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Notice of Motion and Motion to Compel Lathan & Watkin’s Compliance With Subpoenas 

Case No. 17-CV-00851 EDL and Case No. 17-cv-01232 EDL 

58619077v.2 

SEYFARTH SHAW LLP

Gregory A. Markel (GM 5626) 

gmarkel@seyfarth.com 

Heather E. Murray (admitted pro hac vice) 

hmurray@seyfarth.com 

620 Eighth Avenue 

New York, New York 10018

Telephone: (212) 218-5500 

Facsimile: (212) 218-5526 

SEYFARTH SHAW LLP 

Giovanna A. Ferrari (SBN 229871) 

gferrari@seyfarth.com 

560 Mission Street, Suite 3100 

San Francisco, California 94105 

Telephone: (415) 397-2823 

Facsimile: (415) 397-8549 

Attorneys for Defendants 

MICHAEL R. FITZSIMMONS, PETER LAI, 

CHRISTOPHER G. POWER, 

PETER J. GOETTNER, CHRISTIAN BORCHER, 

ERNEST D. DEL, MARC S. YI, 

JAMES C. PETERS and SOUHEIL S. BADRAN 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

JOHN E. ABDO, as Trustee of the JOHN E. 

ABDO TRUST DATED JUNE 11, 2014, et 

al., 

Plaintiffs, 

v. 

MICHAEL FITZSIMMONS, et al., 

Defendants. 

Case No. 17-cv-00851 EDL 

Case No. 17-cv-01232 EDL 

DEFENDANTS’ NOTICE OF 

MOTION AND MOTION TO 

COMPEL DOCUMENTS AND 

TESTIMONY FROM LATHAM & 

WATKINS, LLP RESPONSIVE TO 

DEFENDANTS’ SUBPOENAS 

Date: October 1, 2019 

Time: 10:00 a.m. 

Courtroom: E, 19th Floor

RISING TIDE I, LLC et al., 

Plaintiffs, 

v. 

MICHAEL FITZSIMMONS, et al., 

Defendants. 

Case 3:17-cv-00851-TSH Document 117 Filed 08/27/19 Page 1 of 35
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Notice of Motion and Motion to Compel Lathan & Watkin’s Compliance With Subpoenas 

Case No. 17-CV-00851 EDL and Case No. 17-cv-01232 EDL 

58619077v.2 

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NOTICE OF MOTION AND MOTION 

TO PLAINTIFFS AND THEIR ATTORNEYS OF RECORD: 

PLEASE TAKE NOTICE that on October 1, 2019 at 10 a.m. or as soon thereafter as the 

parties may be heard, in the United States District Court, Northern District of California, located at 

450 Golden Gate Avenue, San Francisco, California 95102, before the Honorable Elizabeth D. 

LaPorte, Courtroom E, on the 19th Floor, Defendants Michael R. Fitzsimmons (”Fitzsimmons”), 

Peter Lai, Chris G. Power, Peter J. Goettner, Christian Borcher, Ernest D. Del., Marc S. Yi, James 

C. Peters, Souheil S. Badran (“Defendants”) will and hereby do move the Court for an order 

compelling the production of documents responsive to subpoenas served on Latham & Watkins, 

LLP (“Latham”) and compelling testimony related thereto over Latham’s attorney-client privilege 

and work product objections. 

Defendants bring this motion on grounds that: (i) the Delivery Agent Audit Committee 

members (Defendants Power, Goettner, and Borcher), as well as the other individual Defendants, 

hold the privilege over the Subpoenaed Matters with Latham and therefore can waive it; (ii) no 

valid privilege exists in the Subpoenaed Matters with Latham as Delivery Agent waived any such 

privilege before a Bankruptcy Trustee was appointed; (iii) neither Latham nor the Trustee can 

reasonably continue the fiction that the attorney-client privilege will maintain the confidentiality of 

the Subpoenaed Matters; (iv) fairness and equity require waiver of any privilege; and (v) the 

attorney-client privilege does not protect from disclosure non-privileged information that Latham 

has not produced. 

This Motion is based on this Notice of Motion and Motion, the Memorandum of Points and 

Authorities in Support thereof, the Declarations of Giovanna Ferrari, Gregory Markel, Chris 

Power, James Peters, Mark Smith, Jeffrey Hagan, Michael Fitzsimmons, and upon such other and 

further oral and written materials as may be presented at or before the hearing on this matter. For 

the sake of judicial economy, Defendants join in and fully incorporate all arguments set forth in 

Defendants’ Opposition to Plaintiffs’ Motion to Strike as if set forth fully herein rather than include 

them in full in this Memorandum. Defendants also respectfully request that this Court resolve the 

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Motion to Strike and the instant motion concurrently since the issues in both motions are 

inextricably linked. 

DATED: August 27, 2019 SEYFARTH SHAW LLP 

By /s/ Giovanna Ferrari 

Giovanna Ferrari 

Attorneys for Defendants 

Case 3:17-cv-00851-TSH Document 117 Filed 08/27/19 Page 3 of 35
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i 

Memorandum In Support of Motion to Compel Latham & Watkin’s Compliance with Subpoenas 

Case No. 17-CV-00851 EDL and Case No. 17-cv-01232 EDL 

58619077v.2 

MEMORANDUM OF POINTS AND AUTHORITIES 

TABLE OF CONTENTS 

 Page(s) 

I. INTRODUCTION .............................................................................................................. 1 

II. FACTUAL BACKGROUND ............................................................................................. 3 

1. Plaintiffs, Delivery Agent, and Defendants. ............................................... 3 

2. Delivery Agent’s Audit Committee. ........................................................... 4 

3. Latham. ....................................................................................................... 4 

a. As Principal Legal Counsel. ........................................................... 5 

b. As Counsel to The Audit Committee. ............................................. 5 

i. Latham’s Representation of the Audit Committee in 

Connection with the Internal and External 

Investigations. ..................................................................... 5 

ii. Latham’s Representation of the Audit Committee in 

Connection with the Change of Accountants and 

Item 304. ............................................................................. 6 

c. As Counsel to Individual Defendants. ............................................ 7 

4. Waiver of Subpoenaed Matters Before the 2017 Trustee 

Appointment. .............................................................................................. 7 

5. Use of Latham Documents On Subpoenaed Matters in this 

Litigation. .................................................................................................... 9 

6. The Subpoenas and Latham’s Objections. ................................................ 10 

III. ARGUMENT .................................................................................................................... 10 

A. The Bankruptcy Trustee Does Not Hold The Privilege. ....................................... 11 

1. The Audit Committee Holds The Privilege Over the Subpoenaed 

Matters, Separate and Distinct From Any Corporate Privilege. ............... 11 

2. Delivery Agent’s Officers and Directors Separately Hold A 

Privilege Over the Subpoenaed Matters. .................................................. 13 

B. No Valid Underlying Privilege Exists For the Trustee to Assert Because 

Delivery Agent Waived Any Privilege Before His Appointment. ....................... 15 

1. Delivery Agent Waived Any Privilege By Its Pre-Bankruptcy 

Disclosures of the Subpoenaed Matters To Third-Parties. ....................... 15 

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2. Delivery Agent Waived Any Remaining Privilege While A 

Debtor-In-Possession When It Sold Substantially All of Its Assets 

in 2016. ..................................................................................................... 18 

C. The Court Cannot Reasonably Continue The Fiction That The AttorneyClient Privilege Will Protect The Confidentiality of the Subpoenaed 

Matters. ................................................................................................................. 20 

D. Fairness and Equity Requires Waiver of The Attorney-Client Privilege. ............ 21 

E. The Attorney-Client Privilege Does Not Excuses Latham’s Failure To 

Produce Documents To Which The Privilege Does Not Apply. .......................... 24 

IV. CONCLUSION ................................................................................................................. 25 

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Memorandum In Support of Motion to Compel Latham & Watkin’s Compliance with Subpoenas 

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58619077v.2 

TABLE OF AUTHORITIES 

 Page(s) 

Federal Cases 

AT&T Corp. v. Microsoft Corp., 

2003 WL 21212614 (N.D. Cal., Apr. 18, 2003) ......................................................................20 

United States ex rel. Barko v. Halliburton Company, 

2014 WL 6657103 (D.D.C. 2014) ...........................................................................................25 

In re BCE West, L.P., 

No. M-8-85, 2000 WL 1239117 (S.D.N.Y. Aug. 31, 2000) ....................................................12 

Bierman v. Marcus, 

122 F. Supp. 250 (D.N.J. 1954) ...............................................................................................21 

Bisno v. U.S., 

299 F. 2d 711 (9th. Cir. 1961) .................................................................................................22 

Bittaker v. Woodford, 

331 F.3d 715 (9th Cir. 2003) ...................................................................................................16 

Board of Trustees of Leland Stanford Junior University v. Roche Molecular 

Systems, Inc., 

237 F.R.D. 618 (N.D.Cal. 2006) ..............................................................................................16 

Chemeon Surface Tech., LLC v. Metalast Int’l, Inc., 

2016 WL 4967716 (D. Nev. Sept. 15, 2016) ...........................................................................20 

Chevron Corp. v. Pennzoil Co., 

974 F.2d 1156 (9th Cir. 1992) .................................................................................................17 

In re China Medical Tech., Inc., 

522 B.R. 28 (Bankr. S.D.N.Y. 2014) .................................................................................12, 13 

Commodity Futures Trading Comm’n v. Weintraub, 

471 U.S. 343 (1985) .................................................................................................................13 

Diasonics Securities Litig., 

1986 WL 53402 (N.D. Cal., June 15, 1986) ......................................................................15, 17 

Dukes v. Wal-Mart Stores, Inc., 

2013 WL 1282892 (N.D. Cal., Mar. 26, 2013) ........................................................................20 

Federal Deposit Ins. Corp. v. W.R. Grace & Co., 

1987 WL 7810 (N.D. Ill. 1987) ...............................................................................................25 

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Feshbach v. S.E.C., 

5 F. Supp. 2d 774 (N.D. Cal. 1997) .........................................................................................20 

Georgia-Pacific Corp. v. GAF Roofing Mfg. Corp., 

No. 93 Civ. 5125, 1996 WL 29392 (S.D.N.Y. Jan.25, 1996) ..................................................25 

