Chelsea Hotel Owner LLC v. City Of New York

Background

Chelsea Hotel Owner LLC, Ira Drukier, Richard Born, and Sean MacPherson sued the City of New York and other defendants under 42 U.S.C. § 1983, alleging violations of substantive due process rights. The court previously dismissed the claims against the New York City Department of Housing Preservation & Development, Martha Ann Weithman in her official capacity, and the New York City Department of Buildings, while denying the motion to dismiss in all other respects. The case was referred to Magistrate Judge Robert W. Lehrburger for general pretrial management.

The district court reviewed objections to three of Judge Lehrburger’s discovery orders under Federal Rule of Civil Procedure 72(a). Under that rule, a district judge may modify or set aside a magistrate judge’s nondispositive order if it is clearly erroneous or contrary to law. The district court emphasized that magistrate judges receive substantial deference in managing discovery disputes.

January Order: Plaintiffs’ objections

Judge Lehrburger had reviewed twenty-five documents privately and ruled on the City’s privilege assertions. He found that the City met its evidentiary burden, that the common legal interest doctrine could protect communications that were otherwise privileged, that attorney-client privilege could cover communications involving legal advice even when they concerned policy or press matters, that the plaintiffs had not shown sufficient need for certain attorney work product, and that changes in the City’s privilege assertions did not require forfeiture of the protections.

The district court rejected each objection. It held that Judge Lehrburger acted within his discretion by conducting private review of selected documents and did not clearly err in finding that the City established privilege. The court also held that the common legal interest doctrine was applied only to communications that independently qualified as privileged.

The court further held that the City’s late or changing privilege assertions did not automatically waive privilege or work-product protection. It agreed that communications about policy-making and press strategy could be privileged when their predominant purpose was requesting or providing legal advice. Finally, the court found the plaintiffs’ challenge concerning substantial need for certain work product moot because Judge Lehrburger later found that the plaintiffs had demonstrated substantial need for work product concerning what the City knew about the Hotel’s status, when it learned that information, and what inquiry or investigation it conducted.

The court affirmed the January Order and overruled the plaintiffs’ objections.

April Order: City’s objections

Judge Lehrburger ordered the City to produce documents from July 2018 through January 2021 concerning what the City knew about the Hotel’s status, when it acquired that knowledge, and what inquiry, review, or investigation it conducted. The order applied even if a document was otherwise privileged or attorney work product, but it did not require production of information reflecting litigation strategy.

The district court upheld the order under the rule that a party may waive privilege by placing the reasonableness of its conduct at issue. The court found that the City had asserted that it acted reasonably, including by conducting a 2018 review and discussing the matter with the Department of Housing Preservation & Development. The court therefore held that Judge Lehrburger did not clearly err by requiring production of information relevant to the reasonableness of the City’s investigation, including investigations into whether the Hotel qualified for an exemption.

The district court understood the order to cover communications that surfaced during the relevant period, rather than every document the City possessed. It also held that production was not limited only to information the City actually relied upon. The City did not challenge Judge Lehrburger’s finding that the plaintiffs had a substantial need for attorney work product covered by the April Order, so the district court did not review that issue.

The court affirmed the April Order and overruled the City’s objections.

July Order: Plaintiffs’ objections

After the April Order, Judge Lehrburger directed the City to produce materials covered by the April Order that were outside the City’s pending objections. The plaintiffs later claimed that the City had failed to produce unredacted communications and had not produced communications from 2008 through 2010 concerning the Hotel’s status. Judge Lehrburger ruled that the plaintiffs were not entitled to the 2008–2010 communications and that the City had not violated the production order while its objections remained pending.

The district court agreed. It found that the plaintiffs’ requested materials fell within the City’s objections to the April Order and therefore were excluded from the production order while those objections were unresolved. The court also held that the plaintiffs had waived their challenge to the limitation on 2008–2010 communications because they did not timely object to Judge Lehrburger’s ruling at the April 8 discovery conference. The court concluded that Judge Lehrburger did not clearly err by finding the request untimely and did not need to address the City’s other reasons for opposing it.

The court affirmed the July Order and overruled the plaintiffs’ objections.

Disposition

The court affirmed Judge Lehrburger’s orders docketed at ECF Nos. 111, 149, and 175, and overruled all objections. The Clerk of Court was directed to terminate the pending motions at ECF Nos. 161 and 184 as moot.