Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-02071/USCOURTS-cand-3_06-cv-02071-10/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:2201 Constitutionality of State Statutes

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

THELEN REID & PRIEST LLP,

Plaintiff,

Counterdefendant,

and CounterCounterclaimant,

v

FRANÇOIS MARLAND,

Defendant,

Counterclaimant,

and CounterCounterdefendant. /

No C 06-2071 VRW

ORDER

Defendant Francois Marland (“Marland”) seeks an order

directing plaintiff Thelen Reid & Priest LLP (“Thelen”) to produce

64 documents for which Thelen has asserted attorney-client and work

product privileges. Doc #66 at 2, Doc #93. Marland also seeks an

order directing Thelen to identify, on its privilege log, certain

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documents from after February 2005 that Thelen also claims are

privileged. Doc #99 at 8.

Thelen seeks an order compelling production of an August

27, 2002 letter to Marland from his European counsel that Marland

claims was inadvertently produced. Doc #106-1. Marland seeks

sanctions against Thelen, including disqualification of Thelen’s

counsel, Keker & Van Nest (“Keker”), for alleged misconduct

relating to Marland’s inadvertently produced documents.

I

This issue arises out a contract dispute between Thelen

and Marland. Thelen is a California limited liability partnership

and a law firm. Doc #11 at 1. Marland is a citizen of France, a

French attorney and currently a resident of Switzerland. Id.

A

In 1997, Marland approached the New York law firm of Reid

& Priest, claiming to possess information about an undisclosed

fronting agreement, or contrat de portage, through which Crédit

Lyonnais, a French bank, had illegally acquired the insurance

assets of Executive Life Insurance Company (ELIC), an insolvent

California insurance company, at an auction conducted by the

California Department of Insurance (CDOI) in 1991. Doc #78 at 13. 

Marland wanted to know whether he could obtain a financial benefit

by divulging information about a July 1991 contrat de portage he

claimed to have in his possession to parties in the United States. 

Id. After Reid & Priest merged with Thelen, Marrin, Johnson &

Bridges in 1998, Marland met with Gary Fontana, a Thelen partner in

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San Francisco who had previously worked for other clients on ELIC

proceedings. Id.

Between October 1998 and February 1999, Thelen partners

met with representatives of CDOI and attempted to negotiate an

agreement between CDOI and Marland. Id at 14. Ultimately, CDOI

failed to offer acceptable compensation. Id at 15. As a result,

Thelen recommended that Marland initiate his own qui tam lawsuit on

behalf of the state of California and CDOI. Id. In February 1999,

Thelen and Marland signed an attorney-client agreement, providing

that Thelen would file a qui tam lawsuit against Crédit Lyonnais

and advise or assist CDOI and/or the California Attorney General in

connection with the lawsuit, in exchange for a percentage of any

recovery that Marland received. Id. Thelen helped Marland

incorporate an entity called RoNo LLC to protect his anonymity

through the process. Doc #72 at 2. Marland alleges that Thelen

hurried him to accept an unconsionable fee agreement and that

Fontana signed the agreement without obtaining the necessary firm

approvals. Id at 33.

On February 18, 1999, Thelen filed the qui tam lawsuit in

San Francisco superior court. Doc #78 at 15. That same day, CDOI

independently filed a separate complaint in Los Angeles County

superior court, raising almost identical claims against many of the

same defendants. Id.

Subsequently, in May 1999, CDOI asked Thelen to represent

CDOI in its lawsuit. Id. CDOI agreed to allow Marland and

Marland’s European counsel to share a portion of Thelen’s legal

fees if it succeeded in the litigation. Id at 16. Thelen claims

that it informed Marland and Marland’s European counsel of CDOI’s

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proposal and of the potential conflicts between CDOI’s lawsuit and

Marland’s own qui tam lawsuit. Doc #98 at 3-4. Marland contends

that Thelen never disclosed its potential conflicts from the dual

representation. Doc #72 at 34.

Thelen alleges that Marland’s claim to possess a copy of

the July 1991 contrat de portage was critical to CDOI’s decision to

retain Thelen and CDOI’s consent to Thelen’s sharing fees with

Marland. Doc #78 at 16. Marland contends that Thelen never told

him he had an obligation to preserve or produce evidence that might

have identified him as the whistleblower. Doc #72 at 33. 