Glidden Co. v. Jandernoa, 

173 F.R.D. 459 (W.D. Mich. 1997) .........................................................................................14 

GOT I, LLC v. XRT, Inc., 

2017 WL 3113408 (N.D. Ga. Feb. 28, 2017) ..........................................................................18 

Gottlieb v. Wiles, 

143 F.R.D. 241 (D. Colo. 1992) ..............................................................................................14 

Granite Partners v. Bear, Stearns & Co., Inc., 

184 F.R.D. 49 (S.D.N.Y. 1999) ...............................................................................................11 

Haddock v. Nationwide Financial Services, Inc., 

2009 WL 3734059 (D. Conn. 2009) ........................................................................................25 

Harris v. Wells, 

1990 WL 150455 (D. Conn. Sept. 5, 1990) .............................................................................14 

Heartland Surgical Specialty Hosp., LLC v. Midwest Div., Inc., 

2007 WL 2192885 (D. Kan. 2007) ..........................................................................................25 

Hercules, Inc. v. Exxon Corp., 

434 F. Supp. 136 (D. Del. 1977) ..............................................................................................14 

Howard v. S.E.C., 

376 F.3d 1136 (D.C. Cir. 2004) ...............................................................................................22 

In re In–Store Advertising Sec. Litig., 

163 F.R.D. 452 (S.D.N.Y. 1995) .............................................................................................18 

In re Juniper Networks, Inc. Securities Litigation, 

2009 WL 4644534 (N.D.Cal. 2009) ........................................................................................17 

Kaufman v. Sungard Invest. Sys., 

05-cv-1236, 2006 WL 1307882 (D.N.J. May 10, 2006)..........................................................18 

In re Kennedy, 

143 B.R. 776 (D. Colo. 1992) ..................................................................................................21 

Lewis v. U.S., 

2004 WL 3203121 (W.D. Tenn. 2004), order aff’d, 96 A.F.T.R.2d 2005-5300, 

2005 WL 1926655 (W.D. Tenn. 2005) ....................................................................................23 

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Lira v. Chipotle Mexican Grill, Inc., 

2018 WL 2128707 (N.D.Cal. May 9, 2018 ) ...........................................................................10 

Lopes v. Vieira, 

688 F. Supp. 2d 1050 (E.D. Cal. 2010), on reconsideration, 719 F. Supp. 2d 

1199 (E.D. Cal. 2010) ..............................................................................................................23 

McCafferty’s, Inc. v. Bank of Glen Burnie, 

1998 U.S. Dist. LEXIS 12859 (D. Md. Jan. 26, 1998) ............................................................16 

McFadden v. Norton Co., 

118 F.R.D. 625 (D. Neb. 1988)................................................................................................25 

Medinol, Ltd. v. Boston Scientific Corp., 

214 F.R.D. 113 (S.D.N.Y. 2002) .......................................................................................15, 17 

Moskowitz v. Lopp, 

128 F.R.D. 624 (E.D. Pa. 1989) ...............................................................................................22 

Optronic Technologies, Inc. v. Ningbo Sunny Electronic Co., Ltd., 

2018 WL 5886013 (N.D. Cal. 2018) .......................................................................................15 

Parus Holdings, Inc. v. Banner & Witcoff, Ltd., 

585 F. Supp. 2d 995 (N.D. Ill. 2008) .......................................................................................19 

Phoenix Solutions Inc. v. Wells Fargo Bank, N.A., 

254 F.R.D. 568 (N.D. Cal. 2008) .......................................................................................16, 22 

Randleman v. Fidelity Nat. Title Ins. Co., 

2008 WL 4683297 (N.D. Ohio 2008) ......................................................................................18 

Rhone-Poulenc Rorer Inc. v. Home Indem. Co., 

1993 WL 106429 (E.D. Pa. 1993) ...........................................................................................17 

In re Rospatch Securities Litigation, 

1991 WL 574963 (W.D. Mich. 1991) ......................................................................................25 

S.E.C. v. Ferrone, 

2016 WL 824721 (N.D. Ill. Feb. 22, 2016) .............................................................................22 

S.E.C. v. Prince, 

2013 WL 1831841 (D. D.C. May 2, 2013) ..............................................................................22 

S.E.C. v. Roberts, 

254 F.R.D. 371 (N.D. Cal. 2008) .............................................................................................16 

S.E.C. v. TenFold Corp., 

2005 WL 7874298 (D. Utah Aug. 19, 2005) ...........................................................................22 

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Securities Investor Protection Corp. v. Stratton Oakmont, Inc., 

213 B.R. 433 (Bankr. S.D.N.Y. 1997) .....................................................................................15 

In re Shopping Carts Antitrust Litigation, 

95 F.R.D. 299, 34 Fed. R. Serv. 2d 778 (S.D.N.Y. 1982) .......................................................25 

Sidibe v. Sutter Health, 

2018 WL 783808 (N.D.Cal. 2018) ....................................................................................11, 12 

SimpleAir, Inc. v. Microsoft Corp., 

No. 2:11-cv-416, 2013 WL 4574594 (E.D. Tex. Aug. 27, 2013) ............................................19 

Society of Professional Engineering Employees in Aerospace v. Boeing Co., 

C.A. No. 05-1251-MLB, 2010 WL 3083536 (D. Kan. Aug. 5, 2010) ....................................18 

Soverain Software LLC v. The Gap, Inc., 

340 F. Supp. 2d 760 (E.D. Tex. 2004) .....................................................................................19 

States v. W.R. Grace, 

439 F.Supp.2d 1125 (D. Mont. 2006) ......................................................................................23 

Stooksbury v. Ross, 

No. 3:09-CV-498, 2012 WL 3779113 (E.D. Tenn. Aug. 31, 2012) ........................................18 

In re Subpoena Duces Tecum Served on Willkie Farr & Gallagher, 

1997 WL 118369 (S.D. N.Y. 1997) .........................................................................................17 

TAS Distributing Co., Inc. v. Cummins Inc., 

2009 WL 3255297 (C.D. Ill. 2009)..........................................................................................23 

Teachers Ins. and Annuity Ass’n of America v. Shamrock Broadcasting Co., Inc., 

521 F. Supp. 638 (S.D. N.Y. 1981) .........................................................................................24 

Teltron Inc. v. Alexander, 

132 F.R.D. 394 (E.D.Pa.1990) .................................................................................................24 

Tennenbaum v. Deloitte & Touche, 

77 F.3d 337 (9th Cir. 1996) .....................................................................................................16 

U.S. v. Freese, 

2006 WL 1041820 (D. Neb. 2006) ..........................................................................................25 

U.S. v. Willis, 

565 F. Supp. 1186, 13 Fed. R. .................................................................................................25 

United States v. Gann, 

732 F. 2d 714 (9th Cir. 1984) ..................................................................................................16 

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United States v. Graf, 

610 F.3d 1148 (9th Cir. 2010) .................................................................................................15 

United States v. Palmer, 

536 F. 2d 1278 (9th Cir. 1976) ................................................................................................20 

Weil v. Investment/Indicators, Research and Management, Inc., 

647 F.2d 18 (9th Cir. 1981) .....................................................................................................11 

In re Woolworth Corp. Sec. Class Action Litig., 

1996 WL 306576 (S.D.N.Y. June 7, 1996) .............................................................................12 

State Cases 

Kirby v. Kirby, 

1987 WL 14862 (Del. Ch. July 29, 1987)................................................................................14 

Moore Bus. Forms, Inc. v. Cordant Holdings Corp., 

1996 WL 307444 (Del. Ch. June 4, 1996) ...............................................................................14 

Federal Statutes 

15 U.S.C. 78j-1(m)(5) ....................................................................................................................12 

Sarbanes-Oxley Act of 2002 ..........................................................................................................12 

Rules 

Fed. R. Civ. P. 26(b)(1)..................................................................................................................10 

Fed. R. Civ. P. 26(b)(5)..................................................................................................................21 

Fed. R. Evid. 502(a) .................................................................................................................16, 22 

Fed. R. Evid. 502(b) .................................................................................................................16, 22 

Rule 44(b) ......................................................................................................................................21 

Rule 45 ...........................................................................................................................................10 

Other Authorities 

Joseph K. Leahy, What Due Diligence Dilemma? Re-Envisioning Underwriters’ 

Continuous Due Diligence After WorldCom, 30 Cardozo L. Rev. 2001, 2013-

14 (2009) ..................................................................................................................................17 

SEC Release No. 33-8220, 2003 WL 1833875 (April 9, 2003) ....................................................12 

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I. INTRODUCTION 

Defendants Michael R. Fitzsimmons, Peter Lai, Chris G. Power, Peter J. Goettner, 

Christian Borcher, Ernest D. Del, Marc S. Yi, James C. Peters, and Souheil S. Badran (collectively, 

the “Defendants”) seek an order from the Court directing Latham & Watkins, LLP to comply with 

Defendants’ subpoenas, and to produce the documents and materials described therein, and provide 

testimony regarding the same. 

Defendants are former officers and directors of Delivery Agent, Inc. Delivery Agent filed 

for Chapter 11 protection in September 2016 during which time it sold substantially all of its assets 

to its third-party creditor Hillair Capital Management LLC (“Hillair”) (which, upon the close of the 

sale, transferred the assets to its affiliate, Connekt, Inc. (“Connekt”)) before converting its 

bankruptcy to a Chapter 7 liquidation in May 2017. Only thereafter, in June 2017, was a 

Bankruptcy Trustee (the “Trustee”) appointed. 

Plaintiffs filed the instant actions against Defendants in February 2017, alleging that 

Defendants made false statements and omitted material information about two investigations into 

an H&M 2014 Super Bowl advertising campaign, its decision to change auditors, and the effect 

that change in auditors had on the prospect of Delivery Agent’s contemplated initial IPO. 

