U.S. Bank National Association v. Triaxx Asset Management LLC

Background

U.S. Bank National Association brought the action as trustee for three collateralized debt obligations. It asked the court to compel Triaxx Asset Management LLC, the collateral manager, and its affiliate, Phoenix Real Estate Solutions Ltd. (together, the TAM Parties), to amend their categorical privilege log. U.S. Bank argued that the log did not provide enough information for it to assess the TAM Parties’ claims of attorney-client privilege, work-product protection, and other protections from discovery under Federal Rule of Civil Procedure 26(b)(5)(A). In the alternative, U.S. Bank asked for a log containing the withheld documents’ metadata.

The TAM Parties argued that the parties’ stipulated discovery order allowed a categorical privilege log and that their log was sufficient. They also argued that preparing a metadata log would be burdensome because the metadata could itself reveal privileged information.

The Privilege Log

The log covered more than 12,500 withheld documents divided into 21 categories. It generally identified each category’s description, subjects, asserted protections, and numbers of withheld and redacted documents. But it did not provide category-specific dates, and it did not list the senders, addressees, or other recipients of the withheld communications. Many categories used broad and nearly identical descriptions, including references to “activist litigations,” and listed several possible privileges without identifying which privilege applied to which documents.

The court found particular problems with Categories 10, 16, and 18. Category 10 covered 968 documents involving business entities and included communications concerning Phoenix’s engagement, its work, and the pending action. The only lawyer identified in that category, Nicholas Calamari, acted in both legal and business capacities. Category 16 covered 53 documents and also appeared to contain communications among business entities without an outside lawyer. Category 18 covered 4,723 documents described as work product, but did not identify the individuals by or for whom the documents were prepared.

Court’s Analysis

Rule 26(b)(5)(A) requires a party withholding discovery on privilege grounds to describe the withheld material sufficiently to allow the other parties to assess the claim without revealing the protected information itself. The court also explained that Local Civil Rule 26.2 ordinarily requires information such as the document type, general subject, date, author, addressees, recipients, and relevant relationships among them.

The court recognized that Local Civil Rule 26.2(c) allows parties to agree to categorical logs instead of document-by-document logs. But that rule also allows an objection when the required information has not been provided in a comprehensible form. The court concluded that the TAM Parties’ descriptions were too vague and repetitive and that the categories did not meaningfully help U.S. Bank determine whether the withheld documents were potentially protected.

The court considered proportionality—the need to balance the usefulness of the requested discovery against the burden of producing it. Because the conduct of the activist litigations was not directly at issue in this action, the court required less detail for 17 categories involving outside counsel and concerning those litigations than it required for Categories 4, 10, and 16.

Order

The court granted U.S. Bank’s letter-motion in part. For the 17 categories involving outside counsel and concerning the activist litigations, the TAM Parties had to provide an accurate date range and, to the extent they had not already done so, a complete list of the communications’ senders, addressees, and other recipients.

For Category 18, the TAM Parties had to provide an accurate date range and, to the extent they had not already done so, a complete list of the individuals by and for whom the withheld documents were prepared.

For Categories 4, 10, and 16, the TAM Parties had to produce a traditional document-by-document privilege log. The order allowed an alternative only if the parties stipulated: the TAM Parties could instead produce a metadata log for those categories. The revised log had to be served by April 28, 2021. The court directed the clerk to close the motion at Docket Number 315.