On May 25, 1999, Thelen and CDOI signed a formal

attorney-client agreement, under which CDOI agreed to pay Thelen a

percentage of any recovery it received. Doc #78 at 16. On June 2,

1999, Thelen and Marland executed a written amendment to the

February 1999 agreement under which Marland agreed that Thelen

would take all reasonable steps to dismiss the qui tam action. Id. 

On June 3, 1999, Thelen, Marland and Marland’s European counsel

entered into an agreement under which Thelen agreed to share any

legal fees it received from CDOI with Marland and European counsel. 

Id.

By July 2001, the Attorney General completed his

investigation of the qui tam action and elected to intervene in the

action. Doc #98 at 4. The Attorney General objected to Thelen’s

continued representation of RoNo as the qui tam relator. Id. 

Thelen withdrew from representing RoNo in the qui tam action and

assisted Marland in retaining other counsel. Id. Thelen continued

to serve as general counsel to RoNo. Id.

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Thelen alleges that by December 2001, CDOI’s lawsuit had

become much more costly than the parties had anticipated. Doc #78

at 18. Thelen wanted to ask CDOI for a non-recourse advance to the

firm. Id. Because the June 1999 agreement required Thelen to pay

to Marland a percentage of any fees received from CDOI, Thelen

approached Marland to negotiate a restructuring of their fee

sharing relationship. Id. 

In June or July of 2002, Thelen requested that Marland

produce the July 1991 portage. Id. Marland refused to produce the

document and said for the first time that he had destroyed it. Id. 

On July 8, 2002, pursuant to the terms of the February 1999

agreement, Thelen gave Marland 30 days’ written notice of its

decision to withdraw from representing him. Id. Thelen extended

the notice period once, to August 30, 2002. Doc #98 at 5. Thelen

claims that “[a]fter that date,” Thelen’s attorney-client

relationship with Marland ended. Id. Presumably, Thelen means

that its attorney-client relationship with Marland ended

immediately after August 30, 2002 (i e, September 1, 2002).

Thelen contends that Marland’s actions constituted a

material breach of the June 1999 agreement and provided grounds for

rescission, excuse of performance or both. Doc #98 at 6. Thelen

considered any future performance on its part under the June 1999

agreement excused by Marland’s breach. Id.

On December 19, 2002, Thelen, Marland, and Marland’s

European counsel entered a new agreement which replaced “any and

all other agreements among them.” Doc #78 at 19. Under the terms

of the December 2002 agreement, Thelen agreed to pay Marland and

European counsel 35% of the fees paid to Thelen by CDOI, in

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exchange for the parties’ mutual release and waiver of all claims. 

Id at 19-20.

Marland alleges that Thelen used the litigation costs and

the portage as a pretense to get Marland to reduce his share of the

recoveries from the litigation. Doc #72 at 37. Marland alleges he

was coerced into signing the December 2002 agreement through

intentional misrepresentations and inadequate respresentation of

his interests by Thelen. Id at 37-39.

Thelen claims that, in reliance on the December 2002

agreement, it continued to expend time and resources on the

litigation and ultimately succeeded in obtaining nearly $1 billion

in settlements and judgments. Doc #78 at 20. Thelen has paid, and

Marland has accepted, over $19 million pursuant to the terms of the

December 2002 agreement. Id.

On February 13, 2006, Marland commenced an arbitration

proceeding against Thelen in New York City, asserting that the

December 2002 agreement is not fair and is unenforceable and that

the release and waiver provisions of that agreement are void. Id. 

Marland alleges that the December 2002 agreement never went into

effect and that the February 1999 and June 1999 agreements remain

valid and binding. Doc #72. Marland claims that it had an

attorney-client relationship with Thelen until February 4, 2005. 

Doc #102, Ex A.

Thelen initiated this action against Marland, seeking to

enforce the December 2002 agreement and to enjoin Marland from

pursuing the New York arbitration. Doc ##1, 11. Thelen maintains

that its attorney-client relationship with Marland ended in 2002. 

Supra.

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B

Thelen claims that its attorneys on the CDOI case and its

executive committee sought and gave legal advice internally in

connection with the litigation. Doc #98 at 2, 6-10. This included

communications with the firm’s general counsel, Wynne Carvill. Id. 