At all times, Latham served as Delivery Agent’s counsel and advised its Audit Committee 

and its individual members with respect to: (1) the internal investigation of Delivery Agent’s 2014 

Super Bowl campaign (RFPs1 1B and 10); (2) the external, third party investigation of the 2014 

Super Bowl campaign and the resulting remediation plan (RFPs 1B and 1C); (3) the disclosures in 

Financing Documents (i.e., the Series F and G Purchase Agreements, Schedule of Exceptions, and 

convertible notes for which Defendants signed Consents) regarding potential liability arising out of 

the 2014 Super Bowl ad campaign (RFPs 1A, 2, 4, 5, 6, and 7); (4) the decision to change IPO 

auditors from Deloitte & Touche (“Deloitte”) to Grant Thornton, LLP (“Grant Thornton”) (RFPs 

1D, 3, and 11); and (5) the Form S-1, Item 304 to the Securities and Exchange Commission 

1 “RFPs” refers to the specific Requests For Production in Defendants’ subpoenas to 

Latham. Defendants served 14 RFPs on Latham. Declaration of Giovanna Ferrari (“Ferrari 

Dec.”) at ¶10, Ex. B.

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(“SEC”) which required a statement of why Delivery Agent changed auditors (RFPs 1A and 1D) 

(the “Subpoenaed Matters”).2

In connection with their claims, Plaintiffs subpoenaed from Connekt all documents it 

acquired from Delivery Agent in its possession, custody or control, which included over 27,000 

attorney-client communications and attorney work product documents; over 12,000 of those 

involved Latham. Ferrari Dec. at ¶¶22-23.3 All of those Connekt documents were produced to 

Plaintiffs in 2019. The Trustee has taken no position on whether it holds any privilege over the 

documents disclosed and any undisclosed documents regarding the same subject matter, or 

whether the privilege was waived before his appointment. Even so, no reasonable basis exists to 

maintain the fiction that the Subpoenaed Matters are confidential; once the proverbial cat is out of 

the bag, the privilege’s underlying purpose of maintaining confidentiality is defeated and the 

communications are no longer worthy of protection. 

Given Plaintiffs’ ongoing and selective use of the attorney-client communications and 

attorney work-product produced by Connekt,4 and to defend against Plaintiffs’ claims, Defendants 

subpoenaed Latham, seeking production of documents regarding the Subpoenaed Matters. Latham 

does not challenge the relevance of the requested materials to this action. Rather, it objects to the 

subpoenas on the grounds that it seeks the production of documents protected from disclosure by 

the attorney-client privilege and the attorney work product doctrine. Thus, Latham states that it will 

2 RFP 1 subparts E-H and RFP 12 (regarding the likelihood of an IPO and financial 

factors effecting the same after the change in auditors), RFPs 2 and 14 (communications and 

documents to Plaintiffs); RFP 8 (referencing documents wherein the investigations and change of 

accountants allegedly should have been disclosed); RFP 9 (regarding the termination of 

individuals involved in the 2014 Superbowl ad campaign); and RFP 13 (communications with 

third parties regarding the investigations and change of accountants) are necessarily subsumed by 

these 5 categories because the 5 categories and the RFPs referenced in this footnote all relate to 

Latham’s involvement in the investigations into the 2014 Superbowl ad campaign and their 

recommendation to change auditors, which Plaintiffs allege should have been disclosed to 

investors and caused the loss of Plaintiffs’ investments when an IPO became impossible.

3 Latham’s communications and work product are in over 19,700 documents produced by 

the parties and third parties. Ferrari Dec. at ¶25.

4 Plaintiffs have used over 85 of the documents in all 11 depositions taken so far -- 

including third party depositions -- while seeking to preclude Defendants from using them 

through a Motion to Strike. Ferrari Dec. at ¶¶28-40, Exs. O-T; see 17-cv-01232 Dkt. 102. 

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not produce documents until it receives either (1) direction from the holder of the privilege; or (2) a 

court order determining whether otherwise applicable privileges or protections have been waived. 

Latham’s objections are not well taken. As set forth more fully below, Latham ignores that 

both the Audit Committee and Delivery Agent’s former officers and directors hold an independent 

privilege in the Subpoenaed Matters separate and apart from the corporate privilege and, thus, can 

waive it. Latham, in fact, admitted the Audit Committee’s independent privilege on the 

topics at issue in a 2015 email. Ferrari Dec. at ¶41, Exs. U. Moreover, even if a corporate 

privilege attached, no valid underlying privilege remains in the Subpoenaed Matters for the Trustee 

to assert because Delivery Agent waived the privilege before his appointment. Indeed, as will be 

demonstrated below, the attorney-client communications with Latham were waived in 2014 

and 2015, when Delivery Agent was still a going concern (i.e., even before bankruptcy 

proceedings). See, e.g., Id., wherein Latham says anything distributed outside the Company, like 

the internal investigation report and anything shared with Deloitte, “is not a privileged 

communication.” Certainly, no reasonable basis exists to maintain the fiction that attaching the 

attorney-client privilege to Latham’s communications regarding the Subpoenaed Matters will 

maintain their confidentiality. And given Plaintiffs’ conduct, fairness and equity also dictate that 

any privilege attached to the Subpoenaed Matters be waived. 

In any event, the attorney-client privilege does not excuse Latham’s failure to produce nonprivileged documents or communications (i.e., RFP 2 seeking communications between Latham 

and Plaintiffs, RFP 13 seeking communications between Latham and third parties, and any 

documents where Latham provided Defendants with findings of fact rather than advice). 

Accordingly, Defendants respectfully request the Court enter an order finding a waiver of the 

attorney-client privilege and work-product protections applicable to the Subpoenaed Matters and 

compelling Latham to comply with the subpoenas. 

II. FACTUAL BACKGROUND 

1. Plaintiffs, Delivery Agent, and Defendants. 

Plaintiffs are sophisticated venture-stage investors who invested in DA between 2014 and 

2016, purportedly based on the promise Delivery Agent would go public. 

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Delivery Agent, a technology company which enabled direct purchases of merchandise 

through multi-channel media, was founded in the mid-2000s. From 2013 and 2016, Delivery Agent 

considered an IPO. At various times, Mark Smith, Brian Erb, and Mark Epstein were Delivery 

Agent’s General Counsel. Declarations of Mark Smith (“Smith Dec.”) at ¶1, Jeffrey Hagan 

(“Hagan Dec.”) at ¶¶3-4. Delivery Agent’s Board included, at varying times, all Defendants except 

Lai who was an Officer. Peters and Fitzsimmons were also Officers. Defendants Power, Borcher, 

Goettner, Badran, Del, and Yi were outside directors. See Amended Complaints (“FACs”). 

2. Delivery Agent’s Audit Committee. 

Delivery Agent’s Board had committees tasked with specific matters. The Audit 

Committee was tasked with handling any matters associated with auditors and finances, and 

working with Delivery Agent’s CFOs, Mike Novelly (“Novelly”) and Jeffrey Hagan (“Hagan”). 

Hagan Dec. at ¶2. The Audit Committee was chaired by outside director Defendant Power (the 

CFO of LifeLock); outside director Defendants Goettner and Borcher were the other members. 

See FACs. From 2014-2015, in addition to routine Audit Committee duties, the Board delegated 

the handling of two investigations into Delivery Agent’s 2014 Superbowl ad campaign, which 

ultimately required the Audit Committee to consider and approve a remediation plan, to consider 

and approve a change in auditors from Deloitte to Grant Thornton, to consider and approve draft 

Item 304 (“Change In Auditors”) language for Delivery Agent’s IPO filing documents. Declaration 

of Chris Power (“Power Dec.”) at ¶¶1-24.5

3. Latham. 

5 The scope of the Audit Committee’s delegation from the Board relates to every aspect 

of Plaintiffs’ case—the core of Plaintiffs’ claims are that the investigations into the 2014 

Superbowl ad campaign and the change in auditors should have been disclosed (in, at the least, 

the Financing Documents) to investors. According to Plaintiffs, the required Item 304 language 

describing the basis for changing auditors defeated Delivery Agent’s ability to go public, and 

caused Delivery Agent’s bankruptcy and the loss of Plaintiffs’ investments. Plaintiffs have sued 

Defendants for violation of securities laws (10b5 and 20a) and California Corporations Code 

sections for acts and omissions related to the investigations, the remediation plan, the change in 

auditors, and the 304 language. Defendants’ case necessarily relies on defeating scienter and 

supporting the good faith defense of the California Code and proving their business judgment 

and advice of counsel defenses. While advice of counsel requires showing legal advice from 

Latham, other matters are not so limited and can be supported by any information provided by 

Latham to Defendants (findings of fact, updates, drafts of the Financing Documents, etc.).

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a. As Principal Legal Counsel. 

Latham served as Delivery Agent’s principal legal counsel. Latham attended every Board 

meeting and drafted all Board meeting minutes. Because of Latham’s particular expertise in 

corporate matters, Delivery Agent General Counsel Mark Smith ultimately deferred to Latham in 

all matters relevant to this Motion. Smith Dec. at ¶¶2-3. Latham drafted the Financing Documents 

which form the sole basis for Plaintiffs’ claims against several Defendants, and frequently sent 

edited versions of those documents directly to (without copying Defendants) investors, including 

Plaintiffs. Ferrari Dec. at ¶¶13, 20, 38, Exs. K and S; Declarations of James Peters (“Peters Dec.”) 

at ¶5; and Michael Fitzsimmons (“Fitzsimmons Dec.”) ¶2. 

b. As Counsel to The Audit Committee. 

i. Latham’s Representation of the Audit Committee in 

Connection with the Internal and External 

Investigations. 

On or about February 6, 2014, allegations were made that a few Delivery Agent employees 

(none of whom are defendants) falsified data from a February 2, 2014 Super Bowl advertisement 

in which Delivery Agent partnered with H&M to sell David Beckham underwear. Delivery Agent 

employees rather than third parties had purchased a majority of the underwear. After being made 

aware of these allegations, the Audit Committee promptly arranged a meeting for February 8, 2014 

and requested that Latham attend the meeting to provide legal advice. Power Dec. at ¶¶6-11; 

Smith Dec. at ¶4. At the meeting, Latham advised the Audit Committee regarding how to proceed, 

including whether an internal investigation should be commenced. Id. The Audit Committee, 

pursuant to Latham’s advice, decided to proceed with an internal investigation. Id. 

The Audit Committee instructed the general counsel, Mark Smith, to conduct the 

independent internal investigation on behalf of the Audit Committee, report to the Audit 

Committee throughout his investigation and, ultimately, present his findings directly to the Audit 

Committee. Id. Latham provided the Audit Committee with legal advice throughout the 

investigation, including by recommending best practices, explaining how to keep the investigation 

independent, drafting an internal investigation summary for the Audit Committee and advising 

how to address the internal investigation’s findings. Id.; Ferrari Dec. at ¶14, Ex. E. 

