingtheir erstwhile professional relationship. Such dictatesand control of another's defense will not be honored, atleast not under these circumstances. Further, we do notobserve Dunn asking to use these documents beyond thenarrowly crafted context of her defense and there is nowholesale waiver of the privileges as The State Defendantsfear. Therefore, for these reasons and the applicability ofself defense doctrine, the seventeen documents shall bedisclosed.

2. Qualified Immunity DefenseThe qualified immunity defense has been raised severaltimes in this litigation. It was raised in the StateDefendants' First Motion to Dismiss, first Answer,Appeal to the Second Circuit, and Amended Answer.See Dkt. No. 51, Am. Ans. at ¶ 131 (“At all relevanttimes, defendants acted under the reasonable belief thattheir conduct was in accordance with clearly established

031





















































2007 WL 4344915


laws. They are, therefore, protected under the doctrineof qualified immunity.”). Defendants also pled that theywere not personally involved in the alleged constitutionalor statutory violations. Id . at ¶ 133. In this respect,Dunn wants to take advantage of these defenses toestablish that her conduct was objectively reasonable inaccordance with clearly established law and that she wasnot personally involved in the final decision. And in orderto successfully raise these two defenses, she claims theneed to use documents that are protected by the attorney-client privilege and the work product doctrine. Since thequalified immunity defense has been interjected into thiscase, an at issue waiver may have occurred.

Qualified immunity shields “government officials fromliability for civil damages when their conduct does notviolate ‘clearly established statutory or constitutionalrights of which a reasonable person would have known.’“ African Trade & Info. Ctr., Inc. v. Abromaitis, 294 F.3d355, 359 (2d Cir.2002) (quoting Harlow v. Fitzgerald, 457U.S. 800, 818 (1982)); see also Mollica v. Volker, 229 F.3d366, 370 (2d Cir.2000). This also applies “insofar as it wasobjectively reasonable for [the government officials] tobelieve that their acts did not violate those rights.” Mollicav. Volker, 229 F.3d at 370 (internal quotation marks andcitations omitted); see also Anderson v. Creighton, 483 U.S.635, 641 (1987). The objectively reasonable test will be met“ ‘if [officials] of reasonable competence could disagree’ onthe legality of the defendant's actions.” Lennon v. Miller,66 F.3d 416, 420 (2d Cir.1995) (quoting Malley v. Briggs,475 U.S. 335, 341 (1986) (further citation omitted)). Publicofficials will further be entitled to qualified immunity if,“at the time the [official] was acting, the right in question

was not clearly established[.]” 22 Pitsley v. Ricks, 2000 WL362023, at *1 n.1 (N.D.N.Y. Mar. 31, 2000) (citing Connellv. Signoracci, 153 F.3d 74, 80 (2d Cir.1988)).

22 “In order for the constitutional right to be clearlyestablished, three elements must be met: ‘1) ... [that]the right in question [be] defined with reasonablespecificity; 2) [that] the decisional law of the SupremeCourt and applicable circuit court support theexistence of the right in question; and 3) [that]under preexisting law a reasonable defendant officialwould have understood that his or her acts wereunlawful.’ Mollica v. Volker, 229 F.3d 366, 371 (2dCir.2000) (internal quotation marks and citationsomitted) (alterations in original); see also Moore v..Vega, 371 F.3d 110, 114 (2d Cir.2004) (stating that inassessing whether defendants are entitled to qualified

immunity, the Court must examine ‘[o]nly SupremeCourt and Second Circuit precedent existing at thetime of the alleged violation’ to determine if a right isclearly established (citation omitted)).”

Luessenhop v. Clinton County, New York, 2007 WL1063650, at *5 (N.D.N.Y. Apr. 6, 2007).

*19 It is well settled law that in “certain circumstancesa party's assertion of factual claims can, out ofconsideration of fairness to the party's adversary, resultin the involuntary forfeiture of privileges for matterspertinent to the claims asserted.” John Doe Co. v. UnitedStates, 350 F.3d 299, 302 (2d Cir.2003) (citing, inter alia,United States v. Bilzerian, 926 F.2d 1285 (2d Cir.1991)).The application of an “at issue” waiver is primarily dueto the fact that the party asserting the privilege has placed“a contention at issue.” Id. (citing, inter alia, Worthingtonv. Endee, 177 F.R.D. 113, 116-117 (N.D.N.Y.1998) and 6JAMES WM. MOORE ET AL, MOORE'S FEDERALPRACTICE § 26.70[6][c] (3d ed.1997)). Moreover, it isnot the filing of the lawsuit that matters but the relevanceof the contention that controls. Remington Arms Co. v.Liberty Mut. Ins. Co., 142 F.R.D. 408 (D.Del.1992). Thetest that the courts within the Second Circuit have resortedto in order to determine whether an at issue waiver hasoccurred is:(1) assertion of the privilege was a result ofsome affirmative act, such as filing suit, (2) through theaffirmative act, the asserting party puts the protectedinformation at issue by making it relevant to the case, and(3) the application of the privilege would have denied theopposing party access to information vital to the defense.Bank Brussels Lambert v. Credit Lyonnais (Suisse), 1995WL 598971, at *3 (S.D.N.Y. Oct. 11, 1995) (citing Hearn

v. Rhay, 68 F.R.D. 574, 581 (E.D.Wash.1975)). 23 Theforfeiture of the privilege should be narrowly construedand tailored to remedy the unfairness or prejudice. In reGrand Jury Proceedings, 219 F.3d 175, 188 (2d Cir.2000).“It is further axiomatic, when a number of documentsare claimed to be privileged, that there is no wholesalewaiver but rather a specific inquiry as to each document.”Lugosch v. Congel, 2006 WL 931687, at *23 (N.D.N.Y.Mar. 7, 2006).

