United States District Court, D. Connecticut
RULING ON MOTION TO COMPEL
Donna
F. Martinez, United States Magistrate Judge.
Plaintiffs
Denis Marc Audet, Michael Pfeiffer, Dean Allen Shinners, and
Jason Vargas, individually and on behalf of a class of all
others similarly situated, bring this action against
defendants Stuart A. Fraser ("Fraser"), GAW Miners,
LLC, and ZenMiner, LLC (collectively "the
companies"[1]) alleging violations of federal and
state securities law. Pending before the court is defendant
Fraser's motion to compel. (Doc. #82.) Defendant Fraser
seeks notes plaintiffs' counsel took during an interview
of Homero Garza ("Garza"), the companies' CEO
who formerly was a defendant in this action.[2] The
plaintiffs object on the ground that the notes are work
product. For the reasons set forth below, the motion is
granted.
I.
Factual Background
The
plaintiffs initially named Garza as a defendant in their
complaint.[3] On October 20, 2016, Garza entered
into a written agreement with the plaintiffs in which he
agreed to provide them with information. (Doc. #118-1, Garza
Dep. at 148-50.) Thereafter, on October 24, 2016, the
plaintiffs dismissed Garza as a defendant from the civil
action. (Doc. #52.) On October 26, 2016, plaintiffs'
counsel, attorney Colin Watterson, conducted an in-person
interview of Garza. (Doc. #118, Watterson Decl. ¶3.)
Attorney Watterson's paralegal, Simon DeGeorges,
participated in the interview by phone. (Doc. #118, Watterson
Decl. ¶4.) According to Attorney Watterson, "[t]he
main purpose of the interview was to learn information that
would support plaintiffs' claim that Stuart Fraser was a
controlling person of GAW Miners, LLC, ZenMiner, LLC, and Mr.
Garza, as well as information on the underlying fraud."
(Doc. #118, Watterson Decl. ¶5.) Attorney Watterson took
notes by hand. (Doc. #118, Watterson Decl. ¶6.)
Paralegal DeGeorges also took notes. (Doc. #118, Watterson
Decl. ¶7.) After the interview, Attorney Watterson
edited and supplemented DeGeorges' notes. (Doc. #118,
Watterson Decl. ¶7.)
On
November 4, 2016, after the interview with Garza, the
plaintiffs filed an amended complaint with additional factual
assertions about Fraser and his role in the alleged fraud.
On
November 8, 2016, plaintiff Allen Shinners sent a copy of the
interview notes to FBI Special Agent Mark
Munster.[4] (Doc. #118, Watterson Decl. ¶8.)
Defendant
Fraser subsequently served the plaintiffs with a discovery
request which sought all statements Garza made to the
plaintiffs as well as "any notes or documents produced
as a result of Garza's statements." (Doc. #82-2,
Production Request 50.) Plaintiffs objected to producing the
interview notes on the grounds that they are work
product.[5] This motion followed.
II.
Discussion
Defendant
Fraser argues that the plaintiffs waived work product
protection when they shared the notes with the FBI. The
plaintiffs' disclosure, the defendant argues,
substantially increased the likelihood that plaintiffs'
adversary (Fraser) would obtain the information, thereby
waiving work product protection. I agree.
"[T]he
party asserting the protection afforded by the work product
doctrine has the burden of showing both that the protection
exists and that it has not been waived." NL Indus.,
Inc. v. ACF Indus. LLC, No. 10CV89W, 2015 WL 4066884, at
*5 (W.D.N.Y. July 2, 2015) (internal quotation mark and
citation omitted).
Disclosure
of attorney work-product to a third party, "unlike
disclosure of a document protected by the attorney-client
privilege . . . does not necessarily waive the work product
immunity." In re Grand Jury Subpoenas Dated
December 18, 1981 & Jan. 4, 1982, 561 F.Supp. 1247,
1257 (E.D.N.Y. 1982). "Disclosure of work product to a
third party does not waive its protection unless it
substantially increases the opportunity for potential
adversaries to obtain the information." Id. See
NL Indus., Inc., 2015 WL 4066884, at *5 ("The test for
waiver is whether the disclosure at issue has substantially
increased the opportunities for potential adversaries to
obtain the information.")(quotation marks and citations
omitted); Bank of Am., N.A. v. Terra Nova Ins. Co.,
212 F.R.D. 166, 170 (S.D.N.Y. 2002) ("a disclosure to a
non-adversary that 'substantially' or
'materially' increases the likelihood that an
adversary will obtain the information results in a waiver of
the work product protection").