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After Mr. Smith presented the internal investigation findings to the Audit Committee, 

Latham advised the Audit Committee about whether an investigation by an outside law firm should 

be conducted and recommended potential law firms to conduct the external investigation on behalf 

of the Audit Committee. Power Dec. at ¶¶12-13; Smith Dec. at ¶5. Upon Latham’s advice and 

recommendation, the Audit Committee retained Bergeson LLP (“Bergeson”) in the spring of 2014 

to conduct the external investigation. Id.; Ferrari Dec. at ¶26 Exs. L and M. Latham provided the 

Audit Committee with guidance throughout the course of the external investigations and drafted a 

summary of the external investigation findings for the Audit Committee. Power Dec. at ¶¶12-13; 

Smith Dec. at ¶5; Ferrari Dec. at ¶¶16-17, Exs. G and H. 

After the internal and Bergeson investigations were completed, the Audit Committee 

worked closely with Latham to develop a remediation plan. Power Dec. at ¶¶14-15; Smith Dec. at 

¶5; Ferrari Dec. at ¶¶ 17, 37, Exs. H and R. Patrick Pohlen of Latham was in very frequent 

communication with the Chairman of the Audit Committee, Defendant Power, regarding the 

specifics of the remediation plan to determine if it was sufficiently comprehensive and reasonably 

designed to achieve the goals for remediation of the behavior. Power Dec. at ¶¶14-15. Mr. Pohlen 

discussed each of the subparts of the remediation plan with the Audit Committee, and advised that 

the provisions of the remediation plan properly addressed the findings of the investigations. Since 

the remediation plan was developed in reliance on the advice of Latham given only to the Audit 

Committee, the Audit Committee reasonably believed that Latham was acting as its counsel. Id. 

As counsel for the Audit Committee, Mr. Pohlen ultimately sent the remediation plan to the full 

Board who thereafter approved it. Id. 

ii. Latham’s Representation of the Audit Committee in 

Connection with the Change of Accountants and Item 

304. 

After learning of the internal investigation described above, Delivery Agent’s then auditor, 

Deloitte, decided to suspend its work on Delivery Agent’s financials. Nevertheless, in the hopes 

that Deloitte would restart its auditing work, the Audit Committee kept Deloitte apprised of all 

findings from the internal and Bergeson investigations, including by presenting the remediation 

plan and the Bergeson report to Deloitte. Power Dec. at ¶¶16; Ferrari Dec. at ¶¶17 and 37; Exs. H 

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and R. However, Deloitte refused to restart its work. On July 29, 2014, after receiving legal advice 

from Latham, the Board decided to switch auditors from Deloitte to Grant Thornton. Power Dec. 

at ¶¶16-18; Smith Dec. at ¶6; Ferrari Dec. at ¶17, Ex. H, see deKay testimony. 

Under Item 304 of the SEC’s regulations, Delivery Agent, if it made a filing with the SEC 

of an S-1 for an IPO, would be required to explain this change in accountants in that S-1. The 

Audit Committee relied upon Latham heavily in connection with this Item 304. Power Dec. at 

¶¶18-21. Specifically, Latham drafted the initial Item 304 language explaining the change of 

accountants, which was sent to Deloitte on behalf of the Audit Committee. Id.; Ferrari Dec. at ¶18, 

Ex. I (e.g., CONNEKT 0293522-35); Smith Dec. at ¶7. Latham also revised and edited subsequent 

iterations of the language after Delivery Agent’s former auditor, Deloitte, added specificity about 

the investigations and remediation plan to the Item 304. Id. Latham provided the Audit Committee 

with comprehensive advice about the specific language of the Item 304 throughout the 

Committee’s discussions with Deloitte. Id. Latham further attended every Audit Committee 

meeting, during which it provided the Committee with legal advice, including advice concerning 

the Item 304/IPO. 

In 2015, Latham admitted that the privilege related to the activities described in this 

subsection b. belonged to the Audit Committee. Ferrari Dec. at ¶41, Ex. U. 

c. As Counsel to Individual Defendants. 

Latham advised each of the individual defendants on their fiduciary duties and Mr. 

Fitzsimmons on whether or not he should disclose the investigations and change in accountant. 

Ferrari Dec. at ¶20, Ex. K; Fitzsimmons Dec. at ¶4, Exs. A and B. 

4. Waiver of Subpoenaed Matters Before the 2017 Trustee Appointment. 

To the extent Delivery Agent held any privilege, from 2014 to 2015 while it was still a 

going concern, Delivery Agent voluntarily disclosed privileged communications and work product 

to third parties—including, but not limited to, its outside auditors (Deloitte and Grant Thornton), 

proposed but not yet retained auditors (Grant Thornton), potential new hires (Brian Erb), 

“mentors” (Lionsgate), underwriters (Credit Suisse, Barclays, Bank of Montreal, Deutsche Bank, 

and Macquarie), underwriters’ counsel (Davis Polk), potential investors (BTIG), and Plaintiffs—

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regarding the two investigations, the remediation plan, the change in auditors, the 304 language 

which chronicled the investigations, the remediation plan, and change in auditors, and disclosures 

in the Financing Documents. Ferrari Dec. at ¶¶13-20, 41, Exs. E-K, U; Hagan Dec. at ¶¶1-5, Ex. A; 

Peters Dec. at ¶¶1-5, Ex. A; Fitzsimmons Dec. at ¶¶1-7, Ex. A; Smith Dec. at ¶¶1-7. 

For example, Latham’s advice on the internal investigation was initially disclosed, in 

Spring 2014, to Deloitte and Lionsgate. Ferrari Dec. at ¶15, Ex. F at Novelly testimony and 

CONNEKT0547712-13; see also ¶41, Ex. U (wherein Latham admits, in 2015, that the 

privilege related to the internal investigation was waived). Latham’s advice on both the 

internal and external investigations, Latham’s remediation plan based on Bergeson’s report, 

Latham’s advice to change accountants, and Latham’s advice on the 304 was disclosed to: 

 Deloitte in 2014 (when it was Delivery Agent’s auditor) and 2015 (when it was no 

longer Delivery Agent’s auditor) (Ferrari Dec. at ¶¶15, 17, 19, 41, Exs. F, H, J, U; 

Peters Dec. at ¶¶1-4; Smith Dec. at ¶7; Power Dec. at ¶¶16,18); 

 Potential new auditor Grant Thornton in Summer 2014 (Ferrari Dec. at ¶17, Ex. H, 

deKay testimony); 

 Potential new employee Brian Erb in 2015 (Hagan Dec. at ¶¶3-4, Ex. A); 

 Underwriters and underwriters’ counsel in 2014 and 2015 (Ferrari Dec. at ¶19, Ex. 

J; Hagan Dec. at ¶5; Fitsimmons Dec. at ¶5); 

 Potential new investors BTIG in 2015 (Fitzsimmons Dec. at ¶6); and 

 Plaintiffs in 2015 (e.g., Peters Dec. at ¶¶3-4, Ex. A). 

See generally, Ferrari Dec. at ¶¶13-20, 41. Latham’s draft and final Financing Documents were 

disclosed to third parties and Plaintiffs in 2014 and 2015. (Ferrari Dec. at ¶20, 38, Exs. K and S). 

In September 2016, Delivery Agent filed for Chapter 11 bankruptcy. Request for Judicial 

Notice “RFJN”), Ex. A. During its pendency, Delivery Agent retained control over all of its 

property and continued managing its business as debtors-in-possession. Before confirmation of a 

reorganization plan, however, Delivery Agent—in “an appropriate exercise of [its] business 

judgment”— agreed to sell substantially all” of Delivery Agent’s assets to a company named 

Hillair. As part of that transaction, Delivery Agent expressly agreed to transfer to Hillair both its 

“computer and computer-related hardware (including, computers, file servers, facsimile servers, 

scanners, printers, and networks)” as well as its “Documents,” defined to include “all files, 

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documents, instruments, books, reports, records. . . letters, . . . and other similar materials, in each 

case whether or not in electronic form.” RFJN, Ex. B at §§ 1.1, 2.1(f), 2.1(i)). On November 18, 

2016, shortly after their acquisition, Hillair then transferred Delivery Agent’s assets to Connekt. Id.

at § 12.8. In 2017, the bankruptcy was converted to a Chapter 7 and the current Trustee was 

appointed. RFJN, Ex. C. The Trustee is aware of the privilege issues, the subpoenas, and that this 

Motion will be made and has not taken any position on who holds privilege on Latham’s advice 

and whether privilege was waived prior to his appointment. Declaration of Gregory Markel 

(“Markel Dec.”) at ¶¶ 1-7. 

5. Use of Latham Documents On Subpoenaed Matters in this Litigation.6

Plaintiffs served a subpoena on Connekt on or around July 25, 2018. Ferrari Dec. at ¶21. 

Connekt provided Defendants with all of the Delivery Agent documents it had received in the asset 

sale, and Defendants produced those documents to Plaintiffs in March and May 2019. Ferrari Dec.

at ¶22. In total, approximately 210,000 Delivery Agent documents were produced through that 

production. Id. Within those documents were the approximately 12,000 documents to, from, 

or by Latham. Id. Thousands of the documents in the Connekt production showed Latham’s 

advice and work product were shared with third parties prior to filing Delivery Agent filing for 

bankruptcy. Id. at ¶¶23, 25. Third parties and Plaintiffs have also produced thousands of 

communications between them and Latham regarding Delivery Agent. Id. 

Plaintiffs have used Latham advice and work product in every single deposition to date and 

clearly intend to use those documents to support their case while demanding Defendants be 

precluded from doing so. See Plaintiffs’ Motion to Strike. The number of deposition exhibits that 

were to, from and/or drafted by Latham are as follows: 1 at the deposition of Mac Hagel (third 

party), 1 at the deposition of Steve Lumboski (third party), 17 at the deposition of Michael Novelly 

(third party), 14 at the deposition of Timothy de Kay (third party), 5 at the deposition of 

6 Plaintiffs also contend Murphy Pearson, Orrick Harrington & Sutcliff, and Bergeson, 

LLP were counsel with respect to Item 304. Thousands of documents with their 

communications/work product have already been produced by the parties and third parties to this 

litigation, and many have been used in depositions. Any such privilege with regard to Item 304 

has been waived. Ferrari Dec. at ¶¶19, 22, 24, Ex. J.

