Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_06-cv-01588/USCOURTS-casd-3_06-cv-01588-0/pdf.json

Nature of Suit Code: 820
Nature of Suit: Copyright
Cause of Action: 17:101 Copyright Infringement

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- 1 - 06cv1588-H (POR)

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

BRIGHTON COLLECTIBLES, INC., a

California Corporation,

Civil No. 06cv1588-H (POR)

Plaintiff,

ORDER GRANTING IN PART AND

DENYING IN PART DEFENDANT’S

REQUEST FOR PRODUCTION OF

CERTAIN DOCUMENTS IDENTIFIED

ON BRIGHTON’S AUGUST 4, 2008

PRIVILEGE LOG

v.

DYNASTY DESIGNS, LLC, a Missouri

Limited Liability Company, and DOES 1

through 10, inclusive,

Defendant.

On July 21, 2008, the Court ordered Plaintiff Brighton Collectibles, Inc. to make a due

diligent search of all Project Heart documents, including files and computers maintained by Mr.

Kohl, Ms. Young and Mr. Moran, for documents responsive to Dynasty’s Request for Production of

Documents Numbers 15, 16, 17, 18, and 64. The Court ordered Brighton to prepare and produce a

revised privilege log to the Court for in camera review if a question remained as to whether a

document was subject to the order. Pursuant to the Court’s July 21, 2008 Order, Brighton identified

13 documents on its August 4, 2008 Privilege Log as confidential. Dynasty asserts certain

documents identified on Brighton’s privilege log should be produced. 

I.

APPLICABLE LAW

Federal Rule of Civil Procedure 26(b)(1) provides for discovery of "any non privileged

matter that is relevant to any party's claim or defense." There is no federal privilege preventing the

Case 3:06-cv-01588-H-POR Document 217 Filed 09/11/08 Page 1 of 9
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- 2 - 06cv1588-H (POR)

discovery of settlement agreements and related documents. See JZ Buckingham Invest. LLC v.

United States, 78 Fed.Cl. 15, 22 (Fed.Cl.2007); see also Matsushita Elec. Indus. Co., Ltd. v.

Mediatek, Inc., 2007 WL 963975, *2-4 (N.D.Cal.2007); Board of Trustees of Leland Stanford Junior

University v. Tyco Intern. Ltd., 2008 WL 1023458, *2-3 (C.D. Cal., 2008). Therefore, discovery of

settlement negotiations can be based on the reasonable belief that it may produce information that

can be brought into evidence independent of the settlement context. Morse/Diesel, Inc. v. Trinity

Industries, Inc., 142 F.R.D. 80 (S.D.N.Y. 1992).

Federal courts generally recognize a right to privacy that can be raised in response to

discovery requests. Johnson by Johnson v. Thompson, 971 F.2d 1487, 1497 (10th Cir. 1992). 

Unlike privilege, however, the right to privacy is not an absolute bar to discovery. Rather, courts

balance the need for information against the claimed privacy right. Ragge v. MCA/Universal

Studios, 165 F.R.D. 601, 604 (C.D. Cal. 1995).

The attorney-client privilege covers communication between an attorney and a client made

primarily for the purpose of obtaining legal advice or services from the attorney. Fisher v. United

States, 425 U.S. 391, 403 (1976). There is no privilege for corporate counsel who is giving, or

corporate counsel employees who are seeking, predominantly business advice as opposed to legal

advice. ABB Kent-Taylor, Inc. v. Stallings and Co., 172 F.R.D. 53, 57-58 (W.D.N.Y 1996).

The attorney work product doctrine only applies to "material obtained and prepared by an

attorney or the attorney's agent in anticipation of litigation or preparation for trial.” Verizon

California Inc. v. Ronald Katz Technology Licensing, L.P., 266 F. Supp. 2d 1144, 1147 (C.D. Cal.

2003). The Ninth Circuit states,"a document should be deemed prepared in anticipation of

litigation...if in light of the nature of the document and the factual situation of the particular case, the

document can be fairly said to have been prepared or obtained because of the prospect of litigation." 

In re Grand Jury Subpoena, 357 F3d 900, 910 (9th Cir. 2004).

Privilege will only apply with respect to auditors if the proponent of the protection can show

the audit was conducted only with an eye to preparing for prospective litigation, rather than for some

subsidiary purpose. See United States v. Chevron Texaco Corp., 241 F. Supp. 2d 1065, 1090 (N.D.

Cal. 2002). 

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- 3 - 06cv1588-H (POR)

II.

