New York Wheel Owner LLC v. Mammoet-Starneth LLC

Background

The court reviewed the parties’ papers concerning the defendants’ motion to compel New York Wheel Owner LLC, identified in the order as “NY Wheel,” to produce sanctions-related discovery. The requested material concerns NY Wheel’s communications with its prior counsel.

Issues Identified by the Court

The court directed the parties to be prepared to discuss whether NY Wheel had actually placed its communications with counsel “at issue.” If it had, the court indicated that this could constitute a waiver of the attorney-client privilege, which generally protects confidential communications between a client and lawyer. The court also directed discussion of whether NY Wheel’s statements had merely announced an intention to disclose privileged information, without yet placing those communications at issue.

If NY Wheel had not placed the communications at issue, the court identified two possible approaches. First, it could set a deadline requiring NY Wheel to choose between asserting a defense based on reliance on counsel’s advice and giving up that defense. If NY Wheel asserted that defense, the defendants could obtain otherwise privileged materials. Second, NY Wheel could continue withholding the privileged discovery at its own risk, with the understanding that it could later be treated as having waived any reliance-on-counsel defense to a future sanctions motion.

Order

The court ordered the parties to appear for a conference on January 6, 2021, at 2:00 p.m., to discuss the motion. Judge Jesse M. Furman did not grant or deny the motion to compel in this order and did not decide whether NY Wheel had waived attorney-client privilege.