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Christopher Nam (third party), 3 at the deposition of Patrick Kratus (third party), 1 at the 

deposition of Peter Lai, 8 at the deposition of Tej Shah (third party), 10 at the deposition of Souheil 

Badran, 18 at the deposition of Christian Borcher, and 14 at the deposition of James Peters. Many 

more referencing Latham and/or its advice have been used by Plaintiffs in deposition. Id. at ¶29. In 

Defendant Peters’ deposition, which was taken by Plaintiffs after they filed their Motion to 

Strike, 22 of the 32 exhibits introduced by Plaintiffs were communications to and from, drafted by, 

or referencing Latham. Id. at ¶34. Plaintiffs did not mark that transcript confidential. Id. In 

Defendant Borcher’s deposition, 20 of the 30 exhibits introduced were communications to and 

from, drafted by, or referencing Latham. Id. at ¶35. Plaintiffs did not mark Mr. Borcher’s 

deposition confidential. Id. Plaintiffs have specifically elicited testimony regarding advice given 

by Latham when deposing Defendants and former Delivery Agent employees. Id. at ¶36. 

6. The Subpoenas and Latham’s Objections. 

On July 11, 2019, Defendants served subpoenas on Latham in each case. Ferrari Dec. at 

¶10, Ex. B. The 14 RFPs asked for documents on the Subpoena Matters. On August 6, 2019, 

Latham objected to all 14 RFPs stating that it will not produce “unless and until it receives either 

(i) direction from the holder of the privilege, or (ii) a court order determining whether otherwise 

applicable privileges or protections have been waived, and, if so, the extent of any such waiver.” 

Id. at ¶11, Ex. C, emphasis added. On August 19, 2019, Defendants served deposition subpoenas 

on two Latham counsel. Latham opposes the deposition subpoenas for the same reasons it opposed 

the document subpoenas. Ferrari Dec. at ¶12, Ex. D. 

III. ARGUMENT 

The scope of discovery through a Rule 45 subpoena is the same as the scope of discovery 

permitted under Rule 26(b). See, e.g., Lira v. Chipotle Mexican Grill, Inc., 2018 WL 2128707, at 

*2 (N.D.Cal. May 9, 2018 ) (explaining relationship between Rule 45 and Rule 26). Fed. R. Civ. 

P. 26(b)(1) (discovery permitted “regarding any non-privileged matter that is relevant to any 

party’s claim or defense and proportional to the needs of the case”). Latham does not challenge the 

relevance of the matters sought by Defendants’ subpoenas, or Defendants’ need for the materials to 

support its defenses. Rather, it objects on the grounds that that the subpoenas seek the production 

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of documents and testimony protected from disclosure by the attorney-client privilege and the 

attorney work product doctrine. 

As with all evidentiary privileges, the burden of proving that the attorney-client privilege or 

the work-product doctrine applies rests not with the parting contesting the privilege, but with the 

party asserting it. Weil v. Investment/Indicators, Research and Management, Inc., 647 F.2d 18, 25 

(9th Cir. 1981) (attorney-client privilege); Sidibe v. Sutter Health, 2018 WL 783808, at *2 

(N.D.Cal. 2018) (work-product). To meet its burden, the asserting party must affirmatively 

establish that the neither the privilege nor the work-product protection has been waived. Weil, 647 

F.2d at 25; Granite Partners v. Bear, Stearns & Co., Inc., 184 F.R.D. 49, 54 (S.D.N.Y. 1999) 

(party asserting work product protection must affirmatively establish nonwaiver). 

Latham has not met its burden; indeed, it has made no effort to do so. That is because it 

cannot: Not only do the Audit Committee, and Delivery Agent’s former officers and directors hold 

an independent privilege in the Subpoenaed Matters separate and apart from the corporate privilege 

(which they can waive), even if a corporate privilege attached, no valid underlying privilege 

remains in the Subpoenaed Matters for the Trustee to assert because Delivery Agent waived the 

privilege years before his appointment. And certainly, given Plaintiffs’ cavalier use of the 

purportedly privileged documents, fairness and equity also dictate that any privilege attached to the 

Subpoenaed Matters be waived. The attorney-client privilege does not excuse Latham’s failure to 

produce non-privileged documents or communications. 

A. The Bankruptcy Trustee Does Not Hold The Privilege. 

Latham’s refusal to produce responsive documents “until it receives...further direction 

from the holder of the privilege” ignores that the Audit Committee—and not the Trustee—holds 

the privilege in the Subpoenaed Matters separate and apart from the corporate privilege. 

1. The Audit Committee Holds The Privilege Over the Subpoenaed 

Matters, Separate and Distinct From Any Corporate Privilege. 

The attorney-client privilege protects from disclosure communications between an attorney 

and a client, made in confidence, for the purpose of rendering or obtaining legal advice. Although 

a corporation may be the client of an attorney, it is an intangible entity that can act only through its 

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authorized agents. Consequently, an attorney’s relationship and its communications are not with a 

corporate client, but rather with its managing agents. Circumstances may thus arise where an 

agent’s communication with counsel gives rise to a separate attorney-client relationship with 

counsel, establishing an independent privilege separate and distinct from the corporate privilege. 

Importantly, courts recognize that an audit committee of a corporation’s board of directors 

is legally distinct from both the board as a whole and the corporation which it serves, and enjoys an 

identity and legal privileges distinct from either the larger board or the corporation.7See In re BCE 

West, L.P., No. M-8-85, 2000 WL 1239117, at *2 (S.D.N.Y. Aug. 31, 2000) (“Because the Special 

Committee is a separate and distinct group from the Board of Directors, with separate legal 

representation, the privilege afforded it is not the privilege of the corporation, but rather, is the 

privilege of the Special Committee.”); In re Woolworth Corp. Sec. Class Action Litig., 1996 WL 

306576, at *1 (S.D.N.Y. June 7, 1996) (recognizing the special committee of the board as the 

attorney’s client for privilege purposes). In re China Medical Tech., Inc., 522 B.R. 28, 37 (Bankr. 

S.D.N.Y. 2014) (audit committee of debtor, and not debtor, owned privileges, including attorneyclient privilege, associated with legal services provided to committee). 

Although Latham generally served as corporate counsel to Delivery Agent, it separately 

and independently provided legal services to the Audit Committee and its members with respect to 

the Subpoenaed Matters. Power Dec. at ¶¶1-24; Ferrari Dec. at ¶41, Ex. U. Consistent with its 

7

 In fact, an audit committee's distinct privilege was singled out for special protection by 

Congress when it enacted the Sarbanes-Oxley Act of 2002. See 15 U.S.C. 78j-1(m)(5) (“Each 

audit committee shall have the authority to engage independent counsel and other advisers, as it 

determines necessary to carry out its duties.”). In its official release implementing Section 301 

of Sarbanes-Oxley, the SEC explained that the provision relating to audit committees, and the 

privileges inherent in it, is critical to the proper functioning of a company's audit committee: “To 

perform its role effectively ... an audit committee may need the authority to engage its own 

outside advisors ... as it determines necessary apart from counsel or advisors hired by 

management, especially when potential conflicts of interest with management may be apparent.” 

SEC Release No. 33-8220, 2003 WL 1833875, at *9 (April 9, 2003). The audit committee 

function, in turn, is central to the integrity of a corporation's financial reporting process, which 

was both the spur and the goal of Sarbanes-Oxley. See Id. at *19 (April 9, 2003) (“The audit 

committee provides independent review and oversight of a company's financial reporting 

processes, internal controls and independent auditors. It provides a forum separate from 

management in which auditors and other interested parties can candidly discuss concerns.”). 

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purpose and responsibilities, the Audit Committee exercised independent oversight over the 

corporation’s financial reporting and the company’s legal and regulatory compliance separate from 

Delivery Agent. Power Dec at ¶¶1-24. In this capacity—and as it was expressly empowered to 

do—the Audit Committee independently retained and separately sought Latham’s advice on: (1) 

the two internal investigations into the 2014 Superbowl ad campaign, (2) the resulting remediation 

plan, (3) the change in auditors, including the disclosures required by S-K 304, the firing of 

Novelly and other individuals, and other financial and auditor issues.8Id. Consistent with accepted 

principles of corporate governance, Latham’s advice and recommendations were provided in 

confidence only to the Audit Committee, and without the participation of the corporation or its 

management—particularly as many of the issues on which Latham advised the Audit Committee 

related to members of the Board of Directors and other senior management. 

Under such circumstances, the Audit Committee and its members hold their own privilege 

over the Subpoenaed Matters separate and distinct from that of the corporation. Because such 

privilege is not the corporate privilege, the Trustee has no control over it and the Audit Committee 

and its members are free, as they do so here, to waive it. See Commodity Futures Trading Comm’n 

v. Weintraub, 471 U.S. 343, 350 (1985) (Although a bankruptcy trustee may control the corporate 

privilege, it has no control over the privileges of parties other than the corporation). 

2. Delivery Agent’s Officers and Directors Separately Hold A Privilege 

Over the Subpoenaed Matters. 

Courts have similarly recognized that because a corporation’s officers and directors are 

responsible for the proper management of the corporation, they must be treated as a client and joint 

8

 In its role as counsel for the Audit Committee, Latham attended meetings with the AC 

and provided legal advice about the process to be used for the investigations, drafted summaries 

of the investigations for the AC to review, recommended the outside investigator to be used to 

make factual findings, hosted that investigator’s presentation on his findings and instructed 

attendees not to keep a copy of the presentation, created and recommended the investigation 

remediation plan for the AC to approve, drafted and negotiated terminations for Novelly and 

Gabe Greenberg - the employee who sent bad data, determined a change in auditors was required 

and recommended GT, drafted and negotiated the Item 304 language, and drafted and 

disseminated the Financing Documents which did not disclose the investigations or change of 

accountants. Power Dec. at ¶¶1-24. 