Courts
have considered the issue of waiver of work product
protection in a variety of cases, including those in which
"the disclosure of information to governmental
authorities was made in the hope that the government will
'attack' the disclosing party's adversary."
Matrix Essentials, Inc. v. Quality King Distributors,
Inc., No. CV901070 (LDW/WDW), 2006 WL 8435312, at *2
(E.D.N.Y. Jan. 12, 2006) (quoting Information Resources,
Inc. v. Dun & Bradstreet Corp., 999 F.Supp. 591, 592
(S.D.N.Y. 1998)). "Such disclosure, it has been held,
cannot be said to be done in the pursuit of trial
preparation, and disclosure in such a situation results in a
waiver of the work product protection." Matrix
Essentials, Inc., 2006 WL 8435312, at *2 (quotation marks and
citations omitted). "When material is disclosed to a law
enforcement agency without any agreement regarding
confidentiality, there is a strong potential that the
material may ultimately become public and thus available to
an adversary. This may occur if the material is used at trial
- either as part of the government's case-in-chief or for
purposes of cross-examining a witness." Bank of
America v. Terra Nova Ins. Co., 212 F.R.D. 166, 172
(S.D.N.Y. 2002).
In
Information Resources, Inc. v. Dun & Bradstreet
Corp., 999 F.Supp. 591 (S.D.N.Y. 1998), plaintiffs'
counsel made apparently unsolicited submissions to various
government agencies in the United States and abroad in hopes
of encouraging them to take action against the defendant. The
court concluded that work product "protection is waived
for materials submitted voluntarily to stimulate beneficial
official action. This vindicates the principle of full
disclosure, prevents the unfairness of selective revelations,
and reflects the common-sense perception that in most such
cases the privacy attending creation of the work-product had
either served its purpose or was of little importance in the
first place." Id. at 593. See, e.g., United
States ex rel. Rubar v. Hayner Hoyt Corp., No. 514CV830,
2018 WL 5811427(GLS/CFH), at *6 (N.D.N.Y. Nov. 5, 2018)
("By providing the final version of the Report to the
[Syracuse Police Department] and District Attorney's
Office, the Court concludes that defendants waived the
work-product privilege with respect to both the final Report
and its drafts"); Cante v. Baker, No.
07-CV-1716(ERK), 2008 WL 2047885, at *1 (E.D.N.Y. May 9,
2008)(plaintiffs waived work product protection where they
submitted documents at issue to government agencies);
Bank of Am., N.A. v. Terra Nova Ins. Co., 212 F.R.D.
166, 172-73 (S.D.N.Y. 2002) ("Disclosing information to
governmental authorities in the hope that they will attack an
adversary . . . cannot be said to be done in the pursuit of .
. . trial preparation. . . . Thus, disclosure in such a
situation results in a waiver of the work product
protection.")(quotation marks and citations omitted);
U.S. Info. Sys., Inc. v. Int'l Bhd. of Elec. Workers
Local Union No. 3, No. 00CIV.4763(RMB)(JCF), 2002 WL
31296430, at *4 (S.D.N.Y. Oct. 11, 2002) (plaintiff waived
work product protection where it "made an unsolicited,
uncompelled disclosure of the information to the District
Attorney's Office. It did so without any assurance,
formal or informal, that the communications would be kept
confidential."); D'Ippolito v. Cities Service
Co., 39 F.R.D. 610, 610 (S.D.N.Y. 1965) (plaintiff's
voluntary disclosure of document to attorneys in the
Antitrust Division of the Department of Justice waived work
product protection).
The
plaintiffs, as the party invoking work-product protection,
"bear[] the burden of demonstrating that it has not been
waived." Norton v. Town of Islip, No. CV
04-3079, 2015 WL 5542543, at *3 (E.D.N.Y. Sept. 18,
2015)(quotation marks and citation omitted). The plaintiffs
brush past this burden, addressing the defendant's waiver
argument only in a footnote. They provide no evidence
regarding their disclosure to the FBI, and simply assert that
"the disclosure did not increase the likelihood of
Shinner's adversary (i.e. Fraser) obtaining a copy of the
notes." (Doc. #86 at 16 n. 27.) This assertion is
unavailing. The record before the court shows that plaintiff
Shinners voluntarily shared the notes with the FBI. Nothing
in the record suggests that the disclosure was made pursuant
to any agreement that the notes would be kept confidential.
Under these circumstances, the plaintiffs' disclosure
increased ...