Court Opinion

ID: 4186644
Source: CourtListenerOpinion
Date Created: 2017-07-17 14:14:11.509839+00
Date Added: 2024-06-11T14:39:55.574408
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                     APPROVAL OF THE APPELLATE DIVISION
    This opinion shall not "constitute precedent or be binding upon any court."
     Although it is posted on the internet, this opinion is binding only on the
        parties in the case and its use in other cases is limited. R.1:36-3.

                                      SUPERIOR COURT OF NEW JERSEY
                                      APPELLATE DIVISION
                                      DOCKET NO. A-2471-15T2

IN THE MATTER OF THE ADOPTION
OF THE TOWNSHIP OF MONROE
HOUSING ELEMENT AND FAIR
SHARE PLAN AND IMPLEMENTING
ORDINANCES.

             Argued December 21, 2016 – Decided July 17, 2017

             Before Judges Alvarez and Manahan.1

             On appeal from the Superior Court of New
             Jersey, Law Division, Middlesex County, Docket
             No. L-3365-15.

             Carl R. Woodward, III, argued the cause for
             appellants/intervenors The Municipal Group
             and   Individual   Municipalities   (Carella,
             Byrne, Cecchi, Olstein, Brody & Agnello,
             attorneys; Mr. Woodward, Brian H. Fenlon, G.
             Glennon Troublefield, and Megan A. Natale, of
             counsel and on the briefs).

             Kevin D. Walsh argued the cause for respondent
             Fair Share Housing Center.

1
  Hon. Carol E. Higbee was a member of the panel before whom this
case was argued. The opinion was not approved for filing prior
to Judge Higbee's death on January 3, 2017. Pursuant to R. 2:13-
2(b), "Appeals shall be decided by panels of 2 judges designated
by the presiding judge of the part except when the presiding judge
determines that an appeal should be determined by a panel of 3
judges."   The presiding judge has determined that this appeal
shall be decided by two judges.
PER CURIAM

       On February 23, 2016, we granted the Municipal Group, a

consortium     of    approximately      270   municipalities        combined     with

thirty-five     other    individual      municipalities       (collectively       the

Municipal Group), leave to intervene in the pending declaratory

judgment action filed by Monroe Township.                 The action was brought

in     order   to    clarify    Monroe       Township's     affordable       housing

obligations.        We also granted the Municipal Group leave to appeal

a Law Division judge's discovery order compelling disclosure of a

preliminary     draft    report    prepared     by   an    expert    whose    health

prevented its completion, and forestalled any likelihood that he

would testify.       Lastly, we issued a stay of the disclosure order.

We now dissolve the stay, affirm the Law Division's disclosure

order, and remand the matter for continuation of the declaratory

judgment action.

       The disputed events occurred after the Supreme Court's March

10, 2015 decision authorizing municipalities to file declaratory

judgment actions, on notice to the Fair Share Housing Council

(FSHC), and other "interested parties," seeking a declaration that

"its     housing      element     and    implementing        ordinances       [were]

constitutionally sufficient."            In re Adoption of N.J.A.C. 5:96 &

5:97, 221 N.J. 1, 25 (2015) (Mount Laurel IV).                      To that end,

                                         2                                   A-2471-15T2
special   masters   were   appointed   to   assist   trial   courts    in

determining municipal obligations.

     Members of the Municipal Group prior to receiving a copy of

the draft report, signed a shared services agreement (SSA) which

included the following:

          Paragraph 9(d): No Member shall provide any
          Shared Information, including but not limited
          to any communications with Burchell[2] or any
          draft reports from Burchell with any counsel,
          planner, engineer, or other professional
          consultant     (collectively     "Professional
          Consultants")   to   that   Member   if   said
          Professional Consultant also represents any
          builder or developer who is currently engaged
          in exclusionary zoning litigation or is
          contemplating initiating exclusionary zoning
          litigation or the New Jersey         Builder's
          Associations or similar or related entities.
          To facilitate the implementation of this
          provision term, the expert or consultant with
          whom the designated attorney may consult shall
          be   required   to   sign   a   statement   or
          acknowledgement to that effect . . . .

