Coan v. Dunne

          RULING ON THE TRUSTEE'S MOTION TO OVERRULE DEFENDANTS' PRIVILEGE OBJECTIONS AND COMPEL PRODUCTION OF WITHHELD DOCUMENTS (DOC. 181)

          ROBERT M. SPECTOR UNITED STATES MAGISTRATE JUDGE.

         I. RELEVANT PROCEDURAL HISTORY

         On December 18, 2018, this Court filed a 34-page Ruling on the Trustee's Motion to Compel [“December 18^th Ruling”], in which, inter alia, the Court discussed the parties dispute over documents withheld by the defendants^[1] as privileged. (Doc. No. 129 at 31-32). As stated in the December 18^th Ruling:

The Court [(Meyer, J.)] addressed the parties' privilege logs during the November 16, 2018 hearing, during which the Court inquired whether there was a separate motion addressing this issue and then informed the parties: “I think it really needs to be its own motion if it's going to be something the Court acts on. We had a motions deadline to do that.” (Doc. No. 99 at 78-79). The Court then stated that “this is something to raise with respect to the same other motion[]” that was referred to this Magistrate Judge. (Doc. No. 99 at 80). The Court directed the parties to “look at [the] specific privilege items” and then confer with each other and “try to resolve it.” (Doc. No. 99 at 80). The defendants contend that the Trustee “did not attempt to identify any specific items to [the defendants] in an effort to resolve any disputes concerning them.” (Doc. No. 120 at 23).

(Doc. No. 129 at 32). The parties then embarked in supplemental briefing relating to their then-pending Motion to Compel (see Doc. No. 64), which included argument on the privilege issue and the Trustee's challenge to 6, 756 communications logged in Killilea's May 4, 2018 privilege log. The defendants argued that the issue was not within the scope of the then-pending Motion to Compel and that the Trustee did not follow the Court's (Meyer, J.) directive to “identify . . . specific items” in which the privilege was disputed. (Doc. No. 120 at 23-24). The Trustee argued that the attorney-client privilege was waived as to broad categories of communications, including those that identified James Ryan who the Trustee knew to be a member of the defendants' litigation team both in Ireland and the United States. In the December 18^th Ruling, this Court ruled that the defendants had to produce “documents from James Ryan which are not protected by the attorney-client or work-product privilege[, ]” and that the parties “shall confer about the privilege designations.” (Doc. No. 129 at 25). The Court also directed the parties to “once again . . . confer and try to resolve the outstanding privilege issues.” (Doc. No. 129 at 32).

         On January 17, 2019, the Trustee filed the pending Motion to Overrule Defendants' Privilege Objections and to Compel Production of Withheld Documents (Doc. No. 181; see also Doc. No. 254). The next day, this motion was referred to this Magistrate Judge. (Doc. No. 184). In this pending motion, the Trustee seeks to “compel the [d]efendants to produce all communications with nonlawyers, accountants, architects, engineers and real estate agents, communications with Sean Dunne (“the Debtor”) and communications with adverse attorneys.” (Doc. No. 181 at 2-3). Included within his request, the Trustee seeks “all communications listed in both the [d]efendants' privilege log and the D'Agostino, Levine, Landesman & Lederman, LLP (“D'Agostino”) [log], which was prepared by [d]efendants but not produced until December 11, 2018[, ]” as well as “all responsive emails involving Ross Connolly and James Ryan, who are accountants hired by the Debtor and/or Killilea.” (Doc. No. 181 at 3). The Trustee claims that, “[a]lthough the parties met and conferred on December 21, 2018, the [d]efendants still refuse to withdraw even a single privilege assertion[.]” (Doc. No. 181 at 2). Additionally, the Trustee claims that the defendants have “had nearly a year to establish exactly why Connolly and Ryan were necessary for the delivery of legal advice and have not even attempted to do so.” (Doc. No. 181 at 9).^[2] The Trustee also recounts the fact that, despite the Bankruptcy Court's order on August 17, 2018, directing the parties to “deliver to the Court all unredacted documents referred to in the Privilege Log for an in camera review, ” the defendants “never produced a single document for an in camera review to any Court at any time[, ]” nor did the defendants undertake a review to review any “incorrect” privilege designations as they represented they would to the Bankruptcy Court. (Doc. No. 181, at 2, 6-7).

