Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-almd-3_06-cv-01113/USCOURTS-almd-3_06-cv-01113-2/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 42:1983 Civil Rights Act

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IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF ALABAMA

EASTERN DIVISION

HOPE FOR FAMILIES & COMMUNITY )

SERVICE, INC., et al., )

 )

Plaintiffs, )

 )

v. ) CASE NO. 3:06-CV-1113-WKW

 ) [WO]

DAVID WARREN, et al., )

 )

Defendants. )

MEMORANDUM OPINION AND ORDER

This cause is before the court on Plaintiffs’ Objections to the Magistrate Judge’s

Memorandum Opinion and Order. (Doc. # 195.) Defendants Macon County Greyhound

Park, Inc., d/b/a VictoryLand and Milton McGregor jointly filed a Response to Plaintiffs’

objections (Doc. # 202), as did Defendant David Warren (Doc. # 203). Non-parties Gray,

Langford, Sapp, McGowan, Gray, Gray & Nathanson; Fred D. Gray; and Fred D. Gray Jr.

also filed a Response to Plaintiffs’ Objections to Memorandum Opinion and Order. (Doc.

# 201.) Plaintiffs filed a Reply in Support of their Objections to Memorandum Opinion and

Order (Doc. # 206), and upon Plaintiffs’ motion (Doc. # 220) the court permitted additional

briefs to be filed (Doc. # 223). (See Docs. # 221, 226 & 229.)

Also before the court are attorney-client privilege and related issues which the

Magistrate Judge ordered the parties to brief. (Doc. # 188.) Multiple briefs were filed in

response to that Order (Docs. # 192, 193, 194, 197, 198, 220, 221, 226 & 229), but were not

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 1 of 80
 The background is recited in more detail in the prior Memorandum Opinion and Order (Doc. 1

# 144), in which this court denied Defendants’ motion to dismiss Plaintiffs’ claims for conspiracy under

42 U.S.C. § 1983 and the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1962(c) and

(d) (“RICO”), and state-law claims for tortious interference.

2

ripe for the Magistrate Judge’s consideration before the reference of discovery matters was

withdrawn (Doc. # 207). 

After careful consideration of the arguments of counsel, the relevant law and the

pertinent portions of the record, the court finds that Plaintiffs’ Objections to the Magistrate

Judge’s Memorandum Opinion and Order are due to be sustained in part and overruled in

part. Rulings on the pending attorney-client privilege and related issues also are included in

this opinion. 

I. BACKGROUND

This case finds its origins in Amendment 744 to the Alabama Constitution, which

authorized nonprofit organizations to operate bingo gaming in Macon County, Alabama.

Ala. Const. 1901 amend. No. 744. Amendment 744, approved by statewide ballot on or 1

about November 4, 2003 (5th Am. Compl. ¶ 32 (Doc. # 185)), requires the sheriff of Macon

County to promulgate and enforce “rules and regulations for the licensing and operation of

bingo games within the county.” Ala. Const. 1901 amend. No. 744. Defendant Macon

County Greyhound Park, Inc., which does business as VictoryLand (“VictoryLand”),

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 2 of 80
 The electronic bingo scheme created and implemented by Defendant David Warren (“Sheriff 2

Warren”) requires licenses to be issued only to charities, which in turn contract with an operator to run

electronic bingo gaming. VictoryLand operates electronic bingo at its dog-track location for sixty

charities which are license-holders. (5th Am. Compl. ¶ 60 (alleging that as of May 13, 2008, “all sixty

Class B Bingo Licenses have been issued to non-profit organizations affiliated with VictoryLand”).) 

3

presently operates the only electronic bingo parlor in Macon County. Defendant Milton 2

McGregor (“Mr. McGregor”) is VictoryLand’s president and majority shareholder. (5th Am.

Compl. ¶¶ 25-26.) Plaintiff Lucky Palace, LLC (“Lucky Palace”), also desires to conduct

electronic bingo operations in Macon County, but is precluded from doing so under the most

recent amendments to the bingo rules and regulations, ostensibly written by Sheriff Warren.

Sheriff Warren is the sheriff of Macon County, Alabama, and is sued in his official capacity.

(5th Am. Compl. ¶¶ 1, 24.) Joining Lucky Palace as plaintiffs in this lawsuit are fifteen

Macon County nonprofit organizations (the “Charities”) which have contracted with Lucky

Palace to conduct electronic bingo at a presently unbuilt location in Macon County owned

by Lucky Palace. (5th Am. Compl. ¶¶ 1, 6-21, 58.) 

The Fifth Amended Complaint also identifies and implicates three “relevant nonparties.” (5th Am. Compl. ¶¶ 27-29.) They are: (1) the law firm of Gray, Langford, Sapp,

McGowan, Gray, Gray & Nathanson, P.C. (“Gray Law Firm”), an Alabama professional

corporation; (2) Fred D. Gray Jr. (“Mr. Gray Jr.”), an attorney and a shareholder in the Gray

Law Firm; (3) Fred D. Gray (“Mr. Gray”), an attorney who is Mr. Gray Jr.’s father. Mr. Gray

not only is a shareholder in the Gray Law Firm, but also is a shareholder in VictoryLand (5th

Am. Compl. ¶¶ 27-29), and has represented VictoryLand on non-bingo matters since

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 3 of 80
 The difference between references to Mr. Gray and Mr. Gray Jr. requires careful attention. 

3

Because of the complexity of the Grays’ relationships, the reader should beware. To illustrate, Mr. Gray

Jr. represents Sheriff Warren who regulates a business in which his father, Mr. Gray, is a shareholder and

for which Mr. Gray serves as legal counsel; Mr. Gray and Mr. Gray Jr. also are law partners and

shareholders in the Gray Law Firm, not to mention father and son; both have appeared for and represent

Sheriff Warren in this case, and both are named in the Fifth Amended Complaint as interested nonparties. 

4

approximately 1983 (McGregor Dep. 198 (Ex. A to Doc. # 221); Gray Aff. 2 (Ex. A to Doc.

# 62).) Mr. Gray Jr. is counsel to Sheriff Warren and in that capacity, rendered legal advice

regarding all versions of the bingo rules and regulations promulgated by Sheriff Warren.3

(Gray Aff. 2; Warren Dep. 52-55, 69-70 (Doc. # 168); 5th Am. Compl. ¶¶ 54, 56.)

VictoryLand operates under those rules and regulations as enforced by Sheriff Warren.

It is alleged that “VictoryLand and [Mr.] McGregor, through unlawful influence [of

Mr. Gray Jr.], caused Sheriff Warren to arbitrarily promulgate unreasonable rules and

regulations for the operation of bingo in Macon County that allowed only one entity –

VictoryLand – to operate electronic bingo games.” (5th Am. Compl. ¶ 3.) It is further

alleged that, although Mr. Gray Jr. is a private attorney, he acted as a “public servant” when

advising Sheriff Warren concerning the promulgation and amendment of the rules and

regulations governing electronic bingo in Macon County. (5th Am. Compl. ¶¶ 2, 28, 36-39,

44, 54, 61, 68-112.) 

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 4 of 80
 See Rules and Regulations for the Licensing and Operation of Bingo Games in Macon County, 4

Alabama (“Rules & Regulations”), issued Dec. 5, 2003 (Ex. A to 5th Am. Compl.); First Amended and

Restated Rules and Regulations for the Licensing and Operation of Bingo Games in Macon County,

Alabama (“First Amended Rules”), issued June 2, 2004 (Ex. B to 5th Am. Compl.); Second Amended

and Restated Rules and Regulations for the Licensing and Operation of Bingo Games in Macon County,

Alabama (“Second Amended Rules”), issued Jan. 6, 2005 (Ex. C to 5th Am. Compl.). Throughout, the

court refers collectively to the Rules and Regulations and their amendments as “rules and regulations.”

 The nonprofit organizations that operate bingo at VictoryLand are Class B licensees, and 5

VictoryLand is a “‘qualified location’ for the holder of a Class B Bingo License.” (See, e.g., Rules &

Regulations at 3.) The rules and regulations also provide for “Class A” bingo licenses and “qualified

locations” for holders of Class A bingo licenses. (See, e.g., Rules & Regulations at 3.) “Class A”

licenses and “qualified location[s]” for Class A bingo operations concern “paper card bingo” (see, e.g.,

Rules & Regulations at 3), and are not at issue in this case.

5

Those rules and regulations have been amended twice by Sheriff Warren, with the

assistance of his counsel, Mr. Gray Jr. (5th Am. Compl. ¶¶ 54, 56; Warren Dep. 69-70.) It 4

is alleged that the amendments were implemented to solidify VictoryLand’s electronic bingo

monopoly. The First Amended Rules added a provision that “[n]o Class B Licensee shall be

authorized to operate bingo at any qualified location . . . unless a minimum of fifteen (15)

applicants shall first obtain a Class B License for such location.” (5th Am. Compl. ¶ 46.) 5

The Second Amended Rules included a new provision that “[a]t no time shall there be issued

and outstanding more than sixty (60) Class B Licenses for the operation of bingo in Macon

County.” (5th Am. Compl. ¶ 55.) As alleged, this provision was added with Sheriff

Warren’s knowledge that, at that time, forty-six Class B licenses “had been, or soon would

be, issued to non-profit organizations with contractual ties to . . . VictoryLand.” (5th Am.

Compl. ¶ 56.) The sixty-license maximum combined with the fifteen-license minimum

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 5 of 80
 There is one discovery matter upon which there has been agreement. All parties agreed upon 6

the terms and consented to the entry of a protective order (Doc. # 104) that the Magistrate Judge entered

on September 20, 2007 (Doc. # 105). The order provides, among other things, that “[d]ocuments and

materials designated as ‘CONFIDENTIAL’ shall be used solely for purposes of preparation and trial of

this lawsuit, and shall not be disclosed by either party or its counsel or any person acting on behalf of or

for either party or its counsel, for any purpose whatsoever other than the preparation and trial of this

action and any appeal which may ensue.” (Protective Order ¶ 3 (Doc. # 105).)

6

“foreclosed the operation of bingo games in Macon County at any location other than

VictoryLand.” (5th Am. Compl. ¶ 56.)

The parties and claims have evolved through a series of amendments to the complaint.

The Fifth Amended Complaint, which is the operative complaint, sets out the following

federal claims against Sheriff Warren, Mr. McGregor and VictoryLand: (1) denial of equal

protection in violation of the Fourteenth Amendment, as enforced by 42 U.S.C. § 1983, by

effectively denying Lucky Palace’s right to operate a Class B bingo facility and the Charities’

rights to obtain Class B bingo licenses, as allowed by Amendment 744 to the Alabama

Constitution (5th Am. Compl. ¶¶ 124-130); (2) 42 U.S.C. § 1983 conspiracy to deprive

Plaintiffs of equal protection (5th Am. Compl. ¶¶ 131-137); and (3) violations of substantive

and conspiracy provisions of RICO, 18 U.S.C. § 1962(c)-(d) (5th Am. Compl. ¶¶ 113-123),

including an alleged “ongoing pattern of violations of Alabama’s bribery statutes,” Ala. Code

§ 13A-10-60, et seq. (5th Am. Compl. ¶¶ 67-68). The complaint also alleges state-law

tortious interference claims against Mr. McGregor and VictoryLand. (5th Am. Compl.

¶¶ 138-150.) 

Discovery disputes have been legion in this litigation, which commenced December

18, 2006. Magistrate Judge Charles S. Coody entered a Memorandum Opinion and Order 6

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 6 of 80
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(Doc. # 187), attempting to resolve several disputes, but objections have abounded. Because

of the myriad objections and related discovery issues which emerged after the rulings, this

court withdrew the reference of discovery motions to the Magistrate Judge. (Doc. # 207.)

All pending discovery disputes are before the undersigned for resolution. At issue here are

Plaintiffs’ Objections to the Magistrate Judge’s Memorandum Opinion and Order (Docs.

# 187, 195). That opinion addressed one privilege issue (Doc. # 187), to which Plaintiffs

object (Doc. # 195). By separate order (Doc. # 188), the Magistrate Judge ordered briefing

on other privilege issues which now also are ripe for disposition.

II. STANDARD OF REVIEW AND GENERAL PRINCIPLES OF LAW

Pursuant to Rule 72(a) of the Federal Rules of Civil Procedure, the court must

consider timely objections to an order by a magistrate judge and modify or set aside any part

of the order that is clearly erroneous or contrary to law. Fed. R. Civ. P. 72(a); see also 28

U.S.C. § 636(b)(1)(A). A magistrate judge’s order is clearly erroneous when the reviewing

court is left “with ‘the definite and firm conviction that a mistake has been committed.’”

Rowlin v. Ala. Dep’t of Pub. Safety, 200 F.R.D. 459, 460 (M.D. Ala. 2001) (quoting

Germann v. Consol. Rail Corp., 153 F.R.D. 499, 500 (N.D.N.Y. 1994)). “The mere fact that

a reviewing Court might have decided the issue differently is not sufficient to overturn a

decision when there are two permissible views of the issue.” Merrill-Stevens Yacht Sales,

LLC v. Fr. Lurssen Werft, GmbH & Co., No. 07-61389-CIV, 2008 WL 2690798, at *2 (S.D.

Fla. July 2, 2008). 

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 7 of 80
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Given the issues presently at stake, some discussion of the rules governing the

discovery process is helpful at this point.

A. Discovery of Relevant, Non-Privileged Evidence; Protective Orders

Pursuant to Rule 26(b)(1) of the Federal Rules of Civil Procedure, the court has broad

discretion to ensure that parties “obtain discovery regarding any matter, not privileged, that

is relevant to any party’s claim or defense,” and “[f]or good cause, . . . may order discovery

of any matter relevant to the subject matter involved in the action.” Fed. R. Civ. P. 26(b)(1).

“Relevant information need not be admissible at the trial if the discovery appears reasonably

calculated to lead to the discovery of admissible evidence.” Id. “[I]f there is an objection

that the discovery goes beyond material relevant to the parties’ claims or defenses, the Court

. . . become[s] involved to determine whether the discovery is relevant to the claims or

defenses[.]” Fed. R. Civ. P. 26(b)(1), advisory committee’s note (2000 Amendment). If it

is not, the court must determine “whether good cause exists for authorizing it so long as it

is relevant to the subject matter of the action. The good-cause standard warranting broader

discovery is meant to be flexible.” Id. Rule 26(b)(1) is “highly flexible,” United States v.

Microsoft Corp., 165 F.3d 952, 959-60 (D.C. Cir. 1999), and, as a whole, the federal

discovery rules are to be construed broadly and liberally, Herbert v. Lando, 441 U.S. 153,

177 (1979).

The liberal discovery rules, however, do not automatically signify liberal

dissemination of acquired discovery. “In order to preserve the confidentiality of sensitive

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 8 of 80
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materials, a district court may regulate access to the information by issuing a protective order

pursuant to Rule 26(c).” In re Alexander Grant & Co. Litig., 820 F.2d 352, 355 (11th Cir.

1987) (citing Fed. R. Civ. P. 26(c)). While Rule 26(c) “contains no specific reference to

privacy or to other rights or interests that may be implicated, such matters are implicit in the

broad purpose and language of the Rule.” Seattle Times Co. v. Rhinehart, 467 U.S. 20, 35

n.21 (1984). The Rule 26(c) standard is “good cause,” Fed. R. Civ. P. 26(c), but “courts have

superimposed a somewhat more demanding balancing of interests approach to the Rule,”

Farnsworth v. Procter & Gamble Co., 758 F.2d 1545, 1547 (11th Cir. 1985). One of those

interests is the “‘the countervailing public interest[] which [is] sacrificed by [protective]

orders.’” Shingara v. Skiles, 420 F.3d 301, 308 (3d Cir. 2005) (quoting Pansy v. Borough

of Stroudsburg, 23 F.3d 772, 785 (3d Cir. 1994)).

B. Attorney-Client Privilege and Work-Product Privilege

1. Attorney-Client Privilege

Federal privilege law governs the application of the attorney-client privilege in this

case because the court has federal question jurisdiction over the subject matter. See Fed. R.

Evid. 501, advisory committee’s note (“In non-diversity jurisdiction civil cases, federal

privilege law will generally apply.”); see also United States v. Hankins, 581 F.2d 431, 438

n.13 (5th Cir. 1978) (“[S]tate law does not determine the scope of the attorney-client

privilege[;] . . . federal law supplies the rule of decision, and the federal common law

therefore determines the scope of the privilege.”); Lykken v. Brady, No. 07-4020, 2008 WL

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 9 of 80
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2077937, at *3-*4 (D.S.D. May 14, 2008) (“[W]here the issue is the discoverability of

evidence that is relevant to both the federal and the state claims, courts have consistently held

that federal law determines the existence and scope of any asserted privilege.” (collecting

cases)).

“The attorney-client privilege exists to protect confidential communications between

client and lawyer made for the purpose of securing legal advice.” In re Grand Jury

Proceedings 88-9, 899 F.2d 1039, 1042 (11th Cir. 1990) (internal quotation marks omitted).

The protection the privilege affords to communications between the attorney and client

applies where:

(1) the asserted holder of the privilege is or sought to become a client; (2) the

person to whom the communication was made (a) is [the] member of a bar of

a court, or his subordinate and (b) in connection with this communication is

acting as a lawyer; (3) the communication relates to a fact of which the

attorney was informed (a) by his client (b) without the presence of strangers

(c) for the purpose of securing primarily either (i) an opinion on law (ii) legal

services or (iii) assistance in some legal proceeding, and not (d) for the

purpose of committing a crime or tort; and (4) the privilege has been (a)

claimed and (b) not waived by the client.

