TECNOMATIC, S.P.A. v. REMY, INC. et al

Filing 641

ORDER - ON TECNOMATIC'S MOTION TO COMPEL ; The Court hereby DENIES Tecnomatic's Motion to Compel Regarding Privilege. [Dkt. 586.]. Signed by Magistrate Judge Mark J. Dinsmore on 6/3/2014. *** SEE ORDER *** (CKM)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION

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TECNOMATIC, S.P.A.,
REMY, INC,
Plaintiffs,
vs.
REMY, INC.,
ODAWARA AUTOMATION, INC.,
REMY INTERNATIONAL, INC.,
DELCO REMY MEXICO, S.R.L. DE C.V.,
REMY COMPONENTES S. DE R.L. DE
C.V.,
1-5 DOES,
TECNOMATIC S.P.A.,
RICHARD VAN SICKLE,
MARK STEPHENSON KEVIN,
KEVIN YOUNG,
STUART PERRY,
REMY TECHNOLOGIES, LLC.,
RVS DIRECT SERVICES INC.,
Defendants.

No. 1:11-cv-00991-SEB-MJD

ORDER ON TECNOMATIC’S MOTION TO COMPEL
This matter comes before the Court on Tecnomatic S.p.A.’s (“Tecnomatic”) Motion to
Compel Regarding Privilege, filed on December 16, 2013. [Dkt. 586.] For the following
reasons, the Court hereby DENIES Tecnomatic’s motion.
I. Background
This is a consolidated case wherein Remy, Inc. (“Remy”) initially alleged claims of
Breach of Express Warranty, Breach of Implied Warranty, and Revocation of Contract against
Tecnomatic in 2008. [Dkt. 584-2 at 2.] Specifically, Remy alleged that it was “forced to buy
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replacement equipment from various suppliers because the equipment [provided by Tecnomatic]
did not work.” [Id. (quotations omitted).] In 2011, the case was consolidated to include
allegations by Tecnomatic that Remy breached their Mutual Confidentiality Agreement
(“MCA”) by using Tecnomatic’s confidential information to improperly replicate its property in
a manner that violated several statutes. [Id. at 3.]
During the discovery process, Tecnomatic has made several requests for production,
which encompass several documents that Remy claims are protected by attorney-client privilege
(“the Documents”). [Dkt. 592.] The first document, ECF Docket Entry 587-2 at pages two
through three (“Document One”), is an email to Remy’s in-house counsel and two other
individuals. After Remy initially produced Document One without any privilege designation,
Remy inadvertently included Document One on a subsequent privilege log. [Dkt. 586-1.] Remy
and Tecnomatic have both since acknowledged in their memoranda and at oral argument that
Document One is not privileged. [Dkts. 593 at 5, 596-1 at 2.]
ECF Docket Entry 587-2 at pages six through seven (“Document Two”), pages eight
through eleven, (“Document Three”) and pages four through five (“Document Four”) are strings
of emails that contain exchanges between a Remy employee and Remy’s in-house counsel. In all
three documents, only the portions constituting emails sent to in-house counsel or sent by inhouse counsel have been redacted on privilege grounds. [Dkt. 583-2 at 6, 8.] The next three
documents, ECF Docket Entry 587-2 at pages twelve through thirteen (“Document Five”), pages
fourteen through fifteen (“Document Six”), and seventeen through eighteen (“Document
Seven”), consist of email exchanges between a Remy employee and in-house counsel, which
documents have been withheld in their entirety on privilege grounds. The email exchanges of
Document Six are included within Documents Five and Seven, which two documents are