          Paragraph 15:    If the firm of the attorney
          representing the municipality also represents
          (i) the New Jersey Builder's Association; (ii)
          a developer seeking a builder's remedy or is
          presently contemplating bringing a builder's
          remedy action, the municipality may become
          part of this consortium subject to the
          following limitations.     Said attorney shall
          not (i) be made privy to any of the information
          presented to [Burchell]; (ii) have the right
          to make submissions to [Burchell]; (iii) be
          entitled   to   attend    any   meetings   with
          [Burchell] or the [Municipal Group]. Nothing

2
  "Burchell" is Dr. Robert Burchell of Rutgers University who was
retained by the Municipal Group as an expert.

                                  3                             A-2471-15T2
           in this paragraph is intended nor shall be
           interpreted to waive the Rules of Professional
           Conduct and/or the Local Government Ethics
           Law.

     FSHC filed a motion in the declaratory judgment action on

short notice to compel production of the draft report after their

Open Public Records Act (OPRA) request to obtain it was refused.

On November 19, 2015, the Law Division judge ordered Monroe to

produce it, and after the Municipal Group filed an order to show

cause for leave to intervene and seek reconsideration, the court

conducted a hearing on November 30, 2015. At that hearing, counsel

for FSHC named planners and special masters who had been given

access to the report but also represented builders in litigation

against municipalities.       Ultimately, the judge decided that the

draft report conclusions were not discoverable, but the data

sources,     analysis,   manner    of       calculations,       mechanisms,   and

protocols could lead to relevant evidence and were, therefore,

discoverable.     The court therefore denied the Municipal Group's

order to show cause, denied intervenor status, and denied the

request for a stay of the enforcement of the disclosure order.

     We thereafter granted the Municipal Group's application for

leave to appeal and a stay, and remanded the matter in order for

additional    findings   to   be   made      by   the   judge    regarding    Rule

                                        4                                A-2471-15T2
4:10-2(c),       the   attorney-client       privilege,    the   work     product

doctrine, and the common interest rule.

      As a result of the remand order, the judge requested the

parties provide him with a copy of the draft report for his in

camera inspection. He further directed the Municipal Group produce

a   list    of   persons   to   whom   the    report   had   been    sent,     and

certification from each as to whether they had disseminated the

report to anyone else, and if so, "to whom, and their relationship

to the litigation which may be adverse to any other municipality

in declaratory judgment litigation[.]"

      The    certifications     totaled      more   than   700   pages.       Each

identified the individuals to whom the person completing the

certification had sent the report, and whether those individuals

were involved in litigation against a municipality.                 The court's

decision found that because of the widespread dissemination of the

report, any privileges were waived.             He relied on his review of

the certifications as well as other submissions to reach that

conclusion. The judge found as a fact that "almost every [s]pecial

[m]aster throughout this State is in possession of the draft

report."

      The judge was particularly concerned about this because, he

said, it could "shape the substance and provide a basis for their

opinions     and   recommendations     to    the    designated   Mount     Laurel

                                       5                                  A-2471-15T2
judge," while being inaccessible to the judges themselves or to

the FSHC, or other intervenors.        This would allow the Municipal

Group an unfair advantage; it would be privy to the information a

special master might rely upon in fashioning a recommendation,

while the adverse parties would not be.        The judge opined that

this imbalance would jeopardize fundamental fairness.        He also

concluded that various individuals with "obvious conflicts were

recipients of the [] draft."       He named planners who represent

municipalities and builders, as well as attorneys whose firms

represent municipalities and builders.      The Municipal Group again

appealed on leave granted.3

                                  I.

     A court's evidentiary rulings are entitled to substantial

deference.   Estate of Hanges v. Metro. Prop. & Cas. Ins. Co., 202
N.J. 369, 383-85 (2010).      Determinations to admit evidence will

not be reversed absent a finding of abuse of discretion.        State

v. Wakefield, 190 N.J. 397, 426 (2007) (citing State v. Nelson,

173 N.J. 417, 470 (2002), cert. denied, 552 U.S. 1146, 128 S. Ct.
1074, 169 L. Ed. 2d 817 (2008).

3
  We permitted the Municipal Group to supplement the record with
certifications   in  which   individual   counsel,  whose   firms
represented builders, stated they had not disseminated the report
within their office. Additionally, some individuals specifically
refuted representations made by FSHC's counsel regarding their
alleged distribution of the report.