According to Thelen, Carvill gathered facts, analyzed legal issues,

advised firm management of its legal options and represented the

firm in its negotiations with Marland and CDOI, as the parties

worked toward new agreements in 2002. Id.

Carvill was appointed to the bench and left Thelen in

November 2003. Thelen’s current general counsel is Robert Blum. 

Until Marland commenced the arbitration proceeding against Thelen

in February 2006, Blum was Thelen’s “only litigation counsel.” Doc

#101 at 7. 

C

Marland sought leave of court on November 21, 2006,

December 1, 2006 and December 18, 2006 to bring a discovery motion

regarding (1) electronic discovery requests, (2) testimony of

Thelen’s 30(b)(6) witnesses, and (3) Thelen’s privilege log. Doc

##66, 77, 87. At the hearing on January 3, 2007, the parties

reported that they had resolved the electronic discovery dispute. 

The parties also agreed that a motion on Thelen’s FRCP 30(b)(6)

witnesses was premature. The court requested additional briefing

on the privilege log issues.

The parties submitted simultaneous opening briefs on

January 11, 2007. Doc ##98, 99. The parties submitted

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simultaneous reply briefs on January 16, 2007. Doc ##101, 103. 

The matter was heard on January 18, 2007.

D

The privilege log identifies 64 documents for which

Thelen asserts attorney-client privilege, work product privilege,

or both. Doc #93. The documents contain communications between

and among Carvill, Thelen staff working at the direction of

Carvill, members of Thelen’s executive committee, Gary Fontana and

Karl Belgum (the lead attorneys on the CDOI case), and Robert Blum

and Stephen O’Neal (Thelen partners). Doc #98 at 6-10.

According to Thelen, documents 1-10, 12, 14, 25-31, 33-

34, 50-51, and 57-64 “show Carvill providing information and legal

analysis of various terms under discussion, answering questions

posed by management, analyzing Thelen’s legal options in light of

Marland’s admitted destruction of key documents, and analyzing the

potential ramifications of not reaching a new agreement.” Id at 7.

According to Thelen, documents 11, 13, 15-19, 20, 24, 35,

38-43, 47-48, and 52-56 “reflect Carvill’s efforts to advise 

Thelen management regarding the progress of negotiations with CDOI

over the terms of an amendment to the CDOI-Thelen fee agreement and

the potential consequences of failed negotiations.” Id at 8. 

These documents “show Carvill providing information and legal

analysis of various terms under discussion, answering questions

posed by management, analyzing the potential specifications of

CDOI’s proposals, and of not agreeing to an amendment at all.” Id

at 8-9.

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According to Thelen, document 46 is a memo from Carvill

to the executive committee providing advice on a partner’s

suggestion that the firm withdraw from its representation of RoNo

and CDOI. Id at 9. Document 9 is an email from the same partner

to Carvill asking for Carvill’s legal opinion on the February 1999

agreement and the June 1999 fee sharing agreement. Id. Document

49 is an email from Blum to Carvill, various firm partners, and the

executive committee providing analysis on an Attorney General

memorandum that claimed that Thelen had a conflict of interest in

representing RoNo and CDOI. Id. Documents 21-23 and 36-37 are

emails from Belgum to Carvill asking about the agreements Carvill

had negotiated in 2002 and 2003. Id at 10.

According to Thelen, documents 32, 44, and 45 are emails

among Carvill and others at the firm discussing negotiation of the

new fee agreement with CDOI. Doc #93.

Thelen has not logged certain Blum documents, containing

attorney-client communications and attorney work product, created

after February 5, 2005, when Marland terminated Thelen. Doc #101

at 6-7. In addition to seeking an order compelling production of

the 64 logged documents, Marland seeks an order directing Thelen to

individually log the Blum documents. Doc #99 at 8.

E

Just prior to and during the hearing on Thelen’s

privilege log, the parties raised two additional discovery

disputes.

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1

One of these new disputes stems from Thelen’s deposition

of Marland’s European counsel, Philippe Brunswick. Brunswick is a

named cross-defendant in this action. On January 12, 2007, Thelen

deposed Brunswick in New York City. Doc #104 at 1. According to

Thelen, just before the deposition commenced, Brunswick provided

Thelen with a letter from the Paris Bar stating that Brunswick

would be committing a breach of French secrecy and confidentiality

rules should he testify regarding any element or fact relating to

his representation of any client. Id at 2. Based on this letter,

Brunswick refused to answer any questions about Thelen and the ELIC

litigation. Id. Thelen seeks a court order compelling Brunswick’s

deposition testimony. Id. The parties, including Brunswick’s

counsel, have submitted letter briefs on this issue. Doc ##104,

107, 113.