In re Federal Grand Jury Proceedings 89-10, 938 F.2d 1578, 1581 (11th Cir. 1991) (internal

quotation marks omitted). “The party invoking the attorney-client privilege has the burden

of proving that an attorney-client relationship existed and that the particular communications

were confidential.” Bogle v. McClure, 332 F.3d 1347, 1358 (11th Cir. 2003) (internal

quotation marks and citations omitted). Hence, non-confidential communications are not

protected. “To determine if a particular communication is confidential and protected by the

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attorney-client privilege, the privilege holder must prove the communication was

‘(1) intended to remain confidential and (2) under the circumstances was reasonably

expected and understood to be confidential.’” Id. (quoting United States v. Bell, 776 F.2d

965, 971 (11th Cir. 1985)). The protections of the privilege also extend to communications

from client to attorney, see Upjohn Co. v. United States, 449 U.S. 383, 390 (1981) (“[T]he

privilege exists to protect not only the giving of professional advice to those who can act on

it but also the giving of information to the lawyer to enable him to give sound and informed

advice[.]”), but do not extend to the underlying facts which were communicated to the

attorney:

“A fact is one thing and a communication concerning that fact is an entirely

different thing. The client cannot be compelled to answer the question, ‘What

did you say or write to the attorney?’ but may not refuse to disclose any

relevant fact within his knowledge merely because he incorporated a statement

of such fact into his communication to his attorney.”

Id. at 395-96 (quoting Philadelphia v. Westinghouse Elec. Corp., 205 F. Supp. 830, 831

(E.D. Pa. 1962)).

2. Work-Product Privilege

The work-product privilege “protects from disclosure materials prepared by an

attorney acting for his client in anticipation of litigation.” In re Grand Jury Proceedings, 601

F.2d 162, 171 (5th Cir. 1979). Tracing the origins of the attorney work-product privilege to

a Supreme Court decision decided more than sixty years ago, the Eleventh Circuit reiterated

that “‘it is essential that a lawyer work with a certain degree of privacy, free from

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unnecessary intrusion by opposing parties and their counsel.’” Cox v. Adm’r U.S. Steel &

Carnegie, 17 F.3d 1386, 1421 (11th Cir.) (quoting Hickman v. Taylor, 329 U.S. 495, 510-11

(1947)), modified on other grounds, 30 F.3d 1347 (11th Cir. 1994). “This [privilege] is

distinct from and broader than the attorney-client privilege[] . . . ; it protects materials

prepared by the attorney, whether or not disclosed to the client, and it protects material

prepared by agents for the attorney.” In re Grand Jury Proceedings, 601 F.2d at 171. 

Federal Rule of Civil Procedure 26(b)(3) embodies the work-product privilege,

providing that “[o]rdinarily, a party may not discover documents and tangible things that are

prepared in anticipation of litigation or for trial by or for another party or its representative

(including the other party’s attorney, consultant, surety, indemnitor, insurer, or agent).” Fed.

R. Civ. P. 26(b)(3). Furthermore, “because the work product privilege looks to the vitality

of the adversary system rather than simply seeking to preserve confidentiality, it is not

automatically waived by the disclosure to a third party.” In re Grand Jury Subpoena, 220

F.3d 406, 409 (5th Cir. 2000). Like the attorney-client privilege, the party seeking to assert

the work-product privilege bears the initial burden of proof. In re Grand Jury Subpoena, 510

F.3d 180, 183 (2d Cir. 2007); United States v. Roxworthy, 457 F.3d 590, 593 (6th Cir. 2006).

Once that showing is made, the burden shifts, and “Rule 26(b)(3) . . . places a twofold burden

on the party seeking discovery. The [party] must show both substantial need and undue

hardship.” Castle v. Sangamo Weston, Inc., 744 F.2d 1464, 1467 (11th Cir. 1984) (citation

omitted).

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 12 of 80
 Although Lucky Palace and the Charities are represented by different counsel, they have joined 7

forces for purposes of filing their objections and related briefs addressing the pending privilege issues;

hence, references to “Plaintiffs” include Lucky Palace and the Charities. Hereafter, for ease of reference,

the court refers to the parties’ briefs by the docket numbers assigned by the Clerk’s Office.

13

III. DISCUSSION

A. Plaintiffs’ Objections to the Rulings of the Magistrate Judge

Relying on 28 U.S.C. § 636(b)(1)(A) and Rule 72(a) of the Federal Rules of Civil

Procedure, Plaintiffs raise seven objections to the Magistrate Judge’s Memorandum Opinion

and Order entered on May 15, 2008 (Doc. # 187). For housekeeping purposes, those 7

objections are: (1) the Magistrate Judge’s denial of Lucky Palace’s motion to compel

VictoryLand to answer interrogatories 9 and 10 (see Doc. # 142); (2) the denial of Lucky

Palace’s motion to compel VictoryLand to respond in full to document production requests

numbers 12 and 13 (see Doc. # 143); (3) the denial of the Charities’ motion to compel Mr.

McGregor to respond to document production request number 15 (see Doc. # 107); (4) the

denial of the Charities’ motion to compel VictoryLand to respond to document production

requests numbers 13, 14, 15 and 26 (see Doc. # 106); (5) the denial of Plaintiffs’ motions to

compel Mr. Gray Jr. (see Doc. # 134), Mr. Gray (see Doc. # 135), and the Gray Law Firm

(see Doc. # 136) to produce documents pursuant to Rule 45 subpoenas; (6) the grant of the

motion to quash Lucky Palace’s deposition notice of Mr. Gray Jr. (see Doc. # 150); and

(7) the denial of the Charities’ motion to compel Sheriff Warren to respond in full to

document production requests 30, 31, 32, 33, 34 and 36 (see Doc. # 42). (See generally Doc.

# 195.) The court addresses each objection in the subsections below.

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 13 of 80
 The specifics of the four requests at issue are as follows. In interrogatories 9 and 10, Lucky 8

Palace requests VictoryLand to state “annual gross revenues for” and “net profit from electronic bingo

gaming at Victory[L]and for the years 2003, 2004, 2005 and 2006.” (Doc. # 142-3.) In request number

12, Lucky Palace asks VictoryLand to “produce all documents, internal memos, notes, forecasts,

correspondence, e-mails, electronic filed information regarding all financial information for

[VictoryLand] regarding the operation of electronic bingo in Macon County, Alabama, from its inception

at Victory[L]and until the present which show gross revenues, payments, profit, payments to charities or

others.” (Doc. # 143-3 at 5-6.) In request number 15, the Charities request Mr. McGregor to “produce

any and all documents in [his] possession or control that reflect or relate to the revenue of Victory[L]and

including but not limited to financial statements, balance sheets, bank statements, profit reports and

income and expense reports for the time period January 1, 2003 to the present date.” (Doc. # 107-2.)

Lucky Palace’s request number 13 pertains to shareholder information and is discussed infra in

subsection III.A.3. 

14

1. The Magistrate Judge’s Denial of Plaintiffs’ Motions to Compel the

Discovery of Financial Information of Mr. McGregor and VictoryLand 

This subsection addresses Plaintiffs’ objections numbered (1), (2) and (3) pertaining

to the Magistrate Judge’s order prohibiting Plaintiffs from obtaining financial information

relating to VictoryLand. To summarize, Plaintiffs seek documents and answers to 8

interrogatories from Mr. McGregor and/or VictoryLand relating to VictoryLand’s annual

gross revenues and net profits for electronic bingo from 2003 to the present, and all financial

information for VictoryLand regarding the operation of electronic bingo in Macon County,

Alabama, from its inception at VictoryLand until the present that shows gross revenues,

profits, and payments to charities and others. Denying these requests, the Magistrate Judge

ruled:

The charities’ motion to compel McGregor (doc. # 107, request 15) asks

McGregor for all of VictoryLand’s financial information from 2003 to the

present. Lucky Palace’s motion to compel VictoryLand (doc. # 142) to answer

interrogatories 9 and 10 seeks annual gross revenues and profit for electronic

bingo gaming for 2003-2006. VictoryLand is a closely-held corporation which

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15

often are characterized as “incorporated partnerships,” and it is common

practice for them to pay a large percentage of their profits as salary. Lucky

Palace argues that the “profitability and volume of income from electronic

bingo gaming at VictoryLand go[] to the heart of the motive and intent of this

Defendant to seek to maintain and assure a monopoly in Macon County.” In

Nat’l Org. for Women, Inc. v. Scheidler, 510 U.S. 249, 262 (1994), the

Supreme Court held that “RICO contains no economic motive requirement.”

Thus, motive evidence cannot be relevant to the plaintiffs’ RICO claims.

However, the plaintiffs do assert the existence of a conspiracy, and a

conspiracy certainly may be proved by circumstantial evidence, that is,

evidence from which a jury reasonably could infer the existence of an

agreement to injure the plaintiffs.

No reasonable person and certainly no reasonable jury drawn from the

Eastern Division of this District could fail to know that VictoryLand is highly

profitable. The financial information which the plaintiff seeks merely would

quantify the magnitude of VictoryLand’s profitability. Lucky Palace argues

that revenue and profit information will show the “damages suffered by [it

from] this cabal’s effort to exclude all, but VictoryLand . . . ” (Pl’s. Mo.

Compel, doc. # 142 at 5). Remarkably, however, immediately preceding this

statement is Lucky Palace’s claim that it “is not in competition with

VictoryLand.” Id. If that be so, it is difficult to understand how a noncompetitor’s revenue and profits can quantify Lucky Palace’s damages. On

balance, the court concludes that while the revenue and profit information only

marginally supports the plaintiff’s claims, its slight evidentiary utility is far

outweighed by the intrusiveness and potential injury of the release of the

information about the operation of a closely-held corporation. The motions to

compel will be denied.

. . . .

2. Request # 12. In this request, Lucky Palace asks the court to order

VictoryLand to produce documents reflecting all financial information about

electronic bingo in Macon County from its inception at Victoryland until the

present showing gross revenues, payments, profit and payments to charities

and others. For the same reasons previously discussed above, the court will

deny the motion to compel this information.

(Doc. # 187 at 9-10.)

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 15 of 80
 If the parties cannot agree on a definition of “gross profits” as the term applies to a closely-held 9

corporation in the gaming business, the court will order the matter briefed. However, in its response,

VictoryLand shall fully define its method of arriving at “gross profits” by disclosing all the elements (but

not the values) of its formula.

16

Plaintiffs’ objections focus principally on the Magistrate Judge’s findings that the

requested financial information is of inconsequential relevancy (Doc. # 195 at 4-7), that the

financial information “‘merely would quantify the magnitude of VictoryLand’s profitability’”

(Doc. # 195 at 9) and that VictoryLand’s status as a closely-held corporation makes the

disclosure of the “requested information overly intrusive” (Doc. # 195 at 10). Responding,

Mr. McGregor and VictoryLand argue that the documents requested are irrelevant, amount

to trade secrets, and constitute confidential and proprietary information. They further

contend that the harm that disclosure of VictoryLand’s “trade secrets” would cause is not

eliminated by the protective order and “far outweighs” Plaintiffs’ need for the information.

(See Doc. # 202 at 3.) 

For the reasons to follow, the court finds that the Magistrate Judge’s denial of

Plaintiffs’ motions to compel disclosure of the requested financial information was, in part,

clearly erroneous and contrary to law. Specifically, this court will order Mr. McGregor

and/or VictoryLand to disclose to Plaintiffs the following information: (1) annual gross

receipts and annual gross profits of VictoryLand from electronic bingo from the inception 9

of VictoryLand’s electronic bingo operations to the present; and (2) all payments by

VictoryLand to its charities – to include the amounts, dates and payees, relating to electronic

bingo – from the inception of VictoryLand’s electronic bingo operations to the present. 

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17

a. Relevancy

The Magistrate Judge found that the financial information sought was relevant to the

motive of the named parties to enter into a conspiracy, but stopped there and concluded that

this limited relevancy was overshadowed by the “intrusiveness and potential injury of the

release of the information about the operation of a closely-held corporation.” (Doc. # 187

at 10.) The relevancy of the financial information to be ordered, however, extends beyond

that. 

First, to reiterate, relevant evidence is not confined to evidence admissible at trial, and

here the court finds that disclosure of the financial information, as noted above to include

annual gross receipts, annual gross profits and VictoryLand’s payments to charities, is

reasonably calculated to lead to the discovery of admissible evidence pertaining to the

commission of the predicate acts underlying Plaintiffs’ RICO claims, namely, “the bribery

of [Mr.] Gray, Jr.” (Doc. # 195 at 6-7). The requested information, viewed alone or in

connection with other evidence (e.g., changes in share values or shareholder distributions as

a result of increased profitability wrought by electronic bingo, changes in the number and

amounts paid to charities), may reveal to what extent, if any, electronic bingo benefitted Mr.

Gray, who undisputedly is a shareholder in VictoryLand, and, thus, whether any benefit to

Mr. Gray is valuable to his son, Mr. Gray Jr. Hence, evidence of VictoryLand’s profitability

could be admissible to prove the receipt of things of value by Mr. Gray Jr. in exchange for

rules and regulations granting an alleged bingo monopoly to VictoryLand. 

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18

Second, because Plaintiffs have alleged that “the Enterprise was formed and

conducted to increase VictoryLand’s profitability” (Doc. # 195 at 9), the financial

information may reveal that VictoryLand, in fact, was or became more profitable because of

electronic bingo, thus, suggesting that it had a motive to participate in the alleged enterprise.

Third, the court finds that the information may lead to the discovery of admissible

evidence on Plaintiffs’ tortious interference claims, specifically, to evidence pertaining to

whether the market for electronic bingo in Macon County profitably would sustain multiple

electronic bingo facilities, evidence which Plaintiffs could offer to support their assertion that

they reasonably expected to profit from operating an electronic bingo facility in Macon

County. Fourth, the court cannot conclude that the requested information is not relevant to

Plaintiffs’ claims for damages. 

Moreover, the court finds that Scheidler’s holding that “RICO contains no economic

motive requirement,” 510 U.S. at 262, is not tantamount to a determination that economic

motive evidence is completely irrelevant to Plaintiffs’ RICO claims. In Scheidler, the Court

was presenting an additional avenue for proving a RICO claim when it held that “proof that

either the racketeering enterprise or the predicate acts of racketeering were motivated by an

economic purpose” is not required to sustain a RICO claim. 510 U.S. at 252; see also id.

at 258 (“An enterprise surely can have a detrimental influence on interstate or foreign

commerce without having its own profit-seeking motives.”); United States v. Browne, 505

F.3d 1229, 1273 (11th Cir. 2007) (“The issue in Scheidler was whether the alleged enterprise

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 18 of 80
19

or racketeering acts must have an economic motive.” (emphasis added)). It did not dispose

of economically-motivated RICO claims, and notably, Defendants have not attempted to

defend the interpretation of and reliance on Scheidler. Overall, the court finds that the

financial information subject to disclosure is relevant for these additional purposes, thus,

substantially increasing the information’s weight which the Magistrate Judge deemed only

“slight.” (Doc. # 187 at 11.) In sum, the court finds that compelling discovery, as set out

above – i.e., discovery of VictoryLand’s annual gross receipts and annual gross profits from

electronic bingo from the inception of VictoryLand’s electronic bingo operations to the

present, and its payments to charities, including the amounts, dates and payees – is

reasonably calculated to lead to the discovery of admissible evidence and may be admissible

evidence in its own right.

b. Privacy Interests: Closely-held Corporation

Plaintiffs object to the Magistrate Judge’s determination that VictoryLand’s status as

a closely-held corporation renders the disclosure of the “requested information overly

intrusive.” (Doc. # 195 at 10-12.) Plaintiffs argue that the ruling is wrong because it ignores

the public aspect of VictoryLand’s electronic bingo operations. Plaintiffs rely on the rules

and regulations governing bingo gaming in Macon County and Sheriff Warren’s deposition

transcript, specifically, his testimony confirming that VictoryLand’s “net profit from . . .

electronic bingo” is “available to [him].” (Doc. # 195 at 10 (quoting Warren Dep. 321).) In

defense of the Magistrate Judge’s ruling, Mr. McGregor and VictoryLand contend that, as

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20

a closely-held corporation, VictoryLand is a purely “private” entity immunized from

disclosing its financial information. (Doc. # 202 at 4-5.) They say that the bingo rules and

regulations, as promulgated and amended by Sheriff Warren, “do not require the reporting

of any of VictoryLand’s financial records,” but rather only require disclosure to the sheriff

of gross receipts from those charities who hold a license to operate bingo at VictoryLand

(Doc. # 202 at 7), and that its “financial information has not been disclosed to the [s]heriff”

(Doc. # 202 at 8). Mr. McGregor and VictoryLand are right about the rules but wrong about

the privacy interest. 

The Magistrate Judge’s finding, as well as Mr. McGregor and VictoryLand’s

argument, does not paint the full picture. While the bulk of the rules and regulations’

disclosure requirements admittedly applies to the charities, not to VictoryLand,

VictoryLand’s bingo operations are a matter of intense public interest and not immune from

public oversight. The rules and regulations that govern VictoryLand’s bingo operations were

promulgated and amended by the sheriff of Macon County, who received his authority from

an amendment to the Alabama Constitution passed by the Alabama Legislature and approved

by a public, statewide vote. As established in Article V, § 112 of the Alabama Constitution,

the sheriff of Macon County “is an executive officer of the State of Alabama,” Parker v.

