Dollar Tree Stores, Inc. v. Pau et al

Filing 50


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1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE NORTHERN DISTRICT OF CALIFORNIA 7 8 DOLLAR TREE STORES INC, 9 United States District Court For the Northern District of California 10 11 No. C 10-325 SI; C No. 11-2696 SI Plaintiff, ORDER DENYING DEFENDANTS’ MOTION FOR RELIEF FROM NONDISPOSITIVE PRETRIAL ORDER OF MAGISTRATE JUDGE v. TOYAMA PARTNERS LLC, et al., 12 Defendants. / 13 14 Defendants have filed a motion for relief from Magistrate Judge Vadas’ December 20, 2011 15 Order Compelling Production of Documents Pursuant to the Crime Fraud Exception to the Attorney 16 Client Privilege. In the December 20, 2011 order, which was issued after Judge Vadas conducted an 17 in camera review, Judge Vadas found that a limited number of documents support the application of the 18 crime-fraud exception, and he ordered defendants to produce those documents to plaintiff. On 19 December 23, 2011, the Court denied defendants’ motion to stay the December 20, 2011 order pending 20 the instant appeal. The appeal is fully briefed, and the parties have filed a copy of the documents at 21 issue. 22 Defendants contend that the order must be set aside because Judge Vadas erroneously found that 23 plaintiff had established a prima facie case of fraudulent conveyance. However, as plaintiff correctly 24 notes, the Court previously rejected these arguments in its November 29, 2011 denying defendants’ 25 appeal of Judge Vadas’ October 28, 2011 order requiring defendants to produce allegedly privileged 26 communications for in camera review. 27 Defendants also contend that Judge Vadas erred by requiring the production of documents “not 28 reasonably related to the alleged fraudulent transfer.” Defendants assert that a review of the privileged 1 communications shows that many of the documents have “no relationship” to the Second Amendment 2 to the Sale Agreement (the alleged fraudulent transfer), such as documents dated prior to April 17, 3 2011.1 The Court has reviewed the documents and finds that Judge Vadas did not err in ordering 4 production of pre-April 17, 2011 documents. Those documents relate to the sale of the shopping center 5 and discuss the possibility that plaintiff will sue the new owner of the shopping center (Capella), and 6 include numerous emails between Pau and his counsel (Matthews and Roberts) discussing the Second 7 Amendment. Finally, citing California case law and California Evidence Code section 956, defendants contend 9 that Judge Vadas erred in ordering production of documents protected by the work product doctrine. 10 United States District Court For the Northern District of California 8 However, “[u]nlike issues of attorney-client privilege, issues concerning the work-product doctrine are 11 procedural and thus governed by Federal Rule of Civil Procedure 26(b)(3).” Great American Assur. Co. 12 v. Liberty Surplus Ins. Corp., 669 F. Supp. 2d 1084, 1090 (N.D. Cal. 2009). Federal courts have held 13 that “the crime-fraud exception may be used to abrogate work product protection as well as the attorney- 14 client privilege.” In re National Mortg. Equity Corp. Mortg. Pool Certificates Litig., 116 F.R.D. 297, 15 301 (C.D. Cal. 1987); A. Farber and Partners, Inc. v. Garber, 234 F.R.D. 186, 193 n.6 (C.D. Cal. 2006). 16 Thus, even if the documents at issue are protected by the work product doctrine – an issue plaintiff 17 disputes – Judge Vadas did not err by ordering that they be produced. 18 Plaintiff has requested the opportunity to depose, on an expedited basis, Pau, Matthews and 19 Roberts regarding the subject matter of the produced documents. The Court GRANTS the request and 20 orders the parties to immediately meet and confer to schedule the depositions. The depositions shall 21 take place prior to February 1, 2012. Plaintiff may file a supplemental summary judgment brief of no 22 more than 10 pages regarding the depositions and recently produced documents no later than noon on 23 February 6, 2012, and defendants may file a supplemental response of no more than 10 pages by noon 24 on February 10, 2012. The summary judgment motions are rescheduled to February 17, 2012 at 9:00 25 26 27 28 1 Pau executed the Second Amendment on April 21, 2011. The documents ordered produced show that beginning on April 18, 2011, defendants’ transactional counsel circulated a draft Second Amendment and revised Assignment to retroactively modify Capella’s assumption of the lease. Defendants do not explain why they have selected April 17, 2011 as the date relevant to the Second Amendment. 2 1 am. 2 3 This order resolves Docket No. 431. 4 5 IT IS SO ORDERED. 6 7 Dated: January 19, 2012 SUSAN ILLSTON United States District Judge 8 9 United States District Court For the Northern District of California 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3

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