Morningstar Holding Corporation v. G2, LLC et al

Filing 86

ORDER Regarding Defendant's Motion for Protective Order and Plaintiff;s Motion for Discovery, re 77 MOTION for Discovery; 82 MOTION for Protective Order. The parties shall file responses to the pending motions by 8/3/2011. (Evidentiary Hearing set for 8/9/2011 11:00 AM in Boise - Courtroom 3 before Judge B. Lynn Winmill.) Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by cjm)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

MORNINGSTAR HOLDING
CORPORATION, a Foreign
Corporation qualified to do business in
Idaho,
Plaintiff,
v.

Case No. CV-10-439-BLW

ORDER REGARDING
DEFENDANTS’ MOTION FOR
PROTECTIVE ORDER (Dkt. 82)
and PLAINTIFF’S MOTION FOR
DISCOVERY (Dkt. 77)

G2, LLC, a California Limited Liability
Company, HENRY GEORGE A/K/A
JOHN DOE I, and RICH DOUGLAS
A/K/A JOHN DOE II, individually, and
as Partners or Members of a Joint
Venture,
Defendants.

The Court has before it several simultaneously filed motions and memoranda
raising discovery disputes: Plaintiff’s Motion for Discovery (Dkt. 77), Defendants’
Memorandum on Pending Discovery Issues (Dkt. 79), and Defendants’ Motion for
Protective Order (Dkt. 82). A central issue raised in the memoranda is the applicability of
an attorney-client or work product privilege to certain e-mail communications between
Defendant Goldsmith and an attorney, Michael Josephs, and co-defendant Rich Douglas.

ORDER - 1

The Court has reviewed the memoranda and affidavits by counsel, Mr. Goldsmith and
Mr. Josephs submitted in support of the parties’ respective positions.
The issue of the applicability of the attorney-client or work product privileges
under the circumstances is a mixed question of law and fact. The factual record appears
to be contested. It is clear and undisputed that Mr. Josephs represented the Plaintiff,
Morningstar, in related litigation in Florida, and that G2 and/or Mr. Goldsmith was
involved in retaining the Josephs Jacks law firm to represent the Plaintiff. It is also clear
from the record that Mr. Goldsmith believed that, at some point, he and G2 believed they
had an attorney-client relationship with Mr. Josephs, and that they both sought and
received legal opinions from him regarding a matter potentially adverse to Plaintiff’s
interests.
Mr. Josephs disputes having an attorney-client relationship with Mr. Goldsmith or
G2, and contends that to the extent any relationship had been formed, or any expectation
of confidence developed, Mr. Goldsmith expressly waived this privilege with respect to
the communications at issue in the parties’ memoranda.
Because the affidavits by counsel, Mr. Goldsmith and Mr. Joseph’s were filed
simultaneously, it is not clear which factual statements set forth in the affidavits are
disputed. The Court believes an evidentiary hearing on the factual record of the
relationship between Mr. Josephs and Mr. Goldsmith and/or G2 may be necessary to
resolve the issue of privilege applicable to the disputed communication.

ORDER - 2

For these reasons, the Court will allow the parties to file supplemental briefing
(not to exceed five pages in length) on the issue of the standard of law the Court should
apply and the necessity for an evidentiary hearing to resolve any factual disputes. See Fed.
R. Evid. 501; KL Group v. Case, Kay & Lynch, 829 F.2d 909, 918 (9 th Cir.
1987)(addressing law applicable to privilege issue).
The parties are also reminded that the Court is obligated to impose reasonable
expenses in favor of the prevailing party on a motion for protective order or to compel
discovery unless it finds the opposition “substantially justified” or “other circumstances
make an award of expenses unjust.” Fed. R. Civ. P. 37(a)(5)(A) & (B). For that reason,
the Court encourages counsel to resolve this dispute without the need for further
proceedings. If the parties are able to resolve the dispute, the scheduled evidentiary
hearing will be vacated.
For the foregoing reasons,
IT IS HEREBY ORDERED:
1.

The parties shall file responses to the pending Motion for Protective Order
(Dkt. 82) and Motion for Discovery (Dkt.77) by August 3, 2011. Such
responses shall be limited to five pages in length and shall address both the
need for an evidentiary hearing and the applicable standard of law.

2.

An evidentiary hearing in this matter shall be set for August 9, 2011, at
11:00 a.m. MDT at the United States courthouse in Boise, Idaho. Out of

ORDER - 3

state witnesses and counsel may appear by video to minimize the costs
incurred by either party. If the parties are able to resolve this dispute, they
are to immediately so advise the Court so that the hearing can be vacated.

DATED: July 29, 2011

Honorable B. Lynn Winmill
Chief U. S. District Judge

ORDER - 4