Amerson, 519 So. 2d 442, 442 (Ala. 1987), not a private individual. VictoryLand could not

engage in bingo gaming until the sheriff found that it had complied with those rules and

regulations, and the areas of compliance are far from few. Among other requirements in the

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21

rules and regulations’ most recent iteration, “satisfactory evidence” had to be presented to

the sheriff (1) that VictoryLand’s facility, inclusive of the land and capital improvements,

cost $15 million; (2) that VictoryLand was covered by public liability insurance in a specified

amount; (3) that it had adequate parking; (4) that it employed “onsite security” and “first aid

personnel as prescribed by the Sheriff”; and (5) that its owner, if an individual, had been an

Alabama resident for at least three years or, if a legal entity, that its Alabama members, in

addition to having resided in-state for at least three years, collectively owned at least twothirds of the voting rights and equity interests. (2d Am. Rules 4.) It also rests with the same

public official to ensure that the requirements are met “at all times that any bingo games are

being conducted or operated.” (2d Am. Rules 4.) 

In addition to VictoryLand’s oversight by a public official, there is testimony from

Sheriff Warren which supports Plaintiffs’ position that, while he may have chosen not to look

at VictoryLand’s financial information, he had access to it. (See, e.g., Doc. # 204 at 3; Doc.

# 195 at 11; Warren Dep. 321 (testifying that VictoryLand’s net profits “are available to

[him],” that he can look at those records “any time [he] want[s] to see them,” that he has

“seen them in past times,” and that he “will see them this year”).) While Mr. McGregor and

VictoryLand quibble with whether Sheriff Warren meant to say that VictoryLand’s financial

records are accessible to him or whether he was mistaken (Doc. # 202 at 8-10), the fact is that

Sheriff Warren said it under oath. 

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 21 of 80
 The cases relied upon by Mr. McGregor and VictoryLand for the proposition that

10

VictoryLand’s financial information is a trade secret are factually inapposite because there was no

evidence in those cases that an outside third party, much less a third-party state official, had access to the

information sought to be protected. (See Doc. # 202 at 6 (citing Ex parte W.L. Halsey Grocery Co., 897

So. 2d 1028 (Ala. 2004), and Ex parte Miltope Corp., 823 So. 2d 640 (Ala. 2001).) The court also finds

that the financial information ordered to be produced is not a trade secret, as that term is defined by

Alabama law. See Ala. Code § 8-27-2 (Alabama Trade Secrets Act).

22

The court finds that the sheriff’s public regulation of VictoryLand’s bingo operations,

on behalf of the state of Alabama, confers inherent relevancy in exploring the actions of a

public official who single-handedly regulates a form of gaming, particularly when the sheriff

allegedly creates a bingo monopoly in the absence of the state legislature and voters doing

so. Moreover, the evidence that VictoryLand’s financial information freely is available to

a public official cuts against VictoryLand’s argument that the information is private or a

trade secret and, thus, not discoverable under the liberal discovery rules. In sum, the court 10

finds that Mr. McGregor and VictoryLand cannot reasonably expect the blanket of privacy

to which they say they are entitled with regard to the limited financial information to be

disclosed.

c. Balancing Plaintiffs’ Need Against Privacy Interests

Moreover, the court finds that Plaintiffs’ need for VictoryLand’s financial

information, only a limited amount of which the court is directing VictoryLand to disclose,

outweighs Mr. McGregor and VictoryLand’s claim of privacy. Thisis particularly true since,

as the Magistrate Judge recognized in other contexts in his opinion (see, e.g., Doc. # 187

at 14, 16, 22), the feared adverse impact of the disclosure of the information is subverted by

the protective order (Doc. # 105), which prohibits the use of the information for anything

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23

other than “preparation and trial of this lawsuit” and proscribes its disclosure for any other

purpose. (See Doc. # 105 ¶ 3); CEH, Inc. v. FV “Seafarer,” 153 F.R.D. 491, 499 (D.R.I.

1994) (“While a party does have an interest in nondisclosure and confidentiality of its

financial records, this interest can be adequately protected by a protective order.”); In re

Heritage Bond Litig., No. CV 02-1475, 2004 WL 1970058, at *5 n.12 (C.D. Cal. July 23,

2004) (“Any privacy concerns . . . defendants have in their bank records and related financial

statements are adequately protected by the protective order, and are not sufficient to prevent

production in this matter.”).

d. Summary

In sum, the court finds that the Magistrate Judge clearly erred and acted contrary to

law in denying Plaintiffs’ motions to compel disclosure (by means of propounded

interrogatories and requests for production of documents to VictoryLand and/or Mr.

McGregor) of VictoryLand’s annual gross receipts, annual gross profits from electronic

bingo, and payments to its charities, as detailed above. Otherwise, the court finds that the

Magistrate Judge’s rulings on Plaintiffs’ motions to compel pertaining to VictoryLand’s

finances are neither clearly erroneous nor contrary to law. 

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 23 of 80
Specifically, the Charities subpoenaed any and all documents in Mr. Gray’s possession or 11

control (1) that “refer or relate to any interest [Mr. Gray] ha[s] in any entity or property owned or

operated by [Mr.] McGregor or any corporation in which [Mr.] McGregor is a shareholder, director or

officer” (Request No. 19); (2) that “refer or relate in any way to any benefit received by [Mr. Gray], [his]

relatives, partners or associates, from any officer, director, shareholder, employee or any other person or

entity associated with VictoryLand, either directly or indirectly, including but not limited to gifts,

gratuities, political campaign contributions including payments made to a Political Action Committee,

business transactions, transportation services, vacations, privileges at VictoryLand or any other form of

tangible or intangible property or service” (Request No. 20); (3) that “refer or relate to in any way to any

benefit received by [Mr. Gray], [his] relatives, partners or associates, from any corporation in which

[Mr.] McGregor is an officer, director, shareholder or employee, either directly or indirectly, including

but not limited to gifts, gratuities, political campaign contributions including payments made to a

Political Action Committee, business transactions, transportation services, vacations, or any other form

of tangible or intangible property or service” (Request No. 21); and (4) that “refer or relate in any way to

any benefit received by [Mr. Gray], [his] relatives, partners or associates, by any business in which [Mr.]

McGregor is the owner, sole proprietor, partner, member, manager or employee, either directly or

indirectly, including but not limited to gifts, gratuities, political campaign contributions including

payments made to a Political Action Committee, business transactions, transportation services, vacations,

or any other form of tangible or intangible property or service” (Request No. 22). Plaintiffs further

request (1) “any and all documents in [Mr. Gray’s] possession or control that refer or relate to

distribution of funds received by the Gray Law Firm to its shareholders” (Request No. 24); (2) “all

federal and state tax returns filed by [Mr. Gray] since January 1, 2003” (Request No. 26); (3) “any and all

documents related to [Mr. Gray’s] last will and testament and any and all trusts or other estate plans in

which [Mr.] Gray Jr. is a named beneficiary” (Request No. 27); and (4) “any and all documents related to

any gifts or loans [Mr. Gray] ha[s] made to [Mr.] Gray, Jr.” (Request No. 28). (See Doc. # 135; Doc.

# 195 at 20-22.)

24

2. The Magistrate Judge’s Denial of Plaintiffs’ Motion to Compel Mr. Gray and

the Gray Law Firm to Produce Documents Pursuant to Rule 45 Subpoenas

Plaintiffs object to the Magistrate Judge’s denial of Plaintiffs’ motion to compel Mr.

Gray to produce documents pursuant to a Rule 45 subpoena. (Doc. # 195 at 21-22; Doc. 11

# 135 (subpoena).) To summarize, the requested documents relate to Mr. Gray’s interest in

any of Mr. McGregor’s properties or endeavors; any benefits (to include gifts, gratuities,

political campaign contributions, transportation services, vacations, privileges at

VictoryLand) received by Mr. Gray from Mr. McGregor or any person or entity associated

with VictoryLand or one of Mr. McGregor’s businesses; Mr. Gray’s federal and state tax

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 24 of 80
 Plaintiffs also challenge the Magistrate Judge’s denial of their motion to compel Mr. Gray Jr. 12

to produce, pursuant to a Rule 45 subpoena, “all documents in [his] possession or control that contain

any communication between [Mr. Gray Jr.] and [Mr.] Gray regarding electronic bingo.” (Doc. # 195

at 17 (quoting Charities’ Request No. 7 to Gray Jr. (Doc. # 134)).) Additionally, Plaintiffs point out that

the Magistrate Judge deferred a ruling, pending additional briefing, on Plaintiffs’ motion to compel Mr.

Gray Jr. to produce, pursuant to a Rule 45 subpoena, “any and all documents . . . that contain any

communication between [Mr. Gray Jr.] and any of VictoryLand’s agents or attorneys regarding electronic

bingo.” (Doc. # 195 at 17 n.7 (quoting Charities’ Request No. 4 to Gray Jr. (Doc. # 134)).) These issues

are addressed later in this opinion and are not part of the discussion of objections to the Magistrate

Judge’s order, see infra, III.B.2.a. & III.B.2.c.

25

returns filed since 2003; Mr. Gray’s last will and testament and any trusts or other estate

plans in which Mr. Gray Jr. is named the beneficiary; and any gifts or loans made by Mr.

Gray to Mr. Gray Jr. (Doc. # 135 at 2-3.) Mr. Gray objected, arguing that the information

sought was harassing, overly broad in scope and time, not reasonably calculated to lead to

admissible evidence, protected from disclosure by a constitutional right to privacy, and

otherwise unduly time-consuming, expensive and burdensome. (Doc. # 135 at 2-3.) 

Relatedly, the Magistrate Judge denied Plaintiffs’ motion to compel the Gray Law

Firm to produce, pursuant to a Rule 45 subpoena, documents “that refer or relate to the

distribution of funds received by the Gray Law Firm to its shareholders,” and “all federal and

state tax returns filed by the Gray Law Firm since January 1, 2003.” Plaintiffs ask the court

to overturn these rulings as well. (Doc. # 195 at 23-24; Doc. # 136.) 12

Denying Plaintiffs’ motions to compel Mr. Gray and the Gray Law Firm to produce

documents pursuant to Rule 45 subpoenas, the Magistrate Judge did not address Plaintiffs’

requests individually or specifically. Rather, the Magistrate Judge ruled: 

In a nutshell, the plaintiffs’ theory that Fred Gray, Jr. was bribed boils down

to this convolution of tortured reasoning: McGregor and VictoryLand paid to

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 25 of 80
The omitted footnote provides: 13

Stated another way, the argument goes like this:

(1) Fred Gray is an investor in VictoryLand and has represented McGregor and VictoryLand

since 1983.

(2) Fred Gray, Jr. is Fred Gray’s son.

(3) Junior knows how much Father has benefitted financially from his relationship with

McGregor and VictoryLand.

(4) Father’s financial benefits constitute “things of value” in Junior’s mind.

(5) These financial benefits are Junior’s “motive” to draft the regulations in a manner to

benefit only McGregor and VictoryLand.

(6) Because Junior has “benefit[t]ed” from Father’s financial acumen in terms of the

shareholder profits he has received, or he will benefit by means of an inheritance or

loans, he has in essence been bribed to draft the rules and regulations in a manner to

favor McGregor and VictoryLand.

(Doc. # 185 at 27-28 n.23.)

26

Fred Gray and the Gray law firm money or provided other benefits. Fred Gray

Jr., as a shareholder and Fred Gray’s son, knew that McGregor and

VictoryLand paid his father and the firm money or conferred benefits. The

money paid by McGregor and VictoryLand to Fred Gray and the firm or the

benefits constituted “a thing of value in the mind of Fred Gray, Jr.” in

accordance with the Alabama bribery statute. Consequently, because Fred

Gray, Jr. knew he would get more money or benefits through his father from

McGregor and VictoryLand if he drafted the rules and regulations in a way to

favor McGregor and Victoryland, he was “bribed” to draft the rules in a

manner giving VictoryLand a monopoly on electronic bingo in Macon County.

Throughout their motions and briefs on this issue, the plaintiffs remark upon

their entitlement to the information sought with the caveat “if their theory is

correct.” The theory is not correct. It boils down to an assertion that Fred

Gray, Jr. is bribed because he thinks his present actions may result in increased

benefit to him; he is a bribee in his own mind. The sophistry of this contingent

interest argument astounds, but it does not persuade. The argument is simply

too attenuated to support the intrusive requests which with two exceptions will

be denied.

 (Doc. # 185 at 27-28 (internal footnote omitted).)13

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27

The Magistrate Judge’s reasoning is clearly erroneous and contrary to law and the law

of the case. In the Memorandum Opinion and Order entered on March 5, 2008 (Doc. # 144),

denying Defendants’ motion to dismiss, this court concluded that, “[b]ecause the case is

moving forward on all claims, the parties can expect full discovery.” (Doc. # 144 at 21.)

The court allowed claims to proceed beyond the motion to dismiss stage and provided that

discovery would be full within the rules and applicable law. All claims necessarily include

the RICO claims which is precisely why, without belaboring the point, the Magistrate Judge

is wrong for denying discovery on the premise that Plaintiffs’ “theory that Fred Gray, Jr. was

bribed” revolves around a “convolution of tortured reasoning,” namely, “that Fred Gray, Jr.

. . . is a bribee in his own mind” and that “[t]he theory is not correct.” (Doc. # 187 at 27, 28.)

The statement that Mr. Gray Jr. is a “bribee in his own mind” assumes that Mr. Gray

Jr. did not receive pecuniary benefits after he allegedly cooperated in the charged RICO

conspiracy. At this phase of the litigation, this court assumes neither that he did or did not,

but it cannot ignore the allegations that he did receive pecuniary benefits. (See, e.g., 5th Am.

Compl. ¶ 72 (alleging that Mr. Gray Jr. “has violated and continue[s] to violate Ala. Code

§ 13A-10-61(a)(2))); see also Ala. Code § 13A-10-61(a)(2) (“A person commits the crime

of bribery if . . . [w]hile a public servant, he solicits, accepts or agrees to accept any

pecuniary benefit upon an agreement or understanding that his vote, opinion, judgment,

exercise of discretion or other action as a public servant will thereby be corruptly

influenced.”); Ala. Code § 13A-10-60(b)(2) (defining “pecuniary benefit” for purposes of

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 27 of 80
 The issue of whether Mr. Gray Jr., as legal counsel to a public official (Sheriff Warren) on 14

matters pertaining to that public official’s prescribed duties, is a “public servant” was raised in

Defendants’ motions to dismiss. In a prior Memorandum Opinion and Order denying the motions, this

court concluded that the complaint’s facts, “taken as true, are sufficient to state a RICO claim on the

theory that [Mr.] Gray, Jr., participated as an advisor in the performance of a governmental function and

is thus a public servant under the clear and unambiguous language of § 13A-10-1(7)” of the Alabama

Code. (Doc. # 144 at 16-17.) The reasoning for that conclusion is explained in the opinion. (See Doc.

# 144 at 14-17.)

28

violations of Ala. Code § 13A-10-61(a)(2) as any “[b]enefit in the form of money, property,

commercial interests or anything else the primary significance of which is economic gain”).

The ruling forecloses discovery of whether Mr. Gray Jr. did receive pecuniary benefits –

evidence the existence or nonexistence of which is unknown to this court. Should such

evidence exist, the benefits would not only be in his own mind, but also in his own bank

account or elsewhere, and the presence or absence of such benefits most assuredly is relevant

and discoverable. Moreover, the reasoning disregards Mr. Gray Jr.’s alleged expectation of

benefit, which exists in every bribe. Scienter in a bribery originates with expectation of

benefit. A public servant who has an “understanding” that his corruptly-influenced action

may result in a pecuniary benefit, and then accepts or agrees to accept the benefit directly or

through a third person, is guilty of bribery under Alabama law. See Ala. Code § 13A-10- 14

61(a)(2). 

Assuming arguendo that ultimately Plaintiffs’ claims fail either at the summary

judgment stage or at trial, an attempt to circumscribe discovery, after this court denied

Defendants’ motion to dismiss for failure to state a claim on core causes of action,

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 28 of 80
 Mr. McGregor and VictoryLand also have grasped onto the “convolution of tortured 15

reasoning” theory, citing it no less than six times in their briefs (see Doc. # 197 at 2, 8, 9; Doc. # 202

at 17-18, 24; Doc. # 203 at 11), but for the reasons discussed, the repeated recitation of the statement

does nothing for their argument. Those criticisms bear similarities to the arguments made in support of

the motions to dismiss. Those arguments and similar protestations against the bribery theory have been

rejected and the motions denied. The law of the case is the ruling of this court.

 Attorney’s fees and retainers are addressed in connection with the discussion on privilege 16

issues, see infra III.B.1.

29

nevertheless is premature. At this early stage, the court cannot acquiesce in a subjective

perspective as to the validity of Plaintiffs’ bribery theory. 

15

While the court finds that the Magistrate Judge’s reasoning is flawed under Rule

72(a)’s standard, his conclusions as to the scope of discovery need not be overturned in their

entirety. On balance, the majority of those findings are neither clearly erroneous nor contrary

to law. Plaintiffs’ objections are sustained only to the extent that the court will compel Mr.

Gray and the Gray Law Firm to make three disclosures. First, Mr. Gray shall produce

documents disclosing all dividends, distributions, fees (excluding for the moment attorney’s

fees and retainers, if any) or payments of any nature to him from VictoryLand or Mr. 16

McGregor, not just those dividends, distributions, fees or payments related to electronic

bingo, since January 1, 2000. Second, the court will compel Mr. Gray to produce all

documents that relate in any way to any benefits, gifts, gratuities or any other direct or

indirect benefit, property or service received by Mr. Gray from VictoryLand or Mr.

McGregor since January 1, 2000. Third, Mr. Gray and the Gray Law Firm shall produce

documents establishing the methods of division of income and profits of the Gray Law Firm

among its shareholders, but not the amounts of such divisions, since January 1, 2000. 

