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Antech Diagnostics, Inc. v. Veterinary Oncology and Hematology Center, LLC

United States District Court, D. Connecticut

May 17, 2018

ANTECH DIAGNOSTICS, INC.
v.
VETERINARY ONCOLOGY AND HEMATOLOGY CENTER, LLC, and GERALD POST VETERINARY ONCOLOGY AND HEMATOLOGY CENTER, LLC, and GERALD POST
v.
VCA, INC., VCA ANIMAL HOSPITALS, INC., and MANHATTAN VETERINARY GROUP, P.C.

          RULING ON MOTION TO COMPEL [Doc. #171]

          HON. SARAH A. L. MERRIAM UNITED STATES MAGISTRATE JUDGE.

         Plaintiff Antech Diagnostics, Inc. (“Antech”), and third party defendants VCA, Inc. (“VCA”), VCA Animal Hospitals, Inc. (“VCAAH”), and Manhattan Veterinary Group, P.C. (“MVG”) (Antech, VCA, VCAAH, and MVH are hereinafter sometimes collectively referred to as the “VCA parties”) have filed a Motion to Compel Documents Contained on Defendants' Privilege Log [Doc. #171]. On February 14, 2018, Judge Alvin W. Thompson referred the motion to compel to the undersigned. [Doc. #173]. Defendants and third party plaintiffs Veterinary Oncology and Hematology Center, LLC d/b/a The Veterinary Cancer Center (“VCC”) and Dr. Gerald Post (“Dr. Post”) (VCC and Dr. Post are hereinafter sometimes collectively referred to as the “VCC parties”) have filed a response in opposition to the VCA parties' motion to compel. [Doc. #174]. As will be discussed below, the parties submitted additional cross-briefing on two issues relating to the VCC parties' claims of privilege. See Docs. #195, #196, #202, #203. After considering the parties' written submissions, as well as conducting an in camera review of certain emails withheld on the grounds of the attorney-client privilege, the Court GRANTS plaintiff's Motion to Compel Documents Contained on Defendants' Privilege Log [Doc. #171], as limited by the parties' cross briefing [Docs. #195, #196, #202, #203].

         A. BACKGROUND

         The Court presumes familiarity with the general procedural and factual background of this matter, and outlines the procedural history only as relevant to the current dispute.

         On February 12, 2018, the VCA parties filed a motion to compel the production of all documents identified on the VCC parties' privilege log. [Doc. #171]. In that motion, the VCA parties sought to compel production of each document listed in the VCC parties' privilege log because that log allegedly did not comply with the Federal or Local Rules of Civil Procedure. See generally Id. at 1-2. The VCA parties also contended that many of the documents claimed as privileged are not, and that the VCC parties had failed to meet their burden of establishing privilege. See generally Id. at 2, 16-21. On March 5, 2018, the VCC parties filed a memorandum in opposition to the motion to compel. [Doc. #174]. In addition to responding to the substance of the motion, the VCC parties contended that the VCA parties had failed to complete the meet and confer process as required by Local Rule 37. See Id. at 4-7.

         Upon review of the VCC parties' response, the Court entered an Order on March 6, 2018, requiring counsel to meet and confer, in person, on or before March 16, 2018. See Doc. #175. The Court further ordered that on or before the close of business on March 21, 2018, counsel file a joint status report identifying any issues remaining for Court intervention. See id.

         On March 21, 2018, the parties filed the joint status report as directed, along with a request to submit additional briefing. [Doc. #184]. The parties reported that they had successfully resolved many of the issues raised in the motion to compel and that the VCC parties had submitted a revised privilege log. See Id. at 2. The parties further represented that only two issues remained for the Court's consideration: (1) “whether inclusion of registered investment advisors ... on [certain] documents and communications vitiates and/or otherwise results in a waiver of the attorney-client privilege[;]” and (2) “whether the marital communications privilege applies to ... [certain] documents ... [which] were authored before Mr. Duchemin and Dr. Post were married.” Id. In light of the narrowed issues presented, and the “importance” of those issues, the parties requested permission to submit additional briefing, and proposed a briefing schedule. Id.