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identical and include one additional email from in-house counsel that is not included in
Document Six. [Dkt. 587-2 at 12-18.] Finally, ECF Docket Entry 587-2 at page sixteen
(“Document Eight”), an email string containing emails between a Remy employee, a paralegal,
and in-house counsel, has been withheld in its entirety on privilege grounds.
Tecnomatic filed a Motion to Compel on December 16, 2013 seeking the production of
the Documents that Remy has withheld in whole or in part on privilege grounds. [Dkt. 587.]
Remy thereafter submitted the Documents to Tecnomatic and to the Court for in camera review.
Remy retains its claim of privilege under the Court’s Order Governing Disclosure of Privileged
Documents and pursuant to Rule 502(d) of the Federal Rules of Evidence. [Dkt. 583.] The
Court conducted a hearing on the motion on January 23, 2014, which motion the Court now
addresses.
II. Discussion
Rule 26 of the Federal Rules of Civil Procedure allows parties to “obtain discovery
regarding any nonprivileged matter that is relevant to any party’s claim or defense.” Fed. R. Civ.
P. 26(b)(1). While Rule 26 generally provides for broad, open discovery, materials may be
shielded from discovery in certain instances, such as when they are protected by attorney-client
privilege. See Sandra T.E. v. S. Berwyn Sch. Dist. 100, 600 F.3d 612, 618 (7th Cir. 2010).
Remy has withheld in their entirety, or redacted portions thereof, Documents Two through Eight
on the basis of attorney-client privilege. [Dkt. 592 at 2.] Tecnomatic now moves to compel the
production of those documents in their entirety, asserting (1) that the Documents are not
privileged or, in the alternative, (2) that Remy has waived any privilege claimed with respect to
the Documents. [Dkt. 597.]

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A. Attorney-Client Privilege
The purpose of attorney-client privilege is to encourage open and honest communication
between clients and their attorneys. Upjohn Co. v. United States, 449 U.S. 383, 388 (1981). The
attorney-client privilege protects “communications made in confidence by a client and client's
employees to an attorney, acting as an attorney, for the purpose of obtaining legal advice.”
Sandra, 600 F.3d at 618. Before finding that a document is privileged, the court must first
determine “(1) whether legal advice was sought from an attorney in her capacity as an attorney;
and (2) whether any communications between the client and her attorney or attorney’s agent
were germane to that purpose and made confidentially.” F.D.I.C. v. Fid. & Deposit Co. of
Maryland, 3:11-CV-19-RLY-WGH, 2013 WL 2421770, at *2 (S.D. Ind. June 3, 2013) (citing
Sandra, 600 F.3d at 618). It is the burden of the party asserting that such privilege exists to
“make a prima facie showing of these elements.” Id. (citing Rockies Express Pipeline LLC v.
58.6 Acres, 1:08-CV-0751-RLYDML, 2009 WL 5219025, at *3 (S.D. Ind. Dec. 31, 2009)). The
court must determine whether a document is privileged on a document-by-document basis. Long
v. Anderson Univ., 204 F.R.D. 129, 134 (S.D. Ind. 2001).
Tecnomatic contends that Documents Two through Eight1 “do not seek legal consultation
and merely relay facts.” [Dkt. 596-1 at 2-3.] However, the court has reviewed Documents Two
through Eight on a document-by-document basis and finds that the communications withheld
explicitly request, render, arrange for, or act in furtherance of rendering legal assistance. Such
actions fall squarely within the Seventh Circuit standard of a client or client’s employees
communicating with an attorney, who is acting as an attorney, for the purpose of obtaining or
rendering that attorney’s legal services, as explicated in Sandra. Accordingly, the Court finds

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Tecnomatic likewise argues that Document 1 is not privileged. However, Remy did not intend to withhold
Document One as privileged, and this concession was confirmed at oral argument. [See Dkts. 592 at 5, 596-1 at 2.]