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 29 of 80
30

This information is relevant because of the potential that it will demonstrate the

transfer of money or other pecuniary benefits to Mr. Gray, which, as alleged in the complaint,

would have “had value in the mind of [Mr.] Gray Jr.” (5th Am. Compl. ¶ 75.) That value,

in turn, as Plaintiffs say, arguably would be evidence that Mr. Gray Jr. “had a motive to

structure the Rules and Regulations in a manner favorable to [Mr.] McGregor and

VictoryLand and, ultimately, to grant VictoryLand a monopoly on the operation of electronic

bingo in Macon County.” (Doc. # 195 at 26.) The information also will be relevant if it does

not tend to establish such benefits. And none of it would be relevant but for the combination

of an alleged bingo monopoly and the relationships summarized in supra note 3.

3. The Magistrate Judge’s Denial of Plaintiffs’ Motion to Compel VictoryLand

to Produce Documents Pertaining to Shareholder Information

Plaintiffs object to the Magistrate Judge’s rulings denying their motions to compel the

production of documents pertaining to VictoryLand’s shareholders. (Doc. # 195 at 12-15.)

These motions to compel pertain to requests to VictoryLand for the following documents:

(1) documents reflecting the names of shareholders, as well as the number of shares held by

them, in VictoryLand from January 1, 1999, until the present (Doc. # 143 at 7 (Lucky

Palace’s Request No. 13)); (2) documents relating “to any investment of Sheriff Warren,

Pebblin W. Warren, J.B. Walker, [Mr.] Gray, [Mr.] Gray Jr. or any of their relatives in

VictoryLand” (Doc. # 106 at 10 (Charities’ Request No. 13)); (3) documents reflecting

“ownership and operation of VictoryLand, including but not limited to the corporate status

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 30 of 80
31

of VictoryLand and the identity of all investors in VictoryLand” (Doc. # 106 at 12 (Charities’

Request No. 14)); (4) documents reflecting “monies paid to the investors in VictoryLand by

VictoryLand and its officers, directors, shareholders, employees, representatives,

accountants, attorneys or agents since January 1, 2003” (Doc. # 106 at 12 (Charities’ Request

No. 15)); and (5) documents that refer or relate in any way to any known benefit given by

VictoryLand, “or any officer, director, shareholder, employee or any other person or entity

associated with VictoryLand, either directly or indirectly, to [Mr.] Gray or any of his

relatives, partners or associates, including but not limited to gifts, gratuities, political

campaign contributions (including payments made to a Political Action Committee) business

transactions, transportation services, vacations, privileges at VictoryLand or any other form

of tangible or intangible property or service,” since January 1, 2003 (Doc. # 106 at 17

(Charities’ Request No. 26, as subsequently modified by Charities, see Doc. # 187 at 23-24)).

Denying Lucky Palace’s Request Number 13, the Magistrate Judge reasoned:

3. Request # 13 - Shareholders and Shares. In this request Lucky

Palace asks the court to compel the production of all documents and

electronically filed information reflecting shareholders and shares held by any

shareholder in VictoryLand since 1999. The record reflects that VictoryLand

has already stipulated that Fred Gray, Sr. is a shareholder in VictoryLand.

VictoryLand has also stipulated that Fred Gray, Jr., the Sheriff and the

Sheriff’s wife are not shareholders.

Lucky Palace wants more; specifically it wants to know the extent of

Fred Gray’s holdings as well as the identity of other shareholders. It argues

that Fred Gray, Jr.’s drafting of the rules and regulations governing bingo

gaming “must be examined with regard to any attachment to a shareholder/

shareholders of stock in VictoryLand.” (Mot. to Compel, doc. # 143 at 7).

Lucky Palace also argues it needs this information to identify potential

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 31 of 80
32

witnesses with information about VictoryLand’s efforts to secure a monopoly

in electronic bingo in Macon County. Id. at 8. VictoryLand argues that to the

extent not already disclosed, the identity of non-party shareholders and the

extent of their holdings is both irrelevant and harmful because it is sensitive,

private and trade secret information.

Beyond making these claims, VictoryLand offers little to back up its

contention that disclosure of the identity of VictoryLand shareholders is

harmful in any manner. On balance and with the protective order in place, the

court concludes that VictoryLand will be compelled to disclose the identi[t]y

of all shareholders since 1999. However, the extent of shareholders’ holdings

is quite another matter. Lucky Palace has failed to show that this private

information about non-party shareholders is relevant in any sense. Further,

Lucky Palace’s request asks for “the production of all documents and

electronically filed information reflecting shareholders.” This request is

simply too broad; it encompasses all documents on which the name or identity

of shareholders is reflected. The identity of the shareholders is enough for the

purposes identified by Lucky Palace.

. . . .

3. [The Charities’] Requests 13-15. These requests in their narrowed form

seek documents which show the magnitude and extent of Fred Gray’s

ownership or investment in VictoryLand as well as the amount of investment

income he has received. VictoryLand has confirmed that Fred Gray has an

interest in VictoryLand. The charities want to know the magnitude of that

interest 

[b]ecause I think it shows the motivation. If our theory of

bribery is a good one, it shows that Fred Gray, Junior had very

much an incentive to increase the amount or to grant this

monopoly so that his father’s interest would multiply. 

(Tr. Oral Argument at 43).

The court will not reiterate what it has earlier said about the speculative nature

of the plaintiffs’ claims. The quote from oral argument shows that the

plaintiffs recognize the tenuousness of their bribery theory. These requests

will be denied.

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 32 of 80
 The previous discussion regarding law of the case applies here as well. 17

33

. . . .

7. [The Charities’] Request 26. . . . The broadness of this request is its

undoing. For example, under the terms of the request if a shareholder in

VictoryLand was represented in an entirely [different] civil matter by a lawyer

in Gray’s firm, VictoryLand would be required to disclose the amount of fees

paid to the lawyer. By no stretch of any reasonable person’s imagination is

this information relevant to a claim or defense in this case. Beyond that, the

limitation on the request is so fraught with ambiguity as to make it even more

unworkable, because it poses the question of when does an entity “know”

something, a question here which cannot be answered without knowing the

minds of persons not parties to this suit. It is not the function of the court to

recast discovery requests into some manageable form even if the court could

speculate about what information is sought. The request will be denied.

(Doc. # 187 at 15-16, 21, 23-24 (internal footnote omitted).)

Mr. McGregor and VictoryLand defend the Magistrate Judge’s rulings. (Doc. # 202

at 22-25.) In particular, they assert that the Magistrate Judge “properly limited Plaintiffs’

discovery to the ‘identity of all [VictoryLand] shareholders since 1999,’” given “Plaintiffs’

speculative claims and tenuous bribery theory,” and because “requests for additional private

shareholder information, including . . . the extent of the non-party’s shareholders’ interest in

VictoryLand” are overbroad and irrelevant. (Doc. # 202 at 22-23.) Mr. McGregor and

VictoryLand also assert that the Magistrate Judge correctly factored into his ruling the fact

that Mr. Gray, among other shareholders, is a non-party in this lawsuit. (Doc. # 202 at 22.)

The court finds that the Magistrate Judge’s findings are clearly erroneous and contrary

to law in one respect. The court will compel VictoryLand to produce documents reflecting 17

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 33 of 80
34

Mr. Gray’s ownership interest in VictoryLand on January 1, 2003, each transfer of ownership

to or from Mr. Gray since that date to the present, to include the number of shares and the

percentage of Mr. Gray’s ownership interest when compared to the whole, and all dividend

or shareholder, director, committee or other payments to Mr. Gray by date, description and

amount. The Magistrate Judge’s reasoning for disallowing the production of documents

pertaining to the extent of Mr. Gray’s ownership interest in VictoryLand is premised solely

on his belief that Plaintiffs’ claims are “speculative” (Doc. # 187 at 21), but, as discussed

supra, the court has rejected that reasoning. So also then, the court rejects Mr. McGregor

and VictoryLand’s present assertion that the Magistrate Judge properly prohibited Plaintiffs

from discovering the extent of Mr. Gray’s ownership interest in VictoryLand given

“Plaintiffs’ speculative claims and tenuous bribery theory.” (Doc. # 202 at 23.) 

Also without merit is Mr. McGregor and VictoryLand’s relevancy argument. (Doc.

# 202 at 22.) The number and percentage of outstanding shares held by Mr. Gray are

relevant to determine what interest he held both before and after the birth of electronic bingo

and whether his holdings increased shortly before or soon after the passage of the multiple

versions of the rules and regulations. Again, the information relating to the shares of

VictoryLand held by Mr. Gray is relevant because Plaintiffs have alleged that the “bribery

scheme . . . was executed, in part, through dividend payments made to [Mr.] Gray by

VictoryLand.” (Doc. # 187 at 15.) Further, the court finds that evidence that Mr. Gray

received valuable benefits from VictoryLand is relevant to show that Mr. Gray Jr. had a

motive to structure the rules and regulations in a manner favorable to Mr. McGregor and

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 34 of 80
 The parties do not dispute the general proposition that bribes involving benefits to family

18

members or friends can provide the predicate for a criminal bribery conviction. (Doc. # 195 at 15 n.3;

Doc. # 197 at 12-14.) See, e.g., United States v. Kemp, 500 F.3d 257, 285 (3d Cir. 2007) (concluding

“that providing a loan to a public official (or his friends or family) that would have otherwise been

unavailable . . . may constitute a bribe”); United States v. Frega, 179 F.3d 793, 807 (9th Cir. 1999)

(noting that under California law, it is the “intent in making the payment, whether to a judge or to a

member of the judge’s family,” that is critical); United States v. Krilich, 159 F.3d 1020, 1024 (7th Cir.

1998) (noting that rigging a hole-in-one contest so that the mayor’s son would win $40,000 constituted

bribing the mayor); Buchanan County v. Blankenship, 496 F. Supp. 2d 715, 722 (W.D. Va. 2007)

(recognizing that clothing given to the official’s wife constituted a bribe); United States v. Biaggi, 705 F.

Supp. 790, 812 (S.D.N.Y. 1988) (finding bribery where stock was put in the name of a close friend of the

public official).

35

VictoryLand and, ultimately, to grant VictoryLand a monopoly on the operation of electronic

bingo in Macon County. The absence of any such benefits would also be relevant. 18

Moreover, while not a party in this lawsuit, Mr. Gray specifically is named as a

“relevant non-part[y],” as is his son, Mr. Gray Jr. (5th Am. Compl. ¶ 28), and collectively the

Grays’ names appear more than 200 times in the Fifth Amended Complaint. In practical

terms, Mr. Gray’s and Mr. Gray Jr.’s interests in this case parallel the interests of the named

Defendants, as the Grays are alleged to be integral players, alongside Mr. McGregor,

VictoryLand and Sheriff Warren, in the racketeering enterprise and conspiratorial acts

alleged in the complaint. (5th Am. Compl. ¶¶ 64-105.) Indeed, in these proceedings, Mr.

Gray and Mr. Gray Jr. have denied and vigorously defended against the complaint’s

allegations that they were involved in a bribery scheme. Mr. Gray Jr. and Mr. Gray are

relatives and law partners; their blending of personal business interests with business of the

law firm and its public client, Sheriff Warren, under all the circumstances, is relevant on the

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 35 of 80
 In an Order entered on December 29, 2008 (Doc. # 234), the court directed Mr. Gray Jr. to file

19

with the court a written response containing this information which the Magistrate Judge ordered him to

disclose. That order was complied with on December 31, 2008. (Docs. # 235, 238.)

36

pleadings now before the court. Finally, the court finds that any concerns regarding the

privacy of Mr. Gray’s ownership interest in VictoryLand or confidentiality of that

information are resolved by the protective order. 

4. The Magistrate Judge’s Grant of the Motion to Quash Lucky Palace’s

Deposition Notice of Mr. Gray Jr.

Plaintiffs object to the Magistrate Judge’s grant of the motion to quash Lucky Palace’s

deposition notice of Mr. Gray Jr., filed by the Gray Law Firm, Mr. Gray, and Mr. Gray Jr.

(Doc. # 195 at 25-27; Doc. # 150.) The Magistrate Judge ruled:

The court has already determined that, except to the extent set forth in this

order, the plaintiffs can’t have information or documents about financial

matters so that is not a reason to allow the deposition of Gray [Jr]. Moreover,

other than not knowing to whom Gray [Jr.] spoke about rules and regulations

for bingo, Lucky Palace has not met its burden [of] showing the deposition

should be allowed. 

(Doc. # 187 at 30.) The Magistrate Judge further ruled: “A separate order will issue to Fred

Gray Jr. requiring him to identify by name, address and phone number the identity of all

persons, except Defendant Warren, to whom he spoke about rules and regulations for bingo

gaming in Macon County.” (Doc. # 197 at 31.) 19

Plaintiffs assert that they “have a substantial need to obtain [Mr.] Gray Jr.’s deposition

testimony as the information is crucial to the preparation of [their] case.” (Doc. # 195 at 25,

27-28.) In particular, Plaintiffs assert that Mr. Gray Jr. “is the only person who can testify

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 36 of 80
37

about who[m] he received information from and shared information with, regarding the rules

and regulations for electronic bingo” (Doc. # 195 at 34) and that the Magistrate Judge’s

solution – requiring Mr. Gray Jr. to answer only limited inquiries – permits Mr. Gray Jr. to

avoid providing information as to the substance, date, length of, location of, reason for, and

number of communications (Doc. # 195 at 29). 

In view of rulings elsewhere in this order, the court finds that the ruling precluding

Mr. Gray Jr.’s deposition is clearly erroneous and contrary to law. In this order, the court has

expanded the financial documents subject to disclosure, in particular, the financial documents

which Mr. Gray and the Gray Law Firm must disclose; thus, the primary reason for refusing

to make Mr. Gray Jr. sit for a deposition is no longer viable. Moreover, it is noteworthy that

the federal rules permit the deposition of “any person,” Fed. R. Civ. P. 30(a)(1), 31(a)(1), and

do not carve out an exception for attorneys, even those who represent a party in a lawsuit.

Fed. R. Civ. P. 26-32; see also 8A Charles Alan Wright, Arthur R. Miller & Richard L.

Marcus, Federal Practice and Procedure § 2102 (2d ed. 2008) (“fact that the proposed

deponent is an attorney, or even an attorney for a party to the suit, is not an absolute bar to

taking his or her deposition, although it may be that the attorney-client privilege will provide

a ground for refusal to answer some or all questions”). Finally, Mr. Gray Jr.’s testimony

regarding his non-privileged communications with persons not his client is relevant insofar

as the communications relate in any manner to bingo rules and regulations or motives

underpinning their particulars.

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 37 of 80
 As to Plaintiffs’ argument that any communications between Mr. Gray Jr. and Sheriff Warren 20

concerning electronic bingo at VictoryLand are not privileged such that Plaintiffs may probe Mr. Gray Jr.

as to his one-on-one communications with Sheriff Warren concerning electronic bingo at VictoryLand

and the drafting of the rules and regulations, (Doc. # 195 at 30), see the court’s discussion infra at

III.B.1.a.iv. on privileges. 

38

 In short, the court will compel Mr. Gray Jr. to appear for a deposition. The subjects

for questioning obviously are constrained in part by the other rulings in this opinion. While

the court agrees with Plaintiffs that Mr. Gray Jr.’s deposition is necessary for them “to obtain

critical information on many topics” (Doc. # 195 at 25), Mr. Gray Jr.’s interest in his father’s

estate or other purely family business is out of bounds.20

5. The Magistrate Judge’s Denial of the Charities’ Motion to Compel Sheriff

Warren to Produce Certain Financial Documents 

Plaintiffs object to the Magistrate Judge’s rulings denying the Charities’ motion to

compel the production of documents from Sheriff Warren pertaining to his financial

information. (Doc. # 195 at 33-39; Doc. # 42.) The Charities tendered six requests for

production of documents from Sheriff Warren requesting, among other things, documents

relating to campaign contributions; documents related to property purchased by Sheriff

Warren in his name, including all sources of any payment for the purchase of the property

since January 1, 2003; documents relating to all income earned by him from any source since

January 1, 2003; all federal and state tax returns filed by Sheriff Warren since January 1,

2003; documents relating to all of Sheriff Warren’s assets and liabilities from January 1,

2003, to the present date; all statements of financial accounts in which Sheriff Warren has

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 38 of 80
 In the Charities’ document production requests 30, 31, 32, 33, 34 and 36 to Sheriff Warren, the 21

Charities ask for (1) all documents “that reflect or relate to campaign contributions made to any and all of

[Sheriff Warren’s] political campaigns for the office of Sheriff of Macon County, Alabama, including but

not limited to records identifying the source of campaign contributions, bank statements for the accounts

that held campaign proceeds and any campaign disclosure statements filed with the State” (Request No.

30); (2) all documents “that refer or relate to property purchased by [Sheriff Warren] or in [his] name,

including all sources of any payment for the purchase of the property and all sources of any payment for

property taxes for the property, since January 1, 2003” (Request No. 31); (3) all documents “that refer or

relate to all income earned by [Sheriff Warren] from any source whatsoever since January 1, 2003”

(Request No. 32); (4) “all federal and state tax returns filed by [Sheriff Warren] since January 1, 2003”

(Request No. 33); (5) all documents “that refer or relate to all of [Sheriff Warren’s] assets and liabilities

for the time period January 1, 2003 to the present date” (Request No. 34); and (6) all documents

pertaining to “statements of financial accounts in which [Sheriff Warren] ha[s] an interest or signatory

authority, including all bank statements, mortgage account statements, real estate investment account

statements, retirement account statements, brokerage account statements, trust account statements,

including statements jointly held with [his] spouse, and the corresponding check registers, returned

checks, and records of wire transfers, for the time period beginning January 1, 2003 to the present date”

(Request No. 36).

 It is insufficient for Sheriff Warren to incorporate by reference, without independent 22

discussion, all seemingly beneficial arguments.