         On March 22, 2018, the Court granted the parties' request to submit additional briefing on the two issues identified in the parties' joint status report. See Doc. #185. The Court adopted the parties' proposed briefing schedule, and ordered that opening cross briefs be filed on or before April 13, 2018, and that cross response briefs be filed on or before April 27, 2018. See Id. As directed, the parties filed their cross opening briefs on April 13, 2018, [Docs. #195, #196], and cross responses on April 27, 2018 [Docs. #202, #203].

         On April 26, 2018, the Court ordered that the VCC parties submit for the Court's in camera review the thirteen emails listed on pages 4 and 5 of the VCA parties' opening brief. See Doc. #201. The Court received those documents by email on April 27, 2018.

         Before turning to the instant dispute, the Court first considers the law applicable to the claims of privilege.

         B. LAW OF FORUM TO BE APPLIED

         Antech brings this breach of contract action in federal court based on diversity jurisdiction. See generally Doc. #1. “[I]n a diversity case, the issue of privilege is to be governed by the substantive law of the forum state[.]” Dixon v. 80 Pine St. Corp., 516 F.2d 1278, 1280 (2d Cir. 1975); accord Application of Am. Tobacco Co., 880 F.2d 1520, 1527 (2d Cir. 1989); see also Safeco Ins. Co. of Am. v. Vecsey, 259 F.R.D. 23, 27-28 (D. Conn. 2009) (“Where, as here, a federal court's subject-matter jurisdiction is premised on diversity of citizenship, the court must apply state law to privilege issues.” (footnote, citation, and internal quotation marks omitted)).

         The parties do not appear to dispute that Connecticut law applies to the issues of privilege now before the Court. See Doc. #195at 5-6, n.2; Doc. #196 at 4-5. Nevertheless, the Court notes that the VCC parties have filed an amended counterclaim and third-party complaint against the VCA parties. See Doc. #138. That pleading alleges subject matter jurisdiction arising from both diversity of citizenship and the existence of a federal question. See Id. at 6. Of the fourteen counts brought, one alleges a federal claim - specifically, a violation of the Sherman Act. See Id. at 29-31. Each of the other thirteen counts alleges a state law claim. See generally Doc. #138. “A counterclaim that raises a federal question will ... bring a case within the purview of federal privilege law.” Baker's Aid, a Div. of M. Raubvogel Co. v. Hussmann Foodservice Co., No. 87CV0937(JMM), 1988 WL 138254, at *3 (E.D.N.Y. Dec. 19, 1988). However, “to determine whether federal common law or the Connecticut state statute applies to the privilege asserted ... a district court in a federal proceeding must examine the claims for which the discovery is sought and the basis for the Court's jurisdiction.” Tavares v. Lawrence & Mem'l Hosp., No. 3:11CV770(CSH), 2012 WL 4321961, at *5 (D. Conn. Sept. 20, 2012).

         Here, it does not appear that the discovery in dispute relates to the Sherman Act claim. That claim alleges that “VCA has a dominant and near or actual monopolistic position in the relevant geographic and services market[, ]” and has “unlawfully directed the hospitals it owned or controlled in Connecticut refused to deal with VCC.” Doc. #138 at 30 (sic). The parties do not connect their arguments as to the privilege issues to this claim in any way.

         Accordingly, and in light of the parties' apparent consensus that Connecticut law applies to the present dispute, the Court will apply Connecticut law to the claims of privilege asserted by the VCC parties. See also Fed.R.Evid. 501 (“[I]n a civil case, state law governs privilege regarding a claim or defense for which state law supplies the rule of decision.”).[1]

         C. DISCUSSION

         The VCA parties ask the Court to compel the production of communications between two categories of persons: First, between the VCC parties, their attorneys, and their financial advisors; and second, between Dr. Post and his now husband, David Duchemin. See generally Docs. #171, #195, #203. The VCC parties vigorously oppose the motion to compel, and maintain that valid privileges protect the communications from disclosure. See generally Docs. #174, #196, #202.