2

The other recent discovery dispute involves the

inadvertent production of certain documents by Marland’s counsel,

Andrew Hayes (“Hayes”).

Specifically, during the January 2007 Brunswick

deposition mentioned above, Thelen’s counsel sought to use a

document that Marland had produced in October 2006. Doc #106-1 at

1. The document was a letter dated August 27, 2002 from Brunswick

to Marland and Francois Chateau (Marland’s other European counsel). 

Id. Hayes claimed that the letter was privileged and inadvertently

produced. Id. 

Prior to this, there had been three other occasions where

Hayes claimed that his office had inadvertently produced one or

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more privileged documents. Id. Accordingly, following the

Brunswick deposition, both sides decided to investigate the

discrepancies in the defense production. Doc #112-1, Exs 17-18. 

Hayes reports that, following the Brunswick deposition, he

discovered for the first time that his copy service had erroneously

sent all of Marland’s privileged documents to Thelen’s counsel,

Keker and Van Nest. Doc #107 at 1. 

Thelen now seeks an order compelling production of the

August 27 Brunswick letter. Doc #106-1. Marland seeks sanctions

against Thelen including disqualification of Keker for their

alleged misconduct in handling the inadvertently produced

documents. Doc #107. The parties have briefed these issues by

letter. Doc ##106-1, 107, 111-1, 114-1. 

II

Thelen’s Privilege Log Documents

Federal courts sitting in diversity apply the law of the

forum state on attorney-client privilege issues but apply federal

common law to attorney work product issues. Bank of the West v

Valley Nat Bank of Arizona, 132 FRD 250, 251 (ND Cal 1990). 

In California, the attorney-client privilege is codified

in Cal Evid Code § 954 and specifies that, subject to certain

exceptions, “the client * * * has a privilege to refuse to

disclose, and to prevent from disclosing, a confidential

communication between client and lawyer if the privilege is claimed

by * * * the holder of the privilege * * *.” “Confidential

communication is defined as including ‘a legal opinion formed and

the advice given by the lawyer in the course of that [attorneyCase 3:06-cv-02071-VRW Document 130 Filed 02/21/07 Page 11 of 25
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client] relationship.’ * * * [T]he attorney-client privilege

applies to confidential communications within the scope of the

attorney-client relationship even if the communication does not

relate to pending litigation; the privilege applies not only to

communications made in anticipation of litigation, but also to

legal advice when no litigation is threatened.” Roberts v City of

Palmdale, 5 Cal 4th 363, 371 (1993) (internal citations omitted).

“At its core, the work-product doctrine shelters the

mental processes of the attorney, providing a privileged area

within which he can analyze and prepare his client's case.” In re

Grand Jury Subpoena, 357 F3d 900, 907 (9th Cir 2004). “[T]he work

product doctrine only attaches to documents prepared in

anticipation of litigation or for use in trial.” Hickman v Taylor,

329 US 495, 511-12 (1947); FRCP 26(b)(3).

 A

Assuming that the communications at issue reflect

privileged attorney-client communications as defined by California

law, the issue is whether the attorney-client privilege applies

where a law firm is attorney to both an outside client and to

itself. Thelen argues that it does, citing United States v Rowe,

96 F3d 1294 (9th Cir 1996). 

In Rowe, a law firm senior partner assigned associates at

the firm to investigate the conduct of another of the firm’s

attorneys in handling client funds. When the government attempted

to question the associates in connection with a grand jury

investigation, the law firm claimed attorney-client privilege. 

After the trial court ordered the associates to testify, the court

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of appeals held that the privilege could apply to intra-firm

communications. While Thelen relies on Rowe here, the case

involved the assertion of privilege against a third party. Rowe

does not address whether the attorney-client privilege can be

asserted against the firm’s then-current client.

Thelen cites no case in which an intra-firm communication

relating to the firm’s representation of a client was withheld from

the client under a claim of privilege. The court finds In re

Sunrise Sec Litig, 130 FRD 560 (ED Pa 1989) instructive. 

