Audet et al v. Garza et al

Filing 127

ORDER granting 82 Motion to Compel. See attached. Signed by Judge Donna F. Martinez on 1/22/2019. (Constantine, A.)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
DENIS MARC AUDET, et al.,
Plaintiffs,
v.
STUART A. FRASER, GAW MINERS,
LLC, and ZENMINER, LLC,
Defendants.

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CASE NO.

3:16cv940(MPS)

RULING ON MOTION TO COMPEL
Plaintiffs Denis Marc Audet, Michael Pfeiffer, Dean Allen
Shinners, and Jason Vargas, individually and on behalf of a class
of

all

others

similarly

situated,

bring

this

action

against

defendants Stuart A. Fraser ("Fraser"), GAW Miners, LLC, and
ZenMiner, LLC (collectively "the companies"1) alleging violations
of federal and state securities law.

Pending before the court is

defendant Fraser's motion to compel. (Doc. #82.) Defendant Fraser
seeks notes plaintiffs' counsel took during an interview of Homero
Garza ("Garza"), the companies' CEO who formerly was a defendant
in this action.2

1Default

The plaintiffs object on the ground that the

has been entered as to the companies. (Doc. #65.)
District Judge Michael P. Shea referred the dispute to
the undersigned.
(Doc. #78.)
The parties subsequently filed
briefs. See doc. ##82, 86, 89. Pursuant to the court's order,
see doc. #116, the plaintiffs submitted the documents to chambers
and plaintiffs' counsel filed an affidavit regarding the creation
of the notes.
(Doc. #118-2.)
Defendant Fraser filed a letter
response. (Doc. #120.)
2U.S.

notes are work product.

For the reasons set forth below, the

motion is granted.
I.

Factual Background
The plaintiffs initially named Garza as a defendant in their

complaint.3

On October 20, 2016, Garza entered into a written

agreement with the plaintiffs in which he agreed to provide them
with

information.

(Doc.

#118-1,

Garza

Dep.

at

148-50.)

Thereafter, on October 24, 2016, the plaintiffs dismissed Garza as
a defendant from the civil action.

(Doc. #52.)

On October 26,

2016, plaintiffs' counsel, attorney Colin Watterson, conducted an
in-person interview of Garza.

(Doc. #118, Watterson Decl. ¶3.)

Attorney Watterson's paralegal, Simon DeGeorges, participated in
the

interview

According

to

by

phone.

Attorney

(Doc.

Watterson,

#118,
"[t]he

Watterson
main

Decl.

purpose

of

¶4.)
the

interview was to learn information that would support plaintiffs'
claim that Stuart Fraser was a controlling person of GAW Miners,
LLC, ZenMiner, LLC, and Mr. Garza, as well as information on the
underlying fraud."

(Doc. #118, Watterson Decl. ¶5.)

Attorney

Watterson took notes by hand. (Doc. #118, Watterson Decl. ¶6.)
Paralegal DeGeorges also took notes.

3During

(Doc. #118, Watterson Decl.

the pendency of this case, Garza was criminally
charged and pled guilty to wire fraud. United States v. Garza,
3:17cr158(RNC).
The United States Securities and Exchange
Commission ("SEC") also brought a civil enforcement action against
him. SEC v. Garza, 3:15cv1760(JAM).
3

¶7.)

After

the

interview,

Attorney

Watterson

edited

and

supplemented DeGeorges' notes. (Doc. #118, Watterson Decl. ¶7.)
On November 4, 2016, after the interview with Garza, the
plaintiffs filed an amended complaint with additional factual
assertions about Fraser and his role in the alleged fraud.
On November 8, 2016, plaintiff Allen Shinners sent a copy of
the interview notes to FBI Special Agent Mark Munster.4

(Doc.

#118, Watterson Decl. ¶8.)
Defendant Fraser subsequently served the plaintiffs with a
discovery request which sought all statements Garza made to the
plaintiffs as well as "any notes or documents produced as a result
of Garza's statements."

(Doc. #82-2, Production Request 50.)

Plaintiffs objected to producing the interview notes on the grounds
that they are work product.5
II.

This motion followed.

Discussion
Defendant

Fraser

argues

that

the

plaintiffs

waived

product protection when they shared the notes with the FBI.
plaintiffs'

disclosure,

the

defendant

argues,

work
The

substantially

increased the likelihood that plaintiffs' adversary (Fraser) would

4Plaintiff

Shinners testified at his deposition that he had
had numerous conversations with the FBI in an effort to help build
a criminal case against Garza.
(Doc. #105-1, Shinners Dep. at
167.)
5The plaintiffs listed the interview notes on their privilege
log. (Doc. #86, Ex. A-3.)
4

obtain the information, thereby waiving work product protection.
I agree.
"[T]he party asserting the protection afforded by the work
product doctrine has the burden of showing both that the protection
exists and that it has not been waived."

NL Indus., Inc. v. ACF

Indus. LLC, No. 10CV89W, 2015 WL 4066884, at *5 (W.D.N.Y. July 2,
2015) (internal quotation mark and citation omitted).
Disclosure of attorney work-product to a third party, "unlike
disclosure

of

a

document

protected

by

the

attorney-client

privilege . . . does not necessarily waive the work product
immunity."

In re Grand Jury Subpoenas Dated December 18, 1981 &

Jan. 4, 1982, 561 F. Supp. 1247, 1257 (E.D.N.Y. 1982). "Disclosure
of work product to a third party does not waive its protection
unless it substantially increases the opportunity for potential
adversaries to obtain the information."

Id.

