Malherbe v. Oscar Gruss & Son, Inc.

Background

On May 13, 2024, Plaintiffs filed a letter-motion concerning Defendant’s withholding of 19 documents listed in an amended privilege log. Plaintiffs asked the Court to review the documents privately, known as an in-camera review, to determine whether attorney-client or attorney work-product privilege applied. Defendant argued that Plaintiffs’ request was untimely, that the documents were privileged, and that Plaintiffs had not shown a need for them.

The dispute arose after a February 2024 deposition of Danielle Landau, Defendant’s Chief Compliance Officer and CFO. Landau testified that she had received a folder of documents previously possessed by certain former owners of Defendant and their former counsel. Defendant later produced some documents from the folder and withheld others under a categorical privilege log. After Plaintiffs requested an itemized log, Defendant provided one on April 5, 2024. Plaintiffs then challenged the privilege assertions for 19 documents, many of which did not identify an author, recipient, date, or purpose.

The Court held a conference on May 24, 2024, granted Plaintiffs’ request for an in-camera review, and received the documents from Defendant. The parties had also cross-moved for summary judgment on April 29, 2024.

Legal Standard

The Court treated Plaintiffs’ letter-motion and arguments at the conference as a motion to compel under Rule 37(a) of the Federal Rules of Civil Procedure. Rule 26 generally permits discovery of nonprivileged information that is relevant to a claim or defense and proportional to the needs of the case.

Attorney-client privilege protects confidential communications made for the purpose of obtaining legal advice from a lawyer acting as a legal adviser, unless the privilege has been waived. Attorney work-product privilege provides qualified protection for materials prepared by or at the direction of a lawyer in anticipation of litigation or for trial. The party asserting either privilege bears the burden of establishing that it applies.

Court’s Analysis

The Court found that the 19 documents were summaries of cases, filings, and judgments in German proceedings. Some involved Plaintiffs, and all involved Defendant and related to underlying activity that was the subject of Plaintiffs’ allegations. The Court therefore found the documents at least minimally relevant under Rule 26.

The Court then found that Defendant had not shown that any of the documents were protected by attorney-client or work-product privilege. Nothing on the face of the documents clearly showed that they contained attorney-client communications, were prepared by or at the direction of an attorney, or were prepared in anticipation of litigation. Most documents did not identify an author, recipient, or purpose.

The Court rejected Defendant’s reliance on the fact that the documents had been found in a folder previously possessed by a lawyer. Attorney possession alone was not enough to establish privilege. The documents’ translations or translated summaries of German court proceedings suggested possible attorney involvement but were also consistent with preparation by a non-lawyer for business executives. References to “client” were ambiguous and inconsistently used, and the Court construed those ambiguities against Defendant.

The Court stated that the privilege designations appeared to have been made in good faith, but concluded that Defendant had not carried its burden to establish that the documents were protected.

Disposition

The Court ordered Defendant to produce the 19 relevant, nonprivileged documents to Plaintiffs no later than June 19, 2024. It further ordered that briefing on the pending cross-motions for summary judgment resume, with oppositions due by July 12, 2024, and replies due by July 26, 2024.