In re Sunrise was multidistrict litigation arising out of

the collapse of the Sunrise Savings and Loan Association. One of

the defendants was a Philadelphia law firm that had served as

Sunrise's general counsel. An issue before the court was whether

the firm had properly withheld from discovery on the ground of the

attorney-client privilege a number of documents to and from lawyers

in the same firm who had consulted with each other during the time

when the firm was general counsel to Sunrise and after the Sunrise

litigation against the firm had been instituted. The court

recognized the theoretical existence of an attorney-client

privilege between the law firm as attorney and itself as client. 

The court held, however, that:

[A] law firm’s consultation with in house counsel may

cause special problems which seldom arise when other

businesses or professional organizations consult their in

house counsel. A law firm’s representation of a client,

and its ability to meet its ethical and fiduciary

obligations to that client, may be affected by its

representation of another client, even if the second

client is the law firm itself. So, for example, when a

law firm seeks legal advice from its in house counsel,

the law firm’s representation of itself (through in house

counsel) might be directly adverse to, or materially

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limit, the law firm’s representation of another client,

thus creating a prohibited conflict of interest.

Id at 595. The court ordered in camera inspection of individual

documents to determine “if the communication implicates or creates

a conflict between the law firm’s fiduciary duties to itself and

its duties to the client seeking to discover the communications.”

Similarly in Veruslaw Inc v Stoel Rives, 127 Wash App

309, 334 (2005), a legal client sued a law firm for malpractice,

and the firm asserted privilege over documents concerning legal and

ethical issues in representing the client, created during the

representation. The court held that whether documents relating to

advice to one attorney given by other members of the firm were

covered by attorney-client privilege required in camera review to

determine whether there was a conflict between the firm’s own

interests and its fiduciary duty to the client.

Based on these authorities, the court grants Marland’s

request to order Thelen to produce the documents listed in its

privilege log. The logged documents relate to the Marland

representation and were created during the Marland representation. 

While Thelen states that some of the documents pertain to the CDOI

representation, Thelen represented Marland and CDOI for the same

purpose; and the interests of Thelen, CDOI and Marland intertwined. 

As a result, all of these documents implicate or affect Marland’s

interests, and Thelen’s fiduciary relationship with Marland as a

client lifts the lid on these communications. Accordingly, the

court orders Thelen to produce all the logged documents other than

those that fall within the narrow exception discussed next.

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The court recognizes that law firms should and do seek

advice about the their legal and ethical obligations in connection

with representing a client and that firms normally seek this advice

from their own lawyers. Indeed, many firms have in-house ethics

advisers for this purpose. A rule requiring disclosure of all

communications relating to a client would dissuade attorneys from

referring ethical problems to other lawyers, thereby undermining

conformity with ethical obligations. Such a rule would also make

conformity costly by forcing the firm either to retain outside

counsel or terminate an existing attorney-client relationship to

ensure confidentiality of all communications relating to that

client. This court declines to follow such a strict rule,

preferring one that is consistent with a law firm in-house ethical

infrastructure. Accordingly, Thelen is to produce some but not

all communications in which a Thelen lawyer seeks or gives advice

on the firm’s ethical obligations to Marland. 

Specifically, while consultation with an in-house ethics

adviser is confidential, once the law firm learns that a client may

have a claim against the firm or that the firm needs client consent

in order to commence or continue another client representation,

then the firm should disclose to the client the firm’s conclusions

with respect to those ethical issues. See ABA Model Rule of Prof

Conduct 1.7. See also NY Eth Op 789, 2005 WL 3046319 at 4. 

In sum, Thelen must produce the documents listed on its

privilege log except for certain documents reflecting consultations

between Thelen lawyers on the firm’s ethical and legal obligations

to Marland. Regarding the consultations, Thelen must produce

certain conclusions of those consultations: Thelen must produce any

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communications discussing claims that Marland might have against

the firm or discussing known errors in its representation of

Marland. Thelen must produce any communications discussing known

conflicts in its representation of Marland or other circumstances

that triggered Thelen’s duty to advise Marland and obtain Marland’s

consent. Conflicts include any representation – whether of Thelen

itself, CDOI, or another – adversely implicating or affecting the

interests of Marland, when Thelen was receiving information from

and/or providing legal advice to its own lawyers while at the same

time continuing to represent Marland. 