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holders of the privilege when legal advice applicable to all is rendered to one or more of its officers 

or directors. See Glidden Co. v. Jandernoa, 173 F.R.D. 459, 473 (W.D. Mich. 1997) (“directors 

have a right to access attorney communications of the company relating to the time they served as 

directors” because the entire board is the client of the corporation’s counsel); Harris v. Wells, 1990 

WL 150455, at 3-4 (D. Conn. Sept. 5, 1990) (director could not assert attorney-client privilege 

against his fellow corporate directors); Hercules, Inc. v. Exxon Corp., 434 F. Supp. 136, 145 (D. 

Del. 1977) (“Since a corporation acts only through its representatives the Court must distinguish 

between those employees who act as representatives of the corporation and those who do not. Only 

the former qualify as “clients” for the purpose of the privilege.”).

Under this rationale, courts have rejected a corporation’s attempts to withhold as privileged 

documents sought by former officers and directors. See, e.g., Gottlieb v. Wiles, 143 F.R.D. 241, 

247 (D. Colo. 1992) (granting former director’s motion to compel attorney-client privileged and 

work product protected documents from corporation generated during his tenure); Kirby v. Kirby, 

1987 WL 14862 at *7 (Del. Ch. July 29, 1987) (ordering corporation to produce documents to 

former director, explaining “[t]he directors are all responsible for the proper management of the 

corporation, and it seems consistent with their joint obligations that they be treated as the ‘joint 

client’ when legal advice is rendered to the corporation through one of its officers or directors”); 

Moore Bus. Forms, Inc. v. Cordant Holdings Corp., 1996 WL 307444 at*4 n. 4 (Del. Ch. June 4, 

1996) (clarifying that when a lawyer advises a corporation there is a single client, the entire board, 

and ordering production of documents to plaintiffs, former directors of corporation). 

All Defendants were officers or directors of Delivery Agent and the individuals through 

which Latham passed its legal advice related to the Subpoenaed Matters. Defendants approached 

Latham on numerous occasions for the purpose of seeking legal advice, making it clear that they 

were doing so in their individual capacity rather than their representative capacity (e.g., with 

respect to their individual fiduciary duties), and Latham plainly saw fit to communicate with 

individual Defendants in their individual capacities. Ferrari Dec. at ¶27, Ex. N (wherein Latham 

provided each Defendant individual advice on their fiduciary duties to Delivery Agent -- the issue 

at the core of this securities litigation); Fitzsimmons Dec. at ¶¶3-4, Exs. A and B. (wherein Latham 

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advised Mr. Fitzsimmons not to disclose the investigations or the change in auditors to investors -- 

exact factual matter at issue in this litigation). Surely, Latham is sophisticated enough to recognize 

possible conflicts could arise, but saw fit to communicate with Defendants on their individual 

liability. Each individual defendant, therefore, can claim a personal privilege with Latham’s 

counsel. See United States v. Graf, 610 F.3d 1148, 1159–60 (9th Cir. 2010) (adopting test 

established by the Third Circuit to determine claims of personal privilege with a client 

corporation’s counsel). Each, therefore, are properly clients of Latham—separate and distinct from 

the corporate client—for purposes of the attorney-client privilege with the power to waive it. 

B. No Valid Underlying Privilege Exists For the Trustee to Assert Because 

Delivery Agent Waived Any Privilege Before His Appointment. 

Even if a corporate privilege attached, no valid underlying privilege remains in the 

Subpoenaed Matters for the Trustee to assert because the privilege was waived before his 

appointment. See Securities Investor Protection Corp. v. Stratton Oakmont, Inc., 213 B.R. 433, 

439–40 (Bankr. S.D. N.Y. 1997) (Although control of the corporate privilege passes to an 

appointed bankruptcy trustee upon the corporation’s bankruptcy, the trustee acquires no more right 

to assert the privilege than the entity controlling the privilege possessed before the appointment). 

1. Delivery Agent Waived Any Privilege By Its Pre-Bankruptcy 

Disclosures of the Subpoenaed Matters To Third-Parties. 

The disclosure of a privileged communication to a third party waives the attorney-client 

privilege that attached to the communication. Optronic Technologies, Inc. v. Ningbo Sunny 

Electronic Co., Ltd., 2018 WL 5886013, at *2 (N.D. Cal. 2018), citing Weil v. 

Investment/Indicators, Research & Management, Inc., 647 F.2d 18, 25 (9th Cir. 1981). Likewise, 

disclosure of work-product protected documents to a third party not aligned in interest with the 

privilege holder also waives any work product protection attached to the communication. 

Diasonics Securities Litig., 1986 WL 53402 (N.D. Cal., June 15, 1986) (disclosure of work product 

to third party whose interests may not have been aligned waives work product protection); 

Medinol, Ltd. v. Boston Scientific Corp., 214 F.R.D. 113, 115 (S.D.N.Y. 2002) (same). 

The scope of such waiver is not limited solely to the communications disclosed, but rather 

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extends to any undisclosed communication or work product on the same subject matter. Phoenix 

Solutions Inc. v. Wells Fargo Bank, N.A., 254 F.R.D. 568, 576 (N.D. Cal. 2008) (“the voluntary 

disclosure of the attorney communication constituted a waiver of the privilege as to all other such 

communications on the same subject matter. This is, of course, black letter law.”); See, e.g., S.E.C. 

v. Roberts, 254 F.R.D. 371, 378 (N.D.Cal. 2008) (When either privilege [attorney-client or work 

product] is waived, its scope extends to “all communications on the same subject matter ... so that a 

party is prevented from disclosing communications that support its position while simultaneously 

concealing communications that do not.”); Board of Trustees of Leland Stanford Junior University 

v. Roche Molecular Systems, Inc., 237 F.R.D. 618, 623 (N.D.Cal. 2006) (treating the scope of the 

waiver of attorney-client privilege and work product protection as the same—extending to 

undisclosed documents on the same subject matter—because the voluntary disclosure substantially 

increased the possibility of an opposing party obtaining the privilege and thus defeated the policy 

underlying work product protection); see also Fed. R. Evid. 502(a), (b). 

Importantly, whether the privilege holder had the subjective intent to waive the privilege is 

irrelevant; the focus instead is on the act of disclosure to a party outside the attorney-client 

relationship. Tennenbaum v. Deloitte & Touche, 77 F.3d 337, 341 (9th Cir. 1996) (“we have 

admonished that the focal point of privilege waiver analysis should be the holder's disclosure of 

privileged communications to someone outside the attorney-client relationship, not the holder's 

intent to waive the privilege”); see also Bittaker v. Woodford, 331 F.3d 715, 720 n. 4 (9th Cir. 

2003) (“an express waiver need not be effectuated by words or accompanied by the litigant's 

subjective intent”) (citations omitted). As a result, to establish an applicable attorney-client 

privilege, the party asserting the privilege must affirmatively demonstrate non-waiver. United 

States v. Gann, 732 F. 2d 714, 723 (9th Cir. 1984); [see also McCafferty's, Inc. v. Bank of Glen 

Burnie, 1998 U.S. Dist. LEXIS 12859, *17–20 (D. Md. Jan. 26, 1998) (simply claiming did not 

know how third party obtained privilege documents insufficient for privilege holder to satisfy 

burden to show non-waiver). 

Tellingly, while it asserts the attorney-client and work-product doctrine as the basis for its 

refusal to produce responsive documents, Latham makes no effort to demonstrate affirmatively the 

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existence of the privilege and its non-waiver. That is because it cannot make the requisite 

showing; indeed, not only did Defendants hold the privilege with the power to waive it, Delivery 

Agent also waived any privilege attached to the Subpoenaed Matters years before it entered into 

bankruptcy through its disclosures of a significant portion of its communications with Latham 

and/or Latham’s work product to various third-parties. 

Specifically, between 2014 and 2015—well before it entered into bankruptcy—Delivery 

Agent voluntarily disclosed a number of its privileged communications with Latham and/or 

Latham’s privileged work product regarding the two investigations, the remediation plan, the 

change in auditors, and the 304 language which chronicled the investigations, and drafts of the 

Financing Documents to various parties outside of the attorney-client relationship, including but 

not limited to its outside auditors,9 proposed but not yet retained auditors, potential new hires, 

“mentors,” underwriters, underwriters’ counsel, potential investors, and Plaintiffs.10 See Section II, 

9

 Courts have routinely found voluntary disclosures to auditors waive the attorney-client 

privilege and work-product protection. See, e.g., Chevron Corp. v. Pennzoil Co., 974 F.2d 1156, 

1162 (9th Cir. 1992) (“Pennzoil concedes that the district court was correct in ordering 

disclosure of the documents actually provided to the outside auditor.”); In re Juniper Networks, 

Inc. Securities Litigation, 2009 WL 4644534, at *2 (N.D.Cal. 2009) (“even if the attorney-client 

privilege initially attached to the communications, the Audit Committee's disclosure of the 

substance of the communications to Juniper's outside auditors effected a waiver of the 

privilege”); In re Subpoena Duces Tecum Served on Willkie Farr & Gallagher, 1997 WL 

118369, *3 (S.D. N.Y. 1997) (corporation waived privilege by disclosing results of an internal 

investigation of company’s accounting practices, policies and procedures performed by outside 

law firm to auditor in order to obtain an unqualified audit opinion); Diasonics Securities Litig., 

1986 WL 53402 at * (N.D. Cal., June 15, 1986) (concluding that the work product protection did 

not apply to documents disclosed to an auditor acting as a public accountant); Medinol, Ltd. v. 

Boston Scientific Corp., 214 F.R.D. 113 (S.D.N.Y. 2002) (concluding that work product 

protection was waived with respect to litigation committee minutes that were disclosed to outside 

auditor because the auditor's interests were not aligned with the company). 

10 Like auditors, an underwriter is not only a third party but its interests not aligned with 

the corporation. See Joseph K. Leahy, What Due Diligence Dilemma? Re-Envisioning 

Underwriters’ Continuous Due Diligence After WorldCom, 30 Cardozo L. Rev. 2001, 2013-14 

(2009) (an underwriter’s duties include independently verifying information about the issuer, and 

involves consulting sources both inside and outside the issuer); Thomas Lee Hazen, Defenses 

Under 1933 Act Section 11(b)—Underwriters' Liabilities, 2 Law Sec. Reg. § 7:36 (May 2019) 

(an underwriter’s presence in an offering can act as an implied representation that the 

underwriter has investigated the issuer). Accordingly, voluntary disclosure to an underwriter 

should result in a waiver of both attorney-client privilege and work product protection. See, e.g., 

See, e.g., Rhone-Poulenc Rorer Inc. v. Home Indem. Co., 1993 WL 106429, at *2 (E.D.Pa. 1993) 

(holding that corporation waived the attorney-client privilege and work-product protection by 

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4-5, supra. Regardless of the intent behind these disclosures, they constitute pre-bankruptcy 

waivers of the attorney-client privilege or work product protection in the Subpoenaed Matters. 