See NL Indus., Inc.,

2015 WL 4066884, at *5 ("The test for waiver is whether the
disclosure at issue has substantially increased the opportunities
for potential adversaries to obtain the information.")(quotation
marks and citations omitted); Bank of Am., N.A. v. Terra Nova Ins.
Co., 212 F.R.D. 166, 170 (S.D.N.Y. 2002) ("a disclosure to a nonadversary

that

'substantially'

or

'materially'

increases

the

likelihood that an adversary will obtain the information results
in a waiver of the work product protection").

5

Courts have considered the issue of waiver of work product
protection in a variety of cases, including those in which "the
disclosure of information to governmental authorities was made in
the hope that the government will 'attack' the disclosing party's
adversary."

Matrix Essentials, Inc. v. Quality King Distributors,

Inc., No. CV901070 (LDW/WDW), 2006 WL 8435312, at *2 (E.D.N.Y.
Jan. 12, 2006) (quoting Information Resources, Inc. v. Dun &
Bradstreet Corp., 999 F. Supp. 591, 592 (S.D.N.Y. 1998)).

"Such

disclosure, it has been held, cannot be said to be done in the
pursuit of trial preparation, and disclosure in such a situation
results in a waiver of the work product protection."

Matrix

Essentials, Inc., 2006 WL 8435312, at *2 (quotation marks and
citations

omitted).

enforcement

agency

"When

material

without

any

is

disclosed
agreement

to

a

law

regarding

confidentiality, there is a strong potential that the material may
ultimately become public and thus available to an adversary. This
may occur if the material is used at trial – either as part of the
government's case-in-chief or for purposes of cross-examining a
witness."

Bank of America v. Terra Nova Ins. Co., 212 F.R.D. 166,

172 (S.D.N.Y. 2002).
In Information Resources, Inc. v. Dun & Bradstreet Corp., 999
F. Supp. 591 (S.D.N.Y. 1998), plaintiffs' counsel made apparently
unsolicited submissions to various government agencies in the
United States and abroad in hopes of encouraging them to take
6

action against the defendant.

The court concluded that work

product "protection is waived for materials submitted voluntarily
to

stimulate

beneficial

official

action.

This

vindicates

the

principle of full disclosure, prevents the unfairness of selective
revelations, and reflects the common-sense perception that in most
such cases the privacy attending creation of the work-product had
either served its purpose or was of little importance in the first
place."

Id. at 593.

See, e.g., United States ex rel. Rubar v.

Hayner Hoyt Corp., No. 514CV830, 2018 WL 5811427(GLS/CFH), at *6
(N.D.N.Y. Nov. 5, 2018) ("By providing the final version of the
Report to the [Syracuse Police Department] and District Attorney's
Office, the Court concludes that defendants waived the workproduct privilege with respect to both the final Report and its
drafts"); Cante v. Baker, No. 07-CV-1716(ERK), 2008 WL 2047885, at
*1

(E.D.N.Y.

May

9,

2008)(plaintiffs

waived

work

product

protection where they submitted documents at issue to government
agencies); Bank of Am., N.A. v. Terra Nova Ins. Co., 212 F.R.D.
166,

172–73

(S.D.N.Y.

2002)

("Disclosing

information

to

governmental authorities in the hope that they will attack an
adversary . . .

cannot be said to be done in the pursuit of . .

. trial preparation. . . . Thus, disclosure in such a situation
results in a waiver of the work product protection.")(quotation
marks and citations omitted); U.S. Info. Sys., Inc. v. Int'l Bhd.
of Elec. Workers Local Union No. 3, No. 00CIV.4763(RMB)(JCF), 2002
7

WL 31296430, at *4 (S.D.N.Y. Oct. 11, 2002) (plaintiff waived work
product protection where it "made an unsolicited, uncompelled
disclosure of the information to the District Attorney's Office.
It did so without any assurance, formal or informal, that the
communications would be kept confidential."); D'Ippolito v. Cities
Service Co., 39 F.R.D. 610, 610 (S.D.N.Y. 1965) (plaintiff's
voluntary disclosure of document to attorneys in the Antitrust
Division

of

the

Department

of

Justice

waived

work

product

protection).
The

plaintiffs,

as

the

party

invoking

work-product

protection, "bear[] the burden of demonstrating that it has not
been waived."

Norton v. Town of Islip, No. CV 04-3079, 2015 WL

5542543, at *3 (E.D.N.Y. Sept. 18, 2015)(quotation marks and
citation

omitted).

The

plaintiffs

brush

past

this

burden,

addressing the defendant's waiver argument only in a footnote.
They provide no evidence regarding their disclosure to the FBI,
and simply assert

that "the disclosure did not increase the

likelihood of Shinner's adversary (i.e. Fraser) obtaining a copy
of the notes."
unavailing.

(Doc. #86 at 16 n. 27.)

This assertion is

The record before the court shows that plaintiff

Shinners voluntarily shared the notes with the FBI.

Nothing in

the record suggests that the disclosure was made pursuant to any
agreement that the notes would be kept confidential.

Under these

circumstances, the plaintiffs' disclosure increased the likelihood
8

that Fraser, their adversary, would obtain the information.

The

plaintiffs have not met their burden of showing they did not waive
work product protection and therefore, the defendant's motion is
granted.6
III. Conclusion
For these reasons, defendant Fraser's motion to compel is
granted.
SO

ORDERED

this

22nd day

of

January

2019

at

Hartford,

Connecticut.
____________/s/_______________
Donna F. Martinez
United States Magistrate Judge

6Because

I
find
defendant
Fraser's
waiver
argument
dispositive, I do not reach the defendant's other arguments –
namely, that the notes are not work product and that even if they
are work product, the plaintiffs should produce the notes because
they contain factual information for which defendant Fraser has
substantial need and cannot obtain the equivalent without undue
hardship.
9