Finally, the court notes that, while the logged documents

extend through 2003, the parties disagree over when their attorneyclient relationship ended. The court also notes that this issue

relates in part to the merits of the case. Thelen argues that the

attorney-client relationship ended “after” August 30, 2002, which

the court presumes is September 1, 2002. Doc #98 at 5. Marland

argues that the relationship lasted until 2005 on the grounds that

the 2002 agreement, which purportedly terminated the prior

relationship, is invalid and unenforceable. Doc #102, Ex A. The

court finds that Marland’s argument is neither frivolous nor made

for an improper purpose. Accordingly, for purposes of this motion

only, and without reaching the merits of the underlying claims, the

court orders production of all the logged documents, subject to the

limited exception described above. The court will refer this

dispute to a United States Magistrate Judge to review in camera all

of Thelen’s logged documents and determine which ones should be

produced to Marland, based on this directive. 

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B

The court notes that Thelen has asserted two privileges

for most of the logged documents: attorney-client and work product. 

While the above cases only address attorney-client privilege, the

court finds the same issues of conflict pertain to the work product

protection:

Like the attorney-client privilege, protection afforded

by the work-product doctrine is not absolute. Clearly,

lawyers cannot cloak themselves in its mantle when their

mental impressions and opinions are directly at issue.

The doctrine does not apply where a client, as opposed to

some other party, seeks discovery of the lawyer's mental

impressions. It cannot shield a lawyer's papers from

discovery in a conflict of interest context anymore than

can the attorney-client privilege.

Koen Book Distributors, Inc v Powell, Trachtman, Logan, Carrle,

Bowman & Lombardo, PC, 212 FRD 283, 286 (ED Pa 2002) (internal

citations omitted) (Court ordered production of firm’s

communications to counsel it retained after client threatened legal

malpractice proceedings where firm had continued to represent

client). Similarly, the court finds that Thelen’s logged documents

should be produced here, subject to the above guidelines.

III

The Blum Documents

Under FRCP 26(b)(5):

When a party withholds information otherwise discoverable

under these rules by claiming that it is privileged or

subject to protection as trial-preparation material, the

party shall make the claim expressly and shall describe

the nature of the documents, communications, or things

not produced or disclosed in a manner that, without

revealing information itself privileged or protected,

will enable other parties to assess the applicability of

the privilege or protection.

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Accordingly, Marland’s request to direct Thelen to log Blum

documents created between February 4, 2005 and the commencement of

the New York arbitration proceeding is GRANTED. The court also

DIRECTS Marland individually to log otherwise responsive documents

for which it is claiming privilege for this time period. 

IV

Brunswick Testimony

The court lacks jurisdiction to compel Brunswick’s

testimony at this time. The deposition subpoena issued from the

Southern District of New York, and the deposition occurred in New

York City. Doc #113. Under FRCP 45(a)(2), a motion to compel

concerning a subpoena must be presented to the court for the

district in which the deposition would occur. See Adv Comm note to

1991 amendment (“[T]he court in whose name the subpoena issued is

responsible for its enforcement.”) Thelen does not dispute that

this court is unable to grant the relief it requests. Accordingly,

the court DENIES Thelen’s request that it issue an order compelling

Brunswick’s testimony, although the court does not foreclose

reconsideration of the issue at a later time upon procedurally

proper request.

V

Marland’s Inadvertently Produced Documents

Last, the court addresses both parties’ requests

surrounding Marland’s inadvertently produced documents, including

the August 27, 2002 Brunswick letter.

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A

Thelen’s Request to Compel Brunswick Letter

Thelen seeks an order compelling production of the

Brunswick letter. Thelen contends that the Brunswick letter is not

privileged because: (1) Marland’s delay in asserting the privilege

and failure to include the document on his privilege log created a

waiver, and (2) the crime-fraud exception to the attorney-client

privilege applies. The court need only address Thelen’s first

argument to conclude that it is correct. 

Thelen states that Marland’s counsel never identified

Brunswick’s letter “on any version of Marland’s privilege log: not

the log produced on October 3; not the draft revised log produced

on October 27, and not the second revised log produced on January

2, 2007.” Doc #111-1 at 6. Marland’s counsel does not dispute

that he never logged this document and offers no explanation. 

