Court Opinion

ID: 9898700
Source: CourtListenerOpinion
Date Created: 2023-11-14 22:01:14.997579+00
Date Added: 2024-06-11T09:16:09.092207
License: Public Domain

UNITED STATES DISTRICT COURT
                              FOR THE DISTRICT OF COLUMBIA

 BROIDY CAPITAL MANAGEMENT,
 LLC, et al.,

                Plaintiffs,
                                                          No. 19-cv-150 (DLF)
        v.

 NICOLAS D. MUZIN, et al.,

                Defendants.

                                 MEMORANDUM OPINION

       Before the Court is non-party ArentFox Schiff LLP’s Motion for a Protective Order and

Sanctions. Dkt. 226. For the following reasons, the Court will deny the motion.

       Arent Fox is a law firm. Until August 2023, it represented Joseph Allaham in litigation

against Broidy Capital Management, LLC and Elliott Broidy (collectively, “Broidy”). See Dkt.

25. Broidy and Allaham settled in August 2023. Dkt. 195. In parallel with the settlement, and

without Arent Fox’s consent, Allaham provided much of his correspondence with Arent Fox to

Broidy. See, e.g., Dkts. 215-2 (proposed changes to interrogatory responses); 215-3 (discussion

of case strategy). Broidy continues to litigate against Allaham’s former codefendants.

       Arent Fox, now lawyering without a client, contends that Allaham gave away materials

protected by the work-product privilege.        It moves for “an order (1) directing [Broidy]

to . . . promptly return or destroy all work product of Arent Fox [in his possession] as well as any

material that references or is derived from that work product . . . and (2) sanctioning [Broidy] for

improperly reviewing and using Arent Fox’s work product.” Dkt. 226 at 1.

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       The Court finds that Allaham validly waived any privilege held by Arent Fox and will

therefore deny the motion. “The work product privilege . . . exempts from discovery documents

prepared by an attorney in contemplation of litigation.” Moody v. IRS, 654 F.2d 795, 798 (D.C.

Cir. 1981); see Fed. R. Civ. P. 26(b)(3).1 “[L]ike other [similar] privileges, it may be waived.”

United States v. Nobles, 422 U.S. 225, 239 (1975).

       In general, “a lawyer may invoke” the work product privilege “on the basis of the lawyer’s

independent interest in privacy.” Restatement (Third) of the Law Governing Lawyers § 90 cmt. c

(Am. L. Inst. 2000). But “[w]hen lawyer and client have conflicting wishes or interests with

respect to work-product material, the lawyer must follow [the] instruction of the client” and may

not assert immunity on her own. Id. After all, an attorney cannot “withhold the fruits of his

professional labors from the client, who presumably paid for and was the intended beneficiary of

those labors.” Martin v. Valley Nat’l Bank of Ariz., 140 F.R.D. 291, 320 (S.D.N.Y. 1991); cf. In

re Sealed Case, 676 F.2d 793, 810 n.56 (D.C. Cir. 1982) (“Courts have often recognized that the

interests of attorneys and those of their clients may not always be the same. To the extent that the

interests do not conflict, attorneys should be entitled to claim privilege even if their clients have

relinquished their claims.”) (emphasis added).

       These principles doom Arent Fox’s assertion of privilege and thus its motion for a

protective order and sanctions. Allaham voluntarily provided his correspondence to Broidy,

presumably to facilitate his dismissal from this litigation. By handing the documents over to his

former adversary, he waived any privilege he might hold in them. See United States v. Deloitte

1
  Because Rule 26(b)(3) covers discovery rather than the voluntary disclosure of information,
this case implicates the common-law version of the work product privilege rather than the
version created by the Federal Rules of Civil Procedure. Cf. In re Sealed Case, 676 F.2d at 808.
Nothing important turns on the distinction here.
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LLP, 610 F.3d 129, 139–40 (D.C. Cir. 2010). And while Arent Fox may disagree with Allaham’s

choice to disclose the documents, its “conflicting wishes” cannot stand in his way. Restatement

(Third) of the Law Governing Lawyers § 90 cmt. c. It follows that Arent Fox’s assertion of

privilege is meritless and that its motion, which relies on its privilege assertion, must fail.