2. Delivery Agent Waived Any Remaining Privilege While A Debtor-InPossession When It Sold Substantially All of Its Assets in 2016. 

When confidential corporate-client privileged communications are transferred to a third 

party in connection with the sale of some or all of the corporation’s assets, the selling party waives 

any privilege still in effect as to those communications—particularly where, as here, the seller 

takes no reasonable measures to ensure their confidentiality. See, e.g., In re In–Store Advertising 

Sec. Litig., 163 F.R.D. 452, 458 (S.D.N.Y. 1995) (“[W]here confidential attorney-client 

communications are transferred from a corporation selling assets to the corporation buying the 

assets, the privilege is waived as to those communications ...”); Kaufman v. Sungard Invest. Sys., 

05-cv-1236, 2006 WL 1307882 (D.N.J. May 10, 2006) (transfer of privileged emails on company 

computer as part of asset sale both “deliberate” and a waiver of the privilege when no reasonable 

measures taken to withhold emails or ensure their confidentiality); Society of Professional 

Engineering Employees in Aerospace v. Boeing Co., C.A. No. 05-1251-MLB, 2010 WL 3083536 

(D. Kan. Aug. 5, 2010) (seller waived attorney-client privilege over pre-closing emails by 

transferring them to seller after closing and made no effort to protect them during the pre-sale 

process); see also GOT I, LLC v. XRT, Inc., 2017 WL 3113408, *2 (N.D. Ga. Feb. 28, 2017) 

(attorney-client privilege waived by disclosure of emails as part of asset sale); Stooksbury v. Ross, 

No. 3:09-CV-498, 2012 WL 3779113, at *3 (E.D. Tenn. Aug. 31, 2012) (privilege “unequivocally 

waived via the selling of” computers containing privileged communications with counsel). 

In September 2016, Delivery Agent filed for Chapter 11 bankruptcy. RFJN, Ex. A. During 

its pendency, Delivery Agent retained control over all of its property and continued managing its 

business as debtors-in-possession. Before confirmation of a reorganization plan, however, Delivery 

disclosing outside counsel’s analysis of liabilities assumed in corporate acquisition to bank that 

had been serving as a the corporation’s “investment advisor” before and after acquisition); 

Randleman v. Fidelity Nat. Title Ins. Co., 2008 WL 4683297, *2 (N.D. Ohio 2008) (waiver 

found by discussing counsel's advice with agents, brokers and lenders—all third parties to the 

lawsuit suit). 

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Agent—in “an appropriate exercise of [its] business judgment”—agreed to sell substantially all” of 

Delivery Agent’s assets including the company’s computers, files, servers and networks to Hillair. 

RFJN, Ex. B at §§ 1.1, 2.1(f), 2.1(i)). On November 18, 2016, shortly after their acquisition, 

Hillair then transferred Delivery Agent’s assets to Connekt. Id. at § 12.8. The following year, the 

bankruptcy was converted to a Chapter 7 and the current Trustee was appointed. RFJN, Ex. C. 

Delivery Agent’s communications with Latham, along with Latham’s work product, and 

other information prepared by Latham for Delivery Agent resided in the company’s computers, 

files, servers and networks. Yet no evidence exists—and Latham certainly has proffered none—

that Delivery Agent made any effort to identify, remove or segregate its privileged 

communications with, or work product prepared by, Latham, from its computers, servers, networks 

or files before transferring them to Hillair. Likewise, no evidence exists that Delivery Agent took 

any steps to claw-back, delete or otherwise protect its privileged communications and workproduct before Hillair subsequently transferred the assets to Connekt. Certainly, the asset purchase 

agreement provides no provisions for the protection of Delivery Agent’s privileged 

communications and attorney work product with respect to the sale of Delivery Agent’s servers. 

Under the circumstances, no merit exits to Latham’s claim that the attorney-client privilege 

precludes its disclosure of the Subpoenaed Matters in response to Defendants’ subpoenas. To the 

extent Delivery Agent held any privilege over such matters, it waived it long before the 

appointment of the Chapter 7 bankruptcy trustee. Delivery Agent took no reasonable measures to 

protect its privileged communications and attorney work-product from disclosure to third-parties, 

including Hillair and Connekt. And, importantly, in October 2018, Connekt reviewed and 

disclosed—without objection from Delivery Agent or its estate—over 210,000 documents from 

Delivery Agent’s computers, servers, networks and files, including Delivery Agent’s privileged 

communications with Latham and Latham’s work product, to the parties.11 Ferrari Dec. at ¶21. 

11 The privileged status of communications between Delivery Agent and Latham was 

extinguished once the assets containing those communications were transferred to third-parties 

Hillair and Connekt. Alternatively, control of the privilege passed to Hillair and/or Connekt 

when they acquired “substantially all” of Delivery Agent’s assets. Parus Holdings, Inc. v. 

Banner & Witcoff, Ltd., 585 F. Supp. 2d 995 (N.D. Ill. 2008) (privilege transfers to buyer); 

Soverain Software LLC v. The Gap, Inc., 340 F. Supp. 2d 760 (E.D. Tex. 2004); SimpleAir, Inc. 

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C. The Court Cannot Reasonably Continue The Fiction That The AttorneyClient Privilege Will Protect The Confidentiality of the Subpoenaed Matters. 

The attorney-client privilege is intended to maintain the confidentiality of the 

communications between an attorney and its client. See, e.g., United States v. Palmer, 536 F. 2d 

1278, 1281 (9th Cir. 1976). Once the proverbial cat is out of the bag, the privilege’s underlying 

purpose of maintaining confidentiality is defeated and the communications are no longer worthy of 

protection. Dukes v. Wal-Mart Stores, Inc., 2013 WL 1282892, at *7 (N.D. Cal., Mar. 26, 2013); 

see also Chemeon Surface Tech., LLC v. Metalast Int’l, Inc., 2016 WL 4967716, at *3 (D. Nev. 

Sept. 15, 2016) (“Since the basis for the attorney-client privilege is to protect confidential 

communications, that purpose ends when confidential communications are voluntarily disclosed to 

a third party”); AT&T Corp. v. Microsoft Corp., 2003 WL 21212614, at *5 (N.D. Cal., Apr. 18, 

2003)(“the attorney-client privilege is about maintaining confidentiality”); Feshbach v. S.E.C., 5 F. 

Supp. 2d 774, 784 (N.D. Cal. 1997) (The attorney-client privilege applies only to maintain the 

confidentiality of information claimed to be privileged). In other words, once confidentiality is 

lost, a communication cannot meet the standard to establish privilege; confidentiality—once 

destroyed—cannot be restored. 

Under the circumstances here, no reasonable basis exists for Latham to continue the fiction 

that the Subpoenaed Matters remain confidential and privileged. For example, in response to 

Plaintiffs’ subpoenas, Connekt produced to both Plaintiffs and Defendants over 27,000 attorneyclient communications with or attorney work-product documents related to the Subpoenaed 

Matters from the Delivery Agent computers, servers, networks and files it acquired from Hillair (of 

these, there were approximately 12,000 communications and documents created, sent, or received 

by Latham pertaining to the Subpoenaed Matters). Ferrari Dec. at ¶¶22, 24. Moreover, thirdparties to this litigation have also produced to Plaintiffs and Defendants thousands of attorneyv. Microsoft Corp., No. 2:11-cv-416, 2013 WL 4574594 (E.D. Tex. Aug. 27, 2013). Under 

either scenario, no valid underlying privilege in the Subpoenaed Matters exists for either Latham 

or the Trustee to assert because the privilege has been waived; indeed, Connekt’s production of 

Delivery Agent’s privileged documents and Latham’s work product is the ultimate voluntary 

waiver of any privilege that might still have attached to the communications. 

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client communications and attorney work-product documents, including communications between 

Defendants themselves and counsel pertaining to the Subpoenaed Matters, which were previously 

disclosed to them before the appointment of the Trustee. Ferrari Dec. at ¶¶22-26. 

Significantly, although Plaintiffs now claim that these attorney-client communications and 

work-product documents produced are privileged against disclosure, they certainly have reviewed 

those documents, and have selectively used (and continue to use) them in their depositions of party 

affiliated witnesses and third-parties. Ferrari Dec. at ¶28-40. Compare Fed. R. Civ. P. 26 (b)(5)

(requiring attorney inadvertently receiving privileged information to: (i) “promptly return, 

sequester, or destroy” the material(s); (ii) “not use or disclose the information until the claim is 

resolved”; and (iii) “take reasonable steps to retrieve the information if the [receiving] party 

disclosed it before being notified.”); see also ABA Model Rule 44(b). 12 In fact, even after 

Plaintiffs filed their Motion to Strike, they introduced 27 exhibits (and testimony) regarding 

privileged communications, 22 of which were communications to, from, drafted by, or referencing 

Latham, without designating them confidential. Ferrari Dec. at ¶34. 

Even if these attorney-client communications and attorney-work product documents were 

inadvertently disclosed, their confidentiality has been lost, and no order by the Court can restore 

it—particularly where, as here, Plaintiffs have used, tactically and selectively, the purportedly 

confidential documents produced to elicit testimony regarding advice given by Latham when 

deposing Defendants, former Delivery Agent employees, and third parties. Since the basis for the 

attorney-client privilege is to protect confidential communications, attaching the attorney-client 

privilege to the Subpoenaed Matters now here serves no purpose. 

D. Fairness and Equity Requires Waiver of The Attorney-Client Privilege. 

In deciding whether the attorney-client privilege is waived, “the most important 

consideration is fairness.” Bierman v. Marcus, 122 F. Supp. 250, 252 (D.N.J. 1954). Certainly, 

the Trustee cannot invoke the privilege as to matters in which he does not hold the privilege, or as 

12 See also In re Kennedy, 143 B.R. 776 (D. Colo. 1992) (If a third party is given notice 

of the potential breach of the confidentiality of his attorney-client communications, his failure to 

object constitutes a waiver). 