As stated above, FRCP 26(b)(5) requires a detailed

showing to withhold discovery on privilege grounds. The law is

well settled that failure to produce a privilege log or production

of an inadequate privilege log may be deemed waiver of the

privilege. See, e g, Burlington Northern & Santa Fe Ry Co v US

Dist Court for Dist of Mont, 408 F3d 1142 (9th Cir 2005) (railroad

waived discovery privileges claimed in privilege log it filed in

response to request for production of documents in environmental

litigation, where railroad filed privilege log five months after

the document request, rather than within the 30-day time limit for

filing written response to discovery request, was a sophisticated

corporate litigant and a repeat player in environmental lawsuits

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and regulatory action involving site that was subject of the suit,

and made substantive changes to privilege log after producing it);

Universal City Development Partners, Ltd v Ride & Show Engineering,

Inc, 230 FRD 688 (MD Fla 2005) (Litigant waived attorney-client

privilege for documents it produced where litigant did not provide

privilege log or generally describe documents to which it asserted

privilege until eight months after written response was due, log

failed to identify capacity of many recipients and did not provide

sufficient information to assess claim of privilege, litigant's

counsel reviewed all 13,000 pages of documents in single evening,

and litigant did not review production after it learned that one

privileged document had been turned over to opponent to determine

whether other privileged documents had been produced.)

Weighing all the factors here, the court finds that

Marland has waived any privilege for the Brunswick letter. Marland

asserts that all of its privileged documents were inadvertently

produced, Doc #107 at 1, and that the bates numbers for these

documents range from 1 to 533. Doc #115 ¶4. Thelen states that

only 24 of these documents appear on the privilege log. Doc #111-1

at 2. Hayes does not dispute that he failed to log the additional

documents and gives no explanation. Moreover, Hayes was put on

notice at least three times prior to the Brunswick deposition that

he had produced privileged documents and that there were

discrepancies between what Keker received and what Hayes intended

Keker to receive. Doc #111-1 at 3-4. Specifically, Brunswick’s

deposition was the third consecutive deposition conducted by Thelen

in which Hayes asserted that a privileged document was

inadvertently produced. Even prior to that, Keker attorneys had

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notified Hayes that they had found what appeared to be two

privileged defense documents. Id at 3. Keker contends that it

regularly prompted Hayes to send a revised privilege log and that

Hayes revised his privilege log twice. Id at 4, 6. Yet Hayes

never logged the Brunswick letter. Id at 6. Hayes does not

dispute any of this. The court therefore finds that Marland failed 

timely and adequately to make his objections.

The court also notes that, while Hayes reports that he

inadvertently produced all of Marland’s privileged documents,

Marland does not move to compel return of those documents. Doc

##107, 114-1. Rather, Marland seeks sanctions and mentions no

other relief. Id. Accordingly, the court finds that Marland has

waived any privilege claim over the Brunswick letter.

B

Marland’s Requests for Sanctions Including Disqualification of

Thelen’s Counsel

Marland seeks an order imposing sanctions on Thelen

including disqualification of Keker for alleged misconduct in

Keker’s handling of the inadvertently produced documents. Doc

##107, 114-1. Marland contends that, based on the scope of

Marland’s privilege claims regarding communications from Brunswick,

Keker knew that Marland had produced many privileged documents and

failed to comply with its ethical obligation to promptly notify

Marland’s counsel and refrain from examining the materials. Doc

#114-1 at 1-2. The court disagrees. 

Marland urges the court to apply ABA Comm on Ethics and

Prof Responsibility, Formal Op 92-368, which states:

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A lawyer who receives materials that on their face appear

to be subject to the attorney-client privilege or

otherwise confidential, under circumstances where it is

clear they were not intended for the receiving lawyer,

should refrain from examining the materials, notify the

sending lawyer and abide the instructions of the lawyer

who sent them.

Doc #107.

Thelen points out that this opinion was withdrawn by the

ABA in 2005 and replaced with ABA Formal Ethics Opinion 05-437,

which states:

A lawyer who receives a document from opposing parties or

their lawyers and knows or reasonably should know that

the document was inadvertently sent should promptly

notify the sender in order to permit the sender to take

protective measures. To the extent that Formal Opinion

92-368 opined otherwise, it is hereby withdrawn.