39

an interest or signatory authority. (See Doc. # 195 at 33-35.) The requests are set out in the

margin.21

Plaintiffs argue that they are entitled to the information to ascertain the motive for

Sheriff Warren to join in the alleged RICO conspiracy. (Doc. # 195 at 35-36.) Plaintiffs’

position is that the information is relevant because it is reasonably calculated to lead to the

discovery of admissible evidence. (Doc. # 195 at 36.) In his responsive brief, Sheriff

Warren merely “incorporates all previous arguments made on his behalf regarding the issues

raised by Plaintiffs[,] as well as the Memorandum and Opinion Order of May 15, 2008

denying Plaintiffs’ requests.” (Doc. # 203 ¶ 1.) 22

The Magistrate Judge examined the purposes proffered by the Charities for these

requests. During the oral argument held before the Magistrate Judge, the Charities stated that

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 39 of 80
40

their claim against Sheriff Warren was that he participated in the alleged conspiracy with the

“expectation of [receiving] future financial benefit or gains.” (Doc. # 187 at 17 (citing H’rg

Tr. at 18).) More particularly, as recited by the Magistrate Judge, the Charities argued that

the

requested information may reveal (1) that Defendant Warren has received

financial benefit from his co-conspirators or (2) that Defendant Warren is

financially vulnerable and (a) easily enticed by promises of future benefits or

(b) willing to ingratiate himself with individuals, like his co-conspirators, who

can bestow future benefits upon him.

(Doc. # 187 at 18 (quoting Mot. to Compel at 7 (Doc. # 42)).) The Magistrate Judge was

unpersuaded by the Charities’ arguments:

The presumption underlying the charities’ requests – that public officials who

take action which favors some and disfavors others are corrupt – is pernicious.

The court is not naive; some officials are corrupt. But the operative

presumption should never favor the existence of corruption. That presumption

undermines democratic government and substitutes cynicism for the trust upon

which democratic government must be founded. In the same vein, the

financial susceptibility argument is too tenuous to support these intrusive

requests about Warren’s personal financial condition. If it were, most every

public official whose decisions displease a constituent would be subject to

similar claims because most public officials are in a real sense “financially

vulnerable” due to their relatively low incomes which seldom match the

importance of their responsibilities.

The charities claim that this information “may reveal” something relevant

about Warren. The phrase “may reveal” underscores how speculative these

requests are. On balance, the speculative nature and the tenuousness of the

foundation for the requests compared with the intrusiveness of the requests

compels the court to deny them except in one obviously relevant way. The

court will compel Warren to disclose whether since January 1, 2003, he has

received and, if so, describe any money, property or thing of value either

directly or indirectly from McGregor or VictoryLand, including any campaign

contributions.

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 40 of 80
 Otherwise, the court finds that the Magistrate Judge did not clearly err or rule contrary to law 23

in denying the Charities’ motion to compel.

41

(Doc. # 187 at 19.) The footnote immediately following this text states: “The court

recognizes that Warren has produced information about campaign contributions which he

has. Some of the campaign contribution information sought may be publically available and

to the extent that it is, Warren may simply refer the charities to the location where he

understands it may be found.” (Doc. # 187 at 20 n.15.)

The court finds that the rulings are clearly erroneous and contrary to law to the limited

extent that the Magistrate Judge’s order will be expanded: Sheriff Warren, who testified that

as of March 2008 he had been the sheriff of Macon County for approximately thirteen years

(Warren Dep. 14), shall produce all documents that relate in any way to campaign

contributions made to all of his political campaigns for the office of Sheriff of Macon

County, Alabama, directly or indirectly from VictoryLand or Mr. McGregor, and all gifts,

gratuities, money, property or any other benefits received directly or indirectly from

VictoryLand or Mr. McGregor during that same time period. To the extent that the scope 23

of the permissible discovery was restricted on the premise that the conspiracy claim against

Sheriff Warren is “tenuous,” it is unnecessary to repeat the reasons, discussed above, why

this court cannot so readily dismiss the conspiracy claim at the discovery stage. 

With that said, relevancy also is bolstered because it is possible that the discovery will

reveal that Sheriff Warren is financially vulnerable or that he received financial benefits from

VictoryLand or Mr. McGregor. Conversely, to Sheriff Warren’s, Mr. McGregor’s and

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 41 of 80
42

VictoryLand’s advantage, it is possible that it will not. Plaintiffs are entitled to probe

evidence pertaining to whether, for the time period ordered, Sheriff Warren shared a common

motive – financial gain – with either Mr. McGregor or VictoryLand. The inferences that can

be drawn from the evidence, whether or not ultimately proved, support Plaintiffs’ position

at this stage of this litigation. Namely, it could be argued that Sheriff Warren delegated the

drafting of rules and regulations to an arguably interested party (Mr. Gray Jr.) and then

“turned a blind eye” to that party’s reliance on VictoryLand and its representatives to create

those rules and regulations. (Doc. # 195 (citing Warren Dep. 169-70, 172, 174, 176, 177-78,

202-03).) It further could be argued that, all the while, Sheriff Warren maintained neutrality

on whether the process should remain free of conflicts of interest or result in rules that

created a neutral playing field for businesses and the citizens of Macon County. (Warren

Dep. 294-96.) Then, while recognizing that a monopoly was not in the best interests of the

citizens of Macon County (Warren Dep. 306-07), it could be argued that Sheriff Warren

nevertheless promulgated Mr. Gray Jr.’s rules and regulations and repeatedly amended them

to ensure that VictoryLand had and maintained a valuable monopoly (Warren Dep. 308-09).

Again, the absence of such evidence and inferences also is relevant. In short, the court finds

that the relevancy standard is met, i.e., that “[t]he information [sought] . . . appears

reasonably calculated to lead to the discovery of admissible evidence,” Fed. R. Civ. P.

26(b)(1).

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 42 of 80
43

6. Conclusion as to Plaintiffs’ Objections to the Magistrate Judge’s Rulings

To summarize, as a result of its rulings on Plaintiffs’ objections to the Magistrate

Judge’s Memorandum Opinion and Order, sustaining some but overruling others, the court

will order:

(1) Mr. McGregor and/or VictoryLand to provide written answers and produce

documents to Plaintiffs disclosing: (a) annual gross receipts and annual gross profits of

VictoryLand from electronic bingo from the inception of VictoryLand’s electronic bingo

operations to the present; and (b) all payments by VictoryLand to its charities – to include

the amounts, dates and payees, relating to electronic bingo – from the inception of

VictoryLand’s electronic bingo operations to the present; 

(2) Mr. Gray to produce (a) documents disclosing all dividends, distributions, fees

(excluding for the moment attorney’s fees and retainers, if any) or payments of any nature

to him from VictoryLand or Mr. McGregor, not just those dividends, distributions, fees or

payments related to electronic bingo, since January 1, 2000; and (b) documents that relate in

any way to any benefits, gifts, gratuities or any other direct or indirect benefit, property or

service received by Mr. Gray from VictoryLand or Mr. McGregor since January 1, 2000; 

(3) Mr. Gray and the Gray Law Firm to produce documents establishing the

methods of division of income and profits of the Gray Law Firm among its shareholders, but

not the amounts of such divisions, since January 1, 2000; and 

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 43 of 80
 Note 12, supra, points to a later discussion of Plaintiffs’ objection to the Magistrate Judge’s

24

denial of their motion to compel Mr. Gray Jr. to produce, pursuant to a Rule 45 subpoena, “all documents

in [his] possession or control that contain any communication between [Mr. Gray Jr.] and [Mr.] Gray

regarding electronic bingo.” (Doc. # 195 at 17 (quoting Charities’ Request No. 7 to Mr. Gray Jr. ).) That

ruling is addressed in subsection III.B.2.c. below.

44

(4) VictoryLand to produce documents reflecting Mr. Gray’s ownership interest

in VictoryLand on January 1, 2003, each transfer of ownership to or from Mr. Gray since that

date to the present, to include the number of shares and the percentage of Mr. Gray’s

ownership interest when compared to the whole, and all dividend or shareholder, director,

committee or other payments to Mr. Gray by date, description and amount.

The court also overrules the Magistrate Judge’s order granting the motion to quash

Lucky Palace’s deposition notice of Mr. Gray Jr. Consequently, Mr. Gray Jr. will be directed

to appear for a deposition.

B. Privilege and Related Issues

With one exception, the Magistrate Judge has not ruled on the pending privilege 24

issues; therefore, the court rules on these issues on a clean slate.

1. The Gray Law Firm Billing Records

Plaintiffs served a Rule 45 subpoena on the Gray Law Firm, including in that

subpoena two requests for production of documents pertaining to legal fees. Specifically,

Plaintiffs seek “any and all documentation in [the Gray Law Firm’s] possession or control

that refer[s] or relate[s] to the receipt of legal fees from VictoryLand since January 1, 2003”

(Request No. 3), and “any and all documentation in [the Gray Law Firm’s] possession or

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 44 of 80
 No contrary evidence or argument having been presented, the court finds that Mr. McGregor 25

and VictoryLand are proper parties to raise the privilege issues as to the Gray Law Firm’s billing records,

as the billing records relate to legal fees incurred in matters pertaining to the Gray Law Firm’s

representation of Mr. McGregor and/or VictoryLand.

45

control that refer[s] or relate[s] to the receipt of legal fees from [Mr.] McGregor since

January 1, 2003” (Request No. 4). (Doc. # 136 at 2.)

Mr. McGregor and VictoryLand object, without specificity, to the disclosure by the

Gray Law Firm of “billing records” on the basis of the work-product privilege. (Doc. # 193 25

at 10-11.) In its in camera submission, provided in compliance with the Magistrate Judge’s

Order, the Gray Law Firm raises the attorney-client privilege, but without much elaboration.

(See Magistrate Judge Order (Doc. # 188) (directing Gray Law Firm to “deliver to the

chambers,” along with its billing records, “a written explanation about why any of [its

billing] records should not be disclosed”).)

Responding to the opposing arguments, Plaintiffs assert that they “are not seeking

detailed billing statements which could potentially disclose strategy or attorney opinion.”

(Doc. # 198 at 12; see also Doc. # 195 at 22 (stating that their “requests relate to money and

other benefits flowing between [Mr.] McGregor, VictoryLand, the Gray Law Firm and [Mr.]

Gray Jr., not to advice or other communication that may be flowing between them”).)

Rather, they say that they are asking only for “documents that relate to the actual ‘receipt of

legal fees,’” or, in other words, that relate to “[t]he amount of attorneys’ fees received.”

(Doc. # 198 at 11 (emphasis in original).)

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 45 of 80
Mr. McGregor and VictoryLand cite a single case from a Florida court in support of their

26

contention that the work-product privilege precludes the disclosure of an attorney’s billing records. HCA

Health Servs. of Florida, Inc. v. Hillman (“Hillman”), 870 So. 2d 104 (Fla. Dist. Ct. App. 2d Dist. 2003).

(See Doc. # 193 at 11.) That case is readily distinguishable. First, Hillman addressed a different issue

under different (Florida) law. Hillman involved an attorney’s fee dispute. The prevailing party

attempted to subpoena a host of records relating to the opposing party’s billing practices, including “all

computer generated records pertaining to attorneys’ fees, costs, expenses . . . , or other related

documents,” id. at 106, and the trial court ordered the opposing party to “produce the actual bills

submitted to it by its counsel including the date of legal service, the hours charged, and the nature of the

services performed,” id. Second, the prevailing parties in Hillman did not narrow their requests, but

asked for all billing records, thereby raising a concern with that court that those records would contain

privileged attorney-client information. See id. at 107. Here, Plaintiffs have narrowly tailored the scope

of their request for billing records in an effort to exclude the possibility that privileged information will

be disclosed.

46

In O’Neal v. United States, the Eleventh Circuit reiterated “the law of this circuit that

information involving receipt of attorneys’ fees from a client is not generally privileged.”

258 F.3d 1265, 1276 (11th Cir. 2001) (citing In re Slaughter, 694 F.2d 1258, 1260 (11th Cir.

1982)); see also Clarke v. Am. Commerce Nat’l Bank, 974 F.2d 127, 129 (9th Cir. 1992) (as

a matter of federal law, “[o]ur decisions have recognized that the identity of the client, the

amount of the fee, the identification of payment by case file name, and the general purpose

of the work performed are usually not protected from disclosure by the attorney-client

privilege”). Given Plaintiffs’ clarification or modification – whichever it may be – as to the

parameters of their Rule 45 subpoena requests for production of documents about legal fees,

and the protective order, the court finds that Plaintiffs’ requests fall within the bounds

permitted by the Eleventh Circuit. No reason has been given as to how disclosure of the

amount of fees paid by VictoryLand and/or Mr. McGregor to the Gray Law Firm for the time

period specified would violate “the law of this circuit,” O’Neal, 285 F.3d at 1276. The 26

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 46 of 80
 The time period specified by Plaintiffs is January 1, 2003, to the present; however, in the in 27

camera submission, the Gray Law Firm represents that “no records exist prior to [February 2004] due to

an extensive fire at the Gray law firm in Tuskegee, Alabama.” While there are no records preceding

February 2004, the Gray Law Firm is directed to update its disclosures to Plaintiffs to include relevant

billing records to the present. 

47

court, therefore, finds that the requested documents evidencing the amount of legal fees are

not protected by the attorney-client privilege.

Accordingly, the court will direct the Gray Law Firm to disclose the amount of all

legal fees paid to it from Mr. McGregor and/or VictoryLand from February 2004 to the

present. In this regard, the court notes that, in its in camera submission, the Gray Law Firm

27

proffers as an alternative solution to the legal fees discovery dispute that it “be allowed to

simply submit the amount of billing or statement paid by a particular payor for the period of

time in question.” It is not clear whether it proposes disclosing two lump sum amounts, one

as to the total fees paid by Mr. McGregor and the other as to the total fees paid by

VictoryLand, but, if it is, the court does not accept in full the proposed alternative solution.

With one exception, see below, each document submitted in camera by the Gray Law Firm

pertaining to receipt of legal fees contains an identification label. For added clarity of this

ruling, the court specifies, by reference to that label, which documents the Gray Law Firm

shall disclose. The Gray Law Firm shall produce, in their entirety, documents labeled

FGJ0157, FGJ0158, FGJ0159, FGJ0160, FGJ0161, FGJ0162, FGJ0163, FGJ0164, FGJ0172,

FGJ0173, FGJ0174, FGJ0175, FGJ0176, FGJ0177, FGJ0178, FGJ0179, FJG0187, FGJ0192,

FGJ0193, FGJ0194, FGJ0195, FGJ0196, FGJ0197, FGJ0198, FGJ0199, FGJ0200, FGJ0201,

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 47 of 80
 This in camera document is contained in a different folder than the other fee documents 28

referenced above. For further description, this document contains a cover page with a typewritten note

stating: “Enclosed under this cover are documents which are withheld [a]nd are partially responsive to

the Gray Law Firm’s Request No. 3.”

48

FGJ0202, FGJ0215, FGJ0216, FGJ0217, FGJ0218, FGJ0219, FGJ0220, FGJ0221 and

FGJ0222. The Gray Law Firm also shall produce, after redacting the description columns,

documents labeled FGJ0165, FGJ0166, FGJ0167, FGJ0168, FGJ0169, FGJ0170, FGJ0171,

FGJ0180, FGJ0181, FGJ0182, FGJ0183, FGJ0184, FGJ0185, FJG0186, FJG0188, FGJ0189,

FGJ0190, FGJ0191, FGJ0203, FGJ0204, FGJ0205, FGJ0206, FGJ0207, FGJ0208, FGJ0209,

FGJ0210, FGJ0211, FGJ0212, FGJ0213 and FGJ0214. The Gray Law Firm also shall

produce, with no redactions, the one-page document that lists fourteen fee payments from

VictoryLand to the Gray Law Firm and that identifies those fees by date, check number, and

amount. 

28

2. Documents Evidencing Electronic Bingo Communications Between

VictoryLand and Either Mr. Gray, Mr. Gray Jr. or Any Other Partner or Associate of the

Gray Law Firm

At issue here are four of Plaintiffs’ discovery requests, two to VictoryLand and two

to Mr. Gray Jr. Regarding VictoryLand, the Charities served requests for production of

documents, seeking “any and all documents in [VictoryLand’s] possession or control that

contain any communication between [it] and [Mr.] Gray or [Mr.] Gray, Jr., relating to the

licensing of bingo in Macon County, Alabama” (Doc. # 194 at 1 (quoting Charities’ Request

No. 11 to VictoryLand (Doc. # 106)), and “that contain any communication between [it] and

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 48 of 80
 (See also Doc. # 187 at 33 ¶ 12 (deferral by Magistrate Judge on ruling on Plaintiffs’ motion to 29

compel VictoryLand to respond to the Charities’ requests for production of documents, numbers 11 and

12).)

 The documents Plaintiffs seek relate to “electronic bingo.” Included within that topic is 30

licensing of bingo. All uses of the phrase “electronic bingo” in this section of the opinion include

electronic bingo and licensing of bingo, and it is notable also that the parties use the terms

interchangeably in their briefs. Moreover, where the order appears inconsistent on parameter dates for

disclosure, it is because the court has mirrored the requests for production.

49

[Mr.] Gray, [Mr.] Gray, Jr., or any of their partners and associates relating to the licensing

of bingo in Macon County, Alabama, from January 1, 2003, until January 6, 2005” (Doc.