DISCUSSION

A. ITEM 1

Item 1 is an e-mail regarding Bear Financial Accounting Questions. It includes a spreadsheet

with questions from one bidder for Brighton and Brighton's responses. Brighton asserts three

grounds for denying production of this document to Dynasty: (1) settlement communications are

privileged and protected from discovery by third parties; (2) disclosing these agreements would

infringe on the privacy rights of the other parties to each agreement; and (3) the documents have no

relevance to the present action between Brighton and Dynasty.

After reviewing Item 1, it is evident a majority of the information discussed therein is

relevant to Dynasty's defense against Brighton's claim it suffered more than $14 million in lost

profits and harm to its brand goodwill. Thus, the relevant information in Item 1 comes within Rule

26(b)(1), which provides for discovery of "any non-privileged matter that is relevant to any party's

claim or defense." Further, Brighton shared Item 1 with investment banker Peter J. Solomon

(“Solomon”) as part of the Project Heart auction due diligence process. Third party privacy rights

shall be addressed pursuant to the parties’ Stipulated Protective Order. 

Based thereon and on the reasoning above, IT IS HEREBY ORDERED: Brighton shall

produce Item 1 in redacted form. Brighton shall redact column J, lines 139-140 because these

answers are not relevant to the issue of Brighton’s damages in this case..

B. ITEM 2

Item 2 is an email from a Brighton attorney to Brighton's CFO, Mr. Moran. Brighton

opposes production of this communication between a Brighton attorney and a Brighton officer

because it is (1) attorney-client communication, (2) attorney work product, and (3) irrelevant. 

Upon review of Item 2, it is apparent the document was neither drafted primarily for the

purpose of obtaining legal advice or services from the attorney nor prepared in anticipation of

litigation. Thus, Item 2 is not protected by either the attorney-client privilege or the attorney-work

product doctrine. 

//

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Nonetheless, Item 2 is irrelevant to the instant case as it neither relates to Brighton's claim against

Dynasty nor Dynasty's defense. Based thereon, IT IS HEREBY ORDERED: Dynasty's request for

production of Item 2 is denied.

C. ITEM 3

Item 3 is an email from Brighton's counsel to Solomon including a summary of all IP

litigation and pending litigation to which Brighton is a party. Brighton asserts four grounds for

denying production of Item 3 to Dynasty: (1) settlement communications are privileged and

protected from discovery by third parties; (2) disclosing these agreements would infringe on the

privacy rights of the other parties to each agreement; (3) the documents have no relevance to the

present action between Brighton and Dynasty, and (4) these documents are attorney work product.

 After reviewing Item 3, it is evident The IP settlements discussed therein are relevant to

Dynasty's defense against Brighton's claims. Item 3 was not drafted in anticipation of litigation and

therefore is not protected by the attorney work product doctrine. Thus, the IP settlements come

within Rule 26(b)(1), which provides for discovery of "any non-privileged matter that is relevant to

any party's claim or defense." Further, Brighton voluntarily shared Item 3 with Solomon. Third

party privacy rights shall be addressed pursuant to the parties’ Stipulated Protective Order. Based

thereon and on the reasoning above, IT IS HEREBY ORDERED: Brighton shall produce Item 3. 

D. ITEM 4

Item 4, an e-mail drafted by Brighton's counsel and sent to Solomon, includes a summary of

all litigation that does not involve intellectual property. Brighton asserts four grounds for denying

production of this document to Dynasty: (1) settlement communications are privileged and protected

from discovery by third parties; (2) disclosing these agreements would infringe on the privacy rights

of the other parties to each agreement; (3) the documents have no relevance to the present action

between Brighton and Dynasty, and (4) these documents are attorney work product.

After reviewing Item 4, there is no evidence of information relating to IP litigation in which

Brighton is a party. However, information in Item 4 may be probative of issues bearing on

Brighton’s claims and Dynasty’s defenses. Item 4 was not drafted in anticipation of litigation and

therefore is not protected by the attorney work product doctrine. Thus, Item 4 comes within Rule

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26(b)(1), which provides for discovery of "any non-privileged matter that is relevant to any party's

claim or defense." Further, Brighton voluntarily shared Item 4 with Solomon. Third party privacy

rights shall be addressed pursuant to the parties’ Stipulated Protective Order. 

Based thereon and on the reasoning above, IT IS HEREBY ORDERED: Brighton shall

produce Item 4 in redacted form. Brighton shall produce Item 4.