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that the withheld and redacted portions of Documents Two through Eight are protected by
attorney-client privilege.
B. Waiver
Once the protection of attorney-client privilege has been established, the party seeking
the production of the privileged communications bears the burden of showing that the
withholding party has waived the privilege. See Rehling v. City of Chicago, 207 F.3d 1009, 1019
(7th Cir. 2000); FDIC v. Fid. & Deposit Co of Md., 3:11-CV-19-RLY-WGH, 2013 WL 2421770
(S.D. Ind. June 3, 2013). On the issue of waiver, Tecnomatic argues (1) that Remy has implicitly
waived attorney-client privilege and (2) that the disclosure of Document One constituted a
subject matter waiver of privileged documents.
1. Implied Waiver
First, Tecnomatic argues that Remy has implicitly waived attorney-client privilege by
putting its in-house counsel’s knowledge at issue. [Dkt. 587-1 at 2.] A party waives attorneyclient privilege through implication when it “(1) affirmatively places information at issue; (2) the
information is relevant to the dispute; and (3) upholding privilege would be unfair, since it would
deny the other side vital information.” FDIC, 2013 WL 2421770, at *4, (citing Pippenger v.
Gruppe, 883 F. Supp. 1201, 1204 (S.D.Ind. 1994)).
Generally, implied waiver occurs “only if a party uses privileged communications to
defend itself or attack its opponent.” Treat v. Tom Kelley Buick Pontiac GMC, Inc., 1:08-CV173, 2009 WL 1543651 (N.D. Ind. June 2, 2009) (citing Claffey v. River Oaks Hyundai, 486
F.Supp. 2d 776, 778 (N.D. Ill. 2007) (emphasis added). Even where a client’s state of mind may
be relevant, a client does not waive the attorney-client privilege by implication unless the client
relies “specifically on advice of counsel to support a claim or defense.” Harter v. Univ. of Ind., 5

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F. Supp. 2d 657, 664 (S.D. Ind. 1998). “[T]he possibility that privileged communications could
provide the opponent with relevant evidence is not a sufficient basis for finding a waiver of the
privilege.” Id. (emphasis added).
To support its allegation of waiver, Tecnomatic cites to FDIC, where the plaintiff relied
upon the privileged knowledge of its in-house counsel to establish a claim. 2013 WL 2421770.
In FDIC, the in-house counsel “signed . . . a narrative explanation of loss, which detailed his . . .
legal opinion.” Id. at *5 (emphasis added). This narrative was filed and relied upon by the
plaintiff in FDIC to establish its claims. Id.
Here, Tecnomatic claims that Remy has put its in-house counsel’s knowledge at issue,
thereby waiving the privilege of related materials by implication. [Dkt. 587-1 at 2-5.]
Specifically, Tecnomatic asserts that Remy’s reliance upon a nonprivileged exchange of letters
to establish a statute of limitations defense opens the door to the privileged exchanges of letters.
[Id.] Because this exchange of letters is not privileged, however, the materials allegedly relied
upon by Remy are different in kind from the narrative explanation of loss seen in FDIC, where
otherwise-privileged information, the legal opinion of plaintiff’s in-house counsel, was relied
upon and submitted in support of the plaintiff’s claim. Further, Treat and Claffey establish that
implied waiver can only occur when a party relies on privileged material to establish a claim or
defense. Remy asserts that it has not relied, and will not rely, on privileged information to
establish a statute of limitations defense, so FDIC cannot apply to these circumstances.2
Additionally, Tecnomatic believes that, by allowing its in-house counsel to answer a
question regarding his awareness of the MCA at his deposition, Remy as an entity has waived its
privilege regarding such knowledge. [Id.] As a general rule, “the power to waive the corporate

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The Courts trusts that Remy’s assertion is in earnest. If at any time, however, Remy does rely on such privileged
material in support of a claim or defense in this matter, the Court would readdress the issue if it is so raised.