23 There are other criteria which a court may considerin ascertaining whether an “at issue” forfeitureis applicable: (1) the very subject of privilegedcommunication [is] critically relevant to the issuelitigated, (2) there is a good faith basis for believingsuch essential privileged information exists, and (3)there is no other source of direct proof. Bank

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Brussels Lambert v. Credit Lyonnais (Suisse), 1995WL 598971, at *5.

It is also an established principle of law that if the adviceof counsel is placed in issue by either a claim, defense, ortestimony, it is deemed waived. Rhone-Poulenc Rorer Inc.v. Home Indem. Co., 32 F.3d 851 (3d Cir.1994); UnitedStates v. Bilzerian, 926 F.2d 1285. And when defendantsraise the affirmative defense of qualified immunity, itplaces the privilege and relevant information at issue.Mitzner v. Sobol, 136 F.R.D. 359, 362 (S.D.N.Y.1991);Hearn v. Rhay, 68 F.R.D. 574, 581 (E.D.Wash.1975)(finding that legal advice was germane to the affirmativedefense of qualified immunity and the assertion of theprivilege “deprive[d] plaintiff of the information necessaryto defend” itself); see also Pritchard v. County of Erie,2007 WL 3232096, at *4-5 (W.D.N.Y. Oct. 31, 2007)(citing Hearn for the proposition that asserting qualifiedimmunity defense places protected information at issue).

It is obvious that qualified immunity inures to theindividual defendants' benefit and not state agencies. Eventhough represented collectively by the Attorney Generalprior to 2007, clearly the State Defendants interjectedqualified immunity in this case for the sole purpose ofprotecting those state employees who were sued in theirindividual capacity. Therefore, it is incumbent upon theindividual defendants, such as Dunn, to demonstratethat she acted objectively reasonable or that the rightswere not clearly established in order to establish herqualified immunity defense. Connecticut v. Crotty, 346F.3d 84, 102-03 (2d Cir.2003). In this context, qualifiedimmunity is “both fact-intensive and fact-specific [defense][.]” Id. at 102. Thus, the determination of objectivereasonableness, an integral component of this affirmativedefense, can only be made upon a factual record, whichfact may include the rendering of and the legal advicegiven to DMV. Similar to the self defense exception,a waiver of the privileges, under the at issue waiver,can be narrowly tailored to minimize any prejudice, andit appears Dunn's request fits that charge. Trudeau v.New York State Consumer Prot. Bd., 237 F.R.D. 325,341 (N.D.N.Y.2006). And for this reason, as well, thoseseventeen documents will be disclosed. See supra note 20.

III. CONCLUSION

*20 Because privileges remain for the largest lotof documents, the Court intends on remaining underseal those original documents that comprised the StateDefendants' Opposition to CFF's Motion to Compel.Those documents are the State Defendants' Memorandumof Law, Neal Schoen's Affidavit, and the Exhibitssubmitted for an in camera review. Dkt. No. 114. All otherpleadings and documents, except Dunn's Exhibits (Dkt.No. 116), have already been provided to everyone in fullor redacted form, striking any specific factual referencesor discussion that may bear upon the privileges of thosedocuments. With respect to the documents required tobe disclosed, consistent with the mandates of Lugosch v.Pyramid Co. of Onondaga, 435 F.3d 110 (2d Cir.2006),this Court will not require the disclosure for at least ten(10) days in the event a party files objections to thisMemorandum-Decision and Order.

Accordingly, it is hereby

ORDERED, that CFF's Motion to Compel, Dkt. No. 113,is granted in part and denied in part, consistent with thedecision above; and it is further

ORDERED, that Defendant Dunn's Motion to Compel,Dkt. Nos. 116 and 117, is granted; and it is further

ORDERED, that the Clerk of the Court shall file theState Defendants' original and unredacted version of itsOpposition to CFF's Motion under seal; and it is further

ORDERED, that compliance with this Memorandum-Decision and Order shall be stayed for ten (10) dayspending the filing of any objections; and it is further

ORDERED, that the parties shall provide dates and timeswhen they may be available for a telephone conferenceduring the week ending December 21, 2007, to discussamending the Uniform Pretrial Scheduling Order.

IT IS SO ORDERED.

All Citations


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2007 WL 4344915



034


EXHIBIT 4

035


Umpqua Bank v. First American Title Ins. Co., Not Reported in F.Supp.2d (2011)

2011 WL 997212


KeyCite Yellow Flag - Negative Treatment

Distinguished by Hawker v. BancInsurance, Inc., E.D.Cal., December

27, 2013


United States District Court,E.D. California.

UMPQUA BANK, Plaintiff,v.

FIRST AMERICAN TITLEINSURANCE COMPANY, Defendant.

No. CIV S–09–3208 WBS EFB.|

March 17, 2011.


Michael J. Veiluva, Darrell Charles Martin, II, Alborg,Veiluva & Epstein LLP, Walnut Creek, CA, for Plaintiff.

Robert D. Collins, CVM Law Group, LLP, Sacramento,CA, for Defendant.