E. ITEM 5

Item 5, an e-mail drafted by Brighton's counsel and sent to Solomon, relates to a settlement

with the Texas Attorney General. On further review of the document, Brighton has determined this

agreement provides that its terms "are public and may be disclosed and discussed by the parties." 

Therefore, as to this document, Brighton withdraws its assertion of privilege and will produce a copy

to Dynasty. Pursuant to Brighton's withdrawal of its assertion of privilege as to Item 5, IT IS

HEREBY ORDERED: Brighton shall produce a copy of Item 5 to Dynasty.

F. ITEM 6

Item 6, an e-mail drafted by Brighton's counsel and sent to Solomon, includes a summary of

IP and non-IP litigation. Brighton asserts four grounds for denying production of this document to

Dynasty: (1) settlement communications are privileged and protected from discovery by third

parties; (2) disclosing these agreements would infringe on the privacy rights of the other parties to

each agreement; (3) the documents have no relevance to the present action between Brighton and

Dynasty, and (4) these documents are attorney work product.

 After reviewing Item 6, it is evident there is information therein relating to pending IP

litigation. Item 6 was not drafted in anticipation of litigation and therefore is not protected by the

attorney work product doctrine. Thus, Item 6 comes within Rule 26(b)(1), which provides for

discovery of "any non-privileged matter that is relevant to any party's claim or defense." Further,

Brighton voluntarily shared Item 6 with Solomon. Third party privacy rights shall be addressed

pursuant to the parties’ Stipulated Protective Order. 

Based on the reasoning above and Dynasty’s specific request for production of documents

solely relating to the settlement of IP litigation, IT IS HEREBY ORDERED: Brighton shall produce

Item 6 in redacted form. Brighton shall produce Item 6 to the extent it refers to IP litigation. 

Case 3:06-cv-01588-H-POR Document 217 Filed 09/11/08 Page 5 of 9
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- 6 - 06cv1588-H (POR)

G. ITEM 7

Item 7, an e-mail drafted by Brighton's counsel and sent to Solomon, includes a set of letters

from Brighton's counsel to its auditors. Brighton asserts five grounds for denying production of this

document to Dynasty: (1) settlement communications are privileged and protected from discovery

by third parties; (2) disclosing these agreements would infringe on the privacy rights of the other

parties to each agreement; (3) the documents have no relevance to the present action between

Brighton and Dynasty, (4) the documents are protected by the attorney-client privilege, and (5) these

documents are attorney work product.

Upon review of Item 7, it is apparent the document was neither drafted primarily for the

purpose of obtaining legal advice or services from an attorney nor prepared in anticipation of

litigation. Item 7 was also voluntarily disclosed to Solomon. Consequently, Item 7 is not protected

by either the attorney-client privilege or the attorney work product doctrine. Item 7 includes

information which is relevant to Dynasty's defense against Brighton. Thus, Item 7 comes within

Rule 26(b)(1), which provides for discovery of "any non-privileged matter that is relevant to any

party's claim or defense." Third party privacy rights shall be addressed pursuant to the parties’

Stipulated Protective Order. Based thereon and on the reasoning above, IT IS HEREBY

ORDERED: Brighton shall produce Item 7. 

H. ITEM 8

Item 8, an e-mail drafted by Brighton's counsel and sent to Solomon, attaches a settlement

agreement. Brighton asserts three grounds for denying production of this document to Dynasty: (1)

settlement communications are privileged and protected from discovery by third parties; (2)

disclosing these agreements would infringe on the privacy rights of the other parties to each

agreement; and (3) the documents have no relevance to the present action between Brighton and

Dynasty. 

The settlement discussed in Item 8 is relevant to Dynasty's defense against Brighton's claims;

thus, it comes within Rule 26(b)(1), which provides for discovery of "any non-privileged matter that

is relevant to any party's claim or defense." Brighton also voluntarily disclosed Item 8 to Solomon.

Third party privacy rights shall be addressed pursuant to the parties’ Stipulated Protective Order. 

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- 7 - 06cv1588-H (POR)

Based thereon and on the reasoning above, IT IS HEREBY ORDERED: Brighton shall produce

Item 8. 

I. ITEM 9

Item 9, an e-mail drafted by Brighton's counsel and sent to PJ Solomon, attaches a settlement

agreement. Brighton asserts three grounds for denying production of this document to Dynasty: (1)

settlement communications are privileged and protected from discovery by third parties; (2)

disclosing these agreements would infringe on the privacy rights of the other parties to each

agreement; and (3) the documents have no relevance to the present action between Brighton and

Dynasty. 