# 194 at 2 (quoting Charities’ Request No. 12 to VictoryLand (Doc. # 106)). As to Mr. 29

Gray Jr., the Charities served on him a Rule 45 subpoena, requesting him to “produce any

and all documents in [his] possession or control that contain any communication between

[him] and any of VictoryLand’s agents or attorneys regarding electronic bingo,” (Doc. # 194

at 2 (quoting Charities’ Request No. 4 to Mr. Gray Jr. (Doc. # 134)), and “that contain any

communication between [him] and [Mr.] Gray regarding electronic bingo” (Doc. # 195 30

at 17 (quoting Charities’ Request No. 7 to Mr. Gray Jr. (Doc. # 134)); see also supra note 12.

Mr. McGregor and VictoryLand object to disclosing documents containing the

requested communications on the ground of attorney-client privilege. As discussed infra

concerning Mr. McGregor and VictoryLand’s assertion of the attorney-client privilege on

behalf of Mr. Gray Jr. and Sheriff Warren, the assertion is not only perplexing, but also is

problematic on standing grounds. There is no attorney-client privilege relationship between

the Gray non-parties and VictoryLand or Mr. McGregor with respect to electronic bingo.

Nor do the facts support an extension of the attorney-client privilege on “common interest”

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 49 of 80
 It is undisputed that Mr. Gray Jr. was Sheriff Warren’s counsel and rendered legal advice to 31

Sheriff Warren regarding the drafting of all versions of the bingo rules and regulations promulgated by

Sheriff Warren. (Gray Aff. 2; Warren Dep. 52-55, 69-70; 5th Am. Compl. ¶¶ 54, 56.) Moreover, the

testimony reveals that Sheriff Warren authorized Mr. Gray Jr. to speak with representatives of

VictoryLand about the rules and regulations, and that Mr. Gray Jr., in fact, met with Mr. McGregor and

others at VictoryLand about the drafting of the rules and regulations. (Doc. # 163 at 23, VictoryLand’s

Answer to Lucky Palace’s Interrog. No. 12 (“VictoryLand has determined that [attorneys] David

Johns[t]on and John Bolton had discussions with [Mr.] Gray, Jr. regarding proposed or suggested Bingo

Rules and Regulations and that [Mr.] McGregor may have been present at some of those discussions.”).)

50

grounds. Therefore, there can be no privilege among them. While Sheriff Warren is a proper

party to raise the attorney-client privilege as to his communications with his attorney who

represented him in matters pertaining to the drafting of bingo rules and regulations (i.e., Mr.

Gray Jr.), Sheriff Warren has attempted to raise the privilege in a wholly ineffectual manner.

Rule 1.6 of the Alabama Rules of Professional Conduct also has been relied upon as a bar

to disclosure of the requested documents. For these reasons which are discussed more fully

below, neither the attorney-client privilege nor Rule 1.6 protects against disclosure of the

requested documents. Also included in the section is some discussion on the work-product

doctrine. 

a. Attorney-Client Privilege: Communications between Mr. Gray Jr. and

VictoryLand

 Plaintiffs seek documents from Mr. Gray Jr. and VictoryLand evidencing

communications relating to electronic bingo and the licensing of bingo between Mr. Gray Jr.

and VictoryLand’s agents or attorneys. (Doc. # 194 at 10-15.) Plaintiffs argue that 31

documents containing such communications are discoverable, and are not protected by the

attorney-client privilege because Mr. Gray Jr. does not represent VictoryLand. (Doc. # 194

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 50 of 80
 The court assumes that Mr. Bolton and Mr. Johnston fall into the classification of agents or

32

attorneys for VictoryLand. Mr. Bolton is attorney of record for Mr. McGregor in this litigation.

According to Mr. McGregor, Mr. Johnston is his “tax attorney” with whom he (Mr. McGregor) has

consulted “on occasion[]” to discuss “potential legislation” in Alabama. (McGregor Dep. 87.) 

51

at 11.) Alternatively, because Mr. Gray Jr.’s client (Sheriff Warren) testified that he had no

objection to Mr. Gray Jr. “‘talking to people in getting [the rule drafting] accomplished’”

(Doc. # 194 at 11 (quoting Warren Dep. 172)), Plaintiffs contend that any communications

between Mr. Gray Jr. and VictoryLand’s agents or attorneys on the subject of electronic

bingo constitute non-confidential communications made to “strangers” and, thus, are

excepted from the protections of the attorney-client privilege (Doc. # 194 at 11). Plaintiffs

also raise the crime-fraud exception as eviscerating any claim to the attorney-client privilege

concerning communications between Mr. Gray Jr. and VictoryLand. (Doc. # 194 at 18-24.)

Mr. McGregor and VictoryLand argue that attorneys Mr. Gray, Mr. Gray Jr., John M.

Bolton III (“Mr. Bolton”) and David Johnston (“Mr. Johnston”) “have a significant 32

historical relationship with [Mr.] McGregor and his enterprises, including VictoryLand,”

such that any communications between or among these individuals relating to electronic

bingo are protected by the attorney-client privilege. (Doc. # 193 at 3, 4.) Relatedly, they

appear to argue, but without elaboration, that, to the extent that Mr. Gray Jr. had

communications with VictoryLand’s agents or attorneys concerning electronic bingo (to

include Mr. Gray Jr.’s communications with Mr. McGregor, Mr. Gray, Mr. Bolton or Mr.

Johnston), the parties these individuals represented shared a “common interest in the subject

discussed,” and, thus, those communications should be regarded as “in confidence” for

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52

purposes of the attorney-client privilege. (Doc. # 197 at 7 (internal quotation marks

omitted).) Furthermore, Mr. McGregor and VictoryLand argue that the crime-fraud

exception is inapplicable on the facts of this case. (Doc. # 197 at 8-19.) 

i. Attorney-Client Relationship

The court disagrees with Mr. McGregor and VictoryLand in several crucial respects.

Initially, asthe parties are aware, “[t]he attorney-client privilege exists to protect confidential

communications between client and lawyer made for the purpose of securing legal advice.”

In re Grand Jury Proceedings 88-9, 899 F.2d at 1042 (internal quotation marks omitted); see

also id. (holding that attorney-client privilege requires proof of four elements, the first of

which is that “the asserted holder of the privilege is or sought to become a client”). Yet,

there is no evidence that Mr. Gray Jr. was either VictoryLand’s or Mr. McGregor’s attorney

for matters pertaining to electronic bingo or bingo licensing. In fact, the opposite is true.

Mr. Gray attests that he generally reviews and assigns cases within the Gray Law Firm

pertaining to representation of VictoryLand, that he never has “assigned [] [Mr.] Gray, Jr.,

to any case involving [VictoryLand] during the last seven years,” and that “it is [his]

understanding that [] [Mr.] Gray, Jr., has never performed any legal work for [Mr.]

McGregor.” (Gray Aff. 3.) 

Mr. McGregor’s testimony supports Mr. Gray’s. At his deposition, Mr. McGregor

was asked, “Did [Mr.] [] Gray, Jr. ever represent VictoryLand at any point with regard to

drafting, reviewing rules and regulations for bingo licensing in Macon County.” (McGregor

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 52 of 80
 Mr. McGregor and VictoryLand raise the “common legal interest” principle in three short

33

paragraphs, without applying it to any specific document or communication. (Doc. # 193 ¶ 17; Doc.

# 197 ¶¶ 13-15.) Their reliance on a state court case applying California privilege law in the context of

the corporate attorney-client privilege is unpersuasive. (Doc. # 193 ¶ 17.)

53

Dep. 197.) Mr. McGregor answered, “No, he represented the sheriff.” (McGregor

Dep. 197.) There is no contrary evidence suggesting an attorney-client relationship between

Mr. Gray Jr. and VictoryLand regarding electronic bingo or bingo licensing in Macon

County. In other words, because Mr. McGregor and VictoryLand are not clients of Mr. Gray

Jr., electronic bingo communications between Mr. Gray Jr. and VictoryLand’s agents or

attorneys are not communications between counsel and client; therefore, documents

containing such communications cannot be shielded from disclosure by the attorney-client

privilege.

ii. Common Legal Interests

While there is federal case law supporting the general proposition advanced by Mr.

McGregor and VictoryLand (Doc. # 193 at 9-10; Doc. # 197 at 7-8) that the attorney-client

privilege extends to communications among clients, who, although represented by separate

attorneys, have “a common interest in a litigated or non-litigated matter,” In re Grand Jury

Subpoena Duces Tecum, 112 F.3d 910, 922 (8th Cir. 1997) (internal quotation marks

omitted), the evidence in this case is that the interests of Mr. McGregor and VictoryLand are

not parallel to those of Sheriff Warren, whom Mr. Gray Jr. represents. Indeed, one party 33

is the regulator, the other is the regulated; their interests could not be more legally adverse.

The fact that they might share, or say they do, the same public policy interests “of the best

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54

interests of the citizens of Macon County” does not – could not – merge their legal interests

as the regulator and the regulated into a common interest. Here is why. 

Sheriff Warren testified that he hired Mr. Gray Jr. to draft rules and regulations for

electronic bingo which were “in the best interest of the citizens of Macon County.” (Warren

Dep. 162 (Doc. # 168).) Sheriff Warren further agreed with opposing counsel that the rules

and regulations should be “written, amended, and applied to be fair to all applicants for

licensing and [should not] be tilted to favor only Victory[L]and so [that] it could have a

monopoly on electronic bingo in Macon County.” (Warren Dep. 17.) Mr. McGregor

operates the sole electronic bingo facility in Macon County. It goes without saying that he

has an interest in earning profits in his business. (McGregor Dep. 145 (“The primary

function of any business is to make a profit to be able to stay in business. Because if you

don’t make a profit, you won’t stay in business.”).)

While Mr. McGregor testified that he would not “be all right with” rules and

regulations which “favor Victory[L]and and prevent any [open] competition for

Victory[L]and in Macon County on bingo,” (McGregor Dep. 278-79), and that competition

can “push [one] to do a better job” (McGregor Dep. 146), it is reasonable to infer, as

Plaintiffs argue, that rules and regulations which restrict or effectively prevent the operation

of any other electronic bingo facility in Macon County other than VictoryLand would be

economically beneficial to Mr. McGregor’s electronic bingo business in Macon County, yet

adverse to Sheriff Warren’s stated objectives. Indeed, Mr. McGregor admitted that he was

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 54 of 80
 For a discussion of why Mr. Gray and Mr. Gray Jr.’s communications are not protected by the 34

attorney-client privilege, see infra section III.B.2.c.

55

“in favor of limiting [electronic] bingo locations[,]” (McGregor Dep. 289), that he “certainly

wasn’t excited about th[e] possibility” of Lucky Palace building a facility “directly across the

county road” from VictoryLand (McGregor Dep. 327-29), and that electronic bingo

operations at Lucky Palace could reduce “revenue levels” at VictoryLand and result in job

“layoffs” (McGregor Dep. 337-38). In light of the foregoing, it is reasonable to infer that

Sheriff Warren’s interests in the promulgation of rules and regulations governing electronic

bingo in Macon County, when juxtaposed against Mr. McGregor’s interests, are clearly

adverse. Mr. McGregor’s legal and business interests are private; Sheriff Warren’s legal

interests are public. 

Accordingly, the court finds that the “common interest” extension to the attorneyclient privilege does not preserve the privilege for any shared communications between Mr.

Gray Jr. (on behalf of Sheriff Warren) and VictoryLand’s agents or attorneys on subjects

pertaining to electronic bingo and the licensing of bingo.

iii. Communications with Non-Clients

Plaintiffs argue that “to the extent that any communications between [Mr.] Gray, Jr.

and Sheriff Warren occurred in the presence of a third-party (including an agent or attorney

for VictoryLand, or [Mr.] Gray[,] who expressly disavowed representation of Sheriff

Warren), those communications are not protected by the attorney-client privilege.” (Doc. 34

# 194 at 9; see also Doc. # 194 at 12 (arguing that “any communications by [Sheriff] Warren

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 55 of 80
 Based on this finding, the court need not, and declines to, address Plaintiffs’ alternative 35

arguments pertaining to a waiver of the attorney-client privilege and the crime-fraud exception.

56

to [Mr.] Gray Jr. that were disclosed to [] VictoryLand or its attorneys would not be

privileged”).) Plaintiffs are correct that communications “divulged to ‘strangers’ or outsiders

can scarcely be considered a confidential communication between attorney and client.”

United States v. Gordon-Nikkar, 518 F.2d 972, 975 (5th Cir. 1975) (citations omitted); see

also In re Federal Grand Jury Proceedings, 89-10, 938 F.2d at 1581 (delineating as part of

third element of attorney-client privilege that communications must not have occurred in “the

presence of strangers”). Having found a potential conflict between VictoryLand’s and

Sheriff Warren’s interests in matters pertaining to the governance of electronic bingo in

Macon County, and having rejected the “common interest” theory, the court easily finds that

VictoryLand’s agents or attorneys are strangers or outsiders to the attorney-client relationship

between Mr. Gray Jr. and Sheriff Warren; therefore, any electronic bingo communications

between VictoryLand’s agents or attorneys and Mr. Gray Jr. are not privileged

communications. 

35

iv. Sheriff Warren’s Claim to Attorney-Client Privilege

The preceding observations reveal one conclusive flaw in Mr. McGregor and

VictoryLand’s assertion of the attorney-client privilege concerning attorney representation

of clients on matters pertaining to licensing of bingo and electronic bingo: They are not

clients of any attorney with the Gray Law Firm as to these matters. Sheriff Warren, on the

other hand, as the client of Mr. Gray Jr., holds the attorney-client privilege as to Mr. Gray

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 56 of 80
 That response (Doc. # 201) was filed jointly by the Gray Law Firm, Mr. Gray and Mr. Gray Jr. 36

 Interestingly, the parties who submitted the most comprehensive briefing on the issue of Sheriff

37

Warren’s attorney-client privilege are Mr. McGregor and VictoryLand.

57

Jr.’s legal advice to him on drafting of the rules and regulations and their amendments. On

this record, only Sheriff Warren, or Mr. Gray Jr. on his behalf, can assert the attorney-client

privilege. See Fisher v. United States, 425 U.S. 391, 402 n.8 (1976) (“[I]t is universally

accepted that the attorney-client privilege may be raised by the attorney.”); Haines v. Liggett

Group, Inc., 975 F.2d 81, 90 (3d Cir. 1992) (“Although the privilege belongs to the client,

and only the client may waive it, an attorney may assert the privilege on the client’s behalf.”).

Sheriff Warren, however, filed only a terse brief, stating merely that he “understands

that the issue of attorney-client privilege will be addressed by counsel for non-party [Mr.]

Gray, Jr.,” but that he did not waive the privilege. (Doc. # 203.) Running that simple

statement to ground has proven nearly impossible. The response by counsel for non-party

Mr. Gray Jr., to which Sheriff Warren alludes, merely “adopts” by reference some of the 36

prior briefs filed by the Gray Law Firm, Mr. Gray and Mr. Gray Jr. (Docs. # 150, 159, 167),

as well as a brief filed by Mr. McGregor and VictoryLand (Doc. # 193). In their brief (Doc.

# 193 ¶¶ 3, 6), in turn, Mr. McGregor and VictoryLand (purported strangers to the

representation of Sheriff Warren by Mr. Gray Jr.) touch upon the attorney-client privilege as

it pertains to Sheriff Warren’s communications with Mr. Gray Jr. and provide further

elaboration of that privilege in a subsequently-filed reply brief (Doc. # 197 at 2, 5-7). No 37

doubt Sheriff Warren raised the attorney-client privilege during his deposition (see, e.g.,

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 In a prior subsection (III.A.4.) overruling the Magistrate Judge’s grant of the motion to quash 38

Lucky Palace’s deposition notice of Mr. Gray Jr., the court noted, see supra note 20, that it would

address in this section Plaintiffs’ argument that any communications between Mr. Gray Jr. and Sheriff

Warren concerning electronic bingo at VictoryLand are not privileged such that Plaintiffs may probe Mr.

Gray Jr. as to his one-on-one communications with Sheriff Warren concerning electronic bingo at

VictoryLand and the drafting of the rules and regulations. (Doc. # 195 at 30.)

58

Warren Dep. 67, 138), but the Magistrate Judge ordered the matter briefed (Doc. # 188). The

problem with Sheriff Warren’s brief (Doc. # 203) is that the arguments he attempts to rely

upon in invoking the attorney-client privilege are twice removed from him; that is, he relies

on an “understand[ing]” that Mr. Gray Jr.’s counsel would file a brief addressing his

privilege. In turn, the brief which was filed by Mr. Gray Jr.’s counsel adopted yet another

brief filed, not by Mr. Gray Jr.’s counsel, but by Mr. McGregor and VictoryLand’s counsel.

That this is all very strange is a given; that it results in a valid claim to a privilege is not.

There has been no adequate presentation of arguments on behalf of Sheriff Warren that the

communications between Mr. Gray Jr. and agents or attorneys of VictoryLand are privileged.

With that said, however, the court does not embrace Plaintiffs’ position that “there are

serious concerns over whether any privilege could legitimately attach to any communication

between [Sheriff] Warren and [Mr.] Gray Jr.” (Doc. # 195 at 36-37 (emphasis added).) 38

Authorizing one’s attorney to divulge confidential communications is one thing; Sheriff

Warren made it clear he had such communications with Mr. Gray Jr. and that he considered

them confidential (Warren Dep. 170; Doc. # 203 ¶ 2). It is quite another thing for a client

to authorize his attorney, after having engaged in privileged communications, to conduct a

factual investigation with third parties on matters related to the subject matter of the

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 58 of 80
 The court has not overlooked Mr. McGregor and VictoryLand’s argument that any internal law 39

firm communications related to electronic bingo between Mr. Gray Jr. and Mr. Gray (or among Mr. Gray

Jr., Mr. Gray and any of their associates or partners) are privileged. (Doc. # 193 at 8-9.) Given

Plaintiffs’ representation as to the parameters of the Charities’ requests for production of documents to

VictoryLand (request numbers 11 and 12) and to Mr. Gray Jr. (request number 4), (see Doc. # 198 at 7),

that argument is more appropriately discussed, and is addressed, infra in section III.B.2.c. It is notable,

however, that, once again, it does not appear on this record that Mr. McGregor and VictoryLand are

proper parties to raise the issue of the attorney-client privilege’s applicability to such communications

because, as discussed above, there is no evidence that any partner or associate of the Gray Law Firm

represented either Mr. McGregor or VictoryLand concerning matters pertaining to VictoryLand’s

electronic bingo operations. 

