United States v. Dobco Inc.

Nature of the Dispute

The parties asked the court to decide whether Higgins and Merchants could withhold discovery from Dobco under three protections: the common-interest doctrine, attorney-client privilege and the work-product doctrine, and the protection for experts consulted during litigation preparation. The court also addressed Merchants’s investigatory materials and whether several consultants qualified for expert-related protection.

Common-Interest Doctrine

The common-interest doctrine can preserve attorney-client or work-product protection when parties and their lawyers share confidential communications as part of a joint legal strategy. The doctrine does not independently protect material that was not already covered by attorney-client privilege or the work-product doctrine.

The court rejected Higgins’s and Merchants’s apparent request for a blanket protection covering all communications between them. It held that the parties reasonably anticipated litigation by October 2021 and shared a common legal interest by that time. Communications exchanged between Higgins and Merchants from October 2021 onward are protected only if they were confidential communications for obtaining or providing legal advice, or if the documents were prepared because of anticipated litigation. Communications and documents shared before October 2021 are not protected by the common-interest doctrine on that basis. Materials withheld under these protections must be identified on privilege logs.

Merchants’s Investigatory Materials

The court held that Merchants’s investigatory materials created in or after October 2021 were presumptively protected by the work-product doctrine because Merchants had stood behind Higgins, reasonably anticipated litigation, and was investigating numerous increasingly adversarial default notices. The court did not adopt an automatic rule that all materials created after Merchants declined coverage were protected; instead, it considered the circumstances of the investigation.

If Merchants shared those materials with Higgins in or after October 2021, the common-interest doctrine preserves the protection. Investigatory materials created at any time may also be protected by attorney-client privilege if they satisfy that privilege’s requirements and were not waived. Merchants must list materials it withholds on its privilege log.

Consulting-Expert Protection

The court held that documents and communications exchanged between Higgins and Partner Engineering were protected because Higgins retained Partner Engineering in October 2021 after Dobco’s October 8 default notice, in anticipation of litigation. Documents and communications exchanged between Merchants and J.S. Held were also protected because Merchants retained J.S. Held in January 2022 to assist with its investigation while anticipating litigation. Those protections would not apply if either consultant were later disclosed as a testifying expert.

The International Masonry Institute was not a consulting expert under the rule because Higgins did not formally retain or compensate it. The court nevertheless held that Dobco could not seek discovery from the institute because it was an informal consultant. Higgins and Merchants waived consulting-expert protection for North S. Tarr and Niagara Research Associates by voluntarily providing their reports to Dobco.

Other Orders

Judge Victoria Reznik lifted the stay of discovery. The parties were ordered to meet and confer and submit a proposed revised Civil Case Discovery Plan and Scheduling Order by January 12, 2024. The clerk was directed to terminate the pending motions at ECF Nos. 42, 65, 66, 67, and 70. The opinion addresses discovery and privilege questions rather than the underlying merits of the parties’ claims.