                                  6                           A-2471-15T2
      A party who wishes to call an expert to testify at trial must

provide   the     expert's   report   in   discovery.   R.   4:17-4(e).

Disclosure is necessary because the effective cross-examination

of an expert requires advance knowledge of the basis for his or

her   opinion.    Graham v. Gielchinsky, 126 N.J. 361, 367 (1991).

      Experts' draft reports, however, are produced in preparation

for trial and are not necessarily for use in trial.      They may only

be discovered upon a showing that the party seeking discovery has

substantial need of the materials available to the expert and is

unable, without undue hardship, to obtain them by other means.         R.

4:10-2(c).      When an expert has been retained by an adversary and

is not expected to testify at trial, a party may only discover the

facts known or opinions held by that person "upon a showing of

exceptional circumstances."      R. 4:10-2(d)(3).

      In fact, Fed. R. Civ. P. 26(b)(4)(B), the federal counterpart

to our Rule 4:10-2(d)(3), has been described as:

           promote[ing]     fairness      by    precluding
           unreasonable access to an opposing party's
           diligent trial preparation, prevent[s] a party
           from building his own case by means of his
           opponent's   financial    resources,   superior
           diligence and more aggressive preparation, and
           more specifically, [] prevent[s] one party
           from utilizing the services of the opponent's
           experts by means of a deposition. See also,
           Fed.   R.   Civ.   P.,   26(b)(4)(B)   advisory
           committee's    note    (1967).      (The   rule
           "reflect[s] the fear that one side will
           benefit unduly from the other's better

                                      7                         A-2471-15T2
              preparation.")

              [Eliasen v. Hamilton, 111 F.R.D. 396, 401
              (N.D. Ill. 1986) (internal citations and
              quotation marks omitted).]

Similarly, New Jersey courts have held that the reason for Rule

4:10-2(d)(3) is to "[promote] fairness by precluding unreasonable

access to an opposing party's diligent trial preparation."                 Deffer

v. Shop-Rite Supermarkets, Inc., 332 N.J. Super. 540, 545 (App.

Div.   2000)    (internal    citation       marks    and    citation    omitted),

overruled in part on other grounds, Fitzgerald v. Roberts, Inc.,

186 N.J. 286, 302 (2006).

                                      II.

       The Municipal Group argues first that the draft report should

be unavailable because it was issued by a nontestifying expert and

should therefore only be discoverable upon a showing of exceptional

circumstances as defined in Gielchinsky, supra, 126 N.J. at 361.

There, the Court considered, in a medical malpractice action,

whether   a    defendant    doctor   could    call    as    his   own   witness   a

nontestifying expert who had rendered to the plaintiff an opinion

unfavorable to his position.          Id. at 362.          The Court noted that

those courts that preclude physicians in medical malpractice cases

from testifying against a patient as a liability expert did so in

order to protect the well-being of the patient.               Id. at 369. Other

courts allowed such witnesses to be called on the theory that a

                                        8                                 A-2471-15T2
trial is a search for truth, and that the integrity of the process

required disclosure.   Id. at 370.    The Court observed, however,

that "truth has a better chance to emerge if the use of an

adversary's expert is the exception, not the rule."     Id. at 373.

Therefore, the Court held that "in the absence of exceptional

circumstances, as defined under Rule 4:10-2(d)(3), courts should

not allow the opinion testimony of an expert originally consulted

by an adversary."   Id. at 373.

     Interestingly enough, given the parties to this dispute, the

Court went on to state "when the public interest is involved,

supervening policy concerns may require the use of such evidence

to prevent misuse of either the public trust or public funds."

Id. at 374.   The Court cited as an example of the principle,

litigation involving landowners who were permitted to call the

State's expert appraiser to testify on their behalf in order to

ensure that the land in a condemnation proceeding was obtained at

a price fair to the public and to the property owner.     Ibid.