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to matter whose privilege was waived before his appointment or whose confidentiality has already 

been compromised. (See Section II, 2-5 supra). Nor, under the circumstances, can the Trustee 

invoke the privilege to cover undisclosed privileged communications on the same subject matter as 

the communications already disclosed. Fed. R. Evid. 502(a), (b); Phoenix, 254 F.R.D. at 576. 

But fairness and equity also preclude the Trustee any anyone else from asserting the 

attorney-client privilege to prevent Defendants’ introduction of evidence to support their defense of 

this action—including evidence supporting their advice-of-counsel defense, or of their use of a 

process involving counsel or other professionals or other expert advisors to negate scienter, 

establish good faith, demonstrate the proper exercise of their business judgment and similar issues. 

See e.g., S.E.C. v. TenFold Corp., 2005 WL 7874298, at *2 (D. Utah Aug. 19, 2005) (holding that 

former officers were entitled to documents to support an advice-of-counsel defense over 

corporation’s privilege objection based on “limited exception to the attorney-client privilege under 

the unique facts and circumstances presented”); Moskowitz v. Lopp, 128 F.R.D. 624, 638 (E.D. Pa. 

1989) (permitting officers to raise advice of counsel defense without the consent of the 

corporation, holding: “[a]lthough in theory the privilege belongs to the corporation, fairness 

dictates that it be waived where a corporate officer asserts the reliance on counsel defense”); Bisno 

v. U.S., 299 F. 2d 711, 719 (9th. Cir. 1961) (evidence of involvement of counsel in decisionmaking process may be treated as a circumstance indicating good faith which the trier of fact is 

entitled to consider on the issue of fraudulent intent); Howard v. S.E.C., 376 F.3d 1136 (D.C. Cir. 

2004) (officer entitled to introduce evidence that law firm oversaw the closing of an offering at its 

law offices, drafted the documents for another offering, and conveyed its approval of the 

transaction to the defendant’s superior even if not a formal “advice-of-counsel” defense because it 

“constituted powerful evidence” that the defendant did not act with scienter); S.E.C. v. Prince, 

2013 WL 1831841 (D. D.C. May 2, 2013) (finding no scienter based on evidence that defendant 

sought advice from company’s lawyers through superior and in good faith relied on the advice 

received in response; even though evidence was not necessarily an “advice-of-counsel” defense it 

was probative of the defendant’s good faith); S.E.C. v. Ferrone, 2016 WL 824721 (N.D. Ill. Feb. 

22, 2016) (denying S.E.C.’s motion in limine to exclude evidence of the involvement of lawyers 

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and other professionals in putting together transaction and public disclosure documents where 

defendant did not establish the elements of a formal “advice-of-counsel” defense, and finding that 

“the S.E.C.’s motion does not fully account for the issue of good faith and the ways in which it 

might be raised legitimately by Ferrone to contest the scienter element of the S.E.C.’s case.”); Cf.

States v. W.R. Grace, 439 F.Supp.2d 1125, 1142 (D. Mont. 2006) (concluding that assertion of 

privilege by corporation had to yield where its invocation is incompatible with former employees’ 

Sixth Amendment right to present evidence in their defense). 

Indeed, application of the corporate attorney-client privilege here would stand the privilege 

on its head—giving protection to a defunct incorporeal entity that both no longer needs its 

protection and has waived it,13 at the expense of Defendants right to present evidence of their 

communications with counsel to support their defense of the claims against them. Under the 

circumstances, the rationale of the corporate attorney-client privilege is, at best, strained because 

those who the privilege is intended to encourage to communicate with counsel (directors, officers 

and employees) would be barred from presenting evidence that they did so. At the same time 

Plaintiffs have used the documents to build a case with every single witness (including third party 

witnesses) who have been deposed, while simultaneously and hypocritically seeking to prevent 

Defendants from using those documents. Ferrari Dec. at ¶¶14, 18, 20, 28-39; (see especially the 

following exhibits establishing Plaintiffs’ use of the following in depositions: Ex. T (the February 

7, 2014 emails from Delivery Agent General Counsel Mark Smith to the Audit Committee and 

Latham regarding the 2014 Superbowl campaign); Ex. E (Latham’s summary of the internal 

investigation); Ex. M (the Bergeson report commissioned by the Audit Committee at Latham’s 

direction); Ex. R (Latham’s remediation plan); Ex. I (Latham’s drafts of the Item 304), and Exs. K 

13 Lopes v. Vieira, 688 F. Supp. 2d 1050 (E.D. Cal. 2010), on reconsideration, 719 F. 

Supp. 2d 1199 (E.D. Cal. 2010) (although corporate entity existed, it had no operations, nor 

management, nor assets, nor activities of any kind. Privilege policies did not support recognizing 

that the shell entity retained power to assert or waive the privilege); TAS Distributing Co., Inc. v. 

Cummins Inc., 2009 WL 3255297 (C.D. Ill. 2009) (the privilege did not survive the corporation's 

death); Lewis v. U.S., 2004 WL 3203121 (W.D. Tenn. 2004), order aff'd, 96 A.F.T.R.2d 2005-

5300, 2005 WL 1926655 (W.D. Tenn. 2005) (bankrupt corporation found to be "defunct" when 

it had no assets or liabilities, nor did it have shareholders, directors or employees, “attorneyclient privilege cannot be applied to a defunct corporation”). 

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and S ((Latham’s drafts of the Financing Documents). Under the circumstances, it would be 

unconscionable to find that the corporate attorney-client privilege stands in the way of Defendants 

attempts to defend themselves against Plaintiffs’ claims. 

Similarly, fairness and equity also require full disclosure where, as here, there has been 

some disclosure of confidential communications while other related confidential communications 

have not been disclosed. See eg. Teachers Ins. and Annuity Ass'n of America v. Shamrock 

Broadcasting Co., Inc., 521 F. Supp. 638, 641 (S.D. N.Y. 1981) (partial disclosure risks that one 

litigant will paint a distorted picture of the facts from information disclosed, while unfairly 

depriving the opposing party of access to all the facts relevant to the particular subject matter in the 

already disclosed documents; “When a party discloses part of an otherwise privileged 

communication, he must in fairness disclose the entire communication, or at least so much of it as 

will make the disclosure complete and not misleadingly one-sided.”) 

Undoubtedly, Defendants will be unfairly prejudiced by application of the attorney-client 

privilege to the Subpoenaed Matters. Plaintiffs have relied on misleadingly, one-sided privileged 

communications and documents already disclosed both in support of their claims and to evoke 

testimony from party-affiliated witnesses and third-parties. Nonetheless, they now want to preclude 

Defendants’ discovery of and use of communications and documents already disclosed (or yet to 

be disclosed) that are damaging to its claims or explain Latham’s advice. Plainly, the attorneyclient privilege was not designed to be used as a tactical tool to prejudice an opposing party—

particularly, where, as here, the purported privilege holder has not affirmatively asserted the 

privilege. Markel Dec. at ¶¶1-7. Simply put, the Court cannot fairly and equitably enforce the 

privilege when it operates as a tactical advantage to Plaintiffs to the prejudice of Defendants. 

E. The Attorney-Client Privilege Does Not Excuses Latham’s Failure To Produce 

Documents To Which The Privilege Does Not Apply. 

Not every confidential communication between a corporate agent and counsel is protected 

by the corporate-client privilege; indeed, corporate agents frequently seek the assistance of 

attorneys on non-legal as well as legal matters. See, e.g., Teltron Inc. v. Alexander, 132 F.R.D. 394 

(E.D.Pa.1990) (When an attorney offers business advice, instead of legal advice, to a client, the 

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privilege does not apply); McFadden v. Norton Co., 118 F.R.D. 625 (D. Neb. 1988); GeorgiaPacific Corp. v. GAF Roofing Mfg. Corp., No. 93 Civ. 5125, 1996 WL 29392 (S.D.N.Y. Jan.25, 

1996). Similarly, matters that are tangential to the legal communications are not covered by the 

privilege. See e.g., Haddock v. Nationwide Financial Services, Inc., 2009 WL 3734059 (D. Conn. 

2009) (topic of attorney-client communications, not privileged); U.S. v. Freese, 2006 WL 1041820 

(D. Neb. 2006) (communications scheduling attorney-client meetings); United States ex rel. Barko 

v. Halliburton Company, 2014 WL 6657103 (D.D.C. 2014) (documents that reference whether a 

communication took place); Heartland Surgical Specialty Hosp., LLC v. Midwest Div., Inc., 2007 

WL 2192885, *11 (D. Kan. 2007) (Names of those who attended a meeting with counsel). 

Latham’s blanket assertion that the requested documents are protected by the attorney 

client privilege, therefore, is inappropriate. See Federal Deposit Ins. Corp. v. W.R. Grace & Co., 

1987 WL 7810, *1 (N.D. Ill. 1987). (Privilege “is not a blanket defense to discovery. It can be 

asserted to prevent production of specific documents but its assertion should be made to specific 

identified documents so that counsel or the court can make a determination of the applicability of 

the privilege.”); U.S. v. Willis, 565 F. Supp. 1186, 1189, 13 Fed. R. Evid. Serv. 1758 (S.D. Iowa 

1983); In re Rospatch Securities Litigation, 1991 WL 574963 (W.D. Mich. 1991); In re Shopping 

Carts Antitrust Litigation, 95 F.R.D. 299, 305, 34 Fed. R. Serv. 2d 778 (S.D. N.Y. 1982). The 

Connekt productions establish Latham has many documents that were sent, received or drafted by 

Latham and given to third parties/Plaintiffs. Ferrari Dec. at ¶¶ 22-23. Nothing excuses Latham’s 

failure to produce those documents. Moreover, Defendants are entitled to any documents wherein 

Latham is not providing “advice” but rather findings of fact. Latham has not engaged in any such 

analysis to determine whether it has documents responsive to Defendants’ subpoenas. 

IV. CONCLUSION 

Based on the foregoing, Defendants request that the Court enter an Order compelling 

documents and testimony. 

DATED: August 27, 2019 SEYFARTH SHAW LLP 

By: /s/ Giovanna A. Ferrari 

Giovanna A. Ferrari 

Attorneys for Defendants 

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