Cesca Therapeutics, Inc. v. SynGen, Inc., et al.

Filing 111

ORDER signed by Magistrate Judge Kendall J. Newman on 1/9/2017 GRANTING 106 Motion to Compel. (Washington, S)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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CESCA THERAPEUTICS, INC.,

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No. 2:14-cv-2085-TLN-KJN

Plaintiff,
ORDER

v.
SYNGEN, INC., et al.,
Defendants.

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On January 5, 2017, this case was before the undersigned to address defendants SynGen,

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Inc.’s, PHC Medical, Inc.’s, and Philip Coelho’s (collectively “defendants”) motion to compel

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plaintiff Cesca Therapeutics, Inc. (“plaintiff”) to produce two documents that plaintiff

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inadvertently produced and clawed back pursuant to the terms of the stipulated protective order

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filed in this action on November 24, 2015, and re-produced to defendants in redacted form. (ECF

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No. 106.) Specifically, defendants seek to compel plaintiff to produce: (1) a memorandum from

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Ken Harris, plaintiff’s president, to Robin Stracy, plaintiff’s interim CEO, and Dr. Mahendra Rao,

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a member of plaintiff’s board of directors, dated November 3, 2014 (the “Memo”); and (2) a set

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of minutes for a meeting of the board of directors of Thermogenesis Corp., plaintiff’s corporate

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predecessor in interest, dated July 30 and 31, 2009 (the “Meeting Minutes”). At the hearing and

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in the parties’ joint statement, plaintiff claimed that the redacted sections of both documents are

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protected from production pursuant to the attorney-client privilege, while defendants argued that
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such a privilege does not apply. Attorneys Michael Friedland and Lauren Katzenellenbogen

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appeared on behalf of plaintiff. Attorneys Matan Shacham and Eric MacMichael appeared on

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behalf of defendants.

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Based on the parties’ motions and joint statements regarding these discovery disputes,

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other relevant filings, and oral argument, and for the reasons discussed below and on the record

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during the hearing, IT IS HEREBY ORDERED that:

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1. Defendants’ motion to compel (ECF No. 106) is GRANTED:
a. With regard to the Memo, the court finds that plaintiff has not met its burden
of proof in demonstrating that the contested portion of that document is

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protected from disclosure by the attorney-client privilege. See In re Grand

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Jury Investigation, 974 F.2d 1068, 1070 (9th Cir. 1992) (“The party asserting

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the attorney-client privilege has the burden of proving that the privilege applies

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to a given set of documents or communications.”). Much of the passage the

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parties contest in the Memo consists of factual disclosures regarding this

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action, which do not qualify for protection under the attorney-client privilege.

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Upjohn Co. v. United States, 449 U.S. 383, 395 (1981) (“The [attorney-client]

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privilege only protects disclosure of communications; it does not protect

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disclosure of the underlying facts by those who communicated with the

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attorney[.]”). Moreover, to the extent this passage arguably contains attorney-

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client communications, either the Memo itself or defendants’ filings in support

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of their motion demonstrate that the content of those communications that

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plaintiff seeks to protect, i.e., the legal conclusions its counsel drew, were

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relayed to defendants’ counsel by letters from plaintiff’s counsel around the

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same time as the date of the Memo. (See Declaration of Eric MacMichael,

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Exhibits 3, 5, 6.) Therefore, to the extent plaintiff could claim an attorney-

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client privilege in those communications, that privilege was waived by

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plaintiff’s disclosures to defendants. Accordingly, within 14 days of the date

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of this order, plaintiff shall produce to defendants a copy of the Memo without
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redactions to the portions of that document that are in dispute.