59

representation so that the attorney will be in a better position to provide sound legal advice.

This distinction finds support in the Supreme Court’s recognition that while the privilege

“protects disclosure of communications,” the privilege “does not protect disclosure of the

underlying facts by those who communicated with the attorney.” Upjohn, 449 U.S. at 395. 39

Indeed, this finding is consistent with Sheriff Warren’s testimony. Sheriff Warren

expressly authorized Mr. Gray Jr. to talk with third parties on any subject which Mr. Gray

Jr. deemed necessary for “accomplishing” the drafting of bingo rules and regulations (with

the stated caveat that Mr. Gray Jr. knew those “things” that he (Sheriff Warren) wanted to

“keep confidential”). (Warren Dep. 170; see also Warren Dep. 172-74.) Of particular

pertinence, Sheriff Warren testified that those third parties included VictoryLand’s attorneys

(one of whom is Mr. Gray), its shareholders (one of whom is Mr. Gray), its “owners and

operators,” and Mr. Gray Jr.’s “father.” (Warren Dep. 177-78.) 

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v. A Word About the Work-Product Privilege

Given the relatedness between the attorney-client privilege and the work-product

privilege, it is appropriate to discuss the attorney work-product privilege at this point.

Although in their briefs and in camera submissions, Defendants cite the work-product

privilege as precluding disclosure of the requested documents, the arguments by Defendants

on the issue are lean, ranging from nonexistent in Sheriff Warren’s brief (see Doc. # 203) to

scarcely more than boilerplate in Mr. McGregor and VictoryLand’s briefs (see, e.g., Doc.

# 193 at 10-11; Doc. # 197 at 10, 11.) For instance, while Mr. McGregor and VictoryLand

mention the work-product privilege (see Doc. # 193 ¶¶ 6-8), they merely state that “[t]he

subpoena seeks material in violation of [Mr.] Gray Jr.’s work product privilege” (Doc. # 193

¶ 18). Not only is Mr. McGregor and VictoryLand’s argument conclusory – ruling on

privilege issues in a factual vacuum is not possible – but also Mr. McGregor and

VictoryLand have not stated what ground they have to assert the work-product privilege on

behalf of Sheriff Warren’s attorney (Mr. Gray Jr.). Notably, Sheriff Warren does not rely

upon, or even mention, the work-product privilege in his brief (Doc. # 203). The in camera

submissions fare no better. 

Notwithstanding the dearth of argument, in reviewing the in camera documents

submitted by the Gray non-parties and VictoryLand, the court has shielded from disclosure

those documents which on their face clearly are work product within the meaning of Federal

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 Other documents submitted in camera are not discoverable because they fall solely within the

40

purview of Mr. McGregor’s attorney-client privilege with respect to communications between Mr.

McGregor and his attorneys, Mr. Bolton and Mr. Johnston.

61

Rule of Civil Procedure 26(b)(3). See Fed. R. Civ. P. 26(b)(3) (“Ordinarily, a party may 40

not discover documents and tangible things that are prepared in anticipation of litigation or

for trial by or for another party or its representative (including the other party’s attorney,

consultant, surety, indemnitor, insurer, or agent).”). Other documents clearly are not owed

protection under the work-product privilege. 

vi. Conclusion

In sum, there is no evidence of an attorney-client relationship between Mr. Gray Jr.

and VictoryLand. There also is an absence of evidence of parallel interests between Sheriff

Warren and VictoryLand in the promulgation of rules and regulations governing electronic

bingo in Macon County; to the contrary, there is evidence of clearly adverse interests.

VictoryLand and Mr. Gray are third-party “strangers” to the attorney-client relationship

between Mr. Gray Jr. and Sheriff Warren. Moreover, VictoryLand’s and Mr. McGregor’s

privilege arguments raised on behalf of an adverse third party, as well as Sheriff Warren’s

attempt to rely on those privilege arguments to preclude disclosure of bingo-related

documents flowing between Mr. Gray Jr. and VictoryLand’s agents or attorneys, are

unpersuasive. Consequently, the court finds that communications relating to electronic bingo

among Mr. Gray Jr. and VictoryLand’s attorneys or agents are not protected by the attorneyclient privilege. But, to the extent that the work-product privilege applies to any in camera

Case 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 61 of 80
62

document that contains communications falling outside the protections of the attorney-client

privilege, the court has not directed the document’s disclosure.

VictoryLand, therefore, shall produce any and all documents in its possession or

control (including its attorneys or agents) that contain any communication between it and Mr.

Gray Jr. relating to electronic bingo from January 1, 2003, to January 6, 2005. Of the

documents submitted for in camera review by VictoryLand, the court finds that the following

documents, identified by the number assigned to the document by VictoryLand, are not

protected by any privilege and, therefore, shall be disclosed: PTF00553, PTF00554,

PTF00555, PTF00556, PTF00557, PTF00558, PTF00559, PTF00560, MCGP004181,

MCGP004182, MCGP004000, MCGP004001 and MCGP004002. 

Furthermore, Mr. Gray Jr. shall produce any and all documents in his possession or

control that contain any communication between him and any of VictoryLand’s agents or

attorneys regarding electronic bingo, except those communications relating directly to this

or other litigation. Of the documents jointly submitted for in camera review by Mr. Gray Jr.,

Mr. Gray and the Gray Law Firm, the court finds that the documents labeled FGJ0001

through and including FGJ0027, and FGJ0066 through and including FGJ0156 are

responsive to the requests at issue and are not protected by any privilege and, therefore, shall

be disclosed. 

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63

b. Attorney-Client Privilege: Communications between Mr. Gray or Other

Gray Law Firm Attorneys and VictoryLand 

Just as electronic bingo communications between Mr. Gray Jr. and VictoryLand’s

agents or attorneys are not protected by the attorney-client privilege, Plaintiffs argue that they

“likewise are entitled to disclosure of all communications regarding electronic bingo that

occurred between VictoryLand and [Mr.] Gray” (Doc. # 194 at 15) and “documents

evidencing communications between VictoryLand and any partner or associate at the Gray

Law Firm” (Doc. # 194 at 17). The arguments advanced by Mr. McGregor and VictoryLand

in the preceding subsection also are raised by them as a bar to the discovery of documents

pertaining to Mr. Gray’s electronic bingo communications with VictoryLand. (Doc. # 193

at 3, 4; Doc. # 197 at 7.) Mr. McGregor and VictoryLand’s arguments again fail. 

For substantially the same reasons discussed in the preceding section, the court will

compel disclosure. The information sought relates to electronic bingo and licensing of bingo,

but the evidence indicates that Mr. Gray did not represent either Mr. McGregor or

VictoryLand on such matters. By affidavit, Mr. Gray testifies that, although he has

represented VictoryLand “since shortly after it was incorporated,” he “was not retained by

[VictoryLand] for the purpose of doing anything in connection with the Rules and

Regulations governing Bingo, nor ha[s] [he], at any time, advised [VictoryLand] concerning

the same.” (Gray Aff. 2.) “[He] was not involved because [he] knew that [] [Mr.] Gray, Jr.,

who had represented the [s]heriff for over ten years, was working with the [s]heriff on the

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64

Rules and Regulations.” (Gray Aff. 2-3.) Mr. McGregor’s testimony also establishes that,

with regard to electronic bingo in Macon County, Mr. Gray was not VictoryLand’s attorney:

Q. Was Fred Gray, Sr. representing VictoryLand at that time while Fred

Gray, Jr. was engaged to draft, review and assist in the publication of

any rules and regulations for bingo licensing in Macon County?

A. Fred Gray, Sr. has represented VictoryLand since 1983. Fred Gray, Sr.

has had nothing to do with representing VictoryLand as far as

establishing bingo in Macon County, zero.

(McGregor Dep. 198.) Based on the foregoing, it cannot be said that Mr. Gray was providing

legal advice or assistance to VictoryLand if he communicated with VictoryLand’s agents or

attorneys regarding matters pertaining to electronic bingo. 

Moreover, the fact that Mr. Gray has represented VictoryLand on other matters does

not alter the result. The Eleventh Circuit has made clear, in a comparable circumstance, that

“the argument that any communication between an attorney and client is protected by the

privilege is overbroad. . . . The privilege is . . . designed to protect . . . only confidential

communications between the attorney and client regarding the matter of representation.”

In re Grand Jury Matter No. 91-01386, 969 F.2d 995, 997 (11th Cir. 1992) (emphasis

added); see also In re Allen, 106 F.3d 582, 609 (4th Cir. 1997) (Niemeyer, J., concurring in

part) (“The party asserting the attorney-client privilege carries the burden of establishing,

inter alia, that . . . communications for which he claims the attorney-client privilege . . .

concerned matters on which the lawyer was representing him.”). 

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Nor is there any evidence that any other partner or associate of the Gray Law Firm

represented VictoryLand on matters pertaining to electronic bingo. The evidence is to the

contrary: Mr. Gray attests that “there have been no funds received by the Gray Law Firm

from [VictoryLand] that ha[ve] anything to do with Bingo.” (Gray Aff. 4; McGregor Dep. 83

(testifying that he did not consult the Gray Law Firm for advice or representation in “areas

concerning potential legislation and areas concerning bingo in general”).) Because there is

no evidence that either Mr. Gray or any other partner or associate of the Gray Law Firm

represented VictoryLand or its agents regarding electronic bingo in Macon County,

communications relating to electronic bingo between either Mr. Gray (or the Gray Law Firm)

and VictoryLand’s agents (or attorneys) are not privileged.

Accordingly, VictoryLand shall produce any and all documents in its possession or

control that contain any communication between it, its agents or attorneys, and Mr. Gray –

or between it, its agents or attorneys and any other partner or associate with the Gray Law

Firm – relating to the establishment, regulation or licensing of bingo in Macon County,

Alabama, from January 1, 2003, until January 6, 2005. 

Two in camera documents submitted by VictoryLand need special attention because

of the tangle of relationships and the application of a timeline to the analysis. They involve

two communications by Mr. Gray, who is one of the litigation lawyers for Sheriff Warren,

with Mr. McGregor, who sometimes is a client of Mr. Gray on non-bingo matters, but the

communications relate to this bingo litigation at a point in time before Mr. McGregor became

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 These in camera documents are listed on the sealed privilege log as “Privilege Document # 1” 41

and “Privilege Document # 2.”

 This particular episode illustrates an instance in which some of the documents submitted for in 42

camera inspection by VictoryLand rest in the shadow of both sides of the ethical wall. Mr. Gray, who on

the one hand, denies any representation of Sheriff Warren in the drafting of the bingo rules and

regulations, now, in the thick of litigation, can traverse the ethical wall to bingo-related matters given his

representation of Sheriff Warren to this point in this litigation. He cannot do so in this instance,

however, with a work-product privilege in hand.

66

a party to the litigation. The facsimile transmission cover sheet, labeled MCGP004003, from

Mr. Gray to Mr. McGregor, dated January 4, 2007, and its accompanying documents

(MCGP004004 to and including MCGP004009), as well as documents labeled MCGP004010

to and including MCGP004022, are not protected by the attorney-client privilege, for the

reasons already discussed. However, these documents nonetheless may be protected under 41

the work-product privilege because they were prepared in anticipation of or connection with

this litigation at a time when Mr. Gray was representing Sheriff Warren in this litigation.

Application of the work-product privilege is contraindicated, however, because Mr. Gray

communicated his work product (ostensibly for Sheriff Warren) to a non-attorney and, at the

time, non-party (Mr. McGregor). The documents are relevant for a number of reasons, none

of which have anything to do with the work product contained therein. On balance, and in

view of the immateriality of the actual content of the work product in the documents, the

documents will be produced.42

c. Attorney-Client Privilege: Intra-Firm Communications

The Magistrate Judge denied Plaintiffs’ motion to compel Mr. Gray Jr. to respond,

pursuant to a Rule 45 subpoena, to the Charities’ seventh request for production of

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 The propriety of the Magistrate Judge’s ruling is appropriately discussed here in conjunction 43

with the other pending privilege issues, rather than in a preceding section addressing Plaintiffs’

objections to the Magistrate Judge’s rulings. 

67

documents, pertaining to communications between Mr. Gray Jr. and Mr. Gray regarding

electronic bingo. (Doc. # 187 at 26 n.21.) The reason for the denial was: “Fred Gray, Jr. 43

and Fred Gray are lawyers and members of the same firm, notwithstanding their familial ties.

Communications between lawyers in the same firm regarding their clients are clearly

protected by the attorney-client privilege.” (Doc. # 187 at 26 n.1.)

Plaintiffs urge the court to find clear error in this ruling. (Doc. # 195 at 18-19.)

Among the documents sought by Plaintiffs from Mr. Gray Jr. is a “memorandum” submitted

in camera, dated May 2, 2006, from Mr. Gray to Mr. Gray Jr. and the eleven-page document

labeled “First Amended and Restated Rules and Regulations for the Licensing and Operation

of Bingo Games in Macon County, Alabama,” which is attached to that memorandum and

which contains handwritten notations. (See, e.g., Doc. # 194 at 12-13.) Pointing out that, as

played out by the evidence, Mr. Gray Jr. has not represented VictoryLand on any matters

pertaining to electronic bingo (but instead represents Sheriff Warren), and that Mr. Gray

maintains that he has not been involved in any way with the promulgation of the bingo rules

and regulations, Plaintiffs argue that the Gray Law Firm has “attempted to ‘Chinese Wall’

[Mr.] Gray Jr. from the rest of the Gray Law Firm when he was dealing with electronic

bingo,” in order to absolve Mr. Gray from ethical problems posed by his ownership interest

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 While not factually on point, two cases have been cited by Plaintiffs to illustrate the concept of

44

an intra-firm ethical wall. (Doc. # 198 (citing Norfolk S. Ry. Co. v. Reading Blue Mountain & N. Ry., 397

F. Supp. 2d 551, 554 (M.D. Pa. 2005) (An effective intra-firm screen precluding communications

between attorneys representing clients with antagonist interests should have a “strong firm policy against

breach, including sanctions, physical and/or geographical separation.”), and Visa U.S.A., Inc. v. First

Data Corp., 241 F. Supp. 2d 1100, 1110 (N.D. Cal. 2003) (observing that firm “immediately put an intrafirm ethical wall in place” when it became clear that two attorneys in the same law firm were

representing clients with opposing interests).)

 Mr. McGregor and VictoryLand defend the Magistrate Judge’s ruling, saying that any advice 45

Mr. Gray Jr. obtained from Mr. Gray related to Mr. Gray Jr.’s “representation of Sheriff Warren” is

privileged and confidential. (Doc. # 193 at 8.) Again, Mr. McGregor and VictoryLand, neither being a

client of Mr. Gray or Mr. Gray Jr. as pertains to legal representation on electronic bingo matters, are

attempting to insert themselves into an attorney-client relationship in which they play no part.

68

in VictoryLand. (Doc. # 195 at 18.) Having erected an intra-firm ethical wall between Mr. 44

Gray and Mr. Gray Jr. for purposes of electronic bingo matters, Plaintiffs argue that Mr. Gray

Jr. “cannot now claim that the . . . wall does not exist for purposes of attorney-client

privilege.” (Doc. # 195 at 18.) Hence, Plaintiffs contend that any communications between

Mr. Gray and Mr. Gray Jr. regarding electronic bingo are not privileged. (Doc. # 195 at 18; 45

see also Doc. # 198 at 7.) The arguments presented by Sheriff Warren, the client of Mr. Gray

Jr., are essentially nonexistent for reasons set out earlier in this opinion. The dearth of

argument aside, the ruling challenged by Plaintiffs simply is not defensible because the facts

of this case do not fall within the general principle upon which the ruling is grounded.

Although an attorney-client privilege for intra-firm communications has been

recognized, see, e.g., United States v. Marlingo, No. 04-80372, 2005 WL 465432, at *4 (E.D.

Mich. Feb. 28, 2005), it also has been recognized that the attorney-client privilege is vitiated

when a lawyer’s communication with another lawyer in the same firm “implicates or creates

a conflict,” In re Sunrise Secs. Litig., 130 F.R.D. 560, 597 (E.D. Pa. 1989); cf. Nesse v.

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Pittman, 202 F.R.D. 344, 354 (D.D.C. 2001) (“[P]ermitting lawyers to rely on

[attorney-client and work-product] privileges[,] although they know or ought to know that

they are in a perilous ethical position and in need of truly independent advice[,] discourages

them from seeking that advice.”). One of the multiple issues in Sunrise Securities Litigation

involved a law firm’s obtaining legal advice from in-house counsel relating to “the law firm’s

representation of itself (through in house counsel)” and the potential conflict arising from

that “representation of itself” (a client in that scenario) and the firm’s representation of

another client, see 130 F.R.D. at 596-97. Nesse, in turn, concerned the potential that an

attorney’s legal advice to a current client was adverse to that of a former client. 