The settlement discussed in Item 9 is relevant to Dynasty's defense against Brighton's claims;

thus, it comes within Rule 26(b)(1), which provides for discovery of "any non-privileged matter that

is relevant to any party's claim or defense." Brighton also voluntarily disclosed Item 9 to Solomon. 

Third party privacy rights shall be addressed pursuant to the parties’ Stipulated Protective Order. 

Based thereon and on the reasoning above, IT IS HEREBY ORDERED: Brighton shall produce

Item 9. 

J. ITEM 10

Item 10, an e-mail drafted by Brighton's counsel and sent to Solomon, attaches a settlement

agreement. Brighton asserts three grounds for denying production of this document to Dynasty: (1)

settlement communications are privileged and protected from discovery by third parties; (2)

disclosing these agreements would infringe on the privacy rights of the other parties to each

agreement; and (3) the documents have no relevance to the present action between Brighton and

Dynasty. 

The settlement discussed in Item 10 is relevant to Dynasty's defense against Brighton's

claims; thus, it comes within Rule 26(b)(1), which provides for discovery of "any non-privileged

matter that is relevant to any party's claim or defense." Brighton also voluntarily disclosed Item 10

to Solomon. Issues of third party confidentiality shall be addressed pursuant to the parties’

Stipulated Protective Order. Based thereon and on the reasoning above, IT IS HEREBY

ORDERED: Brighton shall produce Item 10. 

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- 8 - 06cv1588-H (POR)

K. ITEM 11

Item 11 is an email from Gary Freedman, counsel for Brighton, to Jerry Kohl, Laura Young,

and Jeffrey Moran, all officers of Brighton. Brighton opposes production of this communication

between a Brighton attorney and a Brighton officer because it is (1) attorney-client communication,

(2) attorney work product, and (3) irrelevant. 

Upon review of Item 11, it is apparent the document was neither drafted for the purpose of

obtaining legal advice or services from the attorney nor prepared in anticipation of litigation. 

Rather, the document appears to have been drafted for a business purpose. Thus, Item 11 is not

protected by either the attorney-client privilege or the attorney-work product doctrine. Nonetheless,

Item 11 is irrelevant to the instant case as it neither relates to Brighton's claim against Dynasty nor

Dynasty's defense. Based thereon and on the reasoning above, IT IS HEREBY ORDERED:

Dynasty's request for production of Item 11 is denied.

L. ITEM 12

Item 12 is an email from Jerry Kohl, a Brighton officer, to Gary Freedman, counsel for

Brighton, and Jeffrey Moran and Laura Young, Brighton officers. Brighton opposes production of

this communication between a Brighton attorney and a Brighton officer because it is (1)

attorney-client communication, (2) attorney work product, and (3) irrelevant. 

Upon review of Item 12, it is apparent the document was neither drafted for the purpose of

obtaining legal advice or services from the attorney nor prepared in anticipation of litigation. 

Rather, the document appears to have been drafted for a business purpose. Thus, Item 12 is not

protected by either the attorney-client privilege or the attorney-work product doctrine. Item 12 is

relevant to the instant case as it relates to Dynasty's defense against alleged copyright, trademark,

and trade dress infringement. Based thereon and on the reasoning above, IT IS HEREBY

ORDERED: Brighton shall produce Item 12.

M. ITEM 13

Item 13 is an email from Jinhee Peralta, a paralegal for Brighton, to Jeffrey Moran,

Brighton's CFO. Brighton opposes production of this communication because it is (1)

attorney-client communication, (2) attorney work product, and (3) irrelevant. 

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Upon review of Item 13, it is apparent the attachment was neither drafted for the purpose of

obtaining legal advice or services from the attorney nor prepared in anticipation of litigation. 

Rather, the attachment appears to have been drafted for a business purpose. Thus, the attachment in

Item 13 is not protected by either the attorney-client privilege or the attorney-work product doctrine. 

 The attachment in Item 13 is relevant to the instant case as it relates to Dynasty's defense against

alleged copyright, trademark, and trade dress infringement. Conversely, the cover page in Item 13

appears to contain attorney work product and is therefore not discoverable. Based thereon and on

the reasoning above, IT IS HEREBY ORDERED: Brighton shall produce Item 13 in redacted form. 

Brighton shall redact the cover sheet but produce the attachment. 

The discovery allowed under this order shall be completed by September 26, 2008.

IT IS SO ORDERED.

DATED: September 11, 2008

LOUISA S PORTER

United States Magistrate Judge

cc: The Honorable Marilyn L. Huff

all parties

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