Doc #111-1.

Under either authority, the first question is whether the

receiving lawyer had reason to know that the documents were subject

to a claimed privilege. Marland’s only argument is that Keker knew

Marland was asserting privilege over communications from Marland’s

European counsel, including Brunswick, that were not shared with

Thelen. Doc #114-1 at 1-2, 5-6. The court finds that blanket and

general objections do not provide sufficient detail about the

documents in this case in order to trigger the obligations under

the foregoing ethical rule. This is why FRCP 26(b)(5) requires a

detailed showing to withhold discovery on privilege grounds. See

Universal City Development Partners, Ltd v Ride & Show Engineering,

Inc, 230 FRD 688 (MD Fla 2005). Indeed here, Thelen points out

that Marland had produced nearly 800 pages of communications

between and among Brunswick, Marland, and Chateau. Doc #112-1 at

8.

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Even as to the 24 inadvertently produced documents that

Marland did log, the court cannot find an ethical violation. 

Marland did not provide bates numbers on its log. Id at 7. 

Marland cites no authority, and the court knows of none, requiring

a receiving party to cross-check documents produced against the

producing party’s privilege log. Nonetheless, where Keker became

aware of logged documents that had been produced, it notified Hayes

immediately. Id at 2. Following the Chateau deposition, the

second consecutive deposition where Hayes asserted that a

privileged document was inadvertently produced, Keker emailed Hayes

stating: “You have indicated at various times that your office

inadvertently produced one or more privileged documents from Mr

Marland. In order to be sure we are understand [sic] fully the

documents you believe are privileged and were inadvertently

produced, please provide us promptly with a list of these

documents, and a revised privilege log.” Doc #112-1 Ex 13. Hayes

responded: “I am not aware of any other inadvertently-produced

documents.” Id. 

Finally, following the Brunswick deposition, Keker did

undertake its own investigation into the discrepancies by crosschecking Marland’s production against the log and then promptly

notifying Hayes that it had found 24 logged documents in the

production. Doc #112-1 at 8-9. Because the log did not include

bates numbers, Keker associates and staff were forced to crosscheck the documents using the date, author, recipient, and

description information on the log, taking several days. Id.

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Marland does not dispute this. “We note that whenever a

lawyer seeks to hold another lawyer accountable for misuse of

inadvertently received confidential materials, the burden must rest

on the complaining lawyer to persuasively demonstrate inadvertence. 

Otherwise, a lawyer might attempt to gain an advantage over his or

her opponent by intentionally sending confidential material and

then bringing a motion to disqualify the receiving lawyer.” State

Compensation Ins Fund v WPS, Inc, 70 Cal App 4th 644, 657 (1999). 

Accordingly, the court does not find an ethical violation in Thelen

or Keker’s handling of the documents and DENIES Marland’s request

for sanctions. 

VI

For the reasons discussed above, the court will refer

this matter to Chief United States Magistrate Judge Larson for

random assignment to a United States Magistrate Judge. Thelen

shall within two days of entry of this order submit all of its

logged documents under seal to the assigned magistrate judge, who

is directed to review the documents in camera as soon as

practicable. The assigned magistrate judge shall determine which,

if any, of the documents can be withheld based on the limited

exception described above. The court ORDERS Thelen to produce to

Marland all documents falling outside of the exception as

determined by the magistrate judge. Such production shall be made

within two days of the magistrate judge’s determination. 

Additionally, as discussed above, the court DIRECTS both

Marland and Thelen to revise their privilege logs to include

documents created between February 4, 2005 and the commencement of

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the New York arbitration. The court DENIES without prejudice

Thelen’s request for an order compelling Brunswick’s deposition

testimony. The court GRANTS Thelen’s request to compel production

of the August 27, 2002 Brunswick letter and ORDERS Marland to

produce that letter. The court DENIES Marland’s request for

sanctions including disqualification of Thelen’s counsel.

The court has received Thelen’s letter of February 20,

2007, Doc #128, requesting a conference regarding a dispute over

the continuation of Marland’s deposition. The parties are to

appear for a conference on February 23, 2007 at 9:00 am. 

SO ORDERED.

 

VAUGHN R WALKER

United States District Chief Judge

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