ORDER

EDMUND F. BRENNAN, United States MagistrateJudge.

*1 On March 2, 2011, the court heard plaintiff UmpquaBank's (“Umpqua”) motion to compel defendant FirstAmerican Title Insurance Company (“First American”)to produce documents. Dckt. No. 29. Attorney DarrellMartin appeared at the hearing on behalf of Umpqua;attorney Anthony Coss appeared on behalf of FirstAmerican. For the reasons stated herein and on the recordat the March 2 hearing, the motion to compel will begranted in part and denied in part, as set forth below.

This lawsuit arises from claims under two title insurancepolicies issued by First American in favor of Umpqua.Joint Statement Re: Discovery Disagreement (“Jt.Stmt.”),Dckt. No. 32, at 2. Umpqua tendered claims to FirstAmerican because a third party, A. Teichert & Sons, filedsuit seeking foreclosure of mechanics' liens it asserted weresenior in priority to Umpqua's deeds of trust. Id. FirstAmerican denied coverage contending that: (1) the claims

were excluded under the policies; (2) Umpqua's settlementof Teichert's suit was unauthorized and in violation ofthe terms of the policies; (3) Umpqua did not give timelynotice of the claims in violation of the terms of thepolicies; and (4) there was a lack of proof of damage. Id.Umpqua contends the denial was a deliberate breach ofFirst American's policies of title insurance and was in badfaith. Id.

The primary dispute between the parties in this motion tocompel is the scope and/or applicability of the attorneyclient privilege and work product doctrine, as they relateto Jeffrey Lowenthal, First American's coverage counsel.Umpqua contends that First American “is improperlyshielding more than 1200 pages of documents that itclaims are attorney-client communications or attorneywork product, including the majority of its claims filerelating to the two claims at issue in this dispute.” Id. at4. Umpqua argues that the facts establish that Lowenthalserved as First American's claim adjuster, not its counsel,and that First American should not be permitted to shieldthe thoughts, impressions and analysis of its claim adjuster(including his claim file) from production just because heis an attorney, especially in a bad faith action such asthis one, where the claims adjuster's file is indispensableevidence. Id. at 6–7. Umpqua further contends that “tothe extent Mr. Lowenthal or his firm acted in a quasi-legal capacity, their communications still do not deserveprotection because the nonlegal, and any arguably legalactivities they performed, were so intertwined one cannotclearly distinguish between them.” Id. at 7.

First American counters that Umpqua “is improperlyattempting to obtain documents that were created asa result of First American's retention of an outside,independent attorney to provide a coverage opinion,”and that the “documents are clearly protected underthe attorney-client privilege and are not discoverable.”Id. at 9. First American argues that Catherine Pirainowas the claims adjustor and also is an attorney, thatPiraino retained Lowenthal to provide a coverage opinionin this case, that he is not an employee or in-housecounsel for First American, and that the communicationsbetween Lowenthal and First American were done aspart and parcel of the attorney-client relationship withan expectation that those communications would remainconfidential. Id. at 10, 13; see also Piraino Aff., Dckt.No. 31, ¶¶ 1, 3, 8–10. First American contends thatit has met its burden of establishing a prima facie

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2011 WL 997212


claim that the communications were privileged, and thatUmpqua now has the burden of proof to establish thatthe communications were not confidential or that theprivilege does not apply for other reasons. Id. at 10–11.First American also contends that the communicationsand documents at issue are also protected by the workproduct doctrine because they contain Lowenthal's mentalimpressions. Id. at 14.

ATTORNEY CLIENT PRIVILEGE*2 The parties agree that in diversity actions such as

this one, the attorney-client privilege is governed bystate law. Fed.R.Evid. 501. Under California law, theattorney-client privilege, set forth at California EvidenceCode section 954, confers a privilege on the client“to refuse to disclose, and to prevent another fromdisclosing, a confidential communication between clientand lawyer....” Cal. Evid.Code. § 954. A confidentialcommunication between client and lawyer is defined as“information transmitted between a client and his orher lawyer in the course of that relationship and inconfidence by a means which, so far as the client isaware, discloses the information to no third personsother than those who are present to further the interestof the client in the consultation or those to whomdisclosure is reasonably necessary for the transmission ofthe information or the accomplishment of the purposefor which the lawyer is consulted, and includes a legalopinion formed and the advice given by the lawyer in thecourse of that relationship.” Cal. Evid.Code § 952. “Theparty claiming the privilege has the burden of establishingthe preliminary facts necessary to support its exercise,i.e., a communication made in the course of an attorney-client relationship.” Costco Wholesale Corp. v.Super. Ct.,47 Cal.4th 725, 733, 101 Cal.Rptr.3d 758, 219 P.3d 736(2009) (citations omitted). “Once that party establishesfacts necessary to support a prima facie claim of privilege,the communication is presumed to have been made inconfidence and the opponent of the claim of privilege hasthe burden of proof to establish the communication wasnot confidential or that the privilege does not for otherreasons apply.” Id.

Umpqua relies heavily on 2022 Ranch v. Superior Court,which was also an insurance bad faith action and whichinvolved communications that were transmitted to theinsurer from its in-house claims adjusters who also wereattorneys. 113 Cal.App.4th 1377, 1387, 7 Cal.Rptr.3d197 (2003). In 2022 Ranch, the insurer claimed all the

communications were privileged, as involving legal adviceemanating from its attorneys, whereas the petitionerasserted none were, as the attorneys were serving merelyas claims adjusters. Id. The California Court of Appealdistinguished communications reporting the results offactual investigations from those reflecting the renderingof legal advice, held only the latter were privileged,and ordered the trial court to review each of thecommunications to determine its dominant purpose. Id. at1397, 7 Cal.Rptr.3d 197.

