Hayden v. International Business Machines Corporation
- Vincent Briccetti
- 7:21-cv-02485
- U.S. District Court · Southern District of New York
- 31
In Hayden v. IBM, Judge McCarthy partly granted and partly denied Hayden’s protective-order motion, requiring production of many disputed documents while protecting others.
Gerald Hayden must produce the documents identified by the court, while IBM, Pablo Suarez, and Shanker Ramamurthy may obtain those materials through discovery; some communications remain protected or may be redacted under the court’s stated rules.
What happened
In Hayden v. International Business Machines Corporation, Gerald Hayden sued IBM, Pablo Suarez, and Shanker Ramamurthy over alleged trade-secret and intellectual-property misappropriation, employment-related claims, and other alleged wrongdoing. Hayden asked the court to protect 1,036 documents from disclosure during discovery based on attorney-client privilege and protection for materials prepared for litigation.
The court reviewed the documents privately and found that many were not protected because they did not seek or provide legal advice, merely copied attorneys, forwarded nonconfidential material, included outside parties, or consisted of Hayden’s personal notes that were not shown to have been shared with counsel. The court protected some communications about shared whistleblower, workplace-safety, and False Claims Act matters, but found no shared legal interest for Hayden’s personal intellectual-property claim and certain other claims. It also ordered production of many factual litigation materials because the defendants showed a substantial need for them.
Judge McCarthy granted in part and denied in part Hayden’s motion. The court ordered Hayden to review and produce documents falling within specified categories, including many documents involving waived or unsupported privilege claims, unidentified authors, materials not prepared for litigation, and work product concerning his intellectual-property claim; it allowed certain other protected communications to remain withheld or redacted.
The detailed version
- Hayden v. International Business Machines Corporation · No. 7:21-cv-02485
- Vincent Briccetti
- July 19, 2023
Background
Gerald Hayden brought claims against International Business Machines Corporation, Pablo Suarez, and Shanker Ramamurthy alleging theft and misappropriation of trade secrets and intellectual property, breach of an employment contract and the duty of good faith and fair dealing, tortious interference, and retaliatory discharge under federal and state law. The opinion states that Hayden worked for IBM as a Chief Digital Officer from November 2015 through October 2018 and alleged that he developed a business methodology called A2E.
The dispute before the court was about discovery, not the merits of those claims. Hayden moved for a protective order covering 1,036 documents that he submitted for private judicial review. He asserted attorney-client privilege and protection for materials prepared in anticipation of litigation. The court expressly stated that its description of the facts was provided only as context for the discovery dispute and did not make factual findings about the merits of the lawsuit.
Attorney-Client Privilege
Attorney-client privilege protects confidential communications between a client and lawyer made to obtain or provide legal advice. The court found that many of Hayden’s withheld communications did not qualify because they were not primarily legal in purpose. The court ordered production of communications in five principal categories:
- Messages from Hayden or another nonlawyer to other nonlawyers that copied a lawyer but did not seek or provide legal advice.
- Messages forwarding nonprivileged material, such as podcasts, news articles, or earlier communications, including their nonprivileged attachments.
- Retainer agreements and related communications that did not reveal legal advice, litigation strategy, or the reason for seeking counsel, including communications about ending the attorney-client relationship.
- Communications that included government investigators or other third parties for whom Hayden did not claim protection based on a shared legal interest. The court found that including such parties waived the privilege in the circumstances presented.
- Hayden’s standalone notes and documents that were not shown to have been communicated to counsel or used as the basis for a discussion with counsel. The court found that merely preparing a document with legal representation in mind was not enough to establish privilege.
Where a document contained both protected and unprotected material, the court required production with the unprotected information left visible. The court also stated that Log No. 21 was clearly communicated to an attorney to seek legal advice, while other documents identified by Hayden as draft communications or notes were not shown to have been communicated to counsel and therefore had to be produced, unless work-product protection applied.
Shared Legal Interest
The common-interest doctrine can preserve the confidentiality of otherwise privileged communications shared by people pursuing a coordinated legal strategy. The court found that Hayden and BaaP team members Cohen, Bingham, and Gotlieb shared a legal interest concerning their Securities and Exchange Commission whistleblower claims, workplace-safety complaints, and False Claims Act claims. Hayden could therefore withhold confidential communications among that group and their lawyers concerning those claims from March 2018 forward.
The court found that Hayden, the BaaP team, Boris Kusovski, and Yosef Elkaim shared a legal interest concerning those same types of claims beginning in January 2020, when they retained joint counsel. Hayden had to produce communications involving Kusovski or Elkaim before January 2020 concerning those claims.
The court rejected the claimed shared legal interest for communications concerning unnamed Federal Trade Commission laws, the Sarbanes-Oxley Act, IRS regulations, and Hayden’s personal intellectual-property claim. It found no demonstrated coordinated legal strategy for those matters. The court therefore required production of communications concerning those claims when third parties were included, while allowing redaction of portions discussing claims for which an applicable shared legal interest existed.
Work-Product Protection
The work-product doctrine protects documents prepared by or for a party or its representative because of anticipated litigation. The court rejected Hayden’s broad argument that all of his personal notes were specially protected opinion work product. It found that his standalone materials generally contained facts rather than an attorney’s mental impressions or legal strategy.
The court found that some standalone documents about non-intellectual-property claims were prepared because of the prospect of litigation and could remain protected. However, Hayden had to disclose standalone documents that were not prepared for litigation. For his intellectual-property claim, the court found that the prospect of litigation became real in September 2018 and required production of standalone documents about that claim created before that time. The court also required production of 32 documents for which the author was indeterminate or was not shown to be Hayden or his representative.
The court did not find that Hayden waived work-product protection merely by sharing materials with the BaaP team, Kusovski, or Elkaim. It also declined to find waiver under the defendants’ witness-disclosure argument because the cited cases involved witnesses who had actually been shown protected communications before depositions, which the court found was not the situation presented.
The court nevertheless found that the defendants had shown a substantial need for factual work product concerning Hayden’s intellectual-property claim. The materials were important to the defendants’ statute-of-limitations defense and to determining when Hayden discovered the alleged misappropriation. The court also found the materials highly probative of contested issues, including misappropriation, discovery, and bad faith. Hayden therefore had to produce work product about his intellectual-property claim created both before and after March 22, 2018, unless a document was protected by attorney-client privilege. The conclusion also required production of standalone intellectual-property materials withheld under either protection, subject to the opinion’s stated parameters.
Disposition
The court granted in part and denied in part Hayden’s motion for a protective order. It ordered production of the documents identified in the conclusion, including nonprivileged documents, communications involving unsupported shared-interest claims, certain communications involving Kusovski and Elkaim before January 2020, standalone intellectual-property documents, the 32 documents with an indeterminate author, and standalone work product not prepared for litigation. Hayden was ordered to complete the review and production by August 14, 2023. Judge Judith C. McCarthy directed the Clerk of Court to terminate the pending motion.
Read the full 31-page opinion on CourtListener, the free public archive maintained by the Free Law Project.