Rising Tide I, LLC v. Fitzsimmons

Background

In an earlier order, the court required Latham & Watkins, former counsel for Delivery Agent, to produce documents responsive to defendants’ subpoenas in this case and a related action. The court had found a presumption that Delivery Agent’s attorney-client privilege was no longer viable because Delivery Agent had ceased to function. Although Delivery Agent’s trustee said he did not intend to waive any privilege, the trustee did not provide a basis to show that a privilege existed.

The present discovery disputes involved similar subpoenas served by plaintiffs on Bergeson and Orrick, Herrington & Sutcliffe. Defendants were relying on Latham’s legal advice for an advice-of-counsel defense. Bergeson and Orrick raised additional objections concerning relevance, privilege, work product, burden, confidentiality, the bankruptcy stay, and costs.

Attorney-Client Privilege and Relevance

The court rejected Bergeson’s argument that its communications were irrelevant because defendants might not be relying specifically on Bergeson’s advice. Once defendants invoked an advice-of-counsel defense, plaintiffs were entitled to learn about all advice defendants received on the relevant subjects, not only the advice defendants intended to use. The court found that Bergeson’s engagement overlapped with Latham’s on relevant subject matter.

The court also concluded that Bergeson had not established that Delivery Agent’s attorney-client privilege continued to exist or that an unwaived privilege was held by another entity. The court noted that Hillair acquired substantially all of Delivery Agent’s assets in bankruptcy and later transferred them to Connekt, but it saw nothing showing that either Hillair or Connekt claimed the privilege. Connekt’s production of the Delivery Agent documents it received also did not show that a privilege continued. The trustee’s statement that he was not waiving a privilege did not establish that the privilege existed.

As to Orrick, the court found its legal advice relevant even though Orrick was retained after plaintiffs received the draft 304 response. Orrick’s advice could bear on the reasonableness of the earlier legal advice, what defendants relied on, whether different attorneys gave contradictory advice, and the extent of defendants’ reliance. The court again concluded that Orrick had not established that Delivery Agent’s attorney-client privilege continued.

Attorney Work Product

The court adopted the approach from In re EchoStar Communications Corp. for attorney work product, which is material prepared because of litigation or for legal strategy. Under that approach, the court identified three potentially relevant categories: documents communicating attorney advice to the client about the case; attorneys’ private mental impressions that were not communicated to the client; and documents discussing attorney-client communications without themselves being communications to or from the client.

The first category was discoverable. The second category was not discoverable. The third category was discoverable, although material containing the attorney’s uncommunicated mental impressions could require redaction. The court rejected an approach that would require production of an attorney’s entire file when work-product protection is waived by asserting an advice-of-counsel defense. It specifically held that uncommunicated opinion work product remained protected here.

Other Objections and Disposition

The court rejected Bergeson’s burden argument because Bergeson did not identify which responsive documents plaintiffs already possessed or show that all responsive documents had already been produced. The court found that the requested time sheets, invoices, and bills were relevant and proportional because they could help identify when legal communications occurred and test testimony about meetings or communications.

The court found that the action’s protective order adequately addressed third-party confidentiality concerns. It also concluded that the subpoenas did not implicate the automatic bankruptcy stay and that shifting the costs of production was unwarranted.

Judge Thomas S. Hixson granted the motion to compel against Bergeson, except as to uncommunicated opinion work product. The court also granted the motion to compel Orrick to produce documents responsive to plaintiffs’ subpoena, with the same exception. The order was dated November 22, 2019.