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attorney-client privilege rests with the corporation's management and is normally exercised by its
officers and directors.” Commodity Futures Trading Comm'n v. Weintraub, 471 U.S. 343, 348
(1985). As discussed at oral argument, however, the deposition was not a Rule 30(b)(6)
deposition, as the deponent, Remy’s in-house counsel, was not testifying on behalf of Remy as
an entity. Further, although an attorney may assert privilege on his client’s behalf, the attorneyclient privilege belongs to the client, not the attorney, and can only be waived by the client. See
Sandra T.E. v. S. Berwyn Sch. Dist. 100, 600 F.3d 612, 618 (7th Cir. 2010). Thus, the deposition
testimony of in-house counsel, with a yes-or-no answer regarding such in-house counsel’s
awareness of the MCA, cannot waive Remy’s attorney-client privilege. Accordingly, the Court
finds that Remy has not implicitly waived its attorney-client privilege with regard to Documents
Two through Eight.
2. Subject Matter Waiver
Tecnomatic also argues that Remy’s disclosure of Document One waives privilege for all
other documents with regard to the same subject matter. [Dkt. 587-1 at 5.] Rule 502 of the
Federal Rules of Evidence grants that a disclosure constitutes a waiver that extends to
undisclosed communications if the “disclosure is (1) intentional, (2) the disclosed and
undisclosed material concern the same subject matter, and (3) fairness requires considering the
material together.” Appleton Papers, Inc. v. E.P.A., 702 F.3d 1018, 1026 (7th Cir. 2012) (citing
Fed. R. Evid. 502(a)). However, this rule only applies when a party “discloses . . . a portion of
privileged material.” Id.
Again, Tecnomatic relies on case law that does not pertain to the matter at hand. [Dkt.
587-1 at 5.] In Rockies Express Pipeline LLC v. 58.6 Acres, the plaintiff disclosed a privileged
document during a deposition. 1:08-CV-0751-RLYDML, 2009 WL 5219025 at *6 (S.D. Ind.

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Dec. 31, 2009). at 6. Here, Tecnomatic bases its argument upon the production of Document
One, which the parties agree is not privileged. [Dkts. 593 at 5, 596-1 at 2.] Tecnomatic has
offered no authority in support of the proposition that disclosure of a nonprivileged document
can serve as basis for a subject matter waiver as to privileged documents. Therefore,
Tecnomatic has not met its burden of proof, and the Court finds that there is no basis for a
subject matter waiver of Remy’s attorney-client privilege.
III. Conclusion
For the aforementioned reasons, the Court hereby DENIES Tecnomatic’s Motion to Compel
Regarding Privilege. [Dkt. 587.]

06/03/2014
Date: _____________
Mark J. Dinsmore
United States Magistrate Judge
Southern District of Indiana

Distribution:
Patrick David Murphy
BOVERI MURPHY RICE LLP
[e-mail]
Charles P. Rice
BOVERI MURPHY RICE, LLP
[e-mail]
Justin M. Righettini
BRYAN CAVE LLP
[e-mail]
Kara E. F. Cenar
BRYAN CAVE LLP
[e-mail]
Mariangela M. Seale
BRYAN CAVE LLP
[e-mail]
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S. Patrick McKey
BRYAN CAVE LLP
[e-mail]
Andrew C. Warnecke
Bryan Cave LLP
[e-mail]
David M. Allen
FAEGRE BAKER DANIELS LLP - Chicago
[e-mail]
David P. Irmscher
FAEGRE BAKER DANIELS LLP - Indianapolis
[e-mail]
Munjot Sahu
FAEGRE BAKER DANIELS LLP - Indianapolis
[e-mail]
Ryan Michael Hurley
FAEGRE BAKER DANIELS LLP - Indianapolis
[e-mail]
Randall E. Kahnke
FAGRE BAKER DANIELS, LLP
[e-mail]
Scott A. Weathers
KEN NUNN LAW OFFICE
[e-mail]
Jason Michael Lee
LEWIS WAGNER LLP
[e-mail]
John Carl Trimble
LEWIS WAGNER LLP
[e-mail]
A. Richard Blaiklock
LEWIS WAGNER, LLP
[e-mail]
Anne L. Cowgur
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TAFT STETTINIUS & HOLLISTER LLP
[e-mail]
Jason P. Bichsel
THOMPSON HINE LLP
[e-mail]
Nicholas W. Myles
THOMPSON HINE LLP
[e-mail]
Thomas A. Knoth
THOMPSON HINE LLP
[e-mail]

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