     Rule 4:10-2(d)(3) specifically provides:

          A party may discover facts known or opinions
          held by an expert . . . who has been retained
          or specially employed by another party in
          anticipation of litigation or preparation for
          trial and who is not expected to be called as
          a witness at trial only upon a showing of
          exceptional circumstances under which it is
          impractical for the party seeking discovery
          to obtain facts or opinions on the same

                                  9                          A-2471-15T2
          subject by other means. If the court permits
          such discovery, it shall require the payment
          of the expert's fee provided for by Rule 4:10-
          2(d)(2), and unless manifest injustice would
          result, the payment by the party seeking
          discovery to the other party of a fair portion
          of the fees and expenses which had been
          reasonably incurred by the party retaining the
          expert in obtaining facts and opinions from
          that expert.

     In this case, despite the most scrupulous adherence to the

agreement on the part of each individual whose certification was

obtained, clearly the report was shared with others within each

municipality    who   were   not   similarly   bound.    More   than   200

certifications were filed.         Although the persons who signed the

certifications no doubt strictly complied with the terms of the

SSA, and only shared the report with certain named individuals

associated with the municipalities, those individuals were not

members of the Municipal Group, nor bound by the SSA.              It is

unsurprising that the report would have been disseminated to

individuals not required to comply with the SSA.        Thus, to prevent

the FSHC from obtaining access would be both unrealistic and not

in keeping with the goals of Rule 4:10-2(d)(3).         The point of the

rule is to bar discovery when it would provide one party an unfair

advantage.     Potentially hundreds if not thousands of people have

already seen this draft report.           It would actually be unfair,

under those circumstances, to deny FSHC access, if not to the

                                     10                           A-2471-15T2
opinions, to at least the information upon which it was formulated.

The widespread and natural dissemination of the draft report,

which includes persons not bound by the SSA, meets the definition

of an exceptional circumstance.                  It is one unlikely to have

previously occurred, or to occur again.

     Additionally,        it     would     not     be    equitable     under      the

circumstances for any portion of the expert's fees to be paid by

FSHC. Meeting fair housing obligations would not be an appropriate

forum in which to shift the costs.                 See State Dept. of Envtl.

Prot. v. Ventron Corp., 182 N.J. Super. 210 (App. Div. 1981),

aff’d as modified, 94 N.J. 473 (1983).

                                         III.

     N.J.R.E.       504    and     N.J.S.A.        2A:84A-20       provide       that

communications made in professional confidence between an attorney

and a client are privileged, unless knowingly made within the

hearing of a person whose presence nullifies the privilege.                    Where

two or more people employ a lawyer to act for them in common, none

can assert the privilege against the others for communications

involving that matter.         N.J.S.A. 2A:84A-20(2).

     The        attorney-client      privilege          protects     only      those

communications expected or intended to be confidential.                     O'Boyle

v. Borough of Longport, 218 N.J. 168, 185-86 (2014).                        It also

extends    to    consultations     with    third    parties    whose   advice       is

                                         11                                  A-2471-15T2
necessary to the legal representation.                 Ibid.     But it is waived

when a confidential communication between attorney and client is

revealed to a third party, unless the third party disclosure is

necessary to advance the representation.                Ibid.

     The Municipal Group contends the report is protected by the

attorney-client      privilege    as   it    was   a    product     of   privileged

communications    between   the    expert      and     representatives       of   the

group.   That the privilege was protected was demonstrated by the

individual    certifications      setting     forth      dissemination       of   the

report with the confidentiality the SSA required.                          Thus the

Municipal Group argues that since the certifications establish

that confidentiality was maintained, the attorney-client privilege

was never waived.

     This argument lacks merit.             Paragraph 9(d) of the SSA could

not contain any directive which would address familiarity with the

report and any future conflict.         It could not address distribution

of the report to individuals who were not prohibited from sharing

it with clients whose interests might be in conflict with the

group,   or   even   municipal    employees.            The     draft    report   was

disseminated to persons who never executed the SSA and were

therefore not bound by its terms.

     Accordingly, we hold that the Municipal Group has waived the

attorney-client privilege by disseminating the draft report to

                                       12                                    A-2471-15T2
persons who, actually or potentially, have adverse interests to

the Municipal Group, and who, according to the SSA were not

authorized to receive copies.         We do agree with the Municipal

Group that the sheer number of persons receiving the draft report

is in and of itself not conclusive.           See id. at 187.         But the

"presence of a stranger negates the privilege for communications

made in the stranger's presence."             Ibid. (citing Restatement

(Third) of the Law Governing Lawyers, § 76(1) comment c (2002)).