         II. DISCUSSION

         A. Defendants' Privilege Logs - Schedules 4, 4-A and 4-B

         As this Court discussed in the December 18^th Ruling (at 24-25), the defendants bear the burden of proving the applicability of the attorney-client privilege:

A party invoking the attorney-client privilege bears the burden to establish the elements of the privilege: “(1) communication between client and counsel that (2) was intended to be and was in fact kept confidential, and (3) was made for the purpose of obtaining or providing legal advice.”

In re Smith, No. 14-21261 (JTT), 2017 WL 1190590, at *5 (Bankr. D. Conn. Mar. 29, 2017) (quoting In re Cty. of Erie, 473 F.3d 413, 419 (2d Cir. 2007)). “The rule in this Circuit, . . . is that the applicability of the attorney-client privilege to a particular communication depends on ‘whether the predominant purpose of the communication is to render to solicit legal advice.'” Deutsche Bank Nat. Trust Co. v. WMC Mortg., LLC, Nos. 3:12 CV 933(CSH), 3:12 CV 969, 3:12 CV 1347(CSH), 2015 WL 1650835, at *5 (D. Conn. Apr. 14, 2015) (quoting Erie, 473 F.3d at 420) (footnote omitted)).

         The privilege logs filed under seal with the Trustee's Motion total 430 pages (see Doc. No. 182; see Doc. Nos. 183, 185) and, as the Trustee explains, reflect that the attorney-client privilege was asserted 7, 481 times for communications with non-lawyers, including 6, 756 times for communications with James Ryan and 67 times for communications with Ross Connolly, and at least 436 times with various non-lawyers who the Trustee has identified as engineers, real estate agents, architect and accountants.^[3] (Doc. No. 181 at 10; Doc. No. 182; see also Doc. No. 254 at 8). Additionally, the Trustee points to assertions of the privilege on communications involving lawyers who are directly adversarial, as well as other non-lawyers, and note that Killilea “failed to identify the roles of people identified in the log, [so that the] Trustee has only listed . . .communications with the people that the Trustee knows are either nonlawyers or adverse lawyers who destroy any colorable claim of privilege.” (Doc. No. 181 at 11).

         As this Court recently explained in its Ruling on the Plaintiff's Renewed Motion for Further Contempt (Doc. No. 225 at 22-23), filed on February 11, 2019, privilege logs must include “sufficient substantive detail for a meaningful review of the application of the privilege[, ]” including whether the communications were confidential and made between an attorney and client for the purpose of providing legal advice. Bolorin v. Borrino, 248 F.R.D. 93, 95 (D. Conn. 2008).^[4]Although the defendants argue that the Trustee has not identified “any individual specific communications in an effort to resolve any disputes concerning them[]” (Doc. No. 217 at 16), the record is clear that the Trustee has identified, at minimum, 7, 481 communications, as referenced above, which includes over 600 documents with lawyers who are directly adversarial and with non-lawyer third parties (exclusive of the documents involving Connolly and Ross).

         Rule 26(b)(5) of the Federal Rules of Civil Procedure provides that, when a party withholds discoverable information by claiming it is privileged or protected, “the party must: (i) expressly make the claim; and (ii) describe the nature of the documents, communications, or tangible things not produced or disclosed-and do so in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the claim.” Id.; see also D. Conn. L. Civ. R. 26(e) (“[i]n accordance with Fed.R.Civ.P. 26(b), . . . when a claim of privilege or work product protection is asserted in response to a discovery request for documents, ” the party asserting the privilege “shall serve on all parties a privilege log containing the following information”: (1) “[t]he type of document”, (2) “[t]he general subject matter of the document”, (3) “[t]he date of the ...