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b. With regard to the Meeting Minutes, the court similarly finds that plaintiff fails

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to establish that the contested portion of that document is entitled to protection

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under the attorney-client privilege. First, with regard to the first portion of the

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contested passage discussed at the hearing,1 the court finds that plaintiff has

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failed to show that the discussion referred to in that portion was between

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plaintiff’s board members and plaintiff’s counsel for the purpose of obtaining

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legal advice, or that counsel provided legal advice to the board during that

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discussion. See In re Grand Jury Subpoenas (Hirsch), 803 F.2d 493, 496 (9th

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Cir. 1986) ((“The attorney-client privilege protects confidential disclosures

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made by a client to an attorney in order to obtain legal advice.”); In re Fischel,

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557 F.2d 209, 211 (9th Cir. 1977) (attorney-client privilege protects attorney’s

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response or advice to client disclosures made to that attorney in seeking legal

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advice). Moreover, nothing in the passage itself suggests that the board’s

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decision to waive any conflicts of interest was made in confidence in order to

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obtain legal advice from the counsel present at that meeting. Nor does that

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passage reveal any legal advice counsel may have provided to the board. To

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the contrary, the second portion of the contested passage makes it clear that

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that decision to waive the company’s conflicts of interest was made as part of

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the board’s larger business plan with regard to how the company was to

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address its relationship with defendant Coelho moving forward. The

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disclosure of that decision in such a context is insufficient to show that the

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contested portion of the Meeting Minutes is entitled to protection under the

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attorney-client privilege. See Brinckerhoff v. Town of Paradise, 2011 WL

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2926936, at *3 (E.D. Cal. July 15, 2011) (denying attorney-client privilege

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protection for minutes of a board meeting at which counsel was present and

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This portion of the passage begins with the phrase “After further discussion,” and ends with the
word “Company.”
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involved, but where legal advice was not the predominant purpose of the

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communications reflected in those minutes); N. Pacifica, LLC v. City of

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Pacifica, 274 F. Supp. 2d 1118, 1127 (N.D. Cal. 2003) (quoting Marten v.

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Yellow Freight System, Inc., 1998 WL 13244, at *7 (D. Kan. Jan. 6, 1998)

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(noting that “‘[l]egal advice must predominate for the communication to be

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protected’” under the attorney-client privilege and that, “[w]hen the legal

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advice ‘is merely incidental to business advice,’ the privilege does not apply”).

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Accordingly, within 14 days of the date of this order, plaintiff shall also

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produce to defendants a copy of the Meeting Minutes without redactions to the
portion of that document that is in dispute. 2

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c. The parties’ requests to seal various documents submitted in relation to the

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present motion (ECF Nos. 107, 108) are DENIED.3 The parties’ purpose

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behind those requests is to seal from public view the information contained in

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the contested parts of the documents defendants seek to compel through their

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motion based on plaintiff’s contention that that information is protected from

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disclosure under the attorney-client privilege. However, that information is not

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subject to the attorney-client privilege for the reasons discussed above.

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Furthermore, after having conducted an in camera review of the two

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Although at the hearing the court inquired whether it was possible to parse certain passages in
the redacted portion, for the reasons set forth herein the court ultimately concludes that the entire
passage is not privileged. Moreover, despite the court exploring such possibilities, the court
shares counsels’ concern raised during the hearing that parsing the contested passages in the
documents at issue could potentially lead to future disputes with regard to other documents and
whether the attorney-client privilege applies to small subsections or even parts of sentences in
those documents. The court cautions the parties that future discovery disputes in this action based
on such hairsplitting will not be looked upon favorably absent a clear showing that it is necessary
to preserve such a privilege.
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Specifically, the parties seek to seal the following documents: (1) the Memo described above;
(2) the Meeting Minutes described above; (3) the parties’ joint statement with regard to
defendants’ present motion to compel; (4) the Declaration of Ali S. Razai in support of plaintiff’s
opposition to defendants’ motion to compel; and (5) the Declaration of Eric MacMichael in
support of defendants’ motion to compel.
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documents at issue in full and the parties’ other filings they seek to seal, the

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court concludes that the contents of these documents do not meet the

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requirements for such a request. Accordingly, any documents the parties have

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submitted with the court with regard to the present motion to compel shall be

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filed in the public record for this action to the extent they have not already

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been filed in such a manner.

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IT IS SO ORDERED.
Dated: January 9, 2017

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