However, in disapproving 2022 Ranch in part, theCalifornia Supreme Court in Costco, specifically statedthat in 2022 Ranch, the court should first have“determine[d] the dominant purpose of the relationshipbetween the insurance company and its in-houseattorneys, i.e., was it one of attorney-client or one

of claims adjuster-insurance corporation.” 1 Costco, 47Cal.4th at 739–40, 101 Cal.Rptr.3d 758, 219 P.3d 736.According to the Costco court, “[t]he corporation, havingthe burden of establishing the preliminary fact thatthe communications were made during the course ofan attorney-client relationship [would then be] free torequest an in camera review of the communicationsto aid the trial court in making that determination,but the trial court [cannot] order disclosure of theinformation over the corporation's objection.” Id. at740, 101 Cal.Rptr.3d 758, 219 P.3d 736. “If thetrial court determined the communications were madeduring the course of an attorney-client relationship,the communications, including any reports of factualmaterial, would be privileged, even though the factualmaterial might be discoverable by some other means.If the trial court instead concluded that the dominantpurpose of the relationship was not that of attorney andclient, the communications would not be subject to theattorney-client privilege and therefore would be generallydiscoverable.” Id.; see also Aetna Casualty & Surety Co. v.Superior Court, 153 Cal.App.3d 471, 475 (1984).

1 Although Umpqua argues that “when applying thistest, courts look to both (1) the dominant purposefor the communication, and (2) the dominant purposeof the attorney's work,” citing 2022 Ranch, 113Cal.App.4th at 1390–91, 7 Cal.Rptr.3d 197, thecourt in Costco specifically stated that the initialquestion should be about the dominant purpose of therelationship.

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2011 WL 997212


*3 The ultimate question raised here is whetherLowenthal was hired by First American to give his legalopinion or whether he was hired to take over the claimsadjuster role and to shield First American from liabilityon any bad faith claim. Where the answer appears tobe both, the court must make a determination of whichpurpose was primary. The court takes the considerationof that question very seriously, particularly in light ofthe critical importance of claims files to the litigationof an insurance bad faith claim, which is the cause ofaction asserted here. See Reavis v. Metropolitan Prop.& Liab. Ins. Co., 117 F.R.D. 160, 164 (S.D.Cal.1987).Admittedly, the court finds it suspicious that after beingretained, Lowenthal became the only point of contactwith Umpqua, Lowenthal retained an outside consultingexpert to opine on the coverage issues raised in Umpqua'sclaims, and Lowenthal himself sent the May 26, 2009coverage opinion letter directly to Umpqua's counsel.Such conduct suggests that his role for First Americanextended beyond that of outside claims counsel and

into that of claims adjuster. 2 This suggests the veryintertwining and ultimate blurring of lines between theroles of attorney and claims adjuster that the Californiacourts have criticized. Indeed, California courts havenoted that where the legal advice activities of the attorney“were so intertwined with activities which were whollybusiness or commercial [i.e., claims investing/adjusting]that a clean distinction between the two roles becameimpossible to make. This merging of business and legalactivities jeopardizes the assertion of the attorney-clientprivilege, since the attorney and the client in effect havebecome indistinguishable.” 2,022 Ranch, 113 Cal.App.4that 1393, 7 Cal.Rptr.3d 197 (quoting Chicago Title Ins.Co. v. Superior Court, 174 Cal.App.3d 1142, 1154, 220Cal.Rptr. 507 (1985)). Nonetheless, this intermingling ofroles does not relieve the court of the requirement that itmake a determination as to which function predominated,even where the facts present a close call on the question.Costco, 47 Cal.4th at 739–40, 101 Cal.Rptr.3d 758, 219P.3d 736.

2 Although Umpqua argues that the retention letterfrom First American to Lowenthal suggests thatLowenthal was hired as a claims adjuster and not ascoverage counsel, Jt. Stmt. at 6, the court finds thatthe retention letter, which states that Lowenthal wasretained to assist “in identifying any loss under thesubject policy” is ambiguous. Martin Decl., Dckt. No.33, Ex. 1.

Although Lowenthal clearly performed both functionsand the overlap has obscured the distinction, based on therepresentations of Catherine Piraino, First American's in-house claims counsel and the claims adjuster in this case,as well as the representations of First American's counselat the March 2 hearing, the court finds that the dominantpurpose of the relationship between First American andLowenthal was in fact one of attorney-client, not claimsadjuster-insurance corporation. Specifically, Piraino aversthat (1) she is an attorney and claims counsel for FirstAmerican and was also the claims adjuster assigned tothis case, Piraino Aff. ¶¶ 1, 3; (2) she specifically retainedLowenthal, who was outside counsel, “to provide FirstAmerican with a legal coverage opinion concerning theclaims made by Umpqua” and, as part of that retention,authorized Lowenthal to conduct any necessary factualinvestigation and to directly contact Umpqua, id. ¶ 8, 101Cal.Rptr.3d 758, 219 P.3d 736; (3) “[a]ll communicationsbetween First American and Mr. Lowenthal were to be,and stay, confidential,” id.; (4) “Lowenthal was not anemployee of First American” during the time he wasretained to provide a legal coverage opinion and hasnever been an employee of First American, id. ¶ 9, 101Cal.Rptr.3d 758, 219 P.3d 736; and (5) she authorizedLowenthal to issue a coverage letter directly to Umpqua'scounsel “after Lowenthal provided First American withhis legal opinions concerning the coverage issues,” id. ¶10, 101 Cal.Rptr.3d 758, 219 P.3d 736 (emphasis added).Additionally, at the March 2 hearing, First American'scounsel represented that Piraino, as the claims adjuster,maintained her own claims file for this case and was the“ultimate decision-maker.”