       Arent Fox contends that “attorneys have an independent right to protect their own work

product.” Arent Fox’s Mot. at 5. Even so, an attorney cannot protect his work product at his

client’s expense. The cases Arent Fox cites do not say otherwise, as “none involved an invocation

of the [work product] rule against the client or against the client’s stated wishes and interests.”

Martin, 140 F.R.D. at 321. In Hobley v. Burge, for instance, the Seventh Circuit allowed a law

firm to claim work product privilege when the claim was “not inconsistent with [its client’s]

interests in [the] litigation.” 433 F.3d 946, 949 (7th Cir. 2006). And in In re Grand Jury

Proceedings, the Fifth Circuit held that a client’s alleged crimes did not abrogate his innocent

attorney’s privileges.2 43 F.3d 966, 972 (5th Cir. 1994) (per curiam); see also QBE Ins. Co. v.

Griffin, No. 08-cv-949, 2009 WL 2913478, *2–3 (M.D. Ala. Sept. 4, 2009) (declining to find that

former client’s failure to object to discovery request in subsequent litigation forfeited attorney’s

work-product privilege); Krys v. Paul, Weiss, Rifkind, Wharton, & Garrison LLP (In re China

Med. Techs., Inc.), 539 B.R. 643, 658 (S.D.N.Y. 2015) (declining to find that foreign liquidator

could waive privilege on behalf of formerly solvent entity’s Audit Committee).

2
  Arent Fox’s assertion that the clients in In re Grand Jury “expressly waived privilege as part of
a plea agreement,” Arent Fox Reply at 5, Dkt. 232, is not relevant. The Fifth Circuit’s analysis
turned on whether “the crime/fraud exception [would] permit disclosure of materials when the
attorney who prepared the materials had no knowledge that his efforts were furthering his
client’s criminal activity,” not on whether a client could waive privilege through a plea
agreement without his lawyer’s consent. 43 F.3d at 972.
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       So too, the fact that Allaham is no longer a party in this case does not diminish his interest

in disclosing Arent Fox’s work product to Broidy. Cf. Arent Fox’s Mot. at 5–6; FTC v. Grolier,

462 U.S. 19, 25 (1983) (holding that work-product privilege applies even after litigation has

terminated). Allaham acquired his documents while a defendant in this litigation. Indeed, handing

the documents over to Broidy may well have facilitated his departure from it. Against that

backdrop, it is obvious that Allaham has a legitimate interest in conveying his documents to

Broidy—one that Arent Fox, Allaham’s fiduciary, must honor. See Restatement (Third) of the

Law Governing Lawyers § 21(2) & cmt. d.

       Finally, in passing, Arent Fox contends that Allaham disclosed “communications covered

by a joint-defense agreement among” his former codefendants. Arent Fox’s Mot. at 5; see Arent

Fox’s Reply at 1. But if that is so, Allaham has victimized his now-former codefendants, not his

own lawyers. “Ordinarily, a party must assert its own legal rights and cannot rest its claim to relief

on the legal rights of third parties.” Metro. Wash. Chapter, Assoc. Builders & Contractors, Inc. v.

District of Columbia, 62 F.4th 567, 573 (D.C. Cir. 2023) (cleaned up). Even if a joint defense

agreement made Allaham’s disclosure of Arent Fox’s work product improper, Arent Fox’s

sanctions motion is not the appropriate vehicle for such a claim.

       For these reasons, Arent Fox’s motion for a protective order and sanctions, Dkt. 226, is

denied. Because the motion—while not meritorious—was not frivolous, Broidy’s cross-motion

for sanctions, Dkt. 231 at 7, is also denied. A separate order consistent with this decision will

accompany this memorandum opinion.

                                                              __________________________
                                                              DABNEY L. FRIEDRICH
November 14, 2023                                             United States District Judge

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