Here, an unknown but substantial number of strangers were given

access to the report.

       The common interest rule protects communications made to a

non-party who shares the client's interests.           In re State Comm'n

of    Investigation,   226   N.J.   Super.   461,   466-68,   (App.    Div.),

certif. denied, 113 N.J. 382 (1988).         We found in In re State that

there was a common interest when two groups were formally related,

and    had   closely   intertwined   operations     and   identical     legal

interests.     Id. at 464-68.

             [T]he   common-interest   privilege   somewhat
             relaxes the requirement of confidentiality
             . . . by defining a widened circle of persons
             to whom clients may disclose privileged
             communications.    .    .    .    [Privileged]
             communications of several commonly interested
             clients remain confidential against the rest
             of the world, no matter how many clients are
             involved. However, the known presence of a
             stranger    negates    the    privilege    for

                                     13                               A-2471-15T2
          communications   made     in    the   stranger's
          presence.

          [O'Boyle, supra, 218 N.J. at 187 (citation
          omitted).]

     In the ordinary situation, the Municipal Group's argument

that the common interest rule applies, and that therefore the

attorney-client privilege remains intact, would have some weight.

See LaPorta v. Gloucester Cty. Bd. of Chosen Freeholders, 340 N.J.

Super. 254, 262 (App. Div. 2001).        A common interest exception

applies where disclosure is made for the purpose of advancing a

common interest and doing so in a manner not inconsistent with

maintaining confidentiality.   Ibid.     In this case, however, it is

unclear if dissemination has not already occurred to persons who

do not share those common interests.        Therefore, the attorney-

client privilege does not protect the document either.

     The work product doctrine recognizes the need for lawyers to

"work with a certain degree of privacy, free from unnecessary

intrusion by opposing parties and their counsel."     O'Boyle, supra,

218 N.J. at 189-90 (citation omitted).      Rule 4:10-2(c) provides,

however, that a party may obtain discovery of material prepared

in anticipation of litigation by another party's attorney or

consultant (i.e., work product) "upon a showing that the party

seeking discovery has substantial need of the materials . . . and

                               14                             A-2471-15T2
is   unable    without   undue    hardship      to     obtain    the    substantial

equivalent of the materials by other means."

      Disclosure of his or her work product to a third party by an

attorney      waives   the    protection,      unless     such    disclosure        is

confidential,     such   as   pursuant    to    the     common    interest     rule.

O'Boyle, supra, 218 N.J. at 189-90.            If the material is disclosed

in a manner that is inconsistent with keeping it from an adversary,

the work product doctrine is waived.                 Id. at 192.        The inquiry

focuses on whether the disclosure to a third party reached an

adversary or made it substantially likely that the protected

material would reach an adversary.             Ibid.

      The Municipal Group argues the report was protected work

product, for which FSHC did not assert a substantial need or

demonstrate that it could not secure the information by any other

means.     The extent of dissemination, which included persons not

covered by the SSA, and persons who may represent interests adverse

to the group, removes that mantle of protection.                       Although the

trial judge did not explicitly discuss Rule 4:10-2(c), he did

discuss O'Boyle's explanation of the rule.                As he noted, when an

attorney discloses his or her work product to an adverse third

party, the privilege is deemed waived.                 See O'Boyle, supra, 218

N.J. at 189.

                                     15                                      A-2471-15T2
     It is unrealistic for the Municipal Group to contend that the

extent to which that draft report was shared magically shielded

it from disclosure to adversaries, or prevented it from reaching

adversaries.     It   is   unrealistic    to   assume   that   even   if   the

signatories to the SSA kept the report confidential from their

clients, they or others associated with them              would not have

benefitted from the knowledge thus gained to advance adversarial

positions.       This      reality    pierces     any     confidentiality.

Accordingly, the report does not enjoy the protection of the work

product privilege either.

     Affirmed.   The stay is dissolved and the matter is remanded

for further proceedings in accord with this opinion.

                                     16                               A-2471-15T2