*4 Accordingly, the court finds that First Americanhas met its burden of establishing the preliminary factsnecessary to support a prima facie claim of attorney-clientprivilege for information that was transmitted betweenLowenthal and First American (1) in the course oftheir attorney-client relationship, (2) in confidence bya means which, so far as First American was aware,disclosed the information to no third persons other thanthose who were present to further the interest of theclient in the consultation or those to whom disclosurewas reasonably necessary for the transmission of theinformation or the accomplishment of the purpose forwhich Lowenthal was consulted, and (3) which included alegal opinion formed and the advice given by Lowenthalin the course of that relationship. See Costco WholesaleCorp., 47 Cal.4th at 733, 101 Cal.Rptr.3d 758, 219 P.3d

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2011 WL 997212


736; see also Cal. Evid.Code § 952. Because Umpquahas not, at this time, met its burden of proof toestablish that specific communications at issue that meetthe definition prescribed above were not confidentialor that the privilege does not for other reasons apply,information that was transmitted between Lowenthaland First American that meets the above definition ofconfidential communications need not be disclosed byFirst American.

WORK PRODUCT DOCTRINEFirst American also contends that certain documents atissue are protected by the work product doctrine. Jt.Stmt. at 14–15. Umpqua, on the other hand, argues thatthe documents at issue are not protected work productsince this is a bad faith action and “[b]y assuming therole of First American's agent, decision maker and claimsadjuster, Mr. Lowenthal has made himself the personmost knowledgeable regarding the denial of Umpqua'sclaims.” Jt. Stmt. at 8 (citing Holmgren v. State Farm Mut.Auto. Ins. Co., 976 F.2d 573, 577 (9th Cir.1992)).

As an initial point, it is unclear whether First Americanis withholding any documents on the basis of attorneywork product that are not otherwise protected by theattorney-client privilege, as prescribed above. However, tothe extent that First American is withholding documentson the basis of attorney work product alone, the courtaddresses the applicability of the attorney work productdoctrine. Umpqua and First American both agree thatbecause the attorney work-product doctrine is not aprivilege, it is governed by federal law. Jt. Stmt. at 8, 15.

Here, First American has not met its burden ofestablishing that documents it is withholding are protectedby the work product doctrine. See Navigators Ins.Co. v. Calportland Co., 2011 WL 219601, at *1(W.D.Wash. Jan.24, 2011) (“The party claiming work-product protection bears the burden of establishing thatit applies.”). The work product doctrine only protectsmaterials that were prepared in anticipation of litigation.See Fed.R.Civ.P. 26(b)(3) ( “Ordinarily, a party maynot discover documents and tangible things that areprepared in anticipation of litigation or for trial by or foranother party or its representative (including the otherparty's attorney, consultant, surety, indemnitor, insurer,or agent).”). The phrase “in anticipation of litigation”has both temporal and motivational components. “[A]tthe time she prepared the document, the attorney must

at least have had a subjective belief that litigation was areal possibility, and that belief must have been objectivelyreasonable,” and “the party claiming the privilege mustdemonstrate that in light of the nature of the documentand the factual situation in the particular case, thedocument can fairly be said to have been prepared orobtained because of the prospect of litigation.” EqualRights Ctr. v. Post Properties, Inc., 247 F.R.D. 208, 210(D.D.C.2008); United States v. Adlman 134 F.3d 1194,1200 (2nd Cir.1998). Documents prepared in the ordinarycourse of business or that would have been created inessentially similar form irrespective of the litigation arenot protectable as work product. “Even if such documentsmight also help in preparation for litigation, they do notqualify for protection because it could not fairly be saidthat they were created ‘because of’ actual or impendinglitigation.” See United States v. Adlman, 134 F.3d at 1202;see also Harper v. Auto–Owners Ins. Co., 138 F.R.D.655, 663–64 (S.D.Ind.1991) (finding that an insurer's first-party claims files are presumptively not work productuntil a final decision is made to deny the insured's claimand that to overcome that presumption, the insurer “mustdemonstrate, by specific evidentiary proof of objectivefacts, that a reasonable anticipation of litigation existedwhen the document was produced, and that the documentwas prepared and used solely to prepare for the litigation,not to arrive at a (or buttress a tentative) claim decision.”);Fru–Con Const. Corp. v. Sacramento Mun. Utility Dist.,2006 WL 2050999, at *4, n. 3 (E.D.Cal. July 20, 2006).

*5 Here, First American specifically states that “thedocuments generated by Lowenthal were not generatedduring litigation, but were instead generated as part of thelegal coverage opinion.” Jt. Stmt. at 16. Accordingly, FirstAmerican has not has not met its burden of establishingthat any documents it is withholding are protected by thework product doctrine.