Here, the conflict does not arise, as in Sunrise Securities Litigation, from the fact that

a law firm was an attorney to both an outside client and to itself. Nor, on the present facts,

is the conflict between two clients: Mr. Gray renounces any attorney-client relationship with

VictoryLand and Mr. McGregor that includes matters of representation pertaining to

electronic bingo. That renunciation supports the argument that the non-bingo matters on

which Mr. Gray advises his clients, VictoryLand and Mr. McGregor, are unrelated to, and

thus not antagonistic to, the bingo matters upon which Mr. Gray Jr. advises his client, Sheriff

Warren, or to Mr. Gray’s undisputed ownership interest in VictoryLand. The conflict instead

is between Mr. Gray’s personal investment in VictoryLand and the matters upon which

Sheriff Warren obtained the legal services of Mr. Gray Jr. The conflict, outlined supra and

not repeated here, arises from the legal relationship between the regulator (Sheriff Warren)

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 The conflict – or potential conflict – between the interests of Mr. Gray and his son’s client is

46

highlighted to illuminate why Mr. Gray and Mr. Gray Jr.’s reliance on an intra-firm attorney-client

privilege with regard to communications between Mr. Gray and Mr. Gray Jr. concerning Mr. Gray Jr.’s

representation of Sheriff Warren is not consistent with the law of privilege and is therefore unpersuasive. 

Whether there has been a breach of any state or other ethical rule, given the Gray Law Firm’s concurrent

representation of Sheriff Warren and VictoryLand, is not an issue addressed in this opinion. 

70

and the regulated (VictoryLand), and it appears dubious that Mr. Gray can disassociate

himself from that conflict given his legal interest in VictoryLand as one of its shareholders.

No reason has been presented, and none can be envisioned, as to why these competing

interests are any less conflicting because they are between one attorney in a law firm and a

client of another attorney in the same law firm. The rationale espoused in Nesse – that the

attorney-client privilege ought not be permitted when the internal firm advice should have

been sought from an independent source to avoid a taint of ethical impropriety – applies

equally here as a matter of federal common law privilege. See 202 F.R.D. at 354.

Applying the foregoing principles to the present record, the court finds that Mr. Gray 46

cannot, on the one hand, say that he is a shareholder in VictoryLand with no involvement

with Sheriff Warren’s legal matters pertaining to electronic bingo, but, at the same time and

on the other hand, be shielded by Mr. Gray Jr.’s claim of attorney-client privilege as to

internal communications between father and son concerning the subject matter (i.e., the

drafting of bingo rules and regulations) of his son’s representation of Sheriff Warren. Such

over-the-wall discussions fall within no privilege in view of the overall circumstances. This

includes both the attorney-client and work-product privileges. For these reasons, the court

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finds that the Magistrate Judge’s ruling on this issue was clearly erroneous and contrary to

law.

Accordingly, the court will grant Plaintiffs’ motion to compel Mr. Gray Jr. to produce,

pursuant to a Rule 45 subpoena, “[a]ny and all documents in [his] possession or control that

contain any communication between [him] and [Mr.] Gray regarding electronic bingo.”

(Doc. # 195 at 17 (quoting Charities’ Request No. 7 to Mr. Gray Jr.).) As to the documents

submitted in camera, Mr. Gray Jr. shall produce the one-page “memorandum” dated May 2,

2006, from Mr. Gray to Mr. Gray Jr., and the eleven-page document labeled “First Amended

and Restated Rules and Regulations for the Licensing and Operation of Bingo Games in

Macon County, Alabama,” which is attached to that memorandum and which contains

handwritten notations.

d. Rule 1.6 of the Alabama Rules of Professional Conduct

Mr. McGregor and VictoryLand also invoke Rule 1.6 of the Alabama Rules of

Professional Conduct as a shield against disclosing the documents in VictoryLand’s

possession or control that contain any communications concerning electronic bingo gaming

between VictoryLand and Mr. Gray, between VictoryLand and Mr. Gray Jr., or between

VictoryLand and any partner or associate of the Gray Law Firm. (Doc. # 193 at 4-7; Doc.

# 197 at 3-5.) They argue that “[d]isclosure of the information and documents sought by

Plaintiffs would violate counsel’s [i.e., the Gray Law Firm’s] duties under Rule 1.6 of the

Alabama Rules of Professional Conduct.” (Doc. # 193 at 4 (brackets added); see also Doc.

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 Rule 1.6 provides: 47

(a) A lawyer shall not reveal information relating to representation of a client unless the

client consents after consultation, except for disclosures that are impliedly authorized in

order to carry out the representation, and except as stated in paragraph(b).

(b) A lawyer may reveal such information to the extent the lawyer reasonably believes

necessary:

(1) to prevent the client from committing a criminal act that the lawyer believes is likely

to result in imminent death or substantial bodily harm; or

(2) to establish a claim or defense on behalf of the lawyer in a controversy between the

lawyer and the client, to establish a defense to a criminal charge or civil claim against the

lawyer based upon conduct in which the client was involved, or to respond to allegations

in any proceeding concerning the lawyer’s representation of the client.

72

# 197 at 3-5.) Plaintiffs, however, contend that the rule applies only to a lawyer’s conduct

outside the courtroom, not to judicial proceedings where a court can compel disclosure. In

other words, Plaintiffs say that Rule 1.6 “is not an evidentiary privilege that prohibits

discovery; rather, it is an ethical duty that prevents attorneys from disclosing confidential

information outside of judicial proceedings.” (Doc. # 198 at 1-2.) In court proceedings,

Plaintiffs argue that only the attorney-client privilege protects against disclosure. (Doc. 47

# 194 at 3-7.) 

Again and first, Mr. McGregor and VictoryLand have not set forth any grounds

demonstrating that they are proper parties to invoke Rule 1.6 on behalf of the Gray Law Firm

or any of its associates or partners, and that should be the end of it. Second, assuming

arguendo that the Gray Law Firm (see Doc. # 201) adequately preserved the issue of Rule

1.6’s applicability (see Doc. # 201, adopting Rule 1.6 second-hand arguments raised in Doc.

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# 150), Rule 1.6 only forecloses, in the proper context, an attorney’s disclosure of

“information relating to representation of a client.” Ala. Rules of Prof’l Conduct R. 1.6. The

documents sought pertain only to information relating to Macon County electronic bingo

matters, and, as discussed in other parts of this opinion, the only representation pertaining to

Macon County bingo matters was by provided by Mr. Gray Jr., as a partner in the Gray Law

Firm, to Sheriff Warren. As to Mr. Gray Jr.’s representation of Sheriff Warren, which

pertained to the drafting of the bingo rules and regulations, the court is persuaded that

Plaintiffs have the better argument.

The parties have not cited, and the court has not found, any decision from an Alabama

court directly addressing the applicability of Rule 1.6 to judicial proceedings. The

commentary to Rule 1.6 is illuminating; it provides that “[t]he attorney client privilege

applies in judicial and other proceedings in which a lawyer may be called as a witness or

otherwise required to produce evidence concerning a client. The rule of client-lawyer

confidentiality applies in situations other than those where evidence is sought from the

lawyer through compulsion of law.” Ala. Rules of Prof’l Conduct R. 1.6 cmt. (emphasis

added). 

Also instructive are discussions from other courts interpreting similar ethical rules,

and concluding that those rules cannot be used as a shield to producing discovery when it is

sought from opposing counsel through compulsion of law in a judicial proceeding. See

United States v. Stepney, 246 F. Supp. 2d 1069, 1073-74 (N.D. Cal. 2003) (The attorneyCase 3:06-cv-01113-WKW-CSC Document 252 Filed 01/26/09 Page 73 of 80
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client privilege applies inside the courtroom, but “[m]echanisms other than the attorney-client

privilege [including the Rule 1.6 ethical duty of confidentiality] protect against voluntary

disclosure of confidential communications by counsel” outside the courtroom.); Honda Lease

Trust v. Middlesex Mut. Assur. Co., No. 3:05cv1426, 2008 WL 349239, at *4 (D. Conn. Feb.

6, 2008) (rejecting third party witnesses’s Rule 1.6 and 1.9 confidentiality objections to

producing requested documents because “[t]hose rules permit confidential information to be

produced to comply with a court order”); Adams v. Franklin, 924 A.2d 993, 999 n.6 (D.C.

2007) (“‘[T]he admissibility of evidence in a court of law . . . is normally determined by

reference to relevant constitutional and statutory provisions, applicable court rules and

pertinent common-law doctrines. Codes of professional conduct play no part in such

decisions.’” (citation omitted)); In re Criminal Investigation No. 1/242Q, 602 A.2d 1220,

1222 (Md. 1992) (“[T]he rule of confidentiality is broader than the attorney-client privilege.

Rule 1.6 applies to confidential communications between a client and an attorney in all

situations except where the ‘evidence is sought from the lawyer through compulsion of law.’

In the latter situation, only the attorney-client privilege, not the broader rule of

confidentiality, protects against disclosure.” (citation omitted)). 

Based on the foregoing authorities, the court is persuaded that Mr. Gray Jr. cannot use

Rule 1.6 to oppose Plaintiffs’ motion seeking a court order directing disclosure of the

specified documents. The two informal opinions from the Office of General Counsel, relied

upon by Mr. McGregor and VictoryLand, are not to the contrary. (See Doc. # 193, Exs. A

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& C.) In each informal opinion, it is expressly acknowledged that disclosure is required upon

a court order. (See Doc. # 193 Ex. A (observing that “[t]he only reason you would be

allowed to disclose such information [i.e., information protected by Rule 1.6] would be after

the informed consent and waiver of your client or if the court orders you to do so after you

have made appropriate objections” (emphasis added)); (Doc. # 193 Ex. C (“Absent a waiver

by the client, or a court order, the father and son lawyers should make every effort to protect

this information.” (emphasis added)).) Moreover, in one of the informal opinions, it is

recognized that the issue of whether Plaintiffs can “challenge the lawyer-client relationships

which father and son have with clients A and B, and, thus, whether they have any right to the

information which they now seek from the lawyers . . . . is a question more properly

determined by the trial court as a matter of law, rather than as an issue concerning ethics.”

(Doc. # 193 Ex. C.)

Accordingly, having carefully considered the ethical, privilege and relevancy

arguments in light of the discovery rules and law, the court finds that the documents

Plaintiffs seek are not non-discoverable by operation of Rule 1.6. 

IV. CONCLUSION

For the foregoing reasons, the court finds that the Magistrate Judge’s Memorandum

Opinion and Order (Doc. # 187), denying Plaintiffs’ motions to compel, is clearly erroneous

and contrary to law and the law of the case, in part. Consequently, it is ORDERED that

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Plaintiffs’ Objections to the Magistrate Judge’s Memorandum Opinion and Order (Doc.

# 195) are SUSTAINED to the extent that on or before February 6, 2009: 

(1) Mr. McGregor and/or VictoryLand are DIRECTED to provide written answers

and produce documents to Plaintiffs disclosing: (a) annual gross receipts and annual gross

profits of VictoryLand from electronic bingo from the inception of VictoryLand’s electronic

bingo operations to the present; and (b) all payments by VictoryLand to its charities – to

include the amounts, dates and payees, relating to electronic bingo – from the inception of

VictoryLand’s electronic bingo operations to the present. If the parties cannot agree on a

definition of “gross profits” as the term applies to a closely-held corporation in the gaming

business, the court will order the matter briefed. However, in its response, VictoryLand shall

fully define its method of arriving at “gross profits” by disclosing all the elements (but not

the values) of its formula.

(2) Mr. Gray is DIRECTED to produce (a) documents disclosing all dividends,

distributions, fees (excluding for the moment attorney’s fees and retainers, if any) or

payments of any nature to him from VictoryLand or Mr. McGregor, not just those dividends,

distributions, fees or payments related to electronic bingo, since January 1, 2000; and

(b) documents that relate in any way to any benefits, gifts, gratuities or any other direct or

indirect benefit, property or service received by Mr. Gray from VictoryLand or Mr.

McGregor since January 1, 2000. 

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(3) Mr. Gray and the Gray Law Firm are DIRECTED to produce documents

establishing the methods of division of income and profits of the Gray Law Firm among its

shareholders, but not the amounts of such divisions, since January 1, 2000. 

(4) VictoryLand is DIRECTED to produce documents reflecting Mr. Gray’s

ownership interest in VictoryLand on January 1, 2003, each transfer of ownership to or from

Mr. Gray since that date to the present, to include the number of shares and the percentage

of Mr. Gray’s ownership interest when compared to the whole, and all dividend or

shareholder, director, committee or other payments to Mr. Gray by date, description and

amount.

(5) Sheriff Warren is DIRECTED to produce all documents that relate in any way

to campaign contributions made to all of his political campaigns for the office of Sheriff of

Macon County, Alabama, directly or indirectly from VictoryLand or Mr. McGregor, and all

gifts, gratuities, money, property or any other benefits received directly or indirectly from

VictoryLand or Mr. McGregor during that same time period. “Directly or indirectly” shall

be construed broadly, to include benefits to immediate family members, and to entities owned

or controlled by Sheriff Warren or immediate family members. 

(6) Mr. Gray Jr. is DIRECTED to produce, pursuant to a Rule 45 subpoena, “[a]ny

and all documents in [his] possession or control that contain any communication between

[him] and [Mr.] Gray regarding electronic bingo.” As to the documents submitted in camera,

Mr. Gray Jr. is DIRECTED to produce the one-page “memorandum” dated May 2, 2006,

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from Mr. Gray to Mr. Gray Jr., and the eleven-page document labeled “First Amended and

Restated Rules and Regulations for the Licensing and Operation of Bingo Games in Macon

County, Alabama,” which is attached to that memorandum and which contains handwritten

notations.

Furthermore, the court having found that the Magistrate Judge’s Memorandum

Opinion and Order, granting Mr. Gray Jr.’s motion to quash Lucky Palace’s deposition

notice, is clearly erroneous and contrary to law, Plaintiffs’ objections are SUSTAINED and

Mr. Gray Jr. is DIRECTED to appear for a deposition on or before March 2, 2009, or at a

later time if all parties agree to the later date. The subjects for questioning obviously are

constrained in part by the other rulings in this opinion. While the court agrees with Plaintiffs

that Mr. Gray Jr.’s deposition is necessary for them “to obtain critical information on many

topics” (Doc. # 195 at 25), Mr. Gray Jr.’s interest in his father’s estate or other purely family

business is out of bounds. 

In all other respects, Plaintiffs’ Objections to the Magistrate Judge’s Memorandum

Opinion and Order are OVERRULED.

Consistent with the court’s rulings herein on the pending privilege issues, it is further

ORDERED that on or before February 6, 2009,

(1) The Gray Law Firm is DIRECTED to disclose the amount of all legal fees paid

to it from Mr. McGregor and/or VictoryLand from February 2004 to the present. Of the

documents submitted in camera, the Gray Law Firm is DIRECTED to produce, in their

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entirety, documents labeled FGJ0157, FGJ0158, FGJ0159, FGJ0160, FGJ0161, FGJ0162,

FGJ0163, FGJ0164, FGJ0172, FGJ0173, FGJ0174, FGJ0175, FGJ0176, FGJ0177, FGJ0178,

FGJ0179, FJG0187, FGJ0192, FGJ0193, FGJ0194, FGJ0195, FGJ0196, FGJ0197, FGJ0198,

FGJ0199, FGJ0200, FGJ0201, FGJ0202, FGJ0215, FGJ0216, FGJ0217, FGJ0218, FGJ0219,

FGJ0220, FGJ0221 and FGJ0222. The Gray Law Firm further is DIRECTED to produce,

after redacting the description columns, documents labeled FGJ0165, FGJ0166, FGJ0167,

FGJ0168, FGJ0169, FGJ0170, FGJ0171, FGJ0180, FGJ0181, FGJ0182, FGJ0183, FGJ0184,

FGJ0185, FJG0186, FJG0188, FGJ0189, FGJ0190, FGJ0191, FGJ0203, FGJ0204, FGJ0205,

FGJ0206, FGJ0207, FGJ0208, FGJ0209, FGJ0210, FGJ0211, FGJ0212, FGJ0213 and

FGJ0214. The Gray Law Firm further is DIRECTED to produce, with no redactions, the

one-page document that lists fourteen fee payments from VictoryLand to the Gray Law Firm

and that identifies those fees by date, check number, and amount.

(2) VictoryLand is DIRECTED to produce any and all documents in its possession

or control (including its attorneys or agents) that contain any communication between it and

Mr. Gray Jr. relating to electronic bingo from January 1, 2003, to January 6, 2005. Of the

documents submitted for in camera review by Victoryland, VictoryLand shall produce those

documents labeled PTF00553, PTF00554, PTF00555, PTF00556, PTF00557, PTF00558,

PTF00559, PTF00560, MCGP004181, MCGP004182, MCGP004000, MCGP004001 and

MCGP004002.

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(3) Mr. Gray Jr. is DIRECTED to produce any and all documents in his possession

or control that contain any communication between him and any of VictoryLand’s agents or

attorneys regarding electronic bingo, except those communications relating directly to this

or other litigation. Of the documents jointly submitted for in camera review by Mr. Gray Jr.,

Mr. Gray and the Gray Law Firm, Mr. Gray Jr. is DIRECTED to produce documents labeled

FGJ0001 through and including FGJ0027, and FGJ0066 through and including FGJ0156.

(4) VictoryLand is DIRECTED to produce any and all documents in its possession

or control that contain any communication between it, its agents or attorneys, and Mr. Gray

– or between it, its agents or attorneys and any other partner or associate with the Gray Law

Firm – relating to the establishment, regulation or licensing of bingo in Macon County,

Alabama, from January 1, 2003, until January 6, 2005, including the fax transmission cover

sheet, labeled MCGP004003, from Mr. Gray to Mr. McGregor, dated January 4, 2007, and

its accompanying documents (MCGP004004 to and including MCGP004009), and

documents labeled MCGP004010 to and including MCGP004022. 

DONE this 26th day of January, 2009.

 /s/ W. Keith Watkins 

UNITED STATES DISTRICT JUDGE

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