         1. Inclusion of Third Parties on Attorney-Client Communications

         Before turning to the parties' substantive arguments, the Court first reviews the general principles applicable to claims of the attorney-client privilege in Connecticut.

         a. Attorney-Client Privilege, Generally

         “As a general rule, communications between client and attorney are privileged when made in confidence for the purpose of seeking legal advice.” Blumenthal v. Kimber Mfg., Inc., 826 A.2d 1088, 1095 (Conn. 2003) (citation omitted). “In Connecticut, the attorney-client privilege protects both the confidential giving of professional advice by an attorney acting in the capacity of a legal advisor to those who can act on it, as well as the giving of information to the lawyer to enable counsel to give sound and informed advice.” Olson v. Accessory Controls & Equip. Corp., 757 A.2d 14, 22 (Conn. 2000) (citation omitted). “To invoke the attorney-client privilege, a communication must satisfy four criteria: (1) the attorney participating in the communication must be acting in a professional capacity as an attorney; (2) the communication must be between the attorney and the client; (3) the communication must be for the purpose of providing legal advice; and (4) the communication must be made in confidence.” Kent Literary Club v. Wesleyan Univ., No. CV-15-6013185, 2016 WL 2602274, at *2 (Conn. Super. Ct. Apr. 12, 2016).

         “[S]ince the privilege has the effect of withholding relevant information from the factfinder, it applies only where necessary to achieve its purpose.” Shew v. Freedom of Info. Comm'n, 714 A.2d 664, 670 (Conn. 1998). “[T]he privilege is strictly construed.” PSE Consulting, Inc. v. Frank Mercede and Sons, Inc., 838 A.2d 135, 167 (Conn. 2004).

         “The burden of proving each element of the privilege, by a fair preponderance of the evidence, rests with the [party] seeking to assert it.” Blumenthal, 826 A.2d at 1096; see also State v. Hanna, 191 A.2d 124, 130 (Conn. 1963) (“The burden of proving the facts essential to the privilege is on the person asserting it.”). “That burden is discharged by the presentation of evidence in the form of testimony or affidavit concerning the document's content and use.” Babcock v. Bridgeport Hosp., 742 A.2d 322, 355 (Conn. 1999).[2]

         b. Inclusion of Third Parties on Attorney-Client Communications

         Although the Connecticut Supreme Court has “acknowledged that statements made in the presence of a third party are usually not privileged because there is then no reasonable expectation of confidentiality[, it] ha[s] recognized that the presence of certain third parties who are agents or employees of an attorney or client, and who are necessary to the consultation, will not destroy the confidential nature of the communications.” Olson, 757 A.2d at 22 (emphasis added) (internal citations and quotation marks omitted); accord Leone v. Fisher, No. 3:05CV521(CFD)(TPS), 2006 WL 2982145, at *5 (D. Conn. Oct. 18, 2006) (“Connecticut courts also require necessity, noting that, the presence of certain third parties ... who are agents or employees of an attorney or client, and who are necessary to the consultation, will not destroy the confidential nature of the communications.” (citation omitted)). Said another way, “[t]he presence of third parties generally destroys the confidentiality of a communication, precluding a claim of privilege. This rule does not apply, however, when the presence of the third parties is required to achieve the purpose of the communication.” State v. Mark R., 17 A.3d 1, 7 (Conn. 2011).

         c. Summary of Arguments

         The VCA parties contend that the Court should compel the VCC parties to produce any alleged attorney-client communication that has been disclosed to third parties. See Doc. #171-1 at 20-21. Specifically, the VCA parties assert that several attorney-client communications were also sent to the VCC parties' financial advisors, thereby vitiating any attorney-client privilege. See Id. at 21. The VCC parties respond: “The very nature of the relationship between an individual and their financial advisor warrants the inference that the parties intended for the communications to remain confidential, just as they intended their ...


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