Moreover, even if First American could establish thatthe documents at issue were prepared in anticipation oflitigation and not in the ordinary course of business, workproduct may be discovered if it is otherwise discoverableunder Rule 26(b)(1) and “the party shows that it hassubstantial need for the materials to prepare its case andcannot, without undue hardship, obtain their substantialequivalent by other means.” Fed.R.Civ.P. 26(b)(3); seealso Hickman v. Taylor, 329 U.S. 495, 511, 67 S.Ct. 385,91 L.Ed. 451 (1947). Even opinion work product, whichreceives the greatest protection, may be discovered “when

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mental impressions are at issue in a case and the need forthe material is compelling.” Holmgren, 976 F.2d at 577(finding that “[i]n a bad faith insurance claim settlementcase, the ‘strategy, mental impressions and opinions of [theinsurer's] agents concerning the handling of the claim aredirectly at issue’ ”). Here, Lowenthal played a key role inevaluating the coverage issues raised in Umpqua's claimsand was, at the very least, an agent of First Americanwho was involved in the handling of the claims. Therefore,his strategies, mental impressions, and opinions are atissue and Umpqua's need for information revealing thosestrategies, mental impressions, and opinions is compellingsince Umpqua has no other way to probe the reasons forFirst American's denial of Umpqua's claims. Therefore,the work product doctrine is not a valid basis for FirstAmerican to withhold documents from Lowenthal's claimfile.

SPECIFIC DISCOVERY REQUESTS

A. Request for Production of Documents Number 1Umpqua moves to compel First American to producedocuments responsive to Umpqua's Request forProduction of Documents Number 1. The request seeks

“YOUR entire claim file RELATED TO the CLAIMS.” 3

According to First American, its entire claims file has nowbeen produced except documents that are protected underthe attorney client privilege or the work product doctrine.Jt. Stmt. at 12.

3 CLAIMS is defined as “Umpqua's request forindemnification and/or defense under the POLICIES,submitted to First American on or about 1/20/08by Peter Isola on behalf of Umpqua.” POLICIES isdefined as “(1) the complete policy of title insurancedated 11/1/04 issued by First American to Umpqua,and referred to as Policy Number CW–7471040,insuring Umpqua's loan number 150003538; and (2)the complete policy of title insurance dated 11/2/05issued by First American to Umpqua, and referred toas Policy Number CW–8165002, insuring Umpqua'sloan number 68708581.” Jt. Stmt. at 3.

As stated above and for the reasons stated above,documents that are responsive to this request and that arenot protected by the attorney client privilege should beproduced within fourteen days of the date this order isfiled.

B. Request for Production of Documents Number 2Umpqua also moves to compel First American toproduce documents responsive to Umpqua's Requestfor Production of Documents Number 2. The requestseeks “Any and all DOCUMENTS RELATED to thePOLICIES.” First American objects on the grounds ofattorney client privilege and work product, and alsocontends that the document request is vague and overlybroad. First American contends that its objection that therequest is overly broad is based on the fact that it “is notlimited to a time period and encompasses underwritingfiles, drafts of the form documents on which the policyforms were originally drafted years ago and which maynot exist, correspondence between the drafters of the formpolicies from which the policies in this case were based,etc.” Jt. Stmt. at 18.

*6 As Umpqua notes, while the request “may cover abroad range of categories, it is all appropriately limitedby the fact that such documents should only relate to thepolicies at issue, and the time period from their issuance tothe present—hardly a limitless time period.” Jt. Stmt. at17. The court finds that this request is not overly broad orvague. As stated above and for the reasons stated above,documents that are responsive to this request and that arenot protected by the attorney client privilege should beproduced within fourteen days of the date this order isfiled.

C. Request for Production of Documents Number 3Umpqua moves to compel First American to producedocuments responsive to Umpqua's Request forProduction of Documents Number 3. The requestseeks “Any and all DOCUMENTS RELATED to theCLAIMS.” First American contends that “Request No.1 seeking the claims file would contain all the documentsrelated to the claims” and that “First American hasproduced to plaintiff all documents related to the claimsthat are not protected and that are reasonably calculatedto lead to the discovery of admissible evidence.” Jt. Stmt.at 19.

As stated above and for the reasons stated above,documents that are responsive to this request and that arenot protected by the attorney client privilege should beproduced within fourteen days of the date this order isfiled.

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D. Request for Production of Documents Numbers 4and 5

Umpqua also moves to compel First American toproduce documents responsive to Umpqua's Request forProduction of Documents Numbers 4 and 5. The requestsseek “Any and all COMMUNICATIONS between YOUand LOWENTHAL REGARDING the POLICIES” and“Any and all COMMUNICATIONS between YOU andLOWENTHAL REGARDING the CLAIMS.” FirstAmerican objects to the production of documents,arguing that the requests “seek[ ] documentation that isprotected under the attorney-client privilege and the workproduct doctrine.” Jt. Stmt. at 20.

As stated above and for the reasons stated above,documents that are responsive to these requests and thatare not protected by the attorney client privilege shouldbe produced within fourteen days of the date this order isfiled.

E. Request for Production of Documents Numbers 14,15, 24 and 25

Umpqua moves to compel First American to producedocuments responsive to Umpqua's Request forProduction of Documents Numbers 14, 15, 24, and 25.The requests seek “Any and all COMMUNICATIONSbetween YOU and any other PERSON or third partynot heretofore requested RELATED TO the CLAIMS,”Request No. 14; “Any and all COMMUNICATIONSbetween YOU and any other PERSON or third partynot heretofore requested RELATED TO the POLICIES,”Request No. 15; “Any and all COMMUNICATIONSbetween LOWENTHAL and any other PERSON orthird party not heretofore requested RELATED TOthe CLAIMS,” Request No. 24; and “Any and allCOMMUNICATIONS between LOWENTHAL andany other PERSON or third party not heretoforerequested RELATED TO the POLICIES,” Request No.25. First American objects to the production of documentsresponsive to these requests, arguing that the requests seekdocuments protected by the attorney client privilege andwork product, that the requests are vague and ambiguousand are not related to any specific person, and are overlybroad since they are not limited as to time and scope. Jt.Stmt. at 21, 23, 24, 25.

*7 Umpqua counters that, “[a]t a minimum, this requestencapsulates any and all communications to or from

Lowenthal (and his firm) with consultant Steve Walker,”and that “[t]he express language of the only responsivedocument so far produced confirms that no attorney-client relationship existed between Walker and Lowenthalnor Walker and First American.” Jt. Stmt. at 22 (citingMartin Aff ., Ex. 4), 23, 24, 25. Umpqua furtherargues that “Walker is First American's retained expertand has agreed to testify in this matter, rendering hisfiles, opinions, communications and other informationreceived from counsel as wholly discoverable.” Id. Finally,Umpqua contends that First American's production on itsface is deficient since “the produced document from Mr.Walker states that he will supply billings to Mr. Lowenthalfor his services,” but “First American's response does notagree to produce any billings, and its privilege log does notidentify any.” Id.

First American responds that “Mr. Walker was retainedby Mr. Lowenthal to assist in the legal coverage analysis,”and that because he was retained as a consulting expert,his observations and opinions are irrelevant and notdiscoverable. Jt. Stmt. at 23, 24, 25. First Americancontends that “all communications between Lowenthaland Walker are protected.” Id.

Because it appears that these requests really seekcommunications with consultant Steve Walker andbecause Umpqua has not identified any other individualswhose communications Umpqua is seeking, these requestsshall be limited to communications between FirstAmerican and Walker related to the claims (14);communications between First American and Walkerrelated to the policies (15); communications betweenLowenthal and Walker related to the claims (24); andcommunications between Lowenthal and Walker relatedto the policies (25).

Here, Walker's retention agreement with Lowenthal madeclear that he was hired by Lowenthal “as a consultingexpert” and that he was “not being retained ... as anattorney to represent” Lowenthal or First American.Martin Aff., Ex. 4. Therefore, although Walker is alsoan attorney, it appears that there was no direct attorney-client relationship between Walker and Lowenthal orbetween Walker and First American. However, in lightof the attorney-client relationship between Lowenthaland First American, as discussed above, communicationsfrom First American to Walker, as Lowenthal's expert,would be protected by the privilege, but only to the

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extent that any disclosures from First American toWalker were reasonably necessary for the transmission of

the information to Lowenthal. 4 Cal. Evid.Code § 952;Nat'l Steel Prods. Co. v. Superior Court (Rosen), 164Cal.App.3d 476, 483, 210 Cal.Rptr. 535 (1985).

4 Although Umpqua contends that Walker has agreedto testify in this action, First American contendsthat Walker was retained as a consulting expertonly. While it is true that Rule 26 requires thedisclosure of the identity of experts who have beenretained or specially employed to provide experttestimony in a case, as well as their opinions andcertain other information, in light of First American'srepresentation that Walker is not a testifying expert,that information need not be disclosed at thistime. Fed.R.Civ.P. 26(a)(2),(b)(4). Facts known oropinions held by an expert who has been retainedor specially employed in anticipation of litigation orpreparation for trial (i.e., a consultant) and who isnot expected to be called as a witness at trial aregenerally only discoverable “on showing exceptionalcircumstances under which it is impracticable for theparty to obtain facts or opinions on the same subjectby other means.” Fed.R.Civ.P. 26(b)(4)(D)(ii). Here,Umpqua has not shown (or even argued) any suchexceptional circumstances.

Additionally, in light of the attorney-client relationshipbetween First American and Lowenthal, communicationsbetween Lowenthal and Walker which disclose anyconfidential communications between First Americanand Lowenthal (as defined in California EvidenceCode § 952) are protected by the privilege, but onlyto the extent that the disclosure was “reasonablynecessary for the transmission of the information or theaccomplishment of the purpose for which the lawyeris consulted.” Cal. Evid.Code § 952; see also Cal.Evid.Code § 912(d) (“A disclosure in confidence of acommunication that is protected by a privilege providedby Section 954 (lawyer-client privilege), ... when disclosureis reasonably necessary for the accomplishment of thepurpose for which the lawyer ... was consulted, is nota waiver of the privilege.”); Nat'l Steel Prods. Co., 164Cal.App.3d at 484, 210 Cal.Rptr. 535. However, othercommunications between Lowenthal and Walker are notprotected by the attorney-client privilege, even thoughWalker was Lowenthal's consulting agent, unless theyconcern information which emanated directly from FirstAmerican. See Great Am. Surplus Lines Ins. Co. v. AceOil, 120 F.R.D. 533, 538 (E.D.Cal.1988) (“The attorney-

client privilege does not apply to this document becausecommunications between an expert and an attorney arenot privileged unless they concern information whichemanates directly from the client.”).

*8 Documents that are responsive to these requests andthat are not protected by the attorney client privilege, asprovided herein, should be produced within fourteen daysof the date this order is filed.

F. Request for Production of Documents Number 26Umpqua moves to compel First American to producedocuments responsive to Umpqua's Request forProduction of Documents Number 26. The request seeks“YOUR claims manual(s) in effect from 2005 to 2010for handling and responding to title insurance claims byinsured lenders.” First American objects to the productionof documents, arguing that the request is vague andambiguous because “claim manual” is not a defined term,that the request for claims manuals in effect from 2005 to2010 is overly broad due to the fact that the investigationconducted by First American does not encompass thesetime frames, that the request for all the claims manualswith regards to responding to any “title insurance claimsby insured lenders” is overly broad and encompassesclaims that have absolutely nothing to do with theunderlying mechanic's lien and stop notice claims thatform the basis of this action, that any such “claimsmanual” would be privileged and subject to privacy rightsand are proprietary, and that any such “claims manuals,”to the extent they exist, would be general in nature anddesigned merely as a summary guideline and would not bematerial to the facts of this case as they would be intendedto apply to all claims as presented in any state in thecountry. Jt. Stmt. at 26, 27.

As Umpqua points out, because Umpqua alleges thatFirst American denied the claims at issue in badfaith, “what instructions First American provides to itsemployees for the proper processing and evaluating ofclaims is highly relevant.” Jt. Stmt. at 27. Additionally, thecourt finds that this request is not overly broad or vague.However, in light of First American's assertion that theresponsive documents are confidential and proprietary,the parties are directed to meet and confer and preparea proposed stipulated protective order to be submitted tothe court, as provided in Eastern District of CaliforniaLocal Rule 141.1. Within fourteen days after any such

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protective order is issued, First American shall produce alldocuments responsive to this request.

G. Request for Production of Documents Numbers 27,28, and 29

Umpqua also moves to compel First American toproduce documents responsive to Umpqua's Request forProduction of Documents Numbers 27, 28, and 29. Therequests seek “Any and all DOCUMENTS RELATEDTO YOUR written policies, practices or procedures from2005 to 2010 REGARDING how YOU responded to titleinsurance claims by insured lenders ...” for loss of lienpriority due to mechanics' lien claims, Request No. 27,for loss due to stop notice claims, Request No. 28, andfor claims where a claimant asserted both a stop noticeand mechanics' lien claim, Request No. 29. First Americanobjects to the production of documents, arguing thatthe timeframe of 2005 to 2010 is overly broad and thatresponding would be unduly burdensome in that it wouldrequire First American to go through thousands of claimsfiles to determine which involved mechanic's liens and/or stop notices and how each claim was handled. Such asearch would be extremely time consuming and expensiveand is simply not required by the facts of this case. Jt.Stmt. at 28, 30, 31–32; Piraino Aff. ¶ 11. First Americanalso objects on the ground that because “stop noticeclaims are not covered under the title insurance policies,”“First American should not be forced to conduct extensiveresearch of its files (as set forth above) to produce filesinvolving stop notice claims.” Jt. Stmt. at 32.

*9 As Umpqua points out, in light of Umpqua's badfaith claim against First American, “First American'sinstructions to its employees for processing and evaluatingclaims is highly relevant.” Jt. Stmt. at 28, 31. Thisincludes First American's instructions to its employeesfor processing and evaluating claims where a claimantasserted both a stop notice and mechanics' lien claim.However, given the significant burden of responding tothese requests, as outlined in Ms. Piraino's affidavit, theserequests shall be limited to written policies, practices orprocedures that First American had in place generallyfrom 2005 to 2010 regarding how First Americanresponded to title insurance claims by insured lenders forloss of lien priority due to mechanics' lien claims, forloss due to stop notice claims, and for claims where aclaimant asserted both a stop notice and mechanics' lienclaim. In other words, First American need only produce

those policies, practices or procedures that First Americanprovided to its employees as instructions for processingand evaluating these types of claims, and need not reviewevery single policy and claims file pertaining to those typesof claims. First American's responses to these requests, aslimited herein, shall be produced within fourteen days ofthe date this order is filed.

H. Request for Production of Documents Numbers 30and 31

Umpqua moves to compel First American to producedocuments responsive to Umpqua's Request forProduction of Documents Numbers 30 and 31. Therequests seek “[a]ny and all DOCUMENTS RELATEDto YOUR inspection of the PROPERTY prior toissuance of the POLICIES” and “[a]ny and allCOMMUNICATIONS RELATED to YOUR inspectionof the PROPERTY prior to issuance of the POLICIES.”First American contends that it “is not in possession ofany documents or communications related to any type ofinspection of the property,” and that any documents thatFirst American does have were already produced. Jt. Stmt.at 33, 34.

Because it appears that there is nothing further to compelFirst American to produce with regard to Requests 30 and31, Umpqua's motion to compel further responses to thoserequests is denied.

I. Request for Production of Documents Number 33Umpqua originally moved to compel First Americanto produce documents responsive to Umpqua's Requestfor Production of Documents Number 33. However,Umpqua withdrew that motion at the March 2 hearing.

CONCLUSIONIn accordance with the foregoing, IT IS HEREBYORDERED that Umpqua's motion to compel, Dckt. No.29, is granted in part and denied in part as provided herein.

SO ORDERED.

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